Existing law requires the Public Utilities Commission to appoint a chief internal auditor who holds office at the pleasure of the commission. Existing law makes the chief internal auditor responsible for the oversight of the internal audit unit. Existing law requires the chief internal auditor to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management, and to report their findings and recommendations directly to an audit subcommittee of the commission.

This bill would instead require the Governor to appoint an Inspector General, subject to Senate confirmation, to be responsible for the oversight of the internal audit unit and would instead require the Inspector General to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management. The bill would also require the Inspector General to ensure, among other things, that the commission administers funds and programs in a prescribed manner, fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and monitors reporting compliance. The bill would provide for the appointment and removal of the Inspector General, as specified. The bill would authorize the Inspector General to access and examine all records, files, documents, accounts, reports, correspondence, or other property of the commission and public utilities, and would require other entities that are regulated by the commission and participate in programs administered by the commission, upon request of the Inspector General, to provide or make available to the Inspector General for examination all relevant records, files, documents, accounts, reports, correspondence, or other property pertaining to participation in those programs, as specified. The bill would require the Inspector General to report specified information to the Governor and the Legislature, as provided.

Existing law requires the Public Utilities Commission to appoint a chief internal auditor who holds office at the pleasure of the commission. Existing law makes the chief internal auditor responsible for the oversight of the internal audit unit. Existing law requires the chief internal auditor to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management, and to report their findings and recommendations directly to an audit subcommittee of the commission.

This bill would instead require the Governor to appoint an Inspector General, subject to Senate confirmation, to be responsible for the oversight of the internal audit unit and would instead require the Inspector General to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management. The bill would also require the Inspector General to ensure, among other things, that the commission administers funds and programs in a prescribed manner, fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and monitors reporting compliance. The bill would provide for the appointment and removal of the Inspector General, as specified. The bill would authorize the Inspector General to access and examine all records, files, documents, accounts, reports, correspondence, or other property of the commission, public utilities, and other entities regulated by the commission, commission and public utilities, and would require other entities that are regulated by the commission and participate in programs administered by the commission, upon request of the Inspector General, to provide or make available to the Inspector General for examination all relevant records, files, documents, accounts, reports, correspondence, or other property pertaining to participation in those programs, as specified. The bill would require the Inspector General to report specified information to the Governor and the Legislature, as provided.

Existing law requires the Public Utilities Commission to appoint a chief internal auditor who holds office at the pleasure of the commission. Existing law makes the chief internal auditor responsible for the oversight of the internal audit unit and unit. Existing law requires the chief internal auditor to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management. management, and to report their findings and recommendations directly to an audit subcommittee of the commission.

This bill would repeal the provision providing for the appointment of the chief internal auditor and, on or before January 1, 2028, would transfer the internal audit unit of the commission and its staff to the Independent Office of Audits and Investigations, which the bill would establish within the commission, as specified. instead require the Governor to appoint an Inspector General, subject to Senate confirmation, to be responsible for the oversight of the internal audit unit and would instead require the Inspector General to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management. The bill would also require the Inspector General to ensure, among other things, that the commission administers funds and programs in a prescribed manner, fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and monitors reporting compliance. The bill would provide for the appointment and removal of the director of the office, who would have the title of Inspector General. General, as specified. The bill would provide the office with authorize the Inspector General to access to, and authority to examine, and examine all records, files, documents, accounts, reports, correspondence, or other property of the commission, public utilities, and other entities regulated by the commission, as specified. The bill would require the Inspector General to report specified information to the Governor and the Legislature, as provided.

Existing law, the Digital Equity Bill of Rights, provides that it is the principle of the state to ensure digital equity for all residents of the state, that residents shall have access to broadband that meets specific requirements, and that it is the policy of the state that, to the extent technically feasible, broadband internet subscribers benefit from equal access to broadband internet service within the service area of a broadband provider.

Existing law, the California Internet Consumer Protection and Net Neutrality Act of 2018, prohibits fixed and mobile internet service providers, as defined, that provide broadband internet access service, as defined, from engaging in specified actions concerning the treatment of internet traffic, including engaging in paid prioritization.

This bill would require every California internet service provider, except as specified, to offer for purchase to eligible households, as defined, within their California service territory affordable home internet service that meets minimum speed requirements. service, as defined. The bill would also require every California internet service provider to make commercially reasonable efforts to promote and advertise the availability of affordable home internet service for eligible households, as provided.

Existing law establishes within the Government Operations Agency the Department of Technology, which is supervised by the Director of Technology. Existing law authorizes the director and the department to exercise various powers in creating and managing the information technology policy of the state.

This bill would, starting January 1, 2027, require California internet service providers to annually provide a report to the Department of Technology with specified information related to their affordable home internet service plans and broadband products. plans.

This bill would provide that the Public Utilities Commission has no jurisdiction or regulatory authority to implement, enforce, interpret, or oversee any aspect of these provisions, as specified, and would require any administrative or oversight responsibilities to be carried out exclusively by the Department of Technology.

This bill would make its provisions inoperative upon the implementation of a federal or state broadband subscription subsidy program for low income households that meets specified criteria.

Existing law, the Digital Equity Bill of Rights, provides that it is the principle of the state to ensure digital equity for all residents of the state, that residents shall have access to broadband that meets specific requirements, and that it is the policy of the state that, to the extent technically feasible, broadband internet subscribers benefit from equal access to broadband internet service within the service area of a broadband provider.

Existing law, the California Internet Consumer Protection and Net Neutrality Act of 2018, prohibits fixed and mobile internet service providers, as defined, that provide broadband internet access service, as defined, from engaging in specified actions concerning the treatment of internet traffic, including engaging in paid prioritization.

This bill would require every California internet service provider, except as specified, to offer for purchase to eligible households, as defined, within their California service territory affordable home internet service that meets minimum speed requirements. The bill would also require every California internet service provider to make commercially reasonable efforts to promote and advertise the availability of affordable home internet service for eligible households, as provided.

Existing law establishes within the Government Operations Agency the Department of Technology, which is supervised by the Director of Technology. Existing law authorizes the director and the department to exercise various powers in creating and managing the information technology policy of the state.

This bill would, starting January 1, 2027, require California internet service providers to annually provide a report to the Department of Technology with specified information related to their affordable home internet service plans and broadband products.

Existing law, the Digital Equity Bill of Rights, provides that it is the principle of the state to ensure digital equity for all residents of the state, that residents shall have access to broadband that meets specific requirements, and that it is the policy of the state that, to the extent technically feasible, broadband internet subscribers benefit from equal access to broadband internet service within the service area of a broadband provider.

Existing law, the California Internet Consumer Protection and Net Neutrality Act of 2018, prohibits fixed and mobile internet service providers, as defined, that provide broadband internet access service, as defined, from engaging in specified actions concerning the treatment of internet traffic, including engaging in paid prioritization.

This bill would require every California internet service provider, except as specified, to offer for purchase to eligible households, as defined, within their California service territory affordable home internet service that meets minimum speed requirements. The bill would also require every California internet service provider to make commercially reasonable efforts to promote and advertise the availability of affordable home internet service for eligible households, as provided.

Existing law establishes within the Government Operations Agency the Department of Technology, which is supervised by the Director of Technology. Existing law authorizes the director and the department to exercise various powers in creating and managing the information technology policy of the state.

This bill would, starting January 1, 2027, require California internet service providers to annually provide a report to the Department of Technology with specified information related to their affordable home internet service plans and broadband products.

Existing law, the Digital Equity Bill of Rights, provides that it is the principle of the state to ensure digital equity for all residents of the state, that residents shall have access to broadband that meets specific requirements, and that it is the policy of the state that, to the extent technically feasible, broadband internet subscribers benefit from equal access to broadband internet service within the service area of a broadband provider.

Existing law, the California Internet Consumer Protection and Net Neutrality Act of 2018, prohibits fixed and mobile internet service providers, as defined, that provide broadband internet access service, as defined, from engaging in specified actions concerning the treatment of internet traffic, including engaging in paid prioritization.

This bill would require every California internet service provider provider, except as specified, to offer for purchase to eligible households, as defined, within their California service territory affordable home internet service that meets minimum speed requirements, and requirements. The bill would also require every California internet service provider to make commercially reasonable efforts to promote and advertise the availability of affordable home internet service for eligible households, as provided.

Existing law establishes within the Government Operations Agency the Department of Technology, which is supervised by the Director of Technology. Existing law authorizes the director and the department to exercise various powers in creating and managing the information technology policy of the state.

This bill would, starting January 1, 2027, require California internet service providers to annually provide a report to the Department of Technology with specified information related to their affordable home internet service plans and broadband products.

Existing law, the Digital Equity Bill of Rights, provides that it is the principle of the state to ensure digital equity for all residents of the state, that residents shall have access to broadband that meets specific requirements, and that it is the policy of the state that, to the extent technically feasible, broadband internet subscribers benefit from equal access to broadband internet service within the service area of a broadband provider.

Existing law, the California Internet Consumer Protection and Net Neutrality Act of 2018 prohibits fixed and mobile internet service providers, as defined, that provide broadband internet access service, as defined, from engaging in specified actions concerning the treatment of internet traffic, including engaging in paid prioritization.

This bill would state the intent of the Legislature to enact legislation that would require broadband internet service providers to offer affordable home internet to California residents.

GOVERNOR'S VETO

GV Bill Id:AB 353

Author:(Boerner)

As Enrolled Ver:September 4, 2026

2/3 vote

SUMMARY

This bill requires the Governor to appoint an Inspector General (IG) of the California Public Utilities Commission (CPUC), subject to Senate confirmation, for a six-year term. The Inspector General would oversee the CPUC's internal audit unit, with a focus on improving accountability and transparency in the agency's executive and operational management.

Senate Amendments

1. Remove the entire contents of the bill, previously related to affordable home internet.
2. Replace the bill's contents with the present language related to an IG at the CPUC.

Governor's Veto Message

The bill would require the Governor to appoint an Inspector General of the Public Utilities Commission (CPUC) to serve a six-year term and transfer the existing internal auditing functions to the new Inspector General.

I understand the author's ambition to bring more oversight to the decisions made at, and programs administered by, the CPUC. However, this bill contains several flaws. Most significantly, it would compromise the Public Advocates Office's (Office) role as a robust advocate before the CPUC. By granting existing agency staff access to internal deliberations, work products, and litigation strategies, this measure would undermine the independence of the Office. Further, a reorganization of the CPUC at the scale envisioned by this bill would have significant fixed and operational costs in the tens of millions of dollars that are not included in this year's budget.

In partnership with the Legislature this year, my administration has enacted a balanced budget that recognizes the challenging fiscal landscape our state faces while maintaining our commitment to working families and our most vulnerable communities. With significant fiscal pressures and the federal government's hostile economic policies, it is vital that we remain disciplined when considering bills with significant fiscal implications that are not included in the budget, such as this measure.

COMMENTS

The CPUC's Chief Internal Auditor, created by SB 19 (Hill) Chapter 421, Statutes of 2017, reports to the CPUC's commissioners through the Audit Committee and oversees a six-person Office of Internal Audit Services that conducts assurance, advisory, and risk-assessment work, completing nearly 30 audits over five years. The Internal Auditor's reports are internal, unlike federal IG offices, where about half of the federal IGs are presidentially appointed with Senate confirmation and operate independently within their agencies.

This bill replaces the Chief Internal Auditor at the CPUC with an IG modeled on that federal approach, appointed by the Governor and confirmed by the Senate for a six-year term. This measure raises the question of whether the current arrangement – where the auditor serves at the commissioners' pleasure and reports are not public – still fits given growing scrutiny of CPUC operations, including the author's concerns about a federal IG audit that found dead and duplicate Lifeline subscribers enrolled by California providers, with no public CPUC follow-up.

This bill grants the new IG office the ability to access records from the CPUC and utilities. The new IG office can also request records from other entities that are regulated by the CPUC and participate in programs administered by the CPUC.

According to the Author

"Although the California Public Utilities Commission is an independent agency of state government, its internal operations should be transparent to the public and subject to regular independent review by an outside entity to ensure efficient operations, economic administration of ratepayer funds, and compliance with state law. As utility costs continue to rise, regulatory decisions are continuously delayed, grant funds are held back for years, and Commissioners decline to participate in legislative oversight hearings it is clear that more accountability is needed on the agency operations. By establishing an independent Inspector General at the CPUC, the public and the Legislature will be better informed about the agency's internal operations."

Arguments in Support

None received.

Arguments in Opposition

None received.

FISCAL COMMENTS

According to the Senate Appropriations Committee, ongoing costs of about $2.5 million annually for the CPUC to implement the provisions of this bill.

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 7-2-1

YES: Boerner, Ahrens, Bonta, Caloza, Garcia, Lowenthal, Rogers

NO: Hoover, Castillo

ABS, ABST OR NV: Blanca Rubio

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 58-18-3

YES: Addis, Aguiar-Curry, Ahrens, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Ávila Farías, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

ABS, ABST OR NV: Arambula, Flora, Hadwick

SENATE FLOOR: 30-7-3

YES: Allen, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Cortese, Durazo, Gonzalez, Grayson, Hurtado, Laird, Limón, McGuire, McNerney, Menjivar, Padilla, Pérez, Reyes, Richardson, Rubio, Smallwood-Cuevas, Stern, Umberg, Wahab, Weber Pierson, Wiener

NO: Alvarado-Gil, Choi, Dahle, Grove, Jones, Niello, Seyarto

ABS, ABST OR NV: Ochoa Bogh, Strickland, Valladares

ASM UTILITIES AND ENERGY: 17-0-1

YES: Petrie-Norris, Patterson, Boerner, Calderon, Chen, Davies, Harabedian, Hart, Irwin, Kalra, Papan, Rogers, Schiavo, Schultz, Ta, Wallis, Zbur

ABS, ABST OR NV: Mark González

ASSEMBLY FLOOR: 67-8-4

YES: Addis, Aguiar-Curry, Ahrens, Alanis, Alvarez, Arambula, Ávila Farías, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Chen, Connolly, Davies, DeMaio, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Hoover, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Patterson, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Rogers, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Ta, Tangipa, Valencia, Wallis, Ward, Wicks, Wilson, Zbur, Rivas

NO: Castillo, Ellis, Flora, Jeff Gonzalez, Johnson, Lackey, Macedo, Sanchez

ABS, ABST OR NV: Dixon, Hadwick, Michelle Rodriguez, Blanca Rubio

UPDATED

VERSION: September 4, 2026

CONSULTANT: Laura Shybut / U. & E. / (916) 319-2083 FN: 0004591

(Without Reference to File)

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 353

Author:(Boerner)

As Amended Ver:August 21, 2026

Majority vote

SUMMARY

Original Committee of Reference: Communications and Conveyance

This bill requires the Governor to appoint an Inspector General (IG) of the California Public Utilities Commission (CPUC), subject to Senate confirmation, for a six-year term. The Inspector General would oversee the CPUC's internal audit unit, with a focus on improving accountability and transparency in the agency's executive and operational management.

Senate Amendments

Current Committee Recommendation: Senate Amendments be Concurred In

1. Remove the entire contents of the bill, previously related to affordable home internet.
2. Replace the bill's contents with the present language related to an IG at the CPUC.

COMMENTS

The CPUC's Chief Internal Auditor, created by SB 19 (Hill) Chapter 421, Statutes of 2017, reports to the CPUC's commissioners through the Audit Committee and oversees a six-person Office of Internal Audit Services that conducts assurance, advisory, and risk-assessment work, completing nearly 30 audits over five years. The Internal Auditor's reports are internal, unlike federal IG offices, where about half of the federal IGs are presidentially appointed with Senate confirmation and operate independently within their agencies.

This bill replaces the Chief Internal Auditor at the CPUC with an IG modeled on that federal approach, appointed by the Governor and confirmed by the Senate for a six-year term. This measure raises the question of whether the current arrangement – where the auditor serves at the commissioners' pleasure and reports are not public – still fits given growing scrutiny of CPUC operations, including the author's concerns about a federal IG audit that found dead and duplicate Lifeline subscribers enrolled by California providers, with no public CPUC follow-up.

This bill grants the new IG office the ability to access records from the CPUC and utilities. The new IG office can also request records from other entities that are regulated by the CPUC and participate in programs administered by the CPUC.

According to the Author

"Although the California Public Utilities Commission is an independent agency of state government, its internal operations should be transparent to the public and subject to regular independent review by an outside entity to ensure efficient operations, economic administration of ratepayer funds, and compliance with state law. As utility costs continue to rise, regulatory decisions are continuously delayed, grant funds are held back for years, and Commissioners decline to participate in legislative oversight hearings it is clear that more accountability is needed on the agency operations. By establishing an independent Inspector General at the CPUC, the public and the Legislature will be better informed about the agency's internal operations."

Arguments in Support

None received.

Arguments in Opposition

The California Water Association (CWA) opposes this bill on three grounds: 1) the bill was substantially amended late in session, leaving stakeholders and the Legislature insufficient time to evaluate its merits or unintended consequences; 2) the bill would politicize the CPUC, a quasi-judicial body whose independence underpins its credibility in ratemaking and technical proceedings, by installing a politically appointed Inspector General within its structure, eroding institutional integrity and public confidence; and 3) the CPUC already has robust audit capacity, making the new office a duplicative cost to ratepayers.

FISCAL COMMENTS

According to the Senate Appropriations Committee, ongoing costs of about $2.5 million annually for the CPUC to implement the provisions of this bill.

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 7-2-1

YES: Boerner, Ahrens, Bonta, Caloza, Garcia, Lowenthal, Rogers

NO: Hoover, Castillo

ABS, ABST OR NV: Blanca Rubio

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 58-18-3

YES: Addis, Aguiar-Curry, Ahrens, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Ávila Farías, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

ABS, ABST OR NV: Arambula, Flora, Hadwick

SENATE FLOOR: 30-7-3

YES: Allen, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Cortese, Durazo, Gonzalez, Grayson, Hurtado, Laird, Limón, McGuire, McNerney, Menjivar, Padilla, Pérez, Reyes, Richardson, Rubio, Smallwood-Cuevas, Stern, Umberg, Wahab, Weber Pierson, Wiener

NO: Alvarado-Gil, Choi, Dahle, Grove, Jones, Niello, Seyarto

ABS, ABST OR NV: Ochoa Bogh, Strickland, Valladares

ASM UTILITIES AND ENERGY: 17-0-1

YES: Petrie-Norris, Patterson, Boerner, Calderon, Chen, Davies, Harabedian, Hart, Irwin, Kalra, Papan, Rogers, Schiavo, Schultz, Ta, Wallis, Zbur

ABS, ABST OR NV: Mark González

UPDATED

VERSION: August 21, 2026

CONSULTANT: Laura Shybut / U. & E. / (916) 319-2083 FN: 0004289

CONCURRENCE IN SENATE AMENDMENTS

CSA2 Bill Id:AB 353

Author:(Boerner)

As Amended Ver:August 21, 2026

Majority vote

SUMMARY

Original Committee of Reference: Communications and Conveyance

This bill requires the Governor to appoint an Inspector General (IG) of the California Public Utilities Commission (CPUC), subject to Senate confirmation, for a six-year term. The Inspector General would oversee the CPUC's internal audit unit, with a focus on improving accountability and transparency in the agency's executive and operational management.

Senate Amendments

Current Committee Recommendation: Senate Amendments be Concurred In

1. Remove the entire contents of the bill, previously related to affordable home internet.
2. Replace the bill's contents with the present language related to an IG at the CPUC.

COMMENTS

The CPUC's Chief Internal Auditor, created by SB 19 (Hill) Chapter 421, Statutes of 2017, reports to the CPUC's commissioners through the Audit Committee and oversees a six-person Office of Internal Audit Services that conducts assurance, advisory, and risk-assessment work, completing nearly 30 audits over five years. The Internal Auditor's reports are internal, unlike federal IG offices, where about half of the federal IGs are presidentially appointed with Senate confirmation and operate independently within their agencies.

This bill replaces the Chief Internal Auditor at the CPUC with an IG modeled on that federal approach, appointed by the Governor and confirmed by the Senate for a six-year term. This measure raises the question of whether the current arrangement – where the auditor serves at the commissioners' pleasure and reports are not public – still fits given growing scrutiny of CPUC operations, including the author's concerns about a federal IG audit that found dead and duplicate Lifeline subscribers enrolled by California providers, with no public CPUC follow-up.

This bill grants the new IG office the ability to access records from the CPUC and utilities. The new IG office can also request records from other entities that are regulated by the CPUC and participate in programs administered by the CPUC.

According to the Author

"Although the California Public Utilities Commission is an independent agency of state government, its internal operations should be transparent to the public and subject to regular independent review by an outside entity to ensure efficient operations, economic administration of ratepayer funds, and compliance with state law. As utility costs continue to rise, regulatory decisions are continuously delayed, grant funds are held back for years, and Commissioners decline to participate in legislative oversight hearings it is clear that more accountability is needed on the agency operations. By establishing an independent Inspector General at the CPUC, the public and the Legislature will be better informed about the agency's internal operations."

Arguments in Support

None received.

Arguments in Opposition

The California Water Association (CWA) opposes this bill on three grounds: 1) the bill was substantially amended late in session, leaving stakeholders and the Legislature insufficient time to evaluate its merits or unintended consequences; 2) the bill would politicize the CPUC, a quasi-judicial body whose independence underpins its credibility in ratemaking and technical proceedings, by installing a politically appointed Inspector General within its structure, eroding institutional integrity and public confidence; and 3) the CPUC already has robust audit capacity, making the new office a duplicative cost to ratepayers.

FISCAL COMMENTS

According to the Senate Appropriations Committee, ongoing costs of about $2.5 million annually for the CPUC to implement the provisions of this bill.

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 7-2-1

YES: Boerner, Ahrens, Bonta, Caloza, Garcia, Lowenthal, Rogers

NO: Hoover, Castillo

ABS, ABST OR NV: Blanca Rubio

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 58-18-3

YES: Addis, Aguiar-Curry, Ahrens, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Ávila Farías, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

ABS, ABST OR NV: Arambula, Flora, Hadwick

SENATE FLOOR: 30-7-3

YES: Allen, Archuleta, Arreguín, Ashby, Becker, Blakespear, Cabaldon, Caballero, Cervantes, Cortese, Durazo, Gonzalez, Grayson, Hurtado, Laird, Limón, McGuire, McNerney, Menjivar, Padilla, Pérez, Reyes, Richardson, Rubio, Smallwood-Cuevas, Stern, Umberg, Wahab, Weber Pierson, Wiener

NO: Alvarado-Gil, Choi, Dahle, Grove, Jones, Niello, Seyarto

ABS, ABST OR NV: Ochoa Bogh, Strickland, Valladares

ASM UTILITIES AND ENERGY: 17-0-1

YES: Petrie-Norris, Patterson, Boerner, Calderon, Chen, Davies, Harabedian, Hart, Irwin, Kalra, Papan, Rogers, Schiavo, Schultz, Ta, Wallis, Zbur

ABS, ABST OR NV: Mark González

UPDATED

VERSION: August 21, 2026

CONSULTANT: Laura Shybut / U. & E. / (916) 319-2083 FN: 0004289

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 353

Author:(Boerner)

As Amended Ver:August 21, 2026

Majority vote

SUMMARY

This bill requires the Governor to appoint an Inspector General (IG) of the California Public Utilities Commission (CPUC), subject to Senate confirmation, for a six-year term. The Inspector General would oversee the CPUC′s internal audit unit, with a focus on improving accountability and transparency in the agency′s executive and operational management.

Senate Amendments

1. Remove the entire contents of the bill, previously related to affordable home internet.
2. Replace the bill′s contents with the present language related to an IG at the CPUC.

COMMENTS

The CPUC′s Chief Internal Auditor, created by SB 19 (Hill, Chapter 421, Statutes of 2017), reports to the CPUC′s commissioners through the Audit Committee and oversees a six-person Office of Internal Audit Services that conducts assurance, advisory, and risk-assessment work, completing nearly 30 audits over five years. The Internal Auditor′s reports are internal, unlike federal IG offices, where about half of the federal IGs are presidentially appointed with Senate confirmation and operate independently within their agencies.

This bill replaces the Chief Internal Auditor at the CPUC with an IG modeled on that federal approach, appointed by the Governor and confirmed by the Senate for a six-year term. This measure raises the question of whether the current arrangement – where the auditor serves at the commissioners′ pleasure and reports are not public – still fits given growing scrutiny of CPUC operations, including the author′s concerns about a federal IG audit that found dead and duplicate Lifeline subscribers enrolled by California providers, with no public CPUC follow-up.

This bill grants the new IG office the ability to access records from the CPUC and utilities. The new IG office can also request records from other entities that are regulated by the CPUC and participate in programs administered by the CPUC.

According to the Author

According to the author, ″Although the California Public Utilities Commission is an independent agency of state government, its internal operations should be transparent to the public and subject to regular independent review by an outside entity to ensure efficient operations, economic administration of ratepayer funds, and compliance with state law. As utility costs continue to rise, regulatory decisions are continuously delayed, grant funds are held back for years, and Commissioners decline to participate in legislative oversight hearings it is clear that more accountability is needed on the agency operations. By establishing an independent Inspector General at the CPUC, the public and the Legislature will be better informed about the agency′s internal operations.″

Arguments in Support

None received.

Arguments in Opposition

The California Water Association (CWA) opposes this bill on three grounds: 1) the bill was substantially amended late in session, leaving stakeholders and the Legislature insufficient time to evaluate its merits or unintended consequences; 2) the bill would politicize the CPUC, a quasi-judicial body whose independence underpins its credibility in ratemaking and technical proceedings, by installing a politically appointed Inspector General within its structure, eroding institutional integrity and public confidence; and 3) the CPUC already has robust audit capacity, making the new office a duplicative cost to ratepayers.

FISCAL COMMENTS

According to the Senate Appropriations Committee, ongoing costs of about $2.5 million annually for the CPUC to implement the provisions of this bill.

VOTES:

ASM COMMUNICATIONS AND CONVEYANCE: 7-2-1

YES: Boerner, Ahrens, Bonta, Caloza, Garcia, Lowenthal, Rogers

NO: Hoover, Castillo

ABS, ABST OR NV: Blanca Rubio

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

ASSEMBLY FLOOR: 58-18-3

YES: Addis, Aguiar-Curry, Ahrens, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NO: Alanis, Ávila Farías, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

ABS, ABST OR NV: Arambula, Flora, Hadwick

UPDATED

VERSION: August 21, 2026

CONSULTANT: Laura Shybut / U. & E. / (916) 319-2083 FN: 0004281

 THIRD READING  

Bill No: AB 353

Author: Boerner (D)

Amended: 8/21/26 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 15-2, 6/30/26

AYES: Allen, Ochoa Bogh, Archuleta, Arreguín, Ashby, Becker, Caballero, Gonzalez, Grove, Hurtado, McNerney, Reyes, Richardson, Stern, Wahab

NOES: Dahle, Strickland

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/13/26

AYES: Cervantes, Cabaldon, Grayson, Richardson, Wahab

NOES: Seyarto, Dahle

ASSEMBLY FLOOR: 58-18, 6/4/25 - See last page for vote

SUBJECT: Public Utilities Commission: Inspector General

SOURCE: Author

DIGEST:

1. This bill requires the Governor to appoint an Inspector General, subject to Senate confirmation, to serve a six-year term, to be responsible for the oversight of the internal audit unit at the California Public Utilities Commission (CPUC) focused on improving accountability and transparency of executive and state management of the agency.

Senate Floor Amendments of 08/21/26 make changes to narrow the Inspector General’s authority to access and examine records of entities who are regulated by the CPUC, but are not public utilities.

ANALYSIS:

Existing law:

1. Establishes and vests the CPUC with regulatory authority over public utilities. (Article XII of the California Constitution)
2. Requires the CPUC to regulate public utilities and to establish just and reasonable rates for service, and establishes a division of the CPUC responsible for consumer protection and safety. (Public Utilities Code §451 and §309.7)
3. Requires the CPUC to appoint a chief internal auditor to hold office at the pleasure of the CPUC. (Public Utilities Code §307.6 (a))
4. Requires the chief internal auditor to be responsible for the oversight of the internal audit unit and to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the CPUC to improve accountability and transparency to executive and state management, and to report their findings and recommendations directly to an audit subcommittee of the commission. (Public Utilities Code §307.6 (b))
5. Establishes the State Auditor’s Office under the direction of the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy independent of the executive branch and legislative control. Provides the State Auditor’s Office with duties to examine and report annually upon the financial statements prepared by the executive branch of the state and to perform other related assignments, including performance audits mandated by statute. (Government Code §8543 et seq.)
6. Establishes requirements for internal auditors in state government, including a framework to establish a level of independence for the internal auditors and a reporting structure that allows for disclosure to external parties, such as the Governor’s office or the State Auditor. (Government Code §13885 et seq.)

This bill:

1. Requires the Governor to appoint an Inspector General, subject to Senate confirmation, to be responsible for the oversight of the internal audit unit and would instead require the Inspector General to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management.
2. Requires the Inspector General to ensure, among other things, that the CPUC administers funds and programs in a prescribed manner, fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and monitors reporting compliance. 
3. Provides for the appointment and removal of the Inspector General to a six-year term and prohibits their removal except for good cause.
4. Authorizes the Inspector General to access and examine all records, files, documents, accounts, reports, correspondence, or other property of the CPUC and public utilities.
5. Requires entities who are regulated by the CPUC, but are not public utilities, and participate in programs administered by the CPUC, to make available to the Inspector General all relevant records related to those programs upon the request of the Inspector General.
6. Requires the Inspector General to report all audit findings and recommendations to the Governor and the Legislature on an ongoing basis, and annually.

Background

Chief Internal Auditor at the CPUC. The Chief Internal Auditor reports to the CPUC Commissioners, through the CPUC’s Audit Committee, and under the general direction of the President. The Chief Internal Auditor position was codified by statute pursuant to SB 19 (Hill, Chapter 421, Statutes of 2017) which required the Chief Internal Auditor to be responsible for oversight of the internal audit unit and to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the CPUC to improve accountability to executive and state management. The Office of Internal Audit Services (IAS) is intended to provide independent, objective and advisory services designed to add value and improve the CPUC’s internal operations. According to the CPUC website, the IAS Office provides the following services: assurance (financial, operational, compliance, and IT risk-based audits), advisory (advise management on change initiatives, control effectiveness, enhancements to risk management, including special management reviews and investigations of alleged noncompliance); and anticipating and assessing risks (assist business owners in understanding risks and in crafting preventive mitigating controls); as well as, developing the internal audit plan for the CPUC. The IAS Office is composed of six employees (out of over 1,000 employees in total at the agency). According to the CPUC, the IAS Office completed nearly 30 audits of CPUC operations over a five-year timeframe. The Internal Auditor also receives notice of whistleblower complaints submitted to the CPUC’s internal compliance unit and is informed of the investigation results and management’s handling of corrective actions. Internal audit reports are intended for the internal use of the CPUC, and therefore are not posted publicly; however, they are public records and not exempt from disclosure.

About Inspector Generals. California state government has a few Inspector Generals (for the High-speed Rail Authority, the California Highway Patrol, and a handful of others). However, Inspector Generals are a more common position and function in the federal government. Under the Inspector General Act of 1978, the role of federal Inspector Generals is “to prevent and detect waste, fraud, and abuse relating to their agency’s programs and operations, and to promote economy, efficiency, and effectiveness in the agency’s operations and programs.” Federal Inspector Generals are located within their agencies but conduct their audits and investigations independently from their agencies. Roughly half of the federal Inspector Generals are appointed by the President of the United States, subject to U.S. Senate confirmation, and approximately half are appointed by the agency head. 

Comments

What’s in a name? This bill replaces the Chief Internal Auditor with an Inspector General appointed by the Governor and confirmed by the Senate, to serve a six-year term. The Inspector General’s role as envisioned in this bill is akin to those in federal government, including the appointment, independence, and powers to investigate and audit the agency.

Revisiting the internal audit functions at the CPUC. SB 19 (Hill, Chapter 421, Statutes of 2017) required the CPUC to appoint a Chief Internal Auditor who holds the office at the pleasure of the CPUC and is responsible for the oversight of the internal audit unit and plan. At the time, the administration argued that such appointment authority will help ensure that the CPUC commissioners can better manage the workload and operations of the CPUC. While those benefits were noted, there was also concern that the appointment by the commissioners could result in less independence of the Chief Internal Auditor. Given that the current audits of the IAS Office are not public, it’s difficult to know whether there is a need to revamp the unit and replace the head with the Inspector General envisioned by this bill. The author argues that a more transparent oversight process to the internal operations of the CPUC is needed to better inform the public and the Legislature about areas of improvement. While the CPUC is statutorily required to have an internal auditor that exercises some independence, their office reports to CPUC Commissioners and those internal reports are not regularly made public.

Is there a need for this change? The author contends that growing frustration in recent years with the CPUC’s operations makes it clear more oversight and accountability is needed. The author’s office cites concerns with a Federal Communications Commission (FCC) Inspector General audit that found that deceased Lifeline phone subscribers (federal subsidy program for income-eligible households) were enrolled by providers in California and found evidence that Lifeline subscribers were enrolled in multiple states concurrently. In February, the author met with the FCC Inspector General and learned the fraud was committed by three providers in California. The author contends the CPUC hasn’t published any follow-up audits or investigations to refute the FCC’s report or identify the three providers.

Is the proposed broad access to other public offices necessary? This bill requires the new office to have access to all public offices or institutions in the state during regular business hours, and access, examine, and reproduce all records, files, documents, accounts, reports, vouchers, files and all other records for any audit or investigation. The author’s office contends that such broad authority is consistent with CalTrans Inspector General powers pursuant to Government Code Section 14461 and important to the proposed Inspector General at the CPUC in order to avoid delays from public records act requests.

Recent amendments narrow the Inspector General’s authority relative to entities the CPUC regulates who are not public utilities. The bill requires entities regulated by the CPUC that are not public utilities and participate in CPUC programs to provide the Inspector General with access to examine all records, files, documents, accounts, reports, correspondence, or other property pertaining to those programs upon request of the Inspector General. According to the author, the recent amendments are intended to address concerns raised by various telecommunications providers who are not public utilities but are regulated by the CPUC and may participate in particular programs, such as the California Advanced Services Fund which provides grants to build out broadband infrastructure. This approach likely also applies to other entities, including charter-party carriers, including transportation network companies, such as Uber.

Related/Prior Legislation

ACA 9 (Boerner, 2026) would have placed a ballot measure before voters to modify the CPUC’s constitutional composition and authority to do the following: 1) expands the membership of the CPUC from five to nine commissioners to include two commissioners appointed by the Speaker of the Assembly and two commissioners appointed by the Sente Rules Committee; 2) deletes telephone and telegraph service from the constitutional definition of a utility service; 3) specifies that the Legislature may set the CPUC’s duties related to telecommunications services, including assigning those duties to another state agency; and 4) requires the CPUC to consider affordability when setting rates. The bill was held by the author in the Senate Energy, Utilities, and Communications Committee.

AB 705 (Boerner, 2025) the bill contained similar language to this bill. The bill was held by the Senate Appropriations Committee.

(See the Senate Energy, Utilities and Communications Committee Analysis for more related legislation.)

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

According to the Senate Appropriations Committee, ongoing costs of about $2.5 million annually for the California Public Utilities Commission (CPUC) to implement the provisions of this bill. CPUC workload could include needing to support the Inspector General's audits and investigations of the CPUC's financial, management, operational, and information technology functions, respond to data requests and document production across its divisions, and post the Inspector General's annual summaries on its internet website (ratepayer funds).

SUPPORT: (Verified 8/21/26)

None received

OPPOSITION: (Verified 8/21/26)

California Water Association

ARGUMENTS IN SUPPORT: According to the author:

Although the California Public Utilities Commission is an independent agency of state government, its internal operations should be transparent to the public and subject to regular independent review by an outside entity to ensure efficient operations, economic administration of ratepayer funds, and compliance with state law. As utility costs continue to rise, regulatory decisions are continuously delayed, grant funds are held back for years, and Commissioners decline to participate in legislative oversight hearings it is clear that more accountability is needed on the agency operations. By establishing an independent Inspector General at the CPUC, the public and the Legislature will be better informed about the agency’s internal operations.

ARGUMENTS IN OPPOSITION: The California Water Association (CWA) states:

CWA opposes this measure on three grounds. The bill has not had adequate time for deliberation. AB 353 was substantially amended late in the legislative session, leaving stakeholders, the regulated community, and the Legislature itself insufficient time to evaluate its merits, identify unintended consequences, or engage in meaningful analysis. …The bill politicizes a quasi-judicial agency. The CPUC was established as an independent regulatory body vested with constitutional authority over California's public utilities. That independence is not incidental — it is the foundation of the Commission's credibility in setting just and reasonable rates and resolving complex technical proceedings. AB 353 would install a politically appointed Inspector General within the Commission's structure, injecting political considerations into an institution that is designed to operate independent of political influence. CWA is deeply concerned that this change would erode the institutional integrity of the CPUC and undermine public confidence in its proceedings. The CPUC already has robust audit capacity — ratepayers should not pay for duplicative functions.

ASSEMBLY FLOOR: 58-18, 6/4/25

AYES: Addis, Aguiar-Curry, Ahrens, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Ávila Farías, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

NO VOTE RECORDED: Arambula, Flora, Hadwick

Prepared by: Nidia Bautista / E., U. & C. / (916) 651-4107

8/24/26 11:10:01

**** END ****

 THIRD READING  

Bill No: AB 353

Author: Boerner (D)

Amended: 8/3/26 in Senate

Vote: 21

SENATE ENERGY, U. & C. COMMITTEE: 15-2, 6/30/26

AYES: Allen, Ochoa Bogh, Archuleta, Arreguín, Ashby, Becker, Caballero, Gonzalez, Grove, Hurtado, McNerney, Reyes, Richardson, Stern, Wahab

NOES: Dahle, Strickland

SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/13/26

AYES: Cervantes, Cabaldon, Grayson, Richardson, Wahab

NOES: Seyarto, Dahle

ASSEMBLY FLOOR: 58-18, 6/4/25 - See last page for vote

SUBJECT: Public Utilities Commission: Inspector General

SOURCE: Author

DIGEST:

1. This bill requires the Governor to appoint an Inspector General, subject to Senate confirmation, to serve a six-year term, to be responsible for the oversight of the internal audit unit at the California Public Utilities Commission (CPUC) focused on improving accountability and transparency of executive and state management of the agency.

ANALYSIS:

Existing law:

1. Establishes and vests the CPUC with regulatory authority over public utilities. (Article XII of the California Constitution)
2. Requires the CPUC to regulate public utilities and to establish just and reasonable rates for service, and establishes a division of the CPUC responsible for consumer protection and safety. (Public Utilities Code §451 and §309.7)
3. Requires the CPUC to appoint a chief internal auditor to hold office at the pleasure of the CPUC. (Public Utilities Code §307.6 (a))
4. Requires the chief internal auditor to be responsible for the oversight of the internal audit unit and to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the CPUC to improve accountability and transparency to executive and state management, and to report their findings and recommendations directly to an audit subcommittee of the commission. (Public Utilities Code §307.6 (b))
5. Establishes the State Auditor’s Office under the direction of the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy independent of the executive branch and legislative control. Provides the State Auditor’s Office with duties to examine and report annually upon the financial statements prepared by the executive branch of the state and to perform other related assignments, including performance audits mandated by statute. (Government Code §8543 et seq.)
6. Establishes requirements for internal auditors in state government, including a framework to establish a level of independence for the internal auditors and a reporting structure that allows for disclosure to external parties, such as the Governor’s office or the State Auditor. (Government Code §13885 et seq.)

This bill:

1. Requires the Governor to appoint an Inspector General, subject to Senate confirmation, to be responsible for the oversight of the internal audit unit and would instead require the Inspector General to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the commission to improve accountability and transparency to executive and state management.
2. Requires the Inspector General to ensure, among other things, that the CPUC administers funds and programs in a prescribed manner, fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and monitors reporting compliance. 
3. Provides for the appointment and removal of the Inspector General to a six-year term and prohibits their removal except for good cause.
4. Authorizes the Inspector General to access and examine all records, files, documents, accounts, reports, correspondence, or other property of the CPUC, public utilities, and other entities regulated by the CPUC.
5. Requires the Inspector General to report all audit findings and recommendations to the Governor and the Legislature on an ongoing basis, and annually.

Background

Chief Internal Auditor at the CPUC. The Chief Internal Auditor reports to the CPUC Commissioners, through the CPUC’s Audit Committee, and under the general direction of the President. The Chief Internal Auditor position was codified by statute pursuant to SB 19 (Hill, Chapter 421, Statutes of 2017) which required the Chief Internal Auditor to be responsible for oversight of the internal audit unit and to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the CPUC to improve accountability to executive and state management. The Office of Internal Audit Services (IAS) is intended to provide independent, objective and advisory services designed to add value and improve the CPUC’s internal operations. According to the CPUC website, the IAS Office provides the following services: assurance (financial, operational, compliance, and IT risk-based audits), advisory (advise management on change initiatives, control effectiveness, enhancements to risk management, including special management reviews and investigations of alleged noncompliance); and anticipating and assessing risks (assist business owners in understanding risks and in crafting preventive mitigating controls); as well as, developing the internal audit plan for the CPUC. The IAS Office is composed of six employees (out of over 1,000 employees in total at the agency). According to the CPUC, the IAS Office completed nearly 30 audits of CPUC operations over a five-year timeframe. The Internal Auditor also receives notice of whistleblower complaints submitted to the CPUC’s internal compliance unit and is informed of the investigation results and management’s handling of corrective actions. Internal audit reports are intended for the internal use of the CPUC, and therefore are not posted publicly; however, they are public records and not exempt from disclosure.

About Inspector Generals. California state government has a few Inspector Generals (for the High-speed Rail Authority, the California Highway Patrol, and a handful of others). However, Inspector Generals are a more common position and function in the federal government. Under the Inspector General Act of 1978, the role of federal Inspector Generals is “to prevent and detect waste, fraud, and abuse relating to their agency’s programs and operations, and to promote economy, efficiency, and effectiveness in the agency’s operations and programs.” Federal Inspector Generals are located within their agencies but conduct their audits and investigations independently from their agencies. Roughly half of the federal Inspector Generals are appointed by the President of the United States, subject to U.S. Senate confirmation, and approximately half are appointed by the agency head. 

Comments

What’s in a name? This bill replaces the Chief Internal Auditor with an Inspector General appointed by the Governor and confirmed by the Senate, to serve a six-year term. The Inspector General’s role as envisioned in this bill is akin to those in federal government, including the appointment, independence, and powers to investigate and audit the agency.

Revisiting the internal audit functions at the CPUC. SB 19 (Hill, Chapter 421, Statutes of 2017) required the CPUC to appoint a Chief Internal Auditor who holds the office at the pleasure of the CPUC and is responsible for the oversight of the internal audit unit and plan. At the time, the administration argued that such appointment authority will help ensure that the CPUC commissioners can better manage the workload and operations of the CPUC. While those benefits were noted, there was also concern that the appointment by the commissioners could result in less independence of the Chief Internal Auditor. Given that the current audits of the IAS Office are not public, it’s difficult to know whether there is a need to revamp the unit and replace the head with the Inspector General envisioned by this bill. The author argues that a more transparent oversight process to the internal operations of the CPUC is needed to better inform the public and the Legislature about areas of improvement. While the CPUC is statutorily required to have an internal auditor that exercises some independence, their office reports to CPUC Commissioners and those internal reports are not regularly made public.

Is there a need for this change? The author contends that growing frustration in recent years with the CPUC’s operations makes it clear more oversight and accountability is needed. The author’s office cites concerns with a Federal Communications Commission (FCC) Inspector General audit that found that deceased Lifeline phone subscribers (federal subsidy program for income-eligible households) were enrolled by providers in California and found evidence that Lifeline subscribers were enrolled in multiple states concurrently. In February, the author met with the FCC Inspector General and learned the fraud was committed by three providers in California. The author contends the CPUC hasn’t published any follow-up audits or investigations to refute the FCC’s report or identify the three providers.

Is the proposed broad access to other public offices necessary? This bill requires the new office to have access to all public offices or institutions in the state during regular business hours, and access, examine, and reproduce all records, files, documents, accounts, reports, vouchers, files and all other records for any audit or investigation. The author’s office contends that such broad authority is consistent with CalTrans Inspector General powers pursuant to Government Code Section 14461 and important to the proposed Inspector General at the CPUC in order to avoid delays from public records act requests.

Related/Prior Legislation

ACA 9 (Boerner, 2026) would have placed a ballot measure before voters to modify the CPUC’s constitutional composition and authority to do the following: 1) expands the membership of the CPUC from five to nine commissioners to include two commissioners appointed by the Speaker of the Assembly and two commissioners appointed by the Sente Rules Committee; 2) deletes telephone and telegraph service from the constitutional definition of a utility service; 3) specifies that the Legislature may set the CPUC’s duties related to telecommunications services, including assigning those duties to another state agency; and 4) requires the CPUC to consider affordability when setting rates. The bill was held by the author in the Senate Energy, Utilities, and Communications Committee.

AB 705 (Boerner, 2025) the bill contained similar language to this bill. The bill was held by the Senate Appropriations Committee.

(See Policy Committee Analysis for more related legislation.)

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

According to the Senate Appropriations Committee, ongoing costs of about $2.5 million annually for the California Public Utilities Commission (CPUC) to implement the provisions of this bill. CPUC workload could include needing to support the Inspector General's audits and investigations of the CPUC's financial, management, operational, and information technology functions, respond to data requests and document production across its divisions, and post the Inspector General's annual summaries on its internet website (ratepayer funds).

SUPPORT: (Verified 8/13/26)

None received

OPPOSITION: (Verified 8/13/26)

California Water Association

ARGUMENTS IN SUPPORT: According to the author:

Although the California Public Utilities Commission is an independent agency of state government, its internal operations should be transparent to the public and subject to regular independent review by an outside entity to ensure efficient operations, economic administration of ratepayer funds, and compliance with state law. As utility costs continue to rise, regulatory decisions are continuously delayed, grant funds are held back for years, and Commissioners decline to participate in legislative oversight hearings it is clear that more accountability is needed on the agency operations. By establishing an independent Inspector General at the CPUC, the public and the Legislature will be better informed about the agency’s internal operations.

ARGUMENTS IN OPPOSITION: The California Water Association (CWA) states:

CWA opposes this measure on three grounds. The bill has not had adequate time for deliberation. AB 353 was substantially amended late in the legislative session, leaving stakeholders, the regulated community, and the Legislature itself insufficient time to evaluate its merits, identify unintended consequences, or engage in meaningful analysis. …The bill politicizes a quasi-judicial agency. The CPUC was established as an independent regulatory body vested with constitutional authority over California's public utilities. That independence is not incidental — it is the foundation of the Commission's credibility in setting just and reasonable rates and resolving complex technical proceedings. AB 353 would install a politically appointed Inspector General within the Commission's structure, injecting political considerations into an institution that is designed to operate independent of political influence. CWA is deeply concerned that this change would erode the institutional integrity of the CPUC and undermine public confidence in its proceedings. The CPUC already has robust audit capacity — ratepayers should not pay for duplicative functions.

ASSEMBLY FLOOR: 58-18, 6/4/25

AYES: Addis, Aguiar-Curry, Ahrens, Alvarez, Bains, Bauer-Kahan, Bennett, Berman, Boerner, Bonta, Bryan, Calderon, Caloza, Carrillo, Connolly, Elhawary, Fong, Gabriel, Garcia, Gipson, Mark González, Haney, Harabedian, Hart, Irwin, Jackson, Kalra, Krell, Lee, Lowenthal, McKinnor, Muratsuchi, Nguyen, Ortega, Pacheco, Papan, Patel, Pellerin, Petrie-Norris, Quirk-Silva, Ramos, Ransom, Celeste Rodriguez, Michelle Rodriguez, Rogers, Blanca Rubio, Schiavo, Schultz, Sharp-Collins, Solache, Soria, Stefani, Valencia, Ward, Wicks, Wilson, Zbur, Rivas

NOES: Alanis, Ávila Farías, Castillo, Chen, Davies, DeMaio, Dixon, Ellis, Gallagher, Jeff Gonzalez, Hoover, Lackey, Macedo, Patterson, Sanchez, Ta, Tangipa, Wallis

NO VOTE RECORDED: Arambula, Flora, Hadwick

Prepared by: Nidia Bautista / E., U. & C. / (916) 651-4107

8/14/26 10:44:49

**** END ****

SENATE COMMITTEE ON

Senator Sabrina Cervantes, Chair

2025 - 2026 Regular Session

AB 353 (Boerner) - Public Utilities Commission: Inspector General

Bill Summary:

This bill would require the Governor to appoint an Inspector General, subject to Senate confirmation, to serve a six-year term and oversee the CPUC's (CPUC’s) existing internal audit unit, as specified.

Fiscal Impact:

• Ongoing costs of about $2.5 million annually for the California Public Utilities Commission (CPUC) to implement the provisions of this bill. CPUC workload could include needing to support the Inspector General's audits and investigations of the CPUC's financial, management, operational, and information technology functions, respond to data requests and document production across its divisions, and post the Inspector General's annual summaries on its internet website (ratepayer funds).

Background:

The CPUC maintains an internal audit function established in statute, staffed within the agency and funded through the same ratepayer-derived account that supports the CPUC's operations generally.

The internal audit unit. SB 19 (Hill, 2017) codified the position of chief internal auditor, appointed by the CPUC and holding office at its pleasure, responsible for oversight of the internal audit unit and for planning, initiating, and performing audits of key financial, management, operational, and information technology functions within the CPUC. The chief internal auditor reports to the commissioners through the CPUC's Audit Committee, under the general direction of the president. The unit — the Office of Internal Audit Services — provides assurance services (financial, operational, compliance, and information technology risk-based audits), advisory services (including special management reviews and investigations of alleged noncompliance), and risk assessment, and develops the CPUC's internal audit plan. The office is composed of six employees, and according to the CPUC completed nearly 30 audits of CPUC operations over a five-year timeframe. The internal auditor also receives notice of whistleblower complaints submitted to the CPUC's internal compliance unit and is informed of investigation results and management's handling of corrective actions. Internal audit reports are intended for the CPUC's internal use and are not posted publicly, but they are public records and not exempt from disclosure.

PUCURA. The CPUC's energy work is supported by the Public Utilities Commission Utilities Reimbursement Account (PUCURA), funded by fees paid by regulated utilities and ultimately borne by ratepayers. The internal audit function, as part of the CPUC's administrative operations, is supported by the same account structure.

Audit and oversight structures in state government. Existing law establishes requirements for internal auditors in state government, including a framework for auditor independence and a reporting structure allowing disclosure to external parties such as the Governor's office or the State Auditor, and separately establishes the State Auditor's Office, independent of executive and legislative control, to examine and report on the state's financial statements and perform statutorily mandated performance audits. California state government also includes a small number of Inspectors General — for the High-Speed Rail Authority, the California Highway Patrol, and the Department of Transportation under Government Code Section 14461, among a handful of others. Inspectors General are a more common function in the federal government, where, under the Inspector General Act of 1978, they prevent and detect waste, fraud, and abuse relating to their agencies' programs and conduct audits and investigations independently from within their agencies; roughly half are appointed by the President subject to Senate confirmation, and roughly half by the agency head.

Proposed Law:

This bill would:

1. Delete the requirement that the CPUC appoint a chief internal auditor who holds office at the pleasure of the CPUC, and instead require the Governor to appoint an Inspector General, subject to Senate confirmation, who would serve a six-year term and could not be removed during that term except for good cause. Any basis for removal would be stated in writing, sent to the Secretary of the Senate and the Chief Clerk of the Assembly at the time of the removal, and deemed a public document.
2. Delete the requirement that the chief internal auditor report all audit findings and recommendations made under the chief internal auditor's jurisdiction directly to an audit subcommittee of the CPUC.
3. Require the Inspector General to be responsible for the oversight of the internal audit unit and to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the CPUC to improve accountability and transparency to executive and state management, and, in addition, to ensure all of the following:
   1. The CPUC administers funds under its control, including ratepayer funds, efficiently, effectively, economically, and in compliance with applicable state and federal requirements.
   2. The CPUC's programs function consistent with applicable accounting standards and practices and are administered effectively, efficiently, and economically.
   3. The CPUC fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program, and makes efficient, effective, and financially responsible decisions.
   4. The president of the CPUC, the Legislature, and the Governor are fully informed concerning fraud, improper activities, and other serious abuses or deficiencies relating to the expenditure of ratepayer funds or the administration of CPUC programs and operations.
   5. The CPUC monitors compliance for reports prepared by the CPUC that are required to be submitted to the Governor and Legislature.
4. Vest the Inspector General with the full authority to exercise all responsibility for maintaining a full scope, independent, and objective audit and investigation program.
5. Require the Inspector General to have access to, and authority to examine, all records, files, documents, accounts, reports, correspondence, or other property of the CPUC, public utilities, and other entities regulated by the CPUC. Authorize an authorized representative of the Inspector General to enter any public office or institution in this state, during regular business hours, and access, examine, and reproduce all records, files, documents, accounts, reports, vouchers, correspondence files, and all other records for any audit or investigation. Require an officer or employee of an agency or entity that has records or property in their possession or under their control, or that otherwise has access to records, to permit access to, and examination and reproduction of, the records or property upon request.
6. Require the Inspector General to report all audit findings and recommendations made under the Inspector General's jurisdiction to the Governor and the Legislature on an ongoing and current basis.
7. Require the Inspector General to report to the Governor and the Legislature at least annually, and upon request, with a summary of the Inspector General's investigation and audit findings and recommendations. Require the summary to be posted on the CPUC's internet website and otherwise made available to the public upon its release to the Governor, the CPUC, and the Legislature, and to include, but not be limited to, significant problems discovered by the Inspector General and whether the Inspector General's recommendations relative to audits and investigations have been implemented by the affected units and programs of the CPUC or affected external entities.
8. Require the Inspector General to comply with the state's internal auditor requirements under Part 3.5 of Division 3 of Title 2 of the Government Code.
9. Provide that no reimbursement is required by this bill pursuant to Section 6 of Article XIII B of the California Constitution.

Related Legislation:

ACA 9 (Boerner, 2026) would have placed a ballot measure before voters to expand the membership of the CPUC from five to nine commissioners, including two appointed by the Speaker of the Assembly and two by the Senate Rules Committee; delete telephone and telegraph service from the constitutional definition of a utility service; specify that the Legislature may set the CPUC's duties related to telecommunications services, including assigning those duties to another state agency; and require the CPUC to consider affordability when setting rates. The measure was held by the author in the Senate Energy, Utilities and Communications Committee.

AB 705 (Boerner, 2025) would have enacted provisions nearly identical to a prior version of this bill. The bill died in this committee.

SB 19 (Hill, 2017), among its provisions, established a chief internal auditor at the CPUC responsible for the oversight of the internal audit unit.

AB 2903 (Gatto, 2016) would have provided a suite of reforms of the operations of the CPUC, including clarifying the responsibilities and oversight of various positions, improvements to ethics practices, reports related to telecommunications services and CPUC staffing, and stating the intent of the Legislature to transfer most non-rail, for-hire transportation services to the State Transportation Agency, among others. The bill was never heard in its amended form.

ACA 11 (Gatto, 2016) would have placed a measure on the ballot to authorize the Legislature to reallocate or reassign all or a portion of the functions of the CPUC to other state agencies, departments, boards, or other entities, consistent with specified purposes, and would have repealed the provisions of the California Constitution pertaining to the CPUC effective January 1, 2019. The measure was never heard in the Senate Energy, Utilities and Communications Committee.

SB 215 (Leno-Hueso, 2016) enacted a suite of reforms of the rules, operations, and procedures of the CPUC pertaining to the laws and rules related to ex parte communications and the criteria and process for disqualification of commissioners to a proceeding.

SB 512 (Hill, 2016) enacted a suite of reforms of the operations and governance of the CPUC, including allowing intervenor compensation for certain local governments, requiring that specified information be available to the public, requiring specified reporting by the CPUC regarding the timeliness of proceedings, and applying the Code of Ethics from the Administrative Procedure Act to administrative law judges, among others.

SB 1017 (Hill, 2016) would have modified statutes that limit public access to utility-supplied documents at the CPUC, including specifying that an action arising from the California Public Records Act may be brought before the superior court instead of the Supreme Court. The bill died on the Assembly Floor.

AB 825 (Rendon, 2015) would have proposed a suite of reforms of the CPUC largely directed at increased transparency of the activities of the agency, including requiring the California State Auditor's Office to appoint an Inspector General within its office for the CPUC, expanding the roles and responsibilities of the CPUC public advisor, specifying additional requirements of commissioners, and increasing transparency of electric utilities' procurement, among others. The bill was vetoed.

SB 48 (Hill, 2015) would have proposed a suite of reforms of the governance and operations of the CPUC, including requiring sessions in Sacramento, applying the Code of Ethics from the Administrative Procedure Act to administrative law judges, and clarifying and augmenting the information the CPUC must provide the Legislature in its annual report, among others. The bill was vetoed.

SB 660 (Leno-Hueso, 2015) would have proposed a suite of reforms of the governance, rules, operations, and procedures of the CPUC, including reform of laws and rules related to ex parte communications, criteria and process for disqualification of commissioners to a proceeding, and authorizing the CPUC to appoint the chief administrative law judge. The bill was vetoed.

SB 1452 (Speier, 2006) established a process for the Legislature to be informed when auditor recommendations are not being implemented by state agencies.

-- END --

SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS

Senator Benjamin Allen, Chair

2025 - 2026 Regular

Bill No: Hearing Date: 6/30/2026

SUBJECT:

DIGEST: This bill transfers the existing internal audit functions at the California Public Utilities Commission (CPUC) to the Independent Office of Audits and Investigations (IOAI), as created by this bill, and names the head of the office, the Inspector General, who would be appointed by the Governor, and confirmed by the Senate, for a six-year term.

ANALYSIS:

Existing law:

1. Establishes and vests the CPUC with regulatory authority over public utilities. (Article XII of the California Constitution)
2. Requires the CPUC to regulate public utilities and to establish just and reasonable rates for service, and establishes a division of the CPUC responsible for consumer protection and safety. (Public Utilities Code §451 and §309.7)
3. Requires the CPUC to appoint a chief internal auditor to hold office at the pleasure of the CPUC. (Public Utilities Code §307.6 (a))
4. Requires the chief internal auditor to be responsible for the oversight of the internal audit unit and to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the CPUC to improve accountability and transparency to executive and state management. (Public Utilities Code §307.6 (b))
5. Establishes the State Auditor’s Office under the direction of the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy independent of the executive branch and legislative control. Provides the State Auditor’s Office with duties to examine and report annually upon the financial statements prepared by the executive branch of the state and to perform other related assignments, including performance audits mandated by statute. (Government Code §8543 et seq.)
6. Establishes requirements for internal auditors in state government, including a framework to establish a level of independence for the internal auditors and a reporting structure that allows for disclosure to external parties, such as the Governor’s office or the State Auditor. (Government Code §13885 et seq.)

This bill:

1. Repeals, as of January 1, 2028, the provision providing for the CPUC commissioners to appoint the chief internal auditor.
2. Requires, effective January 1, 2028, the internal audit unit of the CPUC and its staff are transferred to the IOAI, which this bill establishes within the CPUC, to ensure:
   1. The CPUC is administering funds under its control, including ratepayer funds efficiently and in compliance with applicable state and federal requirements.
   2. The CPUC’s programs are functioning consistent with applicable accounting standards and practices and are administered effectively.
   3. The CPUC is accomplishing mandated requirements, developing an annual audit plan, administering an effective enterprise risk management program, and is making efficient, effective, and financially responsible decisions.
   4. The President of the CPUC, the Legislature, and the Governor are fully informed concerning fraud, improper activities, and other serious abuses related to the expenditure of ratepayer funds or the administration of CPUC programs and operations.
   5. The CPUC is monitoring for compliance for reports prepared by the CPUC that are required to be submitted to the Governor and Legislature.
3. Provides for the appointment of the director of the IOAI by the Governor, subject to confirmation by the Senate, who would have the title of Inspector General, and serve a six-year term.
4. Requires that the IOAI have access and authority to examine all records, files, documents, accounts, reports, correspondence, or other property of the CPUC, public utilities, and other entities regulated by the CPUC, including entering any public office or institution in this state, during regular business hours.
5. Requires the Inspector General to report to the Governor and the Legislature on all audits and confidential investigation findings and recommendations made under the Inspector General’s jurisdiction.
6. Requires the Inspector General to report at least annually, and upon request, to the Governor and the Legislature with a summary of the Inspector General’s investigation and audit findings and recommendations. Requires the summary to be posted on the IOAI’s website and made publicly available.

Background

Office of Internal Audit Services (IAS) at the CPUC. The IAS is intended to provide independent, objective and advisory services designed to add value and improve the CPUC’s internal operations. The Chief Internal Auditor reports to the CPUC Commissioners, through the CPUC’s Audit Committee, and under the general direction of the President. The Chief Internal Auditor position was codified by statute pursuant to SB 19 (Hill, Chapter 421, Statutes of 2017) which required the Chief Internal Auditor to be responsible for oversight of the internal audit unit and to plan, initiate, and perform audits of key financial, management, operational, and information technology functions within the CPUC to improve accountability to executive and state management. According to the CPUC website, the IAS provides the following services: assurance (financial, operational, compliance, and IT risk-based audits), advisory (advise management on change initiatives, control effectiveness, enhancements to risk management, including special management reviews and investigations of alleged noncompliance); and anticipating and assessing risks (assist business owners in understanding risks and in crafting preventive mitigating controls); as well as, developing the internal audit plan for the CPUC. The IAS Office is composed of six employees (out of over 1,000 employees in total at the agency). According to the CPUC, the IAS Office completed nearly 30 audits of CPUC operations over a five-year timeframe. The Internal Auditor also receives notice of whistleblower complaints submitted to the CPUC’s internal compliance unit and is informed of the investigation results and management’s handling of corrective actions. Internal audit reports are intended for the internal use of the CPUC, and therefore are not posted publicly; however, they are public records and not exempt from disclosure.

About Inspector Generals. California state government has a few Inspector Generals (for the High-speed Rail Authority, the California Highway Patrol, and a handful of others). However, Inspector Generals are a more common position and function in the federal government. Under the Inspector General Act of 1978, the role of federal Inspector Generals is “to prevent and detect waste, fraud, and abuse relating to their agency’s programs and operations, and to promote economy, efficiency, and effectiveness in the agency’s operations and programs.” Federal Inspector Generals are located within their agencies but conduct their audits and investigations independently from their agencies. Roughly half of the federal Inspector Generals are appointed by the President of the United States, subject to U.S. Senate confirmation, and approximately half are appointed by the agency head. 

Comments

What’s in a name? In addition to transferring the operations of the internal audit unit of the CPUC to the IOAI, this bill replaces the head of the unit with an Inspector General appointed by the Governor, confirmed by the Senate, to serve a six-year term. The Inspector General’s role as envisioned in this bill is akin to those in federal government, including the appointment, independence, and powers to investigate and audit the agency.

Revisiting the internal audit functions at the CPUC. SB 19 (Hill, 2017) required the CPUC to appoint a chief internal auditor who holds the office at the pleasure of the CPUC and be responsible for the oversight of the internal audit unit and plan. At the time, the administration argued that such appointment authority will help ensure that the CPUC commissioners can better manage the workload and operations of the CPUC. While those benefits were noted, there was also concern that the appointment by the commissioners could result in less independence of the Chief Internal Auditor. Given that the current Internal Audit Unit’s audits are not public, it’s difficult to know whether there is a need to revamp the unit and replace the head with the Inspector General envisioned by this bill. The author argues that a more transparent oversight process to the internal operations of the CPUC is needed to better inform the public and the Legislature about areas of improvement. While the CPUC is statutorily required to have an internal auditor that exercises some independence, their office reports to the Commissioners themselves and those internal reports are not regularly made public. The author contends that growing frustration in recent years with the CPUC’s operations makes it clear more oversight and accountability is needed. The author’s office cites concerns with a Federal Communications Commission (FCC) Inspector General audit that found that deceased Lifeline phone subscribers (federal subsidy program for income-eligible households) were enrolled by providers in California and found evidence that Lifeline subscribers were enrolled in multiple states concurrently. In February, the author met with the FCC Inspector General and learned the fraud was committee by three providers in California. The author contends the CPUC hasn’t published any follow-up audits or investigations to refute the FCC’s report or identify the three providers.

Is the proposed broad access to other public offices necessary? This bill requires the new office to have access to all public offices or institutions in the state during regular business hours, and access, examine, and reproduce all records, files, documents, accounts, reports, vouchers, files and all other records for any audit or investigation. The author’s office contends that such broad authority is consistent with CalTrans Inspector General powers, under Government Code §14461 and important to the proposed Inspector General at the CPUC in order to avoid delays from public records act requests.

Prior/Related Legislation

ACA 9 (Boerner, 2026) places a ballot measure before voters to modify the CPUC’s constitutional composition and authority to do the following: 1) expands the membership of the CPUC from five to nine commissioners to include two commissioners appointed by the Speaker of the Assembly and two commissioners appointed by the Sente Rules Committee; 2) deletes telephone and telegraph service from the constitutional definition of a utility service; 3) specifies that the Legislature may set the CPUC’s duties related to telecommunications services, including assigning those duties to another state agency; and 4) requires the CPUC to consider affordability when setting rates. The bill was held by the author in this committee.

AB 705 (Boerner, 2025) this bill contained nearly identical language to the bill. The bill was held by the Senate Appropriations Committee.

SB 19 (Hill, Chapter 421, Statutes of 2017) among its provisions, established a Chief Internal Auditor at the CPUC responsible for the oversight of the internal audit unit.

AB 825 (Rendon, 2015) would have proposed a package of reforms of the CPUC largely directed at increased transparency of the activities of the agency, including requiring the California State Auditor's Office to appoint an Inspector General within its office for the CPUC. The bill was vetoed.

SB 1452 (Speier, Chapter 452, Statutes of 2006) established a process for the Legislature to be informed when auditor recommendations are being ignored or not implemented by state agencies.

AB 2903 (Gatto, 2016) would have provided a suite of reforms of the operations of the CPUC, including clarifying the responsibilities and oversight of various positions; improvements to ethics practices; reports related to telecommunications services and CPUC staffing; stating the intent of the Legislature to transfer most non-rail, for-hire transportation services to the State Transportation Agency; and others. The bill was never heard in its amended form.

ACA 11 (Gatto, 2016) would have proposed a measure on the ballot to authorize the Legislature to reallocate or reassign all or a portion of the functions of the CPUC to other state agencies, departments, boards, or other entities, consistent with specified purposes and proposed to repeal the provisions of the California Constitution pertaining to the CPUC effective January 1, 2019. The bill sat in this committee and was never heard.

AB 825 (Rendon, 2015) would have proposed a suite of reforms of the CPUC largely directed at increased transparency of the activities of the agency, including requiring the California State Auditor's Office to appoint an Inspector General within its office for the CPUC, expanding the roles and responsibilities of the CPUC public advisor, specifying additional requirements of commissioners, and increased transparency of electric utilities' procurement, among others. The bill was vetoed.

SB 48 (Hill, 2015) would have proposed a suite of reforms of the governance and operations of the CPUC, including, among others, requiring sessions in Sacramento, applying the Code of Ethics from the Administrative Procedures Act to administrative law judge, clarifying and augmenting the information the CPUC must provide the Legislature in its annual report, and others. The bill was vetoed.

SB 215 (Leno-Hueso, Chapter 807, Statutes of 2016) proposed a suite of reforms of the rules, operations and procedures of the CPUC pertaining to the laws and rules related to ex parte communications and criteria and process for disqualification of commissioners to a proceeding.

SB 512 (Hill, Chapter 808, Statutes of 2016) proposed a suite of reforms of the operations and governance of the CPUC, including allowing intervenor compensation for certain local governments, requiring specified information is available to the public, requiring specified reporting of the CPUC regarding the timeliness of proceedings, applying the Code of Ethics from the Administrative Procedures Act to administrative law judges, and others.

SB 660 (Leno-Hueso, 2015) would have proposed a suite of reforms of the governance, rules, operations and procedures of the CPUC, including: reform of laws and rules related to ex parte communications, criteria and process for disqualification of CPUCs to a proceeding, and authorizes the CPUC to appoint the chief administrative law judge. The bill was vetoed.

SB 1017 (Hill, 2016) would have modified statutes that limit public access to utility supplied documents at the CPUC, including specifying an action arising from the California Public Records Act may be brought before the Superior Court instead of the Supreme Court. The bill died on the Assembly Floor.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

None received

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: According to the author:

Although the California Public Utilities Commission is an independent agency of state government, its internal operations should be transparent to the public and subject to regular independent review by an outside entity to ensure efficient operations, economic administration of ratepayer funds, and compliance with state law. As utility costs continue to rise, regulatory decisions are continuously delayed, grant funds are held back for years, and Commissioners decline to participate in legislative oversight hearings it is clear that more accountability is needed on the agency operations. By establishing an independent Inspector General at the CPUC, the public and the Legislature will be better informed about the agency’s internal operations.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 353

Author:(Boerner)

As Amended Ver:June 3, 2025

Majority vote

SUMMARY

This bill would require every California internet service provider, with limited exceptions, to offer for purchase to eligible households, as defined, within their California service territory affordable home internet service that meets minimum speed requirements.

Major Provisions

1. Defines "affordable home internet service" to mean an internet service plan or subscription costing no more than fifteen dollars ($15) per month, inclusive of any recurring taxes and fees.
2. Defines "minimum speed requirements" to mean at least 100 megabits per second downstream and 20 megabits per second upstream and sufficient speed and latency to support distance learning and telehealth services.
3. Defines "Eligible household" to mean a household within the California internet service provider's California service territory with at least one resident of the household participating in a qualified public assistance program.
4. Defines "Qualified public assistance program" to include state and federal Supplemental Security Income (SSI), Temporary Assistance for Needy Families (TANF), the CalFresh program, and Medi-Cal.
5. Exempts small independent telephone corporations, California internet service providers with less than 50,000 subscribers that primarily serve households for which there are no other providers, and some joint powers authorities.
6. Requires every California internet service provider to make commercially reasonable efforts to promote and advertise the availability of affordable home internet service for eligible households, as specified.
7. Requires an annual report beginning on January 1, 2027 by every California internet service provider to the California Department of Technology (CDT) with specified information relating to affordable home internet plans, verification, enrollment, and denials.
8. Prohibits the California Public Utilities Commission (CPUC) from implementing, enforcing, or overseeing any aspect of this bill.
9. Provides that this bill shall become inoperative upon the implementation of a federal or state broadband subscription subsidy program, as specified.

COMMENTS

1. Cost of living, including broadband affordability, is a major issue for Californians. Industry data show that prices for high-speed broadband services continue to decline overall, due in part to greater infrastructure investment and intense competition in some markets. However, market-rate prices for the lowest tiered plans are often still unaffordable to the lowest-income residents. According to 2020 report from the California Department of Technology, an estimated 23% of California housing units do not have broadband subscriptions. A more recent report from 2023 conducted by the California Emerging Technology Fund-University of Southern California found that over two-thirds of the survey respondents cited affordability as the reason they chose not to subscribe to broadband. By requiring internet service providers (ISPs) to offer affordable home internet to qualified households, this bill is directly addressing a persistent, measurable, and well-documented challenged for some California households. Taking a step beyond just broadband policy, this bill may be viewed as part of a larger effort by the Legislature to address cost of living issues generally. Studies show that cost of living issues are a top concern for California voters, as costs generally have risen for housing, food, and basic necessities. To put the sentiment of voters into perspective, recent polling from UC Berkeley/IGS shows that voters are growing increasingly pessimistic about their economic situations.
2. The minimum speed requirements in this bill is consistent with state and federal policies. A 100/20mbps speed is sufficient to meet a household’s basic internet needs and support multiple devices. More importantly, anything less than 100/20mbps could be considered “underserved” according to state and federal policies. For example, the bipartisan Infrastructure Investment and Jobs Act defines an underserved location as one without broadband service offering speeds of at least 100/20mbps. Furthermore, state and federal regulations establish a benchmark of 100/20mbps to measure broadband deployment and availability. While a slower speed benchmark might be capable of supporting modern applications, like video conferencing or video streaming, these lower speed connections might not be considered true high speed internet by some definition. Given that the author’s intent is to provide a basic level of home broadband service, aligning the speed in this bill with other state and federal laws is exceedingly reasonable. A lower speed threshold would necessarily raise other questions of consistency, equitable access, and performance.
3. The eligibility for this bill is based on participation in other public assistance programs. The requirements of this bill would be directed towards eligible low-income households, which this bill defines based on participation in a list of other public assistance programs, including Medi-Cal. Recent amendments strike the California Alternative Rates for Energy (CARE) program from the list of eligible entities. The remaining list of programs would comprehensively cover the population of low-income households in California, and many of these programs have overlapping eligibility criteria. Among the program, the Medi-Cal program likely has the largest swath of eligibility. Given the need to connect low-income Californians to telehealth, including Medi-Cal as an eligible program is reasonable.
4. This bill establishes a $15 per month affordability metric. What an individual household is able to afford for utilities and broadband is necessarily a function of income and other cost of living burdens. Given that this bill is specifically aimed at low-income households and their affordability needs, the monthly rate is best evaluated from the perspective of that population.

Without any intervention, the lowest-cost generally available broadband plans on the market from large ISPs begin around $30 per month. While that rate might be affordable for a middle-income households, the CETF-USC surveys demonstrates that lower-income households are choosing to forgo a home broadband subscription even at that price. To address affordability, in the recent past, the federal government through the Affordable Connectivity Program (ACP) offered a $30 per month subsidy for low-income households. In conjunction with the plans offered by major ISPs, some households had their out of pocket costs reduced to $0. Some of those households may have used their subsidy on higher quality and pricier plans, but there isn’t robust data to determine what higher level of plans were being purchased and what the total out-of-pocket costs actually were after accounting for the subsidy. In any case, as of 2024 the ACP program no longer exists and the 3,000,000 California households that utilized the program are without robust support to afford their home internet bills. As a result, many of those households have stopped subscribing to home internet service and this bill could help bring them back online at an affordable rate.

1. This bill exempts some ISPs. This bill exempts three categories of internet service providers: small independent telephone companies and their affiliates, internet service providers with less than 50,000 subscribers that serve areas for which there are no alternative providers, and also joint powers authorities formed under the Government Code.

Small independent telephone corporations, as defined in the Public Utilities Code, are rural carriers subject to commission rate regulation. Given that these providers by definition service high-cost areas and are already subject to some rate regulation by the CPUC, an exemption for these types of providers is reasonable. Additionally, this bill also exempts some other small provides that serve areas with no alternatives. To the extent that this bill limits the revenue a small ISP might collect from some of its low-income subscribers, this bill could potentially have an undue burden on those small providers. To address the issue, this bill includes an exception for ISPs with less than 50,000 subscribers that primarily serve areas for which they are the only ISP. The rationale for not excluding all ISPs below 50,000 subscribers is that in markets with multiple providers, exempting some ISPs but not others might create a competitive disadvantage in the marketplace if only some providers are required to comply with the law. In other words, under this bill any burden of complying with the law would be spread equally among providers in a competitive market. However, in areas where there is only one ISPs available, there is a greater interest in preserving the sole provider’s ability to collect market-rate revenue to sustain the network.

Lastly, this bill includes an exemption for joint powers authorities formed under the California Government Code. In recent years the legislature has approved billions of dollars of funding and established programs to encourage broadband deployment, especially by municipal governments and joint power authorities. Despite the heavy investment in those types of providers, some have argued that they could not comply with the bill. While the affordability of their service offering may continue to be a concern, an exemption is reasonable to ensure the state’s investment in supporting municipal broadband is not undermined and to ensure the most favorable financing options for these types of providers that are primarily serving high-cost, rural areas where the private market has never invested.

1. This bill includes sunset provisions. Recent amendments establish sunset language in the bill, contingent on the implementation of a state or federal broadband subscription subsidy program that meets certain requirement. The requirement include criteria that would ensure a new program would be similar or provide a similar benefit to this bill.

According to the Author

"High-speed broadband is an essential service that too many Californians cannot afford. However there is a lack of support for affordable broadband programs within California and across the nation. It is time our state took a proactive approach to ensuring the affordability of broadband services, just as we have historically for telephone service."

Arguments in Support

Supporters of this bill, the California EDGE Coalition, argue that the rapid advancement of broadband and digital services has outpaced public policy and investment, leaving thousands of California households unconnected or without adequate resources to fully participate in today's technology-driven economy. AB 353 directly addresses the affordability barrier for these individuals and families and upholds a longstanding commitment to universal service.

Arguments in Opposition

Opponents of this bill, a coalition of industry trade associations representing ISPs and business interests, argue that this bill would impose government-mandated rate regulation on broadband providers, distort California's broadband market, and ultimately undermine private-sector investment in digital infrastructure. In turn, they argue consumers might be harmed from decreased investment in California networks and creates a cost shift that may fall onto the middle-class to make up for lost revenue from lower-income subscribers.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, this bill would create significant costs for the California Department of Technology to accept, store and organize ISP data and to make the data publicly available. CDT assumes this work will require $250,000 General Fund (GF) in the first year of implementation and $150,000 (GF) each year thereafter.

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 7-2-1

YES: Boerner, Ahrens, Bonta, Caloza, Garcia, Lowenthal, Rogers

NO: Hoover, Castillo

ABS, ABST OR NV: Blanca Rubio

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: June 3, 2025

CONSULTANT: Emilio Perez / C. & C. / (916) 319-2637 FN: 0000970

ASSEMBLY THIRD READING

ATR Bill Id:AB 353

Author:(Boerner)

As Amended Ver:May 27, 2025

Majority vote

SUMMARY

This bill would require every California internet service provider, with limited exceptions, to offer for purchase to eligible households, as defined, within their California service territory affordable home internet service that meets minimum speed requirements.

Major Provisions

1. Defines "affordable home internet service" to mean an internet service plan or subscription costing no more than fifteen dollars ($15) per month, inclusive of any recurring taxes and fees.
2. Defines "minimum speed requirements" to mean at least 100 megabits per second downstream and 20 megabits per second upstream and sufficient speed and latency to support distance learning and telehealth services.
3. Defines "Eligible household" to mean a household within the California internet service provider's California service territory with at least one resident of the household participating in a qualified public assistance program.
4. Exempts small independent telephone corporations, California internet service providers with less than 50,000 subscribers that primarily serve households for which there are no other providers, and some joint powers authorities.
5. Requires every California internet service provider to make commercially reasonable efforts to promote and advertise the availability of affordable home internet service for eligible households, as specified.
6. Requires an annual report beginning on January 1, 2027 by every California internet service provider to the California Department of Technology (CDT) with specified information relating to affordable home internet plans, verification, enrollment, and denials.

COMMENTS

1. Cost of living, including broadband affordability, is a major issue for Californians. Although industry data show that prices for high-speed broadband services continue to decline overall, due in part to greater infrastructure investment and competition in some markets, market prices for the lowest tiered plans are often still unaffordable to the lowest-income residents. According to 2020 report from the California Department of Technology, an estimated 23% of California housing units do not have broadband subscriptions. A more recent report from 2023 conducted by the California Emerging Technology Fund-University of Southern California found that over two-thirds of the survey respondents cited affordability as the reason they chose not to subscribe to broadband. By requiring internet service providers (ISPs) to offer affordable home internet to qualified households, this bill is directly addressing a persistent, measurable, and well-documented challenged for some California households.

Taking a step beyond just broadband policy, this bill may be viewed as part of a larger effort by the Legislature to address cost of living issues generally. Studies show that cost of living issues are a top concern for California voters, as costs generally have risen for housing, food, and basic necessities. To put the sentiment of voters into perspective, recent polling from UC Berkeley/IGS shows that voters are growing increasingly pessimistic about their economic situations.

1. The minimum speed requirements in this bill is consistent with state and federal policies. A 100/20mbps speed is sufficient to meet a household's basic internet needs and support multiple devices. More importantly, anything less than 100/20mbps could be considered "underserved" according to state and federal policies. For example, the bipartisan Infrastructure Investment and Jobs Act defines an underserved location as one without broadband service offering speeds of at least 100/20mbps. Furthermore, state and federal regulations establish a benchmark of 100/20mbps to measure broadband deployment and availability. While a slower speed benchmark might be capable of supporting modern applications, like video conferencing or video streaming, these lower speed connections might not be considered true high speed internet by some definition. Given that the author's intent is to provide a basic level of home broadband service, aligning the speed in this bill with other state and federal laws is exceedingly reasonable. A lower speed threshold would necessarily raise other questions of consistency, equitable access, and performance.
2. The eligibility for this bill is based on participation in other public assistance programs. The requirements of this bill would be directed towards eligible low-income households, which this bill defines based on participation in a list of other public assistance programs. For example, Medi-Cal, CalFresh, Temporary Assistance for Needy Families (TANF), California Alternative Rates for Energy (CARE), and federal Supplemental Security Income (SSI) program. This list of programs would comprehensively cover the population of low-income households in California, and many of these programs have overlapping eligibility criteria. Among the program, the Medi-Cal program likely has the largest swath of eligibility. According to the Department of Healthcare Services, the Medi-Cal program covers more than one-third of the state's population. However, this bill is based on households, not the general population. Therefore, it does not necessarily follow that over a third of California households would be eligible for this bill. The actual number of eligible households would be less than a third of total households, as the Medi-Cal population may live in households with multiple other participants.

For reference, there are about 13.43 million households in California, while the population is about 39.43 million. The federal Affordable Connectivity Program (ACP) had about six million California households eligible, which was about 45% of the total households in the state. This bill likely has a smaller eligibility footprint than that federal program.

1. This bill establishes a $15 per month affordability metric. What an individual household is able to afford for utilities and broadband is necessarily a function of income and other cost of living burdens. Given that this bill is specifically aimed at low-income households and their affordability needs, the monthly rate is best evaluated from the perspective of that population.

Without any intervention, the lowest-cost generally available broadband plans on the market from large ISPs begin around $30 per month. While that rate might be affordable for a middle-income households, the CETF-USC surveys demonstrates that lower-income households are choosing to forgo a home broadband subscription even at that price. To address affordability, in the recent past, the federal government through the Affordable Connectivity Program (ACP) offered a $30 per month subsidy for low-income households. In conjunction with the plans offered by major ISPs, some households had their out of pocket costs reduced to $0. Some of those households may have used their subsidy on higher quality and pricier plans, but there isn't robust data to determine what higher level of plans were being purchased and what the total out-of-pocket costs actually were after accounting for the subsidy. In any case, as of 2024 the ACP program no longer exists and the 3,000,000 California households that utilized the program are without robust support to afford their home internet bills. As a result, many of those households have stopped subscribing to home internet service and this bill could help bring them back online at an affordable rate.

1. This bill exempts some ISPs. This bill exempts three categories of internet service providers: small independent telephone companies and their affiliates, internet service providers with less than 50,000 subscribers that serve areas for which there are no alternative providers, and also joint powers authorities formed under the Government Code.

Small independent telephone corporations, as defined in the Public Utilities Code, are rural carriers subject to commission rate regulation. Although the telephone corporations as standalone entities are providers of voice communication, not internet service providers, some of the telephone corporations have affiliates companies that offer home internet services through various technologies. Given that these providers by definition service high-cost areas and are already subject to some rate regulation by the CPUC, an exemption for these types of providers is reasonable.

Additionally, this bill also exempts some other small provides that serve areas with no alternatives. Data from the Public Advocate's Office of the California Public Utilities Commission demonstrate that the combined subscriber numbers of the largest five providers in the state is more than 40 times greater than the combined subscriber numbers of the 6th to 10th largest combined. In other words, the five largest subscribers are exponentially larger than the rest, and the smallest ISPs are likely all below 50,000 subscribers. To the extent that this bill limits the revenue a small ISP might collect from some of its low-income subscribers, this bill could potentially have an undue burden on those small providers. To address the issue, this bill includes an exception for ISPs with less than 50,000 subscribers that primarily serve areas for which they are the only ISP. The rationale for not excluding all ISPs below 50,000 subscribers is that in markets with multiple providers, exempting some ISPs but not others might create a competitive disadvantage in the marketplace if only some providers are required to comply with the law. In other words, under this bill any burden of complying with the law would be spread equally among providers in a competitive market. However, in areas where there is only one ISPs available, there is a greater interest in preserving the sole provider's ability to collect market-rate revenue to sustain the network.

Lastly, this bill includes an exemption for joint powers authorities formed under the California Government Code. In recent years the legislature has approved billions of dollars of funding and established programs to encourage broadband deployment, especially by municipal governments. In response, a the 40-member counties of the Rural County Representative of California came together to create a joint powers authority, the Golden State Connect Authority (GSCA), for the purpose of a funding, constructing, and operating a municipal broadband network in rural counties. Currently, GSCA has received tentative state funding totaling over $185 million for projects in seven counties. In addition to state funding, GSCA will be issuing bonds to cover construction costs. GSCA has argued that this bill would negatively impact their ability to obtain favorable rates from private capital if their revenue is limited, because the revenue from their subscribers will be what is paying back the bonds. While the affordability of the service these joint powers authorities offer may continue to be a concern, an exemption is reasonable to ensure the state's investment in supporting municipal broadband is not undermined and to ensure the most favorable financing options for these types of providers that are serving high-cost areas where the private market has never invested.

According to the Author

"High-speed broadband is an essential service that too many Californians cannot afford. However there is a lack of support for affordable broadband programs within California and across the nation. It is time our state took a proactive approach to ensuring the affordability of broadband services, just as we have historically for telephone service."

Arguments in Support

Supporters of this bill, the California EDGE Coalition, argue that the rapid advancement of broadband and digital services has outpaced public policy and investment, leaving thousands of California households unconnected or without adequate resources to fully participate in today's technology-driven economy. AB 353 directly addresses the affordability barrier for these individuals and families and upholds a longstanding commitment to universal service.

Arguments in Opposition

Opponents of this bill, a coalition of industry trade associations representing ISPs and business interests, argue that this bill would impose government-mandated rate regulation on broadband providers, distort California's broadband market, and ultimately undermine private-sector investment in digital infrastructure. In turn, they argue consumers might be harmed from decreased investment in California networks and creates a cost shift that may fall onto the middle-class to make up for lost revenue from lower-income subscribers.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, this bill would create significant costs for the California Department of Technology to accept, store and organize ISP data and to make the data publicly available. CDT assumes this work will require $250,000 General Fund (GF) in the first year of implementation and $150,000 (GF) each year thereafter.

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 7-2-1

YES: Boerner, Ahrens, Bonta, Caloza, Garcia, Lowenthal, Rogers

NO: Hoover, Castillo

ABS, ABST OR NV: Blanca Rubio

ASM APPROPRIATIONS: 11-3-1

YES: Wicks, Arambula, Calderon, Caloza, Elhawary, Fong, Mark González, Hart, Pacheco, Pellerin, Solache

NO: Dixon, Ta, Tangipa

ABS, ABST OR NV: Sanchez

UPDATED

VERSION: May 27, 2025

CONSULTANT: Emilio Perez / C. & C. / (916) 319-2637 FN: 0000904

Date of Hearing: May 21, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 353

Author:(Boerner) – As Amended Ver:May 5, 2025

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

SUMMARY:

This bill requires all but the smallest internet service provider (ISP) in California to offer home internet service for $15 per month to every eligible household.

The bill defines an eligible household as a household within the service territory of a given ISP in which there resides at least one person on specified public assistance programs. The bill further requires the affordable home internet service the ISP makes available to meet minimum speed requirements—at least 100 megabits per second downstream and 20 megabits per second upstream and sufficient speed and latency to support distance learning and telehealth services.

Beginning January 1, 2027, and annually thereafter, the bill requires each ISP to report to the Department of Technology (CDT) on the ISP’s affordable home internet service plan, including the number of households served and households denied.

FISCAL EFFECT:

This bill will create significant costs for CDT to accept, store and organize ISP data and to make the data publicly available.

CDT assumes this work will require $250,000 General Fund (GF) in the first year of implementation and $150,000 (GF) each year thereafter. CDT describes these activities as directly tied to Action Item 16 of the “Broadband for All Action Plan”—request ISPs to partner with state agencies to promote, track and publicly report the progress of adoption of affordable internet services and devices throughout the California.  

COMMENTS:

1. Purpose. The author intends this bill to ensure high-speed broadband is available and affordable to every Californian. According to the author,

High-speed broadband is an essential service that too many Californians cannot afford. However there is a lack of support for affordable broadband programs within California and across the nation. It is time our state took a proactive approach to ensuring the affordability of broadband services, just as we have historically for telephone service.

1. Background. State law declares that the offering of high-quality basic telephone service at affordable rates to the greatest number of citizens has been a longstanding goal of the state. To achieve that goal, the state law—known as the Moore Universal Telephone Services Act—directs the California Public Utilities Commission (CPUC) to require telephone corporations to offer discounted home phone and cell phone service to qualified low-income Californians, according to terms dictated by the CPUC and funded through a surcharge on telecommunications users. This discount program is known as California Lifeline and, today, about 1.4 million Californians are enrolled in the program.

However, many Californians who are eligible for California Lifeline service are not enrolled in the program. This is, in part, because technology and consumer preferences have changed, and many Californians receive telephonic and other services through a broadband internet connection, and the ISPs who supply the service are, generally, not subject to the requirements of the California Lifeline program.

This bill seems to be modeled, to some extent, after a law in New York state that requires ISPs offer low-income New Yorkers reduced-cost internet plans. ISPs challenged the New York program in court, so far, to no avail.

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

Date of Hearing: April 30, 2025

ASSEMBLY COMMITTEE ON COMMUNICATIONS AND CONVEYANCE

Tasha Boerner, Chair

ABPCA Bill Id:AB 353 (

Author:Boerner) – As Amended Ver:March 24, 2025

SUBJECT: Communications: broadband internet service providers: affordable home internet

SUMMARY: This bill would require every California internet service provider to offer for purchase to eligible households, as defined, within their California service territory affordable home internet service that meets minimum speed requirements.

Specifically, this bill:

1. Provides that this bill shall be known, and may be cited as, the California Affordable Home Internet Act of 2025.
2. Establishes definitions:
   1. “Affordable home internet service” means an internet service plan or subscription costing no more than fifteen dollars ($15) per month, inclusive of any recurring taxes and fees.
   2. “California internet service provider” means an internet service provider doing business within California.
   3. “Eligible household” means a household within the California internet service provider’s California service territory with at least one resident of the household participating in a qualified public assistance program.
   4. “Minimum speed requirements” means at least 100 megabits per second downstream and 20 megabits per second upstream and sufficient speed and latency to support distance learning and telehealth services.
   5. “Qualified public assistance program” means public assistance programs including the California Alternate Rates for Energy or CARE program, the Supplemental Security Income/State Supplementary Payment Program, the federal Temporary Assistance for Needy Families (TANF) program, the CalFresh program, the California Health Benefit Exchange, also known as Covered California, the Medi-Cal program, the federal Supplemental Security Income program, or financial aid programs for postsecondary education.
3. Requires every California internet service provider to make commercially reasonable efforts to promote and advertise the availability of affordable home internet service for eligible households, as specified.
4. Requires an annual report beginning on January 1, 2027 by every California internet service provider to the California Department of Technology (CDT) with specified information relating to affordable home internet plans, verification, enrollment, and denials.

EXISTING LAW:

1. Defines “broadband internet access service” to means a mass-market retail service by wire or radio provided to customers in California that provides the capability to transmit data to, and receive data from, all or substantially all Internet endpoints, including, but not limited to, any capabilities that are incidental to and enable the operation of the communications service, but excluding dial-up Internet access service. (Civil Code § 3100)
2. Establishes the principle of the state, to ensure digital equity for all its residents, and that residents shall have access broadband that is sufficient and reliable. (Civil Code § 3122)
3. Declares that the offering of high-quality basic telephone service at affordable rates to the greatest number of citizens has been a longstanding goal of the state. (Public Utilities Code § 871.5)
4. Requires the California Public Utilities Commission (CPUC) to annually designate a class of lifeline telephone service necessary to meet minimum communication needs, to set the rates and charges for that service, develop eligibility criteria for that service, and asses the degree of achievement of universal service, including telephone penetration rates by income, ethnicity, and geography. (Public Utilities Code § 873)
5. Requires the California Public Utilities Commission (CPUC) to maintain and update a state broadband map which identifies, for each address in the state, each provider of broadband services that offers service at the address and the maximum speed of broadband services offered by each provider of broadband services at the address. (Public Utilities Code § 281.6)
6. Establishes the policy of the United States that, insofar as technically and economically feasible, broadband internet subscribers should benefit from equal access to broadband internet service. (Infrastructure Investment and Jobs Act § 60506 – Public Law 117-58)
7. Prohibits a state or local government from having the authority to regulate the entry of or the rates charged by any commercial mobile service or any private mobile service. (Section 332 of Title 47 of the United States Code)
8. Establishes the federal Telecommunications Act for the purpose of regulating interstate and foreign commerce by wire and radio in order to make available, as far as possible, to all the people of the United State, without discrimination on the basis of race, color, religion, national origin, or sex, a rapid, efficient, nation-wide, and world-wide wire and radio communication service with adequate facilities at reasonable charges, for the purpose of promoting safety of life and property through the use of wire and radio communications. (Section 151 of Title 47 of the United States Code)

FISCAL EFFECT: Unknown. This bill is keyed fiscal by the Legislative Counsel.

COMMENTS:

1. Intent of this bill. This bill intends to advance the longstanding public policy goal of universal access to telecommunications service through the mandated offering of affordable rates, which is an established precedent in state and federal law. By requiring that ISPs offer a $15 affordable internet plan to low-income Californians, this bill aims to ensure greater access to an essential service that enables participation in modern life, education, the economy, telehealth, and basic communication. According to the author: “High-speed broadband is an essential service that too many Californians cannot afford. However there is a lack of support for affordable broadband programs within California and across the nation. It is time our state took a proactive approach to ensuring the affordability of broadband services, just as we have historically for telephone service.”
2. The price of broadband is a barrier to adoption of broadband service. Although industry data^[1] show that prices for high-speed broadband services continue to decline overall, due in part to greater infrastructure investment and competition in some markets, market prices for the lowest tiered plans are often still unaffordable to the lowest-income residents. Various industry stakeholders have warned that as a result of this bill, further investment may be stifled and prices may raise for others. As it is, there are thousands of households across the state for which broadband service is available, but the household chooses not to purchase the service – this is referred to as the broadband adoption gap. There are various factors that contribute to the broadband adoption gap, including digital skills and public awareness, but one of the leading reasons is price. According to the Broadband for All Action Plan^[2] completed by the California Broadband Council in December of 2020, broadband affordability and adoption remains a large challenge to achieving broadband for all in the state. According to the report, 23% of California housing units—home to 8.4 million residents—do not have broadband subscriptions. To put that in context, broadband infrastructure is available to an upwards 95% of California households. According to CETF-USC Statewide Broadband Adoption Survey^[3] over two-thirds of respondents cited affordability as the reason they chose not to subscribe to broadband. In summary, where broadband service is available but not purchased, the price of the service is one of the leading reasons potential subscribers remain without access.

This bill aims to address the broadband adoption gap directly by requiring California ISPs to offer affordable broadband service to eligible households, which are defined as households participating in various public assistance programs. The universe of programmatic eligibility in this bill would cover low-income households widely, in effect ensuring that no low-income household is left uncovered. While the stated intent of the author is to tailor this bill to low-income households, some of the eligibility criteria may widen eligibility beyond just low-income households. For example, both the Covered California program and the inclusion of postsecondary education financial aid programs may inadvertently widen the pool of eligible households to include higher-income households as those programs do not necessarily have income limits for participation. The committee may wish to consider whether it would be reasonable to revise the list of eligible programs to more closely align the list of programs with those programs that are specifically aimed to serve low-income households, as the author has stated. Nonetheless, the larger point remains true that for low-income households specifically broadband adoption remains a problem and this bill would provide greater access to affordable broadband services. In turn, this bill may have the effect of reducing the broadband adoption gap across the state.

1. State and federal law support universal access to telecommunications service. For decades the public policy goal of the state and federal government has supported universal access to basic telecommunications services. For decades, the preferred and most common form of telecommunications occurred through voice communications over telephone lines. Accordingly, legacy telephone service providers have been required to and continue to be required to offer a low-cost class of voice service plans for eligible households in order to make the telecommunications service widely and universally accessible. Under existing law, The Moore Universal Telephone Service Act, telephone corporations in California are required to participate in the California Lifeline program, wherein the rates of the services are strictly regulated by the California Public Utilities Commission (CPUC) in the interest of ensuring affordability for low-income households. As of the most recent figures there about 1.4 million households utilizing the program, which is only about a third of the eligible population. There are various why the Lifeline program is underutilized, including that consumer preferences have moved beyond traditional voice communications.

As technology has progressed beyond traditional landline telephones, the public policies in relation to advanced communications services, like broadband internet, has not kept pace to uphold the longstanding commitment to universal service. In turn, today’s broadband adoption gap exceeds the gap of telephone adoption when rates of telephone use were the highest. For example, California’s peak telephone penetration rate was in the year 2002 when 97.4% of households subscribed to home telephone service^[4]. According to recent survey data published by the University of Southern California and the California Emerging Technology Fund in 2023, 91% of households across the state have subscribe to home broadband. While the gap may seem small, only about 6 points, this figures represents about 800,000 households of California’s 13.43 million total households. To that end, this bill may help address the gap by advancing the longstanding public policy goal of universal service access.

1. Recent efforts to address broadband affordability have faced administrative challenges. While both the federal and state government have attempted to address the digital divide and broadband adoption gap through subsidy programs like the federal Affordable Connectivity Program (ACP) or California Lifeline, these programs have challenges of their own. For example, provider participation is limited in the California Lifeline program, in part, because participation is not mandated for California internet service providers that are not telephone corporations. In turn, California consumers have few options to utilize the program for home broadband. While the ACP did have greater participation, with 3 million California households participating, which is over double of the Lifeline program enrollment, the program has ceased operations due to budget constraints.

Finding a source of ongoing funding to provide subsidies to Californians has proven to be difficult across the board. For example, in early 2024 the federal ACP program stopped enrolling new participants because funding was running low. By mid-2024 the program ceased operations and Congress did not provide more funding. Aside from ACP, the California Public Utilities Commission has recently issued a ruling seeking comment on a pilot program to expand the program to standalone broadband services that are not tied to voice communications. If the CPUC were to combine the California Lifeline program subsidy with the federal Lifeline subsidy, California consumers could see a benefit of up to $19.25. Currently, the federal Lifeline subsidy is $9.25 and can only be used for broadband services. It remains to be seen what the CPUC will propose for the California Lifeline program, and there is pending legislation in the Senate that may address this issue further. Regardless, any subsidization of broadband services for low-income households would likely work in tandem with this legislation to provide the maximum benefit. For example, if this bill mandates a provider offer a $15 broadband plan and the CPUC implements a program that offers eligible households up to $19.25 per month, then some households could see service that ends up being free.

1. Federal courts have upheld a similar law in New York. As an alternative to subsidies, in 2021, the state of New York enacted a first-in-the-nation law that mandated internet service providers (ISPs) offer an affordable broadband plan to some low-income New Yorkers. The New York Affordable Broadband Act (ABA) mandates that ISPs in New York offer low-income residents reduced-cost internet plans. Specifically, qualified households in New York are required to offer access to broadband service for $15 per month with at least 25 Mbps speeds, or $20 per month for speeds of at least 200 Mbps. The household eligibility for that program are similar to what is proposed by this bill, although the pricing and speeds differ.

In response, the ISP industry litigated in opposition to the new law, claiming that regulation of broadband internet service rates was federally preempted under the federal Telecommunications Act. However, that legal effort on the part of the ISP industry has been unsuccessful at almost every turn. Only initially did a district court side with the industry, issuing an injunction to block the law. However, the Second Circuit Court of Appeals later reversed that decision, finding that the law could stand. The industry then appealed that decision to the United State Supreme Court, which declined to take up the case a total of two times. Despite the industry’s arguments that an affordability mandate would be illegal under federal law, or would cause significant harm to the public, even the Supreme Court of the United States (SCOTUS) was not swayed by their arguments. In effect, the SCOTUS decision implies that states have the authority to enact affordability mandates in order to advance universal access to affordable home broadband service, as has been the precedent for decades. While it is likely that the ISP industry would initiate litigation against this bill if it were to become law, the recent cases cast some doubt whether those cases would be successful. For example, the ISP industry also litigated California’s net neutrality laws when those were passed under federal preemption grounds, and the appeals courts ultimately upheld the law as well.

1. Verification and enrollment of eligible households. This bill would require ISPs to offer affordable broadband service to eligible households, while establishing criteria for a household to be considered eligible that is based on participation in other public assistance programs. While this bill does not require an ISP to verify eligibility or otherwise prohibit an ISP from offering affordable broadband service as widely as they please, presumably there is an interest in verifying eligibility to ensure only eligible households are able to purchase the lower priced plans. However, this bill does not propose a process or other guidance for how an eligible household’s eligibility would be verified by an ISP. This may pose a challenge for implementation, both for consumers and ISPs alike. ISPs have voiced concerns about the administrative burden of verifying eligibility for potentially hundreds of thousands of households across the state. A verification process administered by ISPs would likely require significant staff time, coordination of potentially sensitive documents, and also privacy protocols to ensure the integrity of sensitive information. From the consumer perspective, some low-income households may also be reluctant to hand over sensitive personal information to private companies. This is a particularly acute concern given recent experiences with data breaches, and greater surveillance of vulnerable communities by the federal government. If this bill should pass this committee, the author may wish to address verification and enrollment procedures more directly.
2. Small ISPs may be particularly burdened by the requirements of this legislation. The requirements of this bill as currently drafted would apply to everyone ISP in California, regardless of size. While it is difficult to get a precise estimate of the number of subscribers California ISPs have, due to confidentiality and competition concerns, the best estimates are that the largest ISPs in California serve millions of customers each and generate billions in revenue annually across their service offerings. Aside from the large ISPs, there are many smaller ISPs operating across the state that are significantly smaller in the size of their service territories and their numbers of customers. According to the Public Advocates Office of the CPUC (PAO), the combined subscriber numbers of the largest 5 providers is more than 40 times greater than the combined subscriber numbers of the 6th to 10th largest combined. Due to economies of scale, the larger ISPs would more easily be able to comply with the requirements of this bill. For example, an analysis^[5] from the PAO shows that a $15 low-income broadband requirement would potentially reduce the combined revenues of the four largest broadband providers – AT&T, Comcast, Cox, Charter/Spectrum – by less than one percent. However, for smaller ISPs whose profit margins may be smaller, there is some risk that the mandate in this bill may be uneconomical or unprofitable. This would be a particularly significant concern in areas of the state that only have a single option for service, which may be a smaller ISP with less customers. Those small ISPs rely on a smaller base or subscribers to turn a profit in their network in order to afford the ongoing operations and maintenance costs. The committee may wish to consider an exemption threshold, specifically for smaller ISPs that operate in areas for which they are the only option for service.
3. Similar/related legislation.
   1. SB 716 (Durazo) of this session would establish a home broadband service subsidy through the California Lifeline program. The bill is pending hearing in the Senate.
   2. AB 414 (Reyes) Chapter 436, Statutes of 2023, established a digital equity Bill of Rights in statute to support consumers’ right to equal access for broadband internet service within a broadband provider’s service territory.
   3. AB 1588 (Wilson) of 2024, when it passed this committee, would have required the California Department of Technology (CDT) to develop and establish the Net Equality Program to ensure the state and state agencies shall only enter into a procurement contract with a qualified internet service provider (ISP) that offers affordable home internet service, as specified. The bill was later amended to address the Lifeline program and was held in Senate Appropriations committee.
   4. SB 822 (Wiener) Chapter 976, Statutes of 2018, prohibited internet service providers from engaging in specified actions concerning the treatment of Internet traffic and violating net neutrality principles.
4. Committee amendments.
   1. Modify the definition of “qualified public assistance program” to strike Covered California and financial aid programs for postsecondary education.
   2. Include an exception from offering an affordable broadband plan for small independent telephone corporations and their affiliates, and California internet service providers with less than 50,000 subscribers that primarily serve households for which there are no other providers.

REGISTERED SUPPORT / OPPOSITION:

Support

#oaklandundivided
Arts for LA
California Alliance for Digital Equity
California Community Foundation
Communities in Schools of Los Angeles (CISLA)
Community Coalition of the Antelope Valley
County of Santa Clara
Digital Equity LA
Electronic Frontier Foundation
Families in Schools
Fresno Coalition for Digital Inclusion
Gpsn
Hack the Hood
Healing and Justice Center
Institute for Local Self-reliance
Leadingage California
Michelson Center for Public Policy
Nextgen California
Our Voice: Communities for Quality Education
Pacoima Beautiful
Para Los Ninos
Parent Engagement Academy
Soledad; City of
Tech Exchange
Trio Plus
Unite-la

Opposition

Advance Sf

Cal Chamber
Calbroadband
Chamber San Mateo County
CTIA
North Bay Leadership Council

Rural County Representatives of California (RCRC)
San Francisco Chamber of Commerce
San Mateo County Economic Development Association
San Rafael Chamber of Commerce
Santa Rosa Metro Chamber

Sonic Telecom, LLC
Tekify Fiber & Wireless
United States Telecom Association Dba Ustelecom - the Broadband Association
Unwired Broadband, LLC
Wispa - Broadband Without Boundaries

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

1. USTelecom – the Broadband Association. 2024 Broadband Pricing Index. https://www.ustelecom.org/research/2024-bpi/ ↑

2. California Department of Technology, 2020. “Broadband for All Action Plan”. https://broadbandcouncil.ca.gov/wp-content/uploads/sites/68/2020/12/BB4All-Action-Plan-Final.pdf ↑

3. University of Southern California-California Emerging Technology Fund, 2023. “2023 Statewide Digital Equity Survey” https://s42263.pcdn.co/wp-content/uploads/2023/12/2023-Statewide-Digital-Equity-Survey-Final-Report.pdf ↑

4. California Public Utilities Commission, 2007. “Universal Telephone Service to Residential Customers”. https://docs.cpuc.ca.gov/published/report/72294.htm ↑

5. Public Advocate’s Office, 2024. “Broadband Policy Options to Improve Affordability for Low-Income Californians.” https://www.publicadvocates.cpuc.ca.gov/-/media/cal-advocates-website/files/press-room/reports-and-analyses/250318-public-advocates-office-broadband-policy-options-to-address-affordability-in-ca.pdf ↑