Code Section Group

Public Utilities Code - PUC

DIVISION 3. PUBLIC UTILITY FRANCHISES BY LOCAL GOVERNMENTS [6001 - 6467]

  ( Division 3 enacted by Stats. 1951, Ch. 764. )

CHAPTER 2. Gas, Oil, Electric, and Water Franchises by Municipalities [6201 - 6302]

  ( Heading of Chapter 2 amended by Stats. 1965, Ch. 626. )

ARTICLE 2. Manner of Granting [6231 - 6235]
  ( Article 2 enacted by Stats. 1951, Ch. 764. )

6231.
  

An applicant for a franchise shall file with the legislative body of the municipality in which the franchise is desired an application stating all of the following:

(a) The name of the applicant.

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

(c) That the applicant if granted the franchise will pay to the municipality during the life of the franchise 2 percent of the applicant’s gross annual receipts arising from the use, operation, or possession of the franchise, except that this payment shall be not less than 1 percent of the applicant’s gross annual receipts derived from the sale within the limits of the municipality of the utility service for which the franchise is awarded. If the application is for a franchise complementary to a franchise derived under Section 19 of Article XI of the California Constitution as that section existed prior to its amendment on October 10, 1911, then the applicant shall pay annually, if the application is for an electric franchise, 2 percent of the applicant’s gross annual receipts arising from the use, operation, or possession of the franchise, except that this payment shall be not less than one-half of 1 percent of the applicant’s gross annual receipts from the sale of electricity within the limits of the municipality under both the electric franchises; or, if the application is for a gas, oil pipeline, or water franchise, 2 percent of the applicant’s gross annual receipts arising from the use, operation, or possession of the franchise, except that this payment shall be not less than 1 percent of the gross annual receipts from the sale of gas or water within the limits of the municipality under both the gas franchises or both the water franchises.

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 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 or 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 cent ($0.005) times the nominal internal diameter of the pipe, expressed in inches, times the number of lineal feet of the pipe within the public streets, ways, alleys, or other public places within the municipality.

(Amended by Stats. 1984, Ch. 197, Sec. 3.)

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:

Pipe size (internal

Base rate

diameter in inches) _____

per lineal foot 

 0–4

$0.088

 6

0.132

 8

0.176

10

0.220

12

0.264

14

0.308

16

0.352

18

0.396

20

0.440

22

0.484

24

0.528

26

0.572

28

0.616

30

0.660

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.

(Added by Stats. 1989, Ch. 1444, Sec. 4.)

6232.
  

Upon receipt of the application the legislative body of the municipality may pass its resolution declaring its intention to grant the franchise applied for, stating the character of the franchise, setting forth a notice of the day, hour, and place when and where all persons having any objection to the granting thereof may appear before the legislative body and be heard thereon, and directing the clerk of the legislative body to publish the notice at least once within fifteen (15) days after the passage of the resolution in a newspaper of general circulation within the municipality.

The time fixed for the hearing shall be not less than twenty (20) nor more than sixty (60) days after the date of the passage of the resolution.

(Enacted by Stats. 1951, Ch. 764.)

6233.
  

The notice of the time and place of hearing objections shall state that the grantee of the franchise and its successors and assigns will, during the life of its franchise, pay to the municipality the percentage specified in its application, that the percentage will be paid annually from the date of the granting of the franchise, and in the event such payment is not made the franchise will be forfeited. The notice shall also designate the term, whether definite or indeterminate, for which the franchise is proposed to be granted.

(Enacted by Stats. 1951, Ch. 764.)

6234.
  

At any time not later than the hour set for the hearing of objections, any person interested may make written protest stating objections against the granting of the franchise. The protest shall be signed by the protestant and be delivered to the clerk of the legislative body. At the time set for hearing objections the legislative body shall proceed to hear and pass upon all protests so made and its decision shall be final and conclusive, subject to the right of referendum of the people. The legislative body may adjourn the hearing from time to time.

If no protest in writing is delivered to the clerk up to the hour set for hearing, or such protests as are filed have been heard and determined by the legislative body to be insufficient, or have been overruled or denied, the legislative body may grant the franchise. The franchise shall be granted by ordinance adopted in the manner prescribed by law for the enactment of ordinances by the granting body.

(Enacted by Stats. 1951, Ch. 764.)

6235.
  

A franchise granted under this chapter does not become effective until the grantee files written acceptance thereof with the clerk of the granting municipality. When so filed the acceptance constitutes a continuing agreement by the grantee that if and when the granting municipality thereafter annexes, or consolidates with, additional territory, all franchises, rights and privileges owned by the grantee therein, except a franchise derived under Section 19 of Article XI of the Constitution as that section existed prior to the amendment thereof adopted October 10, 1911, shall be deemed abandoned within the limits of the additional territory.

(Enacted by Stats. 1951, Ch. 764.)

PUCPublic Utilities Code - PUC2.