BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 636| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- UNFINISHED BUSINESS Bill No: SB 636 Author: Hill (D) Amended: 6/15/14 Vote: 21 SENATE ENERGY, UTILITIES & COMMUNIC. COMMITTEE : 8-0, 1/14/14 AYES: Padilla, Cannella, De León, DeSaulnier, Hill, Knight, Pavley, Wolk NO VOTE RECORDED: Fuller, Corbett, Wright SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 SENATE FLOOR : 33-0, 1/23/14 AYES: Anderson, Beall, Berryhill, Block, Cannella, Corbett, Correa, De León, DeSaulnier, Evans, Gaines, Galgiani, Hancock, Hernandez, Hill, Hueso, Huff, Jackson, Knight, Lara, Leno, Lieu, Liu, Mitchell, Monning, Padilla, Roth, Steinberg, Torres, Vidak, Walters, Wolk, Yee NO VOTE RECORDED: Calderon, Fuller, Nielsen, Pavley, Wright, Wyland, Vacancy ASSEMBLY FLOOR : 76-0, 8/22/14 - See last page for vote SUBJECT : Public Utilities Commission: proceedings SOURCE : Author DIGEST : This bill prohibits any Public Utilities Commission (PUC) employee, agent or officer that is personally involved in the prosecution or in the supervision of an adjudication case CONTINUED SB 636 Page 2 from participating in, or advising PUC on, the decision of that case or the decision of a factually related proceeding. Assembly Amendments clarify that the provisions apply only to adjudication proceedings. ANALYSIS : Existing law: 1.Requires the Governor to designate one of the commissioners as president who is authorized to direct and prescribe duties of an attorney (general counsel), executive director, and other staff and preside at PUC meetings. 2.Authorizes the PUC to appoint a general counsel to represent the PUC in all actions, to commence, prosecute or intervene in proceedings as directed by the president, to advise the PUC and each commissioner on all matters, and to perform all duties that the president or a vote of the PUC may require. 3.Establishes within the PUC an independent Office of Ratepayer Advocates (ORA), to be staffed with attorneys from the office of the PUC general counsel (Legal Division), and requires the PUC to develop procedures and a code of conduct to ensure that ORA advocates on a particular case or proceeding are not advising decisionmakers on the same case or proceeding. This bill: 1.Prohibits an officer, employee, or agent of the PUC that is personally involved in the prosecution or in the supervision of the prosecution of an adjudication case from participating in the decision of the case or in the decision of any factually related proceeding. 2.Permits an officer, employee, or agent of the PUC that is personally involved in the prosecution or in the supervision of the prosecution of an adjudication case to participate in reaching a settlement of the case, but prohibits the officer, employee, or agent from participating in the decision of the PUC to accept or reject the settlement, except as a witness or counsel in an open hearing or a specified closed hearing. CONTINUED SB 636 Page 3 Background Due process requires separation of functions . The constitutional guarantee of procedural due process includes the right to have legal disputes and proceedings resolved by a neutral, impartial and unbiased adjudicator and tribunal. This generally requires that a judge or other decisionmaker be advised by an attorney who is different from the attorney serving as prosecutor or advocate in a proceeding. A leading California Supreme Court case is Morongo Band of Mission Indians v. State Water Resources Control Board (45 Cal.4th 731 (2009), which involved a board proceeding to revoke a water license where an attorney prosecuting the case also served as advisory counsel for the board in its decision on an unrelated matter. The court held that contemporaneously serving as adviser to a decisionmaker in one case while prosecuting an unrelated case before that same decisionmaker does not by itself violate due process as long as an agency's internal separation of functions are observed. PUC's separation of functions . The California Administrative Procedures Act (APA) requires a state agency's adjudicative function to be separated from the investigative, prosecutorial, and advocacy functions. The PUC, as an independent constitutional entity, has long been exempt from the APA and instead is governed by provisions in the Public Utilities Code. These provisions do not require separation of advocacy and advisory functions for all PUC employees or even all attorneys in the PUC Legal Division. Existing law requires the general counsel, head of the Legal Division, to both prosecute cases on behalf of PUC and advise commissioners. However, provisions governing ORA (which has attorneys assigned to it from the Legal Division), requires PUC to develop a code of conduct and procedures to ensure that an employee does not both advocate and advise decisionmakers in the same case. PUC guidelines and practices . A 1997 memorandum from the PUC executive director to staff on "Conflict of Roles: Guidelines & Procedures" requires separation of functions for PUC staff under the following general principle: "Commission staff who have been personally involved in CONTINUED SB 636 Page 4 preparing or presenting an adjudicatory case shall not serve in an advisory role in the same adjudicatory proceeding, or any factually related adjudicatory proceeding." But the memo emphasizes that its provisions are only guidelines and also gives the executive director and general counsel authority to waive the guidelines. The PUC states that this memo and its "current practice of keeping attorneys separated on a case-by-case basis" complies with the California Supreme Court's Morongo decision. On January 7, 2014, the commissioners issued a memorandum to the general counsel and Legal Division attorneys with a report from an outside expert on ethical duties and responsibilities of PUC attorneys and a directive that legal ethics training will be forthcoming. The PUC hired the outside expert in August 2013 after an internal dispute last summer involving PUC attorneys and supervisors working on an enforcement action against Pacific Gas and Electric (PG&E) in connection with the San Bruno gas pipeline explosion. Comments According to the author's office, this bill is necessary to codify the requirement to separate advocacy and advisory functions at the PUC because the PUC's current policy requiring separation is not binding and can be waived at the discretion of the general counsel and executive director. The author's office describes two incidents demonstrating the need for this bill involving the general counsel serving both as adviser to the commissioners and directing the prosecuting attorneys to take specified actions in the PUC's penalty proceeding against PG&E for the San Bruno gas pipeline explosion. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No ASSEMBLY FLOOR : 76-0, 8/22/14 AYES: Achadjian, Alejo, Allen, Ammiano, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chávez, Chesbro, Conway, Cooley, Dababneh, Dahle, Daly, Dickinson, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gorell, CONTINUED SB 636 Page 5 Gray, Grove, Hagman, Harkey, Roger Hernández, Holden, Jones, Jones-Sawyer, Levine, Linder, Logue, Lowenthal, Maienschein, Mansoor, Medina, Melendez, Mullin, Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea, John A. Pérez, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Rodriguez, Salas, Skinner, Stone, Ting, Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, Yamada, Atkins NOES: NO VOTE RECORDED: Bigelow, Hall, Ridley-Thomas JG:k 8/22/14 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END **** CONTINUED