Law:Division 3. Public Utility Franchises By Local Governments (California)

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Contents

Chapter 1. Franchise Provisions In General

Article 1. Manner Of Granting

Ca Codes (puc:6001-6017) Public Utilities Code Section 6001-6017



6001. Every franchise or privilege to erect or lay telegraph or telephone wires, to construct or operate street or interurban railroads upon any public street or highway, to lay gas pipes for the purpose of carrying gas for light, heat, or power, to erect poles or wires for transmitting electricity for light, heat, or power, along or upon any public street or highway, or to exercise any other privilege whatever proposed to be granted by the governing or legislative body of any county, city and county, or city shall be granted upon the conditions in this article provided, and not otherwise, except when such franchises are granted pursuant to Chapters 2 or 3 of this division. This article does not apply to franchises or privileges for railroads, or telegraph or telephone lines doing an interstate business, or to renewals of franchises for piers, chutes, or wharves, or to community antenna television systems, or to franchises or privileges for purposes not involving the furnishing of any service or commodity to the public or any portion thereof.


6001.5. (a) All franchises, licenses, permits, or other privileges granted to a public utility by any city, county, or city and county holding a freeholder's charter, to use, or to construct, or lay and use, under, along, across, or upon the public streets, ways, alleys, and places within the municipality, facilities which are part of a pipeline system transmitting oil or products thereof, shall be granted upon the terms and conditions provided in, and in accordance with, this chapter or Chapter 2 (commencing with Section 6201). (b) It is the intent of the Legislature, in enacting this section, to preempt the ordinance of any chartered municipality insofar as that ordinance governs the granting of franchises to construct facilities which are part of a pipeline system transmitting oil or other products thereof.


6002. The grantor may, in such a franchise, impose such other and additional terms and conditions not in conflict with this article, whether governmental or contractual in character, as in the judgment of the legislative body thereof are to the public interest.


6003. No clause or condition of any kind shall be inserted in any franchise or grant offered or sold under the terms of this article which shall directly or indirectly restrict free and open competition in bidding therefor, and no clause or provision shall be inserted in any franchise offered for sale, which shall in anywise favor one person, firm, or corporation, as against another, in bidding for the purchase thereof.


6004. An applicant for a franchise or privilege shall file with the governing or legislative body of the county or municipality an application, and thereupon that body shall, in its discretion, advertise the fact of the application, together with a statement that it is proposed to grant the franchise or privilege, in one or more newpapers of the county, city and county, or city wherein the franchise or privilege is to be exercised.


6005. The advertisement shall state that bids will be received for the franchise and that it will be awarded to the highest bidder. The advertisement shall be published once a day for 10 successive days, or as often during that period as the paper is published, if it is a daily newspaper. If there is no daily newspaper published in the county, city and county, or city, it shall be published in a weekly newspaper once a week for four successive weeks. In either case the full publication shall be completed not less than 20 nor more than 30 days before any further action can be taken thereon.


6006. The publication shall state the character of the franchise or privilege proposed to be granted, the term for which it is granted, and, if it is for a street railroad, the route to be traversed; that sealed bids therefor will be received up to a certain hour and day named therein, and that the successful bidder and his assigns shall during the life of the franchise pay to the county or municipality two percent (2%) of the gross annual receipts of the grantee arising from the use, operation, or possession of the franchise.


6007. The advertisement shall also contain a statement that the franchise will be struck off, sold, and awarded to the person, firm, or corporation making the highest cash bid therefor; that at the time of the opening of the bids any responsible person, firm, or corporation present or represented may bid for the franchise or privilege a sum not less than 10 percent above the highest sealed bid therefor, and the bid so made may be raised not less than 10 percent by any other responsible bidder and the bidding may so continue until the franchise is finally struck off, sold, and awarded to the highest bidder therefor in lawful money of the United States.


6008. Each sealed bid shall be accompanied with cash or a certified check payable to the treasurer of the county or municipality for the full amount of the bid, and no sealed bid shall be considered unless the cash or check is enclosed therewith. The successful bidder shall deposit at least 10 percent of the amount of his bid with the clerk of the county or municipality before the franchise is struck off to him. If he fails to make the deposit immediately his bid shall not be received, and is void, and the franchise shall then and there be again offered for sale to the bidder who makes the highest cash bid therefor, subject to the same conditions as to deposit. This procedure shall be had until the franchise is struck off, sold, and awarded to a bidder who makes the necessary deposit of at least 10 percent of the amount of his bid.


6009. The successful bidder shall deposit with the clerk of the county or municipality, within 24 hours of the acceptance of his bid, the remaining 90 percent of the amount thereof. If the bidder fails to deposit with the clerk of the county or municipality the remaining 90 percent of his bid within 24 hours after its acceptance, the award to him of the franchise shall be set aside, the deposit made by him shall be forfeited, and no further proceedings for a sale of the franchise shall be had unless it is readvertised and again offered for sale in the manner provided in this article.


6010. (a) The advertisement may also contain a statement that the successful bidder for any franchise or privilege struck off, sold, and awarded under this article shall file a bond running to the county, city and county, or city, approved by the governing body. The advertisement may require a bond executed by an admitted surety insurer. The bond shall be in a penal sum prescribed by the governing body and set forth in the advertisement for bids, and conditioned that the bidder shall well and truly observe, fulfill, and perform each term and condition of the franchise, and that in case of any breach of condition of the bond, the whole amount of the penal sum therein named shall be deemed to be liquidated damages. (b) The bond if required shall be filed with the governing body within the time specified in the advertisement and if no time is specified within five days after the franchise is awarded. The franchise shall be granted by ordinance to the person, firm, or corporation to whom it has been struck off, sold or awarded. If the bond is not filed within the time required, the award of the franchise may be set aside at any time prior to the filing and, if set aside, any money paid for the franchise shall be forfeited, and if an ordinance has been enacted granting the franchise, the governing or legislative body may repeal the ordinance and the franchise shall, in the discretion of the governing or legislative body, be readvertised and again offered for sale in the same manner and under the same restrictions, as provided in this article.


6010.1. Notwithstanding any other provision of this article, any franchise heretofore or hereafter granted shall not be invalid or subject to revocation because the bond required by law at the time of the award of such franchise shall not have been filed within the time then prescribed, provided the bond is filed prior to the setting aside of the award or, as the case may be, the repeal of the ordinance granting such franchise.


6011. If the franchise is a renewal of a right already in existence, payment of the percentage of gross receipts shall begin at once upon the granting of the franchise. If the franchise is not a renewal of a right already in existence, no percentage shall be paid for the first five (5) years succeeding the date of the franchise, but thereafter the percentage shall be payable annually. If payment is not made, the franchise shall be forfeited.


6012. If the franchise granted is an extension of an existing street railroad system, the gross receipts shall be estimated to be one-half of the proportion of the total gross receipts of the system which the mileage of this extension bears to the total mileage of the whole system. This estimate is conclusive as to the amount of the gross receipts of the extension.


6013. Work to erect or lay telegraph or telephone wires, to construct street or interurban railroads, to lay gas pipes for the purpose of carrying gas for light, heat, or power, to erect poles or wires for transmitting electricity for light, heat, or power, along or upon any public street or highway, or to exercise any other privilege whatever, a franchise for which has been granted pursuant to this article, shall be commenced in good faith within not more than four months from the granting of the franchise. If not so commenced the franchise shall be declared forfeited.


6014. Work to construct street or interurban railroads shall be completed within not more than three years from the granting of the franchise, and if not so completed the franchise shall be forfeited. For good cause shown, the governing or legislative body may by resolution extend the time for completion, not exceeding three months.


6015. Work under any franchise other than for a street or interurban railroad shall be prosecuted diligently and in good faith so as to meet and fill the reasonable needs of the inhabitants of the territory for the service of which the franchise is granted.


6016. The Attorney General, upon the complaint of any county or municipality, or, in his discretion, upon the complaint of any taxpayer, shall sue for the forfeiture of any franchise granted under this article, for the noncompliance with any condition thereof.


6017. Any member of a governing or legislative body of any county, city and county, or city, who, by his vote, violates or attempts to violate any of the provisions of this article is guilty of a misdemeanor and may be punished therefor as provided by law, and may be deprived of his office by the decree of a court of competent jurisdiction, after trial and conviction.


Article 2. Transportation Of Mail Carriers

Ca Codes (puc:6041) Public Utilities Code Section 6041



6041. In all cases where application is made to the governing or legislative body of a city or city and county for permission and authority to lay railroad tracks through streets or public highways of any city or city and county, the authorities before granting such permission and authority, in addition to the terms and restrictions which they are by law authorized to impose shall exact and require from the persons or corporation asking such permission and authority, as a condition precedent to the granting of permission, a satisfactory promise and undertaking to permit and allow mail carriers in the employ of the United States Government, at all times while engaged in the actual discharge of duty, to ride on the cars of such railroad without paying any sum of money whatever for fare or otherwise. All such permissions and franchises shall be subject to all other provisions of the laws of this State applicable to street railroads in general, and subject to regulations from city or city and county authorities.


Article 4. Steam Heat Franchises

Ca Codes (puc:6091-6092) Public Utilities Code Section 6091-6092



6091. All cities and cities and counties are empowered to grant franchises for the laying of pipes in the streets, roads, avenues, alleys, and public highways therein, for carrying steam heat under high pressure to be used, distributed, and sold to the inhabitants thereof for heating purposes.


6092. The granting of franchises under this article shall be pursuant to Article 1 of this chapter.


Chapter 2. Gas, Oil, Electric, And Water Franchises By Municipalities

Article 1. General Provisions

Ca Codes (puc:6201-6205.1) Public Utilities Code Section 6201-6205.1



6201. This chapter may be cited as the Franchise Act of 1937.


6201.3. As used in this chapter, "industrial gas" means any substance which is in a gaseous state at ambient conditions of temperature and pressure used for commercial, industrial, or scientific purposes, but does not include any gaseous hydrocarbon used for light, heat, power, or feedstock.


6201.5. As used in this chapter, municipality includes counties, but no county shall grant a franchise pursuant to this chapter in any incorporated area.

6202. The legislative body of any municipality may grant a franchise to any person, firm, or corporation, whether operating under an existing franchise or not, to use, or to construct and use, poles, wires, conduits, and appurtenances for transmitting and distributing electricity for all purposes, or to use, or to lay and use, pipes and appurtenances for transmitting and distributing gas or industrial gas for all purposes, or to use, or to lay and use, pipes and appurtenances for transmitting and distributing oil or products thereof for all purposes, or to lay and use pipes, ditches, flumes, conduits, and appurtenances for transmitting and distributing water for all purposes, under, along, across, or upon the public streets, ways, alleys, and places within the municipality, upon the terms and conditions provided in this chapter.


6203. The legislative body may in such a franchise impose such other and additional terms and conditions not in conflict with this chapter, whether governmental or contractual in character, as in the judgment of the legislative body are to the public interest.


6204. This chapter provides a procedure, alternative to the procedure provided in Article 1 of Chapter 1 of this division, for the granting of franchises by municipalities. When any proceeding is initiated under this chapter for the granting of a franchise, the provisions of this chapter exclusively govern the granting of such franchise.


6205. This chapter does not apply to any municipality having a freeholders' charter adopted and ratified under the Constitution and having in such charter provisions for the issuance of franchises by the municipality, but nothing contained in this chapter shall restrict the right of any such chartered municipality to avail itself of the provisions of this chapter wherever it may lawfully do so. The provisions of this chapter relating to the payment of a percentage of gross receipts shall not be construed as a declaration of legislative judgment as to the proper compensation to be paid a chartered municipality for the right to exercise franchise privileges therein.


6205.1. (a) Notwithstanding Section 6205, all franchises, licenses, permits, or other privileges granted to a public utility by any city, county, or city and county holding a freeholder's charter containing provisions for the issuance of franchises, to use, or to construct or lay and use, under, along, across, or upon the public streets, ways, alleys, and places within the municipality, facilities which are part of a pipeline system transmitting oil or products thereof, shall be granted upon the terms and conditions provided in, and in accordance with, either this chapter or Chapter 1 (commencing with Section 6001). (b) On and after January 1, 1990, the compensation to be paid for the franchises, licenses, permits, or other privileges granted by any city, county, or city and county, including those holding a freeholder's charter, shall be as provided in Section 6231.5. (c) It is the intent of the Legislature, in enacting this section, to preempt the ordinance of any chartered municipality insofar as that ordinance governs the granting of franchises to construct facilities which are part of a pipeline system transmitting oil or products thereof.


Article 2. Manner Of Granting

Ca Codes (puc:6231-6235) Public Utilities Code Section 6231-6235



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.


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.


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.


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.

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.


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.


Article 3. Scope Of Franchise

Ca Codes (puc:6261-6265) Public Utilities Code Section 6261-6265



6261. Any franchise granted under this chapter with respect to a given utility service is in lieu of all other franchises, rights, or privileges owned by the grantee, or by any successor of the grantee to any rights under the franchise, for transmitting and distributing the utility service within the limits of the municipality as such limits exist at the time of the granting of the franchise or as they may thereafter exist except any franchise derived under Section 19 of Article XI of the Constitution as that section existed prior to the amendment thereof adopted October 10, 1911. The acceptance of any such franchise granted under this chapter shall operate as an abandonment of all such franchises, rights, and privileges within the limits of such municipality as such limits at any time exist, in lieu of which the franchise is granted under this chapter.


6262. No franchise granted under this chapter in any way impairs or affects the right of the granting municipality to acquire the property of the grantee by purchase or condemnation, and nothing contained in such a franchise shall be construed to contract away, modify or abridge either for a term or in perpetuity the municipality' s right of eminent domain in respect to any public utility.


6263. No franchise granted under this chapter shall ever be given any value before any court or other public authority in any proceeding of any character in excess of the cost to the grantee of the necessary publication and any other sum paid by it to the municipality therefor at the time of acquisition.


6264. Every franchise granted pursuant to this chapter, except when a definite term therefor is specified in the ordinance granting it, is indeterminate, that is to say, every such franchise shall endure in full force and effect until, with the consent of the Public Utilities Commission, it is voluntarily surrendered or abandoned by its possessor, or until the State or some municipal or public corporation purchases by voluntary agreement or condemns and takes under the power of eminent domain, all property actually used and useful in the exercise of the franchise and situate within the territorial limits of the State, municipal, or public corporation purchasing or condemning such property, or until the franchise is forfeited for noncompliance with its terms by the possessor thereof.


6265. Every gas franchise granted pursuant to this chapter confers upon the grantee the right to use, or to lay and use, gas pipes and appurtenances for the purpose of transmitting and distributing gas; every oil franchise so granted confers upon the grantee thereof the right to use, or lay and use, oil pipes and appurtenances for the purpose of transmitting and distributing oil or products thereof; every industrial gas franchise so granted confers upon the grantee the right to use, or lay and use, industrial gas pipelines and appurtenances for the purpose of transmitting and distributing industrial gas; every water franchise so granted confers upon the grantee thereof the right to use, or to lay and use, pipes, ditches, flumes, conduits, and appurtenances for the purpose of transmitting and distributing water; and every electric franchise so granted confers upon the grantee thereof the right to use, or to construct and use, poles, wires or conduits and appurtenances for the purpose of transmitting and distributing electricity for all purposes, under, along, across, or upon the public streets, ways, alleys, and places as they now or hereafter exist within the municipality.


Article 4. Duties And Liabilities Of Grantee

Ca Codes (puc:6291-6302) Public Utilities Code Section 6291-6302



6291. If the grantee of any franchise granted under this chapter fails, neglects or refuses to comply with any of the provisions or conditions prescribed in this chapter, and does not within ten (10) days after written demand for compliance begin the work of compliance, or after such beginning does not prosecute the work with due diligence to completion, the municipality, by its legislative body, may declare the franchise forfeited.


6292. Any municipality may sue in its own name for the forfeiture of any franchise granted pursuant to this chapter, in the event of noncompliance with any of the conditions thereof by the grantee, its successors, or assigns.

6293. The grantee shall pay to the municipality a sum of money sufficient to reimburse it for all publication expenses incurred by it in connection with the granting of the franchise. Such payment shall be made within thirty (30) days after the municipality furnishes the grantee with a written statement of the expenses.


6294. The grantee of a franchise under this chapter shall construct, install, and maintain all pipes, conduits, poles, wires, and appurtenances in accordance and in conformity with all of the ordinances and rules adopted by the legislative body of the municipality in the exercise of its police powers and not in conflict with the paramount authority of the State, and, as to state highways, subject to the laws relating to the location and maintenance of such facilities therein.


6295. The grantee shall pay to the municipality on demand the cost of all repairs to public property made necessary by any of the operations of the grantee under the franchise.


6296. The grantee shall indemnify and hold harmless the municipality and its officers from all liability for damages proximately resulting from any operations under the franchise.


6297. The grantee shall remove or relocate without expense to the municipality any facilities installed, used, and maintained under the franchise if and when made necessary by any lawful change of grade, alignment, or width of any public street, way, alley, or place, including the construction of any subway or viaduct, by the municipality.


6298. The grantee shall file with the legislative body of the municipality within thirty (30) days after any sale, transfer, assignment, or lease of the franchise or any part thereof, or any of the rights or privileges granted thereby, written evidence of the transaction certified to by the grantee or its duly authorized officers.


6299. The grantee shall file with the clerk of the municipality, within three (3) months after the expiration of the calendar year, or fractional calendar year, following the date of the granting of the franchise and within three (3) months after the expiration of each calendar year thereafter, a verified statement showing in detail the total gross receipts of the grantee, its successors, or assigns during the preceding calendar year or fractional calendar year from the sale of the utility service for which the franchise was granted.


6300. The grantee shall pay to the municipality within fifteen (15) days after the time for filing its statement of gross receipts, in lawful money of the United States, the specified percentage of its gross receipts for the calendar year or fractional calendar year covered by the statement. Any neglect, omission, or refusal by the grantee to file the verified statement, or to pay the percentage at the times or in the manner provided constitutes grounds for the declaration of a forfeiture of the franchise and of all rights thereunder.

6301. (a) The grantee of a franchise under this chapter may be required to file a bond running to the municipality approved by the legislative body, in a penal sum prescribed by the legislative body and set forth in the resolution of intention to grant the franchise, conditioned that the grantee shall well and truly observe, fulfill, and perform each term and condition of the franchise, and that in case of any breach of condition of the bond the amount of the penal sum therein named shall be recoverable. (b) The bond, if required by the legislative body, shall be filed with the legislative body within five days after the date of the granting of the franchise. If the bond is not so filed, or does not receive the approval of the legislative body, the franchise may be refused or forfeited and any money paid to the municipality in connection therewith shall be retained by the municipality.


6302. The grantee of a franchise under this chapter shall be liable to the granting municipality for all damages proximately resulting from the failure of the grantee well and faithfully to observe and perform any provision of the franchise and any provision of this chapter.


Chapter 2.5. Municipal Public Lands Use Surcharge

Article 1. Intent

Ca Codes (puc:6350) Public Utilities Code Section 6350



6350. There is hereby created a surcharge to be applied to natural gas and electricity transported over utility and nonutility transmission or distribution systems, or both, constructed under, along, across, or upon the public streets, ways, alleys, and places within a municipality, to replace, but not increase, franchise fees that would have been collected pursuant to this division if not for changes in the regulatory environment such as the "unbundling" of the gas industry.


Article 2. Definitions

Ca Codes (puc:6351) Public Utilities Code Section 6351



6351. As used in this chapter: (a) "Municipality" includes counties. (b) "Energy transporter" means and includes every utility and nonutility owner or operator, or both, of a natural gas or electric transmission or distribution system, or both, subject to a franchise agreement executed pursuant to this division, provided that proprietary gas pipelines whose franchise fees are set forth in Article 2 (commencing with Section 6231) of Chapter 2 shall not be covered by this chapter. (c) "Transportation customer" means every person, firm, or corporation, other than the State of California or a political subdivision thereof, transporting gas or electricity on an energy transporter's transmission or distribution system, or both, when the gas or electricity was purchased by the transportation customer from a third party. Transportation customer shall not include one gas utility transporting gas, for end use in its commission designated service area through another gas utility's service area, nor shall transportation customer include a utility transporting its own gas through its own gas transmission or distribution system, or both, for purposes of generating electricity or for use in its own operations. In addition, "transportation customer" shall not include a cogeneration or nonutility generation facility when the facility transports electricity through its own electric transmission or distribution system or otherwise delivers electricity in the manner described in Section 218. (d) "Surcharge" means a municipal surcharge for the use of public lands by a transportation customer as defined in subdivision (c).


Article 3. Surcharge

Ca Codes (puc:6352-6353) Public Utilities Code Section 6352-6353



6352. (a) Notwithstanding any other provision of law, a transportation customer who receives transportation service on a natural gas or electric transmission or distribution system, or both, subject to a franchise agreement executed pursuant to this division from an energy transporter shall be subject to a surcharge as defined in Section 6353. Notwithstanding any other provision of this chapter, no county shall impose a surcharge pursuant to this chapter in an incorporated area. (b) Notwithstanding subdivision (a), the surcharge assessed for gas used to generate electricity by a nonutility facility shall be the same as the surcharge assessed for gas used to generate electricity by the electric utility for that quantity of gas described in Section 454.4. The surcharge amount for electricity shall not apply to the sale of electricity from a cogeneration or nonutility facility to an entity for resale to a retail customer. (c) Nothing in this chapter permits a municipality to recover surcharges imposed pursuant to this chapter on the commodity cost of gas or electricity transported for transportation customers in addition to franchise fees calculated on the imputed value of the same quantities of gas or electricity. If a municipality has a franchise agreement with an energy transporter that requires the energy transporter to pay a franchise fee based upon an imputed value for the commodity cost of gas or electricity transported but not sold by the energy transporter, the energy transporter may apply the surcharge imposed by this chapter toward the amount of the franchise fee due under the franchise agreement. (d) Nothing in this chapter shall in any way affect the rights of the parties to existing franchise agreements executed pursuant to this division that are in force on the effective date of this chapter. (e) Notwithstanding subdivision (a), the surcharge shall not apply to corporations transporting natural gas pursuant to a "gas transportation only" agreement in effect prior to January 1, 1986. (f) Notwithstanding subdivision (a), an energy transporter of gas that is required to obtain a franchise agreement with a municipality, and that is subject to the jurisdiction of the Federal Energy Regulatory Commission, shall not be required to collect the surcharge imposed by this chapter, but shall be required to negotiate with the municipality under the provisions of this division, franchise fees that recover amounts equivalent to those amounts that would otherwise have been recovered pursuant to this chapter.


6353. For purpose of calculating the surcharge required in Section 6352, the energy transporter shall do all of the following: (a) For each transportation customer, determine the volume of transported gas or electricity, in therms or kilowatt hours respectively, subject to the surcharge. (b) Determine the weighted average cost of the energy transporter' s gas or electricity. For gas, the energy transporter shall use its tariffed core subscription weighted average cost of gas (WACOG) exclusive of any California sourced franchise fee factor. For electricity, the energy transporter shall use that portion of the otherwise applicable utility rate or charge which, pursuant to commissioner order, is removed from the bill of a retail electric customer who has elected direct access to reflect the fact that the customer is purchasing energy from a nonutility provider exclusive of any California sourced franchise fee factor. For an energy transporter that does not provide gas or electricity at a commission tariffed rate, the energy transporter shall use the equivalent tariffed rate of the commission regulated energy transporter operating in the same service area. (c) Determine a product for each transportation customer by multiplying the volume determined pursuant to subdivision (a) by the weighted average cost determined pursuant to subdivision (b). (d) Determine the surcharge applicable to each transportation customer by multiplying the product determined pursuant to subdivision (c) by the sum of the franchise fee factor plus any franchise fee surcharge authorized for the energy transporter as approved by the commission in the energy transporter's most recent proceeding in which those factors and surcharges were set. An energy transporter not regulated by the commission shall multiply the product determined in subdivision (c) by the franchise fee rate contained in its individual franchise agreement in effect in each municipality. (e) The surcharge assessed pursuant to this chapter only applies to the end use point.


Article 4. Rights, Restrictions, And Compensation

Ca Codes (puc:6354-6354.1) Public Utilities Code Section 6354-6354.1



6354. (a) Surcharges calculated pursuant to Section 6353 shall be recovered from the transportation customer through the energy transporter's normal billing process. (b) Surcharges collected from the transportation customer shall be remitted to the municipality granting a franchise pursuant to this division in the manner and at the time prescribed for payment of franchise fees in the energy transporter's franchise agreement. In recognition of costs to be incurred by energy transporters in administering the surcharge established by this chapter, the energy transporter may retain interest earned on cash balances resulting from the timing difference between the monthly collection of the surcharge and the remittance thereof, as required by individual franchise agreements. (c) In the event that payment on a transportation customer closed account becomes more than 90 days delinquent, or a transportation customer notifies the utility that they refuse to pay the surcharge, the energy transporter shall, within 30 days, notify the municipality of the delinquency and provide information on the name and address of the delinquent transportation customer and the surcharge amount owed. The energy transporter shall not be liable for these delinquent surcharges. (d) The municipality, including its authorized officials, employees and agents shall use the delinquent transportation customer information only for the purpose of enforcing the surcharge and shall not disclose the information to any officials, employees, agents, or any third parties who are not responsible for and involved in the enforcement of the municipality's franchise agreements. Nothing herein precludes the municipality, through appropriate officials, employees or agents, from contacting the transportation customers in order to collect any surcharges due from the transportation customer. (e) By March 31 of each year, every person, firm, or corporation that transports gas or electricity to any other person, firm, or corporation within a municipality, upon request of the municipality, shall provide the names and addresses of each of its transportation customers and such other information for the preceding calendar year as may be necessary for the municipality to enforce its taxes and fees. The municipality, including its authorized employees and agents, shall use the transportation customer information and any other customer specific information only for the purpose of enforcing its taxes and fees and shall not disclose the information to any officials, employees, agents, or any third parties not responsible for, and involved in, the enforcement of the taxes and fees. Nothing in this subdivision shall prohibit the municipality, through appropriate officials, employees, or agents, from contacting the customers in order to collect any taxes and fees due from the customer. (f) Notwithstanding any other provision of law, any transportation customer information provided by an energy transporter to a municipality pursuant to this chapter or pursuant to a utility user tax ordinance is not a public record within the definitions contained in the Public Records Act (Chapter 3.5 (commencing with Section 6250) of Division 7 of Title 1 of the Government Code). (g) In acknowledgment of the potential for systems startup costs to be incurred by the energy transporters in implementing this chapter, authorization is hereby granted for each energy transporter to retain 10 percent of the added fees collected pursuant to this chapter on transported gas or electricity for systems startup costs not to exceed seven hundred fifty thousand dollars ($750,000), provided that the portion of collections withheld by the energy transporter shall be apportioned to all municipalities based upon each municipality's share of total franchise fees allocated by the transporter in the prior calendar year. (h) Surcharges collected pursuant to this chapter shall be separately identified on the transportation customer's normal bill. At the request of the energy transporter, the municipality shall publish notice in a newspaper of general circulation announcing the change in method of collecting franchise fees brought about by deregulation. Energy transporters may send out notice to transportation customers announcing the change in method of collecting franchise fees through the surcharge. The mailing costs incurred by the energy transporter shall be considered to be part of the implementation costs referenced in subdivision (g). (i) In the case of partial payment by a transportation customer, the transportation customer payment shall first be applied to the energy transporter charges. Only after all energy transporter charges have been satisfied, shall remaining payment amounts be used to satisfy the municipality's surcharge requirement. (j) Energy transporter collection of the surcharge shall begin on or before April 1, 1994. During the interim period between expiration of the targeted sales program and implementation of the energy transporters surcharge collection program, upon request of the municipality, the energy transporter shall provide the municipality with a monthly list of the names and addresses of the transportation customers within the municipality's jurisdiction, the volume of transported gas in therms, the applicable tariffed core subscription weighted average cost of gas (WACOG) exclusive of any California sourced franchise factor, and the franchise fee factor authorized by the commission to enable the municipality to collect the surcharge directly from the transportation customers. Notwithstanding any other provision of law, except as provided in Section 6352, a municipality is hereby authorized to collect an interim surcharge computed in accordance with Section 6353 until the energy transporter commences billing of the surcharge pursuant to this chapter.


6354.1. As an alternative to the requirements of subdivision (h) of Section 6354, an energy transporter may elect to state on each customer's bill, including both transportation customers and customers receiving bundled services, the amount of that bill which is attributable to local franchise fee charges.


Chapter 3. Resettlement Of Street, Suburban,and Interurban Railroad Franchises

Ca Codes (puc:6451-6467) Public Utilities Code Section 6451-6467



6451. The governing or legislative body of any city or city and county having on July 27, 1917, a freeholders' charter adopted under Section 8 of Article XI of the State Constitution, which charter provides for the resettlement of and the granting of a resettlement franchise to any person, firm, or corporation engaged in operating a public utility in such city or city and county, is empowered to provide for a general resettlement of the franchise rights and to grant a resettlement franchise to any person, firm, or corporation actually engaged in operating a street, suburban, or interurban railroad in the city or city and county, upon written application therefor, and upon such terms and conditions as are in this chapter provided, and may, in the resettlement of any such franchise impose other and additional terms and conditions not in conflict with this chapter.

6452. The resettlement franchise shall be granted after such publication and upon such notice as the governing or legislative body shall by resolution determine, or failing such determination, after such publication and upon such notice as is prescribed by law for the enactment of ordinances by the governing or legislative body.


6453. After the final passage of a resettlement franchise, it shall be referred and submitted to the vote of the electors of the city or city and county at the general or special election next ensuing not less than 20 days after the final passage of the ordinance, or if no general or special election is to be held in the city or city and county within a period of not less than 20 days and not more than 90 days after such final passage, the governing or legislative body may call a special election to submit the ordinance to the electors, the special election to be held not less than 30 days and not more than 60 days after such final passage.


6454. No resettlement franchise shall go into effect until it has received the approval of a majority of the electors voting thereon and until it has been accepted in writing by the grantee.


6455. Every resettlement franchise, permit, or privilege shall confer upon the grantee the right to occupy the roads, streets, highways, avenues, boulevards, lanes, alleys, courts, places, and pathways of the city or city and county, particularly set out in the terms and conditions of the franchise, permit, or privilege, for the purpose of conducting, operating and maintaining thereon a street, suburban, or interurban railroad, subject always to the right of the city or city and county to acquire and possess the property of the grantee.

6456. The grantee shall pay to the city or city and county such a percentage of the net revenue annually collected from any and all sources under and by virtue of the franchise, permit, or privilege as is fixed in the franchise. What constitutes such annual net revenue shall be provided in the franchise.

6457. The legislative or governing body may in a resettlement franchise provide that any new franchise granted to the holder of the resettlement franchise shall be considered as part of the resettlement franchise.

6458. The legislative or governing body may in the resettlement franchise provide that in case of consolidation or annexation to the city or city and county of any territory after the date the resettlement franchise is granted, any franchise to operate the street, suburban, or interurban railroad, or any part thereof, held or claimed by the holder of the resettlement franchise in or for any portion of the consolidated or annexed territory shall thereupon be surrendered to the city or city and county, and that the rights and obligations of the resettlement franchise shall thereupon automatically extend to the additional territory, and that a valuation for the purpose of public acquisition of the properties used and useful, or, in the discretion of the city or city and county, prospectively useful, in the operation of the street, suburban, or interurban railroad in the area consolidated or annexed, and not included in the capital valuation already fixed in the resettlement franchise, shall be added to the capital account of the resettlement franchise grantee at a valuation for the purpose of public acquisition fixed by the Public Utilities Commission, and otherwise determined as provided in this chapter.


6459. Every resettlement franchise shall provide that the grantee shall surrender the franchises or rights, owned or claimed by the grantee, to occupy such portion of the roads, streets, highways, avenues, boulevards, lanes, alleys, courts, places, and pathways as it is proposed that the street, suburban, or interurban railroad shall thereafter occupy under the provisions of the resettlement franchise, and that the grantee shall accept in lieu thereof the rights and privileges granted by the resettlement franchise as a franchise for the continued operation of the street, suburban, or interurban railroad within the limits of the city or city and county or such portion thereof as had theretofore been operated under the franchise or franchises surrendered.


6460. The resettlement franchise, permit, or privilege shall be granted for an indeterminate period, subject always to the right of the city or city and county to acquire and possess the property of the grantee.

6461. The resettlement franchise shall be granted upon the express condition that the city or city and county may, at a valuation for the purpose of public acquisition, fixed and determined as provided in Section 6462, assume ownership by purchase, or take over and possess the property used and useful, or, in the discretion of the city or city and county, prospectively useful property of the franchise grantee, its successors or assigns, upon giving the grantee written notice of its intention to purchase and take over the property, which notice shall be given only when authorized by ordinance of the legislative or governing body of the city or city and county.


6462. The valuation for the purpose of public acquisition of property used and useful, or in the discretion of the city or city and county prospectively useful, and owned by the grantee at the time application is made for a resettlement franchise, permit, or privilege shall be fixed by the Public Utilities Commission. The valuation of such property as fixed by the commission may be set forth in the resettlement franchise, permit, or privilege, in which case a readjustment from time to time of this valuation by the addition of the cost of extensions and betterments and by the deduction of the value of property sold or abandoned, and of the amount of depreciation sustained by the property used or useful or prospectively useful, shall be made in such manner as may in the resettlement franchise be provided.


6463. All expenses of the valuation by the Public Utilities Commission shall be paid by the city or city and county to the commission.

6464. The resettlement franchise shall provide that the grantee, its successors or assigns, shall never claim before any court or other public authority in any proceeding of any character any value for the resettlement franchise, permit, or privilege in excess of the amount originally paid for it by the grantee to the granting authority.


6465. The resettlement franchise may be amended from time to time by ordinance passed by the governing or legislative body of the city or city and county and ratified by the electors of the city or city and county in the manner prescribed for the passage of the resettlement franchise in the first instance, and not otherwise. No such amendment is effective unless accepted in writing by the grantee of the resettlement franchise.


6466. The power of the State, in the exercise of its police power or otherwise through the instrumentality of the Public Utilities Commission or other agency, to provide at any and all times for the supervision and regulation of public utilities is not affected by any franchise, permit, or privilege granted under this chapter.


6467. Nothing in this chapter, nor any provision of any franchise granted under this chapter, shall prevent a city or city and county from acquiring at any time the property of any public utility through the exercise of the right of eminent domain, and no city or county shall contract away, either for a term or in perpetuity, the right of eminent domain in respect to any public utility.


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