Session of 1999
By Committee on Utilities

  9             AN  ACT concerning municipalities; relating to granting of franchises;
10             amending K.S.A. 12-2001 and repealing the existing section.
12       Be it enacted by the Legislature of the State of Kansas:
13             Section  1. K.S.A. 12-2001 is hereby amended to read as follows: 12-
14       2001. (a) The governing body of any city may permit any person, firm or
15       corporation to:
16             (1) Manufacture, sell and furnish artificial or natural gas light and
17       heat; electric light, water, power or heat; or steam heat to the inhabitants;
18             (2) build street railways, to be operated over and along or under the
19       streets and public grounds of such city;
20             (3) construct and operate telegraph and telephone lines;
21             (4) lay pipes, conduits, cables and all appliances necessary for the
22       construction, operation of gas and electric-light or steam-heat plants;
23             (5) lay pipes, conduits, cables and all appliances necessary for the
24       construction and operation of electric railways or bus companies;
25             (6) lay pipes for the operation of a water plant for the distribution or
26       furnishing of water over, under and along the streets and alleys of such
27       city; or
28             (7) use the streets in the carrying on of any business which is not
29       prohibited by law.
30             (b) If the governing body of a city permits any activity specified in
31       subsection (a), the granting of permission to engage in the activity shall
32       be subject to the following:
33             (1) All contracts granting or giving any such original franchise, right
34       or privilege, or extending or renewing or amending any existing grant,
35       right, privilege or franchise, to engage in such an activity shall be made
36       by ordinance, and not otherwise.
37             (2) No contract, grant, right, privilege or franchise to engage in such
38       an activity, now existing or hereafter granted, shall be extended for any
39       longer period of time than 20 years from the date of such grant or
40       extension.
41             (3) No person, firm or corporation shall be granted any exclusive
42       franchise, right or privilege whatever.
43             (4) The governing body of any city, at all times during the existence
44       of any contract, grant, privilege or franchise to engage in such an activity,
45       shall have the right by ordinance to fix a reasonable schedule of maximum
46       rates to be charged such city and the inhabitants thereof for gas, light and
47       heat, electric light, power or heat, steam heat or water; the rates of fare
48       on any street railway or bus company; the rates of any telephone company;
49       or the rates charged any such city, or the inhabitants thereof, by any
50       person, firm or corporation operating under any other franchise under
51       this act. The governing body at no time shall fix a rate which prohibits
52       such person, firm or corporation from earning a reasonable rate upon the
53       fair value of the property used and useful in such public service. In fixing
54       and establishing such fair value, the value of such franchise, contract and
55       privilege given and granted by the city to such person, firm or corporation
56       shall not be taken into consideration in ascertaining the reasonableness
57       of the rates to be charged to the inhabitants of such city.
58             (5) No such grant, right, privilege or franchise shall be made to any
59       person, firm, corporation or association unless it provides for adequate
60       compensation or consideration therefor to be paid to such city, and re-
61       gardless of whether or not other or additional compensation is provided
62       for, such grantee shall pay annually such fixed charge as may be pre-
63       scribed in the franchise ordinance. Such fixed charge may consist of a
64       percentage of the gross receipts derived from the service permitted by
65       the grant, right, privilege or franchise: (A) From consumers or recipients
66       of such service located within the corporate boundaries limits of such city,
67       and,; (B) if connected by an extension of lines or pipes laid in the city's
68       streets, alleys or rights-of-way, from consumers or recipients located
69       within three miles of the corporate limits of such city when not within
70       three miles of the limits of any other incorporated city; and (C) in case
71       of public utilities or common carriers situated and operated wholly or
72       principally within the corporate limits of such city, or principally operated
73       for the benefit of such city or its people, from consumers or recipients
74       located in territory immediately adjoining such city and not within the
75       boundaries limits of any other incorporated city; and. In such case such
76       city the grantee shall make and report to the governing body all such gross
77       receipts once each month, or at such other intervals as stipulated in the
78       franchise ordinance and pay into the treasury the amount due such city
79       at the time the report is made. The governing body shall also have access
80       to and the right to examine, at all reasonable times, all books, receipts,
81       files, records and documents of any such grantee necessary to verify the
82       correctness of such statement report and to correct the same, if found to
83       be erroneous. If such statement report of gross receipts is incorrect, then
84       such payment shall be made upon such corrected statement report.
85             On and after the effective date of the act, any provision for compen-
86       sation or consideration, included in a franchise granted pursuant to this
87       section which is established on the basis of compensation or consideration
88       paid by the utility under another franchise, is hereby declared to be con-
89       trary to the public policy of this state and shall be void and unenforceable.
90       Any such provision, included in a franchise granted pursuant to this sec-
91       tion and in force on the effective date of this act which requires payments
92       to the city by a utility to increase by virtue of the compensation or con-
93       sideration required to be paid under a franchise granted by another city
94       to the utility's predecessor in interest, is hereby declared to be contrary
95       to the public policy of this state and shall be void and unenforceable.
96             (6) No such right, privilege or franchise shall be granted until the
97       ordinance granting the same has been read in full at three regular meet-
98       ings of the governing body. Immediately after the final passage, the or-
99       dinance shall be published in the official city paper once a week for two
100       consecutive weeks. Such ordinance shall not take effect and be in force
101       until after the expiration of 60 days from the date of its final passage. If,
102       pending the passage of any such ordinance or during the time between
103       its final passage and the expiration of 60 days before such ordinance takes
104       effect, 20% of the qualified voters of such city voting for mayor, or in case
105       no mayor is elected then the commissioner or council member receiving
106       the highest number of votes, at the last preceding city election present a
107       petition to the governing body asking that the franchise ordinance be
108       submitted for adoption to popular vote, the mayor of the city shall issue
109       a proclamation calling a special election for that purpose. The procla-
110       mation calling such special election shall specifically state that such elec-
111       tion is called for the adoption of the ordinance granting such franchise,
112       and the ordinance shall be set out in full in the proclamation. The proc-
113       lamation shall be published once each week for two consecutive weeks
114       in the official city newspaper, and the last publication shall not be less
115       than 30 days before the day upon which the special election is held. If,
116       at the special election, the majority of votes cast shall be for the ordinance
117       and the making of the grant, the ordinance shall thereupon become ef-
118       fective. If a majority of the votes cast at the special election are against
119       the ordinance and the making of the grant, the ordinance shall not confer
120       any rights, powers or privileges of any kind whatsoever upon the appli-
121       cants therefor and shall be void.
122             All expense of publishing any ordinance adopted pursuant to this sec-
123       tion shall be paid by the proposed grantee. If a sufficient petition is filed
124       and an election is called for the adoption of any such ordinance, the
125       applicants for the grant, right, privilege or franchise, upon receipt by the
126       applicants of written notice that such petition has been filed and found
127       sufficient and stating the amount necessary for the purpose, shall im-
128       mediately deposit with the city treasurer in cash an amount sufficient to
129       cover the entire expense of such election. The mayor shall not issue a
130       proclamation calling such election until such money is deposited with the
131       treasurer. Upon such failure to so deposit such money the ordinance shall
132       be void.
133             (7) All contracts, grants, rights, privileges or franchises for the use of
134       the streets and alleys of such city, not herein mentioned, shall be governed
135       by all the provisions of this act, and all amendments, extensions or en-
136       largements of any contract, right, privilege or franchise previously granted
137       to any person, firm or corporation for the use of the streets and alleys of
138       such city shall be subject to all the conditions provided for in this act for
139       the making of original grants and franchises. The provisions of this section
140       shall not apply to railway companies for the purpose of reaching and
141       affording railway connections and switch privileges to the owners or users
142       of any industrial plants, or for the purpose of reaching and affording
143       railway connections and switch privileges to any agency or institution of
144       the state of Kansas. 
145       Sec.  2. K.S.A. 12-2001 is hereby repealed.
146        Sec.  3. This act shall take effect and be in force from and after its
147       publication in the statute book.