BILL ANALYSIS Ó AB 853 Page 1 Date of Hearing: May 13, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 853 (Roger Hernández) - As Amended April 30, 2015 ----------------------------------------------------------------- |Policy |Utilities and Commerce |Vote:|10 - 4 | |Committee: | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: Yes Reimbursable: No SUMMARY: This bill requires electrical or gas corporations to utilize direct employees for any work associated with its infrastructure and computer systems. Specifically, this bill: AB 853 Page 2 1)Requires an electrical or gas corporation, to the extent feasible, to utilize direct employees for any work associated with the design, engineering, and operation of its nuclear, electrical, and gas infrastructure, including all computer and information technology systems. 2)Defines direct employees for construction or maintenance work to include the employees of a contractor or subcontractor licensed in California working under the direct supervision of the electrical or gas corporation. 3)Requires an electrical or gas corporation, before utilizing direct employees, to file a Tier 3 advice letter with the Public Utilities Commission (PUC) that demonstrates that the work can be performed safely and securely, and without jeopardizing the security of its nuclear, electrical, and gas infrastructure. 4)Requires the PUC to open a proceeding, or expand the scope of an existing proceeding, to evaluate the advice letter and hold at least one duly noticed public hearing. 5)Requires the PUC to issue a written decision determining whether the electrical or gas corporation may utilize persons that are not direct employees for the described work. 6)Declares existing law specifies a person or corporation owning or operating a qualifying facility pursuant to federal law or a facility that is an exempt wholesale generator is not an electrical corporation due to the ownership or operation of that facility. FISCAL EFFECT: AB 853 Page 3 Increased costs to in the $200,000 range (special fund) for the PUC to review advice letters and conduct proceedings. COMMENTS: 1)Purpose. According to the author, recent intrusions into major corporate computer systems such as Sony and Antham Blue Cross and theft of information from those systems have demonstrated the vulnerability of those systems. This bill will prohibit electrical or gas corporations from outsourcing critical nuclear, electrical and gas infrastructure work without first obtaining approval from the PUC. 2)Background. Recently, Southern California Edison (SCE) announced plans to lay off hundreds of employees and hire foreign workers. SCE announced that it was laying off about 400 information technology employees, with an additional 100 leaving voluntarily. SCE said that it was outsourcing some tech-related work to two Indian companies, Infosys in Bangalore and Tata Consultancy Services in Mumbai, after looking at multiple firms. In March 2015, the United States Senate Judiciary Committee held a hearing focused on problems with foreign workers and visa programs. The hearing noted that visas are used to bring high-skilled workers into the US to attract world-class talent and lead in the global arena. However, the hearing highlighted stories of abuses causing the displacement of American workers and noted visa programs are to complement the AB 853 Page 4 US workforce, not displace it. 3)Drafting Considerations. The Tier 3 advice letter process is different than a formal proceeding and results in resolutions, while a proceeding results in decisions. If the author intends the bill to require a formal proceeding to consider the use of outside employees, he may wish to consider requiring the electrical or gas corporations to file an application rather than an advice letter. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081