BILL ANALYSIS
SB 177
Page 1
SENATE THIRD READING
SB 177 (Peace)
As Amended September 7, 1999
Majority vote
SENATE VOTE :32-1
UTILITIES AND COMMERCE 10-0
APPROPRIATIONS 13-7
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|Ayes:|Wright, Pescetti, |Ayes:|Migden, Cedillo, Davis, |
| |Campbell, Frusetta, | |Hertzberg, Kuehl, Papan, |
| |Maddox, Mazzoni, Papan, | |Romero, Shelley, |
| |Reyes, Vincent, Wesson | |Steinberg, Thomson, |
| | | |Wesson, Wiggins, Wright, |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Brewer, Ackerman, |
| | | |Ashburn, Campbell, |
| | | |Maldonado, Runner, Zettel |
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SUMMARY : Revises eminent domain rights as they pertain to
public utilities that offer competitive services and establishes
a public hearing process to determine if the public interest
would be served through an eminent domain action. Specifically,
this bill :
1)Prohibits a telephone corporation from condemning property on
an airport owned by a city and county and located in another
county unless that property is necessary to provide
telecommunications service in an unserved area.
2)Prohibits a public utility that offers competitive services
from condemning property for the purpose of competing with
another public utility unless the California Public Utilities
Commission (CPUC) finds that the public interest would be
served by a condemnation action.
3)Requires any utility seeking to condemn property to file a
complaint or petition at CPUC, serve personal notice upon all
affected property owners and conduct an adjudication hearing.
4)Requires that CPUC hearings be conducted in the local
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jurisdiction and that CPUC make a finding that the public
interest would be served if either of the following conditions
are met:
a) The proposed condemnation is necessary to provide
service as a provider of last resort to an unserved area,
except when there are competing offers from facility-based
carriers to serve that area; or,
b) The public interest requires the project; the property
is necessary for the project; the public benefit of
acquiring the property by eminent domain outweighs the
hardship to the owners of the property; and the project is
located in a manner most compatible with the greatest
public good and least amount of private injury.
5)Requires CPUC to comply with hearing guidelines including, but
not limited to, the following:
a) Commence hearing within 45 days of the date of the
petition unless respondent establishes that an extension of
not more than 30 days is necessary for discovery or other
hearing preparation.
b) Provide copies of the hearing notice to the local
jurisdiction in time for that local jurisdiction to provide
at least seven days advance notice to interested persons.
c) Render a decision within 45 days of the conclusion date
of the hearing and provides for an additional 30 days if
necessary for further briefing.
6)Indicates that time limits described above will be extended,
as necessary, to accommodate a decision that requires a
California Environmental Quality Act (CEQA) review.
7)Exempts railroad corporations, refined petroleum product
common carrier pipelines, and water corporations.
8)Prohibits a public utility from entering into any exclusive
access agreement with any property owner or engaging any act
which would limit the right of any other public utility to
provide service to that property.
9)Expands the environmental factors that should be considered by
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the San Francisco Bay Conservation and Development Commission
(SFBCDC) when considering permit applications to place fill in
the bay.
EXISTING LAW provides public utilities with the authority to use
the power of eminent domain to condemn any property necessary to
deliver service.
FISCAL EFFECT : Annual special fund costs to CPUC of about
$300,000.
COMMENTS : The right of eminent domain was initially codified in
1872 for purposes of providing people or the government the
right to take property for public use. The right of eminent
domain can only be exercised upon payment of just compensation
to the private property owner. The right of eminent domain as
codified in the Public Utilities Code permits public utilities,
including railroads, electric, gas, water and telephone
utilities to exercise the power of eminent domain. These
statutes have been unchanged since 1975. The right of eminent
domain as it pertains to these public utilities "dates from an
era when the numbers of privately owned public utilities were
limited, and their operations were superintended by CPUC in a
regime of monopoly regulation. California Law Revision
Commission Analysis ."
Due to deregulation of the telecommunications industry as well
as restructuring of the electric and gas industries, there is
increased competition in each of these areas (e.g., today
hundreds of competitors hold Certificates of Public Convenience
and Necessity from CPUC to compete as local telecommunications
service providers). The author has introduced this bill to
address the changing public utility and its ability to acquire
property through eminent domain. According to the author,
eminent domain powers "made sense when the public utilities held
monopoly positions and carried the obligation to serve all
customers in their service territory."
Competition today, however, is not limited by industry, but is
rampant across the gas, electric and telephone industries. The
industries are beginning to converge as many non-telephone
utilities provide telecommunications services over their
facilities and rights of way. This bill contains a process to
provide electrical and gas corporations the ability to use
existing eminent domain processes for the condemnation of
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property necessary solely to meet their commission-ordered
obligation to serve. If, however, an electrical or gas
corporation seeks to acquire property for its commission-ordered
obligations and also uses that acquisition of property to
provide competitive telecommunications services, they will be
required to comply with the process embodied in this bill.
This bill includes a clause that pertains solely to the City and
County of San Francisco Airport. The author has included this
very narrow limitation due to ongoing litigation regarding an
eminent domain proceeding with a cellular telephone company.
This provision is to ensure that no further attempts are made at
the airport to acquire property by eminent domain.
SFBCDC evaluates applications for development and landfill in
the San Francisco Bay. This bill expands the environmental
factors that should be evaluated by SFBCDC when considering the
permit applications to place fill in the bay and certain
waterways.
Analysis Prepared by : Carolyn Veal-Hunter / U. & C. / (916)
319-2083
FN: 0003324