A.R.S. tit. 40 | Title 40 — Public Utilities and Carriers

Chapter 1 Corporation Commission

Article 1 In General

§ 40-101 Interest of commissioner or employee prohibited in corporation subject to regulation

Notwithstanding any other law, a person in the employ of, or holding an official relation to a corporation or person subject to regulation by the commission, or a person owning stocks or bonds of a corporation subject to regulation, or a person who is pecuniarily interested therein, shall not be elected, appointed to, or hold the office of commissioner or be appointed or employed by the commission. If a commissioner, or appointee or employee of the commission becomes the owner of such stocks or bonds, or becomes pecuniarily interested in such a corporation involuntarily, he shall within a reasonable time divest himself of such stocks, bonds or interest. If he fails to do so, he thereby vacates his office or employment.

§ 40-102 Corporation commission organization; meetings; acts of commission by majority or by single commissioner; conflict of interest

A. The corporation commission shall elect from its membership a chairman.

B. The commission shall hold a session at least once each month at its office. It may meet at any time or place expedient for the performance of its duties. The commission may, for holding meetings at places other than its offices, occupy any courtroom, or rent offices, the expense of which shall be paid as other expenses authorized by this article. Sessions of the commission shall be open to the public.

C. The act of a majority of the commissioners when in session as a board shall be the act of the commission. Any investigation, inquiry or hearing may be undertaken or held by or before any commissioner designated by the commission for the purpose, and every finding, order or decision made by a commissioner so designated, when approved and confirmed by the commission and ordered filed in its office, shall be the finding, order or decision of the commission.

D. Commissioners and employees of the commission are subject to title 38, chapter 3, article 8.

§ 40-103 Corporation commission seal

The corporation commission shall have a seal bearing the inscription "Arizona Corporation Commission." The seal shall be affixed to all writs and authentications of records and to other instruments as the commission directs.

§ 40-104 Employment; commissioners; prohibition

Any public service corporation or public power entity that is regulated by the commission may not employ or enter into an independent contractor agreement with an individual who in the preceding two calendar years served as a commissioner.

§ 40-105 Executive director; appointment; powers and duties

A. Subject to title 41, chapter 4, article 4, the corporation commission shall appoint an executive director, who shall have the power to serve warrants and other process in any county of the state.

B. The executive director shall if directed by the commission:

Keep a record of all proceedings of the commission, issue necessary writs, warrants and notices, and perform other duties the commission prescribes.
Supervise and administer the overall activities of the commission divisions and employees.
Subject to title 41, chapter 4, article 4, employ experts, engineers, statisticians, accountants, inspectors and employees necessary to perform the duties and exercise the powers of the commission.
Make and submit to the governor and legislature an annual report containing a complete account of the commission's transactions and proceedings for the preceding fiscal year, together with other facts, suggestions and recommendations of value to the people of this state.

C. The executive director may if directed by the commission:

Act as the authorized officer of the commission when performing duties necessary for processing rules adopted by the commission.
Contract for the services of outside advisers, consultants and aides reasonably necessary or desirable to enable the commission to adequately perform its duties.
Contract and incur obligations reasonably necessary or desirable within the scope of commission activities and operations to enable the commission to adequately perform its duties.
Use monies, facilities or services to provide matching contributions for other governmental programs which further the objectives and programs of the commission.
Employ attorneys to represent the commission and each commissioner as provided in section 40-106.
Establish accounts for the purpose of receiving and expending monies for educational and safety programs within the scope of the duties of the commission.

§ 40-106 Legal services

A. The attorney general shall be attorney for the securities division of the commission and the commission for matters arising out of securities division activity. At the commission’s discretion, the attorneys employed by the securities division may represent the commission in administrative and civil matters arising under title 44, chapter 12 or 13.

B. The executive director of the commission may employ attorneys to represent the commission and each commissioner, in regard to matters in connection with the other powers and duties of the commission.

§ 40-108 Compensation of appointees and employees

A. The compensation of corporation commission appointees and employees except as provided in section 40-408 shall be determined pursuant to section 38-611 and shall be paid from the state general fund and the appropriation made to the commission in the general appropriations act.

B. Employee compensation of the utilities division and a part of the administration, hearing and legal divisions shall be determined pursuant to section 38-611 and is payable from the utility regulation revolving fund established pursuant to section 40-408.

§ 40-109 Salaries and expenses of corporation commissioners

A. Each member of the corporation commission shall receive an annual salary pursuant to section 41-1904.

B. Except as provided in section 40-408, all salaries and expenses of members of the corporation commission incurred pursuant to this article, including the actual and necessary traveling and other expenses and disbursements of the commissioners, their officers and their employees incurred while on business of the commission, are payable from the state general fund and other monies appropriated to the commission in the general appropriation bill.

§ 40-110 Consumer services section

A consumer services section is established within the utilities division. The purpose of the section is to receive and investigate consumer complaints and to provide information concerning utility rates and regulatory proceedings of public service corporations regulated by the commission.

§ 40-112 Fees for certification and duplication

The following fees are payable to the commission and upon receipt of the fees the commission, pursuant to sections 35-146 and 35-147, shall deposit the fees:

For issuing certification of documents, five dollars plus fifty cents per page.
For making a copy of any document on file, not more than fifty cents for each page or partial page.

Chapter 2 Public Service Corporations Generally

Article 1 Regulation by Corporation Commission

§ 40-201 Definitions

In this chapter, unless the context otherwise requires:

"Appliance application" means central space heating, clothes drying, water heating and indoor cooking.
"Commission" means the corporation commission.
"Common carrier" means a railroad or street railroad.
"Electric distribution facilities" means all property used in connection with the distribution of electricity from an electric generating plant to retail electric customers except electric transmission facilities.
"Electric distribution service" means the distribution of electricity to retail electric customers through the use of electric distribution facilities.
"Electric distribution utility" means a public service corporation or public power entity that operates, controls or maintains electric distribution facilities.
"Electric generation plant" means all property used in connection with the generation for sale of electricity to retail electric customers but excluding any services provided by electric transmission facilities or electric distribution facilities.
"Electric generation service" means the provision of electricity for sale to retail electric customers but does not include electric distribution or transmission services and generation that are necessary for the reliable operation of the electric distribution or transmission system.
"Electric transmission facilities" means all property so classified by the federal energy regulatory commission or, to the extent permitted by law, so classified by the Arizona corporation commission.
"Electric transmission service" means the transmission of electricity to retail electric customers or to electric distribution facilities that is so classified by the federal energy regulatory commission or, to the extent permitted by law, so classified by the Arizona corporation commission.
"Electricity" or "electric service" means electric energy, electric capacity or electric capacity and energy.
"Electricity supplier" means a person, whether acting in a principal, agent or other capacity, that is a public service corporation that offers to sell electricity to a retail electric customer in this state.
"Pipeline" includes all property used in transmission for compensation of air, steam or fluid substances, except water, through pipelines.
"Railroad" includes every railway, other than a street railroad, operated for public transportation of persons or property.
"Residential structure" means a detached owner-occupied or rental one or two family dwelling unit, an attached duplex or fourplex unit, a manufactured home, a residential factory-built building as defined in section 41-4001 or a mobile home designed to be used with a permanent structure, excluding real property used to accommodate more than four attached dwelling units.
"Retail electric customer" means a person who purchases electricity for that person's own use, including use in that person's trade or business, and not for resale, redistribution or retransmission.
"Service territory" means the geographic area in which a public power entity as defined in section 30-801 or public service corporation owns, operates, controls or maintains electric distribution facilities or natural gas distribution facilities and that additional area in which the public power entity or public service corporation has agreed to extend electric distribution facilities or natural gas distribution facilities, whether established by a certificate of convenience and necessity, by official action by a public power entity or by contract or agreement.
"Sewer corporation" includes every person owning, controlling, operating or managing any sewage system for profit.
"Sewerage system" includes all property used in connection with the collection, treatment, purification and disposal transmission, storage or treatment of sewage.
"Street railroad" includes every railway operated along any street or public way for public transportation of persons or property, but does not include a commercial or interurban railway.
"Telecommunications corporation" means a public service corporation other than municipal engaged in transmitting messages or furnishing public telegraph or telephone service or operating as a telecommunications common carrier.
"Telegraph line" includes all property used in connection with communication by telegraph for compensation with or without the use of transmission wires.
"Telephone line" includes all property used in connection with communication by telephone, for compensation, with or without the use of transmission wires.
"Transportation of persons" includes every service in connection with the carriage and delivery of a person and the person's baggage.
"Transportation of property" includes every service in connection with the transportation and handling of property.

§ 40-202 Supervising and regulating public service corporations; telecommunications promotion; consumer protection; duty to comply

A. The commission may supervise and regulate every public service corporation in this state and do all things, whether specifically designated in this title or in addition thereto, necessary and convenient in the exercise of that power and jurisdiction. In supervising and regulating long-distance telecommunications corporations, the commission shall encourage competition and growth in the telecommunications industry and promote economic development and investment in new telecommunications technologies, infrastructure and services. In furtherance of this policy, the commission shall establish procedures and standards for identifying and regulating competitive long-distance telecommunications markets. When the commission determines that a long-distance telecommunications market is competitive, it shall establish appropriate supervisory and regulatory treatment for competitive long-distance telecommunications markets as distinguished from noncompetitive telecommunications markets. In imposing any assessments or other charges on mobile telecommunications service providers, the commission shall comply with the requirements of the mobile telecommunications sourcing act (P.L. 106-252; 114 Stat. 626; 4 United States Code sections 116 through 126).

B. In supervising and regulating public service corporations, the commission's authority is confirmed to adopt rules to:

Protect the public against deceptive, unfair and abusive business practices, practices related to deposit requirements and reconnection fees, intrusive and abusive marketing, deceptive or untrue advertising practices and practices prohibited under subsection E of this section.
Provide that, notwithstanding any other law, customer information, account information and related proprietary information are confidential unless specifically waived by the customer in writing.
Ensure that public service corporations that employ the services of a contractor for interior household energy service, either directly or through any affiliate, require the contractors and subcontractors to be licensed by the registrar of contractors and shall comply with all municipal permit and inspection standards and applicable life safety codes. For the purposes of this paragraph, "contractor" has the same meaning prescribed in section 32-1101.

C. Except as provided in subsection D of this section, during the initial construction of a residential structure, electric and natural gas facilities at a minimum shall be installed in and to the structure in a manner that provides the retail energy consumer ultimately residing in the structure with the capability to choose between electricity and natural gas as an energy source for each appliance application.

D. A residential structure may be constructed without the installation of any particular facilities if:

The structure is not located within the service territory of a public service corporation certificated to furnish the associated energy service.
Unless mandated otherwise by law or governmental regulation, the public service corporation certificated to furnish the associated energy notifies the contractor or owner that the extension of the facilities to the structure is not economically feasible.
The public service corporation certificated to furnish a particular energy service and the owner or contractor agree that the extension of the facilities to the subdivision, to the structure or to any appliance application would not be economically feasible or would otherwise be inappropriate. In this case, the parties may agree to install no facilities in the subdivision, to install service to any or all residential structures without providing service to any appliance application or to install facilities to some but not all appliance applications.

E. Unless mandated by law or a generally accepted industry code, a person or entity, including municipal corporations and political subdivisions, shall not engage in any practice that interferes with the opportunity to have electric and natural gas facilities at a minimum installed in and to an existing residential structure in a manner that provides the retail energy consumer ultimately residing in the structure and all subsequent retail energy consumers residing in the structure with the capability to choose between electricity and natural gas as an energy source for each appliance application. This subsection does not apply to reasonable sales and marketing activities.

F. If a trench is provided by a contractor or a property owner for the purpose of having utility facilities installed to a residential structure, electric and natural gas facilities at a minimum shall be permitted to occupy the trench if the installation of the facilities is completed in compliance with generally accepted industry safety codes applicable to the installation. Except in the case of underground conversion service areas provided for in sections 40-341 through 40-355 and improvement districts for underground utility facilities provided for in section 48-620, if the contractor or property owner conditions occupancy in a trench on a reimbursement of costs associated with providing the trench, the contractor or property owner may require an occupant to pay a pro rata share of the costs associated with providing the trench. A public service corporation may use as a credit against the payment money paid through the public service corporation's conduit or other reimbursement programs.

G. Before initiating a complaint with a public service corporation or the commission, the parties to a dispute arising under subsections C, D, E and F of this section shall meet and in good faith attempt to resolve the dispute through an informal dispute resolution process. Compliance with subsections C, D, E and F of this section does not require inspection or enforcement by a city, town or county.

H. After facilities have been installed initially in accordance with subsection C of this section, the public service corporation, the homeowner, the home builder or the contractor is not responsible or liable for any subsequent modification to the number of initially installed facilities.

I. A public service corporation shall comply with every order, decision, rule or regulation made by the commission in any matter relating to or affecting its business as a public service corporation and shall do everything necessary to secure compliance with and observance of every such order, decision, rule or regulation.

§ 40-203 Power of commission to determine and prescribe rates, rules and practices of public service corporations

When the commission finds that the rates, fares, tolls, rentals, charges or classifications, or any of them, demanded or collected by any public service corporation for any service, product or commodity, or in connection therewith, or that the rules, regulations, practices or contracts, are unjust, discriminatory or preferential, illegal or insufficient, the commission shall determine and prescribe them by order, as provided in this title.

§ 40-204 Reports by public service corporations to commission; duty of corporation to deliver documents to commission; confidential nature of information furnished; exception; classification

A. Every public service corporation shall furnish to the commission, in the form and detail the commission prescribes, tabulations, computations, annual reports, monthly or periodical reports of earnings and expenses, and all other information required by it to carry into effect the provisions of this title and shall make specific answers to all questions submitted by the commission. If a corporation is unable to answer any question, it shall give a good and sufficient reason therefor.

B. When required by the commission, a public service corporation shall deliver to the commission copies of any maps, profiles, contracts, franchises, books, papers and records in its possession, or in any way relating to its property or affecting its business, and also a complete inventory of all its property in the form the commission directs.

C. No information furnished to the commission by a public service corporation, except matters specifically required to be open to public inspection, shall be open to public inspection or made public except on order of the commission entered after notice to the affected public service corporation, or by the commission or a commissioner in the course of a hearing or proceeding.

D. Any officer or employee of the commission who knowingly divulges any such information is guilty of a class 2 misdemeanor.

§ 40-205 Regulation of commercial flight operators by commission prohibited; definitions

A. Notwithstanding any other provision of law, the corporation commission may not regulate commercial flight operations or commercial flight operators.

B. For purposes of this section:

"Commercial flight operation" means the carrying of persons or goods for hire, including the conducting of flight instruction for compensation.
"Commercial flight operator" means a person who conducts commercial flight operations.

§ 40-206 Exemption of motor carriers

This chapter does not apply to motor carriers as defined in section 28-5851.

§ 40-209 Franchises; electric generation suppliers; limitations

Regulation of electricity suppliers providing electric generation service is a matter of statewide concern. Cities, including charter cities, towns and counties shall not require franchises for electricity suppliers to provide electric generation service within its jurisdiction and shall not impose rents, charges or taxes on the use of public streets, roads and alleys on electricity suppliers for the provision of electric generation service within its jurisdiction, except that a fee equal to the franchise fee of the electric distribution utility may be charged to the electricity supplier on any portion of a retail electricity sale not otherwise subject to a franchise fee made using electric distribution facilities in service territories that are franchised as of the effective date of this section. Nothing in this subsection affects the authority of cities, including charter cities, towns and counties to require franchises for electricity suppliers providing electric distribution service within their jurisdiction.

§ 40-210 Contractors; requirements; prohibition; definition

A. A contractor who is licensed by the registrar of contractors pursuant to title 32 is eligible to participate in a commission approved rebate or other pricing program offered by a public service corporation if the contractor obtains the same or equivalent training or certification required under the program.

B. A contractor who is licensed under the registrar of contractors pursuant to title 32 shall not be required to:

Join any trade association or other membership organization.
Pay dues to any trade association or other membership organization.

C. For the purposes of this section, "contractor" has the same meaning prescribed in section 32-1101.

§ 40-211 Public service corporations; electronic filings

Notwithstanding any other law, the commission may accept electronically any document that a public service corporation is required to submit pursuant to this chapter, any rules adopted pursuant to this chapter or a commission order.

§ 40-212 Internet protocol services; definitions

A. A person that offers, furnishes or provides for profit or otherwise internet protocol-enabled service or voice over internet protocol service is not providing message transmission service to the public and is not a public service corporation. The commission may not regulate, directly or indirectly, the entry, exit, rates, terms, conditions or service quality standards of internet protocol-enabled service or voice over internet protocol service.

B. This section does not affect or modify:

The commission's authority to enforce the requirements on voice over internet protocol service that are provided for or allowed by federal law, including the collection of nondiscriminatory 911 or E911 fees, telecommunications relay service fees and universal service fees.
A person's obligations under or any right granted to a person by 47 United States Code sections 251 and 252.
The commission's jurisdiction over intrastate switched access rates, including the implementation of federal law with respect to intercarrier compensation.

C. For the purposes of this section:

"Internet protocol-enabled service" means a service, functionality or application that uses internet protocol or a successor protocol and enables an end user to send or receive a voice, data or video communication in internet protocol format or a successor format.
"Voice over internet protocol service" means a service that meets all of the following:

(a) Enables real-time, two-way voice communication that originates from or terminates at the user's location in internet protocol or a successor protocol.

(b) Uses a broadband connection from the user's location.

§ 40-213 Electric charging providers; fees; definition

A. Notwithstanding any other law, services engaged by companies to charge batteries for electric vehicles does not qualify electric charging providers as public service corporations.

B. In addition to the fee assessed for the quantity of electrical energy sold, fees may be assessed for other services and may be based on time measurement or a fixed fee or both.

C. For the purposes of this section, "electric charging providers" means entities that both:

Offer the use of specialized equipment for the specific purpose of charging batteries for electric vehicles.
Sell electricity for the purpose of charging batteries for electric vehicles by kilowatt hour or by megajoule.

Article 2 Accounting

§ 40-221 Power of commission to prescribe record-keeping methods and accounts; conformity with interstate commerce commission requirements; limitation on keeping of accounts

A. The commission may establish a system of accounts to be kept by public service corporations, or classify the corporations and establish a system of accounts for each class, and prescribe the manner in which accounts shall be kept. It may prescribe the forms of accounts, records and memoranda to be kept, including the records of the movement of traffic as well as the receipts and expenditures of money, and any other records necessary to carry out the provisions of this article. The commission may prescribe the accounts in which particular outlays and receipts shall be entered, charged or credited.

B. The system of accounts established or forms prescribed shall not, in the case of corporations subject to the regulations of the interstate commerce commission, be inconsistent with the systems and forms established for the corporations by the interstate commerce commission, but the corporation commission may prescribe forms of accounts, records and memoranda covering information in addition to that required by the interstate commerce commission.

C. It shall be unlawful for any such corporation to keep any accounts, records or memoranda other than those prescribed by the commission, or those prescribed by or under the authority of any other state or of the United States, excepting such accounts, records or memoranda as shall be explanatory of and supplemental to the accounts, records or memoranda prescribed.

§ 40-222 Depreciation accounting

The commission may, after hearing, require public service corporations to carry a proper and adequate depreciation account in accordance with regulations and forms of account it prescribes. It may ascertain and fix the proper and adequate rates of depreciation of the several classes of property for each, and each corporation shall conform its depreciation accounts to the rates so ascertained and fixed, and shall set aside the money so provided for out of earnings and carry such money in a depreciation fund and expend the fund, and the income therefrom, only for the purposes and under rules and regulations, both as to original expenditure and subsequent replacement, as the commission prescribes.

Article 3 Investigations, Hearings and Appeals

§ 40-241 Power to examine records and personnel of public service corporations; filing record of examination

A. The commission, each commissioner and person employed by the commission may, at any time, inspect the accounts, books, papers and documents of any public service corporation, and any of such persons who are authorized to administer oaths may examine under oath any officer, agent or employee of such corporation in relation to the business and affairs of the corporation.

B. Any person other than a commissioner or an officer of the commission demanding such inspection shall produce under the hand and seal of the commission his authority to make the inspection.

C. A written record of such testimony or statement given under oath shall be made and filed with the commission.

§ 40-242 Production of records kept without state

The commission may require by order served on any public service corporation in the manner provided in this chapter for the service of orders, the production within this state, at a time and place it designates, of any books, accounts, papers or records kept in any office or place without this state, or, at its option, verified copies thereof, so that an examination may be made by the commission or under its direction.

§ 40-243 Conduct of hearings and investigations; representation by corporate officer or employee; arbitration

A. All hearings and investigations before the commission or a commissioner shall be governed by this article, and by rules of practice and procedure adopted by the commission. Neither the commission nor a commissioner shall be bound by technical rules of evidence, and no informality in any proceeding or in the manner of taking testimony before the commission or a commissioner shall invalidate any order, decision, rule or regulation made, approved or confirmed by the commission.

B. In a hearing or rehearing conducted pursuant to this article, a public service corporation may be represented by a corporate officer or employee who is not a member of the state bar if:

The corporation has specifically authorized the officer or employee to represent it.
The representation is not the officer's or employee's primary duty for the corporation but is secondary or incidental to such officer's or employee's duties relating to the management or operation of the corporation.

C. The commission may adopt or administer arbitration procedures to resolve complaints or disputes brought by a party against a telecommunications company, except that the commission shall not subject a wireless provider to arbitration unless the wireless provider and customer consent in writing. This section does not prohibit the commission from arbitrating disputes or complaints against a wireline service provider, involving telecommunications services contained in the bundle of services, to the extent the commission has jurisdiction as authorized pursuant to this chapter.

§ 40-244 Administration of oaths and certification to official acts by commissioners; taking of depositions; witness fees and mileage

A. Each commissioner may administer oaths and certify to all official acts. The commission, or a commissioner, or any party, may take depositions as in a court of record.

B. Each witness who appears by order of the commission or a commissioner shall receive for his attendance the same fees allowed by law to a witness in civil actions, which shall be paid by the party at whose request the witness is subpoenaed. The fees of a witness subpoenaed by the commission shall be paid from the fund appropriated for the use of the commission as other expenses of the commission are paid. Any witness subpoenaed, except one subpoenaed by the commission, may, at the time of service, demand his mileage and one days attendance, and if not paid need not attend. A witness furnished free transportation shall not receive mileage.

§ 40-245 Admissibility in evidence of copies of documents filed with commission; orders, authorizations or certificates issued by commission required to be in writing; recording

A. Copies of all official documents and orders filed or deposited according to law in the office of the commission, certified by a commissioner or by the secretary under the official seal of the commission to be true copies of the originals, shall be received in evidence in a like manner as the originals.

B. Every order, authorization or certificate issued or approved by the commission under this article shall be in writing and entered on the records of the commission. Any such order, authorization or certificate, or a copy thereof, or a copy of the record thereof certified by a commissioner or by the secretary under the official seal of the commission to be a true copy of the original, may be recorded in the office of the county recorder of any county in which is located the principal place of business of the corporation affected thereby, or in which is located any of its property. A certificate under the seal of the commission that any such order, authorization or certificate has not been modified, stayed, suspended or revoked may also be likewise recorded.

§ 40-246 Complaint alleging violation by public service corporation of law or rule or order of commission; exception; joinder of complaints; notice of hearing

A. Complaint may be made by the commission of its own motion, or by any person or association of persons by petition or complaint in writing, setting forth any act or thing done or omitted to be done by any public service corporation in violation, or claimed to be in violation, of any provision of law or any order or rule of the commission, but no complaint shall be entertained by the commission, except upon its own motion, as to the reasonableness of any rates or charges of any gas, electrical, water or telephone corporation, unless it is signed by the mayor or a majority of the legislative body of the city or town within which the alleged violation occurred, or by not less than twenty-five consumers or purchasers, or prospective consumers or purchasers, of the service.

B. All matters upon which complaint may be founded may be joined in one hearing, and a complaint is not defective for misjoinder or nonjoinder of parties or causes, either before the commission, or on review by the courts. The commission need not dismiss a complaint because of the absence of direct damage to the complainant.

C. Upon filing the complaint, the commission shall set the time when and a place where a hearing will be had upon it and shall serve notice thereof, with a copy of the complaint, upon the party complained of not less than ten days before the time set for the hearing, unless the commission finds that public necessity requires that the hearing be held at an earlier date. Service may be made as a summons in a civil action is required to be served, or may be made in any manner giving actual notice, and no irregularity in the service is an excuse or defense.

§ 40-247 Hearing; process to witnesses; report of proceedings; decision; service of order

A. The complainant and the party complained of, and such persons as the commission allows to intervene, shall be heard in person or by attorney, and may introduce evidence at the hearing. The commission shall issue process to enforce attendance of all necessary witnesses. Proceedings on any formal hearing, and all testimony, shall be stenographically reported by a shorthand reporter appointed by the commission.

B. After conclusion of the hearing, the commission shall make and file an order containing its decision. A copy of the order, certified under the seal of the commission, shall be served upon the person complained of, or his attorney. The order shall become operative twenty days after service thereof, except as otherwise provided, and shall continue in force either for the period designated therein, or until changed or abrogated by the commission. The commission may on application and for good cause shown extend the time for compliance with the order as recited therein.

§ 40-248 Reparation of overcharge; action to recover overcharge; limitations

A. When complaint is made to the commission concerning any rate, fare, toll, rental or charge made by any public service corporation, and the commission finds, after investigation, that the corporation has made an excessive or discriminatory charge, the commission may order that the corporation make reparation to the complainant with interest at the legal rate from the date of collection, if no discrimination will result from such reparation. If the corporation does not comply with the order for payment of reparation within the time specified in the order, an action may be brought to recover the amount thereof.

B. All complaints concerning excessive or discriminatory charges shall be filed with the commission within two years from the time the cause of action accrues, and the action to enforce the order shall be brought within one year from the date of the order of the commission.

C. The remedy afforded in this section is cumulative and in addition to any other remedy provided for failure of a public service corporation to obey an order or decision of the commission.

§ 40-249 Complaint by public service corporation; hearing

Any public service corporation shall have the same privilege to complain as is afforded other parties under this article, and the same procedure shall be followed as in other cases, except that the complaint may be heard ex parte by the commission, or may be served upon any parties designated by the commission.

§ 40-250 Hearing on rate or other change in operations by public service corporation; establishment of rates or other practices by order of commission; rates for retail telecommunications services

A. No public service corporation shall raise any rate, fare, toll, rental or charge, or alter any classification, contract, practice, rule or regulation to result in any increase thereof, except on a showing before the commission and a finding by the commission that an increase is justified. The showing before the commission by a public service corporation with gross operating revenues derived from intrastate operations of less than one million dollars, including the requested rate relief, by a telecommunications corporation or by a member-owned nonprofit cooperative corporation may be made with or without a hearing as determined by order or rule of the commission.

B. When any schedule is filed with the commission stating an individual or joint rate, fare, toll, rental, charge, classification, contract, practice, rule or regulation not increasing or resulting in an increase, the commission, without answer or other pleadings by the interested corporation, but on reasonable notice, may conduct a hearing concerning the propriety of the rate, fare, toll, rental, charge, classification, contract, practice, rule or regulation, and pending the hearing and the decision thereon, it shall not go into effect. The period of suspension thereof shall not extend one hundred twenty days beyond the time when it would otherwise go into effect, unless the commission extends the period of suspension for a further period not exceeding six months.

C. On the hearing the commission shall by order establish the rates, fares, tolls, rentals, charges, classifications, contracts, practices, rules or regulations proposed, in whole or in part, or establish others in lieu thereof, that it finds just and reasonable, and that, if not suspended, shall, on the expiration of thirty days from the time of filing the order, or in such lesser time as the commission grants, become effective and be established, subject to the power of the commission to alter or modify the order.

D. A state regulation of telecommunications providers that is subject to the jurisdiction of the commission shall be competitively neutral in relation to all telecommunications providers competing in this state. Just and reasonable rates for retail telecommunications services that have been classified as competitive by the commission do not need to be based on the rate of return evaluation traditionally used in establishing rates for noncompetitive telecommunications services. Notwithstanding any provision of this chapter and this section to the contrary, maximum rates, terms of service or standards of service for retail telecommunications services classified as competitive may be established or changed on forty calendar days' notice to affected customers and to the commission. The maximum rates, terms of service or standards of service are effective within forty days after the notice unless the commission suspends the effective date. This subsection does not diminish the commission's authority and duty to set just and reasonable rates. An order denying or modifying the filing shall not be ordered until after the commission holds a hearing and finds and determines that such action does not unduly burden or disadvantage the entity in a manner that is not competitively neutral in relation to other telecommunications providers competing in this state regardless of the technology used and the regulatory classification of the other providers. Any period of suspension may not be longer than thirty days after the end of the forty-day notice period. At the end of the suspension period, the requested maximum rates, terms of service or standards of service are effective unless the commission has already acted on the request.

§ 40-251 Hearings on valuation of property of public service corporations; notice; introduction of evidence; written findings of fact required; admissibility in evidence; effect; exception

A. For the purpose of ascertaining matters concerning the valuation or revaluation of the property of public service corporations, the commission may conduct hearings at times or places it designates. Before any hearing or supplemental or further hearing is had the commission shall give the corporation affected thereby at least thirty days' written notice, specifying the time and place of the hearing, but such notice shall not prevent the commission from making any preliminary examination or investigation into such matters or from inquiring into them in any other investigation or hearing.

B. All corporations affected shall be heard and may introduce evidence at the hearing. The commission may receive evidence from other sources of information. The evidence introduced at the hearing shall be reduced to writing and certified under the seal of the commission. The commission shall make and file its finding of facts in writing upon all matters concerning which evidence is introduced which in its judgment relates to the value of the property.

C. The original or supplemental findings, so made and filed, when properly certified under seal, shall be admissible in evidence in any action, proceeding or hearing before the commission or any court in which the commission, the state, or any officer, department or institution thereof, or any county, city, municipality or other body politic, and the corporation affected, is interested, whether arising under the provisions of this article or otherwise. Such findings, when received in evidence in any action or proceeding arising under this article, shall be conclusive evidence of the facts therein stated as of the dates therein stated under conditions then existing, and such facts may only be controverted by showing a subsequent change in conditions bearing upon the facts therein determined.

D. Findings made at supplemental hearings or investigations shall be considered in connection with and as a part of the original findings except insofar as the supplemental findings change or modify the findings made at the original hearing or investigation.

E. For purposes of this section, the commission may establish simplified procedures and may by order or rule dispense with a hearing for a telecommunications corporation or a member-owned nonprofit cooperative corporation.

§ 40-252 Rescission or amendment of orders by commission; collateral attack on final orders or decisions prohibited

The commission may at any time, upon notice to the corporation affected, and after opportunity to be heard as upon a complaint, rescind, alter or amend any order or decision made by it. When the order making such rescission, alteration or amendment is served upon the corporation affected, it is effective as an original order or decision. In all collateral actions or proceedings, the orders and decisions of the commission which have become final shall be conclusive.

§ 40-253 Application for rehearing; hearing; effect; decision

A. After any final order or decision is made by the commission, any party to the action or proceeding or the attorney general on behalf of the state may apply for a rehearing of any matter determined in the action or proceeding and specified in the application for rehearing within twenty days of entry of the order or decision. Unless otherwise ordered, the filing of such an application does not stay the decision or order of the commission. If the commission does not grant the application within twenty days, it is deemed denied. If the commission grants the application, the commission shall promptly hear the matter and determine it within twenty days after final submission.

B. No claim arising from any order or decision of the commission shall accrue in any court to any party or the state unless the party or the state makes, before the effective date of the order or decision, application to the commission for a rehearing.

C. The application shall set forth specifically the grounds on which it is based, and no person, nor the state, shall in any court urge or rely on any ground not set forth in the application.

D. An application for rehearing shall not excuse any person from complying with and obeying any order or decision, or any requirements of any order or decision of the commission theretofore made, or operate in any manner to stay or postpone the enforcement thereof, except in such cases and upon such terms as the commission by order directs.

E. If, after a rehearing and a consideration of all the facts, including those arising since the making of the order or decision, the commission finds that the original order or decision or any part thereof is in any respect unjust or unwarranted, or should be changed, the commission may abrogate, change, or modify the order or decision, and such order or decision has the same force and effect as an original order or decision, but shall not affect any right or the enforcement of any right arising from or by virtue of the original order or decision, unless so ordered by the commission.

§ 40-254 Action to set aside or modify certain orders of commission; filing; limitation; superior court

A. Except as provided in section 40-254.01, any party in interest, or the attorney general on behalf of the state, being dissatisfied with an order or decision of the commission, may within thirty days after a rehearing is denied or granted, and not afterwards, commence an action in the superior court in the county in which the commission has its office, against the commission as defendant, to vacate, set aside, affirm in part, reverse in part or remand with instructions to the commission such order or decision on the ground that the valuation, rate, joint rate, toll, fare, charge or finding, rule, classification or schedule, practice, demand, requirement, act or service provided in the order or decision is unlawful, or that any rule, practice, act or service provided in the order is unreasonable. The answer of the commission shall be served and filed within twenty days after service of the complaint, whereupon the action shall be at issue and ready for trial upon ten days' notice to either party. The action shall be tried and determined as other civil actions except as provided in this section.

B. If the commission rescinds the order complained of, the action shall be dismissed, and if the commission alters, modifies or amends the order, the altered, modified or amended order shall replace the original order complained of, and judgment shall be given thereon as though made by the commission in the first instance.

C. The trial shall conform, as nearly as possible, and except as otherwise prescribed by this section, to other trials in civil actions. Judgment shall be given affirming, modifying or setting aside the original or amended order.

D. Either party to the action, or the attorney general on behalf of the state, within thirty days after the judgment of the superior court is given, may appeal to the supreme court.

E. In all trials, actions and proceedings the burden of proof shall be upon the party adverse to the commission or seeking to vacate or set aside any determination or order of the commission to show by clear and satisfactory evidence that it is unreasonable or unlawful.

F. Except as provided by this section no court of this state shall have jurisdiction to enjoin, restrain, suspend, delay or review any order or decision of the commission, or to enjoin, restrain or interfere with the commission in the performance of its official duties, and the rules, orders or decrees fixed by the commission shall remain in force pending the decision of the courts, but a writ of mandamus shall lie from the supreme court to the commission in cases authorized by law.

§ 40-254.01 Action to set aside or modify certain commission orders; limitation; court of appeals

A. The attorney general on behalf of the state or any party to a proceeding before the commission who is dissatisfied with any order of the commission involving public service corporations and relating to rate making or rate design pursuant to sections 40-243, 40-246, 40-250 and 40-251 may file within thirty days after a rehearing is denied or granted, and not afterwards, a notice of appeal in the court of appeals to vacate, set aside, affirm in part, reverse in part or remand with instructions to the commission the order if the court of appeals determines upon a clear and satisfactory showing that the order is unlawful or unreasonable.

C. The appellate procedure shall be pursuant to rules adopted by the supreme court. The rules shall conform, as nearly as possible, to the manner in which other appeals are undertaken, including indicating the content of the record on review, the briefs to be filed and the time and manner for filing the briefs, record and other documents.

D. Any party to the action, or the attorney general on behalf of the state, may appeal to the supreme court as provided by law.

E. In all appeals that are taken pursuant to this section, the party adverse to the commission or seeking to vacate or set aside an order of the commission must make a clear and satisfactory showing that the order is unlawful or unreasonable.

F. Except as provided by this section, no court of this state has jurisdiction to enjoin, restrain, suspend, delay or review any order or decision of the commission involving public service corporations and relating to rate making or rate design pursuant to sections 40-243, 40-246, 40-250 and 40-251, or to enjoin, restrain or interfere with the commission in the performance of its official duties, and the rules, orders or decrees fixed by the commission remain in force pending the decision of the courts, but a writ of mandamus shall lie from the supreme court to the commission in cases authorized by law.

§ 40-255 Precedence of actions

All actions and proceedings to which the commission or the state is a party, or in which the attorney general has been allowed to intervene, and in which any question arises under this title, or under or concerning any order or decision of the commission, shall be preferred and shall be heard and determined in preference to other civil matters except election actions.

§ 40-256 Time periods for rate decisions; calculation; simplified filing rules; interim rates and charges; definitions

A. From the date on which a utility's rate filing is determined to be sufficient in accordance with this section, the commission shall issue a decision establishing rates and charges for service within the following time periods:

For class 1 utilities, within two hundred seventy days.
For class 2 utilities, within one hundred eighty days.

B. For the purposes of calculating the time periods prescribed in subsection A, a rate filing shall be deemed sufficient if it substantially complies with the commission's rules governing the filing requirements for applications for increased rates or charges for utility service. The utilities division shall review each rate filing to ascertain whether it substantially complies with the applicable rules and shall submit its findings to the commission not more than thirty days after the date of the rate filing. If it is determined that a rate filing does not substantially comply with the applicable rules, the utilities division shall notify the utility, in writing, of the basis for its determination to allow the utility to cure its filing. If this written notice is not provided within thirty days after the date of the utility's rate filing, the rate filing is presumed to be in substantial compliance with the applicable rules and the applicable time period established in subsection A begins. If any deficiencies in the rate filing are identified and written notice is given to the utility, the applicable time period begins on the date the rate filing is amended to cure the deficiencies.

C. On the motion of any party to the contested case proceedings relating to the rate filing or on its own motion, the commission may determine that an extraordinary event that would substantially alter the relief requested in the utility's rate filing has occurred. If such a determination is made, the time period prescribed in subsection A begins again from the date of the determination.

D. To expedite the issuance of final decisions and to minimize the fees and expenses incurred by utilities, the commission shall promptly adopt rules providing for simplified filing requirements and procedures for rate filings by utilities whose annual operating revenues do not exceed two hundred fifty thousand dollars.

E. If a decision in the rate filing has not been issued within the required time period, the commission shall provide that the utility may implement reasonable modifications to rates and charges based on those proposed in the rate filing, on an interim basis, and subject to refund, pending the issuance of a final decision. Notice of the implementation shall be given by keeping open for public inspection new schedules stating the modifications to be made in the schedules then in force and by mailing a written notice to all customers of the utility advising them of the modifications at least thirty days before the effective date of the modifications. Any party to the contested case proceedings relating to the rate filing, including the utilities division, or the commission on its own motion may request that a hearing be scheduled for the limited purpose of determining whether the utility should be required to file a bond approved by the commission in such amount and with sufficient security to ensure prompt payment of any refunds to the persons entitled to them, including an interest rate of not more than the maximum interest otherwise allowed by law, if the modified rates or charges placed into effect are finally determined by the commission to be excessive. The utility may substitute for the bond other arrangements satisfactory to the commission for the protection of the parties involved.

F. For purposes of this section:

"Annual operating revenues" means gross utility operating revenues derived from a utility's jurisdictional operations, including the requested rate relief.
"Class 1 utility" means a utility with annual operating revenues of one million dollars or more.
"Class 2 utility" means a utility with annual operating revenues of less than one million dollars.
"Combination utility" means a utility that provides more than one of the commodities or services in paragraph 7. For combination utilities, departmental operating revenues shall be used for classification purposes.
"Decision" means a final order, decision or determination of the commission that disposes of all issues involved in all parts or phases of the proceedings before the agency concerning a rate filing.
"Rate filing" means an application filed by a utility for the permanent modification to any rate or charge for service requiring the commission to determine the fair value of the utility's jurisdictional property used for the provision of utility service and the rate of return.
"Utility" means a public service corporation that is engaged in supplying electric, gas, telephone, water or sewer utility service in this state and that is subject to the jurisdiction of the commission.

Article 4 Certificates of Convenience and Necessity and Franchises

§ 40-281 Certificate required before construction by public service corporation; exceptions; complaint by corporation injuriously affected by construction hearing; exclusive franchise or monopoly

A. A public service corporation, other than a railroad, shall not begin construction of a street railroad, a line, plant, service or system, or any extension thereof, without first having obtained from the commission a certificate of public convenience and necessity.

B. This section shall not require such corporation to secure a certificate for an extension within a city, county or town within which it has lawfully commenced operations, or for an extension into territory either within or without a city, county or town, contiguous to its street railroad or line, plant or system, and not served by a public service corporation of like character, or for an extension within or to territory already served by it, necessary in the ordinary course of its business. If a public service corporation, in constructing or extending its line, plant or system, interferes or is about to interfere with the operation of the line, plant or system of any other public service corporation already constructed, the commission, on complaint of the corporation claiming to be injuriously affected, may, after hearing, make an order and prescribe terms and conditions for the location of lines, plants or systems affected as it deems just and reasonable.

C. No such corporation shall exercise any right or privilege under any franchise or permit without first having obtained from the commission a certificate of public convenience and necessity.

D. This article shall not be construed as granting or as having granted to any telecommunications corporation an exclusive franchise or monopoly within the territory described by its certificate unless the commission determines after notice and hearing that such an exclusive franchise or monopoly is in the public interest.

E. When the commission determines after notice and hearing that any product or service of a telecommunications corporation is neither essential nor integral to the public service rendered by such corporation, it shall declare that such product or service is not subject to regulation by the commission.

§ 40-282 Application for certificate; hearing; application upon contemplated franchise

A. If the applicant for a certificate of convenience and necessity is a corporation, a certified copy of its articles of incorporation shall be filed in the office of the commission before any certificate of convenience and necessity may issue.

B. Every applicant for a certificate shall submit to the commission evidence required by the commission to show that the applicant has received the required consent, franchise or permit of the proper county, city and county, municipal or other public authority.

C. The commission may, after a hearing, issue the certificate or refuse to issue it, or issue it for the construction of only a portion of the contemplated street railroad, line, plant or system, or extension thereof, or for the partial exercise only of the right or privilege, and may attach to the exercise of rights granted by the certificate terms and conditions it deems that the public convenience and necessity require. The commission may act after an application or after a hearing, if requested by any party, on an application for a certificate to provide any of the following telecommunications services:

Pay telephone service to end users if the applicant has not received a certificate to provide local exchange telecommunications service within the area where the pay telephone is or will be located.
Automated or live operator services accessed from a location where telephones are available to the public or transient users of the premises and where the applicant has not been certificated as either:

(a) A local exchange carrier for the location by January 1, 1996.

(b) A facilities based interexchange carrier by January 1, 1996.

Telecommunications services resold to the public for profit if the applicant obtains the services from another entity.

D. If a public service corporation desires to exercise a right or privilege under a franchise or permit which it contemplates securing, but which has not yet been granted to it, the corporation may apply to the commission for an order preliminary to the issue of the certificate. The commission may make an order declaring that it will thereafter, upon application, under rules it prescribes, issue the desired certificate, upon terms and conditions it designates, after the corporation has obtained the contemplated franchise or permit or may make an order issuing a certificate on the condition that the contemplated franchise or permit is obtained and on other terms and conditions it designates. If the commission makes an order preliminary to the issuance of the certificate, upon presentation to the commission of evidence that the franchise or permit has been secured by the corporation, the commission shall issue the certificate.

§ 40-283 Transmission lines; use of public streets for utility right-of-way; notice; election

A. Any person engaged in transportation or transmission business within the state may construct and operate lines connecting any points within the state and connect at the state boundary with like lines, except that within the confines of municipal corporations the use and occupancy of streets shall be under rights acquired by franchises according to law or licenses pursuant to title 9, chapter 5, articles 1.1 and 4, and subject to control and regulation by the municipal authorities. The use of highways, except state highways, by public utilities not within any incorporated city or town shall be regulated by the board of supervisors of the county by license or franchise.

B. A board of supervisors in granting a license or franchise, or at any time after it is granted, may impose restrictions and limitations upon the use of the public roads as it deems best for the public safety or welfare.

C. Every franchise granted under this article shall include provisions requiring the grantee to bear all expenses, including damage and compensation for any alteration of the direction, surface, grade or alignment of a county road, made for the purpose of such franchise. If the surface of a county highway is used by any grantee for trackage, the franchise shall include reasonable regulations for maintenance by the grantee of that portion of the highway so used.

D. A board of supervisors may authorize public service corporations, telecommunications corporations, cable operators or video service providers to construct a line, plant, service or system within the right-of-way of any road, highway or easement that is designated for access or public use by plat or survey of record of a subdivision, or of unsubdivided land as defined in section 32-2101, provided that any such authorization or construction pursuant to such authorization does not impose on the county the duty of maintaining the road or highway unless the county accepts the road or highway into the county maintenance system by appropriate resolution. This subsection does not grant county boards of supervisors additional authority to require public service corporations, telecommunications corporations, cable operators or video service providers to obtain licenses or franchises.

E. A board of supervisors, before granting any of the privileges authorized under this section, shall give public notice of its intention to grant such privileges by publishing notice in a newspaper of general circulation, published within the county, at least once a week for three weeks before the day set for consideration of such action. If, on or before such date, more than fifty percent of the qualified electors of the county petition the board of supervisors to deny the privilege, it shall do so, and any privilege granted against the petition is void.

§ 40-284 Restrictions upon conduct of public service business by foreign corporations

A. A foreign corporation, unless authorized to transact a public service business within this state, shall not transact within the state any public service business, nor transact within the state any public service business of a character different from that which it is authorized to transact.

B. A license, permit or franchise to own, control, operate or manage any public service business shall not be granted or transferred, directly or indirectly, to any foreign corporation not lawfully transacting within this state a public service business of like character, but foreign corporations engaging in commerce with foreign nations or commerce among the several states of the United States may transact within this state such commerce and intrastate commerce of a like character.

§ 40-285 Disposition of plant by public service corporations; acquisition of capital stock of public service corporation by other public service corporations; exemption

A. A public service corporation shall not sell, lease, assign, mortgage or otherwise dispose of or encumber the whole or any part of its railroad, line, plant or system necessary or useful in the performance of its duties to the public, or any franchise or permit or any right thereunder, nor shall such corporation merge such system or any part thereof with any other public service corporation without first having secured from the commission an order authorizing it so to do. Every such disposition, encumbrance or merger made other than in accordance with the order of the commission authorizing it is void.

B. The approval or permit of the commission under this section shall not revive or validate any lapsed or invalid franchise or permit, or enlarge or add to the powers or privileges contained in the grant of any franchise or permit, or waive any forfeiture.

C. This section does not prevent the sale, lease or other disposition by any such corporation of property that is not necessary or useful in the performance of its duties to the public, and any sale of its property by such corporation shall be conclusively presumed to have been of property that is not useful or necessary in the performance of its duties to the public as to any purchaser of the property in good faith for value.

D. A public service corporation shall not purchase, acquire, take or hold any part of the capital stock of any other public service corporation organized or existing under the laws of this state without a permit from the commission.

E. Every assignment, transfer, contract or agreement for assignment or transfer of any stock in violation of the provisions of this section is void, and the transfer shall not be made on the books of any public service corporation.

F. This section does not apply to a telecommunications corporation whose retail telecommunications services are all classified as competitive by the commission, except as may otherwise be determined by a commission order after the effective date of this amendment to this section.

§ 40-286 Exemption from antitrust statutes

Title 44, chapter 10, article 1, does not apply to any conduct or activity of a public service corporation holding a certificate of public convenience and necessity granted pursuant to this article, which conduct or activity is approved by a statute of this state or of the United States or by the corporation commission or an administrative agency of this state or of the United States having jurisdiction of the subject matter. This section does not apply to the provision of any competitive telecommunications services. This section does not alter, modify or affect applicable federal or state law regarding the rights of an owner of private property relative to provision of or access to telecommunication services on or for that private property.

§ 40-287 Value of certificated area

Any portion of the certificated area of a private water company which does not contain an operating distribution system owned by the private water company primarily for the distribution of domestic water is presumed to have de minimis value for the purposes of condemnation.

Article 5 Stocks and Bonds

§ 40-301 Issuance of stocks and bonds; authorized purposes

A. The power of public service corporations to issue stocks and stock certificates, bonds, notes and other evidences of indebtedness, and to create liens on their property located within this state is a special privilege, the right of supervision, restriction and control of which is vested in the state, and such power shall be exercised as provided by law and under rules, regulations and orders of the commission.

B. A public service corporation may issue stocks and stock certificates, bonds, notes and other evidences of indebtedness payable at periods of more than twelve months after the date thereof, only when authorized by an order of the commission.

C. The commission shall not make any order or supplemental order granting any application as provided by this article unless it finds that such issue is for lawful purposes which are within the corporate powers of the applicant, are compatible with the public interest, with sound financial practices, and with the proper performance by the applicant of service as a public service corporation and will not impair its ability to perform that service.

D. The provisions of this article shall not apply to foreign public service corporations providing communications service within this state whose physical facilities are also used in providing communications service in interstate commerce.

§ 40-302 Order authorizing issuance of stocks, bonds or other evidences of debt; hearing on application to issue; amount of issue; issuance of short term notes without commission order; capitalization of certain items prohibited; accounting for proceeds of issues

A. Before a public service corporation issues stocks and stock certificates, bonds, notes and other evidences of indebtedness, it shall first secure from the commission an order authorizing such issue and stating the amount thereof, the purposes to which the issue or proceeds thereof are to be applied, and that, in the opinion of the commission, the issue is reasonably necessary or appropriate for the purposes specified in the order, pursuant to section 40-301, and that, except as otherwise permitted in the order, such purposes are not, wholly or in part, reasonably chargeable to operative expenses or to income. Before an order is issued under this section, notice of the filing of the application for such order shall be given by the commission or the applicant in such form and manner as the commission deems appropriate. The commission may hold a hearing, and make inquiry or investigation, and examine witnesses, books, papers and documents, and require filing data it deems of assistance.

B. The commission may grant or refuse permission for the issue of evidences of indebtedness or grant the permission to issue them in a lesser amount, and may attach to its permission conditions it deems reasonable and necessary. The commission may authorize issues less than, equivalent to or greater than the authorized or subscribed capital stock of the corporation, and the provisions of the general laws of the state with reference thereto have no application to public service corporations.

C. A public service corporation shall not, without consent of the commission, apply the issue of any stock or stock certificate, bond, note or other evidence of indebtedness, or any part thereof, or any proceeds thereof, to any purpose not specified in the commission's order, or to any purpose specified in the commission's order in excess of the amount authorized for the purpose, or issue or dispose of the proceeds of such issuance on any terms less favorable than those specified in the order.

D. A public service corporation may issue notes, not exceeding seven per cent of total capitalization if operating revenues exceed two hundred fifty thousand dollars, for proper purposes and not in violation of law payable at periods of not more than twelve months after date of issuance, without consent of the commission, but no such note shall, wholly or in part, be refunded by any issue of stocks or stock certificates, bonds, notes or any other evidence of indebtedness without consent of the commission.

E. The commission may not authorize the capitalization of the corporate franchise, or of any franchise or permit whatever, or the right to own, operate or enjoy any such franchise or permit, in excess of the amount, exclusive of taxes or annual charges, actually paid to the state or to a political subdivision thereof as the consideration for the grant of the franchise, permit or right, nor shall any contract for consolidation or lease be capitalized, nor shall any public service corporation issue any bonds, notes or other evidences of indebtedness against or as a lien upon any contract for consolidation or merger.

F. The commission may require public service corporations to account for the disposition of the proceeds of all sales of stocks and stock certificates, bonds, notes and other evidences of indebtedness, in the form and detail it deems advisable, and may establish rules and regulations it deems reasonable and necessary to insure the disposition of such proceeds for the purpose specified in its order.

§ 40-303 Validity of stock certificates or evidences of indebtedness; violation of law or commission authorizations; classification

A. All stock and every stock certificate, and every bond, note or other evidence of indebtedness of a public service corporation, issued without a valid order of the commission authorizing the issue, or if issued with the authorization of the commission but not conforming to the order of authorization of the commission, is void, but no failure in any other respect to comply with the terms or conditions of the order of authorization of the commission shall make the issue void, except as to a person taking the issue other than in good faith and for value and without actual notice.

B. Every public service corporation which, directly or indirectly, issues or causes to be issued any stock or stock certificate, bond, note or other evidence of indebtedness not in conformity with the order of the commission authorizing the issue, or contrary to law, or which applies proceeds from the sale thereof, or any part thereof, to any purpose other than the purpose specified in the commission order, or to any purpose specified in the order in excess of the amount in the order authorized for such purpose, is subject to a penalty of not less than five hundred nor more than twenty thousand dollars for each offense.

C. A person is guilty of a class 4 felony who:

Knowingly authorizes, directs, aids in, issues or executes any stock or stock certificate, bond, note or other evidence of indebtedness not in conformity with the order of the commission authorizing such, or contrary to law.
In any proceeding before the commission knowingly makes any false statement or representation, or, with knowledge of its falsity, files or causes to be filed with the commission any false statement or representation, which may tend to influence the commission to make an order authorizing the issue of any stock or stock certificate, bond, note or other evidence of indebtedness, or which results in procuring from the commission the making of any such order.
With knowledge that any false statement or representation was made to the commission in any proceeding tending in any way to influence the commission to make such order, issues, executes or negotiates, or causes to be issued, executed or negotiated any stock or stock certificate, bond, note or other evidence of indebtedness.
Directly or indirectly, knowingly applies, or causes or assists to be applied the proceeds or any part thereof, from the sale of any stock or stock certificate, bond, note or other evidence of indebtedness, to any purpose not specified in the commission order or to any purpose in excess of the amount authorized for such purpose.
With knowledge that any stock or stock certificate, bond, note or other evidence of indebtedness has been issued or executed in violation of any of the provisions of this article, negotiates, or causes the same to be negotiated.

Article 6 Service and Facilities

§ 40-321 Power of commission to determine adequacy of service rendered by public service corporation; enforcement by order or regulation; duty of compliance by corporation; surety; utility surety fund

A. When the commission finds that the equipment, appliances, facilities or service of any public service corporation, or the methods of manufacture, distribution, transmission, storage or supply employed by it, are unjust, unreasonable, unsafe, improper, inadequate or insufficient, the commission shall determine what is just, reasonable, safe, proper, adequate or sufficient, and shall enforce its determination by order or regulation.

B. The commission shall prescribe regulations for the performance of any service or the furnishing of any commodity, and upon proper demand and tender of rates, the public service corporation shall furnish the commodity or render the service within the time and upon the conditions prescribed.

C. If, after notice and an opportunity to be heard, the commission finds that a public service corporation is in default of the terms and conditions of an order of the commission that requires a performance bond, irrevocable letter of credit or other surety, and the commission exercises its rights under the bond, letter or other surety, the commission shall deposit all monies received as a result of exercising the rights in the utility surety fund established by subsection D of this section.

D. The utility surety fund is established consisting of monies received by the commission pursuant to subsection C of this section. Monies in the utility surety fund shall be administered by the commission for the benefit of the customers of the public service corporation who have incurred a loss of services or commodities or for deposit support pursuant to this section. Monies in the fund are continuously appropriated to the commission and do not revert to the state general fund pursuant to section 35-190.

§ 40-322 Regulation of public service corporations; standards of service; measurement standards; inspections by commission

A. The commission may:

Ascertain and set just and reasonable standards, classifications, regulations, practices, measurements or service to be furnished and followed by public service corporations other than a railroad.
Ascertain and fix adequate and serviceable standards for the measurement of quantity, quality, pressure, initial voltage or other condition pertaining to the supply of the product, commodity or service furnished by such public service corporation.
Prescribe reasonable regulations for the examination and testing of the product, commodity or service and for the measurement thereof.
Establish reasonable rules, regulations, specifications and standards to secure the accuracy of all meters and appliances for measurements.
Provide for the examination and testing of any and all appliances used for measurement of any product, commodity or service of any such corporation.

B. The commission, its officers and employees may enter upon any premises occupied by a public service corporation, for the purpose of making the examinations and tests and exercising any of the other powers provided for in this article, and may set up and use on the premises any apparatus and appliances necessary therefor. The agents and employees of the public service corporation may be present at the making of the examinations and tests.

C. Any consumer or user of any product, commodity or service of a public service corporation may have any appliance used in the measurement thereof tested upon paying the fees fixed by the commission, the fee to be paid by the consumer or user at the time of his request, but to be paid by the corporation and repaid to the consumer or user if the appliance is found defective or operates to the disadvantage of the consumer or user.

§ 40-323 Commission rules and regulations to regulate time for furnishing services by railroad and telephone and telegraph companies; uniformity of demurrage charges

A. The commission may provide by rules and regulations:

The time within which all railroad corporations shall furnish, after demand therefor, cars, equipment and facilities necessary for handling freight in carload and less than carload lots.
The time within which consignors or persons ordering cars shall load them.
The time within which consignees to whom freight is consigned shall unload and discharge it and receive freight from freight rooms.
Provide penalties for failure to conform to such rules.

B. Charges for demurrage shall be uniform so that the same penalty is paid by both shipper, consignee and railroad for an equal number of cars for each day for which demurrage is charged.

C. The commission may provide the time within which express packages shall be received, gathered, transported and delivered at destination, and the limits within which express packages shall be gathered and distributed, and telegraph and telephone messages delivered, without extra charge.

D. The commission may provide the time within which baggage shall be received, transported, delivered and stored.

E. The commission may enforce reasonable regulations for weighing cars and freight offered for shipment over any line of railroad, and test the weights made by a railroad and scales used in weighing freight or cars.

§ 40-324 Power of commission to order changes in service to insure adequate service by railroad

When the commission finds that any railroad or street railroad does not run a sufficient number of trains or cars, or possess or operate sufficient motive power reasonably necessary to accommodate the traffic transported by or offered for transportation to it, or does not run its trains or cars with sufficient frequency or at reasonable or proper times having regard to safety, or does not stop the equipment at proper places, or does not run any train or cars upon a reasonable time schedule for the run, the commission may make any order reasonably necessary to accommodate and transport the traffic, passengers or freight, transported or offered for transportation.

§ 40-325 Power of commission to order physical connection between railroad companies

When the commission finds that the public convenience and necessity will be served by having connections made between the tracks of any two or more railroad corporations so that cars may readily be transferred from one to the other, the commission may order two or more such corporations owning or operating tracks of the same gauge to make physical connections at any and all crossings, and at all points where a railroad shall begin to terminate or run near to any other railroad. After the necessary franchise or permit has been secured from the city, county, or town, the commission may likewise order such physical connection, within such city, county, or town, between two or more railroads which enter the limits thereof. The commission shall by order direct whether the expense thereof shall be borne jointly or otherwise.

§ 40-326 Duty of railroad company to make connection with track of private shipper; conditions

A. Every railroad corporation, upon application of a shipper or receiver or contemplated shipper or receiver of freight for a connection between the railroad of such corporation and an existing or contemplated private track or railroad of such person, shall make such connection and provide switches and tracks necessary, and deliver and receive cars thereover upon condition that the connection is reasonably practicable and can be installed and used without materially increasing the hazard of the operation of the railroad with which the connection is sought, and that the business which may reasonably be expected to be received by the railroad corporation over the connection is sufficient to justify the expense of the connection to the railroad corporation.

B. Under the conditions set forth in subsection A, every railroad corporation, upon application of a shipper or receiver or contemplated shipper or receiver of freight, shall construct upon its right of way a spur to receive and deliver freight.

§ 40-327 Order by commission for connection or spur; right to connect to private track; order to company to switch cars of another corporation

A. When the commission finds that application has been made by any person to a railroad corporation for a connection or spur which the corporation has refused, and that the applicant is entitled thereto, the commission shall make an order therefor and for the maintenance and use of such connection or spur upon terms the commission prescribes.

B. When so provided, any person may connect with the private track thereby connected with the railroad and may use the private track or spur upon payment to the party incurring the primary expense of the private track or spur a reasonable proportion of the cost thereof, to be determined by the commission after notice and hearing, if such connection and use can be made without unreasonable interference with the rights of the party incurring the primary expense.

C. The commission may require one railroad corporation to switch to private spurs and industrial tracks upon its own railroad the cars of a connecting railroad corporation and to prescribe the terms and compensation for the service.

§ 40-328 Duty of telephone and telegraph companies to handle messages of connecting companies

Every telephone corporation and telegraph corporation operating in this state shall receive, transmit and deliver, without delay or discrimination, the conversations and messages of every other telephone or telegraph corporation with which a physical connection is made.

§ 40-329 Power of commission to order connections and joint rates between telephone or telegraph companies

A. Whenever the commission finds that a physical connection can reasonably be made between the lines of two or more telephone or telegraph corporations to form a continuous line of communication, and that public convenience and necessity will be served thereby, or that two or more telegraph or telephone corporations have failed to establish joint rates, tolls or charges for service by or over their lines, and that a connection ought to be established, the commission may require that a connection and joint charges be made, except where the purpose of the connection is primarily to secure transmission of local messages or conversations between points within the same city, or town. The commission may also require that conversations be transmitted and messages transferred over such connections under rules and regulations the commission establishes.

B. If the telephone or telegraph corporations do not agree upon division of the cost of the physical connection, or the divisions of the joint charges established, the commission shall after further hearing establish the division by supplemental order.

§ 40-331 Power of commission to order additions, improvements or changes in plant of public service corporations; additions or changes made jointly

A. When the commission finds that additions or improvements to or changes in the existing plant or physical properties of a public service corporation ought reasonably to be made, or that a new structure or structures should be erected, to promote the security or convenience of its employees or the public, the commission shall make and serve an order directing that such changes be made or such structure be erected in the manner and within the time specified in the order. If the commission orders erection of a new structure, it may also fix the site thereof.

B. If any such changes require joint action by two or more public service corporations, the commission shall notify the corporations thereof and that the changes shall be made at their joint cost, whereupon the corporations shall have such reasonable time as the commission grants within which to agree upon the division of cost. If at the expiration of the time the corporations fail to file with the commission a statement that an agreement is made for a division or apportionment of the cost or expense of the change, the commission may make an order fixing the proportion of the cost or expense to be borne by each corporation, and the manner of payment.

§ 40-332 Power of commission to order joint use of facilities belonging to public service corporation

A. When the commission finds that public convenience and necessity require the use by one public service corporation of the equipment, or any part of the equipment, on, over or under any street or highway belonging to another public service corporation, that the use will not result in irreparable injury to the other users thereof or in any substantial detriment to the service and that the public service corporations have failed to agree upon the use or the terms and conditions of the use, the commission may by order direct that such use be permitted and may prescribe reasonable compensation and terms for the joint use. If the use is directed, the corporation to which the use is permitted shall be liable to the owner or other users of the equipment for damage which results therefrom to the property of the owner or other users thereof.

B. Every public service corporation shall allow every electricity supplier and self-generator of electricity access to electric transmission service and electric distribution service under rates and terms and conditions of service that are just and reasonable as determined and approved by regulatory agencies that have jurisdiction over electric transmission service and electric distribution service. Nothing in this subsection limits the access of a public power entity as defined in section 30-801 to the transmission services of public service corporations in accordance with the federal power act, 16 United States Code section 792.

§ 40-334 Discrimination between persons, localities or classes of service as to rates, charges, service or facilities prohibited

A. A public service corporation shall not, as to rates, charges, service, facilities or in any other respect, make or grant any preference or advantage to any person or subject any person to any prejudice or disadvantage.

B. No public service corporation shall establish or maintain any unreasonable difference as to rates, charges, service, facilities or in any other respect, either between localities or between classes of service.

C. The commission may determine any question of fact arising under this section.

§ 40-335 Persons who may be given free or reduced rates; definitions; carriage during emergency; annual report of reduced rate carriage

A. No common carrier shall, directly or indirectly, issue, give or tender any free or reduced rate of transportation for passengers between points within this state, except to:

Its employees, its officers, agents, surgeons, physicians, attorneys at law, and their families.
Members of the police and fire departments in cities and towns when on duty, whether uniformed or not.
Ministers of religion, traveling secretaries of railroad young men's christian association, inmates of hospitals and charitable institutions and persons exclusively engaged in charitable work.
Indigent and homeless persons, when transported by charitable societies or hospitals, and to the necessary agents employed in such transportation.
Inmates of the homes for soldiers, including those about to enter and those returning after discharge, and to the boards of managers of such homes.
Necessary caretakers of livestock, poultry, milk and fruit while in transit.
Employees on sleeping cars and express cars, and to linemen of telegraph and telephone corporations.
Railway mail service employees, post office, custom and immigration inspectors.
Newsboys on trains, baggage agents and witnesses attending any legal investigation in which the common carrier is interested.
Persons injured in wrecks and physicians and nurses attending such persons.

B. As used in this section:

"Employee" includes furloughed or pensioned employees and persons who developed a disability or infirm in the service of the carrier, and the remains of a person killed in the employment of the carrier, and former employees traveling to re-enter the service of the carrier.
"Families" includes the families of those persons excepted, also the families of persons killed, widows during widowhood, and minor children during minority, of persons who died while in the service of such common carrier.

C. This section shall not be construed to prohibit the interchange of passes for the officers, agents and employees of common carriers and their families, nor to prohibit any common carrier from carrying passengers free to provide relief in cases of general epidemic, pestilence, or other emergency situation.

D. With the consent of the commission, every common carrier may transport free, or at reduced rates:

Former soldiers and sailors for the purpose of attending any convention.
Contractors and their employees, material or supplies, engaged or used in construction, operation or maintenance work, on the line of the issuing carrier, to the extent only that such free or reduced rate transportation is provided for in the specifications upon which the contract is based and in the contract itself. Common carriers may also enter into contracts with each other for an exchange of service.

E. Every common carrier shall on the first Monday in July each year, and at other times required by the commission, file with the commission a verified list of all tickets, passes or reduced rate transportation issued for other than actual bona fide money consideration at full established rates during the preceding year, together with the names of the recipients thereof, the amount received therefor, and the reason for issuing them.

§ 40-336 Power of commission to require safety devices

The commission may by order, rule or regulation, require every public service corporation to maintain and operate its line, plant, system, equipment, and premises in a manner which will promote and safeguard the health and safety of its employees, passengers, customers and the public, and may prescribe the installation, use, maintenance and operation of appropriate safety or other devices or appliances, including interlocking and other protective devices at grade crossings or junctions and block or other systems of signalling, establish uniform or other standards of equipment, and require the performance of any other act which health or safety requires.

§ 40-337 Power of commission over railway crossings

A. No public highway or street shall be constructed across the track of any railroad at grade, nor shall the track of any railroad corporation be constructed across the track of any other railroad at grade, without the permission of the commission, but this provision shall not apply to the replacement of lawfully existing tracks. The commission may refuse permission or grant it upon such terms and conditions as it prescribes.

B. The commission shall have the exclusive power:

To determine and prescribe the manner, including the particular point of crossing, and the terms of installation, operation, maintenance, use and protection of each of the crossings.
To alter or abolish crossings.
To prescribe the terms upon which and the proportions in which the expense of the alteration or abolition of the crossing shall be divided between the parties affected or in interest.

C. When the commission finds that public convenience and necessity demands establishment, creation or construction of a crossing of a street or highway over, under or upon the tracks or lines of any public service corporation, the commission may by order require the establishment, construction or creation of the crossing, and the crossing shall thereupon become a public crossing. The commission shall have the exclusive power to prescribe the character of crossings to be constructed and maintained by railroads where their lines cross public roads or streets of a town or city.

§ 40-337.01 Installation of automatic warning devices; agreements for sharing cost; apportionment of cost

A. The commission may determine, after a public hearing, whether any particular crossing of a railroad and a public highway or street is sufficiently hazardous as to require the installation of automatic warning signals or devices at such crossing, provided, that a public hearing shall not be required if the parties in interest have entered into an agreement for the construction of such crossing and for the apportionment between them of the cost of acquiring and installing such automatic warning signals or devices and provided further such agreement assesses the cost at not to exceed the amounts prescribed in subsection B.

B. If the commission finds that any crossing requires the installation of automatic warning signals or devices, it shall order such installation, and if the parties in interest are unable to agree upon the apportionment of the cost of acquisition and installation, then the cost shall be borne as follows:

The railroad, fifty per cent.
Where a city street is involved: the city, fifty per cent.
Where a county highway is involved: the county, fifty per cent.
When a state highway is involved: the state highway fund, fifty per cent.
City, county or state highway funds may be used to finance the cost of installation of automatic warning signals or devices in amounts greater than those set forth in this subsection, provided that federal funds are available for and are actually reimbursed to the city, county or state highway to cover the cost of the installation.

C. When a railroad has installed automatic signals or warning devices pursuant to order of the commission, it shall secure reimbursement for that portion of the cost thereof which, in accordance with the agreement of the parties in interest or the provisions hereof, is to be borne by others, by filing verified claims with the appropriate fiscal officers, and such claims shall be approved and paid without reference to or limitation by the provisions of any other law. For the purpose of determining the amount of reimbursement to which the railroad is entitled, the commission shall retain jurisdiction of the matter and upon completion of the installation of the automatic signals and warning devices, shall make a determination as to the cost of installing same, including but not limited to, the cost of acquisition and expense of installation.

§ 40-337.02 Allocation of funds for automatic warning signals at railway crossings

A. In each annual budget request prepared by the corporation commission, ten per cent, but not more than two hundred thousand dollars, of the total amount approved for the same year by the federal highway administration for railroad - highway projects within this state under the provisions of the federal highway acts of 1973 and 1976, and subsequent acts, shall be set aside from the general or any other fund for the installation of automatic warning signals or devices or the upgrading of existing warning signals or devices at public railroad grade crossings. Such appropriation shall be used exclusively for the ten per cent required under the federal highway acts of 1973 and 1976, and subsequent acts, for railroad - highway projects approved for federal funding in any year under such acts.

B. Funds appropriated pursuant to this section shall be available for allocation and expenditure without regard to fiscal years.

C. Funds appropriated pursuant to this section shall be in addition to any funds appropriated for the purposes of section 40-337.01.

D. The corporation commission shall in its request for such funds, provide a full report of accomplishments for the previous year and an accounting of all funds not utilized from previous appropriations.

§ 40-337.03 Determination of location of automatic warning signals

On or before February 15 of each year, the commission shall submit to the railroad involved and the city, county and department of transportation in which jurisdiction a public railroad grade crossing is located, an array of such crossings where the installation of automatic warning signals or devices should be considered during the year, or within a reasonable time thereafter depending upon the availability of monies, materials, labor and other factors involved in such installation.

§ 40-338 Accidents on property of public service corporations; investigation; report

A. The commission shall investigate the cause of all accidents upon the property of any public service corporation, or directly or indirectly arising from or connected with its maintenance or operation, resulting in loss of life or injury to persons or property, and may make such order or recommendation with respect thereto as is just and reasonable.

B. Every public service corporation shall file with the commission a report of each accident so occurring, but the report, order and recommendation, shall not be admitted as evidence in any action for damages arising out of the accident.

§ 40-339 Refusal of common carrier to receive or carry passenger; classification

A person, or any agent or officer of a corporation, doing business as a common carrier of passengers, who knowingly refuses, without just cause or excuse, to receive and entertain a guest, or to receive and carry a passenger, is guilty of a class 2 misdemeanor.

§ 40-340 Emergency telephone numbers; use; restrictions

A. To the extent permitted by law, the commission shall administer and regulate the assignment of three digit telephone numbers to protect the integrity of the emergency numbering system. The requirements of this subsection do not apply to federally licensed wireless telephone communications.

B. The three digit telephone number 911 is specifically reserved for exclusive use as an emergency telephone number for accessing police, fire and emergency medical services.

C. Except as provided in subsection D, a person, business, corporation or government entity shall not deny or restrict access to a 911 telephone number or system.

D. The commission may allow, on a case by case basis, a business, corporation or government entity to remain noncompliant with subsection C if it would be excessively burdensome or not in the overall best interest of an appropriate police, fire or emergency medical response if the business, corporation or government entity were required to comply.

Article 6.1 Conversion of Overhead Electric and Communication Facilities

§ 40-341 Definitions

In this article, unless the context otherwise requires:

"Clerk" means the clerk of the board of supervisors or any person or officer who acts as clerk of the board of supervisors.
"Convert" or "conversion" means the removal of existing overhead electric or communication facilities and the replacement thereof with underground electric or communication facilities constructed at the same or different locations.
"Electric or communication facilities" means any works or improvements used or useful in providing electric, communication or cable television service or video service, including poles, supports, tunnels, manholes, vaults, conduits, pipes, wires, conductors, guys, stubs, platforms, crossarms, braces, transformers, insulators, cutouts, switches, capacitors, meters, communication circuits, appliances, attachments and appurtenances. Electric facilities does not include any facilities used or intended to be used for the transmission of electric energy at nominal voltages in excess of twenty-five thousand volts or having a circuit capacity in excess of twelve thousand kVA. Communication facilities does not include facilities used or intended to be used for the transmission of intelligence by microwave or radio, apparatus cabinets or outdoor public telephones.
"Local government" means the city or town council if all or any part of the underground conversion service area is located within the limits of an incorporated city or town or the county board of supervisors if the underground conversion service area is located in an unincorporated area.
"Lot" includes any portion, piece, parcel or subdivision of land, but not property owned or controlled by any person as a right of way.
"Owner" means the person in whom legal title appears by recorded deed, or the person in possession under claim of title, or the person exercising acts of ownership for the person or as the personal representative of the owner, including the boards of trustees of school districts and the boards of education of high school districts owning property within the underground conversion service area.
"Overhead electric or communication facilities" means electric or communication facilities located above the surface of the ground, except as provided for in paragraphs 3 and 12 of this section.
"Public agency" means any irrigation, power, electrical or agricultural improvement district now or hereafter organized that provides electric or communication service to the public by means of electric or communication facilities.
"Public place" includes streets, alleys, roadways, sidewalks, rights of way, easements and similar properties as to which a city, town, county, the state, the public service corporation or the public agency may have a right.
"Public service corporation" means any person or corporation that provides electric or communication service to the public by means of electric or communication facilities.
"Real property" means the real estate owned in fee, but not inclusive of buildings or structures located thereon, or any property owned or controlled as a railroad or street right-of-way.
"Underground conversion service area" means an area in which existing electric and communication facilities are to be placed underground, exclusive of any lines or facilities used or intended to be used for the transmission of electric energy at nominal voltages in excess of twenty-five thousand volts or having a circuit capacity in excess of twelve thousand kVA and facilities used or intended to be used for the transmission of intelligence by microwave or radio and facilities such as transformers, pull boxes, service terminals, pedestal terminals, splice closures, apparatus cabinets and similar facilities that normally are above the surface in areas where service lines are underground in accordance with standard underground practices, and on-the-ground facilities attached to overhead facilities that are used to connect an underground system to overhead facilities.
"Underground conversion cost" means the costs to be paid by each owner to each public service corporation or public agency by the property owners within an underground conversion service area, as provided in this article.

§ 40-342 Petitions of owners for cost study establishing an underground conversion service area

A. In the event that not less than sixty per cent of the owners of contiguous real property within a reasonably compact area of reasonable size, and who own not less than sixty per cent on a square foot basis of the real property within such area, seek to establish an underground conversion service area they shall petition each public service corporation or public agency serving such area by overhead electric or communication facilities to make a study of the costs which will be related to the establishment of such area as an underground conversion service area.

B. The petition shall set forth:

The necessity for the proposed underground conversion service area.
That the public convenience, necessity or welfare will be promoted by the establishment of the underground conversion service area and that the property to be included therein will be benefited.
The name and address of the owner of each parcel or lot within the proposed underground conversion service area as reflected on the records of the county assessor.
Such other matters as may be required by the public service corporation or public agency.

C. Each copy of the petition shall be verified by one of the petitioners and shall be accompanied by a plat or sketch indicating the boundaries of the proposed underground conversion service area and size in square feet of each parcel or lot within the proposed underground conversion service area.

D. Each public service corporation or public agency serving such area by overhead electric or communication facilities shall, within one hundred twenty days after receipt of the petition, make a study of the cost of conversion of its facilities in such area to underground service, and shall in its office make available to the petitioners and to all owners of land within the proposed underground conversion service area a joint report of the public service corporations or public agencies affected as to the results of the study. The joint report shall set forth an estimate of the costs to be assessed to each lot or parcel of real property located within the proposed underground conversion service area for the conversion of facilities within public places. The joint report shall also indicate the estimated cost to be assessed to each lot or parcel of real property for placing underground the facilities of the public service corporation or public agency located within the boundaries of each parcel or lot then receiving service. The costs of preparing the joint report shall be borne by the public service corporation or public agency whose overhead electric or communication facilities are to be included in the proposed underground conversion service area unless the corporation commission or board of supervisors orders the establishment of the underground conversion service area, in which event such costs shall be included in the underground conversion costs.

E. In the event the petitioners desire to convert any facilities used or intended to be used for the transmission of electric energy at nominal voltages in excess of twenty-five thousand volts, or having a current capacity in excess of twelve thousand kva, the petition shall so state, and the joint report of the public service corporation or public agency serving such area by overhead electric or communication facilities shall state separately the costs of conversion of such facilities to underground service.

F. A summary of the estimate of the costs to be assessed against each lot or parcel of real property located within the proposed underground conversion service area for the conversion of facilities within public places and the estimated costs to be assessed to each lot or parcel of real property for placing underground the facilities of the public service corporation or public agency located within the boundaries of each parcel or lot then receiving service shall be mailed by the public service corporation or public agency to each owner of real property located within the proposed underground conversion service area to the address of such owner as set forth on the petition for the cost study.

§ 40-343 Petition of owners and petition of public service corporation or public agency for establishment of underground conversion service area; notice of proposed lien

A. Within ninety days after the joint report referred to in section 40-342 is made available to the petitioners, not less than sixty per cent of the owners of real property within the area who own not less than sixty per cent of the real property within the area excluding public places may petition each public service corporation or public agency rendering electric or communication service in the area for establishment of an underground conversion service area in the same area as described in the original petition or petitions.

B. The public service corporation or corporations shall within sixty days thereafter petition the corporation commission or if not under the jurisdiction of the corporation commission, the board of supervisors or the city or town council for establishment of such an underground conversion service area.

C. The public agency or agencies shall within sixty days thereafter petition the board of supervisors for establishment of an underground conversion service area.

D. Upon filing the petition for the establishment of an underground service area, the public service corporation or corporations or public agency or agencies shall record in the office of the county recorder of the county where the proposed conversion service area is located a notice of proposed lien which shall contain the following:

The legal description of each lot or parcel upon which the proposed lien shall be claimed.
A statement that a petition for the establishment of an underground conversion service area has been filed with the corporation commission, board of supervisors or city or town council, as the case may be.
The public service corporation or public agency which will claim the lien.
A statement of the estimated costs to be assessed against each lot or parcel located within the proposed underground conversion service area for placing underground the facilities of the public service corporation or public agency should the corporation commission, board of supervisors or city or town council order the establishment of the underground conversion service area.

§ 40-344 Hearing on petition; notice

A. Upon receipt of a petition to establish an underground conversion service area, the corporation commission, board of supervisors or city or town council shall set a date for a hearing on the petition, which date shall be not later than sixty days nor sooner than thirty days after receipt of such petition. At the hearing all interested property owners owning property within the proposed underground conversion service area may appear and be heard on the matter. Any person owning property within the proposed underground conversion service area and wishing to withdraw such person's signature from the petition of owners referred to in section 40-343, subsection A, or object to the establishment of the underground conversion service area or to the underground conversion costs as contained in the joint report pertaining to his lot or parcel included within the proposed underground conversion service area shall, not later than ten days before the date set for the hearing, file such person's objections with the clerk of the city or town council or the board of supervisors or with the corporation commission, as the case may be.

B. Notice announcing the hearing and describing the boundaries of the proposed underground conversion service area and stating that the estimated underground conversion costs for each lot or parcel included within the proposed underground conversion service area are available at the office of each public service corporation or public agency shall be posted in not less than three public places within the proposed underground conversion service area for not less than thirty days prior to the date of the hearing and shall be published once in a newspaper published in the county and of general circulation within the proposed underground conversion service area. The publication in the newspaper shall be not less than twenty days prior to the date of the hearing.

C. In the case of public service corporation, the corporation commission shall mail not less than thirty days before the date set for the hearing a notice announcing the hearing and stating the boundaries of the proposed underground conversion service area to each owner of a lot or parcel of land within the boundaries of the proposed underground conversion service area, as reflected on the records of the county assessor and to those governmental agencies having rights in public places within such area. The public service corporation or corporations involved and all property owners within the underground conversion service area shall be deemed parties to the proceedings for the purposes of applications for rehearings or appeals as provided in sections 40-253 and 40-254.

D. If the corporation commission issues an order establishing an underground conversion service area, the public service corporation shall not be required to commence conversion until the time for requesting rehearing has expired and no application has been filed, or if an application for rehearing has been filed, until the commission has declined to modify or reverse the order, and until either the time for commencing an action in the superior court to set aside the order has expired and no application has been filed, or if application has been filed, until a final order, not subject to appeal, approving or refusing to set aside the commission's order has been issued.

E. In the case of public service corporations which are locally regulated and licensed by a municipality, the city or town council shall mail not less than thirty days before the date set for the hearing a notice announcing the hearing and stating the boundaries of the proposed underground conversion service area to each owner of a lot or parcel of land within the boundaries of the proposed underground conversion service area, as reflected on the records of the county assessor and to those governmental agencies having rights in public places within such area. If the city or town council issues an order establishing an underground conversion service area, the public service corporation shall not be required to commence conversion until the time for commencing any action to set aside the order as provided by subsection F of this section has expired and no such action has been commenced, or if commenced, such action has been finally disposed of.

F. Any party aggrieved by any act of the city or town council in the establishment of an underground conversion service area may bring an action in the superior court of the county in which the underground conversion service area is located to set aside the action of the city or town council not later than twenty days after the order of the city or town council establishing the underground conversion service area.

G. In case of public agencies or public service corporations not under the jurisdiction of the corporation commission and regulated by the board of supervisors, the board of supervisors shall mail not less than thirty days before the date set for the hearing a notice announcing the hearing and stating the boundaries of the proposed service area to each owner of a lot or parcel of land within the boundaries of the proposed service area, as reflected on the records of the county assessor and those governmental agencies having rights in public places within the area. If the board of supervisors issues an order establishing an underground conversion service area, the public agency shall not be required to commence conversion until the time for commencing any action to set aside the order as provided by subsection F of this section has expired and no such action has been commenced, or if commenced, such action has been finally disposed of.

H. Any party aggrieved by any act of the board of supervisors in the establishment of an underground conversion service area may bring an action in the superior court of the county in which the underground conversion service area is located to set aside the action of the board of supervisors not later than twenty days after the order of the board of supervisors establishing the underground conversion service area.

I. The costs of posting, publication and mailing provided for in this section shall be assessed by the city or town council, the board of supervisors or the corporation commission on a pro rata basis to each public service corporation or public agency whose overhead electric or communication facilities are to be included in the proposed underground conversion service area.

J. The corporation commission or the board of supervisors shall not establish any underground conversion service area without prior approval of such establishment by resolution of the local government.

K. If the underground conversion service area contains overhead electric or communication facilities of a public service corporation and public agency, then neither the public service corporation nor the public agency shall be required to commence conversion until the corporation commission's order, the board of supervisors' order or the city or town council's order has become final.

§ 40-345 Procedure for making and hearing protests and objections and withdrawing signatures

In determining protests, withdrawals of signatures and objections, the corporation commission, the board of supervisors or the city or town council shall be guided by the following rules:

Each paper containing signatures shall have attached thereto an affidavit of an owner of real estate within the proposed underground conversion service area, stating that each signature was affixed in his presence and is the signer's genuine signature.
The protest or objection shall be counted only for the property described as belonging to the signer, and a signature without the description shall not be counted.
The signature of one co-tenant or, if community property, the signature of either spouse, shall be sufficient for a protest or a withdrawal of signature from a petition of owners.
A protest, withdrawal of signature from petition of owners or objection signed by a guardian, executor, administrator or trustee shall be valid without an order of court therefor.
A protest, withdrawal of signature from petition of owners or objection by a person in possession under contract of purchase shall be valid.
When several persons have a claim to or an interest in property, the signature of any of them shall be sufficient unless questioned by another having such claim or interest, whereupon the wishes of the person legally entitled to possession of the property at the date of the protest shall control.
A protest, withdrawal of signature from petition of owners or objection signed by an agent or attorney-in-fact shall be disregarded unless the authority of the agent has been recorded with the county recorder, or written or telegraphic authority is attached to the protest, withdrawal of signature from petition of owners or objection before expiration of the time for filing the protest, withdrawal or objection.
A signature may be withdrawn from a protest or objection by filing the withdrawal with the clerk of the city or town council or the clerk of the board of supervisors or the corporation commission, as the case may be, at or before five o'clock p.m. of the last day set for the filing of protests.
An objection to the signature of a co-tenant, spouse, claimant or person interested may be filed, and the authority of an agent or attorney-in-fact questioned, at any time before the city or town council, the board of supervisors or the corporation commission finally passes upon the sufficiency of the protest, but the authority of an agent or attorney-in-fact may not be revoked as to the signature after the expiration of the protest period.

§ 40-346 Hearing on petition by corporation commission, board of supervisors or city or town council; determination of economic and technical feasibility; addition or elimination of certain areas

A. The corporation commission, board of supervisors or city or town council, as the case may be, shall hold a hearing, upon notice as provided in this article, to establish the fact that the requirements for the establishment of an underground conversion service area have been satisfied, and that owners of no more than forty per cent of the real property within the underground conversion service area, or no more than forty per cent of the owners of real property, have not objected to the formation of the underground conversion service area, and if the commission, board of supervisors or city or town council so determines, and if the commission, board of supervisors or city or town council further determines after considering all objections, that the cost of conversion as reflected in the joint report prepared pursuant to section 40-342 is economically and technically feasible for the public service corporations or public agencies involved and the property owners affected and that the underground conversion service area is a reasonably compact area of reasonable size, the commission, board of supervisors or city or town council shall then issue an order establishing the area as an underground conversion service area. In those cases where the commission, the board of supervisors and the city or town council have jurisdiction, all must issue orders establishing the area as an underground conversion service area before the public service corporations and public agencies owning overhead electrical or communication facilities therein shall be required to convert such facilities to underground.

B. If the corporation commission, board of supervisors or city or town council, as the case may be, should conclude at the hearing that territory not included in the petition should be included within the underground conversion service area, the real property owners in the additional territory shall be notified in like manner as provided in connection with the original hearing, and a subsequent hearing shall be held on the question of including the additional territory. In establishing the underground conversion service area, the corporation commission, the board of supervisors or the city or town council shall eliminate any territory described in the petition which it finds will not be benefited by the establishment of the underground conversion service area or in which it finds that conversion is not economically or technically feasible.

C. Additions to and alterations of an underground conversion service area shall be made in the manner provided for the establishment of the underground conversion service area.

D. Upon the order of the commission, board of supervisors or city or town council establishing the area as an underground conversion service area, the commission, board of supervisors or city or town council shall then direct the public service corporations or public agencies owning overhead electric or communication facilities, as defined in section 40-341, within the underground conversion service area to convert such facilities to underground in accordance with standard underground practices.

E. If the petition for the establishment of an underground conversion service area requests the conversion of facilities used or maintained to be used for the transmission of electric energy at nominal voltages in excess of twenty-five thousand, or having a current capacity in excess of twelve thousand kva, protests and objections may be filed separately for the conversion of electric facilities and such other facilities. The commission, board of supervisors or city or town council may order the conversion of electric facilities if the owners of no more than forty per cent of the real property within the underground conversion service area and no more than forty per cent of the owners of real property have not objected to the conversion of the electric facilities but have objected to the conversion of such other facilities, in which event the commission, board of supervisors or city or town council shall order the establishment of the underground service area for the conversion of electric facilities only. If the owners of not more than forty per cent of the real property within the underground conversion service area and no more than forty per cent of the owners of real property have not objected to the conversion of electric facilities and such other facilities and the commission or board makes such further determinations as are required by subsection A of this section, then the city or town council, the board of supervisors or the commission may order the establishment of an underground conversion service area for the purpose of converting the electric facilities and such other facilities and the cost of converting such other facilities shall be included in the underground conversion costs and shall be assessed to each lot or parcel of real property in the same manner as provided for in section 40-347.

F. The order of the commission, the board of supervisors or the city or town council establishing the underground conversion service area shall set forth the underground conversion costs to be charged to each lot or parcel.

§ 40-347 Establishment of conversion costs; apportionment of costs; method of payment

A. The order authorizing the establishment of the underground conversion service area shall authorize each public service corporation or public agency whose overhead electric or communication facilities are to be converted to charge the underground conversion costs to each lot or parcel of real property within the underground conversion service area. The underground conversion costs shall be in an amount sufficient to repay the public service corporation or public agency for the following:

The remaining undepreciated original costs of the existing overhead electric and communication facilities to be removed as determined in accordance with the uniform system of accounts applicable to the public service corporation or public agency.
The actual costs of removing such overhead electric and communication facilities, less the salvage value of the facilities removed.
The contribution in aid of construction which the public service corporation or public agency would require under its rules and regulations applicable to underground conversion service areas.
If not paid in full as provided in section 40-348, the actual cost of converting to underground the facilities from the public place to the point of delivery on the lot or parcel owned by each owner receiving service, in the case of an electric public service corporation or public agency, or to the connection point within the house or structures, in the case of a communication corporation, less any credit which may be given such owner under the line extension policy of the public service corporation or public agency then in existence.
If property belonging to the United States, this state, county, city, school district or any other political subdivision or institution of the state or county is included in the underground conversion service area, and they do not voluntarily assume such costs, the underground conversion cost applicable to such property shall be charged pro rata against the remaining property included within the underground conversion service area.

B. The cost incurred in placing underground the facilities in public places shall be apportioned among the owners of property within the area on the basis of relative size of each parcel by the corporation commission, the board of supervisors or the city or town council. The underground conversion cost, as determined by the method prescribed in subsection A shall not exceed the estimated costs indicated in the joint report prepared by the public service corporation or public agency pursuant to subsection D of section 40-342 and, may be paid in cash by the property owners within sixty days from the date the overhead facilities are removed from public places, or may be paid by a uniform plan applicable to all property owners not paying within the sixty-day period in equal periodic installments over a reasonable period of time, not exceeding fifteen years, as established by the corporation commission, the board of supervisors or the city or town council, together with interest at a rate to be determined by the corporation commission, the board of supervisors or the city or town council but not to exceed eight per cent per annum.

C. If funds become available from other public or private sources to pay all or any part of the underground conversion costs, any such funds shall be applied on a pro rata basis to reduce the underground conversion cost charged against each parcel or lot.

D. Notwithstanding the provisions of subsection B of this section, the public service corporation or public agency serving such area may by agreement with all the owners of the property in an underground conversion service area provide for reimbursement to it of the cost of such conversion on a different basis as to payment or security than that set out by the terms of this article.

§ 40-348 Conversion of service lines on owner's property; payment; notice of disconnection to owner

A. The service facilities within the boundaries of each lot or parcel within an underground conversion service area shall be placed underground at the same time as or after the underground system in private easements and public places is placed underground. The public service corporation or public agency involved, directly or through a contractor, shall, at the expense of the owner, convert to underground its facilities on any such lot or parcel up to the point of delivery, in the case of an electric public service corporation or public agency, or to the connection point within the house or structure, in the case of a communication corporation, upon being requested by the owner. Overhead electric service facilities beyond the point of delivery to the service entrance shall be placed underground by the owner, acting directly or through a contractor.

B. If the property owner does not reimburse the public service corporation or public agency in cash for all such costs or expenses so incurred by it within thirty days after completion of such conversion, or reach other agreement with the public service corporation or public agency involved for payment in some other manner, such costs shall be included in the costs on which the underground conversion cost for such property is calculated, as provided by this article.

C. Upon completion of the underground system in public places the corporation commission, board of supervisors or city or town council, as the case may be, shall mail a notice to each owner of a lot or parcel located therein advising him of the provisions of subsection A and stating that unless such owner complies with the requirements of such subsection within thirty days thereafter, all buildings, structures and improvements located upon the lot or parcel will be subject to disconnection from the electric or communication facilities providing service thereto. Thereafter if the owner of any lot or parcel shall fail to comply within the time specified, the public service corporation or public agency providing electric or communication service shall disconnect and remove all overhead electric or communication facilities providing service to any building, structure or improvement located upon such lot or parcel. Written notice of the proposed disconnection shall be given at least thirty days prior to disconnection by leaving a copy of such notice at the principal building, structure or improvement located upon such lot or parcel.

§ 40-349 Permit or easement for conversion of service lines to be furnished by owner

A. The public service corporation or corporations or public agency or agencies shall not commence the work referred to in section 40-348 on property other than private easements or public places until the owner has furnished a permit or easement to the public service corporation or public agency, expressly authorizing such public service corporation or public agency and its representative officers, employees, agents and contractors to enter upon such lot or parcel for such purpose and agreeing to the inclusion of the costs thereof in the underground conversion service costs in the event such costs or any part thereof remain unpaid thirty days after completion.

B. The public service corporation or public agency shall remove its overhead facilities replaced by underground facilities in accordance with this article in the area after the underground system in the private easements and public places has been energized, thereby discontinuing service to those parcels or lots whose owners have not furnished a permit or easement as provided in subsection A of this section.

§ 40-350 Lien for cost of conversion; procedure to perfect lien; recording notice of lien; default; limitation of action to foreclose lien; disconnection of service upon default

A. Upon completion of the conversion of the overhead electric and communication facilities, the public service corporation or public agency shall determine the total conversion costs as provided in section 40-347 and shall prepare and file a verified statement of such costs with the corporation commission, the board of supervisors or the city or town council, as the case may be. In the event the verified statement of the underground conversion costs for the removal of the overhead electric and communication facilities from public places is less than the estimate of such costs, the underground conversion costs to be paid by each owner shall be reduced proportionately, or in the event the actual cost of converting to underground the facilities from the public place to the point of delivery is less than the estimated cost for such conversion, then the underground conversion costs to be paid by the owner of such lot for such conversion shall be reduced. Upon completion of the conversion and the filing of the verified statement of costs, the corporation commission, the board of supervisors or the city or town council, as the case may be, shall mail to each owner a statement of the underground conversion costs setting forth the revisions, if any, which such statement shall specify the date payments are to commence. In the event the statements or the verified statement of costs contain any revisions, any owner desiring to object to such revisions shall file a written objection with the corporation commission, the board of supervisors or the city or town council, as the case may be, within twenty days following receipt of such notice. In the event any objections are filed, the corporation commission, the board of supervisors or the city or town council, as the case may be, shall fix a time for a hearing thereon not later than twenty days from the date of the filing of such objections. Notice of the time and place of such hearing shall be given by the corporation commission, the board of supervisors or city or town council to the owner filing the written objections and to the public service corporation or public agency whose overhead facilities were converted. It shall be a condition of maintaining any objection or appeal from an order of the corporation commission, board of supervisors or city or town council that the person objecting continue to make payments in the manner prescribed by the order of the corporation commission, board of supervisors or city or town council, which such payments may be made under protest and subject to refund if the verified statement, computation or allocation is determined to be improper.

B. The underground conversion cost to be paid by each owner to each public service corporation or public agency concerned shall be a lien separately on each privately owned parcel of real property within the underground conversion service area in favor of such public service corporation or public agency and shall be effective as of the date of filing of the notice of proposed lien as provided in section 40-343 upon its perfection as provided in subsection C of this section. Such lien shall only apply to each parcel of property to the extent determined by the apportionment provided for in section 40-347 plus any amount included pursuant to section 40-348. Upon payment of such entire sum, any lien herein created shall be released.

C. The lien shall be perfected by recording a notice of lien in the office of the county recorder of the county in which the underground conversion service area is located within ninety days after completion of the removal of the overhead system in public places, whether or not the connections to serve the individual lots have been completed, as provided in section 40-349. The notice of lien shall contain the following:

The legal description of each lot or parcel upon which a lien is claimed.
The public service corporation or public agency claiming the lien.
That portion of the underground conversion costs allocated to each lot or parcel.
A certified copy of the order of the corporation commission, the board of supervisors or the city or town council authorizing the establishment of the underground conversion service area.
The periodic installments to be made on account of the repayment of the underground conversion costs allocated to each lot or parcel.
The date of completion of removal of the overhead facilities in private easements and public places.
The date of filing the notice of proposed lien.

D. In the event of a default in the payment of a periodic installment of the underground conversion cost, the unpaid balance of such underground conversion cost may, at the election of the public service corporation or public agency involved, immediately become due and payable, and the public service corporation or public agency involved may, not later than one year after the final installment would have become due and payable, institute an action in superior court to foreclose its lien against such parcel or lot. A lien granted under the provisions of this section shall continue until the entire underground conversion cost apportioned to each such parcel or lot has been paid, notwithstanding the provisions of section 33-998, except that action to enforce the lien shall be commenced not later than one year after the final installment would have become due and payable. The election to accelerate the periodic payment of installments shall become effective thirty days after mailing written notice thereof to the owner of such parcel or lot as reflected on the records of the county assessor and by recording a copy thereof in the office of the county recorder of the county where such parcel or lot is located.

E. Any lien created under this article shall be inferior to any lien of any governmental entity including, but not limited to, any municipal corporation which has arisen or may arise by reason of any ad valorem tax assessment or any improvement or assessment district assessment, or bond assessment as provided by law but shall be superior to all other demands, encumbrances, title or liens whensoever created.

F. In the event of a default in the payment of the equal periodic installment, the public service corporation or public agency involved may, after thirty days' written notice of such default, discontinue service to such meter or account until such time as the delinquent amount has been paid.

§ 40-351 Sale of property to satisfy lien

No sale of property to satisfy a lien granted under the provisions of this article shall be made except upon judgment of foreclosure and order of sale.

§ 40-352 Relocation of underground facilities; public service corporation or public agency to be reimbursed for cost thereof

When facilities converted to underground pursuant to this article are thereafter moved, relocated or removed to avoid interference with public works or improvements, the public service corporation or public agency owning such facilities shall be reimbursed by the state, county, municipality, improvement district or other public authority constructing such works or improvements for the cost of such relocation or removal if such facilities are moved, relocated or removed within ten years following the date of their installation.

§ 40-353 Application of article; reinstallation of overhead facilities prohibited

A. The provisions of this article shall apply only to the relocation underground of existing utilities.

B. Once removed, no overhead electric or communication facilities shall be installed in an underground conversion service area.

C. Following the conversion of overhead electric or communication facilities, the public service corporation or public agency whose facilities were converted may install lines or facilities used or intended to be used for the transmission of electric energy at nominal voltages in excess of twenty-five thousand volts or having a current carrying capacity in excess of twelve thousand kva, provided that prior to the installation of such facilities the public service corporation or public agency desiring to install such facilities shall pay to the then existing owners of real property within the underground conversion service area the principal cost paid by such owners and their predecessors in interest for the conversion of overhead electric or communication facilities.

§ 40-354 No extension of corporation commission jurisdiction to public agencies, video service networks or cable television systems

Nothing contained in this article vests any jurisdiction over public agencies, video service networks or cable television systems in the Arizona corporation commission.

§ 40-355 Franchises, charters and ordinances of local governments not affected

The provisions of this article shall be supplemental and cumulative of existing rights, laws, local charters, ordinances and franchises and shall not be deemed to abrogate or modify the provisions of any franchise granted to public service corporations by any local government or to abrogate or modify in any way existing rights, laws, charters or ordinances of any local government.

§ 40-356 Nonseverability

If any provision of this article be held invalid, such invalidity shall invalidate this article in its entirety, and to this end the provisions of this article are declared to be nonseverable.

Article 6.2 Power Plant and Transmission Line Siting Committee

§ 40-360 Definitions

In this article, unless the context otherwise requires:

"Area of jurisdiction" means the state, a county or an incorporated city or town that exercises concurrent or exclusive jurisdiction over a geographical area.
"Certificate of environmental compatibility" means the certificate that is required by this article and that evidences the approval by the state of the sites for a plant or transmission line, or both.
"Commission" means the corporation commission.
"Committee" means the power plant and transmission line siting committee.
"Current Arizona electric transmission system" means the existing electric transmission system serving this state and all transmission lines on file with the commission as of January 31 of the previous year.
"Facilities" means a plant or transmission line, or both.
"Member" means the state official named herein, the employee designee thereof from the department, agency or governing body of such state official member and the public members designated herein.
"Person" means any state or agency or political subdivision thereof, or any individual, partnership, joint venture, corporation, city or county, whether located within or without this state, or any combination of such entities.
"Plant" means each separate thermal electric, nuclear or hydroelectric generating unit with a nameplate rating of one hundred megawatts or more for which expenditures or financial commitments for land acquisition, materials, construction or engineering exceeding $50,000 have not been made before August 13, 1971.
"Transmission line" means five or more new structures that span more than one mile in length as measured from the first structure outside of the substation, switchyard or generating site to which the line connects to the fifth structure and that are erected above ground and support one or more conductors designed for the transmission of electric energy at nominal voltages of one hundred fifteen thousand volts or more and all new switchyards to be used therewith and related thereto for which expenditures or financial commitments for land acquisition, materials, construction or engineering exceeding $50,000 have not been made before August 13, 1971. Transmission line does not include structures located on the substation, switchyard or generating site to which the line connects.
"Utility" means any person engaged in the generation or transmission of electric energy.

§ 40-360.01 Organization and membership of the committee

A. The commission shall establish a power plant and transmission line siting committee of Arizona.

B. The committee shall consist of the following members:

State attorney general or the attorney general's designee.
Director of environmental quality or the director's designee.
Director of water resources or the director's designee.
Director of the governor's energy office or the director's designee.
Chairman of the Arizona corporation commission or the chairman's designee.
Six members appointed by the commission to serve for a term of two years of which three members shall represent the public, one member shall represent incorporated cities and towns, one member shall represent counties and one member shall be actively engaged in agriculture.

C. The attorney general or the attorney general's designee shall be chairman of the committee.

D. The commission shall establish such procedures as provide for expeditious review of the proposed siting plans and necessary consultation with the person proposing the facilities, for noticing and conducting the hearing provided by section 40-360.04, and for a timely decision regarding the issuance of a certificate of environmental compatibility of the proposed site.

E. Committee members appointed by the commission are eligible to receive compensation of two hundred dollars for each meeting attended, prorated for partial days for each meeting attended, payable from the filing fee required by section 40-360.09. Committee members employed by government entities are not eligible to receive compensation for their services. All committee members shall be reimbursed from the filing fee required by section 40-360.09 for their actual and necessary expenses incurred in connection with their participation in committee meetings.

F. The committee may utilize the staff resources of its constituent agencies as well as necessary consultants. All studies required by the committee shall be conducted as specified by the committee and under its general direction.

§ 40-360.02 Plans; filing; failure to comply; classification

A. Every person contemplating construction of any transmission line within the state during any ten year period shall file a ten year plan with the commission on or before January 31 of each year.

B. Every person contemplating construction of any plant within the state shall file a plan with the commission ninety days before filing an application for a certificate of environmental compatibility as provided in section 40-360.03.

C. Each plan filed pursuant to subsection A or B of this section shall set forth the following information with respect to the proposed facilities to the extent such information is available:

The size and proposed route of any transmission lines or location of each plant proposed to be constructed.
The purpose to be served by each proposed transmission line or plant.
The estimated date by which each transmission line or plant will be in operation.
The average and maximum power output measured in megawatts of each plant to be installed.
The expected capacity factor for each proposed plant.
The type of fuel to be used for each proposed plant.
The plans for any new facilities shall include a power flow and stability analysis report showing the effect on the current Arizona electric transmission system. Transmission owners shall provide the technical reports, analysis or basis for projects that are included for serving customer load growth in their service territories.

D. The information in the plan reported to the commission in subsection B of this section is not open to public inspection and shall not be made public if disclosure of the information in the plan could give a material advantage to competitors. The information in the plan protected as confidential under subsection B of this section is any information that is similar to the information that would be confidential under section 40-204. An officer or employee of the commission who knowingly divulges information in the plan in violation of this subsection is guilty of a class 2 misdemeanor.

E. Failure of any person to comply with the requirements of subsection A, B or C of this section may, in the commission's discretion in the absence of a showing of good cause, constitute a ground for refusing to consider an application of such person.

F. The plans shall be recognized and utilized as tentative information only and are subject to change at any time at the discretion of the person filing the plans.

G. The plans shall be reviewed biennially by the commission and the commission shall issue a written decision regarding the adequacy of the existing and planned transmission facilities in this state to meet the present and future energy needs of this state in a reliable manner.

§ 40-360.03 Application for certificate of environmental compatibility before construction of facilities; electronic format; rules; exception

A. Except as provided in subsection B of this section, every utility that plans to construct a plant or transmission line, or both, in this state shall first file with the commission an application for a certificate of environmental compatibility. The application shall be in a form prescribed by the commission and shall be accompanied by information with respect to the proposed type of facilities and description of the site, including the areas of jurisdiction affected and the estimated cost of the proposed facilities and site. The application shall also be accompanied by a receipt that evidences payment of the appropriate fee required by section 40-360.09. The commission shall promptly refer the application and accompanying information to the chairman of the committee for the committee's review and decision. The application and accompanying information may be submitted to the commission in an electronic format. The commission may adopt rules to accept electronic filings under this section and to ensure that proper notice is provided electronically to interested parties.

B. A utility may replace a conductor or wire on a transmission line or may replace an existing transmission line structure or structures with a new transmission line structure or structures without seeking a new certificate of environmental compatibility and without holding a hearing under this article if the replacement is on a transmission line that previously received a certificate of environmental compatibility or that was in use or authorized before August 13, 1971. All replacement conductors or structures shall comply with the terms and conditions of the applicable existing certificate of environmental compatibility.

§ 40-360.04 Hearings; procedures

A. The chairman of the committee shall, within ten days after receiving an application, provide public notice as to the time and place of a hearing on the application and provide notice by certified mail to the affected areas of jurisdiction at least twenty days prior to a scheduled hearing. If the committee subsequently proposes to condition the certificate on the use of a site other than the site or alternative sites generally described in the notice and considered at the hearing, a further hearing shall be held thereon after public notice. The hearing or hearings shall be held not less than thirty days nor more than sixty days after the date notice is first given and shall be held in the general area within which the proposed plant or transmission line is to be located or at the state capitol at Phoenix as determined by the chairman, at his discretion.

B. The committee may conduct the hearing or may appoint an attorney as a hearing officer. To be eligible for appointment the attorney must reside in a county other than the county in which the proposed site is located and have been admitted to practice in this state for not less than five years.

C. The committee or hearing officer shall receive under oath and before a court reporter the material, nonrepetitive evidence and comments of the parties to the proceedings and any rebuttal evidence of the applicant, and the committee or hearing officer may require the consolidation of the representation of nongovernmental parties having similar interests.

D. The committee shall review and consider the transcript of the public hearing or hearings and shall by a decision of a majority of the members issue or deny a certificate of environmental compatibility within one hundred eighty days after the application has been filed with or referred to the committee.

E. Should the estimated cost of the facilities or site be increased as a result of the action of the committee, such increase, as determined by an independent engineering firm selected jointly by the committee and applicant, shall be reflected in the certificate issued by the committee. The engineering firm shall include a registered professional engineer experienced in utility construction.

§ 40-360.05 Parties to certification proceedings

A. The parties to a certification proceeding shall include:

The applicant.
Each county and municipal government and state agency interested in the proposed site that has filed with the chairman of the committee, not less than ten days before the date set for the hearing, a notice of intent to be a party.
Any domestic nonprofit corporation or association formed in whole or in part to promote conservation or natural beauty, to protect the environment, personal health or other biological values, to preserve historical sites, to promote consumer interests, to represent commercial and industrial groups, or to promote the orderly development of the areas in which the facilities are to be located, that has filed with the chairman of the committee, not less than ten days before the date set for the hearing, a notice of intent to be a party.
Such other persons as the committee or hearing officer may at any time deem appropriate.

B. Any person may make a limited appearance in the proceeding by filing a statement in writing with the chairman of the committee not less than five days before the date set for the hearing. A statement filed by a person making a limited appearance shall become part of the record. A person making a limited appearance shall not be a party or have the right to present oral testimony or cross-examine witnesses.

C. Any person may make an appearance in the proceeding on behalf of county, municipal government or state agency notwithstanding the fact that the county, municipality or state agency may be represented on the committee as provided for in section 40-360.01.

§ 40-360.06 Factors to be considered in issuing a certificate of environmental compatibility

A. The committee may approve or deny an application and may impose reasonable conditions on the issuance of a certificate of environmental compatibility and in so doing shall consider the following factors as a basis for its action with respect to the suitability of either plant or transmission line siting plans:

Existing plans of this state, local government and private entities for other developments at or in the vicinity of the proposed site.
Fish, wildlife and plant life and associated forms of life on which they are dependent.
Noise emission levels and interference with communication signals.
The proposed availability of the site to the public for recreational purposes, consistent with safety considerations and regulations.
Existing scenic areas, historic sites and structures or archaeological sites at or in the vicinity of the proposed site.
The total environment of the area.
The technical practicability of achieving a proposed objective and the previous experience with equipment and methods available for achieving a proposed objective.
The estimated cost of the facilities and site as proposed by the applicant and the estimated cost of the facilities and site as recommended by the committee, recognizing that any significant increase in costs represents a potential increase in the cost of electric energy to the customers or the applicant.
Any additional factors that require consideration under applicable federal and state laws pertaining to any such site.

B. The committee shall give special consideration to the protection of areas unique because of biological wealth or because they are habitats for rare and endangered species.

C. Notwithstanding any other provision of this article, the committee shall require in all certificates for facilities that the applicant comply with all applicable nuclear radiation standards and air and water pollution control standards and regulations, but shall not require either of the following:

Compliance with performance standards other than those established by the agency having primary jurisdiction over a particular pollution source.
That a contractor, subcontractor, material supplier or other person engaged in the construction, maintenance, repair or improvement of any project subject to approval of the commission negotiate, execute or otherwise become a party to any project labor agreement, neutrality agreement as defined in section 34-321, apprenticeship program participation or contribution agreement or other agreement with employees, employees' representatives or any labor organization as a condition of or a factor in the commission's approval of the project. This paragraph does not:

(a) Prohibit private parties from entering into individual collective bargaining relationships.

(b) Regulate or interfere with activity protected by law, including the national labor relations act.

D. Any certificate granted by the committee shall be conditioned on compliance by the applicant with all applicable ordinances, master plans and regulations of the state, a county or an incorporated city or town, except that the committee may grant a certificate notwithstanding any such ordinance, master plan or regulation, exclusive of franchises, if the committee finds as a fact that compliance with such ordinance, master plan or regulation is unreasonably restrictive and compliance therewith is not feasible in view of technology available. When it becomes apparent to the chairman of the committee or to the hearing officer that an issue exists with respect to whether such an ordinance, master plan or regulation is unreasonably restrictive and compliance therewith is not feasible in view of technology available, the chairman or hearing officer shall promptly serve notice of such fact by certified mail on the chief executive officer of the area of jurisdiction affected and, notwithstanding any provision of this article to the contrary, shall make such area of jurisdiction a party to the proceedings on its request and shall give it an opportunity to respond on such issue.

§ 40-360.07 Compliance by utility; commission order

A. No utility may construct a plant or transmission line within this state until it has received a certificate of environmental compatibility from the committee with respect to the proposed site, affirmed and approved by an order of the commission which shall be issued not less than thirty days nor more than sixty days after the certificate is issued by the committee, except that within fifteen days after the committee has rendered its written decision any party to a certification proceeding may request a review of the committee's decision by the commission.

B. The grounds for review shall be stated in a written notice filed with the commission with a copy thereof served on the chairman of the committee. The committee shall transmit to the commission the complete record, including a certified transcript, and the review shall be conducted on the basis of the record. The commission may, at the request of any party, require written briefs or oral argument and shall within sixty days from the date the notice is filed either confirm, deny or modify any certificate granted by the committee, or in the event the committee refused to grant a certificate, the commission may issue a certificate to the applicant. In arriving at its decision, the commission shall comply with the provisions of section 40-360.06 and shall balance, in the broad public interest, the need for an adequate, economical and reliable supply of electric power with the desire to minimize the effect thereof on the environment and ecology of this state.

C. The committee or any party to a decision by the commission pursuant to subsection B of this section may request the commission to reconsider its decision within thirty days after the decision is issued. A request for reconsideration made pursuant to this subsection shall set forth the grounds upon which it is based and state the manner in which the party believes the commission unreasonably or unlawfully applied or failed to apply the criteria set forth in section 40-360.06. The decision of the commission is final with respect to all issues, subject only to judicial review as provided by law in the event of an appeal by a person having a legal right or interest that will be injuriously affected by the decision.

§ 40-360.08 Transfer of certificate; compliance by committee; commission and review panel; authorization to construct

A. Subject to such limitations and conditions as may otherwise be prescribed by law, a certificate may be transferred to any electric company or electric utility agreeing to comply with the terms, limitations and conditions contained therein.

B. If the committee or the commission fails to act on an application within the applicable time period prescribed in this article, the applicant may, in its discretion and in the interest of providing adequate, reliable and economical electric service to its customers, immediately proceed with the construction of the planned facilities at the proposed site or, if application has been made for alternative sites, at the proposed site which in the opinion of the applicant best satisfies the factors expressed in section 40-360.06.

§ 40-360.09 Filing fees; utility siting fund

The fee to be paid for each application is as follows and shall be paid to the committee for deposit, pursuant to sections 35-146 and 35-147, in a special fund to be known as the utility siting fund:

For a new proposed plant site and associated transmission line site, ten thousand dollars.
For expansion of an existing plant site and a new proposed transmission line site, seven thousand five hundred dollars.
For expansion of an existing plant site only, five thousand dollars.
For a new proposed transmission line site one hundred miles or more in length, five thousand dollars.
For a new proposed transmission line site over fifty but less than one hundred miles in length, two thousand five hundred dollars.
For a new proposed transmission line site fifty miles or less in length, one thousand dollars.
For a new proposed transmission line site paralleling an existing transmission line site, regardless of length, one thousand dollars.

§ 40-360.10 Expenditure of funds

The commission, upon receipt of a detailed accounting of the committee's expenses, shall approve and pay the following:

The cost of reporting and transcribing any application hearing, the compensation of the hearing officer at the rate of two hundred dollars for each day and his reimbursable expenses.
Actual and necessary expenses incurred by the committee members in connection with their participation in committee meetings.
The cost of studies and the fees of consultants utilized by the committee. Costs and fees exceeding the amount of the applicant's fee may with the applicant's consent be incurred by the committee and charged to the applicant.
A refund to the person who paid the filing fee of any unused portion thereof.

§ 40-360.11 Jurisdiction of courts

Subject to the rights to judicial review recognized in sections 40-254 and 40-360.07, no court in this state has jurisdiction to hear or determine any case or controversy concerning any matter which was or could have been determined in a proceeding before the committee or the commission under this article or to stop or delay the construction or operation of any facility, except to enforce compliance through the procedures established by article 3 of this chapter.

§ 40-360.12 Jurisdiction of the commission

Except as specifically provided for in this article nothing in this article shall confer upon the commission the power or jurisdiction to regulate or supervise any person, that is not otherwise a public service corporation regulated and supervised by the commission. Nothing contained in this article shall confer upon the commission the power or jurisdiction to regulate or establish the rates, regulations or conditions of service of any such person.

§ 40-360.13 Certificate of environmental compatability; availability of groundwater and impact on groundwater management plan

For facilities subject to the requirements of this article within the service area of a city or town in an active management area, as such terms are used and defined in title 45, chapter 2, the power plant and transmission line siting committee shall consider, as a criterion for issuing a certificate of environmental compatibility, the availability of groundwater and the impact of the proposed use of groundwater on the management plan established under title 45, chapter 2, article 9 for the active management area.

Article 6.3 Underground Facilities

§ 40-360.21 Definitions

In this article, unless the context otherwise requires:

"Abandoned" means no longer in service and physically disconnected from a portion of the facility, or from any other facility, that is in use or still carries service.
"Apartment community" means any real property that has one or more structures and contains five or more dwelling units for rent or lease that are subject to title 33, chapter 10. For the purposes of this paragraph "dwelling unit" has the same meaning prescribed in section 33-1310.
"Building official" means the agency or officer employed by a political subdivision of this state and charged with the administration and enforcement of a building code to regulate the quality, type of material and workmanship of construction of buildings or structures.
"Careful and prudent manner" means conducting an excavation in such a way that when the excavation is less than or equal to twenty-four inches from an underground facility that is marked with stakes or paint or in some customary manner, the facility is carefully exposed with hand tools, and the uncovered facility is supported and protected.
"Carefully" means acting with reasonable care under the circumstances.
"Cross culverts or similar roadway drainage facilities" means transverse drainage structures with both ends or openings visible including box culverts, drainage pipes or other covered structures.
"Detectible underground location device" means any device that is installed underground and that is capable of being detected from above ground with an electronic locating device.
"Excavation" means any operation in which earth, rock or other material in the ground is moved, removed or otherwise displaced by means or use of any tools, equipment or explosives and includes, without limitation, grading, trenching, digging, ditching, drilling, augering, boring, tunnelling, scraping, cable or pipe plowing and driving.
"Implied easement" means any easement or right-of-way on private property required to provide utility services by means of underground facilities in property of the owner requesting such service.
"Inactive" means:

(a) That portion of an underground facility that is not in use but is still connected to the facility, or to any other facility, that is in use or still carries service.

(b) A new underground facility that has not been connected to any portion of an existing facility.

"Installation records of an underground facility" means maps, drawings, diagrams, surveys, schematics, illustrations, sketches or any other depictions or descriptions of an underground facility that reflect the location at the time of installation of the underground facility and any surface extensions in a reasonably accurate manner.
"Homeowners' association" has the same meaning prescribed in section 33-2001.
"Landlord" has the same meaning prescribed in section 33-1310 for an apartment community and has the same meaning prescribed in section 33-1409 for a mobile home park.
"Locator strip" means a type of detectible underground location device that consists of a plastic or other durable material ribbon containing a material capable of being detected from above ground with an electronic locating device and color coded by type of underground facility.
"Locator wire" means a type of detectible underground location device that consists of a copper wire or metallic, conductive, noncorrosive trace wire capable of being detected from above ground with an electronic locating device.
"Mobile home park" has the same meaning prescribed in section 33-1409.
"One-call notification center" means an organization of owners or operators of underground facilities that provides a telephone number notification service for the purpose of receiving and distributing to its members advance notifications from persons regarding planned excavations.
"Person" means any individual, firm, joint venture, partnership, corporation, association, homeowners' association, municipality, governmental unit, department or agency and shall include any trustee, receiver, assignee or personal representative thereof.
"Routine road maintenance grading" means the routine grading or resurfacing of the concrete, asphaltic or composite surface but not the subbase of a roadway by the state or a political subdivision of the state for the purpose of maintaining the surface condition of the road and includes recovery of material from a borrow ditch.
"Stakes or paint or in some customary manner" means marking the location of an underground facility by the colors established by the commission. These colors shall be restricted to the underground facility location.
"Underground facilities operator" means a public utility, municipal corporation, landlord or other person having the right to bury underground facilities in any public street, alley, right-of-way dedicated to the public use or public utility easement, in any apartment community or mobile home park or pursuant to any express or implied private property easement. Underground facilities operator does not include a homeowner or homeowners' association that owns a sewer facility in a public street, alley, right-of-way dedicated to public use or public utility easement.
"Underground facility" means any item of personal property that is buried or placed below ground for use in connection with the storage or conveyance of water, sewage, electronic, telephonic or telegraphic communications, electric energy, oil, gas or other substances, and shall include but not be limited to pipes, sewers, conduits, cables, valves, lines, wires, manholes, attachments and those portions of poles and their attachments below ground except cross culverts or similar roadway drainage facilities and landscape irrigation systems of two inches in diameter or less.
"Working day" means every day excluding Saturday of each week, the fourth Friday in November, Sunday of each week and other legal holidays as prescribed in section 1-301.

§ 40-360.22 Excavations; determining location of underground facilities; providing information; excavator marking; on-site representative; validity period of markings; liability for misuse of locate requests; detectible underground locating devices; civil penalty

A. A person shall not make or begin any excavation in any public street, alley, right-of-way dedicated to the public use or public utility easement or in any express or implied private property utility easement or in any apartment community or mobile home park without first determining whether underground facilities will be encountered, and if so where they are located from each and every underground facilities operator and taking measures for control of the facilities in a careful and prudent manner. For all excavations in an apartment community or mobile home park, the excavator shall inform the landlord as promptly as practical that the excavator intends to submit an inquiry to the landlord that will trigger the landlord's obligations provided by subsection B of this section and the inquiry itself shall be made by certified mail to the landlord, using a form prepared by a one-call notification center. The inquiry to a landlord may be made by a one-call notification center for a reasonable fee to the excavator.

B. Except as otherwise provided in this subsection, upon receipt of the excavator's inquiry, the underground facilities operator shall respond as promptly as practical, but in no event later than two working days, by carefully marking such facility with stakes or paint or in some customary manner. A landlord shall respond in the same manner and as promptly as practical, but in no event later than ten working days. No person shall begin excavating before the location and marking are complete or the excavator is notified that marking is unnecessary. If the excavator consents, an underground facilities operator may notify a one-call notification center that marking is unnecessary pursuant to a method established by the one-call notification center. An underground facilities operator may assign any marking or notification obligations required by this subsection to an agent or servant of the underground facilities operator. An underground facilities operator may notify the excavator that marking is unnecessary pursuant to any mutually agreeable method.

C. On a timely request by the underground facilities operator, the excavator shall mark the boundaries of the area requested to be excavated in accordance with a color code designated by the commission or by applicable custom or standard in the industry. A request under this subsection for excavator marking does not alter any other requirement of this section.

D. Except as provided in subsection F of this section, a person shall not begin excavating in any apartment community or mobile home park before the landlord has completed marking the underground facility or the excavator is notified that marking is unnecessary. After underground facility markings are complete or the excavator has received notice that marking is unnecessary, an excavator shall notify the landlord if any of the following conditions exist:

Visible and obvious evidence, such as pavement cuts, that would alert a reasonable excavator to the presence of an unmarked underground facility within the boundary of the intended area of excavation.
The excavator has concerns regarding the accuracy and meaning of the marks.
The excavator encounters an underground facility that has not been marked.
The excavator encounters an underground facility that has been incorrectly marked or marked in the wrong location.

E. For every excavation in an apartment community or mobile home park where the excavation method is boring:

Every underground facilities operator shall be notified of this methodology.
The excavator shall ensure that sufficient clearance is maintained between the bore path and any marked underground facility.
The excavator shall visually check the drill head each time it passes through potholes, entrances and exit pits, including during pullback.
Each underground facilities operator shall be given a reasonable opportunity to inspect its facility before and during the boring operation.

F. If a landlord fails to respond to an excavator's request in a manner required by this article, an excavator does not violate this article and fulfills the standard of care of a reasonably prudent excavator if the excavator complies with all of the following:

One working day before conducting the excavation, the excavator notifies the landlord in writing or by fax that the excavator has determined that the acts or omissions of the landlord is a refusal to respond to an excavator's request.
The excavator investigates for the presence of visible and obvious evidence that would alert a reasonable excavator to the presence of an unmarked underground facility within the boundaries of the area to be excavated.
The excavator carefully locates all unmarked facilities that are known to exist due to the excavator's investigation performed pursuant to paragraph 2 of this subsection using one of the methods listed in subsection G of this section and carefully marks the facilities with stakes or paint or in some customary manner. In addition, when a landlord provides verbal or written information regarding the location of underground facilities that are within the boundaries of the area to be excavated, the excavator carefully locates all such identified facilities using one of the methods listed in subsection G of this section and carefully marks the facilities with stakes or paint or in some customary manner.
The excavator takes measures to control all such located facilities in a careful and prudent manner.
The excavator shall not excavate if the excavator receives a response from the landlord that notifies or alerts the excavator to the presence of a mistake or an intention by the landlord to respond in a manner that is consistent with this article, even if the response will be untimely. A landlord's delay, failure to respond to a location request, failure to mark or other noncompliance is not excused by the excavator's or landlord's compliance with this subsection.

G. Except as otherwise provided in this section, in performing the marking required by subsection B of this section, the underground facilities operator of an underground facility installed after December 31, 1988 in a public street, alley or right-of-way dedicated to public use or public utility easement, but not including any express or implied private property utility easement, shall carefully locate the facility by referring to installation records of the facility that are in the possession of the underground facility operator and utilizing one of the following methods:

Vertical line or facility markers.
Locator strip or locator wire.
Signs or permanent markers.
Electronic or magnetic location or tracing techniques.
Electronic or magnetic sensors or markers.
Metal sensors or sensing techniques.
Sonar techniques.
Underground electrical or radio transmitters.
Manual location techniques, including pot-holing.
Surface extensions of underground facilities.
Any other surface or subsurface location technique that is at least as accurate as the other marking methods in this subsection and that is not prohibited by the commission or by federal or state law. This paragraph does not obligate an underground facilities operator to be aware of and utilize every surface or subsurface location technique available.

H. Except as otherwise provided in this section, for an underground facility other than one installed after December 31, 1988, in a public street, alley or right-of-way dedicated to public use or public utility easement, in performing the marking required by subsection B of this section, the underground facilities operator may refer to installation records or other records relating to the facility to assist in locating the facility and shall carefully locate the facility utilizing one of the methods listed under subsection G of this section.

I. If an underground facilities operator is unable to complete the location and marking within the time period provided by subsection B of this section, the facilities operator shall satisfy the requirements of this section by providing prompt notice of these facts to the excavator and assigning one or more representatives to be present on the excavation site at all pertinent times as requested by the excavator to provide facility location services until the facilities have been located and marked or the excavator is notified that marking is unnecessary pursuant to any mutually agreeable method. A person that receives notice from the underground facilities operator of these facts shall not begin excavating before the underground facilities operator has completed marking the underground facility or the excavator is notified that marking is unnecessary. Except as provided in subsection J of this section, the underground facilities operator shall bear all of its own expenses associated with assigning representatives.

J. The marking required by subsection B of this section is valid for fifteen working days from the date of the marking. If the excavation will continue past the validity period of the marks as provided by this subsection, the excavator shall notify the underground facilities operator or an organization designated by the underground facilities operator at least two working days before the end of the validity period. All requests for facility markings and requests to extend the validity period of the markings shall be for the purpose of excavating within the validity period of the markings. An excavator that requests facility markings shall limit the request to an area that can reasonably be excavated within the validity period of the markings. A person who violates this subsection is liable to the one-call notification center and to all affected underground facilities operators for any damages proximately caused by the violation, including economic loss.

K. Nothing in this section shall be construed to prevent an excavator and an underground facilities operator from holding a preconstruction conference regarding marking and location of underground facilities and entering into a mutually agreeable written schedule for marking or excavating or written arrangement that may constrain the excavation methods or that may provide for the delivery of installation records to the excavator for the purpose of satisfying the requirements of this section, except that this subsection does not eliminate the excavator's obligation to notify the underground facilities operator to locate and mark excavation sites under subsection B of this section based on the actual construction schedule.

L. For abandoned and apparently abandoned underground facilities:

The underground facilities operator shall notify the excavator whether the facility is active or abandoned. An inactive facility shall be considered active for purposes of this subsection. This section does not obligate any person to represent that an underground sewer facility in any public street, alley, right-of-way dedicated to public use or public utility easement is abandoned if it was installed on or before December 31, 2005 and it is not owned by an underground facilities operator of a sewer system. This paragraph does not obligate a landlord to represent that an underground facility in any apartment community or mobile home park is abandoned if it was installed before January 1, 2007.
For an underground facility abandoned after December 31, 1988 or covered by installation records prepared under section 40-360.30, the underground facilities operator may not advise or represent to the excavator that a facility or portion of a facility is abandoned unless the underground facilities operator has verified, by reference to installation records or by testing, that the facility or portion is actually abandoned and not merely inactive. For all other abandoned or apparently abandoned underground facilities, each one-call notification center shall establish a method of providing personnel from an underground facilities operator qualified to safely inspect and verify that the facility is abandoned or active. For the purposes of this article, an underground facilities operator shall not represent that an underground facility is abandoned unless the facility has been verified as abandoned pursuant to this subsection.
For the purposes of this article, if an excavator encounters an apparently abandoned underground facility, the excavator shall not treat the underground facility as abandoned until the excavator has received notification that the underground facility is abandoned pursuant to paragraph 1 of this subsection or has notified the underground facilities operator of the apparent abandonment and has received verification of abandonment pursuant to paragraph 2 of this subsection.
Each one-call notification center may establish a method for reimbursing the verifying underground facilities operator for the expenses incurred under paragraph 2 of this subsection. The reimbursement method shall not include any charge or expense to the excavator. A landlord that fails to advise or represent that an underground facility is abandoned pursuant to paragraph 1 of this subsection, whose underground facility is verified as abandoned pursuant to this subsection and who has not filed information with a one-call notification center is liable to the one-call notification center and to all affected underground facilities operators and excavators for the cost of verifying abandonment together with any damages, including economic loss, proximately caused by the violation.

M. All new and active underground facilities installed in any real property after December 31, 2005 shall be installed with a detectible underground location device unless the facility is capable of being detected from above ground with an electronic locating device or the facility is installed within single family residential property and is beneath a pool, permanent pool decking that is less than forty-eight inches from the pool or a permanent building. A person who violates this subsection is subject to a civil penalty in an amount not to exceed five thousand dollars. The building official shall administer and enforce this subsection for all underground facilities except those that are installed for a public utility or municipal corporation. Any penalties received by the building official shall be deposited in the municipality's or political subdivision's general fund, as applicable. Except as required by a city, town or county building code or other related code, for purposes of locating an underground facility a building official or political subdivision shall not compel the installation of one or more clean-outs on any underground sewer facility that is owned by another person and serves one customer where any portion of the underground sewer facility is in any public street, alley, right-of-way dedicated to public use, private property or easement.

N. Nothing in this section shall be construed as prohibiting the use of warning tape, warning markers or any other warning device by the underground facilities operator.

O. For every underground facilities operator of a sewer system:

For the purposes of this article, an underground facilities operator of a sewer system is responsible for locating and carefully marking the underground sewer facilities owned by another person pursuant to subsection B of this section if those underground facilities are installed after December 31, 2005 and are in any public street, alley, right-of-way dedicated to public use or public utility easement.
In performing the marking required by this subsection, the underground facilities operator of the sewer system shall carefully locate the facility by referring to installation records of the facility and by using one of the methods listed in subsection G of this section.
This subsection does not obligate an underground facilities operator of a sewer system to locate and mark the underground sewer facilities owned by another person if the customer receiving sewer service from the underground sewer facility refuses to grant permission to the underground facilities operator of a sewer system to access the real property for the purpose of ascertaining the location of the underground sewer facility in any public street, alley, right-of-way dedicated to public use or public utility easement.
This subsection does not obligate an underground facilities operator of a sewer system to maintain, clean or unstop underground sewer facilities owned by another person.

P. For every landlord:

For the purposes of this article, each landlord is responsible for marking the underground facilities operated by the landlord pursuant to subsection B of this section. For the purposes of this paragraph, "underground facilities operated by the landlord" includes every underground facility that is in an apartment community or a mobile home park and that:

(a) Discharges into an underground facility that is operated by the landlord.

(b) Is supplied by an underground facility that is operated by the landlord.

If a landlord is unable to complete the location and marking within the time period provided by subsection B of this section, the landlord shall satisfy its obligations in the manner provided by subsection I of this section. Nothing in this subsection shall be construed to prevent the excavator and the landlord from entering into a mutually agreeable written schedule or written arrangement for satisfying the requirements of this section in the manner provided by subsection K of this section.
In performing the marking required by this subsection for an underground facility installed after December 31, 2006, the landlord shall carefully locate the facility by referring to installation records of the facility that are in the possession of the landlord and by using one of the methods listed in subsection G of this section.
In performing the marking required by this subsection for an underground facility installed before January 1, 2007, the landlord may refer to installation records or other records relating to the facility to assist in locating the facility and shall locate the facility using one of the methods listed in subsection G of this section.
Subject to the availability of monies, landlords may apply for grants from a grant account established for the purpose of meeting the standards prescribed by this article and for the purpose of creating installation records for facilities that are not required to be created or maintained by this article.
Notwithstanding any other provision in this article, a landlord is not liable for any costs or expenses, including damage to third parties, resulting from damage to an underground sewer facility owned by the landlord and located within a public right-of-way if the damage was not caused by either:

(a) The landlord’s or tenant’s actions.

(b) The landlord’s or tenant’s refusal to grant access to the operator of the sewer system that connects to the landlord’s underground sewer facility.

This article does not obligate a landlord to locate and mark a facility owned by a tenant if the tenant owns the mobile home, the tenant refuses to grant permission to the landlord to access the mobile home and the facility cannot be located without accessing the mobile home.
Any rule, regulation, lease or agreement that purports to obligate a tenant to perform the landlord's obligations required by this article is against the public policy of this state and is void.
This subsection does not obligate a landlord to maintain, clean or unstop underground facilities owned by another person.

Q. All inquiries and notices to a landlord shall be made to the address on file at a one-call notification center. Notwithstanding any other law, if the landlord has not filed information at the one-call notification center, the excavator does not violate this article and fulfills the standard of care of a reasonably prudent excavator if the excavator makes the inquiry or notice to the property owner of record according to the records of the county assessor in the county in which the property is located.

§ 40-360.23 Making excavation in careful, prudent manner; liability for negligence; notice; obliteration of marks

A. Except as otherwise provided in section 40-360.28, subsection E, obtaining information as required by this article does not excuse any person making any excavation from doing so in a careful and prudent manner, nor shall it excuse such persons from liability for any damage or injury resulting from their negligence.

B. Except as otherwise provided in section 40-360.22, subsection D, after markings have been made pursuant to section 40-360.22, an excavator shall notify either the underground facilities operator or an organization designated by the underground facilities operator if the excavator encounters an underground facility that has not been located and marked or has been marked in the wrong location.

C. An excavator or an underground facilities operator shall not move or obliterate markings made pursuant to this article or fabricate markings in an unmarked location for the purpose of concealing or avoiding liability for a violation of or noncompliance with this article.

§ 40-360.24 Notice of damage to underground facility

A. In the event of any damage that results in a release from any underground facility that transports natural gas, liquefied petroleum gas, liquefied natural gas, petroleum products or any other hazardous gases or liquids in connection with any excavation, the person responsible for the excavation operations shall immediately notify the underground facilities operator and 911 or the local emergency response agency.

B. In the event of any damage to or dislocation of any underground facility or detectible underground location device in connection with any excavation the person responsible for the excavation operations shall immediately notify the underground facilities operator and shall not attempt any repair to the damaged facility or device except the temporary emergency repairs allowed by this section.

C. Temporary emergency repairs shall not be made by an excavator to a public utility's or municipal corporation's natural gas, electric, propane, hazardous liquid, communication, cable television system or video service network, sewer system, wastewater or water facilities without the consent of the underground facilities operator.

D. The excavation shall be left open until the arrival of representatives of the underground facilities operator. On receipt of notice, the underground facilities operator shall dispatch its representatives promptly, but in no event later than two working days, to examine the underground facility and, if necessary, effect repairs. Unless it would interfere with compliance with commission rules or requirements regarding maintenance or restoration of service and repair of facilities, the underground facilities operator shall immediately respond to a notification for emergencies involving injury or damage.

§ 40-360.25 Injunction; mandamus

A. If any person is engaging in excavation in violation of this article and the violation has resulted in or is likely to result in damage to an underground facility or if any person is proposing to use procedures for excavation in violation of this article that are likely to result in damage to an underground facility, any affected underground facilities operator may commence an action in the superior court in the county in which the excavation is occurring or is to occur, or in which the person complained of has its principal place of business or resides, for the purpose of having such act or omission stopped and prevented, either by mandamus or injunction.

B. If any landlord in violation of this article fails to file information with a one-call notification center, knowingly fails to update the information, fails to locate or mark an underground facility in a manner required by this article or fails to prepare and maintain installation records required by this article, any affected underground facilities operator, any harmed excavator or a one-call notification center may commence an action in the superior court in the county in which the facility is situated or in which the person complained of has its principal place of business or resides, for the purpose of having such acts or omissions stopped and prevented, either by mandamus or injunction. A landlord is deemed to have knowledge of the filing requirements ten working days after a copy of section 40-360.32, subsection A is sent by certified mail to the property owner of record according to the records of the county assessor in the county in which the property is located.

C. Such persons as the court may deem necessary or proper may be joined as parties.

D. The final judgment in any such action or proceeding shall either dismiss the action or direct that the writ of mandamus or injunction issue or be made permanent as prayed for in the complaint. If the court finds that the person complained of has repeatedly engaged in negligent or unsafe excavation or has knowingly violated this article without just cause, the court shall issue such order and take such equitable action as shall be reasonable and appropriate to prevent continuance by such person of such act or omission.

§ 40-360.26 Damage of underground facility; liability to owner; homeowner and tenant exemption

A. If any underground facility is damaged by any person in violation of this article as a result of failing to obtain information as to its location, failing to take measures for protection of the facilities or failing to excavate in a careful and prudent manner, the person is liable to the owner of the underground facility for the total cost of the repair of the facility.

B. A homeowner or homeowners' association engaging in excavating in an express or implied private property utility easement across property owned by the homeowner or homeowners’ association is not liable to the owner or operator of the underground facility damaged by the homeowner or homeowners' association pursuant to this section if the damaged underground facility is not buried or placed below ground in accordance with the applicable standards, if the underground facility is not located within the easement or if the homeowner or homeowners' association engaged in the excavation has complied with section 40-360.22. This subsection does not apply to any person employed by a homeowner or a homeowners' association including a contractor licensed pursuant to title 32, chapter 10 or a person engaging in contracting without a license as prohibited by section 32-1151.

C. Notwithstanding any other provision in this article, a homeowner is not liable for any costs or expenses, including damage to third parties, resulting from damage to an underground facility owned by the homeowner but located within a public right-of-way if the damage was not caused by the homeowner's actions or by the homeowner's refusal to grant permission to the underground facilities operator of a sewer system to access the real property for the purpose of ascertaining the location of the underground sewer facility. A tenant is not liable for any costs or expenses, including damage to third parties, resulting from damage to an underground facility owned by the tenant but located within a mobile home park if the damage was not caused by the tenant's actions or by the tenant's refusal to grant permission to the landlord to access the mobile home for the purpose of ascertaining the location of the underground facility.

§ 40-360.27 Liability for attorney fees; administrative costs and expenses

The prevailing party in an action brought to impose liability under any section of this article or to have any act or omission stopped and prevented, either by mandamus or injunction, pursuant to section 40-360.25 is entitled to recover reasonable attorney fees. In addition, if the prevailing party is a one-call notification center, that party is entitled to recover reasonable administrative costs and expenses.

§ 40-360.28 Civil penalty; liability

A. Except as provided in section 40-360.22, subsection M, a person who violates any provision of this article is subject to a civil penalty in an amount not to exceed five thousand dollars to be imposed by the court in favor of the state. Any penalties received by the state shall be deposited in the state general fund.

B. If a violation of this article results in damage to an underground facility, the violator is liable to all affected underground facilities operators and excavators for all resulting damages proximately caused by the violations, including economic loss.

C. If a person violates this article by failing to provide timely notice as required by this article, by failing to respond in the time and manner provided by this article or by failing to locate and mark an underground facility in the manner provided by this article, the person is liable to all affected underground facilities operators and excavators for all damages proximately caused by the violation, including economic loss.

D. Notwithstanding any other law, a violation of section 40-360.22, subsection D or subsection L, paragraph 3 is a superseding event that breaks the chain of causation for any damages that could result from an underground facilities operator's failure to accurately locate or mark an underground facility.

E. If a landlord or an excavator complies with the duties set forth in sections 40-360.22, 40-360.30 and 40-360.32 for all facilities operated by a landlord as provided in section 40-360.22, subsection P, paragraph 1, the person is not liable for any death or injury to persons or property or for any economic loss to any person to the extent the conduct is regulated by this article. This section does not excuse any landlord or excavator from liability for any death or injury to persons or property or for any economic loss to any person to the extent the injury or loss does not arise from the conduct regulated by this article.

F. This section is not applicable to an excavation made:

During an emergency which involves danger to life, health or property if reasonable precautions are taken to protect underground facilities.
In agricultural operations or for the purpose of finding or extracting natural resources.
With hand tools on property owned or occupied by the person performing the excavation while gardening or tilling such property.

§ 40-360.29 Charters and ordinances of governments not affected; preemption

A. Except as provided in subsection B, the provisions of this article shall be cumulative and supplemental to other provisions of law or charter and shall not be construed to prohibit cities and towns from enacting ordinances regulating excavations.

B. The legislature finds that notification, location, marking, installation records, enforcement and remedies relating to underground facilities pursuant to sections 40-360.22, 40-360.24, 40-360.25, 40-360.26, 40-360.28 and 40-360.30, are a matter of statewide concern and are hereby preempted by this state.

§ 40-360.30 Installation records of underground facilities

A. Except as otherwise provided in this subsection, for all new underground facilities, excluding service drops and service lines, installed after December 31, 1988 in a public street, alley or right-of-way dedicated to the public use or public utility easement, but not including any express or implied private property utility easement, the underground facilities operator shall prepare and maintain installation records of the underground facility and shall refer to such records in marking pursuant to section 40-360.22, subsection B.

B. For all new sewer facilities installed after December 31, 2005 in any public street, alley, right-of-way dedicated to the public use or public utility easement, the underground facilities operator of a sewer system shall prepare and maintain installation records of the underground facility and shall refer to such records in marking pursuant to section 40-360.22, subsection B. To assist the underground facilities operator of a sewer system in preparing and maintaining such records, a certified survey plan of the sewer's location in the public street, alley, right-of-way dedicated to public use or public utility easement shall be provided to the underground facilities operator of a sewer system by the customer receiving sewer service as a condition to receiving such sewer service.

C. For all new underground facilities that are installed after December 31, 2006 in an apartment community or mobile home park and that are not owned or operated by a public utility or municipal corporation, the landlord at the time the facilities are installed or abandoned shall prepare and maintain installation records of the underground facilities. Successor landlords shall maintain the installation records that come into their possession. The landlord shall keep records in its possession and shall refer to records in marking pursuant to section 40-360.22, subsection B.

D. Installation records required by this section shall reflect, if applicable, any field notes or other indications by the installer of the facilities that the installation involved deviations or changes from installation standards, instructions or designs and the correction of any inaccuracies found as a result of locating or marking the underground facilities. Installation records of an underground facility shall indicate if all or a portion of the facility has been abandoned. Installation records required by this section are for the internal use of the underground facilities operator and its successor in locating its underground facilities and are not intended to be relied on by others.

E. Information contained in installation records relating to the nature and location of underground facilities, but not the installation records themselves, shall be made available on a confidential basis within ten working days from a written request to persons who are engaged in the design of construction projects involving excavation in a public street, alley, right-of-way dedicated to the public use, or public utility easement, in any express or implied private property utility easement, or in an apartment community or mobile home park. The underground facilities operator shall make the same information available to authorized persons who are complying with a requirement imposed by contract providing for construction projects involving excavation in a public street, alley or right-of-way dedicated to the public use or public utility easement, in any express or implied private property utility easement, in any apartment community or mobile home park or by operation of law. The only lawful use of the information that is obtainable pursuant to this subsection is to minimize delays of construction projects. The underground facilities operator may indicate any portions of the information that are proprietary and require the authorized person to protect proprietary matters. The underground facilities operator may satisfy the requirements of this subsection by allowing an authorized person to inspect or copy the installation records required by this section, without charge, or may provide the information in another manner for a reasonable fee. The underground facilities operator is not liable to any person for damages arising from any person's inspection of or reliance on the installation records that are made available for the purpose of complying with this subsection.

§ 40-360.31 Routine road maintenance; prior notification

A. Prior to performing routine road maintenance grading as defined in section 40-360.21, the state or the political subdivision performing the routine road maintenance grading shall notify every public utility, municipal corporation or other person having the right to bury underground facilities in advance. For the purpose of this section advance notification means written notice delivered to the utility not more than sixty calendar days nor less than two working days prior to the performance of routine maintenance grading. The notification shall include all roads and their location which are planned for routine road maintenance grading within the time period identified. Notification is complete when received by the persons identified in the records of the commission pursuant to section 40-360.22. No marking pursuant to section 40-360.22 is required in response to a notification of routine road maintenance and the notification specified in this section constitutes full compliance with any notice requirements for routine road maintenance grading.

B. If written notice, as required by subsection A of this section, is not practicable, the state or a political subdivision shall comply with the notice provisions required for excavation under section 40-360.22 before performing routine road maintenance grading.

C. Routine road maintenance grading as defined in section 40-360.21, does not include:

Recovery of material from the bottom of the borrow ditch at a depth beyond the depth established when the borrow ditch was originally constructed or subsequently reconstructed to accommodate a newly installed underground facility.
Grading which progressively reduces the elevation of the roadway surface.
Grading of the sub-base of the roadway.
Any other activity that intrudes on the sub-base of the roadway.

D. If the state or a political subdivision performs any of the activities listed in subsection C of this section, the state or political subdivision shall be required to comply with the notice provisions required for excavation under section 40-360.22.

§ 40-360.32 One-call notification center membership; termination; designated representatives

A. Every landlord, without charge to the landlord, shall file with a one-call notification center the property name, property address, contact name or job title, contact fax number, contact postal mailing address, contact electronic mail address if available, contact telephone number and hours of contact. The landlord shall update any information required by this subsection within seven working days after a change in the information occurs. The contact person or persons shall be readily available during the hours of contact on file. The hours of contact required by this subsection shall be consistent with the landlord’s regular business hours, but shall total at least thirty hours per week. Subject to the availability of monies, a one-call notification center may apply for grants from a grant account established for the purpose of maintaining and imparting the information supplied to the center from landlords as prescribed by this subsection.

B. Every underground facilities operator who is obligated to locate and mark underground facilities pursuant to section 40-360.22, subsection B, except a landlord exempted by this section, shall be a member of a one-call notification center, either statewide or serving each county in which such entity or person has underground facilities. This subsection does not apply to a landlord if the only underground facilities that the landlord are obligated to locate and mark are within an apartment community or mobile home park.

C. Each one-call notification center shall establish a limited basis participation membership option, which may be made available to all members, but which must be made available for any member serving less than one thousand customers, or any member irrigation or electrical district. An underground facilities operator who elects limited basis participation membership shall provide to the one-call notification center the location of its underground facilities solely by identifying the incorporated cities and towns, or for unincorporated county areas, by identifying the townships, in which it has facilities. The service level provided to limited basis participation members by the one-call notification center is limited to providing excavators with the names and telephone numbers the excavators should contact to obtain facilities location. Each one-call notification center shall establish fair and reasonable fees for limited basis participation members, based on customer count, areas occupied or miles of underground facilities.

D. When any person neglects or refuses to pay fees when due and is in arrears for two months, the one-call notification center may terminate the membership of that person without notice and may have a claim for fees and a separate claim for damages for breach of an ancillary agreement. The one-call notification center may refuse to reinstate any person’s membership until that person’s fee is paid in full.

E. Every underground facilities operator, except a landlord exempted by this subsection, shall file with the corporation commission the job title, address and telephone number of the person or persons from whom the necessary information may be obtained. Such person or persons shall be readily available during established business hours. The information on file shall also include the name, address and telephone number of each one-call notification center to which the underground facilities operator belongs. This subsection does not apply to a landlord if the only underground facilities that the landlord are obligated to locate and mark are within an apartment community or mobile home park.

F. All underground facilities operators, except landlords, in a county having a population of more than seven hundred one thousand persons shall have designated representatives available and on call for excavators who by public works contract specifications or municipal ordinances are required to work in congested locations involving public streets, alleys or rights-of-way dedicated to the public use during the night or on weekends. Night and weekend telephone numbers to reach the designated representatives shall be furnished to the excavator in writing within forty-eight hours after they are requested for a specific location.

G. The form prepared by a one-call notification center as provided in section 40-360.22, subsection A may provide a disclaimer of liability, may instruct the landlord to obtain and review this article and may instruct the landlord to obtain the advice of an attorney to answer any questions about any part of the form or this article. The form may include general guidelines that describe the obligations and rights of landlords as established by this article. This information may include the following rights and obligations:

To file and maintain current information with a one-call notification center.
To locate and mark certain underground facilities in response to an excavator’s request.
The manner of marking.
The timing of marking.
The notification to an excavator if the landlord believes that the landlord will not be timely in making the markings.
To provide and receive information from an excavator, including contact information and the estimated construction schedule.
To require the excavator to mark the perimeter of the excavation.
To hold a preconstruction conference with an excavator.
To enter an agreement with an excavator to modify the excavation schedule, marking schedule or means of excavation.
To request an excavator to mark the excavation area.

Article 6.4 High Voltage Power Lines and Safety Restrictions

§ 40-360.41 Definitions

In this article, unless the context otherwise requires:

"Authorized person" means:

(a) An employee of a public utility that produces, transmits or delivers electricity.

(b) An employee of a public utility that provides and whose work relates to communication services or state, county or municipal agencies that have authorized circuit construction on or near the poles or structures of a public utility.

(d) An employee of a cable television operator, video service provider or communication services company or an employee of a contractor of a cable television operator, video service provider or communication services company if specifically authorized by the owner of the poles to make attachments for cable television or communication services or video services.

(e) An employee or agent of state, county or municipal agencies that have or whose work relates to overhead electrical lines or circuit construction or conductors on poles or structures of any type.

"High voltage" means voltage in excess of six hundred volts measured between conductors or between a conductor and the ground.
"Overhead line" means all bare or insulated electrical conductors installed aboveground.
"Person" or "business entity" means those parties that contract to perform any function or activity on any land, building, highway or other premises.
"Public utility" includes public service corporations, municipally owned systems and districts subject to article XIII, section 7, Constitution of Arizona.

§ 40-360.42 Activity near overhead line; safety restrictions

Unless danger against contact with high voltage overhead lines has been effectively guarded against as provided by section 40-360.43:

A person or business entity shall not, individually or through an agent or employee, require any other person to perform any function or activity upon any land, building, highway or other premises if at any time during the performance of any function or activity it is possible that the person performing the function or activity could move or be placed closer to any high voltage overhead line or if it is possible that any part of any tool or material used by the person could be brought closer to any high voltage overhead line during the performance of any function or activity than the following clearances:

(a) For lines rated fifty kv or less, six feet of clearance.

(b) For lines rated over fifty kv, six feet plus four-tenths of an inch for each kv over fifty kv.

A person or business entity shall not individually, through an agent or employee or as an agent or employee, operate any mechanical equipment or hoisting equipment or any load of such equipment, any part of which is capable of vertical, lateral or swinging motion closer to any high voltage overhead line than the following clearances:

(a) For lines rated fifty kv or less, ten feet of clearance.

(b) For lines rated over fifty kv, ten feet plus four-tenths of an inch for each kv over fifty kv.

§ 40-360.43 Activity in close proximity to lines; clearance arrangements; procedure; payment; notice

A. If any person or business entity desires to temporarily carry on any function, activity, work or operation in closer proximity to any high voltage overhead line than permitted by this article, the person or business entity responsible for performing the work shall promptly notify the public utility operating the high voltage overhead line. The person or business entity may perform the work only after satisfactorily mutual arrangements, including coordination of work and construction schedules, have been made between the public utility operating the lines and the person or business entity responsible for performing the work. Arrangements may include placement of temporary mechanical barriers to separate and prevent contact between material, equipment or persons and the high voltage overhead lines or temporary deenergization and grounding or temporary relocation or raising of the high voltage overhead lines.

B. The person or business entity responsible for performing the work in the vicinity of the high voltage overhead lines shall pay any actual expenses of the public utility operating high voltage overhead lines in providing arrangements for clearances, except in instances where the public utility operating high voltage overhead lines has installed lines within ten feet of an existing fixture or structure after the fixture or structure has been in place at the permanent location. The public utility is not required to provide the arrangements for clearances until an agreement for payment has been made.

C. The public utility shall commence construction for temporary clearances within five working days of an agreement for payment, if required, or from the date of the request of the person responsible for the work. Once initiated, the clearance work will continue without interruption to completion.

§ 40-360.44 Violation; civil penalty

A. A person or business entity or agent of the person or business entity who violates this article may be subject to a civil penalty in an amount not to exceed five thousand dollars to be imposed by the court in favor of the state to be deposited in the general fund.

B. If a violation of this article results in physical or electrical contact with any high voltage overhead line, the person or business entity violating this article is liable to the public utility operating the high voltage overhead line for all damages to the facilities and all costs and expenses, including damages to third persons, incurred by the public utility as a result of the contact.

§ 40-360.45 Exemptions

This article does not apply to construction, reconstruction, operation or maintenance by an authorized person of overhead electrical or communication circuits or conductors and their supporting structures or electrical generating, transmission or distribution systems or communication systems.

Article 6.5 Utility Planning

§ 40-360.51 Definitions

In this article, unless the context otherwise requires:

"Facilities" means corridors used by a utility to provide service to customers including poles, towers, transformers and lines for the transmission of electric energy at nominal voltages of one hundred fifteen thousand volts or more, natural gas pipelines of twenty-four or more inches in diameter and substations, regulator stations, measurement stations and compressor stations.
"Facility plan" means a plan for the future location of facilities developed by a utility.
"Municipality" means a city or town chartered or incorporated under the laws of this state.
"Planning area" means outside the extraterritorial jurisdiction limits of a municipality described in section 9-461.11, subsection G.
"Utility" means any retail provider of electric or natural gas services.

§ 40-360.52 Planning

An electric or natural gas utility may engage in advance planning with any municipality or county with respect to each facility that the utility anticipates installing in the municipality or county. If a utility engages in advance planning with a municipality or county, the municipality or county shall cooperate and work with the utility.

§ 40-360.53 Utility facilities included in municipal and county plans

A. If a utility develops and delivers a facility plan to a municipality or a county, the municipality or county, with respect to the facilities located in its corporate limits or planning area, shall include the location and nature of the planned facilities in the municipality general plan under section 9-461.05 or the county comprehensive plan under section 11-804.

B. The utility shall update each facility plan provided to a municipality or a county at least every two years.

§ 40-360.54 Effect on existing rights

This article does not:

Modify the right of a utility or a municipality or county with respect to the determination of the location and nature of utility facilities.
Obligate a utility to engage in facilities planning with any municipality or county.
Obligate a utility to construct facilities in the locations indicated in the facilities plan.
Modify the responsibilities of the commission or the power plant and transmission line siting committee with respect to siting utility facilities.

Article 7 Rates and Rate Schedules

§ 40-361 Charges by public service corporations required to be just and reasonable; service and facilities required to be adequate, efficient and reasonable; rules and regulations relating to charges or service required to be just and reasonable

A. Charges demanded or received by a public service corporation for any commodity or service shall be just and reasonable. Every unjust or unreasonable charge demanded or received is prohibited and unlawful.

B. Every public service corporation shall furnish and maintain such service, equipment and facilities as will promote the safety, health, comfort and convenience of its patrons, employees and the public, and as will be in all respects adequate, efficient and reasonable.

C. All rules and regulations made by a public service corporation affecting or pertaining to its charges or service to the public shall be just and reasonable.

§ 40-362 Power of commission to investigate interstate rates

A. The commission may investigate all existing or proposed interstate rates, fares, tolls, charges and classifications, and all rules and practices in relation thereto, for or in relation to the transmission of messages or conversations, where any act in relation thereto takes place within this state.

B. When the proposed or existing rates are excessive or discriminatory, or in violation of the acts of Congress, or in conflict with the orders or regulations of the interstate commerce commission, the commission may apply to the interstate commerce commission or to any court of competent jurisdiction for relief.

§ 40-365 Filing of rate schedules by public service corporations

Under rules and regulations the commission prescribes, every public service corporation shall file with the commission, and shall print and keep open to public inspection, schedules showing all rates, tolls, rentals, charges and classifications to be collected or enforced, together with all rules, regulations, contracts, privileges and facilities which in any manner affect or relate to rates, tolls, rentals, classifications or service. The commission may, from time to time, approve or fix rates, tolls, rentals or charges in excess of or less than those shown by the schedules. The commission may, from time to time, determine and prescribe by order such changes in the form of the schedules as it finds expedient, and modify the requirements of any of its orders, rules, or regulations.

§ 40-366 Names of parties to joint schedule required on schedule; filing required by only one party with concurrence of other parties

A. The names of the several public service corporations which are parties to any joint tariff, rate, fare, toll, contract, classification or charge shall be specified in each schedule showing such items.

B. Unless otherwise ordered by the commission, a schedule showing a joint tariff, rate, fare, toll, contract, classification or charge need be filed with the commission by only one of the parties to it, provided that there is also filed with the commission, in the form the commission requires, a concurrence in the joint tariff, rate, toll, fare, contract, classification or charge by each of the other parties thereto.

§ 40-367 Changes of rates; notice; filing; exception

A. No change shall be made by any public service corporation in any rate, fare, toll, rental, charge or classification, or in any rule, regulation or contract relating to or affecting any rate, toll, fare, rental, charge, classification or service, or in any privilege or facility, except after thirty days notice to the commission and to the public as provided in this chapter.

B. Notice shall be given by filing with the commission and keeping open for public inspection new schedules stating plainly the change to be made in the schedules then in force, and the time when the change will go into effect.

C. The commission, for good cause shown, may allow changes without requiring the thirty days notice provided for in this section by an order specifying the changes so to be made and the time when they shall take effect, and the manner in which they shall be filed and published.

D. When any change is proposed attention shall be directed to the change on the schedule filed with the commission by some mark, designated by the commission, immediately preceding or following the item.

§ 40-368 Sliding scale of charges

A. Any person engaged in the production, generation, transmission or furnishing of heat, cold air, light, sewer service, water or power, or telegraph or telephone service, may establish a sliding scale of charges and may enter into an arrangement for a fixed period for the automatic adjustment of charges for heat, cold air, light, sewer service, water, or power, or telegraph or telephone service, in relation to the profit to be realized by such person. A schedule showing the scale of charges under such arrangement shall first be filed with the commission and the schedule and each rate set out therein approved by it.

B. The commission may revoke its approval at any time and fix other rates and charges for the product or commodity or service, as authorized in this chapter.

§ 40-369 Limitations on relative charges by telephone and telegraph companies for long and short distance messages

A. A telephone or telegraph corporation shall not charge or receive any greater compensation in the aggregate for transmission of a long distance message or conversation for a shorter than for a longer distance over the same line or route in the same direction within this state, the shorter being included within the longer distance, or charge any greater compensation for a through service than the aggregate of the intermediate rates or tolls subject to the provisions of this chapter. The provisions of this section shall not be construed as authorizing any such corporation to charge and receive as great a compensation for a shorter as for a longer distance service.

B. Upon application to the commission, a telephone or telegraph corporation may, in special cases after investigation, be authorized by the commission to charge less for a longer than for a shorter distance service for the transmission of messages or conversations, and the commission may from time to time prescribe the extent to which the corporation may be relieved from the operation and requirements of this section.

§ 40-370 Water utility surcharges to recover operating costs; notice; definition

A. Subject to the limitations provided in subsection D, the commission shall authorize water utilities to recover increases in specific operating costs by means of a surcharge on water sales and to reduce rates when those specific operating costs decrease. The operating costs that may be considered in this procedure are limited to specific, readily identifiable costs that are subject to the control of another person, including the cost of purchasing electricity or gas, the cost of purchasing water from another utility, municipality or district and the payment of ad valorem taxes or any similar tax or assessment levied on the water utility. The surcharge shall not exceed ten per cent of current rates.

B. The water utility shall file written notice of a surcharge or rate decrease pursuant to this section with the commission, clearly advising the commission of:

The specific operating cost being considered for the rate decrease or recovery by the surcharge.
The amount of the operating cost being considered for the rate decrease or recovery by the surcharge.
The timing and method of cost recovery or rate reduction.

C. The water utility shall also deliver to each customer with the customer's next bill for service a notice of the proposed surcharge or rate reduction. This notice to customers shall include the following information:

The information prescribed by subsection B.
The customer's right to comment on the proposed surcharge or rate reduction.
The address and telephone number of the commission.

D. A surcharge imposed by this section is effective thirty days after the date on which the water utility files the written notice with the commission, unless within that time the commission in its discretion adjusts or denies the surcharge or determines that further investigation of the surcharge is required. The commission shall notify the water utility in writing of a decision to adjust or deny the surcharge or to further investigate the appropriateness of the surcharge. If the commission determines that further investigation of the surcharge is required, the commission may conduct a hearing regarding the appropriateness of the surcharge. If the commission does not issue a decision within one hundred twenty days after the date the water utility files the written notice, the surcharge is effective without further action.

E. For purposes of this section, "water utility" means a public service corporation that is subject to the commission's jurisdiction and that engages in supplying water utility service in this state.

§ 40-371 Limitation of passenger fares to three cents per mile; exceptions; violation; classification

A. A company or corporation operating a railroad, other than a street or electric railroad, in whole or in part within this state, shall not ask, demand or receive for first class transportation for each passenger between points within this state, on the portion of its railroad operated within this state, more than three cents per mile, until otherwise provided by law. The corporation commission may exempt any railroad from the operation of this section upon satisfactory proof that the railroad cannot earn a just and reasonable compensation for the services rendered by it to the public if not permitted to charge more than three cents per mile for the transportation of passengers within this state.

B. If any railroad operating within this state makes application to the commission to be exempt from the operation of this section, and the application is accompanied by an affidavit showing facts that the railroad cannot earn a just and reasonable compensation for services rendered by it to the public if not permitted to charge more than three cents per mile for the transportation of passengers within this state, then the operation of this section shall be suspended pending the hearing upon the application and until final judgment is given by the commission upon the application.

C. Any company or corporation operating a railroad, as provided in subsection A, which violates any of the provisions of this section is guilty of a petty offense. Each violation shall constitute a separate offense.

§ 40-372 Street railways; fares; transfers

A. A street or interurban railroad shall not charge or receive more than five cents for one continuous ride in the same general direction within the corporate limits of any city or town, except upon a showing before the commission that a greater charge is justified.

B. Every street or interurban railroad shall upon such terms the commission finds just and reasonable furnish to its passengers transfers entitling them to one continuous trip in the same general direction over and upon the portions of its lines not reached by the originating car.

§ 40-373 Permitting or obtaining transportation at less than schedule rates prohibited

A. A common carrier shall not, by means of known false billing, classification, weight, weighing or report of weight, or by any other device or means, assist, suffer or permit any person to obtain transportation for any person or property between points within this state at less than the rates and fares then established and in force as shown by the schedules filed and in effect at the time.

B. No person shall by means of false billing, false or incorrect classification, false weight or weighing, false representation as to contents or substance of a package, or false report or statement of weight, or by any other device or means, whether with or without the consent or connivance of a common carrier, seek to obtain or obtain transportation for such person or property at less than the rates then established and in force therefor.

§ 40-374 Prohibition of rebates and agreements

Except as otherwise provided in this chapter, no public service corporation shall charge, demand, collect or receive a greater, less, or different compensation for transportation of persons or property, or for any product or commodity, or for any service rendered in connection therewith, than the rates, fares, tolls, rentals and charges applicable to such transportation or product, commodity or service specified in its schedule on file and in effect at the time, nor shall any public service corporation refund or remit, directly or indirectly, in any manner or by any device, any part of the rates, fares, tolls, rentals and charges so specified, nor extend to any person any form of contract, agreement, or any rule or regulation, or any facility or privilege, except such as are regularly and uniformly extended to all persons and except upon order of the commission.

§ 40-375 Fraudulent means or attempts to obtain rebate or damage prohibited

No person shall knowingly, directly or indirectly, by any false statement or representation as to cost or value, or the nature or extent of damage, or by the use of any false billing, bill of lading, receipt, voucher, roll, account, claim, certificate, affidavit or deposition, or upon any false, fictitious or fraudulent statement or entry, obtain or attempt to obtain any allowance, rebate or payment for damage in connection with or growing out of the transportation of persons or property, or an agreement to transport persons or property, whether with or without the consent or connivance of a common carrier, nor shall any common carrier knowingly pay or offer to pay any such allowance, rebate or claim for damage.

§ 40-376 Payment responsibility; private water companies; sewer corporations

For residential property of four or fewer units, a private water company or sewer corporation may not require payment of unpaid water and wastewater service rates and charges or sewer utility service rates and charges by anyone other than the person who has contracted with the private water company or sewer corporation to provide the service, who physically resides or resided at the property and who receives or received the service. A property owner, an immediate family member of the person who does not reside at the property or any other entity, at its sole discretion, may contract for water and wastewater service with a private water company or for sewer utility service with a sewer corporation and shall provide payment.

Article 8 Annual Assessments

§ 40-401 Annual assessment by commission against public service corporations; exception; rate of assessment; date of levy; annual statement of company intrastate revenue

A. To enable the corporation commission to perform its lawful duties relating to classifications to be used, rates and charges to be made and collected, rules and regulations to be prescribed, and supervision over public service corporations, the commission shall annually make an assessment against each such corporation, excepting corporations not required to hold certificates of convenience and necessity.

B. The amount of the assessment to be made against each corporation pursuant to subsection A of this section shall be computed as follows:

Determine the amount appropriated by the legislature for operating the utilities division and a part of the administration, hearing and legal divisions for the following fiscal year.
Multiply the amount determined in paragraph 1 by 1.2.
Subtract the monies estimated to remain unexpended in the utility regulation revolving fund at the end of the current fiscal year from the amount determined in paragraph 2. The difference is the total amount to be raised by the assessment.
Add the gross operating revenues derived from intrastate operations during the preceding calendar year for all corporations whose revenues reported pursuant to subsection F of this section were greater than five hundred thousand dollars.
For each corporation whose gross operating revenues derived from intrastate operations during the preceding calendar year reported pursuant to subsection F of this section were greater than five hundred thousand dollars:

(a) Divide the corporation’s gross operating revenues by the amount determined in paragraph 4.

(b) Multiply the total amount to be raised by the assessment determined in paragraph 3 by the amount determined in subdivision (a). The product is the amount of the assessment to be made against the corporation pursuant to this section.

C. Notwithstanding the amounts determined in subsection B of this section and section 40-401.01, subsection B, the sum of the amounts assessed under this section and section 40-401.01 shall not exceed one-quarter of one per cent of any such corporation's gross operating revenues derived from intrastate operations during the preceding calendar year.

D. The assessment prescribed by subsections A and B of this section shall be levied by the commission not later than June 15 and shall be paid within fifteen days after mailing by registered mail to any such corporation notice thereof and a statement of the amount.

E. On or before January 10, each public service corporation with gross operating revenues greater than five hundred thousand dollars shall file with the commission a statement showing its estimated gross operating revenues derived from intrastate operations during the preceding calendar year.

F. On or before May 1, each public service corporation shall file with the commission, under oath, a statement showing its gross operating revenues derived from intrastate operations during the preceding calendar year.

§ 40-401.01 Residential utility consumer assessment; exceptions; rate of assessment; date of levy; annual statement of company intrastate revenue

A. To fund the residential utility consumer office the commission shall annually make a residential utility consumer assessment against each public service corporation, excepting corporations not required to hold certificates of convenience and necessity and member-owned nonprofit cooperative corporations.

B. The amount of the assessment to be made against each corporation pursuant to subsection A of this section shall be computed as follows:

Determine the amount appropriated by the legislature for operating the residential utility consumer office for the following fiscal year.
Subtract the monies estimated to remain unexpended in the residential utility consumer office revolving fund at the end of the current fiscal year from the amount determined in paragraph 1. The difference is the total amount to be raised by the assessment.
Add the gross operating revenues derived from intrastate operations serving residential consumers during the preceding calendar year for all corporations whose revenues reported pursuant to section 40-401, subsection F were more than five hundred thousand dollars.
For each corporation whose gross operating revenues derived from intrastate operations during the preceding calendar year reported pursuant to section 40-401, subsection F were greater than five hundred thousand dollars:

(a) Divide the corporation’s gross operating revenues derived from intrastate operations serving residential consumers reported pursuant to subsection E of this section by the amount determined in paragraph 3.

(b) Multiply the total amount to be raised by the assessment as determined in paragraph 2 by the amount determined in subdivision (a). The product is the amount of the assessment to be made against the corporation pursuant to this section.

C. Notwithstanding the amounts computed pursuant to subsection B of this section and section 40-401, subsection B, the sum of the amounts assessed under this section and section 40-401 shall not exceed one-quarter of one per cent of any such corporation's gross operating revenues derived from intrastate operations during the preceding calendar year.

D. The residential utility consumer assessment prescribed by subsections A and B of this section shall be levied by the commission not later than June 15 and shall be paid within fifteen days after mailing by certified mail to any such corporation notice thereof and a statement of the amount.

E. Each public service corporation shall, on or before May 1, file with the commission, under oath, a statement showing the gross operating revenues derived from intrastate operations during the preceding calendar year that were received from residential consumers.

F. The commission shall promulgate an order defining "residential consumer" for purposes of the residential utility consumer assessment prescribed by this section.

§ 40-402 Findings of fact defined

Findings of fact of the commission within the meaning of this article shall be:

Determinations of fact expressed in statements rendered pursuant to this article.
Determinations of fact set out in the minutes of the commission recording the action of the commission in passing upon such statements and upon objections thereto.

§ 40-403 Objection to statement of assessment; hearing; notice of findings; compliance by company

A. Within fifteen days after the date of mailing a statement as provided in this article, the corporation against which the statement is rendered may file with the commission its objections thereto. Not less than five nor more than ten days after giving notice thereof to the objector, the commission shall hold a hearing on the objections.

B. If after the hearing the commission finds any part of the charge against the objecting corporation excessive, erroneous, unlawful or invalid, it shall record its findings upon its minutes and transmit to the objector, by registered mail, an amended statement in accordance with the findings, which shall have the same force and effect as an original statement. If the commission finds the entire statement unlawful or invalid, it shall notify the objector, by registered mail, of such determination, and the original statement shall be null and void. If the commission finds that the statement as rendered is neither excessive, erroneous, unlawful nor invalid, in whole or in part, it shall record such findings upon its minutes, and transmit notice thereof to the objector by registered mail.

C. If a statement against which objections are filed is not paid within ten days after mailing to the objector notice of a finding that the objections have been disallowed, or in case an amended statement is not paid within ten days after a copy thereof is mailed to the objector, the commission shall give notice of the delinquency to the department of public safety and to the objector, and the department of public safety shall proceed to make collection as provided in section 40-407.

§ 40-404 Making of objection to assessment as condition of action to recover assessment paid

No action for recovery of an amount paid under the terms of this article shall be maintained in any court unless objections have been filed with the commission as provided in section 40-403. In an action for recovery of any payments, plaintiff may raise any relevant issue of law, but the commission's findings of fact shall be prima facie evidence of the facts therein stated.

§ 40-405 Action to enjoin collection of assessment prohibited; action to recover assessment paid; limitation

No action or proceeding shall be maintained in any court for the purpose of restraining or delaying the collection or payment of a statement rendered in accordance with the provisions of this article. A corporation against which a statement is rendered shall pay the amount thereof, and after the payment may in the manner provided by this article at any time within two years from the date of the payment, bring against the state an action at law to recover the amount paid, with legal interest thereon from the date of payment, upon the ground that the assessment was excessive, erroneous, unlawful or invalid in whole or in part.

§ 40-406 Exclusive procedure to determine legality of assessments and to recover assessments paid

A. The procedure provided in this article for determining the lawfulness of statements and the recovery of payments made pursuant to statements of assessments shall be exclusive of all other remedies and procedures.

B. The provisions of sections 40-253, 40-254, 40-254.01 and 40-255 for judicial review of orders and determinations of the corporation commission shall not be applicable to any findings, determinations, statements or assessments made under this article.

§ 40-407 Enforcement of payment; seizure and sale of property

A. If any corporation to which a statement for the amount assessed against it as provided in this article has been rendered fails or refuses to pay the amount within fifteen days, or fails to file with the commission objections to the statement as provided by section 40-403, the commission shall transmit to the department of public safety a certified copy of the statement of the assessment together with notice of the neglect or refusal of the corporation to pay the amount thereof, and at the same time shall mail to the corporation a copy of the notice transmitted to the department of public safety.

B. Within ten days after receipt of the notice and certified copy of the statement, the department of public safety shall proceed to collect the amount stated to be due, with legal interest, by seizure and sale of any goods or chattels, including stocks, securities, bank accounts, evidences of debt and accounts receivable belonging to the corporation anywhere within the state. The seizure and sale shall be made by the department of public safety, and the proceedings thereunder governed, as nearly as possible, by sections 42-19108 through 42-19113.

§ 40-408 Disposition of assessment proceeds; utility regulation revolving fund; exemption from lapsing

A. The utility regulation revolving fund is established.

B. All monies received by the commission under the provisions of section 40-401 shall be deposited, pursuant to sections 35-146 and 35-147, in the utility regulation revolving fund.

C. Subject to legislative appropriation, the commission shall use the monies in the utility regulation revolving fund for attorneys and other legal staff employed pursuant to section 40-106, and all expenses of the utilities division, including compensation of auditors, economists and other staff, including staff with expertise in the area of corporate accounting, finance and management efficiency of all types of public service corporations, and a part of the expenses for the hearing and administration divisions, including expenses associated with the commissioners.

D. Monies in the utility regulation revolving fund do not revert to the state general fund pursuant to section 35-190.

E. Monies not appropriated or expended from the utility regulation revolving fund at the end of the fiscal year shall be used to calculate the annual assessment prescribed in section 40-401.

F. The utilities division shall not use any monies from the utility regulation revolving fund unless such monies are appropriated by the legislature.

§ 40-409 Disposition of residential utility consumer assessment proceeds; residential utility consumer office revolving fund; exemption from lapsing

A. The residential utility consumer office revolving fund is established.

B. All monies received by the commission under the provisions of section 40-401.01 shall be deposited, pursuant to sections 35-146 and 35-147, in the residential utility consumer office revolving fund.

C. Monies in the residential utility consumer office revolving fund shall be used, subject to legislative appropriation, to operate the residential utility consumer office pursuant to article 11 of this chapter.

D. Monies in the residential utility consumer office revolving fund do not revert to the state general fund pursuant to section 35-190.

E. Monies not appropriated or expended from the residential utility consumer office revolving fund at the end of the fiscal year shall be used to calculate the annual residential utility consumer assessment prescribed in section 40-401.01.

F. The residential utility consumer office shall not use any monies from the residential utility consumer office revolving fund unless such monies are appropriated by the legislature.

Article 9 Violations and Penalties

§ 40-421 Enforcement of laws relating to public service corporations

A. The commission shall require that the laws affecting public service corporations, the enforcement of which is not specifically vested in some other officer or tribunal, are enforced and obeyed, and that violations thereof are promptly prosecuted and penalties due the state therefor recovered and collected, and for such purposes may bring actions in the name of the state.

B. Upon request of the commission, the attorney general, or the county attorney of the proper county, shall aid in any investigation, hearing or trial conducted under the provisions of this chapter and shall institute and prosecute actions or proceedings for enforcement of the provisions of the constitution and statutes of this state affecting public service corporations and for punishment of all violations thereof.

§ 40-422 Action by commission to enjoin violations or threatened violations; venue; time for answer; joinder of parties

A. When the commission is of the opinion that a public service corporation is failing or about to fail to do anything required of it by law or an order or requirement of the commission, or is doing or about to do or permitting or about to permit anything to be done contrary to law or any order or requirement of the commission, it shall commence a proceeding in the name of the state to have such violations or threatened violations prevented, either by mandamus or injunction. The commission shall bring the action in the superior court in the county in which the claim arose, or in which the corporation complained of has its principal place of business or an agent for any purpose, or in which the commission has its office.

B. The court shall specify a time, not exceeding twenty days after service of the copy of the complaint, within which the corporation complained of shall answer the complaint, and in the meantime the corporation may be restrained. Upon default of answer, or after answer, the court shall immediately try the action.

C. Such persons as the court deems necessary or proper to be joined as parties, in order to make the judgment, order or writ effective, may be joined as parties.

§ 40-423 Liability of public service corporation to persons for injury resulting from violation of chapter

A. If any public service corporation does or permits to be done anything forbidden or declared to be unlawful, or omits to do anything required to be done, by the constitution or laws of the state, or by orders of the commission, the corporation is liable to the persons affected thereby for all loss, damages or injury caused thereby or resulting therefrom. If the court finds that the act or omission was wilful, it may also award exemplary damages.

B. A recovery under this section shall not in any manner affect a recovery by the state of the penalties provided in this chapter, or the exercise by the commission of its power to punish for contempt.

§ 40-424 Contempt of corporation commission; penalty

A. If any corporation or person fails to observe or comply with any order, rule, or requirement of the commission or any commissioner, the corporation or person shall be in contempt of the commission and shall, after notice and hearing before the commission, be fined by the commission in an amount not less than one hundred nor more than five thousand dollars, which shall be recovered as penalties.

B. The remedy prescribed by this article shall be cumulative.

§ 40-425 Penalty for violations not otherwise provided for; separate and continuing offenses; responsibility of corporation for acts of officers, agents or employees

A. Any public service corporation that violates or fails to comply with the constitution or this chapter or that fails or neglects to obey or comply with any order, rule or requirement of the commission, the penalty for which is not otherwise provided, is subject to a penalty of not less than one hundred nor more than five thousand dollars for each offense.

B. Each violation is a separate offense, but violations continuing from day to day are one offense.

C. In enforcing penalties the act or omission of any officer, agent or employee of a public service corporation, acting within the scope of the person's duties or employment is the act, omission or failure of such corporation.

D. Notwithstanding any other provision in this chapter, the exclusive remedy or penalty for any alleged or actual violation by a public service corporation, or any alleged or actual violation by or procured by a public service corporation's officer, agent or employee, of any constitutional provision or any commission rule based on any constitutional provision specifying or relating to the type of electric generation resources a public service corporation must acquire or use is civil and limited to the penalties specified in this section.

§ 40-426 Violations by officers, agents or employees of public service corporations; classification

Every officer, agent or employee of a public service corporation, who violates or fails to comply with, or procures any violation by a public service corporation of any provision of the constitution of the state or of this chapter, or of any order, rule or requirement, of the commission, is guilty of a class 1 misdemeanor unless another classification is specifically prescribed in this chapter.

§ 40-427 Violations by corporations other than public service corporations; violations by officers, agents or employees of corporations other than public service corporations; classification

A. Every corporation, other than a public service corporation, which violates any provisions of this chapter, or which fails to obey or comply with any order, rule or requirement of the commission, for which the penalty is not otherwise provided for such corporation, is guilty of a class 1 misdemeanor.

B. Every person who either individually, or acting as an officer, agent or employee of a corporation other than a public service corporation, violates any provision of this chapter, or fails to obey or comply with any order, rule or requirement of the commission, or who procures any public service corporation in its violation or in its failure to obey or comply with any such order, rule or requirement, for which a penalty for violation is not otherwise provided, for such person, is guilty of a class 1 misdemeanor.

§ 40-428 Cumulative nature of penalties

A. This chapter shall not release or waive any right of action by the state, the commission or any person for any right, penalty or forfeiture which arises or accrues under any law of this state.

B. All penalties accruing shall be cumulative to each other, and an action for recovery of one penalty shall not be a bar to or affect the recovery of any other penalty or forfeiture or be a bar to any criminal prosecution against any public service corporation, or any officer or employee thereof, or any other person, or be a bar to the exercise by the commission of its power to punish for contempt.

§ 40-429 Actions to recover penalties; venue

Actions to recover penalties under this chapter shall be brought by the commission in the name of the state in a court of competent jurisdiction in the county in which the cause or some part of the cause arose, or in which the corporation complained of, if any, has its principal place of business or an agent for any purpose, or in which the person resides, or in the county in which the commission has its office.

§ 40-430 Limitations on requiring bond of employees by common carrier; violation; classification

A. A common carrier doing business in this state requiring an employee to give a bond or undertaking of any nature, shall not require the employee to have the bond or undertaking executed as surety by any particular person, and the carrier shall not reject any such bond or undertaking for any reason other than the financial insufficiency of the surety.

B. A person violating this section is guilty of a class 1 misdemeanor.

C. Any bond or undertaking made in violation of this section hereof is void.

§ 40-431 Preventing officer or agent of public service corporation from examining property; violation; classification

A. A duly appointed and authorized officer or agent of a public service corporation may, at all reasonable times, upon exhibiting written authority signed by the president, secretary or manager of the corporation, enter any premises using the product of such corporation for the purpose of inspecting and examining the property of the corporation, or for ascertaining the quantity of its product consumed.

B. A person who knowingly prevents or interferes with such officer or agent entering such premises or making such examination or inspection is guilty of a class 2 misdemeanor.

§ 40-432 Agent or employee of telegraph or telephone company using information contained in message; classification

An agent, operator or employee of a telegraph or telephone operator who knowingly in any way uses or appropriates information derived by him from a private message passing through his hands and addressed to another person, or in any other manner acquired by him by reason of his trust, or trades or speculates upon information so obtained, or in any manner uses the information for his own account, profit or advantage, is guilty of a class 1 misdemeanor.

§ 40-433 Agent or employee of telegraph or telephone company failing or refusing to send or deliver message; classification

An agent, operator or employee of a telegraph or telephone office who knowingly fails or refuses to send a lawful and prepaid message received at the office for transmission, or knowingly postpones its order of transmission, or knowingly fails or refuses to deliver the message received, is guilty of a class 2 misdemeanor.

Article 10 Pipeline Safety

§ 40-441 Commission safety regulations, rules and orders; definitions

A. For the purpose of providing state control over safety standards and practices applicable to the transportation of gas and hazardous liquids and gas and hazardous liquids pipeline facilities within the state to the full extent permissible under federal law that is applicable to natural gas and hazardous liquid gas pipelines, the commission shall adopt by regulation, rule or order appropriate safety standards for all such transportation of gas and hazardous liquids and gas and hazardous liquids pipeline facilities, including both privately owned and public, which are not subject to exclusive federal control. Upon the adoption of such regulations, rules or orders, the commission shall make certifications and reports and take any other necessary action in accordance with intrastate certifications and interstate agent agreements under federal pipeline safety laws (49 United States Code, subtitle VIII, chapter 601).

B. All terms used in this article that are defined in the federal pipeline safety laws (49 United States Code, subtitle VIII, chapter 601) shall have the definitions set forth in that act.

§ 40-442 Civil penalty for violation; deduction; other remedies

A. Any person, firm or corporation that violates any provision of this article or any rule or order adopted pursuant to this article pertaining to the safety of the transportation of gas and hazardous liquids and pipeline facilities shall be subject to a civil penalty of not to exceed two hundred thousand dollars for each violation with each day constituting a separate violation. The maximum civil penalty shall not exceed two million dollars for any related series of violations.

B. Any civil penalty pertaining to gas and hazardous liquid pipeline safety may be compromised by the commission. In determining the amount of the penalty, or the amount agreed upon in compromise, the appropriateness of the penalty to the size of the business of the person, firm or corporation charged, the gravity of the violation and the good faith of the person, firm or corporation charged in attempting to achieve compliance, after notification of a violation, shall be considered. The amount of the penalty, when finally determined, or the amount agreed upon in compromise, may be deducted from any sums owing by the state to the person, firm or corporation charged or may be recovered in a civil action in the superior court of this state.

C. All monies collected from civil penalties assessed pursuant to this article and any fines collected by the commission in enforcing this article and rules relating to pipeline safety shall be deposited, pursuant to sections 35-146 and 35-147, in the state general fund.

D. The commission may avail itself of any other authority or remedies available under the Constitution of Arizona and this chapter to effect the purpose of this article, including the provisions of article 9 of this chapter.

Article 11 Residential Utility Consumer Office

§ 40-461 Definitions

In this article, unless the context otherwise requires:

"Director" means the director of the residential utility consumer office.
"Office" means the residential utility consumer office.
"Public service corporation" means a public service corporation as defined in article XV, section 2, Constitution of Arizona except a member-owned nonprofit cooperative corporation.

§ 40-462 Residential utility consumer office; director

A. A residential utility consumer office is established to represent the interests of residential utility consumers in regulatory proceedings involving public service corporations before the corporation commission.

B. The governor shall appoint the director of the office pursuant to section 38-211. The director serves at the pleasure of the governor. The director must possess management and administrative skills, as well as knowledge and experience relating to the regulation of utilities.

§ 40-464 Powers and duties

A. The director may:

Research, study and analyze residential utility consumer interests.
Prepare and present briefs, arguments, proposed rates or orders and intervene or appear on behalf of residential utility consumers before hearing officers and the corporation commission as a party in interest and also participate as a party in interest pursuant to sections 40-254 and 40-254.01 in proceedings relating to rate making or rate design and involving public service corporations, except that the director shall not participate in any proceedings pursuant to this paragraph involving a member-owned nonprofit cooperative corporation.
Make and execute contracts and other instruments as necessary to perform his duties.
Hire employees subject to title 41, chapter 4, article 4 as necessary to carry out this article and contract for special services as needed.
Employ such attorneys as are required to represent the interests of residential utility consumers.

B. The director shall adopt administrative rules necessary to carry out the purposes of this article.

C. All contacts by residential utility consumers with regard to quality or quantity of service provided by a public service corporation shall be recorded by the office for the purpose of determining general concerns of consumers. The office may advise the consumer of other agencies that may be of further assistance and shall refer the consumer to the corporation commission utilities division consumer services section established in section 40-110.

Article 12 Tampering With Utility Equipment and Service

§ 40-491 Definitions

In this article, unless the context otherwise requires:

"Customer" means the person in whose name a utility service is provided.
"Person" means an individual, partnership, firm, association or corporation.
"Reconnection" means the restoration of utility service to a customer or other person after service has been legally disconnected by the utility.
"Tamper" or "tampering" means any of the following if committed against property that is owned or operated by the utility for transmission or distribution:

(a) Rearranging, damaging, altering, interfering with or otherwise preventing the performance of a normal or customary function of utility property.

(b) Connecting any wire, conduit or device to any utility property.

(d) Preventing any meter from properly measuring or registering.

(e) Knowingly taking, receiving, using or converting to personal use or the use of another any utility service that has not been measured or authorized.

(f) Diverting or changing the intended course or path of the utility service without the authorization or consent of the utility.

(g) Causing, procuring, permitting, aiding or abetting any person to do any of the acts listed in this paragraph.

"Utility" means any public service corporation, licensed cable television system or video service network, telephone line or telegraph line corporation or person engaged in the generation, transmission or delivery of electricity, gas, telephone, cable television, telegraph or water service, including this state or any political subdivision or agency of this state.
"Utility service" means the provision of services or commodities by the utility for compensation.

§ 40-492 Tampering with a utility; civil action

A. A utility may bring an action for damages or to enjoin any activity against a person who:

Makes a connection or reconnection with property owned or used by the utility to provide utility service without the authorization or consent of the utility.
Prevents a utility meter or other device used to determine the charge for utility services from accurately performing its measuring function.
Tampers with property owned or used by the utility.
Uses or receives the utility services without the authorization or consent of the utility and knows or has reason to know of the unlawful diversion, tampering or connection.

B. A utility need not suffer or be threatened with monetary damages to bring an action to enjoin any activity under this article.

§ 40-493 Damages; costs; attorney fees

In a civil action pursuant to section 40-492, the utility may recover as damages three times the amount of actual damages. The prevailing party shall recover reasonable attorney fees, costs and other expenses.

§ 40-494 Presumption of violation

A rebuttable presumption that there is a violation of section 40-492 arises if either:

An instrument, apparatus or device installed to obtain utility service without paying the full charge is found attached to the meter or other device used to provide the utility service on the premises controlled by the customer or by the person using or receiving the utility service.
A meter was altered, tampered with or bypassed resulting in no measurement or inaccurate measurement of utility services.

§ 40-495 Excess damages considered in establishing rates

Damages recovered in excess of actual damages sustained by the utility shall be considered by a public service corporation in establishing its utility rates.

Chapter 3 Utility Securitization

Article 1 General Provisions

§ 40-601 Definitions

In this chapter, unless the context otherwise requires:

"Ancillary agreement" means any of the following:

(a) A bond.

(b) An insurance policy.

(d) A reserve account.

(e) An interest rate lock or swap arrangement.

(f) A hedging arrangement.

(g) A liquidity or credit support arrangement.

(h) Any other similar agreement, instrument or arrangement that is entered into in connection with the issuance of transition bonds and that is designed to promote the credit quality and marketability of the transition bonds or to reduce or mitigate the risk of an increase in any financing cost.

"Applicant" means any of the following in each case that files an application for a financing order with the commission:

(a) A public service corporation that provides electric service, including a member-owned cooperative corporation.

(b) A group of two or more member-owned cooperatives seeking approval of a combined cooperative securitization. For the purposes of this subdivision, each participating cooperative may be referred to individually as the applicant or the group of cooperatives may be referred to collectively as the applicant as the context indicates.

"Combined cooperative securitization" means a securitization transaction under this chapter that involves two or more member-owned cooperatives acting together including a generation and transmission cooperative and one or more of its member distribution cooperatives even if all applicable transition costs are incurred or will be passed down to the distribution cooperatives.
"Commission" means the corporation commission.
"Customer" means any person or entity within this state to whom one of the following applies:

(a) Regardless of the identity of the person's or entity's electric generation supplier and without regard to whether the person or entity also receives service from other electric service providers, the person or entity receives retail electric service, whether directly or indirectly, whether bundled or unbundled and whether supply or delivery, or both, from any of the following:

(i) An applicant.

(ii) A successor to an applicant.

(iii) Any other person, public service corporation or municipal entity that assumes the responsibility to provide electric service in an applicant's service territory as the service territory exists on the date the commission issues a financing order.

(b) Regardless of the identity of the person's or entity's electric generation supplier and without regard to whether the person or entity also receives service from other electric service providers, the person or entity maintains an interconnection with the electric distribution facilities of an applicant that allows that person or entity to receive retail electric service, whether bundled or unbundled and whether supply or delivery, or both, from any of the following:

(i) An applicant.

(ii) A successor to an applicant.

(c) Without regard to whether the person or entity also receives service from other electric service providers, the person or entity is a cooperative that provides retail electric service to members and that receives electricity from an applicant that provides wholesale electric generation and transmission services.

"Financing charges" mean nonbypassable charges that are paid or payable by all customers to a qualified special purpose entity to recover ongoing financing costs in accordance with this chapter. Financing charges can be adjusted from time to time in accordance with the true-up mechanism.
"Financing cost" means all costs that are incurred by a qualified special purpose entity, including in connection with a combined cooperative securitization, to issue, rate, market, place, authorize, support, repay, refinance, service, administer or refund transition bonds, whether incurred at, before or after issuance or before or after the date of maturity including any of the following:

(a) The principal and interest and any acquisition, defeasance or redemption premiums that are payable on transition bonds.

(b) The costs, fees and expenses that are related to issuing, rating, marketing, placing, authorizing, supporting, repaying, refinancing, servicing, administering or refunding transition bonds that include any costs incurred for implementing the true-up mechanism.

(c) The costs, fees and expenses of trustees or similar fiduciaries, attorneys, accountants, servicers, rating agencies, depository and other agents or other professionals.

(d) The costs, fees and expenses that are associated with hiring expert consultants that are necessary to aid the commission in reviewing and approving an application for a financing order in accordance with this chapter.

(e) The costs that are incurred under an ancillary agreement and any amount that is required to refund or replenish a reserve account or other account established under an ancillary agreement or other document relating to transition bonds.

(f) The costs of forming, operating, administering and dissolving a qualified special purpose entity.

(g) The costs, fees and expenses that are incurred to obtain any consent, release, waiver or approval from any holder of an existing obligation of an applicant that is necessary to permit the issuance of transition bonds or the retirement, abandonment or reduction in the undepreciated book value of a transition asset in connection with a transaction under this chapter.

(h) The costs that are incurred to protect the status of transition property, the right to impose and collect financing charges or the right to receive financing revenues, including costs related to any judicial or other proceedings that are necessary to protect the transition property or collect financing revenues.

(i) Federal, state and other taxes that are imposed on the applicant or the qualified special purpose entity, with respect to the financing charges or financing revenues without duplication, and adjusted to reflect any unrecovered deferred income tax balance associated with the transition costs, and any other fees, charges or other assessments that are imposed on transition bonds.

"Financing order" means an order of the commission that is issued as prescribed in section 40-603, subsection B.
"Financing party" means a holder of transition bonds and any trustee, collateral agent or other person acting for the benefit of the holder.
"Financing revenues" means any money and other property received or to be received, directly or indirectly, in payment of or on account of the financing charges, including all of the proceeds of the investment thereof.
"Nonbypassable" means that the payment of the financing charges may not be avoided and shall be paid by a customer if, at the time invoices or bills are rendered, transition bonds are outstanding or the financing costs have not been recovered in full. Financing charges shall be paid regardless of whether:

(a) The customer is liable to a public service corporation or the applicant for any rate or other charges for electric service.

(b) The system assets serving the customer continue to be owned by the applicable applicant or other public service corporation.

"Ongoing financing costs":

(a) Means all financing costs, including the principal and interest that are payable on the transition bonds.

(b) Does not include up-front financing costs that are paid by the qualified special purpose entity directly or indirectly from the proceeds of the issuance of transition bonds.

"Qualified special purpose entity":

(a) Means a legal entity that:

(i) Is established by and wholly owned, directly or indirectly, by an applicant in which an interest in transition property is created pursuant to this chapter and which issues transition bonds that are secured by transition property.

(ii) Does not provide electric service.

(iii) Is not a public service corporation.

(b) May not conduct any business that is unrelated to owning, protecting, and administering the transition property or issuing, marketing, placing, authorizing, supporting, repaying, refinancing, servicing, administering or refunding transition bonds.

(d) For a combined cooperative securitization, the ownership interests in a qualified special purpose entity may be allocated to the relevant cooperative applicants in proportion to the transition costs that are allocated to each of them or in any other manner approved by the financing order.

"Servicer":

(a) Means a person or entity that is authorized and required by a contract, tariff or otherwise, to do all of the following:

(i) Calculate, bill or collect financing charges on behalf of a qualified special purpose entity.

(ii) Prepare periodic reports on the billing of financing charges and the collection of financing revenues.

(iii) Render other services related to financing charges and the transition property, including administering the true-up mechanism.

(b) Includes:

(i) A public service corporation, including an applicant.

(ii) A third-party servicer that collects finance charges under a transition billing services tariff.

"Significant event recovery costs":

(a) Means costs, fees and expenses that are significant, as determined by the commission, that are incurred or to be incurred through the date of issuance of a financing order and that are associated with or that arise from incidents of severe or extreme weather, natural disasters, civil disturbance, wildfire, criminal acts or acts of war or terrorism that result in any of the applicant's assets, facilities or infrastructure that are in operation providing service for customers becoming destroyed, damaged or otherwise rendered inoperable, in whole or in part.

(b) For a combined cooperative securitization, may include costs that have been incurred by a generation and transmission cooperative applicant that would otherwise be passed on to distribution cooperative applicants in wholesale power or similar charges, regardless of whether the costs have been passed through to distribution cooperative applicants at any given time.

"Third-party servicer" means a person, other than an applicant, that is engaged to act as a servicer for transition bonds in the event an applicant is unable to act as a servicer.
"Transition asset" means any electric power generation, transmission or distribution facilities, including other property or equipment that is used by the applicant and that is identified in an application for a financing order, and that either:

(a) Has been retired and no longer provides service, in whole or in part.

(b) As of the date of the application, is planned to be retired, sold, disposed of, abandoned or otherwise removed from service by the applicant, in whole or in part, within ten years after the date of the application.

(c) Has otherwise been destroyed, damaged or rendered inoperable, in whole or in part, by forces or action outside of the applicant's reasonable control.

"Transition asset retirement costs":

(a) Means the undepreciated value, unrecovered balance or portion thereof as to any transition asset that is included in the applicant's rate base or that is recovered through rates that will be permanently reduced when the transition bonds are issued and the applicant receives the transfer of funds as described in section 40-606, subsection A in connection with a transaction authorized by this chapter and any costs, fees and expenses incurred to retire, abandon or reduce the undepreciated book value of such transition asset in connection with a transaction under this chapter, including without limitation decommissioning, remediation or restoration costs associated with the transition asset.

(b) For a combined cooperative securitization, may include costs that have been incurred by a generation and transmission cooperative applicant that would otherwise be passed on to distribution cooperative applicants in wholesale power or similar charges, regardless of whether such costs have been passed through to distribution cooperative applicants at any given time.

"Transition benefit test" means the assessment described in section 40-603, subsection B, paragraph 2.
"Transition billing services tariff":

(a) Means a tariff of a public service corporation, including an applicant, that authorizes the public service corporation, applicant or other person to act as a servicer.

(b) May not specify or alter the amount of any financing charges nor grant the servicer any right, title or interest in financing revenues.

"Transition bonds" means bonds, notes or other evidences of indebtedness that are issued by a qualified special purpose entity and that are described in an application for a financing order, the proceeds of which are used, directly or indirectly, to recover, finance, refinance or refund transition costs and up-front financing costs and that are directly or indirectly payable from, or secured by, transition property, financing charges or financing revenues.
"Transition costs" includes any of the following:

(a) Transition asset retirement costs.

(b) Significant event recovery costs.

"Transition property":

(a) Means the property rights and property interests of a qualified special purpose entity, any holders of transition bonds when issued or any transferee or assignee thereof that are created or recognized as a result of a transaction authorized by this chapter and is not an asset of the applicant or any other public service corporation.

(b) Includes any of the following:

(i) All rights and interests of a qualified special purpose entity under a financing order.

(ii) The right to impose, charge, collect and receive financing charges, including the right to calculate, impose, charge, collect and receive adjustments to the financing charges pursuant to the true-up mechanism.

(iii) All right and title to, and all interest in, financing revenues, regardless of whether the revenues are billed, received, collected or maintained separately from or commingled with other revenues or monies of any type and regardless of whether the revenues are billed or collected by a servicer.

(iv) All reserves that are established in connection with the transition bonds or the transition property.

(v) All rights of a qualified special purpose entity under any ancillary agreement.

"True-up mechanism":

(a) Means a formula, described in the application for a financing order and established before or concurrent with the issuance of transition bonds, that adjusts financing charges over time to correct for any overcollection or undercollection of financing revenues so that both a qualified special purpose entity timely and completely recovers not more than all ongoing financing costs and any impacts to the applicant's customers from any overcollection are addressed in a timely and complete manner.

(b) For a combined cooperative securitization and in addition to the mechanism described in subdivision (a) of this paragraph, means a mechanism that may also be used to allocate or reallocate financing costs to the customers of the cooperative applicants.

"Unit financing charge" means the share or portion of the financing charges that are imposed on, paid by and collected from a particular customer or from every customer in a particular group of customers and may differ between customers and groups of customers, but if they do, each customer group and how it is defined shall also be described in the application. Unit financing charges are determined, and imposed, without regard to whether, or to what extent, a customer uses the services of any public service corporation during the period in which a particular unit financing charge will apply.
"Up-front financing costs":

(a) Means those financing costs that are paid directly or indirectly from the proceeds of transition bonds, by the qualified special purpose entity.

(b) Includes all or a portion of the costs of obtaining a financing order and designing, marketing, obtaining ratings for and issuing transition bonds.

§ 40-602 Statement of public policy

A. It is the public policy of this state to gain the benefits of securitization by establishing irrevocable financing charges that are payable to a qualified special purpose entity and by creating and vesting a present and alienable property interest in financing revenues in a qualified special purpose entity. Those benefits include reducing all of the following:

The contribution of assets, which are subject to potential retirement, abandonment, sale, disposition or transition, or that have been damaged or destroyed, to the rate base, or as would otherwise be recovered through rates, of public service corporations and any associated liabilities.
The costs arising from or related to weather, wildfire or other significant events or incidents that cause damage, destruction or otherwise render inoperable, in whole or in part, any of the applicant's assets, facilities or infrastructure that are in operation providing service for customers.

B. The use of low-cost securitized borrowing by a separate special purpose entity is intended to enable public service corporations to achieve the benefits of securitization for customers by reinvesting capital now committed to paying the costs related to the production and delivery of energy from new facilities, resources or other assets.

§ 40-603 Securitization transactions; initiation; financing order; application requirements; transition benefit test; timeframes

A. An applicant may request permission to initiate a securitization transaction from the commission by submitting an application for a financing order. The application shall:

Identify, as applicable, any transition assets, transition asset retirement costs or significant event recovery costs. For the purposes of this paragraph, transition assets must currently be or have previously been in operation providing service for the applicant's customers as of September 26, 2025, except for transition assets that are placed into service after September 26, 2025 that become destroyed, damaged or rendered inoperable, in whole or in part, by forces or action outside of the applicant's reasonable control, as provided in section 40-601, paragraph 17, subdivision (c).
Estimate the transition costs and financing costs including an estimate of recovering such costs on a net present value basis.
Describe the expected characteristics of the transition bonds.
Project the financing charges and explain how the financing charges will result in the collection of financing revenues in amounts sufficient but not greater than necessary to enable the timely and complete recovery and payment of all ongoing financing costs. For the purposes of this paragraph, "financing charges" includes any costs and fees that are associated with hiring expert consultants that are necessary to aid the commission in reviewing and approving of an application for a financing order.
Estimate the financing charges and unit financing charges before the first application of the true-up mechanism.
Describe the proposed true-up mechanism and how the true-up mechanism will adjust the financing charges and unit financing charges over time to correct for any overcollection or undercollection of financing revenues.
Identify the qualified special purpose entity.
Include a report that is prepared by a securities firm experienced in underwriting and bond issuance and that concludes the transition bonds are expected to satisfy the current published criteria for an AAA rating or the equivalent.
Identify any anticipated ancillary agreements, individually or by description.
Describe how the applicant proposes to permanently reduce or offset the value of either:

(a) Undepreciated transition assets in rate base or recovered through rates and any associated regulatory assets or recorded liabilities with respect to an offering of transition bonds to recover transition asset retirement costs.

(b) Any regulatory asset or recorded liability that is associated with transition bonds to recover significant event recovery costs in exchange for the net proceeds of the transition bonds.

Include a proposed transition billing services tariff if the proposed initial servicer is a public service corporation.
Commit to making a filing with the commission that will describe the final structure and pricing of the transition bonds, a statement of actual up-front financing costs and an updated calculation of the estimated financing charges and unit financing charges over the life of the transition bonds.
Provide a proposed financing order.
For a combined cooperative securitization, describe the allocation of financing costs or financing charges and unit financing charges to each cooperative applicant's customers, as well as how the true-up mechanism will allocate or reallocate financing costs to the cooperative applicant's customers over time.
Include an analysis that shows the securitization transaction will result in lower costs to the applicant's customers on a net present value basis as compared to financing options that are otherwise available to the applicant.

B. The commission shall issue a financing order that approves, rejects or approves with conditions the initiation of the proposed transaction. The commission may approve or approve with conditions the proposed transaction only if the commission finds that:

The application complies with all of the requirements prescribed in subsection A of this section.
The securitization transaction will result in lower costs to the applicant's customers on a net present value basis as compared to other financing options that are available to the applicant, which shall be determined based on whether the transition benefit test is satisfied. The transition benefit test is satisfied on a showing of all of the following:

(a) The projected net present value over the term of the transition bonds of the financing charges minus, to the extent applicable, the revenue requirement credits that arise from any deferred income tax balances associated with the transition cost will be smaller in absolute value than the projected net present value that is calculated at the same discount rate of the portion of the annual revenue requirements of the applicant that is associated with the transition cost, if the cost were to be financed directly by the applicant.

(b) The proposed structure and projected pricing of the transition bonds are reasonably expected to result, on a net present value basis over the life of the transition bonds, in the lowest financing charges that are commercially available consistent with market conditions at the time the transition bonds are priced and with the terms of the financing order.

(c) For a financing application that involves a transition asset that is an electric power generation facility that will be or has been retired, sold, abandoned, disposed of or otherwise removed from service of the applicant's customers, in whole or in part, as provided in section 40-601, paragraph 17, subdivisions (a) and (b), the replacement means of satisfying the customer load served by the electric power generation facility that will be or has been removed from service is more cost-effective for the applicant's customers than continued reliance on or operation of the electric power generation facility that will be or has been removed from service. Cost-effectiveness shall be determined by comparing the sum of the net present value of all the costs and expenses of reliable replacement generation of equal or greater contribution toward the utility's resource adequacy than the electric power generation facility that will be or has been removed from service over the replacement generation's expected useful life combined with the projected net present value to ratepayers of the total expected cost of the transition bonds over the term of such bonds, as compared to the net present value to ratepayers of the cost, including any unrecovered costs associated with undepreciated value or unrecovered balances of the transition asset if such costs were to be financed directly by the applicant, of continuing to operate the electric power generation facility that will be or has been removed from service over an equivalent time frame regardless of the fuel source of the power generation. The cost-effective evaluation shall include a description of a portfolio that contains new and existing resources that will provide reliable replacement generation of equivalent resource adequacy as the electric power generation that will be or has been removed from service.

The proposed transition billing services tariff, including any true-up mechanism that is designed to address overcollection or undercollection from the applicant's customers, is just and reasonable, is in the public interest and should be in effect.
The proposed transaction, as described in the application for a financing order, is just and reasonable, is in the public interest and should be put into effect.

C. The commission shall issue a final decision regarding the application for a financing order within one hundred twenty days after the date the application for the financing order was filed. The commission may extend the time for an additional ninety days for good cause shown.

D. The parent, holding or other direct beneficial owner of an applicant that is also a public service company may not purchase transition bonds.

E. For the purposes of reviewing and approving an application for a financing order, the commission may use expert consultants and charge the qualified special purpose entity a fee for hiring the expert consultants.

§ 40-604 Commission authority; jurisdiction

A. On an applicant's receipt of the net proceeds of the issuance of the transition bonds under section 40-606, subsection A, the commission has the authority to ensure that:

Any undepreciated value of the transition assets on the applicant's books are reduced by the corresponding amount, including any reductions in associated regulatory assets or recorded liabilities, as applicable.
Any regulatory assets that are related to significant event recovery costs are reduced by that corresponding amount.
Any incurred costs of a recorded liability that are incurred and associated with significant event recovery costs are reduced by that corresponding amount.

B. This chapter does not abrogate or prevent the commission's authority to do any of the following:

Establish and regulate rates of public service corporations.
Investigate the practices of public service corporations.
Review and audit the books and records of public service corporations, including the actions taken under a transition billing services tariff and the receipt, handling and remittance to the qualified special purpose entity of financing revenues.
Investigate an applicant's compliance with the terms and conditions of a financing order and to require that the applicant comply with the financing order.
Impose regulatory sanctions on an applicant for the wilful failure to comply with a financing order or this chapter.

C. The commission shall not order or require, directly or as a condition for any other action or finding, a public service corporation to apply for permission to initiate a securitization transaction under this chapter or to engage in a transaction authorized by this chapter.

D. Except as provided in section 40-610, this chapter does not preclude the commission from considering the bill impact of unit financing charges when determining the design of the rates within its jurisdiction or the allocation of the costs to and among persons or groups of persons paying the rates.

§ 40-605 Transition property; property rights; default on transition bonds

A. Transition property is immediately created by operation of law on the latter of the approval of a financing order, the creation and capitalization of the qualified special purpose entity and issuance and receipt of value for the applicable transition bonds. Transition property continues to exist until the corresponding transition bonds and all ongoing financing costs related to the transition bonds have been fully paid. On creation, transition property belongs to the qualified special purpose entity. A qualified special purpose entity may not conduct any business unrelated to owning, protecting and administering the transition property or issuing, marketing, placing, authorizing, supporting, replaying, refinancing, servicing, administering or refunding transition bonds.

B. Transition property constitutes a vested, existing, present, continuing and irrevocable property right for all purposes, notwithstanding the fact that the value of the property may depend on, or be affected by, events or actions that have not yet occurred. Transition property shall not be an asset of the applicant or any other public service corporation.

C. An applicant may not have an ownership or beneficial interest or any claim of right in the transition property, other than the requirement to calculate, impose, charge, collect and receive the financing charges as servicer and transfer the resulting financing revenues to the qualified special purpose entity that is entitled to receive those financing revenues.

D. The qualified special purpose entity may pledge all or any portion of the transition property to secure the timely and complete payment of transition bonds and financing costs.

E. Transition property, financing charges, financing revenues and the interests of a financing party or any other person in transition property or in financing revenues are not subject to offset, counterclaim, surcharge or defense by a servicer, a customer, an applicant, a creditor of an applicant, a creditor of the qualified special purpose entity or any other person, or in connection with any default, bankruptcy, reorganization or other insolvency proceeding of any such person.

F. If there is a default on the transition bonds, both of the following apply:

Any secured party has the right to foreclose on transition property or otherwise enforce its rights as to the transition property in the same manner as if it were a secured party under the uniform commercial code.
On application by an interested party, and without limiting paragraph 1 of this subsection or any other remedies available to the applying party, a court shall order the sequestration and payment of the monies arising from the transition property to the person that is entitled to receive the monies. The order shall remain in full force and effect notwithstanding any bankruptcy, reorganization or other insolvency or receivership proceedings of an applicant or the qualified special purpose entity.

G. For the purposes of this chapter, transition property shall be in existence regardless of whether the revenues or proceeds with respect to such property have accrued and regardless of whether the value of the property right is dependent on customers receiving service.

§ 40-606 Transition bonds; issuance; authority of qualified special purpose entity; reimbursement of costs

A. After approval of a financing order issued pursuant to section 40-603, the qualified special purpose entity is authorized to issue one or more series, classes or tranches of transition bonds and to pledge transition property to secure the payment of ongoing financing costs. On issuance of the transition bonds, the qualified special purpose entity shall transfer to the applicant the net proceeds of the transition bonds minus the up-front financing costs paid by the qualified special purpose entity.

B. The approval of a financing order does not obligate an applicant or a qualified special purpose entity to engage in the approved transaction, and neither an applicant nor a qualified special purpose entity shall be subject to any regulatory conditions, regulatory sanctions or other penalties for not engaging in an approved transaction. If the qualified special purpose entity determines not to issue transition bonds authorized by a financing order, the applicant shall reimburse the qualified special purpose entity for any costs paid by the qualified special purpose entity that would have constituted up-front financing costs had the transition bonds been issued, except that delaying the issuance of transition bonds pending final resolution of any appeals from the financing order or any legal challenges to this chapter is not deemed to be a determination.

§ 40-607 Transition property; security interest; lien; priority

A. This section applies to all purported transfers of, grants of liens on, or security interests in transition property. Except as otherwise provided in this section, the creation, perfection and enforcement of a security interest in transition property that is pledged to secure the payment of the ongoing financing costs are governed by this section.

B. The description of or reference to transition property in a transfer or security agreement and a financing statement is sufficient if and only if the description or reference refers to this chapter and the financing order describing the transition property. A security interest in transition property is created, valid, binding and enforceable at the latest of any of the following:

When the transition bonds are issued by the qualified special purpose entity.
When a security agreement is executed and delivered by the qualified special purpose entity.
When value is received by the qualified special purpose entity for the transition bonds.

C. The security interest in transition property is a statutory lien in favor of the applicable financing party that attaches automatically when the transition bond is issued and value for the transition bonds is received. The security interest attaches without any physical delivery of collateral or other act, and the security interest is valid, binding and perfected against all parties having claims of any kind against the person granting the security interest, regardless of whether the parties have notice of the lien, on the filing of a financing statement with the secretary of state. The secretary of state shall maintain the financing statement in the same manner and in the same recordkeeping system maintained for financing statements that are filed pursuant to title 47, chapter 9, article 5. Financing statements that are filed pursuant to this section are effective without the need to file a continuation statement until a termination statement is filed.

D. A transfer of an interest, including a grant of a lien or security interest, in transition property is perfected against all third persons. A security interest in transition property is a continuously perfected security interest and has priority over any other lien that may subsequently attach to the transition property unless the holder of the security interest has agreed in writing otherwise.

E. The priority of a security interest in transition property is not affected by the commingling of financing revenues with other funds. Any pledgee or secured party has a perfected security interest in the amount of all financing revenues that are deposited in any account of the servicer in which financing revenues have been commingled with other funds, and any other security interest that may apply to such financing revenues is terminated when those funds are transferred to a segregated account for a financing party or assignee of a financing party.

F. The true-up mechanism does not affect the validity, perfection or priority of a security interest in or transfer of transition property.

G. The validity, perfection or priority of a lien and security interest under this chapter is not impaired by any later modification of a financing order or changes in a customer's financing charges.

§ 40-608 Financing charges; true-up mechanism; civil action

A. Financing charges are nonbypassable, are mandatory and apply to all customers. Financing revenues shall be used solely for the payment of ongoing financing costs.

B. The true-up mechanism shall correct for any overcollection or undercollection of financing revenues and provide for timely and complete payment of ongoing financing costs. Adjustments to financing charges that are made in accordance with the true-up mechanism shall be applied through an equal percentage change to all unit financing charges or through an alternative nondiscretionary mathematical process of adjusting unit financing charges that is included in the true-up mechanism and that is described in the application.

C. For combined cooperative securitization, the true-up mechanism may also allocate or reallocate financing costs or financing charges and unit financing charges to the customers of the cooperative applicants.

D. Adjustments to the financing charges and unit financing charges resulting from the application of the true-up mechanism are not subject to regulation by the commission and are effective without any order or action of the commission or any other body, except as provided in subsection E of this section.

E. After transition bonds have been issued, the determination and imposition of financing charges, the recovery of financing revenues and the adjustment of the financing charges through the true-up mechanism are not subject to review or approval by any government entity including state agencies, public corporations, municipalities or other instrumentalities of this state, except that the superior court has exclusive jurisdiction to and, on commencement of a suit against the qualified special purpose entity by a customer, may review and determine whether there has been a mathematical or administrative error in any of the following:

The calculation or application of the true-up mechanism.
The calculation of the resulting financing charges and unit financing charges.

F. The jurisdiction and authority of the superior court in an action under this section is limited to determining the financing charges and unit financing charges that result from the correct calculation and application of the true-up mechanism. The superior court shall not order or require any modification to the true-up mechanism or limit, reduce, alter, impair, delay or terminate the application of the true-up mechanism or the collection and remittance of financing revenues. A party may not bring any action to enjoin, restrain, stay or delay the validity, calculation and imposition of financing charges or the collection of financing revenues, including the establishment and application of the true-up mechanism and the collection and remittance of financing revenues. An action under this section must be filed within ten days after the qualified special purpose entity or servicer files notice with the commission under subsection K of this section. The time for bringing the action may not be tolled or extended for any reason. Within sixty days after the filing of an action under this section, the superior court shall hear and render a decision on the matter. The decision is appealable only to the supreme court, and the notice of appeal shall be filed within five days after the decision of the superior court in the action. The supreme court shall issue a decision on the appeal promptly but not later than ninety days after the notice of appeal is filed with the supreme court.

G. A court may not enjoin, restrain, stay or delay the application of the true-up mechanism or the collection and remittance of financing revenues. If the final judgment of the superior court, after all appeals are exhausted, requires a modification of any adjustment made under the true-up mechanism, the servicer shall make that modification at the time of and as part of the next periodic adjustment of the financing charges following the final judgment and exhaustion of all appeals through the true-up mechanism.

H. Any adjustments that are made pursuant to the true-up mechanism, any review of the calculations of those adjustments or any action brought to determine whether there has been a mathematical or administrative error in the application of the true-up mechanism shall not affect the irrevocability of the transition property, the financing charges, the financing order, the nonbypassibility of the financing charges and unit financing charges or the nonimpairment pledges prescribed in section 40-610.

I. Regardless of whether financing charges are administered, billed or collected by a servicer that is a public service corporation, the financing charges are not rates or charges imposed or made by a public service corporation for electric service, and the right to receive financing charges and to collect resulting financing revenues is independent of any rate that is established, made or charged by a public service corporation for electric services and the revenues collected thereunder. Financing revenues are the property of the qualified special purpose entity and are not the property of the servicer or any other public service corporation.

J. The servicer, as agent for the qualified special purpose entity, at a minimum semiannually and quarterly during the two-year period preceding the final maturity date of the transition bonds or the final maturity date of the series, class or tranche of the bonds with the latest final maturity date, if more than one series, class or tranche has been issued, shall perform calculations for both of the following:

Estimating whether the existing financing charges and resulting financing revenues are sufficient to provide for timely and complete payment of ongoing financing costs or whether an overcollection or undercollection of financing revenues is projected.
Undertaking the processes used in the true-up mechanism to determine the adjustment to the financing charges projected to correct for any overcollection or undercollection of financing revenues.

K. The qualified special purpose entity or the servicer as agent for the qualified special purpose entity shall file with the commission an informational notice that identifies the adjusted unit financing charges that are to be included on a customer's bills under the transition billing services tariff. This notice shall be provided not later than fifteen days before the date the unit financing charges become effective. The notice shall provide sufficient information to verify the mathematical calculation of the adjusted financing charges and unit financing charges that result from applying the true-up mechanism.

L. If a customer does not pay any unit financing charge, the qualified special purpose entity or the servicer as agent of and in the name of the qualified special purpose entity may bring suit in any court of competent jurisdiction against the customer to collect the unpaid unit financing charges. Reasonable attorney fees and costs shall be awarded to the prevailing party. Commencement of the suit does not affect the calculation of any adjustment that is authorized by the true-up mechanism until and unless net proceeds are recovered and paid to the qualified special purpose entity as financing revenues.

§ 40-609 Public service corporation as servicer; transition billing services tariffs; AAA rating

A. If a servicer is a public service corporation, the public service corporation shall use its resources and systems to perform the duties of a servicer under a transition billing services tariff. The commission has continuing jurisdiction over the terms of a transition billing services tariff that is filed and maintained by a public service corporation.

B. Funds that are collected by a servicer in payment of financing charges, whether under a transition billing services tariff or otherwise, are financing revenues when paid by a customer, and the servicer has no right, title or interest in those revenues other than as agent for the qualified special purpose entity. If a customer pays only a portion of the charges stated on a bill provided by a servicer that includes financing charges, the partial payment shall be first applied to the payment of financing charges.

C. If a servicer fails to make any required payment of financing revenues to a qualified special purpose entity or fails to fulfill its servicing obligations under an applicable transition billing services tariff, the qualified special purpose entity or the holders of the transition bonds may request that the superior court order the sequestration and payment of the financing revenues for the benefit of any financing parties or their assignees and may request any other applicable relief. The order shall remain in full force and effect notwithstanding any bankruptcy, reorganization or other insolvency or receivership proceedings of the servicer or the qualified special purpose entity.

D. If this state, whether through order of the commission or otherwise, allows the billing, collection and remittance by a third party of sums that would otherwise be billed, collected or remitted by a public service corporation that acts as a servicer, the authorization must be consistent with the rating agencies' requirements that are necessary for the transition bonds to receive and maintain an AAA or equivalent rating.

§ 40-610 Transition bonds; irrevocability; public policy; noncompliance

A. On or after the issuance of transition bonds, the transition property, the true-up mechanism and the financing charges are irrevocable, final, nondiscretionary and effective without the need for further action by the commission or any other person, and such financing charges shall not be subject to rescission, alteration, amendment, reduction, impairment or adjustment by further action of the commission or any other person except pursuant to the true-up mechanism, including pursuant to section 40-252.

B. This state, including all agencies, public corporations, municipalities or other instrumentalities of this state, pledges to and agrees with the financing parties, including present and future holders of transition bonds, the applicant, the qualified special purpose entity and any other persons that enter into an ancillary agreement, that after the issuance of transition bonds and until all financing costs which include the principal and interest of transition bonds and all amounts to be paid under an ancillary agreement are fully met and discharged, this state or any agency, public corporation, municipality or other instrumentality of this state may not take or allow any action to be taken to limit, reduce, alter, impair, delay or terminate any of the following:

The rights conferred by this chapter, including the rights in transition property or transition bonds.
The imposition of financing charges and unit financing charges by the qualified special purpose entity.
The operation of the true-up mechanism to adjust financing charges and unit financing charges.
The collection of financing revenues in payment of financing charges and unit financing charges.
The payment of financing costs.

C. It is the intention of this state that the pledges made under subsection B of this section can and will be relied on by the applicant, the qualified special purpose entity, other persons that enter into an ancillary agreement and any financing party. These pledges may be included in transition bonds, ancillary agreements and other documentation related to issuing, rating and marketing the transition bonds.

D. On and after the issuance of the transition bonds, the failure of an applicant or a qualified special purpose entity to comply with this chapter or a financing order does not invalidate, impair or affect the financing order, the transition property, financing charges, transition bonds or financing costs.

E. A financing order, transition property and financing charges are not affected by either of the following:

The bankruptcy, reorganization, sale, dissolution or insolvency of the applicant or the qualified special purpose entity or the successors of the applicant or the qualified special purpose entity.
As to either the applicant, the qualified special purpose entity or the successors of the applicant or the qualified special purpose entity, the commencement of any proceeding for bankruptcy or the appointment of a receiver.

§ 40-611 Financing order; application for rehearing; judicial review

A. A party to the proceeding who is dissatisfied with a commission decision as to an application for a financing order under this chapter or the attorney general on behalf of this state may apply to the commission for rehearing in accordance with section 40-253. The application for rehearing shall be filed not later than twenty days after a commission decision on an application for a financing order. If the commission does not grant the application for rehearing within twenty days after the application is filed, the application is deemed denied.

B. Sections 40-254 and 40-254.01 do not apply to any claims arising under this chapter.

C. Within ten days after a rehearing is denied or granted and not afterwards, a party that files a rehearing application pursuant to subsection A of this section may file, in the superior court in the county in which the commission has its office, an action that seeks to vacate, set aside, affirm in part, reverse in part or remand the commission's decision regarding the financing application. The time for bringing any action authorized by this subsection may not be tolled or extended for any reason.

D. A party that seeks to vacate, set aside or otherwise challenge a financing order or other commission decision under this chapter, in whole or in part, bears the burden of proof. In an action that challenges a financing order or other decision that resulted from an application for an order, relief may be awarded only if the superior court determines, based on clear and satisfactory evidence, that either of the following applies:

The financing order or other commission decision under this chapter is unlawful.
The factual findings made in the financing order or other commission decision under this chapter is unsupported by the application or evidence in the proceeding before the commission.

E. Within sixty days after the filing of the action, the superior court shall hear and issue a decision on the matter. The superior court may extend this time for not more than thirty days for good cause.

F. A party may appeal a decision in an action filed under this section only to the supreme court. The party shall file the notice of appeal within five days after the decision of the superior court in the action. The time for filing the notice of appeal may not be tolled or extended for any reason. The supreme court shall issue a decision on the appeal promptly.

G. Except as otherwise provided by this section, a court in this state does not have jurisdiction to review, enjoin, restrain, suspend, stay or delay any of the following:

A financing order.
The creation of transition property.
The issuance of transition bonds.
The commission's performance of its duties under this chapter.

H. The orders or decrees that are fixed by the commission pursuant to this chapter shall remain in force pending the decision of the court.

§ 40-612 Fees and taxes

Financing charges are not subject to either:

Any assessment of a franchise fee that is imposed by a municipality, county or other local government unit pursuant to a franchise agreement or lawful ordinance.
Taxes that are applicable to services provided by, or rates of, a public service corporation.

§ 40-613 Transition bonds; public debt prohibition; applicant; cooperative

A. Transition bonds are not a public debt, nor a pledge of the faith and credit or taxing power of this state or of any county, municipality, or other local government unit of this state. The approval of a financing order does not obligate this state or any county, municipality or political subdivision of this state to levy any tax or make any appropriation for payment of any financing cost, including the principal and interest on transition bonds. Holders of transition bonds or owners of transition property do not have a right to have taxes levied by this state or the taxing authority of any county, municipality or political subdivision of this state for the payment of the principal of, interest on or premium on transition bonds.

B. Transition bonds are not an obligation of an applicant or a pledge of the assets of an applicant. Approval is not required under section 40-302, or any other provision of law, for the approval of a financing order, for the issuance of transition bonds, or for a sale, assignment or transfer of transition property or an interest in transition property authorized by this chapter. Notwithstanding any other law, a customer that is a cooperative is authorized to include the costs of paying financing charges in the costs it is authorized to recover from persons who use the cooperative's services.

§ 40-614 Transition bonds; legal investments

Transition bonds are legal investments for all governmental units, permanent funds of this state, finance authorities, financial institutions, insurance companies, fiduciaries and other persons requiring statutory authority regarding legal investments.

§ 40-615 Obligations of successor to applicant

Any successor to an applicant, whether pursuant to any bankruptcy, reorganization or other insolvency proceeding or pursuant to any merger or acquisition, sale or transfer or other business combination by operation of law, agreement of the applicant or otherwise, shall perform and satisfy all obligations of and have the same rights and obligations under this chapter or any financing order as the applicant in the same manner and to the same extent as the applicant, including acting as a servicer and collecting and paying to the person entitled to receive the financing charges and financing revenues.

§ 40-616 Choice of law; conflicts with other laws

The laws of this state govern the validity, enforceability, attachment, perfection, priority and exercise of remedies with respect to the creation or transfer of, or of any interest in, transition property, financing charges or financing revenues. If there is any conflict between this chapter and any other law regarding the creation, attachment, transfer, assignment or perfection of, or the effect of perfection on or the priority of any security interest in transition property, financing charges or financing revenues, this chapter governs to the extent of the conflict.

§ 40-617 Effect of invalidity on actions

If all or any part of this chapter is invalidated, superseded, replaced, repealed or expires for any reason, that occurrence does not affect the validity of any prior action allowed under this chapter, whether taken by the commission, a public service corporation, a qualified special purpose entity or any other person, and does not affect transition bonds that were already issued or transition property that was already created.

Chapter 4 Railroads

Article 1 Organization, General Powers and Duties

§ 40-801 Stock subscription required to form railroad corporation

When capital stock of at least one thousand dollars for each mile of a proposed railroad is subscribed by not fewer than five persons who are citizens of the United States, the subscribers, in person or by proxy, may adopt articles of incorporation for the formation of a corporation to construct, own and maintain a railroad, and elect from among themselves not fewer than five nor more than thirteen directors to constitute the first board.

§ 40-802 Articles of incorporation

The articles of a railroad corporation formed under this article shall contain:

Name of corporation.
Duration of corporation, whether permanent or for a stated term of years.
Amount of capital stock. The capital stock shall be divided into shares of one hundred dollars each, and shall be sufficient for the contemplated cost of construction, right of way and rolling stock as estimated by the engineers employed by the corporation.
Names and number of the first directors.
Time and place of the annual stockholders' meeting, the place from and to which the proposed road is to be constructed, the counties into and through which it is intended to pass, and its length as near as can be determined.
Signatures of subscribers. Each subscriber to the articles shall personally, or by his attorney in fact, subscribe his name, place of residence and the number of shares of stock subscribed by him in the corporation.

§ 40-803 Filing and recording articles; commencement of business; amendment of articles to provide for perpetual existence

A. The articles of incorporation of a railroad corporation formed under the provisions of this article shall be filed, published and recorded, and a certificate of incorporation issued, as provided for corporations in general. The incorporation shall be deemed completed and the corporation may commence business upon the issuance of the certificate of incorporation.

B. Articles of incorporation or consolidation of railroad corporations whether incorporated or consolidated under the laws of this state, or under the laws of this state and any other state or states, or any such articles which have been amended, may be further amended by removing any provision limiting the term of the corporation's existence and providing for the permanent existence thereof. The amendment shall be made in the manner prescribed for corporations in general, but the adoption of the amendment shall require, in addition:

Three-fourths of the votes cast at a stockholders' meeting duly called and held for that purpose.
The agreement by the corporation, upon affirmation by three-fourths of the votes cast at the stockholders' meeting, that in consideration of the right granted by the legislature to amend the articles of incorporation to provide for permanent existence of the corporation, it shall be subject to and bound by, the Constitution and laws of this state existing on the date the amendment is adopted.
The filing, recording and publishing of the agreement in the manner required of amendments of corporations in general.

§ 40-804 Organization of board of directors; officers; adoption of by-laws by directors; ratification by shareholders

A. The directors named in the articles of incorporation of a railroad corporation formed under this article shall meet and organize as a board of directors immediately after incorporation. They shall elect a president, secretary and treasurer to serve until the first annual meeting of the stockholders, or until their successors are elected and qualified.

B. The directors shall adopt by-laws which shall provide:

For regular and special meetings of the stockholders, the notice required for the meetings, and by whom special meetings may be called.
For the qualifications of stockholders to vote at the meetings and the right of cumulative voting in the election of directors.
For the qualification and election of officers and directors, for their powers and duties, and for bonds for the faithful performance of their duties.
That no person shall be a director unless a stockholder.
That at least two of the directors shall be residents of this state.
That the stockholders may remove the president or any director, and elect others in their stead, at a meeting where notice of the intended removal has been given and at least two-thirds of the outstanding stock is represented in person or by proxy.

C. The by-laws shall be ratified by a majority of the stockholders at a regular meeting or a special meeting called for that purpose.

§ 40-805 Records required to be kept by secretary

The secretary shall keep:

A record of the meetings of stockholders and directors, of all contracts entered into by the board of directors, and of the assets and liabilities of the corporation.
A stock ledger showing the names and residences of all stockholders, the shares held by each and the actual cash paid therefor.
A stock transfer book.
Other books necessary to show fully the corporate transactions.

§ 40-806 Call for installments on stock subscriptions; notice; action to collect from defaulting subscriber

The directors may make calls on stock subscriptions in installments of not more than ten per cent per month, unless otherwise stipulated in the subscription. Notice of each call shall be given the stockholders by mail, and shall be published once a week, for at least four weeks, in a newspaper published at the principal place of business of the corporation. If the subscriber defaults, action may be brought for collection of the subscription called, or so much of the stock as will be necessary to pay the call and the costs of sale may be sold at public auction in the manner provided in the by-laws.

§ 40-807 Certification by president and secretary of paid-in capital stock

The president and secretary, within thirty days after payment of the last installment of the capital stock as fixed and limited by the company, shall execute a certificate sworn to by them, stating the amount of capital so fixed and paid in, and file it with the corporation commission.

§ 40-808 General powers of railroad corporations

A. Railroad corporations may:

Sue and be sued.
Make contracts.
Acquire by purchase or gift, hold, and convey all property necessary or convenient for the construction, operation and maintenance of railroad and telegraph lines.

B. Generally for the purpose of carrying on their business, railroad corporations shall have all the rights, powers, and privileges of natural persons.

§ 40-809 Specific powers of railroad corporations

A. Railroad corporations may:

Make surveys and select routes for railroad and telegraph lines, and for that purpose, enter upon private and public lands and waters, subject to responsibility for all damage caused thereby.
Lay out the railroad not exceeding two hundred feet wide, and construct and maintain it with single or double track, with facilities the directors deem necessary for the convenient use thereof.
Construct the railroad and telegraph lines across, along or upon any stream of water, water-course, street or highway, or across any railway, canal, ditch or flume which the lines intersect, cross or run along. The corporation shall restore them to their former state as near as possible in order not to impair their use or injure the franchises of others unnecessarily.
Cross, intersect or unite the railroad with any other railroad theretofore constructed at any points on the route thereof, and upon the premises of the other railroad, with the turn-out, sidings, switches and other conveniences necessary to make and complete the intersections and connections. The railroads shall unite in making the intersections and connections and the facilities therefor upon terms agreed upon between them, but, if they are unable to agree upon the compensation therefor, or the points at which, or the manner in which the intersections and connections shall be made, the compensation shall be ascertained and declared in the manner provided by law relating to eminent domain for taking private property for use of such corporations.
Take lands and materials to be used in the construction and maintenance of railroad and telegraph lines in the manner provided by law relating to eminent domain in the event such lands and materials cannot be obtained by agreement with the owners thereof.
Transport persons and property on their railroad and collect compensation therefor.
Take and enjoy by purchase, donation or condemnation as provided by law relating to eminent domain, natural springs and streams of water, or as much thereof as necessary in operating the railroad, together with the right of way thereto for pipes, ditches, canals and aqueducts for transporting the water thereof.
Regulate the speed of locomotives or other machinery used on the railroad, and establish, execute and enforce all useful regulations for management of its trains and business, and for securing the comfort, safety and good behavior of passengers, employees and agents, and for prevention and suppression of gambling on its cars.
Expel from its cars, using no more force than necessary, any passenger who upon demand refuses to pay his fare or who behaves in a rude, riotous or disorderly manner toward other passengers or the employees of the corporation in charge of the cars, or, upon his attention being called thereto, persists in violating the rules of the corporation against gambling on the cars.

B. For the purposes of making embankments, excavations, ditches, drains, culverts and similar works, and of procuring timber, stone, gravel and other materials for the construction and security of the railroad, the corporation may take and occupy as much more land as necessary or convenient for such purposes.

C. If a railroad company's right of way, track or roadbed upon its right of way passes through a canyon, pass or defile, it shall not prevent any other railroad from occupancy and use of the canyon, pass or defile in common with the railroad first located, or the crossing of other railroads at grades. Necessary expenses shall be equitably divided between the railroads occupying and using the same canyon, pass or defile.

§ 40-810 Power to borrow money; issuance of notes and bonds; mortgage of property and franchise; sinking fund to redeem bonds

A. Railroad companies may borrow amounts of money they deem necessary for constructing and completing railroads and may issue and dispose of bonds or promissory notes therefor, in denominations of not less than one hundred dollars, and at a rate of interest not exceeding ten per cent per annum, in an amount not exceeding their capital stock. They may issue bonds or promissory notes in payment of any debts or contracts for constructing and completing railroads with equipment and other property relative thereto.

B. To secure the payment of the bonds or notes, railroad companies may mortgage their corporate property and franchise.

C. The directors shall provide a sinking fund to be applied to the redemption of bonds on or before their maturity.

§ 40-811 Contracting debt exceeding means of corporation to pay; classification; validity of debt

A. Every officer, agent or stockholder of a railroad company, who knowingly assents to or has any agency in contracting a debt by or on behalf of such company, unauthorized by law for the purpose, the amount of which debt with other debts of the company exceeds the means for payment of its debts available, in its possession, under its control and belonging to it at the time such debt is contracted, including its bona fide and available stock subscriptions and exclusive of its real property, is guilty of a class 2 misdemeanor.

B. The validity of the debt as against the company is not affected by the provisions of subsection A.

§ 40-812 Extension of lines; purchase of property and franchise of another railroad company; sale of property; limitations; consolidations; exceptions

A. Any railroad corporation operating in this state may extend its line of railroad into or through any other state or foreign country, and may purchase or lease the property of any railroad company incorporated under the laws of this state, or of any other state or foreign country, with all the rights, privileges or franchises pertaining thereto, or may buy the stocks and bonds, or either, of any such company.

B. Any railroad company of this state may, with the consent of the holders of two-thirds of its capital stock given by a vote at a meeting or consented to in writing, sell or lease its railroad, franchises and appurtenances to any other railroad corporation.

C. No purchase or lease under this section shall be entered into unless the railroad purchased or leased, or the railroad company whose stock is purchased, shall, when constructed, form a branch of, or a continuous line with the railroad of the purchasing company, either by direct connection therewith, or through an intermediate line or lines, constructed or to be constructed, which the first railroad company owns, leases or has the right by contract or otherwise to use or operate, provided that:

Upon the purchase of any railroad the corporation purchasing it shall assume all the liabilities and obligations existing at the time of the purchase against the railroad purchased.
When a railroad is purchased under or by virtue of a sale under an execution, or by virtue of a decree of any court, the purchase shall be subject to obligations provided for by the judgment or decree, and no other, and at the judicial sale a railroad corporation incorporated in any state may be the purchaser.

C. Railroad corporations may consolidate their capital stock, properties, liabilities, and assets of every kind upon terms and in any manner agreed upon by their respective boards of directors. No consolidation shall take effect until it has been ratified and confirmed in writing by stockholders of the respective corporations representing three-fourths of the subscribed capital stock of the respective corporations. In case of consolidation, articles of incorporation and consolidation shall be prepared, setting forth:

The name of the new corporation.
The purpose for which it is formed.
The place where its principal business is to be transacted.
The term for which it is to exist, whether permanent or for a stated term of years.
The number of its directors, which shall not be less than five nor more than thirteen, and the names and residences of the persons appointed to act as directors until their successors are elected and qualified.
The amount of its capital stock, which shall not exceed the amount actually required for the purposes of the new corporation, as estimated by competent engineers, and the number of shares into which it is divided.
The amount of stock actually subscribed, and by whom.
The termini of its road and branches.
The estimated length of its road and branches.
That at least ten per cent of its subscribed capital stock has been paid in.
The names of the constituent corporations and the terms and conditions of consolidation in full.

D. The articles of incorporation and consolidation shall be signed and countersigned by the presidents and secretaries of the constituent corporations and sealed with their corporate seals. There shall be annexed thereto memoranda of the ratification and confirmation thereof by the stockholders of each corporation, signed by stockholders representing at least three-fourths of the capital stock of the respective corporations. The articles shall be filed and recorded as other railroad corporation articles, and thereupon the constituent corporations named therein shall become extinct, and the new corporation shall succeed to all their capital stock and properties and be entitled to possess, enjoy and enforce them as fully and completely as either constituent might have done had no consolidation taken place, and shall be subrogated to all contracts and liabilities of the constituent corporations.

E. This section shall not apply to competing lines of railroads starting from and terminating at the same points within this state.

§ 40-813 Organization of new corporation on sale at foreclosure; powers

A. When property of any railroad corporation located in this state is sold by virtue of a mortgage or deed of trust, pursuant to a judgment, or by virtue of an execution, the purchasers at the sale may acquire the property sold, together with other property and franchises of the corporation in this state, or elsewhere. The purchasers may become a corporation, with power to own, operate and enjoy the properties and franchises acquired by the purchase upon filing and recording articles of incorporation as a railroad corporation. The purchasers shall state in the articles the corporation whose property or part of whose property they have acquired, the court by whose authority the sale was made, the date of the judgment or decrees authorizing or directing the sale, a brief description of the property sold, and the plan or agreement entered into in anticipation of the formation of the new corporation and pursuant to which the purchase was made.

B. Such corporation shall succeed to the rights, privileges and franchises of the corporation whose property it purchased, and shall be subject to such liabilities, regulations and restrictions, and possess such rights, as are granted or imposed by law upon other similar corporations incorporated under the laws of this state.

§ 40-814 Duty of railroads to transport; liability for failure; exceptions

A. Railroad corporations shall:

Start and run cars for the transportation of persons and property at regular and fixed times.
Furnish sufficient accommodations for all persons and property which, within a reasonable time previous to the time of departure, are offered for transportation at the place provided for taking and leaving persons and property.
Transport between such places persons and property upon the payment of lawful charges therefor.

B. If a railroad corporation refuses or fails to transport persons or property as required by this section, or to leave the persons or property at the places of destination, it shall be liable to the party aggrieved for damages thereby sustained.

C. Railroad corporations may decline to receive any person who is intoxicated, afflicted with contagious disease, or otherwise unfit to be admitted into its cars.

§ 40-815 Establishment or maintenance of employee association involving compulsory membership or waiver of rights prohibited

A person operating a railway in this state shall not establish or maintain a relief association or society the rules or by-laws of which require any employee to become a member thereof, or to enter into an agreement or stipulation, directly or indirectly, whereby the employee stipulates or agrees to surrender or waive any right of damage for personal injuries or death, or agrees to surrender or waive, in case he asserts such claim for damages, any right whatever. Any such agreement or contract signed or entered into by such person is void.

Article 2 Rights of Way and Acquisition of Land

§ 40-831 Right of way through public lands; appropriation of water

A. The right of way for railroad and telegraph lines to the width of one hundred feet on each side of the center line of the track is granted to railroad corporations over and through any of the lands belonging to the state.

B. Where deep excavations, heavy embankments or other cuttings, ditches, drains, canals, culverts or other structures to protect the roadbed and to facilitate its use and enjoyment are required for the grade or other uses, at such places a greater width of lands may be taken by the corporation and is granted to it not exceeding in addition five hundred feet in width, and the right is hereby further granted to the corporation to locate, occupy and hold as much of the lands as necessary for sites and grounds for watering places, stations and other buildings or structures along the line of the railroad necessary for the operation thereof.

C. Such corporations may appropriate as much of the waters of any springs or streams on the lands as necessary to operate the lines, together with a right of way over the lands to the springs and streams for the pipes, ditches, aqueducts or other conduits, subject to the laws of the state.

§ 40-832 Right of way through lands of persons under disability

If it is necessary for any of the purposes enumerated in this article for a corporation to acquire land, estate or right therein, which is the property of the estate of an infant, insane person or deceased person, the personal representative may sell and convey the land, estate or right to the corporation, when approved by the judge of the superior court having jurisdiction thereof. The judge of the court shall examine into the terms and conditions of the sale and conveyance, and if just, fair and proper, shall enter an order of approval and endorse the approval upon the conveyance. Thereupon the conveyance shall have the same force and effect as conveyances made by persons competent to convey in their own right.

Article 3 Safety

§ 40-841 Duty of commission to prescribe standards of safety and safety devices

For the purpose of protecting the health and safety of employees of railroads, the Arizona corporation commission shall prescribe standards of safety and safety devices requiring:

Installation and maintenance by railroads of electric marker warning lights on the rear of all trains with sufficient candle power to be visible at a distance of three thousand feet under ordinary atmospheric conditions.
Installation and maintenance by railroads of adequate electrical lighting within cabooses for clerical work.

§ 40-842 Service of complaint; answer; hearing; intervention

When an employee files a complaint with the commission charging violation of regulations of the commission, or the commission upon its own initiative issues a complaint, the person complained of shall be served with a copy thereof and shall, within twenty days, file a written answer with the commission. Within ten days after the answer is filed the commission shall set a date for hearing the complaint at a place convenient to both the complainant and the person complained of. The commission may, in its discretion, permit any interested person or organization to intervene. A party to the hearing may appear and be heard in person or by his representative, and may examine or cross-examine witnesses or present other evidence. On motion of a party, the commission may allow a continuance of not to exceed thirty days.

§ 40-843 Order of decision upon hearing; allowance of time for compliance with order; review of order by superior court; appeal

A. Within forty-five days after conclusion of a hearing held under the provisions of this article, the commission shall issue an order dismissing the complaint or requiring compliance with a regulation of the commission. The commission may, in its discretion, allow the employer not to exceed forty-five days within which to comply with an order.

B. Upon petition any order of the commission shall be reviewed by the superior court of the county in which the place of employment is located, and in such action the chairman of the commission shall be the defendant. The decision of the superior court may be appealed to the supreme court.

§ 40-844 Enforcement of article; compliance with commission regulations and orders

A. All persons engaged in the operation of railroads shall comply with any regulation or order of the commission issued under the provisions of this article, and to furnish any information required by the commission for purposes of this article.

B. The commission or its authorized agent may, during reasonable hours, enter the place of operation of any person engaged in the operation of railroads for the purpose of ascertaining whether the standards prescribed under this article are being complied with.

§ 40-845 Violation; penalty; action to collect penalty

A. Any person failing to comply with an order or regulation of the commission authorized by this article shall be liable to a penalty of twenty-five dollars for each day of noncompliance.

B. The attorney general shall file an action on behalf of the state for any unpaid penalty within one year after the penalty accrues.

C. Any common carrier railroad which is unable on or before January 1, 1956, to equip its cabooses as prescribed in this article may apply to the corporation commission for an extension of time. The commission may grant additional time, not to exceed nine months from January 1, 1956, and during such period the common carrier railroad shall not be subject to the fine prescribed by this section.

§ 40-846 Electric headlights; violation; penalty

A. Every railroad corporation, or receiver or lessee thereof, shall equip its locomotives used in the transportation of trains over the railroad, except locomotives regularly used in switching cars or trains, with electric headlights of not less than fifteen hundred candle power measured without the aid of a reflector.

B. Any railroad company, or receiver or lessee thereof, doing business in this state, which violates the provisions of this section is liable to the state for a penalty of not less than one hundred nor more than one thousand dollars for each offense.

C. Action shall be brought to recover such penalty in a court of competent jurisdiction in the name of the state by the attorney general or by the county attorney of any county in or through which the railroad is operated.

§ 40-847 Bells on locomotives; violation; penalties

A. Each railroad corporation shall equip its locomotives with a bell weighing not less than twenty pounds.

B. Any railroad corporation which fails to comply with subsection A of this section is liable for a penalty of one hundred dollars which shall be recovered by an action filed by the attorney general in the name of the state.

C. The amount recovered shall be paid as follows:

One half thereof to the informer, if there is an informer as determined by the court in which the action is filed.
One half thereof shall be deposited, pursuant to sections 35-146 and 35-147, under direction of the court.

D. In addition to the penalty provided by subsection B of this section, the corporation shall be liable for all damages sustained by any person for failure of the corporation to comply with subsection A of this section.

E. A separate action may be filed for each violation of subsection A of this section.

§ 40-848 Automatic bell ringer required; violation; classification

A. It is unlawful for any railroad to operate on its tracks within the state an engine not equipped with an automatically operated bell ringer for ringing the bell on the engine, which will cause the bell on the engine to continue to ring after being set in motion by the engineer or fireman. The device for starting or stopping the bell ringer shall be placed in a position where it can be operated by the engineer or fireman from his usual position in the cab.

B. A railroad violating this section is guilty of a petty offense for each day that any locomotive engine is used in violation of this section, but if any ringer becomes out of order while the engine in which it is installed is in use, the engine may complete its trip.

§ 40-849 Transportation of employees; equipment required; violation; classification; time to comply

A. It is unlawful for an owner or operator of a common carrier railroad to transport its employees in, or for such purpose to furnish its employees with, a rail motor car not having the following equipment:

A transparent windshield made of safety glass or plastic and sufficient in width and height to afford reasonable protection.
A suitable mechanically operated device that will remove rain, snow and sleet from such windshield.
An electric head lamp of sufficient candle power to render visible under ordinary atmospheric conditions at a distance of three hundred feet any obstruction, landmark, warning sign or grade crossing on the railroad right of way.
At least one electric red lamp on the rear of such motor car with sufficient candle power to be visible at a distance of three hundred feet under ordinary atmospheric conditions.

B. The head and rear lights provided for in subsection A shall only be required during the hours between one-half hour before sunset and one-half hour after sunrise.

C. A common carrier railroad which is unable, on or before July 3, 1955, to equip its rail motor cars as prescribed by subsection A may apply to the corporation commission for an extension of time to do so. Upon a showing of good cause, the commission may grant additional time, not to exceed one year from July 3, 1955, to an operator or owner of a common carrier railroad within which to equip its rail motor cars as prescribed by subsection A. When extension of time is granted, the penalty provisions of subsection D shall not be applicable to such carrier during the period of the extension.

D. Any owner or operator of a common carrier railroad who operates for or furnishes its employees with a rail motor car which is not equipped as prescribed by subsection A shall be guilty of a petty offense. Each day or part of a day a rail motor car not so equipped is operated or furnished its employees constitutes a separate offense.

§ 40-852 Allowing engine or car to remain upon public crossing; classification

An engineer, conductor or other employee or officer of a railroad company who permits a locomotive or cars to be or remain upon the crossing of a public highway over such railway so as to obstruct travel over the crossing for a period exceeding fifteen minutes, except in cases of unavoidable accident, is guilty of a class 2 misdemeanor.

§ 40-854 Failure to warn at public crossing; classification

A person in charge of a railroad locomotive who before crossing any traveled public way omits to cause the bell to ring or a whistle, siren or other sounding device to sound at a distance of at least eighty rods from a crossing and until it is reached, is guilty of a class 2 misdemeanor.

§ 40-855 Violation of duty by railroad officer or employee; classification

An officer, agent or servant of a railroad company who is guilty of any criminally negligent violation or omission of his duty as such officer, agent or servant, whereby human life or safety is endangered, the punishment of which is not otherwise prescribed, is guilty of a class 2 misdemeanor.

§ 40-856 Railroad police; powers; qualifications; liability of company

A. Any railroad company may appoint one or more persons to be designated by such railroad company as railroad police to aid and supplement the law enforcement agencies of this state in the protection of railroad property and the protection of the persons and property of railroad passengers and employees. While engaged in the conduct of this employment, each railroad policeman so appointed shall possess and exercise all law enforcement powers of peace officers in this state.

B. Any person appointed by a railroad company to act as a railroad policeman under the provision of subsection A of this section shall first have the minimum qualifications established for peace officers and police officers pursuant to section 41-1822. The railroad company shall file the name of each such railroad policeman, on the date of the peace officer's appointment, with the Arizona peace officer standards and training board. If the proposed railroad policeman meets the minimum qualifications established under section 41-1822, the Arizona peace officer standards and training board shall issue the appointee a certificate of authority to act as a peace officer and may thereafter revoke such certificate for good cause shown.

C. Each railroad company appointing any railroad police shall be liable for any and all acts of such railroad police within the scope of their employment. Neither the state nor any political subdivision shall be liable for any act or failure to act by any such railroad policeman.

Article 4 Crew Requirements

§ 40-881 Train crew requirements

A. A passenger, mail or express train composed of less than six cars, when operated outside yard limits shall carry a crew consisting of not less than one engineer, one fireman, one conductor and one flagman. This subsection shall not apply to gasoline motor cars.

B. A passenger, mail or express train composed of six or more cars, when operated outside yard limits on main line tracks, shall carry a crew consisting of not less than one engineer, one fireman, one conductor, one flagman, and one brakeman. When such train is operated outside yard limits on branch lines (including the use of main lines where necessary to reach initial or final terminals of branch lines) it shall carry a crew consisting of not less than one engineer, one fireman, one conductor, and one brakeman.

§ 40-882 Train crews; penalty for violation of full crew requirements

A. It is unlawful for any railroad company, or for the receiver of such company, to run upon any railroad or any part thereof within this state, any train, locomotive or engine which does not carry for use in its operation, a full crew as provided by section 40-881.

B. Each railroad company or receiver who runs upon any railroad or any part thereof within this state, any train, locomotive or engine which does not carry in its operation a full crew as provided by section 40-881, is liable to the state for a penalty of not less than one hundred dollars for every such offense.

C. All actions for penalties to be recovered under this section shall be brought and prosecuted to judgment in the name of the state, as plaintiff, in a court of competent jurisdiction in the county of Maricopa, or in any county in the state into or through which the defendant's railroad line is operated, and the action shall be brought and prosecuted by the attorney general or under his direction, or by the county attorney of any such county.

§ 40-883 Exceptions to full crew requirements

A. Nothing contained in sections 40-881 and 40-882 shall apply:

To relief or wrecking trains when a sufficient number of persons are not immediately available to comply with those sections.
To any railroad less than forty miles long, including all of its operated lines.
When trains have been sent out or started at the last division point with the requisite number of employees, but, owing solely to disability or refusal of one or more of the employees to act, the train is left with less than a full crew.

B. No baggage master shall be required in the operation of a train upon which baggage is not carried.

§ 40-884 Train dispatcher; age and experience; violation; classification

A railroad company or corporation operating a line of railroad within this state, which employs or permits any person to act as telegraph operator for the purpose of receiving or transmitting messages, orders or other instructions governing or affecting the movement of a train unless the person is at least eighteen years of age and has had not less than one year experience as a telegraph operator, is guilty of a petty offense.

§ 40-886.02 Featherbedding

It is the policy of the people of the state of Arizona that featherbedding practices in the railroad industry should be eliminated and that national settlement of labor controversies relating to the manning of trains should be made effective in Arizona. Accordingly, the award of the federal arbitration board no. 282 appointed by President John F. Kennedy pursuant to Congressional Public Law 88-108 of August 28, 1963, providing for the elimination of excess firemen and brakemen on diesel powered trains, or awards made pursuant thereto, shall be made effective in this state. Said award was the culmination of the proceedings originating with the presidential railroad commission which was appointed by President Dwight D. Eisenhower at the request of both railroad labor and management and which reported to President Kennedy on February 26, 1962. Nothing contained in the laws of this state shall prevent a common carrier by railroad from manning its trains in accordance with said award, in accordance with any federal legislation or awards pursuant thereto, or in accordance with any agreement between a railroad company and its employees or their representatives.

Chapter 5 Unclaimed Freight or Baggage Held by Common Carrier

Article 1 In General

§ 40-1001 Unclaimed freight or baggage

When any freight or baggage comes into possession of a common carrier, and is unclaimed or cannot be delivered, the carrier shall safely keep it as a warehouseman for three months, unless it is perishable or liable to depreciate in value by keeping, and the carrier shall be entitled to a reasonable compensation for storage thereof.

§ 40-1002 Sale; notice; posting and publication

A. At the expiration of the three months period as provided by section 40-1001, the carrier may sell the freight or baggage at public auction for cash, at the place of delivery, or at the county seat of the county in which the place of delivery is located, after ten days public notice.

B. Notice may be given by one publication at least ten days prior to the date of the sale in a newspaper of general circulation published in the city or town where the sale is to take place, or if there is no such newspaper published at the place of sale, then in the newspaper published nearest thereto, and by posting notices in three conspicuous places at the place of sale for at least ten days next preceding the date of the sale.

C. The notice shall contain a general description of the freight or baggage to be sold, the check number and the name of the consignee, name of the consignor, and the place where shipped from, if known, and the amount of unpaid charges thereon, if any, and the time, place and terms of sale.

§ 40-1003 Inspection; record of sale

A. In order to prepare the notice and make the sale, the carrier shall open each package and inspect the contents thereof, which shall be exposed at the time of sale.

B. A true record of the sale shall be kept, including a copy of the notice.

§ 40-1004 Proceeds of sale; disposition

A. The proceeds of the sale shall be paid, less the expenses of sale and the carrier's charges, upon demand and proof of ownership made by the owner to the carrier at any time within sixty days after the sale.

B. If the proceeds of the sale are not claimed by the owner within sixty days, they shall be deposited into the treasury of the county in which the sale takes place, and if not claimed by the owner within one year thereafter, they shall be paid into the general fund of the county.

§ 40-1005 Perishable freight or baggage

A. If unclaimed freight or baggage is perishable or liable to depreciate in value by keeping, and that fact appears to the carrier, it may be sold forthwith and without notice at the places provided by section 40-1002.

B. The proceedings after such sale shall be the same as provided for nonperishable freight and baggage.

Chapter 6 Urban Mass Transportation Systems

Article 2 Metropolitan Public Transit Authorities

§ 40-1111 Definitions

In articles 2, 3 and 4, unless the context otherwise requires:

"Authority" means a metropolitan public transit authority organized under this article.
"Board" means the board of directors of a metropolitan public transit authority.
"Director" means a member of the board of directors.
"Metropolitan public transit authority" means a political subdivision organized solely to provide necessary plants, equipment, work instrumentalities, and real and personal property and rights thereto, which are used or useful for the transportation of passengers for hire on scheduled routes.
"Municipality" means any incorporated city or town.
"Operating area" means the area within which the authority provides transportation service, the boundaries of which shall be established in accordance with this article.
"Public agency" includes the state of Arizona and any county, city, town, district or other public agency or entity created under the laws of this state or the federal government.
"Public transit" means the local transportation of passengers and their incidental baggage on scheduled routes by means of a conveyance on an individual passenger fare-paying basis, and excluding transportation by a sightseeing bus, taxi or any vehicle not operated on a scheduled route basis. Nothing in this paragraph shall be construed to prohibit the authority from providing school bus services for transportation of pupils between their place of residence and school.

§ 40-1112 Qualifying bodies which may form authority; purposes

A. A metropolitan public transit authority may be formed by any of the following:

The governing body of a municipality, the population of which is not less than fifty-one per cent of the proposed area of the authority.
The governing bodies of more than one municipality acting jointly in a county, the combined population of which are not less than fifty-one per cent of the proposed area of the authority.
The board of supervisors of a county if the population of the unincorporated areas of such county within the proposed authority area and the population of any one or more contracting municipalities when combined is not less than fifty-one per cent of the population of the county.

B. Such an authority may acquire, own and operate a metropolitan public transit system including all appurtenances thereof in the area of the authority.

§ 40-1113 Procedures required to organize an authority

A. A metropolitan public transit authority shall be organized and incorporated in the following manner:

The governing body of a municipality or county or the governing bodies of more than one municipality or county may pass an ordinance or ordinances declaring that the public convenience and necessity require the incorporation of a metropolitan public transit authority. Such ordinance shall state that it is proposed to incorporate the authority under the provisions of this article and shall include the name of the municipalities or counties, the area or portion of whose area is to be included within the operating area of the authority and a description of the unincorporated area of the county to be included within operating area of the authority. The ordinance shall have no force and effect unless the proposed contracting municipalities and counties described in such ordinance and qualified to participate shall have approved participation by ordinance or resolution similarly worded.
The articles of incorporation of a metropolitan public transit authority shall set forth:

(a) The name or names of the originating municipalities or counties.

(b) The name of the metropolitan public transit authority and the area to be served by such authority.

(c) A statement that permission to organize the authority has been granted by resolution duly adopted by the governing body of the initiating municipalities or counties the area or a portion of the area of which is to be included and the date of adoption of such resolution.

B. The articles of incorporation of an authority, any deeds or other documents by which properties are conveyed to the authority, and any mortgages executed by the authority shall be filed for record with the secretary of state.

§ 40-1114 Authority subject to law and regulations; nonprofit status

A. An authority shall be subject, in the operation of its transportation facilities and equipment, to the laws and regulations of the state of Arizona and of the applicable municipalities relating to traffic and operation of vehicles on the streets and highways of the state and of the municipalities.

B. The corporation shall be a nonprofit enterprise, and no part of its net earnings remaining after payment of its expenses shall inure to the benefit of any individual, firm or corporation.

§ 40-1115 Inclusion of additional areas

Additional areas may be included within the boundaries of the authority and become a part of such authority. If a petition for the inclusion of additional territory signed by at least fifty-one per cent of the qualified electors who reside within the limits of the additional territory is filed with the authority, such additional territory may be included in the authority by resolution of the board. Whenever any area shall be annexed or consolidated with a municipality which is a part of and otherwise completely within the boundaries of the authority organized as provided by this article, such annexed or consolidated area shall, by virtue of its annexation or consolidation to such municipality, become and be a part of the authority.

§ 40-1116 Judicial review of action of municipality or county

A party aggrieved by the act of a municipality or county in forming a metropolitan transit authority may, not later than twenty days after passage of the ordinance to incorporate the authority, bring an action in superior court in the county in which the authority is formed to set aside the action of the municipality or county.

§ 40-1117 Condemnation privilege

The authority may use the provisions of law relating to eminent domain. No provision for eminent domain given to the authority by this section or by any provision of law may be exercised against property or any franchise of a common carrier of passengers when a territory is being adequately served by such common carrier of passengers under authority of law. Such condemnation proceedings shall only be applicable to property located within the area of the authority.

§ 40-1118 Exemption from taxation

A. The title to all property acquired under the provisions of this article shall immediately and by operation of law vest in such transit authority, in its corporate name, and is dedicated and set apart for the uses and purposes set forth in this article, and shall be exempt from all taxation, including sales, gross receipts, motor vehicle registration fees, and any use taxes, provided the authority shall not be authorized to acquire title to any property other than property used for transportation purposes or directly connected therewith.

B. Bonds issued pursuant to article 4 of this chapter, their transfer and income therefrom shall at all times be free from taxation within the state.

Article 3 Organization and Powers of Metropolitan Public Transit Authority

§ 40-1121 Board of directors of authority; qualifications; appointment; terms; oath; meetings; compensation

A. All powers, privileges and duties vested in a metropolitan public transit authority shall be administered by a board of directors consisting of at least five and not more than eleven members. Each member shall be a resident of the area covered by the authority. The initial board shall consist of five members as appointed by the governing body or bodies of the originating municipalities or counties. If the authority is organized by more than one municipality or county the initial board shall be appointed by the governing bodies of such municipalities or counties with each such municipality or county having five votes for such selections. Such vote may be cast by a municipality or county for one member or may be divided among any number of prospective appointees, not exceeding five. The governing bodies of any such municipalities or counties in making such appointments shall provide for equal representation on a population basis to all areas within the operating area except each municipality or county the area or a portion of the area of which is included within the authority shall have at least one resident as a member of the board. The initial board shall serve until January 1 of the year succeeding the next general election of the state. The term of office of all elected boards of directors shall be four years. Each four years an election shall be held for the purpose of voting for members of the board and the election shall be held at such time and conducted in such manner as prescribed by the governing body or bodies of the originating municipalities or counties. Appointment to fill a vacancy caused other than by expiration of term shall be made by resolution of the board, upon nomination of the governing body or bodies of the municipalities or counties entitled to representation on the board.

B. At least twelve weeks preceding the date of the next state general election the governing body or bodies of the originating municipalities or counties shall call an election to be held for the succeeding board of directors. The call for election shall specify the number of directors to be voted for and what areas each is to represent. The governing body or bodies calling the election shall provide for equal representation on a population basis to all areas within the operating area except each municipality, county, or portion thereof if all the municipality or county is not within the authority, shall have at least one resident as a member of the board. The governing body or bodies calling the election shall prescribe the manner in which candidates of the board of directors shall qualify in order to have their names printed on the ballots.

C. The governing body or bodies calling the election shall set the day for the election to be held, which day shall be not less than six weeks after the call of the election. Notice of the election must be published once in a daily or weekly newspaper of general circulation within the boundaries of the authority. The election shall be held as nearly as possible in conformity with the general election law. The governing body or bodies shall meet within thirty days following the election to canvass and to certify the results of the election. Only qualified electors residing within the boundaries of the authority on the date of the election shall be entitled to vote at such election. Electors may only vote for qualified candidates to represent the area in which such electors reside.

D. The governing body or bodies calling the election may provide that the election shall be held on the same date as the next state general election. It may require the board of supervisors of the county or counties in which the authority is located to conduct the election for the board of directors in conjunction with its holding of the next state general election. The election shall be held at the same polling places and conducted by the same election officials as at the state general election, but separate ballots shall be used and those offering to vote shall sign an affidavit relating to their qualification to vote in the election for the board of directors. In the event the county sustains any additional expense above the normal expenditures incurred in connection with the general election the authority shall reimburse the county for such additional expenditures.

E. Each director, before entering upon the duties of his office, shall take the oath of office, a copy of which shall be filed with the secretary of state and a copy thereof with the secretary of the authority.

F. The initial meeting of a board shall be held at the time and place fixed by the governing body or bodies creating the authority, and at this first meeting shall elect from among its membership a president, a vice-president and a secretary, each of whom shall serve in such capacity for a period of two years.

G. A majority of all members of the board shall constitute a quorum for the transaction of business.

H. Directors shall each receive twenty-five dollars a day for attendance at board meetings, but not to exceed fifty dollars in one calendar month, and shall be reimbursed for travel to and from such meetings at the rate of ten cents per mile.

§ 40-1122 Powers and duties of the board

A. The board of directors shall:

Be the governing body of the authority and, in compliance with the provisions of this article, shall determine all questions of policy of the authority.
Fix the time and place at which its regular meeting shall be held, and shall provide for the calling and holding of special meetings.
Determine what transportation facilities should be acquired or constructed to provide the standards of public service determined by it to be necessary and reasonably supportable.
Fix the location of the principal place of business of the authority and the location of all offices and departments.
Supervise and regulate every transportation facility owned and operated by the authority, including the fixing of routes, rates, fares, rentals, charges and classifications thereof, and the making and enforcement of rules, regulations, contracts, practices, and schedules for or in connection with any transportation facility owned or controlled by the authority. The board shall establish such policies, insofar as practical, so as to result in revenue which will make the authority self-supporting.
Prescribe by resolution a system of business administration and create any and all necessary offices and positions of employment, and select and employ, and establish and reestablish, the powers, duties and compensation of all officers and employees, prescribe the periods, terms and conditions of their employment, and require and fix the amount of all official bonds necessary for the protection of funds and property of the authority.
Cause a semiannual audit to be made on all books and accounts of the authority by an independent certified public accountant.
As soon as practical after the close of each fiscal year, submit to the chief administrative officer and the governing body of any city and any county whose area or a portion thereof is within the authority a financial report showing the result of operations during the preceding fiscal year and the financial status of the authority on the final day thereof. Copies of the report shall be supplied to the general public upon request and shall be published in the newspaper having the largest circulation in the authority.

B. The board of directors may:

Contract and take all actions and proceedings and do any and all other things necessary to carry out the purposes of this article.
Contract for or employ any professional services required by the authority or for the performance of work or services for the authority, which, in the opinion of the board, cannot satisfactorily be performed by the officers or the employees of the authority.
Adopt bylaws to govern the operation of the authority.
By resolution, delegate and redelegate to officers of the authority power to employ clerical, legal and engineering assistance and labor, and, under such conditions and restrictions as shall be fixed by the directors, power to bind the authority by contract.
Provide by resolution, under such terms and conditions as it sees fit, for the payment of demands against the authority without prior specific approval thereof by the board if the demand is for a purpose for which an expenditure has been previously approved by the board in an amount no greater than the amount so authorized, and if the demand is approved by the general manager or such other officer or deputy as the board may prescribe.
On behalf of the authority borrow money and issue bonds.

§ 40-1123 Officers and employees of authority

A. Officers of an authority may consist of the board of directors, and a general manager, a general counsel, a treasurer and a comptroller, as may be appointed by the board of directors to serve at the pleasure of the board. All other officers, deputies and employees shall be appointed by the board or its designee.

B. The oath of office of all officers appointed by the board of directors or by the general manager of the authority shall be taken, subscribed, and filed with the secretary of the authority any time after the officer has notice of his appointment but not later than fifteen days after the commencement of his term of office. No other filing shall be required.

C. The general manager shall serve full time.

D. The general counsel shall be a person admitted to practice law in the state of Arizona and shall have been engaged in the practice of law for not less than seven years next preceding his appointment.

E. The person appointed comptroller shall have been actively engaged in the practice of accounting for not less than three years next preceding his appointment.

F. The treasurer shall be the custodian of the funds of the authority and shall make payments only upon warrants duly and regularly signed by the president or vice president of the board or other person authorized by the board so to do, and by the secretary or general manager. The treasurer shall keep an account of all receipts and disbursements. The treasurer shall furnish, at the expense of the originating political subdivision or subdivisions, a bond in the amount of fifty thousand dollars. The bond shall be conditioned upon the proper discharge of the powers and duties by the treasurer in accordance with the provisions of this article. The bond shall be approved by the attorney general and the board of directors of the authority and kept on file in the office of the board of directors.

§ 40-1124 General powers of an authority

A metropolitan public transit authority may:

Sue and be sued.
Adopt a corporate seal.
Take by grant, purchase, bequest, devise, or lease, and hold, enjoy, lease, sell, encumber, or otherwise dispose of real property or personal property of every kind within the purview of authority.
Make contracts and enter into stipulations of any nature whatsoever, including without limitations the generality of such contracts and stipulations to indemnify and save harmless, and to do all acts necessary and convenient for the full exercise of the powers granted in this article and may contract with any department or agency of the United States or the state of Arizona or with any public agency or private person, firm or corporation upon such terms and conditions as the board of directors may determine in the best interests of the authority.
Insure against any accident to or destruction of the system or any part thereof, and against loss of revenues from any cause whatsoever against public liability or property damage, or both, or against all other types of events, acts or omissions.
Provide a public transportation system using the roadways of the areas served by the authority for the transportation of passengers and their incidental baggage.
Acquire, contract for, lease, construct, own, operate, control or use rights of way, facilities and works for monorails, bus lines, stations, platforms, yards, terminals, parking lots and any and all other facilities necessary or convenient for public transportation service within or partly within the boundaries of the authority, whether underground, upon, or above the ground, and under, upon, or over public streets, highways, bridges, viaducts, or other public ways or waterways, together with all physical structures necessary or convenient for access for persons or vehicles thereto, and to acquire or contract for any interest in or rights to the use or joint use with a municipality or another authority of any or all of the foregoing, provided that installations in streets of a municipality or county or on the state highways or freeways shall be subject to approval of the state highway commission or governing body of the municipality or county. It shall be presumed that the use of the streets, highways, freeways and other public places by the authority for any purposes permitted under this article constitutes no greater burden on the adjoining properties than the uses existing as of the effective date of this article. If the facilities, other than state highways or freeways including streets, highways, lines, sewers, water mains, storm drains, poles, communications wires, of another public agency, of the state, or of a private owner must necessarily be relocated, replaced, or altered in order for the authority to construct or operate its system, or if the construction or operation by the authority of its system makes necessary the relocation, replacement or alteration of any such facilities of another public agency, of the state, or of a private owner in order to maintain the functioning of such facilities at their previous level of service, such facilities shall be relocated, replaced or altered within reasonable promptness by the respective public corporation, state or private owner, and the authority shall by prior agreement reimburse such public corporation, state or private owner for the actual cost necessarily incurred in such relocation, replacement or alteration. The authority may enter into an agreement with any city or county having jurisdiction over the street or highway involved, and, as may be provided in such an agreement, may close any such street or county highway at or near the point of its inception with any facility of the authority or may make provision for carrying such city street or county highway over or under or to a connection with such facility of the authority and may do any and all work on such city street, or county highway as is necessary. No city street or county highway shall be closed, either directly or indirectly, by construction of facilities of the authority except pursuant to such an agreement, or temporarily while necessary during the construction of such facilities.
Operate such feeder bus lines and other feeder services as necessary.
Collect revenues and monies of a public nature or from other sources as provided for in this article.
Borrow money and issue bonds.

§ 40-1125 Cooperation with state or other agencies

An authority may cooperate with and enter into agreements with the state of Arizona or any public agency for the acquisition, construction, improvement, completion, maintenance, operation or repair, joint or otherwise, and in whole or in part, of public transportation facilities and equipment, and for study and planning thereof. In connection with any such cooperation or contract, the state or any public agency may make public contributions to the authority as in the judgment of the legislature, or the governing board of the agency, are necessary or proper for its undertaking, and the authority may reimburse the state or public agency for any such advance or contribution from the proceeds of the sale of bonds or any other funds available to the authority. The state or any public agency may also authorize, aid and assist the authority to carry out any activity which the state or public agency is by law authorized to perform and carry out in its own behalf.

§ 40-1126 Cooperation with federal government

An authority may contract for and cooperate with and may accept grants, contributions, or loans directly through the sale of securities or equipment, trust certificates, or otherwise, from the United States, or any department, instrumentality, or agency thereof, for the purpose of financing the acquisition, construction, improvement, maintenance and operation of transportation facilities and equipment or for the study and planning thereof, in accordance with any legislation which Congress may have heretofore adopted or may hereafter adopt, under which aid, assistance and cooperation may be furnished by the United States in the acquisition, construction, improvement, maintenance and operation or in the financing of the acquisition, construction, improvement, maintenance and operation of any such transit facility or equipment. An authority, in dealing with the federal government or agencies thereof, may waive any privilege or immunity if such action is deemed in the best interest of the authority.

§ 40-1127 Rates and charges

The rates and charges for service furnished pursuant to this article shall be determined by vote of the majority of all of the members of the board. Such rates shall be reasonable, and, insofar as is practical, the revenue derived therefrom shall be sufficient to pay, in the following priority:

Interest and principal of the bonds, subject to the applicable provisions of this chapter authorizing issuance and retirement of bonds.
Operating expenses of the authority.
Repairs, maintenance and depreciation of works and property owned or operated by the authority.
Amounts necessary for the purchase, lease, or acquisition of property and equipment.
Amounts necessary for the payment of contracts, agreements, leases and other legal liabilities entered into by the authority.

§ 40-1128 Dissolution of authority

Whenever the board of directors of an authority, by resolution, determines that the purposes for which the authority was formed have been substantially complied with, that the need for the authority has terminated, and that all obligations incurred by the authority have been fully paid, the members of the board of directors of the authority shall, upon concurrence by resolution of the governing body creating the authority, thereupon dissolve the authority in accordance with provisions of title 10. A certificate of dissolution of the authority shall be filed for record with the secretary of state. Upon dissolution all property and funds of the authority shall revert to and be the property of the creating political subdivision or subdivisions in the proportion that the population of each contracting political subdivision bears to the total population of the area of the authority.

Article 4 Financing for Metropolitan Public Transit Authority

§ 40-1131 Bonds

A. For the purpose of acquiring, improving, enlarging or extending a transit system, the authority may issue self-liquidating revenue bonds. Bonds issued under this article shall be authorized by resolution of the board and may be issued in one or more series and shall bear the date of their issuance, mature at such time or times during a period of not to exceed thirty years from date of issuance, be in such denomination or denominations and in the form, coupon, registered, or registered as to principal only, carry the conversion or registration privileges, have the rank or priority, be executed in the manner, payable in the medium of payment, at the place or places and subject to the terms of redemption, with or without premium, as the resolution may provide, the total principle amount of all such bonds of the authority shall not exceed at any time the sum of two million dollars. Notwithstanding any provisions of law to the contrary, bonds issued pursuant to this section are negotiable.

B. The bonds shall provide that:

No holder may compel the authority or any municipality the area or a portion of the area of which is included in the operating area thereof to exercise its ad valorem taxing power.
The bond does not constitute a debt of the authority and is payable only from revenues from the operation of the authority and its equipment and facilities.

C. The bonds may be sold at public or private sale, at not less than the par value thereof with all accrued interest to date of delivery. In the event such bonds are sold at public sale, the board shall call for bids by publishing a notice inviting proposals for the purchase of the bonds at least once a week for two successive weeks prior to the date fixed for sale of the bonds, in a daily or weekly newspaper, published and of general circulation in the involved county and designated for such purpose, which notice shall be in the form the board shall prescribe. Pending preparation of the definitive bonds, interim receipts or certificates may be issued to the purchaser of the bonds in the form and containing the provisions determined by the board.

§ 40-1132 Power to secure bonds; reimbursement for advance

A. The board, in connection with the issuance of bonds and in order to secure the payment of the bonds and the interest thereon, shall have power by resolution:

To fix and maintain fees and other charges on equipment and facilities of or operated on behalf of the authority.
To provide that the bonds issued hereunder may be secured by a first and exclusive lien on the income and revenues derived from, and shall be payable from fees, and other charges on equipment and facilities of or operated on behalf of the authority as provided in paragraph 1.
To pledge and assign to or in trust for the benefit of the holder or the holders of bonds any part of the metropolitan public transit authority revenues as will be necessary to pay the principal of and interest on the bonds as the same become due.
To covenant with or for the benefit of the holder or holders of bonds issued hereunder, that so long as any of the bonds remain outstanding and unpaid, the board will prescribe fees and other charges on equipment and facilities of or operated on behalf of the authority and will revise the same when necessary so that the project for which the bonds are issued shall be self-supporting.

B. An authority may reimburse the state or a public agency for any advance or contribution from the proceeds of the sale of bonds or any other funds available to the authority as provided for in section 40-1125.

§ 40-1133 Provision of bond resolution; covenants

A. A resolution pertaining to issuance of bonds under this article may contain covenants as to:

The purpose to which the proceeds of sale of the bonds may be applied and to the use and disposition thereof.
The use and disposition of the revenues of the project for which the bonds are to be issued.
The issuance of other or additional bonds, payable from the revenue received from the operation of the authority and its equipment and facilities.
The operation and maintenance of the authority and its equipment and facilities.
The insurance to be carried thereon and the use and disposition of insurance monies.
The use of capitalized interest, reserve and sinking funds and any other funds as the authority deems necessary to the proper handling of authority monies.
Books of account and the inspection and audit thereof.
The terms and conditions upon which the holders of the bonds, or any proportion of them, or a trustee therefor, shall be entitled to the appointment of a receiver, who may enter and take possession of the authority's records, equipment and facilities, operate and maintain it, prescribe charges, fees and rentals and collect, receive and apply all revenues therefrom thereafter arising in the same manner as the board itself might do, until such time as the terms and conditions of the bonds are satisfied, at which time the receiver shall return possession of the authority and its equipment and facilities to the board.

B. The provisions of this article and any such resolution shall be deemed a contract with the holders of the bonds, and the duties of the board under this article and resolution shall be enforceable by mandamus or other appropriate action in a court of competent jurisdiction.

C. Neither the members of the board nor any person executing the bonds shall be personally liable for the payment of the bonds.

§ 40-1134 Validity of bonds

A. Bonds issued under this article and bearing the signatures of officers in office on the date of the signing thereof shall be valid and binding obligations, notwithstanding that before the delivery thereof and payment therefor any or all of the persons whose signatures appear thereon have ceased to be officers of the board.

B. The validity of the bonds shall not be dependent on or affected by the validity or regularity of any proceedings relating to the construction, acquisition, improvement, reconstruction or extension of the facilities of the authority from the proceeds of the sale of the bonds or the proceedings taken in connection therewith.

§ 40-1135 Prior lien of bonds

A. Except as otherwise provided in the resolution authorizing the bonds, all bonds of the same issue under this article shall have a prior and paramount lien on the revenues of the authority and its equipment and facilities for which the bonds have been issued over and ahead of bonds of an issue payable from that revenue which may be subsequently authorized, and over and ahead of claims or other obligations of any nature against that revenue subsequently arising or subsequently incurred.

B. Bonds of the same issue issued under this article shall be equally and ratably secured, without priority by reason of number, date, sale, execution or delivery, by a lien on the revenue in accordance with the terms of the resolution authorizing the bonds.

§ 40-1136 Bond obligations of the metropolitan public transit authority

All bonds issued pursuant to this article shall be obligations of the authority issuing such bonds, and payable only in accordance with the terms thereof and shall not be obligations general, special or otherwise of the state of Arizona or any county or municipality thereof. Such bonds shall not constitute a legal debt of the state of Arizona or any county or municipality thereof, and shall not be enforceable out of any funds of the authority other than the income and revenue pledged and assigned to, or in trust for the benefit of, the holder or holders of such bonds.

§ 40-1137 Bonds as legal investments

Bonds issued under the provisions of this article are made securities in which all public officers and bodies of the state and all municipalities and political subdivisions of this state, all insurance companies and associations and other persons carrying on an insurance business, all banks, bankers, trust companies, savings banks and savings associations, including savings and loan associations, building and loan associations, investment companies and other persons carrying on a banking business, all administrators, guardians, executors, trustees and other fiduciaries and all other persons whomever are now or may hereafter be authorized to invest in bonds or other obligations of the state, may properly and legally invest funds including capital in their control or belonging to them. The bonds are also made securities which may be deposited with and may be received by all public officers and bodies of the state and all municipalities and political subdivisions of this state for any purpose for which the deposit of bonds or other obligations of the state is now or may hereafter be authorized.

§ 40-1138 Limitation on indebtedness

An authority shall not incur an indebtedness which exceeds one million dollars. As used in this section, "indebtedness" includes, without limitation, any and all forms thereof which an authority is authorized to incur by this article or by any other law.

§ 40-1139 Annual financial statement of authority; estimate of expenses; notice of hearing on estimate

A. The board of directors of each metropolitan public transit authority, on or before the third Monday in July each year, shall prepare a full and complete statement of the financial affairs for the preceding fiscal year and an estimate of the different amounts which will be required to meet the expense for the current fiscal year. The estimate shall include an estimate of the amount of money required for each item of expenditure necessary for authority purposes, the amounts necessary to pay the interest and principal of outstanding bonds, the items and amounts of levy provided by law and an amount for unanticipated contingencies or emergencies.

B. The estimate shall be entered upon the minutes of the board and shall be fully itemized showing under separate heads the following:

The amounts estimated as required for each department, office or official, for each improvement, for the maintenance of structures and institutions and for the salaries of officers.
The separate amounts proposed for construction, maintenance, engineering and administration of the facilities of the authority.
A full and complete disclosure and statement of the contemplated expenditures for the ensuing year, showing the amount proposed to be expended from each separate fund and the total amount of proposed expense.

C. The estimate shall also contain:

A statement of the receipts for the previous year from sources other than direct property taxes.
The amounts estimated to be received during the current fiscal year from sources other than direct property taxes.
The amounts actually levied and the amounts actually collected for authority purposes upon the tax rolls of the previous fiscal year.
The amount proposed to be raised by direct property taxation for the current fiscal year.

D. The estimate required by this section shall be published with a notice that the board will hold a hearing on such estimate for the purposes provided in section 40-1140. Such publication shall be once a week for at least two consecutive weeks in the official newspaper of the county, if there is one, and if not, in a newspaper of general circulation therein.

§ 40-1140 Hearing on estimates; adoption of proposed budget

A. The board of directors of each metropolitan public transit authority shall meet on the day designated in the notice provided by subsection D of section 40-1139, and any taxpayer may appear and be heard in favor of or against any proposed expenditure or tax levy.

B. When the hearing is concluded, the governing board shall determine and adopt estimates of proposed expenditures for the various purposes set forth in the published proposal and such adopted estimates shall constitute the budget of the authority for the current fiscal year.

C. The total amounts in the budget proposed for expenditure shall not exceed the total of amounts proposed for expenditure in the published estimates.

D. No expenditures shall be made for a purpose not included in such budget, and no expenditure shall be made, nor debt, obligation or liability incurred or created in any fiscal year in excess of the amount specified for each purpose in the budget for such fiscal year as adopted.

E. The board of directors shall file, in writing, with the board of supervisors its estimate of the amount of money required by the authority for the ensuing year. If the board of directors determines that the estimated amount to be received from the anticipated revenue of the authority will not produce the amount of money budgeted the board of directors shall include with the estimate the additional amount needed for the authority and shall certify such amount to the board of supervisors at the time of filing the estimate.

§ 40-1141 Metropolitan public transit authority levy

The board of supervisors of each county where a metropolitan public transit authority has been established shall annually, at the time of levying other taxes, levy a metropolitan public transit authority tax on the property in the area of a public transit authority in which an additional amount is required, as determined by the authority pursuant to section 40-1140. The tax shall be at a rate sufficient to provide the additional amount. The tax shall be added to and collected in the same manner as other county taxes on the property within the area of the authority. The amount of the metropolitan public transit authority tax levied upon the property in the area of a particular authority shall be paid to the treasurer of such authority.

§ 40-1142 Investment of funds by board

The board may, by resolution, order that any of the monies in the funds under its control which are not necessary for current operating expenses be invested in any obligation, bonds or securities in which a city or county could invest such funds, provided that:

Any such investment shall be made in such a manner that the monies in such funds will be available at the times and in the amounts necessary to accomplish the purpose for which such funds were established.
No such investment shall be made in contravention of any provision or covenant in any proceedings for the authorization and issuance of bonds, notes, contracts or other evidences of indebtedness.

§ 40-1143 Bids required by board; exception

The purchase of all supplies, equipment and materials, and construction facilities and works, when the expenditure required exceeds two thousand five hundred dollars shall be by contract let to the lowest responsible bidder. Notice requesting bids shall be published in a newspaper of general circulation in the area at least once and not less than ten days prior to expiration of the period within which bids shall be received. The board may reject any and all bids and readvertise at its discretion. If, after rejecting bids, the board determines and declares by vote of two-thirds of all its members that in its opinion supplies, equipment and materials may be purchased at a lower price on the open market, the board may proceed to purchase the same in the open market without further observances of the provisions requiring contracts, bids or notice. Contracts, in writing or otherwise, may be let without advertising for or inviting bids when any repairs, alterations or other work or for the purchase of materials, supplies, equipment or other property shall be deemed by the board of directors to be of urgent necessity, and shall be authorized by a two-thirds vote of the entire board membership.

§ 40-1144 Claims against the authority

Every claim against an authority for damages or injuries alleged to have been caused by the negligent act or omission of the authority shall be presented to the board in writing within fifteen days after the happening of such injury, or damage, signed by the claimant or some person duly authorized to sign for same, and properly verified, stating the time and place at which the injury or damage occurred and a general statement of the cause or circumstances of the death, injury or damages. No action shall be commenced to recover for such death, injury or damages until thirty days after such presentation or unless the board shall sooner deny such claim.

§ 40-1146 Certification of bonds and approval of contracts by attorney general

A. The board may submit to the attorney general of this state any bonds to be issued under this article after all proceedings for the authorization of such bonds have been taken. Upon the submission of such proceedings to the attorney general, the attorney general shall examine into and pass upon the validity of such bonds and the regularity of all proceedings in connection therewith. If such proceedings conform to the provisions of this article, and it is determined that such bonds when delivered and paid for will constitute binding and legal obligations of the authority enforceable according to the terms thereof, the attorney general shall certify in substance upon the back of each of such bonds that it is issued in accordance with the Constitution and laws of the state of Arizona.

B. All agreements for the purpose of carrying out the provisions of this article shall be subject to the approval of the attorney general as to form and content.

§ 40-1147 Supplemental law

The powers conferred by articles 2, 3 and 4 of this chapter shall be in addition to and supplemental to the powers conferred by any other law, general or special. Articles 2, 3 and 4 of this chapter shall, without reference to any other provision in this title, or to any other law, general or special, be deemed full authority for the acquisition of property for future public transit needs under articles 2, 3 and 4 of this chapter, for entering into contracts in connection therewith, and for the authorization, issuance and sale of the bonds pursuant to article 4 of this chapter and without regard to the procedure required by any other such law.

Article 5 Intergovernmental Contract and Agreements for Public Transportation Services

§ 40-1151 Definition

For the purposes of this article, "public transportation services" means the local transportation of passengers and their incidental baggage by means of a public conveyance, including personalized public transit, jitney buses or conveyances, commuter buses, other such systems and excluding sightseeing buses and taxi services.

§ 40-1152 Public transportation services; contracts and agreements; fares and service charges; educational institutions; financial grants

A. In addition to other authority granted pursuant to titles 9 and 11 and this title, or city charter, any county or incorporated city or town may provide public transportation services directly or by contract with a private party, motor carrier or public service corporation, within or without the corporate limits, within or without the county boundaries or to any portion as determined by the board of supervisors or the mayor and council, and may expend public funds for such purposes. Counties, cities and towns and contractors furnishing public transportation services solely at the direction of and in accordance with a system adopted by the governing body of such county, city or town are not subject to the provisions of title 28, chapter 9, article 2 and chapter 16, article 4.

B. Any county, city or town may, by resolution, provide for a system of fares or service charges to defray all or part of the costs of providing public transportation services.

C. Any county, city or town may enter into contracts or agreements pursuant to title 11, chapter 7, article 3 to provide public transportation services on a cooperative or contract basis with one another or may jointly form a nonprofit corporation to carry out public transportation services in their behalf directly or by contract with a private party, motor carrier or public service corporation.

D. In addition to other provisions of law, school districts, universities or colleges may enter into contracts or agreements with cities, towns, counties, any combination thereof, or a nonprofit corporation created by such units of government to provide public transportation services directly or by contract with a private party, motor carrier or public service corporation. Such agreements may include provisions for the sale of school buses to such entities for the purpose of providing joint school and public transportation and for reasonable charges for transportation of the general public by school districts, universities or colleges provided adequate liability insurance has been obtained.

E. Any county, city or town or a nonprofit corporation created by such units of government may accept grants, contributions or loans from this state or the United States, or any instrumentality thereof, for the purpose of financing the acquisition, construction, improvement, operation and maintenance of a public transportation service system directly or by contract with a private party, motor carrier or public service corporation.

F. Nothing contained in this article shall permit or be construed to permit a regional council of governments or a regional planning agency created pursuant to a joint exercise of powers agreement or pursuant to nonprofit corporation statutes to provide public transportation services nor to operate such services contrary to the provisions of section 9-519.

Chapter 7 Gas Appliances

Article 1 General Provisions

§ 40-1201 Definitions

In this chapter, unless the context otherwise requires:

"Commission" means the Arizona corporation commission.
"Contractor" means any person who undertakes to or offers to undertake to or purports to have the capacity to undertake to or submits a bid to, or does himself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or other structures or works in connection therewith. The term "contractor" includes subcontractor and specialty contractor.
"Distributor" means any individual, partnership, corporation, association or other legal relationship which stands between the manufacturer and the retail seller in purchases, consignments or contracts for sale of consumer goods.
"Gas appliance" means any new residential-type furnace, air conditioner, heater, refrigerator, stove, range, dishwasher, dryer, decorative fireplace log or other similar device, except a water heater, which uses a gaseous fuel for operation and is automatically ignited.
"Intermittent ignition device" means an ignition device which is actuated only when the gas appliance is in operation.
"Manufacturer" means any individual, partnership, corporation, association or other legal relationship which manufactures, assembles, produces or gathers consumer goods.
"Person" means any individual, partnership, corporation, association, manufacturer, distributor, retailer, contractor, builder, or other group, however organized, who sells or causes to be distributed or installed, any new gas appliance.
"Pilot light" means any gas operated device that remains continually operated or lighted in order to ignite a gas appliance to begin normal operation.
"Retail seller", "retail outlets", "seller", or "retailer" means any individual, partnership, corporation, association, or other legal relationship which engages in the business of selling new goods to retail buyers.

§ 40-1202 Power of commission to prohibit sale or installation of gas appliances equipped with pilot lights; exemption

A. No new residential-type gas appliance that is equipped with a pilot light shall be sold or installed in the state after an alternate means has been certified by the commission. This prohibition shall become operative twenty-four months after intermittent ignition devices have been demonstrated and certified by the commission as an alternate means. The commission may determine, after demonstration, that there is no feasible alternate means to the use of a pilot light or that the use of a pilot light is necessary for public health and safety.

B. The provisions of this article shall not apply to consumers of propane, butane or other similar bottled gas, nor shall they apply to persons without the boundaries of any electric utility corporation service area.

§ 40-1203 Establishment of specifications for certification of intermittent ignition devices

The commission shall, on or before January 1, 1978, develop in cooperation with affected industry and consumer representatives, who will be designated as such representatives by the commission, the specifications for certification of intermittent ignition devices which shall not significantly affect the price of gas appliances in competition with similar electrical appliances. The specifications shall be developed so as to result in the conservation of primary energy resources, shall include provisions necessary for public health and safety, and shall give due consideration to the initial costs, including installation and maintenance costs imposed upon the consumer.

§ 40-1204 Duty of commission to notify affected manufacturers

The commission shall notify all gas appliance manufacturers doing business in the state within ninety days after one or more intermittent ignition devices have been certified by the commission, as to the prohibition of affected pilot lights and shall inform the manufacturers of the devices available to comply with this article.

§ 40-1205 Creation and distribution of seal of certification; prohibition on sale, distribution, or installation without seal

A. The commission shall create a seal of certification and shall distribute the seal to every manufacturer that complies with this article. The seal shall be affixed to every new appliance sold in the state.

B. No person shall cause to be distributed, sold or installed in this state twenty-four months after an intermittent ignition device has been certified by the commission, any new gas appliances without obtaining the proper seal of certification from the commission, unless the commission otherwise permits such action.

§ 40-1206 Injunction; parties

A. Any person who violates or proposes to violate this chapter may be enjoined by any court of competent jurisdiction. The court may make such orders or judgments, including the appointment of a receiver, as may be necessary to prevent the use or employment by any person of any practices which violate this chapter, or which may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of any practice which violates any provision of this chapter.

B. Actions for injunction under this section may be prosecuted by the attorney general or any county attorney or city attorney in this state in the name of the people of the state upon their own complaint or upon the complaint of any board, officer, person, corporation or association or by any person acting for the interests of itself, its members or the general public.

§ 40-1207 Failure to comply with chapter; penalty

A. Any person who violates any provision of this chapter shall be liable for a civil penalty not to exceed three hundred dollars for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the state by the attorney general or by any county attorney, or city attorney in any court of competent jurisdiction.

B. If civil action is brought by any unit of government and the defendant is proven innocent, the defendant shall be given the right to reclaim all court costs and attorney fees from the complaining unit of government.

C. Civil penalties recovered pursuant to this section shall be deposited, pursuant to sections 35-146 and 35-147, and used for reimbursement for reasonable expenses incurred by the commission in the investigation and prosecution of the action.

Chapter 8 Wildfire Mitigation Planning

Article 1 General Provisions

§ 40-1301 Definitions

In this chapter, unless the context otherwise requires:

"Attachor" means any cable television system or provider of telecommunications or broadband communication services that owns or operates equipment that is attached to a pole, duct or conduit or that is otherwise located within a right-of-way that is owned or controlled by an electric utility, provided that the attaching entity is a current party to and in compliance with an attachment agreement with the electric utility.
"Electric utility":

(a) Means:

(i) Any person, business organization, public service corporation, electric cooperative or other legal entity that owns and operates facilities for the generation, transmission or distribution of electric energy for sale to retail customers in this state.

(ii) Any generation and transmission cooperative operating in this state.

(b) Does not include a public power entity.

"Public power entity" means a public power entity as defined in section 30-901.
"Wildfire" means any unwanted, unplanned or uncontrolled fire that ignites vegetation within a wildland or natural area, including:

(a) Forests.

(b) Grasslands.

(d) Any areas that interface between wildland or natural and urban areas.

"Wildfire mitigation plan" means a plan that is submitted to the state forester in accordance with this chapter and section 37-1311.

§ 40-1302 Cause of action; exclusive means of recovery; legal duty

A. This chapter does not establish a new cause of action. If there is a conflict between this chapter and any other state law, this chapter controls.

B. Except as otherwise agreed to in writing or established by federal law, this chapter establishes the exclusive means of recovery from an electric utility for claims or damages that result from wildfires.

C. This chapter does not establish any additional legal duty that supports any claim that would not otherwise already exist.

D. In any cause of action against a parent, subsidiary or other corporate affiliate of an electric utility that is related to a wildfire, that parent, subsidiary or other corporate affiliate of the electric utility shall be treated the same as and considered equivalent to an electric utility for the purposes of section 40-1304.

E. In any cause of action against an electric utility that is related to a wildfire, any attachor shall be considered to be an electric utility and to be covered by the electric utility's wildfire mitigation plan for the purposes of section 40-1304 with respect to any liability that may be alleged to have arisen out of the attachor's equipment.

§ 40-1303 Wildfire mitigation plan

A. Except as provided in subsection C of this section, an electric utility shall prepare and submit a wildfire mitigation plan to the state forester for review and approval as prescribed in section 37-1311. The electric utility may use the submission as an update to the last approved wildfire mitigation plan. The electric utility shall submit the wildfire mitigation plan to the state forester on or before May 1, 2026 and every even-numbered year thereafter.

B. Any action by the state forester that approves a wildfire mitigation plan is not considered approval for recovery of the electric utility's costs necessary to implement the wildfire mitigation plan through rates for service charged to the electric utility's customers.

C. An electric utility that is an electric cooperative with fewer than forty thousand meters in this state as of January 1, 2025 may prepare and submit a wildfire mitigation plan for review and approval to the state forester in accordance with subsection A of this section. An electric utility that is an electric cooperative with forty thousand or more meters in this state as of January 1, 2025 shall prepare a wildfire mitigation plan as prescribed in section 37-1311, subsection H and may submit the wildfire mitigation plan to the state forester as prescribed in subsection A of this section.

D. If an electric utility that is an electric cooperative does not submit a wildfire mitigation plan to the state forester for review and approval pursuant to section 37-1311, this chapter does not apply to that electric utility.

§ 40-1304 Liability for causing wildfires; severability

A. For any cause of action for negligence against an electric utility that is related to a wildfire, an electric utility that acts in compliance with the approved wildfire mitigation plan is deemed to meet the standard of care for a reasonably prudent electric utility. A party that asserts a cause of action for negligence shall prove that a failure to comply with the approved wildfire mitigation plan was a proximate cause of any loss, injury or other harm alleged.

B. Notwithstanding subsection A of this section, an electric utility that engages in wilful, intentional or reckless misconduct that causes a wildfire is not deemed to meet the standard of care for a reasonably prudent electric utility. A failure to comply with an approved wildfire mitigation plan does not constitute negligence per se. A public power entity's or electric utility's wildfire mitigation plan shall not be admissible as evidence against another public power entity or electric utility in a civil action that arose out of a wildfire.

C. An electric utility shall not be apportioned any proportion of fault for the ignition of a wildfire from sources that are outside of the electric utility's control, including lightning strikes or actions by third parties.

D. An electric utility shall not be apportioned any proportion of fault for vegetation or other wildfire risks outside of the electric utility's right-of-way, lease or other property rights or areas in which the electric utility has been delayed in accessing or denied access to for purposes of performing vegetation management if the delay or denial is outside of the electric utility's reasonable control.

E. A claim for condemnation or inverse condemnation shall not exist against an electric utility related to wildfires.

F. In an action against an electric utility to recover any damages that result from a wildfire, neither exemplary nor punitive damages of any kind may be recovered, only provided, however, that after it has been established that an electric utility, which is not an electric cooperative, is liable for personal injury or bodily harm that results from a wildfire, such damages may be sought if the plaintiff proves by clear and convincing evidence that the defendant electric utility's conduct was both:

Outrageous, oppressive or intolerable.
Consciously pursued knowingly or with intentional disregard that the conduct created a substantial risk of significant physical injury to others.

G. If any provision of this chapter or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of this chapter that can be given effect without the invalid provision or application and to this end the provisions of this chapter are severable.