BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 177|
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UNFINISHED BUSINESS
Bill No: SB 177
Author: Peace (D) and Burton (D)
Amended: 9/7/99
Vote: 21
SENATE JUDICIARY COMMITTEE : 8-1, 4/13/99
AYES: Burton, Escutia, Haynes, Morrow, O'Connell, Peace,
Sher, Schiff
NOES: Wright
SENATE ENERGY, U.&C. COMMITTEE : 6-0, 5/11/99
AYES: Bowen, Hughes, Kelley, Peace, Solis, Speier
NOT VOTING: Alarcon, Baca, Brulte, Mountjoy, Vasconcellos
SENATE APPROPRIATIONS COMMITTEE : 12-0, 5/24/99
AYES: Johnston, Alpert, Bowen, Burton, Escutia, Johnson,
Karnette, Kelley, Leslie, McPherson, Mountjoy,
Vasconcellos
NOT VOTING: Perata
SENATE FLOOR : 32-1, 6/1/99
AYES: Alarcon, Alpert, Baca, Bowen, Brulte, Burton,
Chesbro, Costa, Dunn, Figueroa, Hayden, Johannessen,
Johnson, Johnston, Kelley, Knight, Leslie, Lewis,
McPherson, Monteith, Murray, O'Connell, Ortiz, Peace,
Perata, Polanco, Poochigian, Rainey, Schiff, Sher,
Speier, Vasconcellos
NOES: Wright
NOT VOTING: Escutia, Haynes, Hughes, Karnette, Morrow,
Mountjoy, Solis
ASSEMBLY FLOOR : 66-10, 9/10/99 - See last page for vote
CONTINUED
SB 177
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SUBJECT : Public utilities: eminent domain
SOURCE : Author
DIGEST : This bill pertains to eminent domain powers for
privately owned public utilities. The bill, among other
things, (1) limits the privilege of condemnation when used
for the purpose of competing with another entity, as
specified; (2) prohibits a telephone corporation from
condemning property on specified airports.
Assembly Amendments
1.Add additional harmful efforts that are to be minimized
that impact the environment to existing legislative
findings in existing law.
2.Narrow condemnation portion of the bill to the San
Francisco International Airport.
3.Requires a public hearing in local jurisdiction that is
affected by a condemnation and defines "local
jurisdiction".
ANALYSIS : Existing law provides public utilities with
the authority to use the power of eminent domain to condemn
any property necessary to deliver service.
This bill 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.
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The above 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.
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
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.
C. Defines "local jurisdiction" to mean each city
within those boundaries property sought to e taken by
eminent domain is located, and if property sought to
be taken is not located within city boundaries, each
county within those boundaries that property is
located. However, where the is more than one local
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jurisdiction with respect to a single complaint or
petition, the commission shall provide notice and
copies of notices for mailing to all local
jurisdictions involved, but shall hold only a single
hearing in any one of those local jurisdictions.
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 the San Francisco Bay Conservation and
Development Commission (SFBCDC) when considering permit
applications to place fill in the bay.
Background
The right of eminent domain was originally codified in 1872
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and is defined as the right of the people or government to
take private property for public use. This right may only
be exercised upon payment of "just compensation" to the
private property owner. The right of eminent domain was
only permitted to be exercised for specified public uses,
including construction of aqueducts, bridges, railroads,
pipes, and public transportation, the predecessors of
modern utility services. Current law explicitly permits
public utilities, including railroads, and electric, gas,
water, and telephone utilities (but not cable television
corporations) to exercise the power of eminent domain.
These statutes have been unchanged since 1975.
Analysis by the California Law Revision Commission . The
California Law Revision Commission (CLRC) has been
reviewing the authority of public utilities to condemn
property and stated the following in a September 1998
recommendation:
"This authority dates from an era when the numbers of
privately owned public utilities were limited, and their
operations were superintended by the Public Utilities
Commission in a regime of monopoly regulation.
"Circumstances have changed. Deregulation has occurred in
a number of public utility industries, with a corresponding
increase in the number of competitors and decrease in
Public Utilities Commission oversight. For example, by
mid-1998, hundreds of competitors had been issued
certificates of public convenience and necessity by the
Public Utilities Commission to compete as local
telecommunications service providers.
"Deregulation has been accompanied by complaints of
inappropriate exercise or threatened exercise of
condemnation power by competitors. While the number of
complaints to date are limited, the Law Revision Commission
believes that some constraint on unfettered exercise of
eminent domain power by a privately owned public utility
may be appropriate. (Condemnation by Privately Owned
Public Utility, California Law Revision Commission
Tentative Recommendation, p. 5 (September 1998).)"
The Law Revision Commission has issued a tentative
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recommendation that gives the CPUC the ability to regulate
the exercise of condemnation authority as it deems
appropriate.
Right to Condemn is Limited and Subject to Public Review,
Except When Condemnation is by Utilities . The right to
condemn, or take private property, is one of a number of
privileges that utilities enjoy in exchange for assuming
certain burdens, such as rate regulation and providing
service to all. Other than public entities, the right to
take private property is generally limited to utilities and
certain quasi-public entities, such as nonprofit
educational institutions of collegiate grade and nonprofit
hospitals. Before the quasi-public entity can condemn the
property, the consent of the local public entity is
required. Before the local public entity may authorize the
acquisition, it must first find that:
1.The public interest and necessity require the proposed
project.
2.The proposed project is planned or located in the manner
that will be most compatible with the greatest good and
least private injury.
3.The property to be taken is necessary for the proposed
project.
4.The hardship to the quasi-public entity if the taking is
not permitted outweighs the hardship to the owners of the
property.
Under current law, when utilities condemn property no
public review is required. Despite the relative ease with
which utilities may condemn property, the incidence of
exercise of condemnation power by utilities has been low,
according to the CLRC. However, the real value in
condemnation authority lies as much with its threat as its
actual implementation.
The transformation of utility service from a tightly
controlled monopoly to a much less controlled competitive
market argues for a comparable transformation of the
historical privileges granted to utilities. Some would
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argue that because electricity, natural gas, railroad, and
telecommunications services remain essential, the
unfettered power of condemnation should be retained.
However, society considers dozens of other services
essential, such as gasoline supply and food, yet
privately-owned, for-profit oil companies and farmers have
no condemnation powers.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
An accurate estimate of the number of eminent domain
proceedings and the notice costs that may result from this
bill is difficult to determine.
SUPPORT : (Verified 9/10/99)
Building Owners and Managers Association of California
Cities of Benicia, Culver City, Cupertino, Lakewood, La
Mirada, Malibu, Merced, Moreno Valley, Oceanside, Poway,
Stockton, and Thousand Oaks
California League of California Cities
San Francisco International Airport
California Apartment Association
California State Council of Laborers
California Business Properties Association
National Association of Office and Industrial Properties
OPPOSITION : (Verified 5/26/99)
GTE
Williams Companies, Inc.
ASSEMBLY FLOOR : 66-10, 9/10/99
AYES: Aanestad, Alquist, Ashburn, Bates, Baugh, Calderon,
Campbell, Cardoza, Cedillo, Corbett, Correa, Cox,
Cunneen, Davis, Dickerson, Ducheny, Dutra, Firebaugh,
Florez, Floyd, Frusetta, Gallegos, Havice, Hertzberg,
Honda, House, Jackson, Keeley, Knox, Kuehl, Leach,
Lempert, Leonard, Longville, Lowenthal, Machado, Maddox,
Maldonado, Margett, Mazzoni, McClintock, Migden, Nakano,
Olberg, Oller, Robert Pacheco, Papan, Pescetti, Reyes,
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Romero, Scott, Shelley, Soto, Steinberg, Strickland,
Strom-Martin, Thompson, Thomson, Torlakson, Vincent,
Washington, Wayne, Wiggins, Wildman, Wright, Villaraigosa
NOES: Ackerman, Baldwin, Battin, Brewer, Briggs, Granlund,
Kaloogian, Rod Pacheco, Runner, Zettel
NOT VOTING: Aroner, Bock, Cardenas, Wesson
NC:cm 9/10/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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