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ARIZONA STATE SENATE
Fifty-Fifth Legislature, First Regular Session
eminent domain; existing contracts
Purpose
Requires a municipality acquiring a public utility business or enterprise by eminent domain to assume all existing assets and contractual obligations directly associated with providing utility service in the condemned certificate of convenience and necessity.
Background
The state or a county, city, town, village or political subdivision may exercise the right of eminent domain to take property by condemnation for statutorily outlined uses (A.R.S. Title 12, Chapter 8). An action for taking property by condemnation must be brought as a civil action in superior court. At least 20 days before filing an action, the plaintiff must deliver to the property owner a written offer to purchase the property and pay just compensation and at least one appraisal supporting the proposed compensation amount (A.R.S. § 12-1116).
A municipality may exercise the right of eminent domain to construct, purchase, acquire and own: 1) a public utility business or enterprise for which the municipality may issue a franchise; and 2) real property for public utility purposes. A municipality may establish, lay and operate a plant, electric line or pipeline on any land or right-of-way taken under eminent domain (A.R.S. § 9-511).
The Arizona Corporation Commission issues certificates of convenience and necessity to public service corporations upon approving an application that includes evidence that the proper public authority granted the required consent, franchise or permit (A.R.S. § 40-282).
There is no anticipated fiscal impact to the state General Fund associated with this legislation.
Provisions
1. Requires a municipality that acquires a public utility business or enterprise by eminent domain to assume the existing assets and contractual obligations directly associated with providing current and future utility service in the condemned certificate of convenience and necessity, unless all parties to the contractual obligations agree otherwise.
2. Stipulates a municipality has no obligation to provide utility service if the contractual obligation was executed on or after the date the municipality provided to the public utility business the written purchase offer and appraisal.
3. Defines utility service to mean providing electric, water, wastewater or gas to end-use customers.
4. Contains an applicability clause specifying that the requirements relating to contractual obligations associated with utility service are effective after the general effective date.
5. Makes technical changes.
6. Becomes effective on the general effective date.
House Action
COM 1/19/21 DP 7-3-0-0
3rd Read 2/4/21 32-24-0-1-1
Prepared by Senate Research
February 25, 2021
MH/gs