Code Section

6231.5.  

(a) An applicant for a franchise to build and operate a pipeline system transmitting oil or products thereof shall file with the legislative body of the municipality in which the franchise is desired an application stating all of the following:

(1) The name of the applicant.

(2) The purpose and term, whether definite or indeterminate, for which the franchise is desired.

(3) That the applicant, if granted the franchise, permit, license, or other privilege, will pay to the municipality an annual fee computed as follows:

The length of pipe expressed in feet located within the franchised area shall be multiplied by the applicable base rate, as adjusted pursuant to subdivision (d), in accordance with the following schedule:

For pipelines with an internal diameter not listed above, the fees shall be in the same proportion to the fees of a 12-inch-diameter pipe as the diameter of the unlisted pipe is to 12 inches.

(b) The annual payment for each lineal foot of pipeline shall be computed and revised each calendar year as follows:

(1) The applicable base rate shall be multiplied by the Consumer Price Index for the area, as published by the United States Department of Labor, Office of Information for the month of September immediately preceding the month in which payment is due and payable, and divided by the Consumer Price Index for June 30, 1989, which is declared to be 100.0. Under no circumstances shall the multiplying factor be less than one.

(2) If the United States Department of Labor, Office of Information discontinues the preparation or publication of a Consumer Price Index for the area, and if no translation table prepared by the Department of Labor is available so as to make those statistics which are then available applicable to the index of June 30, 1989, the municipality shall prescribe a rate of payment which shall, in its judgment, vary from the rates specified in this section in approximate proportion as commodity consumer prices then current vary from commodity consumer prices current in December 1988. On this point, the determination by the municipality shall be final and conclusive.

(c) No fee paid to any municipality pursuant to a franchise, permit, license, or other privilege issued under an ordinance which is in effect on September 1, 1989, which exceeds the fee computed under this section shall be reduced. On or after January 1, 1990, a municipality may collect an additional amount which represents the percentage increase in the Consumer Price Index for the area during the preceding calendar year applied to that fee. The formula used in arriving at that fee shall be applicable to any replacement, modification, or extension of the pipeline. Upon expiration of a franchise, permit, license, or other privilege, the municipality may renew or extend the franchise, permit, license, or other privilege, using the local formula contained in an ordinance which is in effect on September 1, 1989. However, the fee shall not exceed the greater of the fee actually paid on September 1, 1989, or the fee computed pursuant to this section.

(d) Notwithstanding any other provision of law, until January 1, 1990, a municipality which is involved in eminent domain proceedings in which a court order for possession has been issued relating to an easement for a pipeline system transmitting oil or products thereof may adopt an ordinance setting its fee without following the provisions of this section. Upon expiration of the ordinance, the municipality may renew or extend the franchise, license, permit, or other privilege, utilizing the local formula in effect on January 1, 1990, or the fee computed pursuant to this section, whichever is greater.

(e) Notwithstanding any other provision of this section, if the application is for a franchise for a nonpublic utility pipeline for industrial gas or oil or products thereof, the application shall state that the applicant, if granted the franchise, will pay to the municipality during the life of the franchise either of the following:

(1) A specified percentage agreed to by the applicant and the municipality of the gross annual receipts of the applicant arising from the use, operation, or possession of the franchise.

(2) An annual franchise fee in an amount agreed to by the applicant and the municipality, or an annual franchise fee computed by multiplying the sum of one-half of the nominal internal diameter of the pipe, expressed in inches, by the number of lineal feet of the pipe within the public streets, ways, alleys, or other public places within the municipality.

(f) Any nonpublic utility pipeline system transmitting oil or products thereof covered by subdivision (e) on December 31, 1989, that converts to public utility status shall continue to pay the fee established pursuant to subdivision (e) for the remaining term of its franchise, license, permit, or other privilege. Upon expiration of its franchise, license, permit, or other privilege, a nonpublic utility pipeline system transmitting oil or products thereof that has converted or seeks to convert to public utility status shall establish to the satisfaction of the franchising authority all of the following:

(1) Its property is dedicated to the service of the public.

(2) Its rates for transportation are established pursuant to tariffs filed with the Public Utilities Commission.

(3) Its accounts and records are established pursuant to rules and regulations adopted by the commission.

(4) It has filed an appropriate annual report with the commission.

(5) Its rates for transportation are just, reasonable, and nondiscriminatory, as evidenced either by an order of the commission approving those rates, or an application for approval of its rates that is pending with the commission.