BILL ANALYSIS
SENATE HOUSING & LAND USE COMMITTEE Amended: 4/8/96
Senator Byron D. Sher, Chairman Set: First
Hearing: 4/15/96
Fiscal: No
Consultant:
Detwiler
SB 1896 - Costa
LOCAL FEES FOR TELECOMMUNICATIONS FACILITIES
Background and Existing Law:
Telephone companies have a state franchise to place
telephone poles and lines in public rights of way. This
statutory franchise preempts local franchises. But
counties and cities can still control the location of
telephone lines, requiring companies to obtain local
permits, pay inspection costs, pay for restoring streets,
and pay for incidental costs.
The Planning and Zoning Law limits cities' and counties'
permit processing fees. The fees to process general plan
amendments, rezonings, subdivisions, conditional use
permits, and other land use applications can't exceed the
reasonable cost of providing the service for which the fee
is charged. Local officials must follow statutory
procedures to set the fees, holding noticed public
hearings.
As telecommunications technologies change, more firms will
offer telephone services and telephone companies will offer
more services. Telecommunications companies fear that
local officials might charge fees that are higher than
their costs, using the evolving industry as a new source of
revenue for their local general funds. They want the
Legislature to limit local permit processing fees.
Proposed Law:
Senate Bill 1896 prohibits cities and counties from
charging fees that exceed the reasonable cost of providing
the service for the placement, installation, repair, or
upgrade of telecommunications facilities, lines, poles, or
antennas in public rights of way. Cities and counties
SB 1896 - 4/8/96 Page 2
cannot levy these fees for general revenue purposes. When
levying fees, local officials must conform to specified
sections of the Planning and Zoning Law.
SB 1896 allows cities and counties to charge additional
fees for expediting permits and for multiple permits.
Cities and counties can charge reasonable fees for their
inspection costs.
SB 1896 declares that it does not change the existing
authority of cities and counties to charge permit
processing fees, charge cable television franchise fees,
levy general taxes or special taxes, and impose exactions
under the Mitigation Fee Act.
The bill makes seven legislative findings and declarations
to support its provisions.
SB 1896 - 4/8/96 Page 3
Argument in Favor:
Codifies existing law. Telephone companies pay local
permit processing fees which can't exceed the cost of the
service. In the 1959 California Supreme Court decision
that preempted local regulation of telephone lines in
public streets in favor of the state's statutory franchise,
the telephone company conceded cities' permit powers,
including fees. SB 1896 codifies that concession by making
telecommunications facility permit fees subject to some of
the existing statutory limits on land use permit fees. In
its own words, the bill does not change existing local
powers over permit fees, franchise fees, taxes, or
mitigation fees. Local officials have no reason to worry
about SB 1896.
Argument Against:
The elephant in the room. Just like the elephant in the
room that no one wants to mention, SB 1896 tries to ignore
two crucial issues in local officials' relationship with
the expanding telecommunications industry: franchises and
mitigation fees. These issues are sources of suspicion,
friction, and future litigation between local governments
and telecommunication companies. If the Legislature fails
to make policy on these topics, it abdicates
decision-making to the courts and impedes California's
technological growth. Because mitigation fees are within
the Committee's jurisdiction, legislators may wish to
consider amending SB 1896 to apply the accepted procedures
and restrictions for developer fees to telecommunications
facilities. Ignoring conflicts will not make them go away.
Other Comments:
1. Death of a thousand cuts. Citing university and
engineering studies, local officials say that utility cuts
shorten the service life of street paving. Although
California cities have yet to impose street cut mitigation
fees, local officials in Anaheim, San Bernardino, San
Diego, San Francisco, and Santa Ana are getting ready.
They say that streets with more utility cuts have shorter
useful lives, requiring resurfacing sooner. Following the
logic that permits local officials to impose mitigation
SB 1896 - 4/8/96 Page 4
fees on other types of developers, city officials want to
charge utilities --- including telecommunications companies
--- fees that offset the higher public costs of street
paving. Local officials fear that SB 1896 may become the
legislative vehicle that preempts local mitigation fees,
just as the Legislature preempted local telephone
franchises.
2. Spell it out? Existing law lets local officials charge
developer fees if they follow special procedures and
observe statutory limits. There must be a "reasonable
relationship between the fee's use and the type of
development project." Further, there must be a "reasonable
relationship between the need for the public facility and
the type of development project." Officials must
separately account for the resulting revenues and, if they
don't spend them in time, return the fees. Builders can
protest the fees, ask for audits, and challenge them in
court. The burden of proof falls on the local officials.
The Committee may wish to consider making street cut
mitigation fees subject to these same established rules.
That way, both private firms and public officials will know
their limits.
3. Chill out! The original version of SB 1896 agitated
many local officials who saw the bill as an attempt to
limit local control over telecommunications facilities.
The Congressional battles over the new Telecommunications
Act of 1996 left tender sensibilities exposed. As amended,
the bill does not affect local officials' power to control
cable television franchises. If that issue returns, the
Senate Committee on Energy, Utilities, and Communications
--- which has jurisdiction over that topic --- may wish to
hear the bill.
Support and Opposition: (4/10/96)
Support: California Taxpayers Association, Cal-Tax
Telecommunications Industry Roundtable, Pacific Bell, AT&T,
MCI, Sprint, GTE, California Cable Television Association,
Building Owners and Managers Association, Service Employees
International Union-California State Council.
Opposition: California State Association of Counties,
County of Marin, League of California Cities, Cities of
SB 1896 - 4/8/96 Page 5
Belmont, Cotati, Cupertino, El Cajon, Fairfield, Grover
Beach, Hayward, Hillsborough, Lakewood, La Mirada, Los
Altos, Los Angeles, Mammoth Lakes, Millbrae, Milpitas,
Moreno Valley, Pacifica, Palmdale, Petaluma, Pleasanton,
Sacramento, San Bernardino, San Carlos, San Francisco, San
Luis Obispo, San Mateo, San Pablo, San Ramon, Santa Ana,
Santa Barbara, Santa Rosa, Santee, Saratoga, Seal Beach,
South Lake Tahoe, South San Francisco, Stockton, Tracy,
Vallejo, Visalia, Walnut Creek; California Municipal
Utilities Association, Marin County Cable Rate Regulation
JPA, Sacramento Metropolitan Cable Television Commission,
Christopher P. Witteman