BILL ANALYSIS
AB 736
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 736 (Horton)
As Amended August 16, 2005
Majority Vote
-----------------------------------------------------------------
|ASSEMBLY: |76-0 |(May 26, 2005) |SENATE: |40-0 |(August 30, |
| | | | | |2005) |
-----------------------------------------------------------------
Original Committee Reference: U. & C.
SUMMARY : Modifies the California Public Utilities Commission's
(PUC's) approval process for the sale or transfer of public
utility assets by allowing public utilities to sell, or
otherwise transfer property valued at less than $5 million if
the transfer is approved by PUC through a 120-day advice letter
process rather than through a formal proceeding.
The Senate amendments :
1)Delete a provision that exempted a public utility from having
to obtain authorization from PUC before merging or otherwise
consolidating with a subsidiary, an affiliate, or a
corporation if certain conditions are met.
2)Provide that PUC may designate a process other than an advice
letter process if it determines that the transaction requires
a more comprehensive review.
3)Provide that PUC shall reject any advice letter request that
seeks to circumvent the $5 million threshold by dividing a
single asset into component parts.
EXISTING LAW requires a public utility to obtain an order from
PUC before selling, leasing, assigning, mortgaging, other
otherwise disposing of any property that is necessary or useful
in the performance of its duties to the public.
AS PASSED BY THE ASSEMBLY , this bill:
1)Required PUC to approve a public utility's request to sell,
lease or otherwise transfer a property valued at less than $5
million through a 120-day advice letter process rather than
AB 736
Page 2
through a formal proceeding.
2)Exempted a public utility from having to obtain authorization
from PUC before merging or otherwise consolidating with a
subsidiary, an affiliate, or a corporation if certain
conditions are met.
FISCAL EFFECT : According to the Assembly Appropriation
Committee, net special fund costs of up to $100,000 annually for
the equivalent of one position to review advice letters
COMMENTS : The purpose of this bill is to help streamline a long
process at PUC for non-controversial asset sales, transfers,
leases or encumbrances of utility property. Current law
requires public utilities to undergo a full proceeding at PUC
before selling, leasing, assigning, mortgaging, other otherwise
disposing of any property necessary for performing its duties to
the public. These proceedings can result in significant costs
for the applicant and other parties and can take up to 18 months
to complete. This bill modifies the approval process by
allowing public utilities to file an advice letter and obtain an
authorizing resolution to sell or transfer property from PUC
rather than requiring the utility to undergo a full proceeding
if the value of the transaction is less than $5 million. PUC is
currently considering the implementation of an advice letter
pilot program with substantially similar components to those
included in this bill.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
FN: 0012604