Amended in Senate April 15, 2013

Senate Bill No. 611

Introduced by Senator Hill

February 22, 2013

An act to amend Sections 305, 307, 308, begin delete 309.6, end delete begin insert 309.5, 309.7, 321.6, 958.5, 1701.1, end insert 1701.2, begin delete and end delete 1701.3 begin insert , 1731, 1756, 5900, and 7661 end insert of begin insert , and to add Section 854.5 to, end insert the Public Utilities Code, relating to the Public Utilities Commission.

LEGISLATIVE COUNSEL’S DIGEST

SB 611, as amended, Hill. Public Utilities Commission: organization: proceedings.

begin delete

The

end delete

begin insert (1) end insert begin insert   end insert begin insert The end insert California Constitution establishes the Public Utilities Commission, with jurisdiction over all public utilities, as defined. The California Constitution grants the commission certain general powers over all public utilities, subject to control by the Legislature, and authorizes the Legislature, unlimited by the other provisions of the California Constitution, to confer additional authority and jurisdiction upon the commission, that is cognate and germane to the regulation of public utilities. begin insert Existing law establishes the Division of Ratepayer Advocates within the commission to represent the interests of public utility customers and subscribers, with the goal of obtaining the lowest possible rate for service consistent with reliable and safe service levels. Existing law requires the Director of the Division of Ratepayer Advocates to submit an annual budget to the commission for final approval. end insert Existing law requires the Governor to designate the president of the commission from among its members and requires the president to direct the executive director, the attorney, and other staff of the commission, except for the Division of Ratepayer Advocates, in accordance with commission policies and guidelines. begin insert Existing law directs the consumer protection and safety division of the commission to undertake certain railroad safety and gas pipeline safety functions. end insert

The bill would repeal the requirement that the president direct the executive director, attorney, and other staff of the commission. begin insert The bill would rename the Division of Ratepayer Advocates the Office of Ratepayer Advocates, would authorize the office to seek rehearings and judicial review of commission decisions, and would require that the director of the office develop a budget for the office that would be submitted to the Department of Finance for final approval. The bill would change current statutory references from the division of consumer protection and safety to the division of safety and enforcement. end insert

begin delete

Existing

end delete

begin insert (2) end insert begin insert   end insert begin insert Existing end insert law authorizes the attorney for the commission, if directed to do so by the president, except as otherwise directed by vote of the commission, to intervene, if possible, in any action or proceeding involving any question arising pursuant to the Public Utilities Act. Existing law requires the attorney for the commission to commence, prosecute, and expedite the final determination of all actions and proceedings, and to generally perform all duties and services as attorney to the commission, as directed or authorized by the president, except as otherwise directed or authorized by vote of the commission.

This bill would authorize the attorney for the commission, if directed to do so by the commission, to intervene, if possible, in any action or proceeding involving any question arising pursuant to the Public Utilities Act. This bill would require the attorney for the commission to commence, prosecute, and expedite the final determination of all actions and proceedings, and to generally perform all duties and services as attorney to the commission, as directed or authorized by the commission. begin insert The bill would provide that in carrying out his or her functions and duties, the attorney is subject to the State Bar Act and the Rules of Professional Conduct of the State Bar of California. end insert

begin delete

Existing

end delete

begin insert (3) end insert begin insert   end insert begin insert Existing end insert law requires the executive director for the commission to keep a full and true record of all proceedings of the commission, issue all necessary process, writs, warrants, and notices, and perform such other duties as the president, or vote of the commission, prescribes. Existing law provides that the president may authorize the executive director to dismiss complaints or applications when all parties are in agreement thereto, in accordance with rules that the commission may prescribe.

This bill would require the executive director to keep a full and true record of all proceedings of the commission, issue all necessary process, writs, warrants, and notices, and perform the other duties the commission prescribes. The bill would provide that the commission may authorize the executive director to dismiss complaints or applications when all parties are in agreement thereto, in accordance with rules that the commission may prescribe.

begin delete

The

end delete

begin insert (4) end insert begin insert   end insert begin insert The end insert California Constitution authorizes the commission to establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process begin insert , and to establish rules for all public utilities end insert . begin delete Existing law provides for the appointment of administrative law judges and the assigning of commissioners to preside over cases before the commission and requires the commission, to adopt procedures on the disqualification of administrative law judges due to bias or prejudice similar to those of other state agencies and superior courts. end delete

This bill would begin delete require the commission to additionally adopt procedures on the disqualification of commissioners due to bias or prejudice similar to those of other state agencies and superior courts. end delete begin insert correct certain statutory references from the commission adopting regulations to the commission adopting rules. end insert

begin insert

(5) Existing law requires the commission, by January 10 of each year, to report to the Joint Legislative Budget Committee and appropriate fiscal and policy committees of the Legislature on all sources and amounts of funding and actual and proposed expenditures, including any costs to ratepayers, related to specified entities or programs established by the commission by order, decision, motion, settlement, or other action, including, but not limited to, the California Clean Energy Fund, the California Emerging Technology Fund, and the Pacific Forest and Watershed Lands Stewardship Council, and any entities or programs, other than those expressly authorized by statute, that are established by the commission under specified statutes.

end insert begin insert

This bill would prohibit the Public Utilities Commission, by order, decision, motion, settlement, or other action from establishing a nonstate entity, as defined. The bill would prohibit the commission from entering into a contract with any nonstate entity in which a person serves as an owner, director, or officer while serving as a commissioner. The bill would provide that any contract between the commission and a nonstate entity is void and ceases to exist by operation of law, if a person who was a commissioner at the time the contract was awarded, entered into, or extended, on or after January 1, 2014, becomes an owner, director, or officer of the nonstate entity while serving as a commissioner.

end insert begin insert

The California Constitution provides that the Legislature may remove a commissioner of the Public Utilities Commission for incompetence, neglect of duty, or corruption, 2⁄3 of the membership of each house concurring.

end insert begin insert

This bill would provide that a commissioner who acts as an owner, director, or officer of a nonstate entity that was established prior to January 1, 2014, as a result of an order, decision, motion, settlement, or other action by the commission in which the commissioner participated, is negligent of his or her duty and may be removed pursuant to the California Constitution.

end insert begin delete

Existing

end delete

begin insert (6) end insert begin insert   end insert begin insert Existing end insert law establishes certain procedures that are applicable to adjudication, rulemaking and ratesetting cases. begin delete Existing law requires the commission, by regulation, to provide for peremptory challenges and challenges for cause of an assigned administrative law judge in adjudication and ratesetting cases and entitles parties to unlimited peremptory challenges in any case in which the administrative law judge has, within the previous 12 months, served in any capacity in an advocacy position at the commission, been employed by a regulated public utility, or has represented a party or has been a party of interest in the case. end delete

This bill would begin delete require the commission, by rule, to provide for peremptory challenges and challenges for cause of an assigned administrative law judge or assigned commissioner in adjudication and ratesetting cases and entitles parties to unlimited peremptory challenges in any case in which the administrative law judge or assigned commissioner has, within the previous 12 months, served in any capacity in an advocacy position at the commission, been employed by a regulated public utility, or has represented a party or has been a party of interest in the case. The bill would end delete prohibit an officer, employee, or agent of the commission that is assigned to assist in the prosecution of, or to testify in, an adjudication case, from participating in the decision of the case, or in the decision of any factually related proceeding. The bill would permit an officer, employee, or agent of the commission that is assigned to assist in the prosecution of an adjudication case to participate in reaching a settlement of the case, but would prohibit the officer, employee, or agent from participating in the decision of the commission to accept or reject the settlement, except as a witness or counsel in an open hearing or a specified closed hearing.

begin insert

(7) Existing law requires the commission to submit an annual report on the number of cases where resolution exceeded the time periods prescribed in scoping memos and the days that commissioners presided in hearings.

end insert begin insert

This bill would additionally require the commission to include data on the disposition of applications for rehearing in that report.

end insert

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 305 of the Public Utilities Code is
amended to read:

305.  

The Governor shall designate a president of the
commission from among the members of the commission. The
president shall preside at all meetings and sessions of the
commission.

SEC. 2.  

Section 307 of the Public Utilities Code is amended
to read:

307.  

(a) The commission may appoint as attorney to the
commission an attorney at law of this state, who shall hold office
during the pleasure of the commission. begin insert In carrying out his or her
functions and duties, the attorney shall be subject to the State Bar
Act and the Rules of Professional Conduct of the State Bar of
California. end insert

(b) The attorney shall represent and appear for the people of the
State of California and the commission in all actions and
proceedings involving any question under this part or under any
order or act of the commission. If directed to do so by the
commission, the attorney shall intervene, if possible, in any action
or proceeding in which any such question is involved.

(c) Except as provided in Section 1701.2, the attorney shall
commence, prosecute, and expedite the final determination of all
actions and proceedings directed or authorized by the commission,
advise the commission and each commissioner, when so requested,
in regard to all matters in connection with the powers and duties
of the commission and the members thereof, and generally perform
all duties and services as attorney to the commission that the
begin delete commission, end delete begin insert commission end insert may require of him begin insert or her end insert .

SEC. 3.  

Section 308 of the Public Utilities Code is amended
to read:

308.  

(a) The commission shall appoint an executive director,
who shall hold office during its pleasure. The executive director
shall be responsible for the commission’s executive and
administrative duties and shall organize, coordinate, supervise,
and direct the operations and affairs of the commission and
expedite all matters within the commission’s jurisdiction.

(b) The executive director shall keep a full and true record of
all proceedings of the commission, issue all necessary process,
writs, warrants, and notices, and perform such other duties as the
commission, prescribes. The commission may authorize the
executive director to dismiss complaints or applications when all
parties are in agreement thereto, in accordance with rules that the
commission may prescribe.

(c) The commission may appoint assistant executive directors
who may serve warrants and other process in any county or city
and county of this state.

begin delete

SEC. 4.  

Section 309.6 of the Public Utilities Code is amended
to read:

309.6.  

(a) The commission shall adopt procedures on the
disqualification of administrative law judges and commissioners
due to bias or prejudice similar to those of other state agencies and
superior courts.

(b) The commission shall develop the procedures with the
opportunity for public review and comment.

end delete

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Section 309.5 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

309.5.  

(a) There is within the commission begin delete a Division end delete begin insert an Office end insert
of Ratepayer Advocates to represent and advocate on behalf of the
interests of public utility customers and subscribers within the
jurisdiction of the commission. The goal of the begin delete division end delete begin insert office end insert shall
be to obtain the lowest possible rate for service consistent with
reliable and safe service levels. For revenue allocation and rate
design matters, the begin delete division end delete begin insert office end insert shall primarily consider the
interests of residential and small commercial customers. begin insert The office
may seek rehearing and judicial review of commission decisions
pursuant to Article 2 (commencing with Section 1731) and Article
3 (commencing with Section 1756) of Chapter 9. end insert

(b) The director of the begin delete division end delete begin insert office end insert shall be appointed by, and
serve at the pleasure of, the Governor, subject to confirmation by
the Senate.

The director shall annually appear before the appropriate policy
committees of the Assembly and the Senate to report on the
activities of the division.

(c) The director shall develop a budget for the begin delete division end delete begin insert office end insert
which shall be subject to final approval of the begin delete commission. In
accordance with the approved budget, the commission shall, by
rule or order, provide for the assignment of personnel to, and the
functioning of, the division. The division may employ experts
necessary to carry out its functions. Personnel end delete begin insert Department of
Finance. As authorized in the approved budget, the office shall
employ personnel end insert and resources, including attorneys and other
legal support begin delete , shall be provided by the commission to the division end delete
begin insert staff end insert at a level sufficient to ensure that customer and subscriber
interests are effectively represented in all significant proceedings.
begin insert The office may employ experts necessary to carry out its functions. end insert
The director may appoint a lead attorney who shall represent the
begin delete division, end delete begin insert office, end insert and shall report to and serve at the pleasure of the
director. All attorneys begin delete assigned by the commission to perform end delete
begin insert performing end insert services for the begin delete division end delete begin insert office end insert shall report to and be
directed by the lead attorney appointed by the director.

(d) The commission shall develop appropriate procedures to
ensure that the existence of the begin delete division end delete begin insert office end insert does not create a
conflict of roles for any employee. The procedures shall include,
but shall not be limited to, the development of a code of conduct
and procedures for ensuring that advocates and their representatives
on a particular case or proceeding are not advising decisionmakers
on the same case or proceeding.

(e) The begin delete division end delete begin insert office end insert may compel the production or disclosure
of any information it deems necessary to perform its duties from
any entity regulated by the commission, provided that any
objections to any request for information shall be decided in writing
by the assigned commissioner or by the begin delete president of the end delete
commission, if there is no assigned commissioner. begin insert The office shall
have access, upon request, to all information provided to the
commission, a commissioner, or an officer or person employed by
the commission pursuant to Section 314. end insert

(f) There is hereby created the Public Utilities Commission
Ratepayer Advocate Account in the General Fund. Moneys from
the Public Utilities Commission Utilities Reimbursement Account
in the General Fund shall be transferred in the annual Budget Act
to the Public Utilities Commission Ratepayer Advocate Account.
The funds in the Public Utilities Commission Ratepayer Advocate
Account shall be utilized exclusively by the begin delete division end delete begin insert office end insert in the
performance of its duties as determined by the director. The director
shall annually submit a staffing report containing a comparison of
the staffing levels for each five-year period.

(g) On or before January 10 of each year, the begin delete commission end delete begin insert office end insert
shall provide to the chairperson of the fiscal committee of each
house of the Legislature and to the Joint Legislative Budget
Committee all of the following information:

(1) The number of personnel years begin delete assigned to the Division end delete
begin insert utilized during the prior year by the Office end insert of Ratepayer Advocates.

(2) The total dollars expended by the begin delete Division end delete begin insert Office end insert of
Ratepayer Advocates in the prior year, the estimated total dollars
expended in the current year, and the total dollars proposed for
appropriation in the following budget year.

(3) Workload standards and measures for the begin delete Division end delete begin insert Office end insert
of Ratepayer Advocates.

(h) The begin delete division end delete begin insert office end insert shall meet and confer in an informal
setting with a regulated entity prior to issuing a report or pleading
to the commission regarding alleged misconduct, or a violation of
a law or a commission rule or order, raised by the begin delete division end delete begin insert office end insert
in a complaint. The meet and confer process shall be utilized in
good faith to reach agreement on issues raised by the begin delete division end delete
begin insert office end insert regarding any regulated entity in the complaint proceeding.

begin insert

begin insert SEC. 5. end insert   

end insert

begin insert Section 309.7 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

309.7.  

(a) The division of the commission responsible for
begin delete consumer protection and end delete safety begin insert and enforcement end insert shall be
responsible for inspection, surveillance, and investigation of the
rights-of-way, facilities, equipment, and operations of railroads
and public mass transit guideways, and for enforcing state and
federal laws, regulations, orders, and directives relating to
transportation of persons or commodities, or both, of any nature
or description by rail. The begin delete consumer protection and end delete safety begin insert and
enforcement end insert division shall advise the commission on all matters
relating to rail safety, and shall propose to the commission rules,
begin delete regulations, end delete orders, and other measures necessary to reduce the
dangers caused by unsafe conditions on the railroads of the state.
The delegation of enforcement responsibility to the begin delete consumer
protection and end delete safety begin insert and enforcement end insert division shall not diminish
the power of other agencies of state government to enforce laws
relating to employee or environmental safety, pollution prevention,
or public health and safety.

(b) In performing its duties, the begin delete consumer protection and end delete safety
begin insert and enforcement end insert division shall exercise all powers of investigation
granted to the commission, including rights to enter upon land or
facilities, inspect books and records, and compel testimony. The
commission shall employ sufficient federally certified inspectors
to ensure at the time of inspection that railroad locomotives and
equipment and facilities located in class I railroad yards in
California are inspected not less frequently than every 180 days,
and all main and branch line tracks are inspected not less frequently
than every 12 months. In performing its duties, the safety begin insert and
enforcement end insert division shall consult with representatives of railroad
corporations, labor organizations representing railroad employees,
and the Federal Railroad Administration.

(c) The general counsel shall assign to the begin delete consumer protection
and end delete safety begin insert and enforcement end insert division the personnel and attorneys
necessary to fully utilize the powers granted to the commission by
any state law, and by any federal law relating to rail transportation,
including, but not limited to, the Federal Rail Safety Act (45 U.S.C.
Sec. 421m, et seq.), to enforce safety laws, rules, regulations, and
orders, and to collect fines and penalties resulting from the
violation of any safety rule or regulation.

(d) The activities of the begin delete consumer protection and end delete safety begin insert and
enforcement end insert division that relate to safe operation of common
carriers by rail, other than those relating to grade crossing
protection, shall also be supported by the fees paid by railroad
corporations, if any, pursuant to Sections 421 to 424, inclusive.
The activities of the begin delete consumer protection and end delete safety begin insert and
enforcement end insert division that relate to grade crossing protection shall
be supported by funds appropriated therefor from the State
Highway Account in the State Transportation Fund. On or before
November 30 of each year, the commission shall report to the
Legislature on the activities of the safety begin insert and enforcement end insert division,
and shall fully document in the report all expenditures of those
funds in the audit report provided in subdivision (f) of Section
421.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 321.6 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

321.6.  

(a) The commission shall do all of the following:

(1) Develop, publish, and annually update an annual workplan
that describes in clear detail the scheduled ratemaking proceedings
and other decisions that may be considered by the commission
during the calendar year. The plan shall include, but is not limited
to, information on how members of the public and ratepayers can
gain access to the commission’s ratemaking process and
information regarding the specific matters to be decided. The plan
shall also include information on the operation of the office of the
public adviser and identify the names and telephone numbers of
those contact persons responsible for specific cases and matters
to be decided. The plan shall also include a statement that specifies
activities that the commission proposes to reduce the costs of, and
rates for, energy, including electricity, and for improving the
competitive opportunities for state agriculture and other rural
energy consumers. The commission shall post the plan under the
Official Documents area of its Internet Web site and shall develop
a program to disseminate the information in the plan utilizing
computer mailing lists to provide regular updates on the
information to those members of the public and organizations
which request that information.

(2) Produce a complete accounting of its transactions and
proceedings for the preceding year, together with other facts,
suggestions, and recommendations that it deems of value to the
people of the state and a statement that specifies the activities and
achievements of the commission in reducing the costs of, and rates
for, energy, including electricity, for state agriculture and other
rural energy consumers.

(3) Create a report on the number of cases where resolution
exceeded the time periods prescribed in scoping memos begin insert ,
information on the disposition of applications for rehearings, end insert and
the days that commissioners presided in hearings.

(4) Submit annually the plan, accounting, and report required
by paragraphs (1), (2), and (3) to the Governor and Legislature no
later than February 1 of each year.

(b) The president of the commission shall annually appear before
the appropriate policy committees of the Senate and Assembly to
report on the annual workplan access guide of the commission
required pursuant to this section.

(c) The president of the commission shall annually appear before
the appropriate policy committees of the Senate and Assembly to
report on the annual report of the commission on the number of
cases where resolution exceeded the time periods prescribed in
scoping memos and the days that commissioners presided in
hearings, pursuant to Section 13 of Chapter 856 of the Statutes of
1996.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 854.5 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 854.5. end insert   

(a) For purposes of this section, a “nonstate entity”
means a company, corporation, partnership, firm, or other entity
or group of entities, whether organized for profit or not for profit.

(b) The commission, by order, decision, motion, settlement, or
other action shall not establish a nonstate entity. This subdivision
does not limit the authority of the commission to form an advisory
committee or other body whose budget is subject to oversight by
the commission and the Department of Finance.

(c) The commission shall not enter into a contract with a
nonstate entity in which a person serves as an owner, director, or
officer while serving as a commissioner. Any contract between the
commission and a nonstate entity shall be void and cease to exist
by operation of law, if a commissioner, who was a commissioner
at the time the contract was awarded, entered into, or extended,
becomes, on or after January 1, 2014, an owner, director, or officer
of the nonstate entity while serving as a commissioner.

(d) A commissioner who acts as an owner, director, or officer
of a nonstate entity that was established prior to January 1, 2014,
as a result of an order, decision, motion, settlement, or other action
by the commission in which the commissioner participated, is
negligent of his or her duty pursuant to Section 1 of Article XII of
the California Constitution, for which the commissioner may be
removed pursuant to that section.

end insert

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 958.5 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

958.5.  

(a) Twice a year, or as determined by the commission,
each gas corporation shall file with the commission’s begin delete consumer
protection end delete safety begin insert and enforcement end insert division a gas transmission and
storage safety report. The begin delete consumer protection end delete safety begin insert and
enforcement end insert division shall review the reports to monitor each gas
corporation’s storage and pipeline-related activities to assess
whether the projects that have been identified as high risk are being
carried out, and to track whether the gas corporation is spending
its allocated funds on these storage and pipeline-related safety,
reliability, and integrity activities for which they have received
approval from the commission.

(b) The gas transmission and storage safety report shall include
a thorough description and explanation of the strategic planning
and decisionmaking approach used to determine and rank the gas
storage projects, intrastate transmission line safety, integrity, and
reliability, operation and maintenance activities, and inspections
of its intrastate transmission lines. If there has been no change in
the gas corporation’s approach for determining and ranking which
projects and activities are prioritized since the previous gas
transmission and storage safety report, the subsequent report may
reference the immediately preceding report.

(c) If the commission’s begin delete consumer protection end delete safety begin insert and
enforcement end insert division determines that there is a deficiency in a gas
corporation’s prioritization or administration of the storage or
pipeline capital projects or operation and maintenance activities,
the division shall bring the problems to the commission’s
immediate attention.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 1701.1 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

1701.1.  

(a) The commission, consistent with due process,
public policy, and statutory requirements, shall determine whether
a proceeding requires a hearing. The commission shall determine
whether the matter requires a quasi-legislative, an adjudication,
or a ratesetting hearing. The commission’s decision as to the nature
of the proceeding shall be subject to a request for rehearing within
10 days of the date of that decision. If that decision is not appealed
to the commission within that time period it shall not be
subsequently subject to judicial review. Only those parties who
have requested a rehearing within that time period shall
subsequently have standing for judicial review and that review
shall only be available at the conclusion of the proceeding. The
commission shall render its decision regarding the rehearing within
30 days. The commission shall establish begin delete regulations end delete begin insert rules end insert regarding
ex parte communication on case categorization issues.

(b) The commission upon initiating a hearing shall assign one
or more commissioners to oversee the case and an administrative
law judge where appropriate. The assigned commissioner shall
schedule a prehearing conference. The assigned commissioner
shall prepare and issue by order or ruling a scoping memo that
describes the issues to be considered and the applicable timetable
for resolution.

(c) (1) Quasi-legislative cases, for purposes of this article, are
cases that establish policy, including, but not limited to,
rulemakings and investigations which may establish rules affecting
an entire industry.

(2) Adjudication cases, for purposes of this article, are
enforcement cases and complaints except those challenging the
reasonableness of any rates or charges as specified in Section 1702.

(3) Ratesetting cases, for purposes of this article, are cases in
which rates are established for a specific company, including, but
not limited to, general rate cases, performance-based ratemaking,
and other ratesetting mechanisms.

(4) “Ex parte communication,” for purposes of this article,
means any oral or written communication between a decisionmaker
and a person with an interest in a matter before the commission
concerning substantive, but not procedural issues, that does not
occur in a public hearing, workshop, or other public proceeding,
or on the official record of the proceeding on the matter. “Person
with an interest,” for purposes of this article, means any of the
following:

(A) Any applicant, an agent or an employee of the applicant,
or a person receiving consideration for representing the applicant,
or a participant in the proceeding on any matter before the
commission.

(B) Any person with a financial interest, as described in Article
1 (commencing with Section 87100) of Chapter 7 of Title 9 of the
Government Code, in a matter before the commission, or an agent
or employee of the person with a financial interest, or a person
receiving consideration for representing the person with a financial
interest.

(C) A representative acting on behalf of any civic,
environmental, neighborhood, business, labor, trade, or similar
organization who intends to influence the decision of a commission
member on a matter before the commission.

The commission shall by begin delete regulation end delete begin insert rule end insert adopt and publish a
definition of decisionmakers and persons for purposes of this
section, along with any requirements for written reporting of ex
parte communications and appropriate sanctions for noncompliance
with any rule proscribing ex parte communications. The begin delete regulation end delete
begin insert rule end insert shall provide that reportable communications shall be reported
by the party, whether the communication was initiated by the party
or the decisionmaker. Communications shall be reported within
three working days of the communication by filing a “Notice of
Ex Parte Communication” with the commission in accordance
with the procedures established by the commission for the service
of that notice. The notice shall include the following information:

(i) The date, time, and location of the communication, and
whether it was oral, written, or a combination.

(ii) The identity of the recipient and the person initiating the
communication, as well as the identity of any persons present
during the communication.

(iii) A description of the party’s, but not the decisionmaker’s,
communication and its content, to which shall be attached a copy
of any written material or text used during the communication.

begin delete SEC. 5. end delete
begin insert SEC. 10. end insert   

Section 1701.2 of the Public Utilities Code is amended
to read:

1701.2.  

(a) If the commission pursuant to Section 1701.1 has
determined that an adjudication case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned commissioner or the assigned administrative law judge
shall hear the case in the manner described in the scoping memo.
The scoping memo shall designate whether the assigned
commissioner or the assigned administrative law judge shall preside
in the case. The commission shall provide by rule for peremptory
challenges and challenges for cause of the administrative law judge
begin delete or assigned commissioner end delete . Challenges for cause shall include, but
not be limited to, financial interests and prejudice. The rule shall
provide that all parties are entitled to one peremptory challenge
of the assignment of the administrative law judge begin delete and one
peremptory challenge of the assigned commissioner end delete in all cases.
All parties are entitled to unlimited peremptory challenges in any
case in which the administrative law judge begin delete or the assigned
commissioner end delete has within the previous 12 months served in any
capacity in an advocacy position at the commission, been employed
by a regulated public utility, or has represented a party or has been
a party of interest in the case. The assigned commissioner or the
administrative law judge shall prepare and file a decision setting
forth recommendations, findings, and conclusions. The decision
shall be filed with the commission and served upon all parties to
the action or proceeding without undue delay, not later than 60
days after the matter has been submitted for decision. The decision
of the assigned commissioner or the administrative law judge shall
become the decision of the commission if no further action is taken
within 30 days. Any interested party may appeal the decision to
the commission, provided that the appeal is made within 30 days
of the issuance of the decision. The commission may itself initiate
a review of the proposed decision on any grounds. The commission
decision shall be based on the record developed by the assigned
commissioner or the administrative law judge. A decision different
from that of the assigned commissioner or the administrative law
judge shall be accompanied by a written explanation of each of
the changes made to the decision.

(b) No officer, employee, or agent of the commission that is
assigned to assist in the prosecution of, begin delete or end delete to testify in, begin insert or to
supervise the prosecution of end insert an adjudication case begin insert before the
commission end insert , shall participate in the decision of the case, or in the
decision of any factually related proceeding, including participation
in or advising the commission as to findings of fact, conclusions
of law, or orders. An officer, employee, or agent of the commission
that is assigned to assist in the prosecution of an adjudication case
may participate in reaching a settlement of the case, but shall not
participate in the decision of the commission to accept or reject
the settlement, except as a witness or counsel in an open hearing
or a hearing closed pursuant to subdivision (d). The Legislature
finds that the commission performs both prosecutorial and
adjudicatory functions in an adjudication case and declares its
intent that an officer, employee, or agent of the commission begin insert ,
including its attorneys, end insert may perform only one of those functions
in any adjudication case, or factually related proceeding.

(c) Ex parte communications shall be prohibited in adjudication
cases.

(d) Notwithstanding any other provision of law, the commission
may meet in a closed hearing to consider the decision that is being
appealed. The vote on the appeal shall be in a public meeting and
shall be accompanied with an explanation of the appeal decision.

(e) Adjudication cases shall be resolved within 12 months of
initiation unless the commission makes findings why that deadline
cannot be met and issues an order extending that deadline. In the
event that a rehearing of an adjudication case is granted the parties
shall have an opportunity for final oral argument.

(f) (1) The commission may determine that the respondent
lacks, or may lack, the ability to pay potential penalties or fines
or to pay restitution that may be ordered by the commission.

(2) If the commission determines that a respondent lacks, or
may lack, the ability to pay, the commission may order the
respondent to demonstrate, to the satisfaction of the commission,
sufficient ability to pay potential penalties, fines, or restitution that
may be ordered by the commission. The respondent shall
demonstrate the ability to pay, or make other financial
arrangements satisfactory to the commission, within seven days
of the commission commencing an adjudication case. The
commission may delegate to the attorney to the commission the
determination of whether a sufficient showing has been made by
the respondent of an ability to pay.

(3) Within seven days of the commission’s determination of the
respondent’s ability to pay potential penalties, fines, or restitution,
the respondent shall be entitled to an impartial review by an
administrative law judge, of the sufficiency of the showing made
by the respondent of the respondent’s ability to pay. The review
by an administrative law judge of the ability of the respondent to
pay shall become part of the record of the adjudication and is
subject to the commission’s consideration in its order resolving
the adjudication case. The administrative law judge may enter
temporary orders modifying any financial requirement made of
the respondent pending the review by the administrative law judge.

(4) A respondent that is a public utility regulated under a rate
of return or rate of margin regulatory structure or that has gross
annual revenues of more than one hundred million dollars
($100,000,000) generated within California is presumed to be able
to pay potential penalties or fines or to pay restitution that may be
ordered by the commission, and, therefore, paragraphs (1) to (3),
inclusive, do not apply to that respondent.

begin delete SEC. 6. end delete
begin insert SEC. 11. end insert   

Section 1701.3 of the Public Utilities Code is amended
to read:

1701.3.  

(a) If the commission pursuant to Section 1701.1 has
determined that a ratesetting case requires a hearing, the procedures
prescribed by this section shall be applicable. The assigned
commissioner shall determine prior to the first hearing whether
the commissioner or the assigned administrative law judge shall
be designated as the principal hearing officer. The principal hearing
officer shall be present for more than one-half of the hearing days.
The decision of the principal hearing officer shall be the proposed
decision. An alternate decision may be issued by the assigned
commissioner or the assigned administrative law judge who is not
the principal hearing officer. The commission shall establish a
procedure for any party to request the presence of a commissioner
at a hearing. The assigned commissioner shall be present at the
closing arguments of the case. The principal hearing officer shall
present the proposed decision to the full commission in a public
meeting. The alternate decision, if any, shall also be presented to
the full commission at that public meeting. The alternate decision
shall be filed with the commission and shall be served on all parties
simultaneously with the proposed decision.

The presentation to the full commission shall contain a record
of the number of days of the hearing, the number of days that each
commissioner was present, and whether the decision was completed
on time.

(b) The commission shall provide by rule for peremptory
challenges and challenges for cause of the administrative law judge
begin delete or the assigned commissioner end delete . Challenges for cause shall include,
but not be limited to, financial interests and prejudice. All parties
shall be entitled to unlimited peremptory challenges in any case
in which the administrative law judge begin delete or assigned commissioner end delete
has, within the previous 12 months, served in any capacity in an
advocacy position at the commission, been employed by a regulated
public utility, or has represented a party or has been a party of
interest in the case.

(c) Ex parte communications are prohibited in ratesetting cases.
However, oral ex parte communications may be permitted at any
time by any commissioner if all interested parties are invited and
given not less than three days’ notice. Written ex parte
communications may be permitted by any party provided that
copies of the communication are transmitted to all parties on the
same day. If an ex parte communication meeting is granted to any
party, all other parties shall also be granted individual ex parte
meetings of a substantially equal period of time and shall be sent
a notice of that authorization at the time that the request is granted.
In no event shall that notice be less than three days. The
commission may establish a period during which no oral or written
ex parte communications shall be permitted and may meet in closed
session during that period, which shall not in any circumstance
exceed 14 days. If the commission holds the decision, it may permit
ex parte communications during the first half of the interval
between the hold date and the date that the decision is calendared
for final decision. The commission may meet in closed session for
the second half of that interval.

(d) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled
in a timely manner. A quorum of the commission shall be present
for the final oral arguments.

(e) The commission may, in issuing its decision, adopt, modify,
or set aside the proposed decision or any part of the decision based
on evidence in the record. The final decision of the commission
shall be issued not later than 60 days after the issuance of the
proposed decision. Under extraordinary circumstances the
commission may extend this date for a reasonable period. The
60-day period shall be extended for 30 days if any alternate
decision is proposed pursuant to Section 311.

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 1731 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

1731.  

(a) The commission shall set an effective date when
issuing an order or decision. The commission may set the effective
date of an order or decision prior to the date of issuance of the
order or decision.

(b) (1) After any order or decision has been made by the
commission, any party to the action or proceeding, begin insert including the
Office of Ratepayer Advocates, end insert or any stockholder or bondholder
or other party pecuniarily interested in the public utility affected,
may apply for a rehearing in respect to any matters determined in
the action or proceeding and specified in the application for
rehearing. The commission may grant and hold a rehearing on
those matters, if in its judgment sufficient reason is made to appear.
No cause of action arising out of any order or decision of the
commission shall accrue in any court to any corporation or person
unless the corporation or person has filed an application to the
commission for a rehearing within 30 days after the date of
issuance or within 10 days after the date of issuance in the case of
an order issued pursuant to either Article 5 (commencing with
Section 816) or Article 6 (commencing with Section 851) of
Chapter 4 relating to security transactions and the transfer or
encumbrance of utility property.

(2) The commission shall notify the parties of the issuance of
an order or decision by either mail or electronic transmission.
Notification of the parties may be accomplished by one of the
following methods:

(A) Mailing the order or decision to the parties to the action or
proceeding.

(B) If a party to an action or proceeding consents in advance to
receive notice of any order or decision related to the action or
proceeding by electronic mail address, notification of the party
may be accomplished by transmitting an electronic copy of the
official version of the order or decision to the party if the party
has provided an electronic mail address to the commission.

(C) If a party to an action or proceeding consents in advance to
receive notice of any order or decision related to the action or
proceeding by electronic mail address, notification of the party
may be accomplished by transmitting a link to an Internet Web
site where the official version of the order or decision is readily
available to the party if the party has provided an electronic mail
address to the commission.

(3) For the purposes of this article, “date of issuance” means
the mailing or electronic transmission date that is stamped on the
official version of the order or decision

(c) No cause of action arising out of any order or decision of
the commission construing, applying, or implementing the
provisions of Chapter 4 of the Statutes of the 2001-02 First
Extraordinary Session that (1) relates to the determination or
implementation of the department’s revenue requirements, or the
establishment or implementation of bond or power charges
necessary to recover those revenue requirements, or (2) in the sole
determination of the Department of Water Resources, the expedited
review of order or decision of the commission is necessary or
desirable, for the maintenance of any credit ratings on any bonds
or notes of the department issued pursuant to Division 27
(commencing with Section 80000) of the Water Code or for the
department to meet its obligations with respect to any bonds or
notes pursuant to that division, shall accrue in any court to any
corporation or person unless the corporation or person has filed
an application with the commission for a rehearing within 10 days
after the date of issuance of the order or decision. The Department
of Water Resources shall notify the commission of any
determination pursuant to paragraph (2) of this subdivision prior
to the issuance by the commission of any order or decision
construing, applying, or implementing the provisions of Chapter
4 of the Statutes of the 2001-02 First Extraordinary Session. The
commission shall issue its decision and order on rehearing within
20 days after the filing of the application.

begin insert

begin insert SEC. 13. end insert   

end insert

begin insert Section 1756 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

1756.  

(a) Within 30 days after the commission issues its
decision denying the application for a rehearing, or, if the
application was granted, then within 30 days after the commission
issues its decision on rehearing, or at least 120 days after the
application is granted if no decision on rehearing has been issued,
any aggrieved party begin insert , including the Office of Ratepayer Advocates, end insert
may petition for a writ of review in the court of appeal or the
Supreme Court for the purpose of having the lawfulness of the
original order or decision or of the order or decision on rehearing
inquired into and determined. If the writ issues, it shall be made
returnable at a time and place specified by court order and shall
direct the commission to certify its record in the case to the court
within the time specified.

(b) The petition for review shall be served upon the executive
director and the general counsel of the commission either
personally or by service at the office of the commission.

(c) For purposes of this section, the issuance of a decision or
the granting of an application shall be construed to have occurred
on the date of issuance, as defined in paragraph begin delete (4) end delete begin insert (3) end insert of
subdivision (b) of Section 1731.

(d) The venue of a petition filed in the court of appeal pursuant
to this section shall be in the judicial district in which the petitioner
resides. If the petitioner is a business, venue shall be in the judicial
district in which the petitioner has its principal place of business
in California.

(e) Any party may seek from the Supreme Court, pursuant to
California Rules of Court, an order transferring related actions to
a single appellate district.

(f) For purposes of this section, review of decisions pertaining
solely to water corporations shall only be by petition for writ of
review in the Supreme Court, except that review of complaint or
enforcement proceedings may be in the court of appeal or the
Supreme Court.

(g) No order or decision arising out of a commission proceeding
under Section 854 shall be reviewable in the court of appeal
pursuant to subdivision (a) if the application for commission
authority to complete the merger or acquisition was filed on or
before December 31, 1998, by two telecommunications-related
corporations including at least one which provides local
telecommunications service to over one million California
customers. These orders or decisions shall be reviewed pursuant
to the Public Utilities Code in existence on December 31, 1998.

begin insert

begin insert SEC. 14. end insert   

end insert

begin insert Section 5900 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

5900.  

(a)  The holder of a state franchise shall comply with
the provisions of Sections 53055, 53055.1, 53055.2, and 53088.2
of the Government Code, and any other customer service standards
pertaining to the provision of video service established by federal
law or regulation or adopted by subsequent enactment of the
Legislature. All customer service and consumer protection
standards under this section shall be interpreted and applied to
accommodate newer or different technologies while meeting or
exceeding the goals of the standards.

(b) The holder of a state franchise shall comply with provisions
of Section 637.5 of the Penal Code and the privacy standards
contained in Section 551 et seq. of Title 47 of the United States
Code.

(c) The local entity shall enforce all of the customer service and
protection standards of this section with respect to complaints
received from residents within the local entity’s jurisdiction, but
it may not adopt or seek to enforce any additional or different
customer service or other performance standards under Section
53055.3 or subdivision (q), (r), or (s) of Section 53088.2 of the
Government Code, or any other authority or provision of law.

(d) The local entity shall, by ordinance or resolution, provide a
schedule of penalties for any material breach by a holder of a state
franchise of this section. No monetary penalties shall be assessed
for a material breach if it is out of the reasonable control of the
holder. Further, no monetary penalties may be imposed prior to
January 1, 2007. Any schedule of monetary penalties adopted
pursuant to this section shall in no event exceed five hundred
dollars ($500) for each day of each material breach, not to exceed
one thousand five hundred dollars ($1,500) for each occurrence
of a material breach. However, if a material breach of this section
has occurred, and the local entity has provided notice and a fine
or penalty has been assessed, and if a subsequent material breach
of the same nature occurs within 12 months, the penalties may be
increased by the local entity to a maximum of one thousand dollars
($1,000) for each day of each material breach, not to exceed three
thousand dollars ($3,000) for each occurrence of the material
breach. If a third or further material breach of the same nature
occurs within those same 12 months, and the local entity has
provided notice and a fine or penalty has been assessed, the
penalties may be increased to a maximum of two thousand five
hundred dollars ($2,500) for each day of each material breach, not
to exceed seven thousand five hundred dollars ($7,500) for each
occurrence of the material breach. With respect to video providers
subject to a franchise or license, any monetary penalties assessed
under this section shall be reduced dollar-for-dollar to the extent
any liquidated damage or penalty provision of a current cable
television ordinance, franchise contract, or license agreement
imposes a monetary obligation upon a video provider for the same
customer service failures, and no other monetary damages may be
assessed.

(e) The local entity shall give the video service provider written
notice of any alleged material breach of the customer service
standards of this division and allow the video provider at least 30
days from receipt of the notice to remedy the specified material
breach.

(f) A material breach for the purposes of assessing penalties
shall be deemed to have occurred for each day within the
jurisdiction of each local entity, following the expiration of the
period specified in subdivision (e), that any material breach has
not been remedied by the video service provider, irrespective of
the number of customers or subscribers affected.

(g) Any penalty assessed pursuant to this section shall be
remitted to the local entity, which shall submit one-half of the
penalty to the Digital Divide Account established in Section 280.5.

(h) Any interested person may seek judicial review of a decision
of the local entity in a court of appropriate jurisdiction. For this
purpose, a court of law shall conduct a de novo review of any
issues presented.

(i) This section shall not preclude a party affected by this section
from utilizing any judicial remedy available to that party without
regard to this section. Actions taken by a local legislative body,
including a local franchising entity, pursuant to this section shall
not be binding upon a court of law. For this purpose, a court of
law shall conduct de novo review of any issues presented.

(j) For purposes of this section, “material breach” means any
substantial and repeated failure of a video service provider to
comply with service quality and other standards specified in
subdivision (a).

(k) The begin delete Division end delete begin insert Office end insert of Ratepayer Advocates shall have
authority to advocate on behalf of video subscribers regarding
renewal of a state-issued franchise and enforcement of this section,
and Sections 5890 and 5950. For this purpose, the begin delete division end delete begin insert office end insert
shall have access to any information in the possession of the
commission subject to all restrictions on disclosure of that
information that are applicable to the commission.

begin insert

begin insert SEC. 15. end insert   

end insert

begin insert Section 7661 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

7661.  

(a) The commission shall require every railroad
corporation operating in this state to develop, within 90 days of
the effective date of the act adding this section, in consultation
with, and with the approval of, the begin delete California Emergency
Management Agency end delete begin insert Office of Emergency Services end insert , a protocol for
rapid communications with the agency, the Department of the
California Highway Patrol, and designated county public safety
agencies in an endangered area if there is a runaway train or any
other uncontrolled train movement that threatens public health and
safety.

(b) A railroad corporation shall promptly notify the begin delete California
Emergency Management Agency end delete begin insert Office of Emergency Services end insert ,
the Department of the California Highway Patrol, and designated
county public safety agencies, through a communication to the
Warning Center of the begin delete California Emergency Management Agency end delete
begin insert Office of Emergency Services end insert , if there is a runaway train or any
other uncontrolled train movement that threatens public health and
safety, in accordance with the railroad corporation’s
communications protocol developed pursuant to subdivision (a).

(c) The notification required pursuant to subdivision (b) shall
include the following information, whether or not an accident or
spill occurs:

(1) The information required by subdivision (c) of Section 7673.

(2) In the event of a runaway train, a train list.

(3) In the event of an uncontrolled train movement or
uncontrolled movement of railcars, a track list or other inventory
document if available.

(d) The begin delete consumer protection and end delete safety begin insert and enforcement end insert division
shall investigate any incident that results in a notification required
pursuant to subdivision (b), and shall report its findings concerning
the cause or causes to the commission. The commission shall
include the division’s report in its report to the Legislature pursuant
to Section 7711.