BILL ANALYSIS
AB 521
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 521 (De La Torre)
As Amended June 8, 2009
Majority vote
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|ASSEMBLY: |67-12|(May 4, 2009) |SENATE: |27-5 |(September 1, |
| | | | | |2009) |
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Original Committee Reference: U. & C.
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.
The Senate amendments are technical, clarifying amendments.
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.
AS PASSED BY THE ASSEMBLY , this bill was substantially identical
to the bill as amended in the Senate.
FISCAL EFFECT : None
COMMENTS : 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. When considering a lease of
utility owned land for a commercial use, PUC looks at the
AB 521
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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.
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.
Analysis Prepared by : Nina Kapoor / U. & C. / (916) 319-2083
FN: 0002158