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 ----------------------------------------------------------------- |Author: |Hill | |-----------+-----------------------------------------------------| |Version: |4/6/2015 | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Arthur Terzakis | | | | ----------------------------------------------------------------- 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 SB 119 (Hill) Page 2 of ? 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: SB 119 (Hill) Page 3 of ? 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 SB 119 (Hill) Page 4 of ? 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 SB 119 (Hill) Page 5 of ? 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. SB 119 (Hill) Page 6 of ? 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 SB 119 (Hill) Page 7 of ? 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 SB 119 (Hill) Page 8 of ? 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 SB 119 (Hill) Page 9 of ? 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 SB 119 (Hill) Page 10 of ? 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