BILL ANALYSIS                                                                                                                                                                                                    Ó



          SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Senator Isadore Hall, III
                                        Chair
                                2015 - 2016  Regular 

          Bill No:           SB 119           Hearing Date:    4/14/2015
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          |Author:    |Hill                                                 |
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          |Version:   |4/6/2015                                             |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Arthur Terzakis                                      |
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          SUBJECT: Protection of subsurface installations


            DIGEST:    This bill: (a) requires the Contractors' State  
          License Board (CSLB) to adopt a program to enforce violations of  
          provisions relating to excavation; (b) creates the California  
          Underground Facilities Safe Excavation Authority (Authority) to  
          enforce laws relating to the protection of underground  
          infrastructures by hearing stakeholder complaints; (c) deletes  
          and modifies existing exemptions relative to participation in  
          regional notification centers, or "one-call" centers; (d) adds  
          liability provisions for excavators and utility operators; (e)  
          requires the Occupational Safety and Health Standards Board to  
          revise its excavation regulations and practices; (f) updates  
          technical requirements of the "call before you dig" process; (g)  
          creates the Safe Energy Infrastructure and Excavation Fund  
          (Fund) in the State Treasury to cover the administrative  
          expenses of the Authority; and, (h) establishes a funding  
          mechanism for the Fund.

          ANALYSIS:
          
          Existing law:
          
           1) Grants the CSLB, within the Department of Consumer Affairs  
             (DCA), all functions and duties relative to the  
             administration of the Contractors' State License Law.

           2) Authorizes the issuance of licenses to applicants for  







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             contractors' licenses by written examination under rules and  
             regulations adopted by the CSLB.  

           3) Requires every operator of a subsurface installation, except  
             the Department of Transportation (Caltrans), to become a  
             member of, participate in, and share the costs of, a regional  
             notification ("one-call") center.  

           4) Exempts owners of non-pressurized sewer lines and storm  
             drains from needing to become members of the one-call  
             centers.  

           5) Requires, except in an emergency, any person who plans to  
             conduct any excavation to contact the appropriate regional  
             notification center, as specified, prior to commencing that  
             excavation if the excavation will be conducted in an area  
             that is known, or reasonably should be known, to contain  
             subsurface installations other than the underground  
             facilities owned or operated by the excavator and, if  
             practicable, the excavator must delineate with white paint or  
             other suitable markings the area to be excavated.  The law  
             exempts homeowners and certain other persons and private  
             entities from this requirement for excavations on their own  
             property.  

           6) Requires any operator of a subsurface installation who  
             receives timely notification of any proposed excavation work  
             to locate and mark the subsurface installation within two  
             working days of receiving that notification, excluding  
             weekends or holidays, or before the start of the excavation  
             work, whichever is later, or at a later time mutually  
             agreeable to the operator and excavator.  

           7) Requires excavators to use hand tools within two feet on  
             each side of a marked line indicating a subsurface  
             installation to determine where that installation is located  
             before using any power excavating equipment.

           8) Defines "subsurface installation" to mean any underground  
             pipeline, conduit, duct, wire, or other structure, except  
             nonpressurized sewer lines, nonpressurized storm drains, or  
             other nonpressurized drain lines.  

           9) Provides that any operator or excavator who violates  
             excavation requirements shall be subject to  the following: 








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             a)   A civil penalty not to exceed $10,000 for negligent  
               violations.

             b)   A civil penalty not to exceed $50,000 for knowing and  
               willful violations.

             c)   Additional civil remedies provided for in law for  
               personal injury and property damages.

             d)   Any actions brought forth by the Attorney General (AG),  
               district attorney, or local or state agency that issued the  
               excavation permit, to enforce the civil penalties listed  
               above.  

           1) Provides that operators and excavators are liable for  
             damages caused from violations of the regional notification  
             system (one-call centers), and that operators who fail to  
             participate in the one-call centers cannot claim damages from  
             an excavator who has complied with the law. 

           2) Authorizes the CSLB to issue a citation for a violation of  
             the Contractors' State License Law in lieu of license denial,  
             suspension, or revocation. 
            
           3) Requires the CSLB to initiate a disciplinary action against  
             a licensee within 30 days of receipt of a certified copy of  
             the Labor Commissioner's finding of a willful or deliberate  
             violation of the Labor Code by a licensee.  

           4) Authorizes the Department of Industrial Relations Division  
             of Occupational Safety and Health Standards (CalOSHA) to  
             adopt occupational safety and health standards.

          This bill:

           1) Contains legislative findings and declarations relative to  
             discussions that have taken place since enactment, in 1989,  
             of state law governing subsurface excavations and the  
             regional notification center system that have led to  
             widespread agreement among various stakeholders that many of  
             the existing provisions of law need to be clarified.

           2) Requires the CSLB to adopt a program to enforce violations  
             of provisions relating to excavation.  Also, for a violation  








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             of provisions related to performing an excavation by a  
             contractor, authorizes CSLB to: (a) require a contractor to  
             undergo excavation training, (b) levy a fine, and (c) suspend  
             a contractor's license.  

           3) Defines the following words and terms for purposes of state  
             law governing subsurface excavations: abandoned subsurface  
             installation, delineate, electronic positive response,  
             emergency, unexpected occurrence, hand tool, inactive  
             subsurface installation, legal excavation start date and  
             time, locate and field mark, near miss, pavement, positive  
             response, ticket, tolerance zone, working day.  Also,  
             modifies and clarifies existing terminology, as specified.

           4) Requires an excavator to delineate the area of proposed  
             excavation in white paint before requesting subsurface  
             facilities be marked.


           5) Requires an excavator to clean up any field markings that  
             will last for longer than 45 days.

           6) Requires that operators mark abandoned subsurface facilities  
             where the locations of those facilities are known.

           7) Requires that operators retain records of the locations of  
             their facilities.

           8) Clarifies that the failure of operators to mark their  
             facilities within two working days is a violation of the  
             one-call law.

           9) States that operators who mismark their facilities are not  
             entitled to damage awards.

           10)Requires communication on the part of facility owners with  
             excavators regarding how to protect facilities that are  
             embedded within pavement, and states that an excavator shall  
             not be liable for damages to facilities embedded within  
             pavement.

           11)Removes the exemption under current law whereby Caltrans is  
             not required to be a member of one-call centers.

           12)Removes the exemption under current law whereby operators of  








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             non-pressurized sewer lines and storm drains are not required  
             to be members of one-call centers.

           13)Removes the exemption under current law whereby private  
             property owners are not required to call one-call centers  
             before beginning an excavation.

           14)Removes the exemption under current law whereby homeowners  
             are not required to call one-call centers before beginning an  
             excavation that involves mechanized equipment or when a  
             utility easement exists on the property.

           15)Authorizes the Public Utilities Commission (PUC) and the  
             Office of the State Fire Marshal to enforce the requirement  
             to locate and field mark subsurface installations and lines  
             against operators of natural gas and electric underground  
             infrastructure and hazardous liquid pipelines, unless these  
             operators are municipal utilities. 
           
           16)Requires CalOSHA, on or before January 1, 2017, to revise  
             its regulations in order to clarify best practices to be used  
             by excavators when excavating near subsurface installations.

           17)Creates a 9-member California Underground Facilities Safe  
             Excavation Authority (Authority) to enforce the one-call law  
             through field audits, incident investigations, and  
             administrative hearings, and to promote safe excavation  
             practices.  Provides that the Governor shall appoint 7  
             members and one each shall be appointed by the Senate  
             Committee on Rules and the Speaker of the Assembly. The term  
             of each member shall be 2 years.

           18)Requires the Authority to meet at least quarterly and hold  
             meetings in Sacramento and Los Angeles and in other locations  
             as necessary. 

           19)Grants the Authority the power to do any of the following:  
             (a) apply for and accept grants, contributions, and  
             appropriations and award grants consistent with the program;  
             (b) contract for professional services if the work cannot be  
             performed by its employees or by any other state agency; (c)  
             sue and be sued; (d) request and utilize the advice and  
             services of all federal, state, local, and regional agencies;  
             and, (e) conduct public education and outreach programs.









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           20)Permits the Authority to obtain funding for its operational  
             expenses from: (a) federal/state grants; (b) a fee charged to  
             members of regional notification centers; (c) assessed fines;  
             (d) a filing or administrative fee charged to hear a  
             complaint; or, (e) any other source.

           21)Also, provides that, after providing opportunity for a  
             hearing, pursuant to the Administrative Procedures Act, the  
             Authority may assess civil penalties upon making a finding of  
             violation.  A person aggrieved by a decision of the Authority  
             may, within 30 days, after receiving the decision, request  
             judicial review of the decision in superior court.   

           22)Requires the Authority, on or before January 1, 2017, and  
             each year thereafter, to report to the Governor and the  
             Legislature on its activities and recommendations.

           23)Creates the Safe Energy Infrastructure and Excavation Fund  
             (Fund) in the State Treasury to cover the administrative  
             expenses of the Authority.  Also, provides that any excess  
             moneys in the Fund that are not necessary for the Authority  
             may be allocated to support education via one-call centers,  
             and fund workforce development at the Public Utilities  
             Commission (PUC), as specified.

           24)Also, provides that moneys collected as a result of the  
             issuance of citations to PUC regulated gas and electrical  
             corporations shall be deposited in the Fund.

           25)Makes other technical and conforming changes. 

          Background

          To protect people who live and work near buried pipes and  
          cables, and to save the costs associated with damage to  
          underground infrastructure, state law outlines a sequential  
          system to aid excavators in locating subsurface installations.   
          Entities that own, operate, or maintain subsurface installations  
          must join a non-profit Regional Notification Center (RNC) to  
          provide advance warning of underground installations close to  
          proposed excavation projects.  Except in an emergency, anyone  
          planning to dig in an area with underground installations must  
          notify the appropriate RNC at least two days before breaking  
          ground and, if practical, must mark the area to be excavated in  
          white paint.  The potentially affected underground installation  








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          operators must locate and field mark the approximate location of  
          their installations.  Excavators must then determine the exact  
          location of the subsurface installations by using hand tools,  
          with limited exceptions, to excavate within the field markings. 

          Purpose of SB 119:  According to the author's office, nationwide  
          data suggests that excavation in California is more dangerous  
          than in other states, largely due to a failure by some  
          excavations and owners of underground facilities to follow the  
          state's excavation safety laws.  Excavation activities accounted  
          for more than 25 percent of pipeline-related fatalities in the  
          U.S. between 2002 and 2011.  This bill is intended to update  
          California's excavation safety laws and create a centralized  
          authority to enforce those laws.

          The author's office points out that SB 119 is part of a process  
          that began with an informational hearing of the Senate  
          Subcommittee on Gas and Electric Infrastructure Safety in June  
          of 2013 and has continued with meetings of interested parties in  
          2014 and 2015.  The author's office emphasizes that "SB 119  
          represents a combination of proposals from utilities,  
          excavators, and California's Regional Common Ground Alliance -  
          the legislation will continue to be discussed and refined in the  
          coming months."  

          Brief history:  Following the attention to gas safety in the  
          wake of the natural gas pipeline explosion in San Bruno (which  
          was not caused by excavation), the Public Utilities Commission  
          (PUC), Pacific Gas and Electric Co (PG&E), and others attempted  
          to reboot reform efforts to improve excavation safety.  In 2005,  
          a construction crew digging a trench to install a new water  
          pipeline for East Bay Municipal Utility District (EBMUD) in  
          Walnut Creek struck a high-pressure petroleum pipeline operated  
          by Kinder Morgan, killing 5 workers.  A backhoe struck the pipe,  
          releasing gasoline that was ignited by nearby welders.  The  
          petroleum line had been installed along the street but had been  
          bent to avoid a tree that had since been removed.  Kinder Morgan  
          had not identified the bend, leading the contractor to believe  
          that the pipe was not in the path of the backhoe.

          In response to this incident, the Legislature required  
          additional communication and operator qualification standards.   
          Specifically, SB 1359 (Torlakson) of 2006 required onsite  
          meetings between excavators and operators when an excavation was  
          to take place near the most dangerous lines, such as  








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          high-pressure gas and petroleum lines and high-voltage electric  
          lines. The bill also required the notification to an operator in  
          the case of damage or the discovery of a prior damage, specified  
          the qualifications for locating underground infrastructure, and  
          added liability provisions.  However, the legislation did not  
          address other means of improving excavation safety that had been  
          previously identified by the National Transportation Safety  
          Board (NTSB) and the federal pipeline safety regulator (Pipeline  
          and Hazardous Materials Safety Administration - PHMSA);  
          particularly enforcement of the one-call law.  

          In its 1997 Safety Study on excavation damage, NTSB found that  
          administratively enforcing a state's one-call law was more  
          effective than relying on an Attorney General or district  
          attorney to do so, and that small penalties were effective  
          enforcement, if for no other reason that large, punitive  
          penalties were rarely levied. 

          In 2005, PHMSA, in adopting regulations requiring distribution  
          pipeline companies to develop comprehensive risk-based pipeline  
          safety programs, explored best practices in excavation  
          enforcement.  Similarly, PHMSA's report, Integrity Management  
          for Gas Distribution Pipelines, found that the states that have  
          had the most success in preventing damage to underground  
          infrastructure have a strong, centralized enforcement agency.

          California still relies on the Attorney General and district  
          attorneys to enforce the one-call law, though regulatory  
          authorities such as the PUC, the Office of the State Fire  
          Marshall and CSLB have broad jurisdiction over gas pipeline and  
          electric operators, hazardous liquid operators, and contractors,  
          respectively, and thus have the ability to enforce safe  
          operations on those entities within their jurisdictions. 

          As required by the federal Pipeline Inspection, Protection,  
          Enforcement, and Safety Act of 2006 (PIPES Act), PHMSA has  
          opened a rulemaking (PHMSA-2009-0192) to determine criteria by  
          which it is to evaluate state enforcement of damage prevention  
          laws.  The PIPES Act limited PHMSA's authority to conduct  
          administrative civil enforcement proceedings against excavators  
          who damage pipelines in states with inadequate damage prevention  
          enforcement programs.  Specifically, the Act states that PHMSA  
          cannot use this new enforcement authority until PHMSA issues a  
          rulemaking that defines the procedures for determining the  
          adequacy of state excavation damage enforcement programs.  PHMSA  








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          published an Advance Notice of Proposed Rulemaking - or ANPRM -  
          on this subject on October 29, 2009.  In the notice of proposed  
          rulemaking, PHMSA sought comment on a number of proposed  
          criteria.   

          Staff Comments: The author and his staff have held numerous  
          stakeholder meetings to address various concerns however, at  
          this point in time, consensus has not been reached. Through  
          letters submitted to the Committee, certain stakeholder groups  
          have expressed a commitment to seek reform of current excavation  
          requirements that also include enhancements to the enforcement  
          program.  Those stakeholders support moving SB 119 through the  
          legislative process in order to keep all interested parties  
          actively involved and committed to finding a solution.  Certain  
          other stakeholders representing the agricultural sector and  
          landscape contractors have submitted letters to the committee  
          that express a desire to continue working with the author and  
          his staff however they maintain an "oppose unless amended"  
          position.  Those entities are listed in the "opposition" column,  
          on page 9 of this analysis.  The following stakeholders  
          "support" position is conditioned on further amendments: 

          AT&T 
          Associated General Contractors of California 
          California Legislative Conference of the Plumbing, Heating and  
          Piping Industry California-Nevada Conference of Operating  
          Engineers 
          California State Council of Laborers 
          Laborers' International Union of North America 
          National Electrical Contractors Association 
          Pacific Gas & Electric Company 
          San Diego Gas and Electric Company
          Southern California Contractors Association 
          Southern California Gas Company 
          United Contractors 
          Western Line Constructors Chapter, Inc.    

          Prior/Related Legislation
          
          AB 811 (Lowenthal), Chapter 250, Statutes of 2013.  Required the  
          regional notification centers (or "one-call" centers) to  
          annually report on subsurface facility damages voluntarily  
          reported to those centers from excavators and utilities.

          AB 1514 (Lowenthal) 2011-12 Session.  Would have increased the  








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          maximum fine for a violation of the "one-call" law from $10,000  
          to $100,000 and would have placed the PUC in charge of  
          investigating excavation damages and referring the  
          investigations to the Attorney General or a district attorney  
          for action.  (Died Assembly Committee on Appropriations -  
          Suspense File)

          SB 1359 (Torlakson), Chapter 651, Statutes of 2006.  Among other  
          things, required onsite meetings between excavators and  
          operators when an excavation was to take place near dangerous  
          lines, such as high-pressure gas and petroleum lines and  
          high-voltage electric lines.  
           
           AB 73 (Elder), Chapter 928, Statutes of 1989.  Created  
          California's one-call law, requiring facility owners to  
          participate in the one-call notification centers, mandatory  
          calling before excavation, use of safe excavation practices, and  
          penalties for noncompliance.

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


            SUPPORT:  

          Underground Service Alert of Southern California

          OPPOSITION:

          Agricultural Council of California
          California Citrus Mutual
          California Cotton Ginners and Growers Association
          California Farm Bureau Federation
          California Fresh Fruit Association
          California Landscape Contractors Association
          Western Agricultural Processors Association
          Western Growers

          TRIPLE REFERRAL:  Senate Judiciary Committee