Public Utilities Commission: Inspector General.

The entire concept of an Independent Office of Audits and Investigations is eliminated. The previous version would have transferred the internal audit unit and its staff to this new office by January 1, 2028. Now the Inspector General directly oversees the internal audit unit within the commission with no transfer or separate office.

The bill's title changed from 'amend, repeal, and add amend Section 307.6' to simply 'amend Section 307.6,' reflecting that it is now a single-section amendment rather than a multi-section act with a new section added.

The Inspector General's access authority was narrowed and restructured. Previously, the Inspector General had direct access to all records of 'the commission, public utilities, and other entities regulated by the commission.' Now, direct access covers only 'the commission and public utilities,' while other regulated entities that participate in commission-administered programs must provide relevant records upon request.

The state-mandated local program finding was removed. The previous version stated 'State-mandated local program: yes' and included a Section 3 explaining why no reimbursement was required (because costs would only be incurred through creation of a new crime). The new version states 'State-mandated local program: no' and omits the reimbursement section entirely.

The January 1, 2028 transfer deadline and the inoperative/repeal provision for the original Section 307.6 were removed, since there is no longer a separate office to which the internal audit unit would be transferred.

The entire California Affordable Home Internet Act of 2025 (new Civil Code Title 15.7, Sections 3150-3164) was removed. This would have required California internet service providers to offer affordable home internet at $15 or less per month with minimum speeds of 50 Mbps downstream and 10 Mbps upstream to households in public assistance programs, with annual reporting to the Department of Technology starting January 1, 2027.

The state-mandated local program determination was changed from 'yes' to 'no,' reflecting the removal of the affordable internet provisions that would have imposed costs on local agencies or school districts.

Removed definitions and eligibility criteria for 'eligible household' (households with at least one resident in a qualified public assistance program such as CalFresh, Medi-Cal, SSI, or TANF) and the list of exempt providers including small independent telephone corporations, providers with fewer than 50,000 subscribers in unserved areas, joint powers authorities, and California Lifeline participants.

Removed the sunset provision that would have made the affordable internet requirements inoperative upon implementation of a federal or state broadband subscription subsidy program meeting specific criteria (at least $15/month benefit, minimum speed consistency, sustained public funding, and use by all providers with more than 100,000 customers).

The Inspector General is now established directly in the amended Section 307.6 rather than only in a separate new section. The Governor appoints the Inspector General (subject to Senate confirmation) with a six-year term and removal protections, replacing the prior structure where the commission appointed a chief internal auditor at its pleasure.

New expanded duties for the Inspector General: must ensure the commission administers funds (including ratepayer funds) efficiently and in compliance with state and federal requirements; that programs function per applicable accounting standards; that the commission fulfills mandated requirements, develops an annual audit plan, administers an effective enterprise risk management program; that the commission president, Legislature, and Governor are fully informed of fraud or serious deficiencies; and that the commission monitors compliance for reports to the Governor and Legislature.

The Inspector General is now directly vested with full authority for a full-scope, independent, and objective audit and investigation program, and has direct access to all records of the commission, public utilities, and other regulated entities. Reporting requirements mandate ongoing reports to the Governor and Legislature plus an annual summary posted on the commission's website.

The bill now includes new Public Utilities Code sections establishing an Independent Office of Audits and Investigations within the PUC. The office is headed by a director with the title Inspector General, appointed by the Governor with Senate confirmation, serving a six-year term removable only for good cause. The internal audit unit must be transferred to this office by January 1, 2028.

The Inspector General is given full authority to examine all records, files, documents, accounts, and property of the PUC, public utilities, and other regulated entities. The Inspector General must report findings to the Governor and Legislature on an ongoing basis and at least annually, with summaries posted publicly.

The definition of 'affordable home internet service' was cleaned up. The old version contained contradictory language about taxes (both 'inclusive of any recurring taxes and fees' and 'not including taxes or other charges imposed by a government entity'). The new version removes the contradictory phrase and retains only 'not including taxes or other charges imposed by a government entity.'

Annual reporting requirements for internet service providers were significantly reduced. The old version required reporting on: plan description, number of households that purchased and were denied service, eligibility verification procedures, and a description of all broadband products with speed and price. The new version only requires a description of the plan offered and the number of households that purchased it.

The state-mandated local program finding changed from 'no' to 'yes' because the new PUC provisions mean violations of commission actions implementing the bill would constitute crimes, triggering reimbursement obligations under the California Constitution. The bill includes a no-reimbursement clause based on the crime-creation exception.

The definition of 'affordable home internet service' now requires speeds of at least 50 Mbps downstream and 10 Mbps upstream, and changes the $15 monthly cap to exclude taxes or other charges imposed by a government entity (previously it was inclusive of all recurring taxes and fees). This lowers the speed bar for the affordable plan and reduces the effective cost burden on providers.

A new definition of 'California service territory' is added, meaning any address in California where a provider offers internet service to residential customers. This clarifies the geographic scope of the obligation.

The definition of 'internet service' is expanded to explicitly exclude dial-up and digital subscriber line (DSL) service and to limit coverage to mass-market retail services provided to residential customers in California, narrowing which services are subject to the bill.

A new exemption is added in Section 3160(d) for any California internet service provider that participates in the California Lifeline program (Public Utilities Code Section 873.5), removing them from the requirement to offer affordable home internet service.

A fourth criterion is added to Section 3164 for the bill to become inoperative: the federal or state broadband subsidy program must be utilized by all California internet service providers with more than 100,000 customers. This makes it harder for the bill to sunset.

New Section 3162 explicitly prohibits the Public Utilities Commission from setting or approving rates, determining compliance, investigating or penalizing providers, administering eligibility verification, or requiring tariffs or advice letters under this title. All administrative and oversight responsibilities are assigned exclusively to the Department of Technology.

New Section 3164 makes the entire title inoperative upon implementation of a federal or state broadband subscription subsidy program for low-income households that meets three criteria: provides a recurring benefit of at least $15 per month, applies to home internet plans meeting the minimum speed requirements (100 Mbps down / 20 Mbps up), and is supported by sustained public funding.

Section 3150 changed from 'This section shall be known' to 'This section title shall be known,' and Section 3152 changed from 'the following definitions apply' to 'all of the following definitions apply.' These are minor drafting clarifications.

Removed 'the California Health Benefit Exchange (Covered California)' and 'financial aid programs for postsecondary education' from the definition of 'qualified public assistance program.' Households enrolled only in Covered California or receiving postsecondary financial aid will no longer qualify as eligible households for the affordable home internet service mandate.

Added a new exemption in Section 3160(c) for 'a joint powers authority formed under Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 of the Government Code.' Joint powers authorities that provide internet service are now exempt from the requirement to offer affordable home internet service to eligible households.

New Section 3160 exempts small independent telephone corporations (as defined in Public Utilities Code Section 275.6(b)(6)) and their California ISP affiliates from the requirement to offer affordable home internet service under Section 3154.

New Section 3160 also exempts any California ISP with fewer than 50,000 subscribers that primarily serves households where no other California ISPs offer internet service, effectively creating a rural/monopoly-provider exemption.

Section 3154 was amended to add the qualifier 'except those exempt pursuant to Section 3160,' making the affordable home internet offering requirement conditional on not falling within the new exemptions.

The fiscal committee vote in the digest changed from 'no' to 'yes,' indicating a fiscal impact was identified or resolved. Page numbering shifted from 98 to 97, and duplicate digest paragraphs were consolidated.

Added an entirely new Title 15.7 (Sections 3150-3158) to Part 4 of Division 3 of the Civil Code, converting the bill from a non-binding intent statement into binding statutory requirements for all California internet service providers.

The original intent statement was retained but renumbered as Section 1 after the new title, preserving legislative intent while adding operative law above it.

Defined 'affordable home internet service' as a plan costing no more than $15 per month inclusive of recurring taxes and fees, and 'minimum speed requirements' as at least 100 Mbps downstream and 20 Mbps upstream with sufficient latency for distance learning and telehealth.

Excluded commercial mobile services and private mobile services from the definition of 'internet service,' limiting the bill's scope to fixed broadband providers.

Defined 'eligible household' as one within the provider's California service territory with at least one resident participating in a qualified public assistance program, which includes CARE, SSI/SSP, TANF, CalFresh, Covered California, Medi-Cal, federal SSI, or postsecondary financial aid programs.

Required every California internet service provider to offer affordable home internet meeting minimum speed requirements to eligible households within their service territory (Section 3154).

Required providers to make commercially reasonable efforts to promote and advertise the availability of affordable home internet, including prominent display on websites and in promotional materials (Section 3156).

Added an annual reporting requirement starting January 1, 2027, requiring providers to report to the Department of Technology on plan descriptions, enrollment/denial numbers, eligibility verification procedures, and a description of all broadband products offered in California with pricing structure (Section 3158).