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State Legislation on Public Utilities in 1934–35
Published online by Cambridge University Press: 02 September 2013
Extract
The trends in state public utilities legislation which were clearly discernible in 1933 continued in somewhat modified form in state legislation during the biennium 1934–35. Only a comparatively few out of the vast number of proposed utilities measures became law. The laws enacted, however, contain features which if adopted generally may have far-reaching effect upon the future of state regulation of public utilities. The intended effects of such features are: (1) to further the creation of public corporations empowered to furnish public utility services; (2) to establish a new method of utilities regulation in the form of contractual relations between the federal government or federal agencies on the one hand and public utilities corporations on the other; (3) to stimulate municipal ownership and operation of selected public utilities.
- Type
- American Government and Politics
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- Copyright
- Copyright © American Political Science Association 1936
References
1 The outstanding features of the 1933 state public utilities laws were: “(1) reorganization of utilities commissions to the end that all regulatory functions may be concentrated in one or a few agencies; (2) increase in the regulatory authority vested in state commissions; (3) creation of a public counselor or attorney to protect the interest of the public in utilities cases before the commission and the courts; (4) regulation of holding companies and inter-company relations; (5) allocating to the utilities a portion of the cost of investigations and regulation; (6) increase in taxes … imposed upon utilities; and (7) provisions for public ownership—state, district, or municipal.” See my “State Legislation on Public Utilities in 1933,” in this Review, February, 1934, p. 84Google Scholar.
2 The Legal Division of the Federal Public Works Administration under Administrator Harold L. Ickes has played no small part in the development of the public corporation. Mr. E. H. Foley, Jr., director of the Legal Division of the Federal Emergency Administration of Public Works, says: “In December, 1934, the public corporation, as an instrumentality of state government for the purpose of meeting the vital social problems confronting the American nation, was formally recognized by the President of the United States. During that month the President wrote the governor of every state suggesting that the governor in formulating his legislative program might wish to consider the need for legislation which would enable the state through municipal and other public corporations to participate more fully in any additional public works program which the Seventy-fourth Congress might authorize.” PW A and Revenue Financing of Public Enterprises, July 16, 1935, p. 7Google Scholar.
3 Tennessee, Acts, 1st Special Session, 1935, Chap. 3, p. 63Google Scholar.
4 Ibid. Chap. 4, p. 76.
5 Ibid. Chap. 32 (S.B. No. 17).
6 Alabama, Laws, 1935, No. 40; South Dakota, Acts, 1935, S.B. 172; Florida, Acts, 1935, S.B. 1010.
7 Tennessee, Acts, 1st Special Session, 1935, Chap. 3. According to the act, the corporate purpose is to “encourage and promote the fullest possible use of energy by all the inhabitants of the state by rendering service to said inhabitants, to whom energy is not available or in the opinion of the Board is not available at a reasonable rate.” No. 3, Sec. 10.
8 David E. Lilienthal (director of the Tennessee Valley Authority), in address before the American Historical Assoc. and American Political Science Assoc., Dec. 29, 1935.
9 Ibid.
10 See p. 10 below.
11 For the types of public corporations created by state legislation in 1934–35, see p. 3 above.
12 The following acts contain the substance of the provision here presented:
(a). Alabama, Acts, 1935, No. 40, Sec. 13. “Improvement Authorities Law.”
(b). Tennessee, Acts, 1935, 1st Special Session, Chap. 3, Sec. 3. “State Rural Electrification Act.”
(c). Alabama, Acts, 1935, No. 47, Sec. 3. “State Rural Electrification Act.”
(d). Tennessee, Acts, 1935, 1st Special Session, Chap. 32, Sec. 4. “Electric Membership Corporation Act.”
(e). Ibid. Chap. 4, Sec. 14. “Power District Act.” The power district was declared to be a municipal corporation and a “non-utility.”
(f). South Dakota, Acts, 1935, S.B. 172, Sec. 14. “Improvement Authorities Act.”
(g). Indiana, Acts, 1935, Chap. 175, Sec. 21. “Rural Electric Membership Corporation Act.”
(h). South Carolina, Acts, 1935, No. 65, Sec. 3. “State Rural Electrification Authority Act.”
(i). California, Laws, 1933, Chap. 999, amending Act of May 31, 1921.
13 Corporate purposes similar to the examples given above are found in:
(a). South Dakota, Acts, S.B. No. 172, Sec. 2. “Improvement Authorities Law.”
(b). Tennessee, Acts, 1935, 1st Special Session, Chap. 32, Sec. 1. “Electric Membership Corporation Act.”
(c). Ibid. Chap. 4, Sec. 2. “Power District Act.”
(d). Ibid. Chap. 3, Sec. 10. “Rural Electrification Authority Act.”
(e). Indiana, Acts, 1935, Chap. 175, Sec. 2. “Rural Electric Membership Corporation Act.”
(f). North Carolina, Acts, 1935, S.B. 427, Sec. 3. “Electric Membership Corporation Act.”
(g). South Carolina, Acts, 1935, No. 65, Sec. 5. “State Rural Electrification Act.”
(h). Alabama, Acts, 1935, No. 40, Sec. 25. “Improvement Authorities Law.”
(i). Ibid. No. 42, Sec. 1. “Power District Act.”
(j). Ibid. No. 45, Sec. 2. “Electric Membership Corporation Act.”
(k). Ibid. No. 47, Sec. 10. “State Rural Electrification Authority Act.”
14 Acts listed below contain in substance such provisions:
(a). Alabama, Acts, 1935, No. 45, Sec. 1. “Electric Membership Corporation Act.”
(b). Ibid. No. 47, Sec. 16. “State Rural Electrification Act.”
(c). Tennessee, Acts, 1935, 1st Special Session, Chap. 32, Sees. 19 and 22. “Electric Membership Corporation Act.”
(d). Ibid. Chap. 4, Sec. 15. “Power District Act.” Surplus devoted solely to reduction in rates.
(e). Ibid. Chap. 3, Sec. 17. “Rural Electrification Authority Act.”
(f). South Carolina, Acts, 1935, No. 65, Sec. 11. “State Rural Electrification Authority Act.”
(g). Indiana, Acts, 1935, Chap. 175, Secs. 2 and 17. “Rural Electric Membership Corporation Act.” Any surplus is to be returned to members on a pro-rata basis according to the amount of energy consumed.
15 (a). Alabama, Acts, 1935, No. 40, Sec. 25. “Improvement Authority Law.”
(b). Ibid. No. 42, Sec. 4. “Power District Act.”
(c). Ibid. No. 45, Sec. 10. “Electric Membership Corporation Act.”
(d). Ibid. No. 47, Sec. 11. “Rural Electrification Authority Act.” The act grants “all powers necessary or requisite for the accomplishment of its corporate purpose and capable of being delegated by the legislature of the state.”
(e). Ibid. Sec. 12 (Item 13). “Rural Electrification Authority Act.” Power was granted “to do any and all acts and things herein authorized or necessary or convenient to carry out the powers expressly given in this act …”
(f). Tennessee, Acts, 1935, 1st Special Session, Chap. 32, Sec. 11. “Electric Membership Corporation Act.”
(g). Ibid. Chap. 4, Sec. 8. “Power District Law.”
(h). Ibid. Chap. 3, Sec. 10. “Rural Electrification Authority Act.”
(i). South Dakota, Acts, 1935, S.B. 172, Sec. 27 (Item 6). “Improvement Authorities Act.”
(j). North Carolina, Acts, 1935, S.B. 427, Sec. 18. “Electric Membership Corporation Act.”
(k). South Carolina, Acts, 1935, No. 65, Secs. 6–7. “State Rural Electrification Authority Act.”
16 Self-liquidating corporations were legalized by the following acts:
(a). South Carolina, Acts, 1935, No. 65, Sec. 10. “State Rural Electrification Authority Act.” The act provides that “no holder or holders of any bonds issued under this act shall ever have the right to compel any exercise of the taxing power of the state, or of any political subdivision thereof, to pay said bonds or the interest thereon. Each bond issued under this act, … including the interest thereon, is payable from the revenues pledged to the payment thereof, and that said bond does not constitute a debt of the state.”
(b). Alabama, Acts, 1935, No. 40, Sec. 30. “Improvement Authority Act.”
(c). Ibid. No. 47, Sec. 15. “State Rural Electrification Authority Act.”
(d). Tennessee, Acts, 1935, 1st Special Session, Chap. 3, Secs. 16 and 19. “Rural Electrification Authority Act.” All or any part of the revenues was pledged as security of bonds.
(e). South Dakota, Acts, 1935, S.B. 172, Sec. 31. “Improvement Authorities Act.”
(f). North Carolina, Acts, 1935, S.B. 427, Sec. 12. “Electric Membership Corporation Act.”
17 Acts granting to public corporations the exercise of the right of eminent domain:
(a). Alabama, Acts, 1935, No. 40, Sec. 26. “Improvement Authorities Law.”
(b). Ibid. No. 42, Sec. 4. “Power District Act.”
(c). Tennessee, Acts, 1st Special Session, Chap. 4, Sec. 8 (Item 3); Sec. 18. “Power District Law.”
(d). Ibid. Chap. 32, Sec. 12. “Electric Membership Corporation Act.”
(e). Ibid. Chap. 3, Sec. 11 (Item 12). “Rural Electrification Authority Act.”
(f). South Dakota, Acts, 1935, S.B. 172, Sec. 27 (Item 3). “Improvement Authorities Law.”
(g). South Carolina, Acts, 1935, No. 65, Sec. 7 (Item 13). “State Rural Electrification Authority Act.”
18 Tennessee, Acts, 1935, Chap. 42. The corporations excluded from the power and jurisdiction of the Railroad and Public Utilities Commission are: “(a) any corporation owned by, or any agency or instrumentality of, the United States; (b) any county, municipal corporation, or other subdivision of the state of Tennessee; (c) any corporation owned by, or any agency or instrumentality of, the state of Tennessee; (d) any corporation or joint stock company, more than fifty per cent of the voting stock or shares of which is owned by the United States, the state of Tennessee, or any ‘non-utility’ referred to in (a), (b), or (c) hereof; (e) any corporation, organization, association, or corporation not organized or doing business for profit; and (f) any of the foregoing non-utilities acting jointly or in combination or through a joint agency or instrumentality.”
19 Tennessee, Acts, 1935, 1st Special Session, Chap. 33, Sec. 4 (Item 6). “Revenue Bond Act.” Similar provisions are found in the following acts of Tennessee:
(a). Tennessee, Acts, 1935, 1st Special Session, Chap. 32, Sec. 12 (Item 8). “Electric Membership Corporation Act.”
(b). Ibid., Chap. 4, Sec. 10 (Item 7). “Power District Law.”
(c). Ibid., Chap. 3, Sec. 12 (Item 13). “State Rural Electrification Authority.”
(d). Ibid., Regular Session, Chap. 32, Sec. 3 (Item g). “Municipal Electric Plant Act.”
20 South Carolina, Acts, 1935, No. 65, Sec. 7 (Item 12).
21 Ibid., Sec. 15.
22 Ibid., Sec. 16.
23 North Carolina, Acts, 1935, S.B. No. 427, Sec. 11 (Item h).
24 Indiana, Acts, 1935, Chap. 175, Sec. 11 (Item h).
25 For example: Alabama, Acts, 1935, No. 40, Sec. 33. “Improvement Authority Act”; Tennessee, Acts, 1935, Regular Session, No. 42. “Act Limiting Jurisdiction of the Railroad and Public Utilities Commission.”
26 (a). Alabama, Acts, 1935, No. 40, Sec. 34. “Improvement Authorities Law.”
(b). Ibid. No. 47, Sec. 17. “Rural Electrification Authority Act.”
(c). Tennessee, Acts, 1935, 1st Special Session, Chap. 3, Sec. 18.
(d). South Carolina, Acts, 1935, No. 65, Sec. 12. “State Rural Electrification Authority Act.”
27 The standard residential rates contained in the schedule attached to the contract between the TVA and the city of Knoxville is as follows:
First 50 Kilowatt hours per month at 3c per K.W.H.
Next 150 Kilowatt hours per month at 2c per K.W.H.
Next 200 Kilowatt hours per month at lc per K.W.H.
Next 1000 Kilowatt hours per month at 0.4c per K.W.H.
Excess over 1400 Kilowatt hours per month at 0.75c per K.W.H.
It is interesting to note that the same residential rates were agreed to in a contract between the TVA and the Lincoln County (Tenn.) Electric Membership Corporation.
28 Contracts which have been examined by the writer include those between the TVA and the following local authorities: (a) city of Dayton, Tenn. (Sept. 12, 1934; May 1, 1935); (b) city of Knoxville, Tenn. (March 1, 1934); (c) town of Pulaski, Tenn. (Aug. 23, 1935); (d) city of Memphis, Tenn. (Nov. 23, 1935); (e) Lincoln County Electric Membership Corporation (Sept. 26, 1935); (f) Monroe county, Miss., Electric Power Association (July 19, 1935); (g) Tishomingo county, Miss., Electric Power Association (July 19, 1935); (h) city of Tupelo, Miss. (Feb. 6, 1934); (i) city of Okolona, Miss. (April 23, 1935); (j) city of Amory, Miss. (Mar. 15, 1935); (k) city of Muscle Shoals, Ala. (Jan. 19, 1935); and (1) city of Athens, Ala. (April 6, 1934).
29 New York, Laws, 1934, Chap. 281.
30 Indiana, Laws, 1935, Chap. 293.
31 South Dakota, Acts, 1935, S.B. No. 177.
32 Tennessee, Acts, 1935, No. 32.
33 Arkansas, Acts, 1935, No. 324.
34 New Hampshire, Acts, 1935, Chap. 153.
35 West Virginia, Laws, 1935, H.B. No. 165.
36 See especially: Arkansas, Acts, 1935, No. 324, Sec. 48; New York, Laws, 1934, Chap. 281; New Hampshire, Acts, 1935, Chap. 153, Sec. 2; Vermont, Acts, 1935, No. 70. New Hampshire cities may “acquire, maintain, and operate gas and electric plants and distributing systems only after a two-thirds vote of the members of the council, confirmed by a majority vote of the electors, while a town may do so only after the approval of two-thirds of the electors voting on the subject.
37 Washington, Acts, 1935, Chap. 107, Sec. 3.
38 New York, Laws, 1934, Chap. 281; South Dakota, Acts, 1935, S.B. 177.
39 Indiana, Laws, 1935, Chap. 311.
40 Louisiana, Acts, 1935, Extraordinary Session, No. 12. Similar provisions are contained in the following acts: (a) Mississippi, Acts, 1934, Chap. 317; (b) Nebraska, Acts, 1935, Chap. 38; (c) New Jersey, Laws, 1935, Chap. 77; (d) Vermont, Acts, 1935, No. 67; (e) Wisconsin, Acts, 1935, Chap. 531; (f) West Virginia, Laws, 1935, H.B. No. 165; (g) New Mexico, Laws, 1934, Chap. 4; (h) North Carolina, Acts, 1935, H.B. 1060; (i) South Carolina, Acts, 1933, No. 236; 1934, Nos. 740 and 798; (j) South Dakota, Acts, 1935, S.B. 177; and (k) Utah, Acts, 1935, S.B. 225.
41 Natural Resources Board, 1935, State Planning, p. 196.
42 Tennessee, Acts, 1935, Regular Session, Chap. 32, Sec. 8a.
43 Minnesota, Laws, 1935, Chap. 316, Sec. 1.
44 Arkansas, Acts, 1935, No. 324, Sec. 45.
45 New York, Laws, 1934, Chap. 281.
46 Oklahoma, Laws, 1935, Chap. 33.
47 Indiana, Laws, 1935, Chap. 293.
48 South Dakota, Acts, 1935, S.B. 177.
49 Louisiana, Acts, 1935, Extraordinary Session, No. 12; Mississippi, Acts, 1935, Chap. 317, Sec. 2.
50 See especially the following acts: Maryland, Acts, 1935, Chap. 393; Mississippi, Acts, 1935, Chap. 316; and Washington, Acts, 1935, Chap. 107.
51 See this Review, February, 1934, pp. 87–88.
52 New York, Laws, 1934, Chap. 280.
53 Ibid.
54 Ibid., Chap. 279.
56 Connecticut, Acts, 1935, Chap. 191, Sec. 3.
56 Ibid., Sec. 6.
57 Massachusetts, Laws, 1935, Chap. 335, Sec. 2.
58 Ibid., Sec. 1.
59 Illinois, Laws, 1935, H.B. No. 146.
60 New Jersey, Laws, 1935, Chap. 44, Sec. 1.
61 Ibid., Sec. 2.
62 Ibid., Chap. 45.
63 Ibid., Chap. 62.
64 Ibid., Chap. 53.
65 Utah, Laws, 1935, Chap. 63.
66 Kentucky, Acts, 1934, Chap. 145, Sec. 2b.
67 Ibid.
68 Arkansas, Acts, 1935, No. 324, Sec. 2.
69 Ibid., Sec. 3.
70 Rhode Island, Laws, 1935, Chap. 2250; New Administrative Code, Sec. 72.
71 Alabama, Acts, 1935, H.B. No. 731.
72 Space allotted to this article does not permit an adequate detailed treatment of this and the following topics. For increased power over holding companies, see above, pages 533–535.
73 Arkansas, Acts, 1935, No. 23.
74 New Jersey, Laws, 1935, Chap. 49.
75 North Dakota, Laws, 1935, Chap. 253, Sec. 2.
76 South Carolina, Acts, 1935, No. 23.
77 Massachusetts, Laws, 1935, Chap. 222.
78 Connecticut, Laws, 1935, Chap. 196.
79 New Jersey, Laws, 1935, Chap. 61.
80 Illinois, Laws, 1935, p. 1096Google Scholar.
81 Arkansas, Acts, 1935, No. 324.
82 Utah, Laws, 1935, Chap. 67.
83 The trend was reversed, however, in Massachusetts, where the legislature repealed the law imposing assessment for a portion of the cost of the administration of the public utilities department upon gas and electric plants (private and municipal). Massachusetts, Laws, 1935, Chap. 411.
84 California, Laws, 1935, Chap. 683.
85 Colorado, Laws, 1935, Chap. 189, Sec. 4b.
86 Illinois, Laws, 1935, S.B. 209 (p. 1195)Google Scholar.
87 Kansas, Laws, 1935, Chap. 267.
88 Louisiana, Acts, 1935, Second Extraordinary Session, No. 26.
89 New Jersey, Laws, 1935, Chap. 144.
90 New York, Laws, 1934, Chaps. 282, 286.
91 North Carolina, Laws, 1935, Chap. 371.
92 North Dakota, Laws, 1935, Chap. 276.
93 Oklahoma, Laws, 1935, Chap. 66, Sec. 4.
94 West Virginia, Acts, 1935, S.B. 146.
95 Such investigating committees were authorized to report their findings and recommendations to the legislature or to the governor in California, Massachusetts, Minnesota, New York, North Dakota, and Vermont.