BILL NUMBER: SB 18 AMENDED
BILL TEXT
AMENDED IN SENATE MARCH 26, 2015
AMENDED IN SENATE FEBRUARY 4, 2015
INTRODUCED BY Senator Hill
DECEMBER 1, 2014
An act to add Section 4216.11 to the Government Code, and
to amend Sections 1702.5, 2104, and 2104.5 of, and to add Section
320.5 to, the Public Utilities Code, relating to utility service,
making an appropriation therefor, and declaring the urgency thereof,
to take effect immediately. An act to add Section
307.5 to the Public Utilities Code, relating to the Public Utilities
Commission.
LEGISLATIVE COUNSEL'S DIGEST
SB 18, as amended, Hill. Gas and Electrical Corporations:
fines and penalties: underground utility facilities.
Public Utilities Commission: outside counsel.
The Public Utilities Act authorizes the Public Utilities
Commission to appoint an attorney for the commission who holds that
office at the pleasure of the commission. The act requires the
attorney to represent and appear for the people and the commission in
all actions and proceedings involving any question under the act or
under any order or act of the commission. The act requires the
attorney to commence, prosecute, and expedite the final determination
of all actions and proceedings directed or authorized by the
president, except as otherwise directed or authorized by vote of the
commission, to advise the commission and each commissioner in regard
to all matters in connection with the powers and duties of the
commission or a commissioner, when requested, and generally, to
perform all duties and services as attorney to the commission that
the president, or vote of the commission, may require of him or her.
This bill would require that any contract or other agreement by
the commission for services by outside legal counsel with respect to
a criminal matter be subject to a 30-day review by the Joint
Legislative Budget Committee before the agreement is entered into.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, as defined. The Public Utilities
Act requires the commission to investigate the cause of all accidents
occurring upon the property of any public utility or directly or
indirectly arising from or connected with its maintenance or
operation, resulting in loss of life or injury to person or property
and requiring, in the judgment of the commission, investigation by
it, and authorizes the commission to make any order or recommendation
with respect to the investigation that it determines to be just and
reasonable. The act provides that any public utility that violates
any provision of the California Constitution or the act, or that
fails or neglects to comply with any order, decision, decree, rule,
direction, demand, or requirement of the commission, where a penalty
has not otherwise been provided, is subject to a penalty of not less
than $500 and not more than $50,000 for each offense. Existing law
requires that any fine or penalty imposed by the commission and
collected from a public utility be paid to the State Treasury to the
credit of the General Fund. The act includes provisions that are
specific to gas corporations that involve safety standards for
pipeline facilities or the transportation of gas in the state.
This bill would revise the provisions that are specific to gas
corporations that involve safety standards for pipeline facilities or
the transportation of gas in the state, to authorize the commission
to order that all or a portion of a fine or penalty levied against a
gas corporation in three specified proceedings be held in a separate
account by the gas corporation to offset investments for pipeline
replacement to be undertaken within the service territory of the
corporation that would otherwise be recovered from the corporation's
ratepayers. The bill would require that moneys ordered by the
commission to be held in a separate account be used only for the
purpose of offsetting investments by the gas corporation for pipeline
replacement to be undertaken within the service territory of the
corporation, and only if the investments would otherwise be recovered
in rates from the utility's ratepayers. The bill would require that
any moneys not used for these purposes be paid to the General Fund 5
years after the date of their deposit into the account. The bill
would require the commission to allocate $30,000,000 from the
separate account to fund an independent monitor for a period of no
less than 5 years to oversee the pipeline operations of the gas
corporation and the effectiveness of the commission's regulatory
oversight of those pipeline operations and would require the
commission to allocate $50,000,000 in seed money from the separate
account to fund the operations of a pipeline safety trust. By
authorizing specified uses of state penalty moneys, this bill would
make an appropriation. The bill would also require the commission to
allocate $300,000,000 from the separate account to the General Fund.
The bill would authorize the commission to adjust the above-described
allocations from the separate account if the fines and penalties
levied against the gas corporation in the three specified proceedings
are less than $950,000,000 in total.
This bill would establish the California Underground Facilities
Safe Excavation Authority. The bill would create the Safe Energy
Infrastructure and Excavation Fund in the State Treasury and would
provide that moneys deposited into the fund are to be used to cover
the administrative expenses of the authority, upon appropriation by
the Legislature. The bill would authorize the commission to use
excess moneys in the fund for specified purposes relating to the
safety of underground utilities, upon appropriation by the
Legislature.
Existing law requires the commission to develop and implement a
safety enforcement program that is applicable to gas corporations and
electrical corporations and that includes procedures for monitoring,
data tracking and analysis, and investigations, as well as issuance
of citations by commission staff, under the direction of the
executive director of the commission, for correction and punishment
of safety violations. That law requires the commission to develop and
implement an appeals process to govern issuance and appeal of
citations, or resolution of corrective action orders. That law
requires the commission to implement the safety enforcement program
for gas safety by July 1, 2014, and for electrical safety by January
1, 2015.
This bill would require that moneys collected as a result of the
issuance of citations to gas corporations and electrical corporations
pursuant to the above-described law be deposited in the Safe Energy
Infrastructure and Excavation Fund.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3 majority . Appropriation:
yes no . Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 307.5 is added to the
Public Utilities Code , to read:
307.5. Any contract or other agreement by the commission for
services by outside legal counsel with respect to a criminal matter
shall be subject to a 30-day review by the Joint Legislative Budget
Committee before the agreement is entered into.
SECTION 1. Section 4216.11 is added to the
Government Code, to read:
4216.11. The California Underground Facilities Safe Excavation
Authority is hereby created.
SEC. 2. Section 320.5 is added to the Public
Utilities Code, to read:
320.5. (a) The Safe Energy Infrastructure and Excavation Fund is
hereby established in the State Treasury. Moneys deposited into the
fund shall be used to cover the administrative expenses of the
California Underground Facilities Safe Excavation Authority, upon
appropriation by the Legislature.
(b) Any excess moneys in the fund that are not necessary for the
administrative expenses of the California Underground Facilities Safe
Excavation Authority may, upon appropriation by the Legislature, be
apportioned by the commission for the following purposes:
(1) The California Underground Facilities Safe Excavation
Authority, for the purpose of the education and training of persons
who violate Article 2 (commencing with Section 4216) of Chapter 3.1
of Division 5 of Title 1 of the Government Code.
(2) Regional notification centers, as defined in Section 4216 of
the Government Code, to cover the cost of public education and
outreach programs designed to promote excavation safety around
underground facilities.
(3) The commission, to further a workforce development program,
which shall be consistent with its equal employment opportunity
program, that recruits and trains safety staff to perform the highest
quality gas and electric utility inspections, audits, accident
investigations, and data tracking and analysis. The commission may
only apportion moneys for this purpose upon commission approval of
the workforce development program at a meeting of the commission.
SEC. 3. Section 1702.5 of the Public Utilities
Code is amended to read:
1702.5. (a) The commission shall, in an existing or new
proceeding, develop and implement a safety enforcement program
applicable to gas corporations and electrical corporations which
includes procedures for monitoring, data tracking and analysis, and
investigations, as well as issuance of citations by commission staff,
under the direction of the executive director. The enforcement
program shall be designed to improve gas and electrical system safety
through the enforcement of applicable law, or order or rule of the
commission related to safety using a variety of enforcement
mechanisms, including the issuance of corrective actions, orders, and
citations by designated commission staff, and recommendations for
action made to the commission by designated commission staff.
(1) When considering the issuance of citations and assessment of
penalties, the commission staff shall take into account voluntary
reporting of potential violations, voluntary removal or resolution
efforts undertaken, the prior history of violations, the gravity of
the violation, and the degree of culpability.
(2) The procedures shall include, but are not limited to,
providing notice of violation within a reasonable period of time
after the discovery of the violation.
(3) The commission shall adopt an administrative limit on the
amount of monetary penalty that may be set by commission staff.
(b) The commission shall develop and implement an appeals process
to govern the issuance and appeal of citations or resolution of
corrective action orders issued by the commission staff. The appeals
process shall provide the respondent a reasonable period of time,
upon receiving a citation, to file a notice of appeal, shall afford
an opportunity for a hearing, and shall require the hearing officer
to expeditiously provide a draft disposition.
(c) The commission shall, within a reasonable time set by the
commission, conclude a safety enforcement action with a finding of
violation, a corrective action order, a citation, a determination of
no violation, approval of the corrective actions undertaken by the
gas corporation or electrical corporation, or other action. The
commission may institute a formal proceeding regarding the alleged
violation, potentially resulting in additional enforcement action,
regardless of any enforcement action taken at the commission staff
level.
(d) The commission shall implement the safety enforcement program
for gas safety by July 1, 2014, and implement the safety enforcement
program for electrical safety no later than January 1, 2015.
(e) This section does not apply to an exempt wholesale generator,
a qualifying small power producer, or qualifying cogenerator, as
defined in Section 796 of Title 16 of the United States Code and the
regulations enacted pursuant thereto. Nothing in this section affects
the commission's authority pursuant to Section 761.3.
(f) Moneys collected as a result of the issuance of citations
pursuant to this section shall be deposited in the Safe Energy
Infrastructure and Excavation Fund.
SEC. 4. Section 2104 of the Public Utilities
Code is amended to read:
2104. (a) Except as provided by Sections 2100 and 2107.5, actions
to recover penalties under this part shall be brought in the name of
the people of the State of California, in the superior court in and
for the county, or city and county, in which the cause or some part
thereof arose, or in which the corporation complained of has its
principal place of business, or in which the person complained of
resides. The action shall be commenced and prosecuted to final
judgment by the attorney or agent of the commission. All fines and
penalties may be sued for and recovered. The commission may enjoin
the sale of a public utility's or common carrier's assets to satisfy
unpaid fines and penalties. The commission may use any of the
remedies afforded to a creditor under the Uniform Fraudulent Transfer
Act (Chapter 1 (commencing with Section 3439) of Title 2 of Part 2
of Division 4 of the Civil Code). Respondents who fraudulently
transfer assets to avoid paying commission-imposed fines or penalties
are subject to prosecution under Sections 154, 531, and 531a of the
Penal Code. In all of these actions, the procedure and rules of
evidence shall be the same as in ordinary civil actions, except for
prosecutions under the Penal Code or as otherwise herein provided.
Except as provided in Sections 1702.5 and 2104.5, all fines and
penalties recovered by the state in any action, together with the
costs thereof, shall be paid into the State Treasury to the credit of
the General Fund. Any action may be compromised or discontinued on
application of the commission upon the terms the court approves and
orders.
(b) This section shall become operative on January 1, 2014.
SEC. 5. Section 2104.5 of the Public Utilities
Code is amended to read:
2104.5. (a) Any penalty for violation of any provision of this
act, or of any rule, regulation, general order, or order of the
commission, involving safety standards for pipeline facilities or the
transportation of gas in the State of California, may be compromised
by the commission. In determining the amount of the penalty, or the
amount agreed upon in compromise, the appropriateness of the penalty
to the size of the business of the person charged, the gravity of the
violation, and the good faith of the person charged in attempting to
achieve compliance, after notification of a violation, shall be
considered. The amount of any penalty, when finally determined, or
the amount agreed upon in compromise, may be recovered in a civil
action in the name of the people of the State of California in the
superior court in and for the county, or city and county in which the
cause or some part thereof arose, or in which the corporation
complained of has its principal place of business or the person
complained of resides. In any such action, all penalties incurred, or
amounts agreed upon in compromise for violations committed up to the
time of commencing the action, may be sued for and recovered. In all
those actions, the procedure and rules of evidence shall be the same
as in ordinary civil actions, except as otherwise herein provided.
All fines and penalties recovered by the state in any action,
together with the costs thereof, shall be paid into the State
Treasury to the credit of the General Fund, except upon order of the
commission pursuant to subdivision (b) or as described in Section
1702.5.
(b) The commission shall order that any fine or penalty levied
against a gas corporation in Investigation 11-02-016, Investigation
11-11-009, or Investigation 12-01-007, be held in a separate account
by the gas corporation to offset investments for pipeline replacement
to be undertaken within the service territory of the corporation and
that would otherwise be recovered from the corporation's ratepayers.
(c) The commission shall set a rate of interest for an account
established pursuant to subdivision (b).
(d) Any moneys ordered by the commission to be held in a separate
account pursuant to subdivision (b) shall be used only for the
purpose of offsetting investments by the gas corporation for pipeline
replacement to be undertaken within the service territory of the
corporation, and only if the investments would otherwise be recovered
in rates from the utility's ratepayers. Any moneys not used for
these purposes shall, five years after the date of their deposit into
the account, be paid to the General Fund.
(e) Notwithstanding subdivision (d), funds held in a separate
account pursuant to subdivision (b) shall be allocated by the
commission in the following manner:
(1) Thirty million dollars ($30,000,000) to fund an independent
monitor for a period of no less than five years to oversee both the
pipeline operations of the gas corporation described in subdivision
(b) and the effectiveness of the commission's regulatory oversight of
those pipeline operations.
(2) Fifty million dollars ($50,000,000) in seed money to fund the
operations of a pipeline safety trust to represent and advocate on
behalf of the interests of the public utility customers and
subscribers within the jurisdiction of the commission in all
appropriate venues.
(3) Three hundred million dollars ($300,000,000) to the General
Fund.
(f) If any fines or penalties levied against a gas corporation
pursuant to the investigations specified in subdivision (b) are less
than nine hundred fifty million dollars ($950,000,000) in total, the
commission may adjust the amount of the allocations specified in
subdivision (e).
SEC. 6. 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 to address and resolve significant financial issues
presented by ongoing proceedings before the Public Utilities
Commission and to provide funding necessary to protect the public
health and safety, it is necessary for this act to take effect
immediately.