FRANCHISE ‑- STATE HIGHWAYS

FRANCHISE ‑- STATE HIGHWAYS

1. The director of highways must consider an application for franchise made by a corporation whose articles of incorporation have been approved by the Secretary of State.

2. An application referring to state highways by number and referring to the right to locate and construct gas pipe, telephone, and telegraph lines, adequately describes the state highway or portion thereof over which the franchise is desired and the nature of the franchise

3. The director of highways has the authority to include in a franchise a provision that during construction of a pipeline it is not in the public interest to allow construction of a competing pipeline.

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                                                                   May 23, 1950

Honorable W. A. Bugge
Director of Highways
Transportation Building
Olympia, Washington                                                                                                              Cite as:  AGO 49-51 No. 281

Dear Sir:

            We have your letter of May 10, 1950, in which you enclose franchise application of Trans-Northwest Gas, Inc., about which you ask the following questions:

            1. Should you consider the application of a corporation when the duplicate articles have not been filed with the county auditor as required by Rem. Rev. Stat. 3803-5?

            2. Does the application adequately describe "the state highway or portion thereof over which franchise is desired" and the "nature of the franchise" within the requirements of 6400-83 Rem. Supp. 1943?

            3. Do you have the authority to include in any franchise you might grant a provision to the effect that it would not be in the public interest to permit the construction of another gas line during the period following the granting of the franchise and while the successful applicant is constructing the pipeline in accordance with the conditions of the franchise?

             [[Orig. Op. Page 2]]

            You are advised:

            1. The director of highways must consider an application for franchise made by a corporation whose articles of incorporation have been approved by the Secretary of State.

            2. The application referring to state highways by number and referring to the right to locate and construct gas pipe, telephone, and telegraph lines, adequately describes the state highway or portion thereof over which the franchise is desired and the nature of the franchise.

            3. You have the authority to include paragraph No. 10 in the franchise if granted.

                                                                     ANALYSIS

            In considering an application for a franchise you should consider only those objections which go to your jurisdiction and disregard all technicalities.

                        Chehalis v. Centralia, 77 Wash. 673, 138 Pac. 293

            Rem. Rev. Stat. 3803-5 provides that the corporation existence begins with the approval of the Secretary of State of the articles of incorporation.  Applicant is therefore a corporation and you must consider its application.

            6400-83 Rem. Supp. 1943 vests you with jurisdiction to grant franchises to private corporations to useany state highway for the construction and maintenance ofgas pipe, telephone, and telegraph lines.

            The right to grant a franchise on any state highway necessarily includes the right to grant a franchise on all state highways on one or more applications.

            The application refers to a proposed franchise which in turn describes the primary state highways and secondary state highways over which the franchise is desired by number which you assigned to said highways under the provisions of Rem. Rev. Stat. 6402-1 as a description thereof.

            The description contained in the application therefore adequately describes the state highway or portion thereof over which the franchise is desired.

             [[Orig. Op. Page 3]]

            The application, by reference to the proposed draft of franchise, asks for the right and privilege of locating, constructing, operating and maintaining gas transmission pipelines, telephone, and telegraph lines.  Eliminating the word transmission, the description contained in the application is that specifically contained in the statute vesting you with jurisdiction and the application, therefore, adequately describes the nature of the franchise.

            We note from your letter that it has been your practice to require an applicant to specifically determine a specific stretch of a specific highway and to describe such specific section over which the franchise is sought, and that it has also been your practice to require applicants to set forth such details as the depth at which pipes are to be laid and the size and kind of pipe to be used.

            Reference to our files shows that we have not heretofore advised you on the type of application with which you are now confronted.  For this reason and because the interests of the public are involved, and since we have concluded that it is your duty to hold a hearing, we think it proper that we advise you further as to your duty in this connection.

            In our opinion of September 19, 1927, to the Honorable Samuel J. Humes, State Highway Engineer (Ops. Atty. Gen. 1927-28, p. 222), we advised that you did not have the authority to formulate rules and regulations in advance.

            This naturally followed from the wording of Rem. Rev. Stat. 6400-84 which authorizes you to conduct a hearing at which the applicant may be required to produce all facts concerning the proposed franchise and at the conclusion of which you are required to determine whether it is for the public interest to grant the franchise in whole or in part.

            If you should determine that the interests of the public will not be served by granting the franchise you deny the application.

            If you should determine that the interests of the public would be served by granting the application you then grant it under such conditions as you find to be proper from the evidence which was submitted at the hearing.

            You have the authority to adopt any reasonable procedure at this statutory hearing.   [[Orig. Op. Page 4]] Witnesses do not have to be sworn unless you should so require, and you are not bound to consider only the evidence introduced at the hearing but must hold an adequate and fair hearing, and in the exercise of your sound judgment determine whether the granting of the franchise would be in the interest of the general public as distinguished from private parties who, on account of proximity to any highway, might have some objection.

                        State ex rel. York v. Walla Walla, 28 Wn. (2d) 891, 184 P. (2d) 577, 172 A.L.R. 1001.

            The legislature, having absolute control over the highways of the state both within and without cities, has delegated to city authorities the right to grant franchises within cities, and as to highways outside of cities has conferred that authority on the county commissioners (Rem. Rev. Stat. 6450-38) as to county roads, and upon you as to primary and secondary state highways.

            Cities have frequently granted franchises over all streets within the corporate limits(North Springs Water Company v. Tacoma, 21 Wash. 517), and also within the corporate limits as they might thereafter be extended.

                        Seattle Light Company v. Seattle, 544 Wash. 9, 102 P. 767.

            In our letter of December 1, 1943, to the Division of Municipal Corporations, we advised that the application of the Kitsap County P.U.D. to the Board of County Commissioners of Kitsap County for a franchise on all county roads in Kitsap County should be considered and that a franchise granted in general terms would not be held invalid for that reason alone.

            In theYork case just cited the application to the county commissioners involved certain county roads and streets in Walla Walla County in the vicinity of and beyond College Place, which was then an unincorporated community.

            InMatthews v. Ellensburg, 73 Wash. 272, 131 Pac 839, our Supreme Court said, with relation to cities, that the legislature authorized them to proceed in a businesslike way, that is, to take one step at a time.  It might be proper to construct or acquire a supply system first and then provide for a distribution system or it might be proper to arrange for the distribution first, the point being that the applicant for the franchise has a right to proceed in a normal and prudent manner and that the law permits an orderly development of a contemplated project in such sequence as sound business judgment requires.

             [[Orig. Op. Page 5]]

            By way of summary you are advised that you should consider whether or not the interest of the general public is to be served by granting the franchise from conditions as you find them at the time of the hearing, that you are to consider the application for a franchise amended in every necessary way to conform to the proof adduced at such hearing, that at such hearing you may and should consider the steps taken by the applicant to perfect its corporate existence and to comply with other provisions of law.

            If you find, as applicant alleges, that the interest of the general public requires that applicant be placed in position to bargain effectively in behalf of prospective rate payers of the state, subject to the ultimate approval of the Washington Public Service Commission, it seems obvious that the applicant should be afforded a reasonable period to begin construction after the Washington Public Service Commission has approved the terms it obtains through such bargaining.

            You are therefore specifically advised that you may and we feel should, if you find that the application should be granted, include therein language of similar import to that quoted by you from paragraph No. 10 of the proposed franchise.  This would not constitute an exclusive franchise or privilege prohibited by the statute.

Very truly yours,

SMITH TROY
Attorney General

E. P. DONNELLY
Assistant Attorney General