BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON ENERGY, UTILITIES AND COMMUNICATIONS
                              Senator Ben Hueso, Chair
                                2015 - 2016  Regular 

          Bill No:          AB 2903           Hearing Date:    8/31/2016
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          |Author:    |Gatto                                                |
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          |Version:   |8/17/2016    Amended                                 |
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          |Urgency:   |Yes                    |Fiscal:      |Yes             |
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          |Consultant:|Nidia Bautista                                       |
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          SUBJECT: Public Utilities Commission: duties and  
          responsibilities: governance

            DIGEST:    This bill provides a suite of reforms of the  
          operations of the California Public Utilities Commission (CPUC),  
          including clarifying the responsibilities and oversight of  
          various positions; improvements to ethics practices; reports  
          related to telecommunications services and CPUC staffing;  
          stating the intent of the Legislature to transfer most non-rail,  
          for-hire transportation services to the State Transportation  
          Agency (STA); and others.

          ANALYSIS:
          
          Existing law:
          
          1)Establishes the CPUC with jurisdiction over all public  
            utilities and grants the CPUC certain general powers over all  
            public utilities and common carriers, subject to control by  
            the Legislature.  (California Constitution, Article 12)

          2)Requires the office of the CPUC to be located in the City and  
            County of San Francisco.  Requires the CPUC to hold at least  
            one session per calendar month in the City and County of San  
            Francisco.  (Public Utilities Code 306) 

          3)Establishes a division of the CPUC responsible for consumer  
            protection and safety with responsibility for inspections,  
            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  







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            laws, regulations, orders, and directives relating to  
            transportation of persons or commodities, or both, of any  
            nature or description by rail. (Public Utilities Code 309.7)

          4)Requires the CPUC to regulate utilities, including telephone  
            corporations and to establish just and reasonable rates for  
            service, with corporations proposing rates either through a  
            general rate case application or an advice letter.  (Public  
            Utilities Code 451)

          5)Specifies that whenever the CPUC finds that the rules,  
            practices, equipment, appliances, facilities, or service of  
            any public utility, or the methods of manufacture,  
            distribution, transmission, storage, or supply employed by it,  
            are unjust, unreasonable, unsafe, improper, inadequate, or  
            insufficient, the CPUC shall determine, and, by order or rule,  
            fix the rules, practices, equipment, appliances, facilities,  
            service, or methods to be observed, furnished, constructed,  
            enforced, or employed.  (Public Utilities Code 761)

          6)Establishes the CPUC's authority to regulate, require license  
            or permit to operate, require insurance and workers  
            compensation, take appropriate enforcement action and other  
            provisions related to passenger stage corporations (Public  
            Utilities Code 226 and 1031 et seq.) and transportation  
            charter-party carriers  (Public Utilities Code 5351).

          7)Establishes the CPUC's authority to regulate private carriers  
            of passengers (Public Utilities Code 4001) and household  
            goods carriers (Public Utilities Code 5101) including  
            requiring public liability and property insurance, cargo  
            insurance, knowledge of rates, documentation, timely reporting  
            of revenues and payment fees, and provides that the CPUC can  
            take appropriate enforcement action, etc. 

          This bill:

          1)Finds and declares that the California Research Bureau in the  
            California State Library shall conduct a study of  
            telecommunications service governance by January 1, 2018 to  
            determine what regulatory structure would provide the  
            appropriate regulatory oversight of telecommunications  
            services. 

          2)Restricts an executive of a public utility from serving as a  








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            commissioner within two years after leaving employment of the  
            utility. 

          3)Requires the CPUC to appoint a chief administrative law judge  
            (ALJ) who holds office at the pleasure of the CPUC and  
            requires the chief ALJ to keep a full and true record of all  
            proceedings of the CPUC.

          4)Requires the CPUC to appoint an internal auditor who holds  
            office at the pleasure of the CPUC.  Requires the internal  
            auditor to be responsible for the oversight of the internal  
            audit unit and plan, initiate, and perform audits of key  
            financial, management, operational, and information technology  
            functions within the CPUC to improve accountability and  
            transparency.

          5)Repeals the requirement on the executive director to keep a  
            full and true record of all proceedings of the CPUC.

          6)Allows the executive director to authorize CPUC employees to  
            undertake temporary training and development assignments with  
            other agencies, departments, and commissions, including the  
            California Energy Commission (CEC), the California Air  
            Resources Board, and the Division of Oil, Gas, and Geothermal  
            Resources at the Department of Conservation.

          7)Requires the executive director to work with the University of  
            California, the California State University, and other  
            education institutions to develop curriculum and training  
            necessary or useful to candidates for employment with the  
            CPUC.

          8)Requires the CPUC to appoint a Deputy Executive Director for  
            Safety who holds office at the pleasure of the CPUC and has  
            primary responsibility for implementing the authority of the  
            CPUC to initiate an investigation into a safety-related matter  
            and to exercise the emergency authority of the CPUC to ensure  
            the safety of the public.

          9)Authorizes the CPUC to conduct financial and performance  
            audits of any entity or program created by any order,  
            decision, motion, settlement, or other action of the CPUC. 

          10)Requires the CPUC public advisor to receive complaints and  
            comments from members of the public concerning how the CPUC is  








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            carrying out its functions and requires the public advisor to  
            compile at least annually the number and nature of complaints  
            and comments from the public.

          11)Requires the CPUC to appoint an independent ombudsman for  
            ethics that receives complaints and comments from employees of  
            the CPUC concerning how the CPUC is carrying out its  
            functions.  Requires the ombudsman to be responsible for  
            instituting a program of enhanced ethics training for all  
            commissioners and employees. 

          12)Requires the CPUC to report to the relevant policy and fiscal  
            committees of the Legislature by March 31, 2017 options to  
            locate operations and staff outside of the CPUC's San  
            Francisco headquarters.  Requires the report to explore  
            options for leveraging additional facilities in areas of the  
            state that would allow the CPUC to collaborate with other  
            state entities and provide staff more opportunities for  
            training, career development, and exchange placements. 

          13)Requires the CPUC, immediately upon completion of an audit of  
            an entity or program created by the CPUC to transmit a copy of  
            the audit report to the Legislature and, once transmitted,  
            make the report available to the public.

          14)Requires the CPUC to advocate before the Federal Nuclear  
            Regulatory Commission for expedited relocation of any spent  
            fuel stored at nuclear powerplants in this state to an  
            independent, offsite spent fuel storage installation. 

          15)States it is the intent of the Legislature to transfer the  
            duties and responsibilities of the CPUC over passenger state  
            corporations, charter-party carriers of passengers,  
            transportation network companies (TNCs), household goods  
            carriers, vessel common carriers, private carriers, for-hire  
            vessels, and commercial air operators to state departments  
            within the STA, consistent with Article XII of the California  
            Constitution.  Requires the Governor to propose, by January  
            31, 2018, the specific budget and statutory changes needed to  
            complete the transfer of the duties and responsibilities to  
            the STA by no later than July 1, 2018.

               a)     States it is the intent of the Legislature to make  
                 conforming changes to this code by July 1, 2018.









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               b)     States it is the intent of the Legislature to  
                 evaluate methods for ensuring that rail crossings  
                 inspected by the CPUC and rail transit approved by the  
                 CPUC are coordinated with the STA to ensure projects are  
                 assessed and funded with regard to safety and mobility  
                 needs.

               c)     States this Act is an urgency statute necessary for  
                 the immediate preservation of the public peace, health  
                 and safety and shall go into immediate effect based on  
                 the need to facilitate the orderly transition of duties  
                 and responsibilities at the earliest possible time.

          Background

          CPUC need for reform.  In response to increased scrutiny due to  
          several recent scandals and incidents, including the fatal PG&E  
          San Bruno natural gas pipeline explosion and the release of  
          emails between CPUC commissioners and staff and regulated  
          utilities, the CPUC has instituted several, changes to  
          personnel, including the resignation of former CPUC president  
          and the former executive director, and replaced other management  
          and staff positions.  The CPUC has also initiated internal  
          reforms to better address safety, including requiring safety to  
          be assessed in all proceedings.  The CPUC has also recently  
          proposed a Division of Safety Advocates to further bolster  
          safety issues in ratemaking proceedings.  The CPUC has also been  
          undergoing a strategic planning process to better focus its  
          efforts.  In the recently approved budget, the CPUC will also be  
          hiring about a quarter of its workforce in the coming year -  
          nearly 250 staff positions in areas of information technology,  
          safety, energy analysts, and others.  The CPUC has also been  
          working to implement the many audits and third-party expert  
          recommendations that range from improving the oversight of  
          natural gas pipelines, to improving overall management  
          processes, to establishing procedures for reviewing balancing  
          accounts and several others.  

          Governor announces reform framework. In June of this year, the  
          Governor announced an agreement with Assemblymember Gatto and  
          Senators Hill and Leno announcing a framework of reform  
          proposals related to the CPUC.  This bill incorporates several  
          of the reforms mentioned in the press release.  Other reforms  
          can be found in SB 215 (Leno-Hueso), SB 512 (Hill), SB 1017  
          (Hill), and SB 62 (Hill).








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          Spread too thin?  A valid and growing concern about the CPUC has  
          been raised several times, including by the current president:  
          is the CPUC spread too thin and handling too many varied areas?   
          The notion that one agency would handle issues related to  
          railroads, transportation, electric and water utilities and  
          phone service does raise concerns.  Interestingly, the plethora  
          of issues is not unique to the CPUC and similar to some other  
          states' public utilities commissions.  Perhaps the biggest  
          exception is the inclusion of TNCs under a statewide public  
          utilities commission which does seem to be unique to California  
          since many other states regulate these services at the local  
          level. 

          Codifying existing positions. This bill proposes to codify  
          positions that currently exist at the CPUC, including an  
          internal auditor and the recently created deputy executive  
          director for safety.  In the case of the internal auditor, the  
          language proposed in this bill may be more appropriately  
          assigned to the existing position of the Chief Internal Auditor  
          who oversees the CPUC's auditing staff.  The author and  
          committee may wish to amend the bill to insert "chief internal  
          auditor where "internal auditor" is referenced.  In the case of  
          the deputy executive director for safety, the powers extended to  
          this position to exercise the emergency authority of the CPUC to  
          ensure safety merits amendments to require the CPUC to establish  
          rules for such emergency actions.  Unfortunately, as of the  
          writing of this analysis, the CPUC has not been able to  
          articulate an existing process for exercising such authority.   
          The author and committee may wish to amend this bill to require  
          the CPUC to determine rules to allow for appeals by any public  
          utility subjected to the emergency authority. 

          CPUC power to appoint.  This bill would provide the CPUC  
          Commissioners greater power to appoint key positions within the  
          operations of the CPUC, including the Chief Administrative Law  
          Judge, the Deputy Executive Director of Safety and the Chief  
          Internal Auditor.  The administration and author argue that such  
          appointment authority will help ensure that the Commissioners  
          can better manage the workload and operations of the CPUC. 

          Cross-training and establishing a career pipeline. This bill  
          would allow the executive director to authorize staff to  
          cross-train at other relevant agencies, boards and commissions.   
          Considering the complexity of the issues before the CPUC, the  








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          staff would benefit from opportunities to further their  
          understanding of issues and perspectives from other relevant  
          state entities, and vice-versa.  Similarly beneficial is this  
          bill's proposal to have the CPUC work with universities and  
          other educational institutions to develop curriculum to build a  
          pipeline for a workforce.

          Ability to audit CPUC created entities and programs.  Among the  
          powers of the CPUC, the CPUC has often negotiated settlements,  
          particularly related to mergers, that create new entities or  
          programs.  For example the California Emerging Technology Fund  
          (CETF) was developed and funded by the CPUC approved mergers  
          between SBC-AT&T and Verizon-MCI as a separate nonprofit.   
          Earlier this year, the author of this bill requested an audit of  
          the CETF.  However, the CPUC informed the author that they  
          lacked the statutory authority to conduct an audit on this and  
          other similarly constructed entities.  This bill will ensure the  
          CPUC has the statutory authority to conduct such audits that  
          adhere to approved general auditing practices. 

          What's in a name? Ombudsman, ethics officer, inspector general,  
          public advisor.  As currently crafted this bill utilizes the  
          term ombudsman which is commonly used in federal and other  
          agencies for a position that interacts with the public.   
          However, the functions of this position, as included in this  
          bill, are purely internal - employee complaints and ethics  
          training.  As currently drafted in this bill, these functions  
          are not workable.  The ethics training and advising portion is  
          more appropriate for an ethics officer.  While, the provisions  
          related to receiving complaints from staff about commissioners  
          and executive director are not well-suited for someone who lacks  
          independence from the commissioners and powers to investigate  
          the complaints.  The author and committee may wish to amend this  
          bill to remove the language related to fielding complaints and  
          replace the name with ethics officer. This bill also expands the  
          responsibilities of the existing public advisor to receive,  
          track and report complaints/comments from the public. However,  
          the author and committee may wish to amend this bill to clarify  
          the public advisor's role in resolving complaints and eliminate  
          the reporting requirements associated with tracking the  
          complaints. 
           
          Staffing outside San Francisco. In recent years, the Legislature  
          has expressed a strong interest in ensuring the CPUC is staffed  
          appropriately throughout the state. This bill incorporates  








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          language to require the CPUC to develop a plan to staff the CPUC  
          in offices located where the staff can benefit from  
          opportunities to work more closely with other agencies,  
          departments and commissions, including in Sacramento.  
          Considering the CPUC will be hiring nearly a quarter of the CPUC  
          staff (roughly 250 positions) in the coming year, a plan that  
          addresses the needs of the agency, staff, but also the public,  
          would be timely.  The author and committee may wish to amend  
          this bill to require the CPUC to ensure the staffing plan  
          considers how the public can be better served. 

          Telecommunications services study.  This bill proposes a study  
          by the California Research Bureau on telecommunications  
          services.  The CPUC has long regulated the communications  
          industry.  However, over the years, changes in state and federal  
          jurisdiction have modified and shifted the exact parameters of  
          the CPUC's regulatory responsibilities.  The growth of new  
          technology and recent decisions by the federal government,  
          including the Federal Communications Commission decision related  
          to open internet, continue to shift the telecommunications  
          regulatory landscape.  Although a study in this area would be  
          extremely beneficial, unfortunately, the desire by the author to  
          have the study completed by April 1 and the limitations of the  
          California Research Bureau's resources would make such a  
          timeline unworkable.  The author and committee may wish to amend  
          this bill to remove the requirement that California Research  
          Bureau conduct a telecommunications services study. 

          Nuclear spent fuel. With the closure of the San Onofre Nuclear  
          Generating Station (SONGS) and the pending closure of the PG&E  
          Diablo Canyon nuclear powerplant, there is a high interest by  
          state leaders and the public to locate safe, off-site storage  
          facilities of the nuclear spent fuel.  However, it is the  
          federal government's purview to site the storage of nuclear  
          spent fuel, involving the Department of Energy (DOE) and the  
          Nuclear Regulatory Commission (NRC). The author and committee  
          may wish to amend this bill to require the CPUC to advocate at  
          the DOE and other relevant federal entities, in addition to the  
          NRC, for expedited relocation of any spent fuel stored at  
          nuclear powerplants in this state to an independent, offsite  
          spent fuel storage installation.
           
          Is the CPUC the right agency to regulate transportation-related  
          efforts?  In consideration of the many challenges the CPUC is  
          facing, the question must be raised as to whether the CPUC is  








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          the right state agency to oversee transportation-related  
          efforts.  After federal deregulation of trucking, the CPUC's  
          corresponding staffing and resources, including investigators,  
          were largely eliminated.  Today, the CPUC is struggling to keep  
          up with existing demands, as well as new challenges that have  
          emerged, such as addressing TNCs, like Uber, Lyft and Sidecar.   
          Moving the transportation-related efforts at the CPUC may be  
          limited by constitutional requirements.  However, the  
          legislature may wish to more deeply explore the question with  
          other relevant legislative committees and agencies.  This bill  
          will require the Governor to develop and propose a plan to the  
          Legislature by January 31, 2018 to reorganize the non-rail  
          transportation for-hire functions at the CPUC to the STA by July  
          1, 2018.  The transportation services that are mentioned  
          include:

                 Passenger Stage Corporations (PSCs) - for-hire carriers  
               transporting passengers over public highways on an  
               individual-fare basis.  Examples include: Greyhound bus  
               service and airport shuttles.

                 Transportation Charter-Party Carriers (TCPs) - operate  
               under the direction and control of their chartering party  
               that arranges the transportation, on a prearranged basis.   
               Examples include tour buses, limousines, and TNCs,  
               including Uber, Lyft, and Sidecar.

                 Private Carriers of Passengers (PCPs) - includes  
               not-for-hire motor carrier transporting passengers in buses  
               (vehicles seating 10 or more) that are required to obtain a  
               "CA number" from CHP. 

                 Household Goods Carriers - includes for-hire moving  
               companies. 

                 Vessel-Common Carriers - ferries that provide  
               transportation on waterways according to regular schedules  
               between fixed points and assess individual fares. 

                 For-hire Vessel Operators - boats that are available for  
               charter, and are commonly engaged for fishing and whale  
               watching expeditions.

                 Commercial Air Operators - persons who own, control,  
               operate, rent, or manage aircraft for any commercial  








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               purpose for compensation, including sightseeing and  
               recreational operators.  This category does not include hot  
               air balloons or any passenger flights between airports  
               within California. 

          Another approach.  Existing statutory authority in Government  
          Code 12080-12081 provides the Governor the power to reorganize  
          the executive branch by using the executive reorganization  
          process.  Such efforts begin with a Governor's submittal of a  
          reorganization plan to the Legislative Counsel for drafting into  
          bill language, and to the Little Hoover Commission, which  
          examines the plan and reports its recommendations.  Thirty days  
          after submission to the Little Hoover Commission, the Governor  
          may submit the plan to the Legislature.  
                                                        
          Appeals.  A party wishing to appeal a decision of the CPUC can  
          appeal to the CPUC's own court or the California Supreme Court.   
          This unique limitation to CPUC processes means most decisions of  
          the CPUC stand as it is unlikely the Supreme Court will wish to  
          hear many of these cases.  This bill proposes to allow any  
          action related to the California Public Records Act to be  
          petitioned at a superior court, where there is greater  
          opportunity to have a case heard. This language is identical to  
          language in SB 1017 (Hill) and similar to language supported by  
          the Senate in SB 48 (Hill, 2015). 

          Prior/Related Legislation
          
          ACA 11 (Gatto, 2016) proposed a measure on the ballot to  
          authorize the Legislature to reallocate or reassign all or a  
          portion of the functions of the CPUC to other state agencies,  
          departments, boards, or other entities, consistent with  
          specified purposes and proposed to repeal the provisions of the  
          California Constitution pertaining to the CPUC effective January  
          1, 2019.  The bill is currently in this committee. 

          AB 825 (Rendon, 2015) would have proposed a suite of reforms of  
          the CPUC largely directed at increased transparency of the  
          activities of the agency, including requiring the California  
          State Auditor's Office to appoint an Inspector General within  
          its office for the CPUC, expanding the roles and  
          responsibilities of the CPUC public advisor, specifying  
          additional requirements of commissioners, and increased  
          transparency of electric utilities' procurement, among others.   
          The bill was vetoed by the Governor.








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          SB 48 (Hill, 2015) would have proposed a suite of reforms of the  
          governance and operations of the CPUC, including, among others,  
          requiring sessions in Sacramento, applying the Code of Ethics  
          from the Administrative Procedures Act (APA) to administrative  
          law judges, clarifying and augmenting the information the CPUC  
          must provide the Legislature in its annual report, and others.   
          The bill was vetoed by the Governor.

          SB 215 (Leno-Hueso, 2015) proposes a suite of reforms of the  
          rules, operations and procedures of the CPUC pertaining to the  
          laws and rules related to ex parte communications and criteria  
          and process for disqualification of commissioners to a  
          proceeding.  The bill is on its way to the Governor.

          SB 512 (Hill, 2016) proposes a suite of reforms of the  
          operations and governance of the CPUC, including allowing  
          intervenor compensation for certain local governments, requiring  
          specified information is available to the public, requiring  
          specified reporting of the CPUC regarding the timeliness of  
          proceedings, applying the Code of Ethics from the APA to ALJs,  
          and others.  The bill is currently on the Senate Floor. 

          SB 660 (Leno-Hueso, 2015) would have proposed a suite of reforms  
          of the governance, rules, operations and procedures of the CPUC,  
          including:  reform of laws and rules related to ex parte  
          communications, criteria and process for disqualification of  
          commissions to a proceeding, and authorizes the Commission to  
          appoint the chief administrative law judge.  The bill was vetoed  
          by the Governor.

          SJR 23 (Bates, Chapter 73, Statutes 2016) urges Congress to pass  
          the Interim Consolidated Storage Act of 2016 (House of  
          Representatives (H.R.) 4745) and the United States Department of  
          Energy (DOE) to implement the prompt and safe relocation of  
          spent nuclear fuel from the SONGS to a licensed and regulated  
          interim consolidated storage facility.  

          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             Yes          Local:          No


            SUPPORT:  

          None received








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          OPPOSITION:

          Communications Workers of America (CWA), District 9


          ARGUMENTS IN SUPPORT:    The author states: "The CPUC is spread  
          too thin, and has too many issues within its jurisdiction. Now  
          is time to think about how we can make the CPUC more focused,  
          specialized, and accountable.  The residents in Porter Ranch are  
          not alone.  It's hard to find a community in California that  
          wasn't affected by the CPUC in recent years. These much-needed  
          reforms are a significant step to restore the public's trust in  
          the commission, and ensuring that it does what is best for  
          ratepayers." 
          
          ARGUMENTS IN OPPOSITION:    According to CWA in opposing this  
          bill: "Despite recent amendments, we still urge you to oppose  
          this bill.  We cannot support telecommunications' effort to  
          conduct a new study that again lacks adequate requirements of  
          broad stakeholder participation, including the CWA.  
          Additionally, CWA opposes any effort to expedite the study for  
          the benefit of the telecommunications industry.  It is likely  
          that telecom is also attempting to manipulate the timing of the  
          report  

           This Act to be known as the Governance, Accountability,  
          Transparency, and Transportation Oversight Act of 2016


            SECTION 1.

           (a) The Legislature finds and declares both of the following:
          (1) The Public Utilities Commission has historically played a  
          vital and important oversight function protecting consumers by  
          regulating monopoly public utilities.
          (2) Ensuring that oversight is transparent and accountable to  
          Californians and is focused on the safety of our communities may  
          require reforming the responsibilities of the Public Utilities  
          Commission.
          (b) By January 1, 2018, the California Research Bureau in the  
          California State Library shall conduct a study of  
          telecommunications service governance to determine what  
          regulatory structure would provide the appropriate regulatory  
          oversight of telecommunications services. The study shall assess  








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          the overarching goals of the various programs carried out by  
          federal and state agencies, including the Federal Communications  
          Commission and the Public Utilities Commission, and include a  
          discussion of whether the commission, as a whole, is  
          strategically aligned towards a clearly articulated public goal.  
          The study shall take into account the history of  
          telecommunications service regulation in the state and changes  
          in technology to make recommendations for guiding principles to  
          clearly define California's goals for the regulation of the  
          telecommunications industry.

           SEC. 2.

           Section 303 of the Public Utilities Code is amended to read:

          303.

           (a) A public utilities commissioner may not hold an official  
          relation to, nor have a financial interest in, a person or  
          corporation subject to regulation by the commission. If any  
          commissioner acquires a financial interest in a corporation or  
          person subject to regulation by the commission other than  
          voluntarily, his or her office shall become vacant unless within  
          a reasonable time he or she divests himself or herself of the  
          interest.
          (b) No executive of a public utility may serve as commissioner  
          within two years after leaving the employment of the utility.
           (b)  (c)  The commission shall  adopt  maintain  an updated  
           Conflict  conflict  of  Interest Code  interest code  and  Statement  
          of Incompatible Activities, by February 28, 1998,  statement of  
          incompatible activities  in a manner consistent with applicable  
          law.

          SEC. 3.

           Section 307.5 is added to the Public Utilities Code, to read:

          307.5.

           (a) The commission shall appoint a chief administrative law  
          judge, who shall hold office at the pleasure of the commission.
          (b) The chief administrative law judge shall be responsible for  
          the oversight of the administrative law judge division and shall  
          organize, coordinate, supervise, and direct the operations of  
          the division as directed by the commission, consistent with  








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          commission policies and priorities.
          (c) The chief administrative law judge shall keep a full and  
          true record of all proceedings of the commission.

          SEC. 4.

           Section 307.6 is added to the Public Utilities Code, to read:

          307.6.

           (a) The commission shall appoint  an   a Chief Internal Auditor  
            internal auditor  , who shall hold office at the pleasure of the  
          commission.
          (b) The  Chief Internal Auditor   internal auditor  shall be  
          responsible for the oversight of the internal audit unit and  
          shall plan, initiate, and perform audits of key financial,  
          management, operational, and information technology functions  
          within the commission to improve accountability and transparency  
          to executive and state management.
          (c) The  Chief Internal Auditor   internal auditor  shall report his  
          or her findings and recommendations directly to an audit  
          subcommittee of the commission.
          (d) The  Chief Internal Auditor   internal auditor  shall comply  
          with Part 3.5 (commencing with Section 13885) of Division 3 of  
          Title 2 of the Government Code.

          SEC. 5.

           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,  notices  and perform such other  
          duties as the president, or vote of the commission, prescribes.  
          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  








          AB 2903 (Gatto)                                    Page 15 of ?
          
          
          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.

           SEC. 5.  SEC. 6.

           Section 309 of the Public Utilities Code is amended to read:

          309.

           (a)  The executive director may employ such officers,  
          administrative law judges, experts, engineers, statisticians,  
          accountants, inspectors, clerks, and employees as the executive  
          director deems necessary to carry out the provisions of this  
          part or to perform the duties and exercise the powers conferred  
          upon the commission by law. All officers and employees shall  
          receive such compensation as is fixed by the commission.
          (b) The executive director may authorize commission employees to  
          undertake temporary training and development assignments with  
          other agencies, departments, and commissions that undertake  
          coordinated activities with the commission, including the Energy  
          Commission, the State Air Resources Board, and the Division of  
          Oil, Gas, and Geothermal Resources.
          (c) The executive director shall work with the University of  
          California, the California State University, and other  
          postsecondary education institutions to develop curriculum and  
          training necessary or useful to candidates for employment with  
          the commission.

          SEC. 7.

           Section 309.2 is added to the Public Utilities Code, to read:

          309.2.

           The commission shall appoint a Deputy Executive Director for  
          Safety, who shall hold office at its pleasure. The deputy  
          executive director shall have primary responsibility for  
          implementing the authority of the commission to initiate an  
          investigation into a safety-related matter and to exercise the  
          emergency authority of the commission to ensure the safety of  
          the public.  The CPUC shall establish processes and procedures,  
          including rules to allow for appeals by any public utility over  
          whom the emergency authority has been exercised, as determined  








          AB 2903 (Gatto)                                    Page 16 of ?
          
          
          by the commission. The commission shall adopt rules establishing  
          processes and procedures pursuant to this section by July 1,  
          2017. The Commission shall establish processes and procedures,  
          including rules to allow for appeals by any public utility over  
          whom the emergency authority has been exercised, as determined  
          by the commission. The commission shall adopt rules establishing  
          processes and procedures pursuant to this section by July 1,  
          2017.  

          SEC. 8.

           Section 314.6 is added to the Public Utilities Code, to read:

          314.6.

           (a) The commission may conduct financial and performance audits  
          of any entity or program created by any order, decision, motion,  
          settlement, or other action of the commission.
          (b) The commission shall complete any audit in a timely manner  
          consistent with the Generally Accepted Government Auditing  
          Standards developed by the United States Government  
          Accountability Office.
          (c) After performing an audit pursuant to this section, the  
          commission may conduct additional followup work that is related  
          to any findings and recommendations related to the audit.

          SEC. 9.

           Section 321 of the Public Utilities Code is amended to read:

          321.

           (a) The commission shall establish an office of the public  
          advisor and shall appoint a public advisor, including a separate  
          office in the Los Angeles office of the commission. The  
          commission may employ staff as necessary to carry out the duties  
          of the office of the public advisor. The office of the public  
          advisor shall assist members of the public and ratepayers who  
          desire to testify before or present information to the  
          commission in any hearing or proceeding of the commission. The  
          public advisor shall advise the commission on procedural matters  
          relating to public participation in proceedings of the  
          commission.
          (b) The public advisor and executive director shall publicize  
          the commission's programs for encouraging and supporting  








          AB 2903 (Gatto)                                    Page 17 of ?
          
          
          participation in the commission's proceedings.
          (c) The public advisor shall receive complaints and comments  
          from members of the public concerning how the commission is  
          carrying out its functions. The public advisor shall maintain  
          the confidentiality of the identity of a member of the public  
          who makes a complaint or comment unless the member of the public  
          expressly indicates a desire to communicate his or her identity  
          to the commission.  The public advisor shall compile, no less  
          than once annually, and make public on the commission's Internet  
          Web site the number and nature of complaints and comments from  
          members of the public.   The public advisor shall assess the nature  
          of substantive complaints and comments from members of the  
          public and take them into consideration when analyzing and  
          recommending options for resolutionof the matters underlying  
          those complaints and comments. 

           SEC. 10.

           Section 321.5 is added to the Public Utilities Code, to read:

          321.5.

           (a)   The commission shall appoint an independent ombudsman for  
          ethics. The ombudsman shall receive complaints and comments from  
          employees of the commission concerning how the commission is  
          carrying out its functions. The ombudsman shall maintain the  
          confidentiality of an employee's identity unless the employee  
          expressly indicates a desire to communicate his or her identity  
          to the commission.  
           (b)  
           NEW SECTION 
           There is within the legal division of the commission an  ethics  
          officer   who   ombudsman, or staff under the direction of the  
          ombudsman,   who shall be appointed by the commission. The ethics  
          officer  shall be responsible for  all of the following:  
           (a)instituting   Instituting  a program of enhanced ethics training  
            for all commissioners and employees of the commission,  
            including training concerning the commission's conflict of  
            interest code, statement of incompatible activities, and  
            limitations upon ex parte communications.
           (b)Providing confidential advice to commissioners and employees  
            of the commission on compliance with the commission's conflict  
            of interest code, statement of incompatible activities, and  
            limitations upon ex parte communications. The ethics officer  
            shall maintain the confidentiality of the commissioner's or  








          AB 2903 (Gatto)                                    Page 18 of ?
          
          
            employee's identity unless the commissioner or employee  
            expressly indicates a desire to communicate his or her  
            identity to the commission.  
           

           SEC. 11.

           Section 1759 of the Public Utilities Code is amended to read:

          1759.   (a) No court of this state, except the Supreme Court and  
          the court of appeal, to the extent specified in this article,  
          shall have jurisdiction to review, reverse, correct, or annul  
          any order or decision of the commission or to suspend or delay  
          the execution or operation thereof, or to enjoin, restrain, or  
          interfere with the commission in the performance of its official  
          duties, as provided by law and the rules of court.

          (b) The writ of mandamus shall lie from the Supreme Court and  
          from the court of appeal to the commission in all proper cases  
          as prescribed in Section 1085 of the Code of Civil Procedure.
          (c) This section does not apply to an action arising from the  
          California Public Records Act (Chapter 3.5 (commencing with  
          Section 6250) of Division 7 of Title 1 of the Government Code).  
          Such an action may be brought in the superior court.

          SEC. 12. 

           Section 910.8 is added to the Public Utilities Code, to read:

          910.8.

           (a) By March 31, 2017, the commission shall report to the  
          relevant policy and fiscal committees of the Legislature on  
          options to locate operations and staff outside of the  
          commission's San Francisco headquarters. The report shall  
          explore options for leveraging additional facilities in areas of  
          the state, including Sacramento, that would allow the commission  
          to  better serve the public, and to  collaborate with other state  
          entities and provide staff more opportunities for training,  
          career development, and exchange placements with other state  
          entities. The report shall do both of the following:
          (1) Consider categories of operations in different offices.
          (2) Analyze recruitment and retention, salary disparities by  
          location based on duty statements, and costs associated with  
          using locations outside of San Francisco with no, or minimal,  








          AB 2903 (Gatto)                                    Page 19 of ?
          
          
          disruption of current commission employees.
          (b) The commission shall conduct one or more public workshops to  
          obtain suggestions, concerns, ideas, and comments from  
          stakeholders and interested members of the public in furtherance  
          of the purpose of the report.
          (c) Pursuant to Section 10231.5 of the Government Code, this  
          section is repealed on March 31, 2021.

          SEC.  12.   13  

           Section 912.3 is added to the Public Utilities Code, to read:

          912.3.

           Immediately upon completion of an audit of any entity or  
          program created by any order, decision, motion, settlement, or  
          other action by the commission conducted pursuant to Section  
          314.6, the commission shall transmit a copy of the audit report  
          to the Legislature, including to the appropriate policy and  
          fiscal committees or subcommittees of the Legislature, and to  
          the Governor. Once the audit report has been transmitted to the  
          Legislature and the Governor, the report shall be made available  
          to the public.

          SEC.  13.   14

           Section 8331 is added to the Public Utilities Code, to read:

          8331.

           The commission shall advocate before the  relevant federal  
          agencies, including the Department of Energy and the  Nuclear  
          Regulatory Commission  ,  for expedited relocation of any spent  
          fuel stored at nuclear powerplants in this state to an  
          independent, offsite spent fuel storage installation.

          SEC. 14.

           (a)  For purposes of this section, the following terms have the  
          following meanings:
          (1) "Charter-party carrier of passengers" has the same meaning  
          as defined in Section 5360 of, subject to the exclusions in  
          Section 5353 of, the Public Utilities Code.
          (2) "Commercial air operator" has the same meaning as defined in  
          Section 5500 of the Public Utilities Code.








          AB 2903 (Gatto)                                    Page 20 of ?
          
          
          (3) "For-hire vessel" has the same meaning as defined in Section  
          4661 of the Public Utilities Code.
          (4) "Household goods carrier" has the same meaning as defined in  
          Section 5109 of the Public Utilities Code.
          (5) "Passenger stage corporation" has the same meaning as  
          defined in Section 226 of the Public Utilities Code.
          (6) "Private carrier" has the same meaning as defined in Section  
          4001 of the Public Utilities Code.
          (7) "Transportation network company" has the same meaning as  
          defined in Section 5431 of the Public Utilities Code.
          (8) "Vessel common carrier" means those persons and corporations  
          that are a common carrier pursuant to subdivision (b) of Section  
          212 of the Public Utilities Code.
          (b) It is the intent of the Legislature to transfer the duties  
          and responsibilities of the Public Utilities Commission over  
          passenger stage corporations, charter-party carriers of  
          passengers, transportation network companies, household goods  
          carriers, vessel common carriers, private carriers, for-hire  
          vessels, and commercial air operators to state departments  
          within the Transportation Agency in a manner consistent with  
          Article XII of the California Constitution. By January 31, 2018,  
          the Governor shall propose the specific budget and statutory  
          changes needed to complete the transfer of the duties and  
          responsibilities to the Transportation Agency by no later than  
          July 1, 2018.
          (c) It is the intent of the Legislature to make conforming  
          changes to this code and the other codes of this state to  
          effectuate subdivision (b) by July 1, 2018.
          (d) It is the intent of the Legislature to evaluate methods for  
          ensuring that rail crossings inspected by the Public Utilities  
          Commission and rail transit approved by the Public Utilities  
          Commission are coordinated with the Transportation Agency to  
          ensure that rail crossings and rail transit systems are  
          assessed, and projects  are  prioritized for funding  are chosen  ,  
          with regard to transportation safety and mobility needs.
                                                                        (9) This act is an urgency statute necessary for the immediate  
          preservation of the public peace, health, or safety within the  
          meaning of Article IV of the Constitution and shall go into  
          immediate effect. The facts constituting the necessity are:
          In order for the provisions of this act to be applicable as soon  
          as possible in the 2017-18 fiscal year and thereby facilitate  
          the orderly transition of duties and responsibilities at the  
          earliest possible time, it is necessary that this act take  
          effect immediately.
                                      -- END --








          AB 2903 (Gatto)                                    Page 21 of ?