BILL NUMBER: AB 2505	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Maldonado

                        FEBRUARY 19, 2004

   An act to amend Section 829 of the Public Utilities Code, relating
to public utilities.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2505, as introduced, Maldonado.  Public utilities: stocks and
security transactions.
   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations,
and authorizes the commission to fix just and reasonable rates.
Under that authority, the commission has adopted decisions adopting
an incentive-based regulatory framework for telephone corporations,
called the new regulatory framework.
   The Public Utilities Act generally exempts from provisions of that
act governing stocks and security transactions any person or
corporation that transacts no business subject to regulation under
the act, except performing services or delivering commodities for or
to public utilities or municipal or other public corporations
primarily for resale or use in serving the public. Notwithstanding
that general exemption, those provisions of the act governing stocks
and security transactions apply to any public utility if the
commission finds that the application of those provisions is required
by the public interest.  The act authorizes the commission to exempt
any public utility or class of public utility from those stock and
security transaction provisions if it finds that their application is
not necessary in the public interest.
   This bill, except as specified, would exempt from those stock and
security transaction provisions, a telephone corporation that is
regulated under a new regulatory framework that utilizes a price-cap
index, price adjustment formula, or substantially similar mechanism
established by the commission, unless the corporation secures the
financing by pledging a plant or assets. The bill would authorize the
commission to reimpose the stock and security transaction provisions
if the commission finds, after an evidentiary hearing, that
imposition is required in the public interest.
   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.  It is the intent of the Legislature that the amendments
to Section 829 of the Public Utilities Code made by the act adding
this section not hinder the commission's existing authority to
disallow imprudent expenses or capital expenditures of the utilities
under its jurisdiction, or the commission's authority to impute a
capital structure or cost of capital for utilities under its
jurisdiction.
  SEC. 2.  Section 829 of the Public Utilities Code is amended to
read:
   829.   (a)  This article  shall  
does  not apply to  any   a  person or
corporation  which   that  transacts no
business subject to regulation under this part, except performing
services or delivering commodities for or to public utilities or
municipal or other public corporations primarily for resale or use in
serving the public or any portion thereof but shall nevertheless
apply to any 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.
 The  
   (b) (1)The requirements in this article for commission approval of
utility financing do not apply to a telephone corporation that is
regulated under a new regulatory framework that utilizes a price-cap
index, price adjustment formula, or substantially similar mechanism
established by the commission, if the corporation does not pledge a
plant or assets to secure the financing.  However, this article shall
continue to apply to any telephone corporation that is also an
electrical corporation or gas corporation that is a public utility,
as defined in Section 216, 218, or 222.
   (2) Notwithstanding paragraph (1), a telephone corporation as
described in this subdivision shall remain subject to Sections 817,
820, 824, 826, 828, 830, and subdivision (a) of Section 827.
   (3) The commission may reimpose any or all of the requirements of
this article for commission approval of utility financing upon a
utility exempt under paragraph (1) if the commission finds, after an
evidentiary hearing in a proceeding considering the financial
condition of the utility, that the application of any or all of the
requirements of this article is required by the public interest.
   (c) The  commission may from time to time by order or rule,
and subject to  such   those  terms and
conditions  as   that  may be prescribed
 therein   in the order or rule  , exempt
any public utility or class of public utility from  the
provisions of  this article , or any portion of this
article,  if it finds that the application  thereof to
such   of this article to the  public utility or
class of public utility is not necessary in the public interest.