BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 476|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: SB 476
Author: Chesbro (D)
Amended: 5/26/99
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 6-0, 4/27/99
AYES: Bowen, Hughes, Peace, Solis, Speier, Vasconcellos
NOT VOTING: Alarcon, Baca, Brulte, Kelley, Mountjoy
SENATE JUDICIARY COMMITTEE : 7-0, 5/18/99
AYES: Burton, Escutia, O'Connell, Peace, Sher, Wright,
Schiff
NOT VOTING: Haynes, Morrow
SUBJECT : Mobilehomes: liquid propane butane sales
SOURCE : Golden State Mobilehome Owners League
DIGEST : This bill would cap the price a moblehome park
manager may charge mobilehome park residents for liquid
propane to 110 percent of the actual price paid, when the
residents can only purchase their propane from the park
management.
ANALYSIS : Current law allows mobilehome parks to bill
residents separately for utility services, including liquid
propane service, if the rental agreement does not include
such services.
This bill limits the price that mobilehome park owners may
charge tenants for propane if the park owner does not
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permit the tenant to purchase his/her own propane. The
price which park owners may charge is capped at 110% of the
actual price paid by the park owner.
The bill requires the mobilehome park management to post
the actual price paid by management for liquid propane sold
by it.
The bill expressly excludes recreational vehicles from its
provisions. The bill clarifies that it applies only to
mobilehome parks covered under the Mobilehome Residency
Law.
The bill clarifies that it will not affect the provisions
of law that allow the costs of services rendered to be
charged to tenants.
Comments
This bill addresses the issue of liquid propane pricing by
mobilehome parks whose tenants have no alternative but to
purchase propane from the park's propane distribution
system. A 1993 study by the California Public Utilities
Commission (CPUC) estimated that approximately 500 of the
state's approximately 1,200 mobilehome parks operated
multi-customer systems where the residents can only
purchase propane from the park owner, creating an effective
monopoly. Propane is to mobilehomes as natural gas is to
traditional homes, yet while the retail price of natural
gas is regulated, the retail price of propane is not. This
bill is intended to deal with this inconsistency in state
policy.
The author doesn't believe that the sale of propane to
captive residents should be allowed to be a profit center
for mobilehome park owners. This bill limits that profit
by capping rates at 110% of the price paid by the park
owner. Out of the 10% margin, the park owner would
presumably cover the costs of operating and maintaining the
system of pipes and storage tanks which deliver the propane
to the mobilehomes. The 10% figure is not scientifically
based, but the author has apparently attempted to acquire
actual cost data from park owners without success. Without
such data it is not possible to determine a fair margin.
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The Legislature has three times in the last ten years
passed bills to limit propane prices in mobilehome parks.
Bills that capped propane prices at 110% of the wholesale
price were passed by the Legislature and vetoed in 1989 and
1991. In 1998, AB 2016 (Brown), which capped the price of
propane at the price paid by the park management plus a
monthly charge to cover the cost of operating, maintaining,
and improving the distribution system, also passed the
Legislature and was vetoed.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No
Local: No
SUPPORT : (Verified 5/27/99)
American Association of Retired Persons
Area Agency on Aging, Eureka
Santa Clara County Council on Aging
California Senior Legislature
El Dorado County Commission on Aging
Golden State Mobile Homeowners League
Western Center on Law and Poverty, Inc.
Numerous individuals
ARGUMENTS IN SUPPORT : The supporters of this bill argue
that it is necessary to prevent excessive charges for
propane by mobilehome park owners. They note that many
residents of mobilehome parks are senior citizens living on
fixed incomes.
NC:sl 5/27/99 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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