Bill Text: CA AB698 | 2009-2010 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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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-Amended.html

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BILL NUMBER: AB 698	AMENDED
	BILL TEXT

	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, as amended, 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  require commission approval of an advice
letter for qualified transactions valued at $5,000,000 or less where
review of the transaction is necessary in the public interest and
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.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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, where review of the transaction
is necessary in the public interest,   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.