BILL NUMBER: AB 861 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 24, 2012
AMENDED IN SENATE JULY 2, 2012
AMENDED IN SENATE JUNE 19, 2012
AMENDED IN SENATE JUNE 7, 2012
AMENDED IN SENATE MAY 14, 2012
AMENDED IN ASSEMBLY MAY 27, 2011
INTRODUCED BY Assembly Member Hill
FEBRUARY 17, 2011
An act to amend Sections 2110 and 2111 of, and to add Section
451.6 746 to, the Public Utilities
Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 861, as amended, Hill. Public Utilities Act: remedies for
violation: gas and electrical corporation executive officer
compensation incentives.
(1) The California Constitution establishes the Public Utilities
Commission, with regulatory jurisdiction over all public utilities,
as defined. The Public Utilities Act provides that every public
utility and every officer, agent, or employee of a public utility,
who violates or fails to comply with, or who procures, aids, or abets
any violation by any public utility of any provision of the
California Constitution or of the act, or who fails to comply with
any part of any order, decision, rule, direction, demand, or
requirement of the commission, or who procures, aids, or abets any
public utility in a violation or noncompliance, in a case in which a
penalty has not otherwise been provided, is guilty of a misdemeanor
and is punishable by a fine not exceeding $1,000, or by imprisonment
in a county jail not exceeding one year, or by both fine and
imprisonment.
This bill would provide that the fine may not exceed $5,000.
(2) The act additionally provides that every corporation or
person, other than a public utility and its officers, agents, or
employees, knowingly violating or failing to comply with, or
procuring, aiding, or abetting any violation of the California
Constitution relating to public utilities or of the act, or that
fails to comply with any part of any order, decision, rule,
direction, demand, or requirement of the commission, or procuring,
aiding, or abetting any public utility in a violation or
noncompliance, in a case in which a penalty has not otherwise been
provided, is subject to a penalty of not less than $500, or more than
$20,000, for each offense.
This bill would increase the maximum penalty to not more than
$50,000 for each offense.
(3) Existing law authorizes the commission to fix the rates and
charges for every public utility, and requires that those rates and
charges be just and reasonable. Existing law requires that any
expense resulting from a bonus paid to an executive officer, as
defined, of a public utility that has ceased to pay its debts in the
ordinary course of business, be borne by the shareholders of the
public utility and prohibits any expense from being recovered in
rates.
This bill would require that any expense resulting from
an earnings- or stock price-based incentive program paid to an
employee or director of an electrical or gas corporation that is a
public utility be borne by the shareholders of the public utility and
would prohibit any expense from being recovered in rates. Because
this provision of the bill would be a part of the act and because a
violation of an order or decision of the commission implementing this
requirements would be a crime, the bill would impose a
state-mandated local program by creating a new crime
the commission to determine the appropriate ratemaking treatment for
incentive compensation paid to officers or employees of an electrical
corporation or gas corporation for incentive compensation that is
linked to the stock price or financial performance of the electrical
corporation or gas corporation .
(4) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 451.6 is added to the Public
Utilities Code, to read:
451.6. Any expense resulting from an earnings- or stock
price-based incentive program paid to an employee or director of an
electrical corporation or a gas corporation that is a public utility
shall not be recoverable either directly or indirectly in rates and
shall be borne exclusively by the shareholders of the public utility.
SECTION 1. Section 746 is added to the
Public Utilities Code , to read:
746. The commission shall determine the appropriate ratemaking
treatment for incentive compensation paid to officers or employees of
an electrical corporation or gas corporation for incentive
compensation that is linked to the stock price or financial
performance of the electrical corporation or gas corporation.
SEC. 2. Section 2110 of the Public Utilities Code is amended to
read:
2110. Every public utility and every officer, agent, or employee
of any public utility, who violates or fails to comply with, or who
procures, aids, or abets any violation by any public utility of any
provision of the California Constitution or of this part, or who
fails to comply with any part of any order, decision, rule,
direction, demand, or requirement of the commission, or who procures,
aids, or abets any public utility in the violation or noncompliance
in a case in which a penalty has not otherwise been provided, is
guilty of a misdemeanor and is punishable by a fine not exceeding
five thousand dollars ($5,000), or by imprisonment in a county jail
not exceeding one year, or by both fine and imprisonment.
SEC. 3. Section 2111 of the Public Utilities Code is amended to
read:
2111. Every corporation or person, other than a public utility
and its officers, agents, or employees, which or who knowingly
violates or fails to comply with, or procures, aids or abets any
violation of any provision of the California Constitution relating to
public utilities or of this part, or fails to comply with any part
of any order, decision, rule, direction, demand, or requirement of
the commission, or who procures, aids, or abets any public utility in
the violation or noncompliance, in a case in which a penalty has not
otherwise been provided for the corporation or person, is subject to
a penalty of not less than five hundred dollars ($500), nor more
than fifty thousand dollars ($50,000) for each offense.
SEC. 4. No reimbursement is required by this
act pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.