SECTIONS 6231-6235 - California Statutes

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 per
diameter in inches) 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.