BILL ANALYSIS
AB 521
Page 1
ASSEMBLY THIRD READING
AB 521 (De La Torre)
As Amended April 17, 2009
Majority vote
UTILITIES AND COMMERCE 12-2
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|Ayes:|Fuentes, Tom Berryhill, | | |
| |Blakeslee, Buchanan, | | |
| |Carter, Fong, Furutani, | | |
| |Huffman, Krekorian, | | |
| |Smyth, Swanson, Torrico | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Duvall, Fuller | | |
| | | | |
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SUMMARY : Requires the California Public Utilities Commission
(PUC) to consider additional benefits when evaluating lease
proposals in order to encourage the use of utility property for
public parks. Specifically, this bill :
1)Authorizes a public utility to lease real property to a
governmental entity for purposes of maintaining a public
park, with the utility retaining a right-of-way easement.
2)Requires PUC to include the community benefits, defined as
public health, environmental protection and building
recreational assets, of parks and open space as part of its
calculation in determining the fair value of the lease to
ratepayers.
EXISTING LAW prohibits public utilities from selling, leasing,
assigning, mortgaging, or otherwise disposing of or encumbering
the whole or any part of property necessary or useful in the
performance of its duties to the public without first having
secured approval from PUC.
FISCAL EFFECT : None
COMMENTS : According to the sponsor, the Trust for Public Land,
this bill would facilitate the ability to use utility
right-of-ways to create new recreational parks and open spaces.
AB 521
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The majority of Californians live in metropolitan areas, many of
which lack adequate park space. These communities often have
difficulty creating new parks because of a lack of open spaces
and the cost of land. This bill would help to create new parks
and mitigate the cost of these parks by utilizing utility
property and ensuring that the community benefits of parks are
taken into account when determining a fair lease rate.
Existing law requires that a public utility to obtain approval
from PUC before engaging in any transaction involving property
used to deliver service. PUC has held that the primary question
in such proceedings is whether the proposed transaction is
adverse to the public interest, and has defined the public
interest as having been served when "utility property is used
for other productive purposes without interfering with the
utility's operation or affecting service to utility customers."
Once the utility submits an application detailing the proposal
and the terms of the lease, PUC reviews it to ensure that it
does not interfere with the utility's ability to provide
adequate service to the public at reasonable rates. The
monetary ratepayer impacts of such transactions are generally
positive in that they shift the costs of property ownership from
the utility to the lessee including the costs of insurance,
maintenance, and management, and therefore justify a lower lease
rate.
The intent of this bill is to increase the likelihood that
utility owned property will be leased to local governments to be
used as parks and open space. In fact, the language may create
a land use priority for usage as park over other commercial
purposes. When considering a lease of utility owned land for a
commercial use, PUC looks at the economic value of the land and
if the lease will allow ratepayers to recover that value. This
bill requires PUC to consider non-economic factors in
determining the economic value of the lease for a public park.
These non-economic factors could increase the benefit of leasing
the land for a public park and decrease the comparative benefit
of a commercial use.
Analysis Prepared by : Nina Kapoor / U. & C. / (916) 319-2083
AB 521
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FN: 0000362