Bill Text: CA AB698 | 2009-2010 | Regular Session | Chaptered
Bill Title: Utility property.
Sponsorship: Partisan Bill (Democrat 1)
Status: (Passed) 2009-10-11 - Chaptered by Secretary of State - Chapter 370, Statutes of 2009. [AB698 Detail]
Download: California-2009-AB698-Chaptered.html
BILL NUMBER: AB 698 CHAPTERED
BILL TEXT
CHAPTER 370
FILED WITH SECRETARY OF STATE OCTOBER 11, 2009
APPROVED BY GOVERNOR OCTOBER 11, 2009
PASSED THE SENATE AUGUST 24, 2009
PASSED THE ASSEMBLY MAY 14, 2009
AMENDED IN ASSEMBLY APRIL 21, 2009
AMENDED IN ASSEMBLY APRIL 2, 2009
INTRODUCED BY Assembly Member Skinner
FEBRUARY 26, 2009
An act to amend Sections 851 and 853 of the Public Utilities Code,
relating to utility property.
LEGISLATIVE COUNSEL'S DIGEST
AB 698, Skinner. Utility property.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities and can establish its own
procedures, subject to statutory limitations or directions and
constitutional requirements of due process. The existing Public
Utilities Act prohibits, with certain exemptions, any public utility
other than a common carrier by railroad, from selling, leasing,
assigning, mortgaging, or otherwise disposing of or encumbering the
whole or any part of specified property necessary or useful in the
performance of the public utility's duties to the public, without
first having either secured an order from the commission authorizing
it to do so for qualified transactions valued above $5,000,000, or
for qualified transactions valued at $5,000,000 or less, having filed
an advice letter and obtained a resolution from the commission
authorizing it to do so. Existing law requires the commission to
determine the types of transactions valued at $5,000,000 or less that
qualify for advice letter handling. Existing law states the intent
of the Legislature that transactions with monetary values that
materially impact a public utility's rate base, or transactions that
would trigger the commission's review responsibilities under the
California Environmental Quality Act, should not qualify for
expedited advice letter review.
This bill would delete the requirement, for qualified transactions
valued at $5,000,000 or less, that the commission approve the advice
letter by resolution. The bill would authorize the executive
director of the commission or the director of the division of the
commission having regulatory jurisdiction over the utility to approve
the advice letter for qualified transactions valued at $5,000,000 or
less for which an advice letter is filed that is uncontested. The
bill would state the intent of the Legislature that transactions with
monetary values that materially impact a public utility's rate base,
or transactions that would trigger the commission's review
responsibilities as lead agency under the California Environmental
Quality Act, should not qualify for expedited advice letter review.
The bill would authorize the filing of an advice letter for
transactions by the public utility if the lead agency has completed
the appropriate review under the California Environmental Quality Act
for the transaction, and the commission is the responsible agency
under the act and approves the advice letter by resolution voted upon
by the commission.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 851 of the Public Utilities Code is amended to
read:
851. A public utility, other than a common carrier by railroad
subject to Part I of the Interstate Commerce Act ( 49 U.S.C. Sec.
10101 et seq.), shall not sell, lease, assign, mortgage, or otherwise
dispose of, or encumber the whole or any part of its railroad,
street railroad, line, plant, system, or other property necessary or
useful in the performance of its duties to the public, or any
franchise or permit or any right thereunder, or by any means
whatsoever, directly or indirectly, merge or consolidate its
railroad, street railroad, line, plant, system, or other property, or
franchises or permits or any part thereof, with any other public
utility, without first having either secured an order from the
commission authorizing it to do so for qualified transactions valued
above five million dollars ($5,000,000), or for qualified
transactions valued at five million dollars ($5,000,000) or less,
filed an advice letter and obtained approval from the commission
authorizing it to do so. If the advice letter is uncontested,
approval may be given by the executive director or the director of
the division of the commission having regulatory jurisdiction over
the utility. The commission shall determine the types of transactions
valued at five million dollars ($5,000,000) or less, that qualify
for advice letter handling. For a qualified transaction valued at
five million dollars ($5,000,000) or less, the commission may
designate a procedure different than the advice letter procedure if
it determines that the transaction warrants a more comprehensive
review. Absent protest or incomplete documentation, the commission
shall approve or deny the advice letter within 120 days of its filing
by the applicant public utility. The commission shall reject any
advice letter that seeks to circumvent the five million dollars
($5,000,000) threshold by dividing a single asset with a value of
more than five million dollars ($5,000,000), into component parts,
each valued at less than five million dollars ($5,000,000). Every
sale, lease, assignment, mortgage, disposition, encumbrance, merger,
or consolidation made other than in accordance with the advice letter
and approval from the commission authorizing it is void. The
permission and approval of the commission to the exercise of a
franchise or permit under Article 1 (commencing with Section 1001) of
Chapter 5, or the sale, lease, assignment, mortgage, or other
disposition or encumbrance of a franchise or permit under this
article shall not revive or validate any lapsed or invalid franchise
or permit, or enlarge or add to the powers or privileges contained in
the grant of any franchise or permit, or waive any forfeiture.
This section does not prevent the sale, lease, encumbrance or
other disposition by any public utility of property that is not
necessary or useful in the performance of its duties to the public,
and any disposition of property by a public utility shall be
conclusively presumed to be of property that is not useful or
necessary in the performance of its duties to the public, as to any
purchaser, lessee or encumbrancer dealing with that property in good
faith for value, provided that this section does not apply to the
interchange of equipment in the regular course of transportation
between connecting common carriers.
SEC. 2. Section 853 of the Public Utilities Code is amended to
read:
853. (a) This article does not apply to any person or corporation
which transacts no business subject to regulation under this part,
except performing services or delivering commodities for or to public
utilities or municipal corporations or other public agencies
primarily for resale or use in serving the public or any portion
thereof, but shall apply to any public utility, and any subsidiary or
affiliate of, or corporation holding a controlling interest in, a
public utility, if the commission finds, in a proceeding to which the
public utility is or may become a party, that the application of
this article is required by the public interest.
(b) The commission may from time to time by order or rule, and
subject to those terms and conditions as may be prescribed therein,
exempt any public utility or class of public utility from this
article if it finds that the application thereof with respect to the
public utility or class of public utility is not necessary in the
public interest. The commission may establish rules or impose
requirements deemed necessary to protect the interest of the
customers or subscribers of the public utility or class of public
utility exempted under this subdivision. These rules or requirements
may include, but are not limited to, notification of a proposed sale
or transfer of assets or stock and provision for refunds or credits
to customers or subscribers.
(c) The provisions of Sections 851 and 854 that prohibit any
assignment, acquisition, or change of control without advance
authorization from the commission, do not apply to the transfer of
the ownership interest in a water utility, with 10,000 or fewer
service connections, from a decedent to a member of the decedent's
family in the manner provided in Section 240 of the Probate Code or
by a will, trust, or other instrument.
(d) It is the intent of the Legislature that transactions with
monetary values that materially impact a public utility's rate base
should not qualify for expedited advice letter treatment pursuant to
this article. It is the further intent of the Legislature that the
commission maintain all of its oversight and review responsibilities
subject to the California Environmental Quality Act, and that public
utility transactions that jurisdictionally require a review by the
commission, as the lead agency, under the act should not qualify for
expedited advice letter treatment pursuant to this article. An advice
letter may be filed for transactions by the public utility if the
lead agency has completed the appropriate review under the California
Environmental Quality Act for the transaction, and the commission is
the responsible agency under the act. The advice letter shall be
subject to approval by resolution voted upon by the commission.
