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