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 ----------------------------------------------------------------- |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 | ----------------------------------------------------------------- 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 SB 177 Page 2 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 SB 177 Page 3 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 SB 177 Page 4 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