BILL ANALYSIS                                                                                                                                                                                                    



                                                             


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|SENATE RULES COMMITTEE            |                   SB 476|
|Office of Senate Floor Analyses   |                         |
|1020 N Street, Suite 524          |                         |
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                    UNFINISHED BUSINESS
                              

Bill No:  SB 476
Author:   Chesbro (D)
Amended:  6/29/99
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

  SENATE FLOOR  :  27-9, 6/1/99
AYES:  Baca, Bowen, Burton, Chesbro, Costa, Dunn, Escutia,  
  Figueroa, Hayden, Hughes, Johannessen, Johnston, Leslie,  
  McPherson, Morrow, Murray, O'Connell, Ortiz, Peace,  
  Perata, Polanco, Rainey, Schiff, Sher, Speier,  
  Vasconcellos, Wright
NOES:  Brulte, Haynes, Johnson, Kelley, Knight, Lewis,  
  Monteith, Mountjoy, Poochigian
NOT VOTING:  Alarcon, Alpert, Karnette, Solis

  ASSEMBLY FLOOR  :  51-24, 8/16/99 - See last page for vote
 

  SUBJECT  :    Mobilehomes:  liquified petroleum gas sales

  SOURCE  :     Golden State Mobilehome Owners League

 
  DIGEST  :    This bill would cap the price a moblehome park  
                                                 CONTINUED





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manager may charge mobilehome park residents for liquified  
petroleum gas to 110 percent of the actual price paid, when  
the residents can only purchase their gas from the park  
management.

  Assembly Amendments  change the term "liquid propane butane"  
to "liquified petroleum gas", and make technical changes.

  ANALYSIS  :    Current law allows mobilehome parks to bill  
residents separately for utility services if the rental  
agreement does not include such services.  Existing law  
allows park management to require a resident wishing to  
purchase liquified petroleum gas to make the purchase  
solely from management at an unregulated price.
  
  This bill limits the price that mobilehome park owners may  
charge tenants for liquified petroleum gas if the park  
owner does not permit the tenant to purchase his/her own  
gas.  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 liquified petroleum  
gas 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 liquified petroleum gas  
pricing by mobilehome parks whose tenants have no  
alternative but to purchase gas 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 gas from the park owner, creating an  







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                                                       Page  
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effective monopoly.  Liquified petroleum gas is to  
mobilehomes as natural gas is to traditional homes, yet  
while the retail price of natural gas is regulated, the  
retail price of liquified gas is not.  This bill is  
intended to deal with this inconsistency in state policy.

The author doesn't believe that the sale of gas 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 gas 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.

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  8/16/99)

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.
California Rural Legal Assistance Foundation
Numerous individuals








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  ARGUMENTS IN SUPPORT  :    The supporters of this bill argue  
that it is necessary to prevent excessive charges for  
liquified petroleum gas by mobilehome park owners.  They  
note that many residents of mobilehome parks are senior  
citizens living on fixed incomes.


  ASSEMBLY FLOOR  :
AYES:  Alquist, Aroner, Battin, Bock, Cardenas, Cardoza,  
  Cedillo, Corbett, Correa, Davis, Ducheny, Dutra,  
  Firebaugh, Florez, Gallegos, Granlund, Havice, Hertzberg,  
  Honda, House, Jackson, Keeley, Knox, Kuehl, Lempert,  
  Leonard, Longville, Lowenthal, Machado, Mazzoni, Migden,  
  Nakano, Papan, Reyes, Romero, Runner, Scott, Shelley,  
  Soto, Steinberg, Strom-Martin, Thompson, Thomson,  
  Torlakson, Washington, Wayne, Wesson, Wiggins, Wildman,  
  Wright, Villaraigosa
NOES:  A anestad, Ackerman, Ashburn, Baldwin, Bates, Baugh,  
  Briggs, Campbell, Cox, Cunneen, Dickerson, Frusetta,  
  Kaloogian, Leach, Maddox, Maldonado, Margett, McClintock,  
  Olberg, Oller, Robert Pacheco, Pescetti, Strickland,  
  Zettel
NOT VOTING:  Brewer, Calderon, Floyd, Rod Pacheco, Vincent


NC:sl  8/18/99   Senate Floor Analyses 

               SUPPORT/OPPOSITION:  SEE ABOVE

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