Fiscal Note & Local Impact Statement

124 th General Assembly of Ohio

Ohio Legislative Service Commission

77 South High Street, 9th Floor, Columbus, OH 43215-6136 ˛ Phone: (614) 466-3615

˛ Internet Web Site: http://www.lsc.state.oh.us/

BILL:

S.B. 255

DATE:

April 23, 2002

STATUS:

As Introduced

SPONSOR:

Sen. Blessing Jr.

LOCAL IMPACT STATEMENT REQUIRED:

Yes

 

 


CONTENTS:

Re-enacts the provisions on the use of public right-of-ways by utility service providers and cable operators as enacted by Am. Sub. H. B. 283 of the 123rd General Assembly and makes other changes.

 

State Fiscal Highlights

 

·        No direct fiscal effect on the state.

Local Fiscal Highlights

 

LOCAL GOVERNMENT

FY 2002

FY 2003

FUTURE YEARS

Counties and other local governments

     Revenues

Potential loss

Potential loss

Potential loss

     Expenditures

Potential increase

Potential increase

Potential increase

Note: For most local governments, the fiscal year is the calendar year. The school district fiscal year is July 1 through June 30.

 

·        There would be a decrease in county and local government revenues from fees for use of public right of ways.

·        There would be an increase in local government expenditures to manage public right of ways.

 

 

Detailed Fiscal Analysis

 

The bill proposes to re-enact certain provisions of the utility and cable public right-of-way law included in Am. Sub. H. B. 283 of the 123rd General Assembly. It would, however, include pipeline companies in the definition of utility companies. It would prohibit local governments from requiring additional consent for the use of an existing public way. It would not prohibit the charging of fees but would provide that only those customers of a utility service provider that receive service from the provider within a political subdivision may be charged for specified costs levied by the subdivision on the provider for the use of public ways. The bill declares an emergency.

 

 

The bill would not have any direct fiscal effect on the state. However, there would be a significant fiscal impact to local governments.

 

Fiscal Impact of the Bill

           

The bill would have a significant impact on local subdivisions (counties, cities, municipalities, townships, villages). The bill would limit the subdivisions’ authority to manage the public right of way. The losses to subdivisions could be substantial.

 

Subdivisions could incur significant expenses due to utility disruptions and outages and permanent damage to the pavements and streets. The increasing number of new utility companies using the public right of ways is likely to increase the congestion of the subdivisions’ public right of ways. According to several studies, even a small cut in the pavement would degrade the life of the pavement[1] and the normal restoration of it would not return the pavement to its previous condition. The increasing number of utility companies using the public right of ways would increase the number of cuts to the streets and will shorten the life of the streets. As a result, subdivisions would have to repair or reconstruct the streets more often, thus increasing the expenses to subdivisions.

 

The bill would limit the construction permit fees that a subdivision could charge to the recovery of the direct incremental costs incurred by the subdivision in inspecting and reviewing any plans and specifications and in granting the associated permit. In addition, subdivisions could also recover the necessary costs to restore the public right of way to its former state of usefulness from the utility service provider or cable operator. However, the bill does not specify the ‘necessary cost to restore the public right of way to its former state of usefulness’ that subdivisions are allowed to charge the utility companies.

 

On April 1, 2002, Franklin County Common Pleas Court determined certain provisions of the utility and cable public right-of-way law as enacted by Am. Sub. H. B. 283 of the 123rd General Assembly to be unconstitutional and void. Currently, there is no limitation by the state on fees that political subdivisions may charge the utility service providers for the right or privilege of using or occupying a public way for purposes of delivering natural gas, electricity, telecommunications, or cable television.  While the bill does not prohibit municipalities from charging other fees to utilities for the use of the public right of way, it would prohibit a utility from passing the cost of such a fee on to its customers living outside of the jurisdiction of the local government that imposed the fee. It is unclear how this will affect the revenue received by municipalities.

 

LSC fiscal staff:  Ruhaiza Ridzwan, Economist

 

SB0255IN

 



[1]Impact of Utility Trenching and Appurtenances on Pavement Performance in Ottawa-Carleton by Stephen Q. S. Lee, Katherine A. Lauter, Environment and Transportation Department Regional Municipality of Ottawa-Carleton, Ottawa, Ontario, Canada, 29 July 1999 (revised 13 August 1999)