BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 476
                                                          Page  1

Date of Hearing:   July 7, 1999

    ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT 
                      Alan Lowenthal, Chair
          SB 476 (Chesbro) - As Amended:  June 29, 1999

  
SUBJECT  :   Mobilehomes

  SUMMARY  :   Caps the price a mobilehome operator may charge a  
resident for liquefied petroleum gas to 110 percent of the  
actual price paid by the operator.  Specifically,  this bill  :  

1)Includes intent language, which states that liquefied  
  petroleum gas (LPG) is an important source of heat for  
  mobilehome owners, and that many park owners require  
  homeowners to purchase the gas from the park owner.

2)Specifies that the 110 percent cap shall only apply to  
  mobilehome parks that do not allow homeowners to purchase LPG  
  from sources other than park management. 

3)Requires park management to post the price paid by management  
  for LPG that it will then sell to homeowners.  

4)Applies only to mobilehome parks regulated under the  
  Mobilehome Residency Law.

  EXISTING LAW  

1)Allows park management to require a resident wishing to  
  purchase LPG to make the purchase solely from management at an  
  unregulated price.

2)Allows mobilehome parks to bill residents separately for  
  utility services, including LPG, if the rental agreement does  
  not include such services.

  FISCAL EFFECT  :   None

  COMMENTS  :   This bill addresses the issue of LPG pricing by  
mobilehome parks whose tenants have no alternative but to  
purchase LPG from the park owner. In many parks across the  
state, a homeowner may receive LPG service from a vendor outside  
the park at market rate. These residents will often own or rent  








                                                          SB 476
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their own storage tanks. However, a 1993 study by the California  
Public Utilities Commission estimated that 500 of the state's  
mobilehome parks operated multi-customer systems where  
homeowners can purchase LPG only from the park owner. 

The author believes that the sale of LPG to captive residents  
should not be a profit center for mobilehome park owners in this  
state. This bill limits the amount a park owner may charge for  
the sale of LPG to 110% of the price paid by the park owner for  
the LPG. The author believes that the 10% margin above the  
purchase price would allow the park operator to cover the costs  
associated with storing and delivering the gas to residents. The  
author concedes that the 10% figure was not derived  
scientifically. He has tried to contact persons in the  
mobilehome industry in order to obtain input but has had no  
success. 

Supporters of SB 476 believe that this bill would bring  
reasonable regulation to the price park owners may charge park  
residents for LPG. They contend that while the PUC regulates  
many forms of other utilities, it does not regulate what park  
owners may charge residents for LPG.  This practice has led to  
excessive charges by some park owners upon residents who are  
often low-income, elderly, and dependent upon LPG to heat their  
homes and cook their food. 

  Prior Legislation:
  
AB 2016 (Brown) of 1998, would have prohibited park management  
from charging homeowners more than the actual price paid by the  
management for gas, plus the price of procuring the gas and  
improving and maintaining the delivery system. Governor Wilson  
vetoed the bill because he believed the bill contained price  
controls that would cause park owners to increase rents and  
other types of charges upon tenants in order to recoup costs.  
His veto message also stated that the bill may cause park owners  
to stop providing LPG distribution services, thereby forcing  
park residents to rely on more expensive alternatives. 

Two other bills were passed by the Legislature which sought to  
cap LPG prices at 110 percent of the wholesale price. AB 1165  
(Waters) of 1989 and SB 413 (Thompson) of 1991. The Governor  
vetoed these bills as well based on the assertion that adequate  
profits should be allowed for providing LPG services to  
homeowners.








                                                          SB 476
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  REGISTERED SUPPORT / OPPOSITION  :

  Support  

American Association of Retired Persons
Area Agency on Aging
California Rural Legal Assistance Foundation
California Senior Legislature
Council on Aging
El Dorado County Commission on Agency
Golden State Mobilehome Owner's League
Western Center on Law and Poverty
  
Opposition  

None on file

  Analysis Prepared by  :    Patrick O'Donnell / H. & C.D. /  
(916)319-2085