BILL ANALYSIS Ó
SENATE JUDICIARY COMMITTEE
Senator Hannah-Beth Jackson, Chair
2015 - 2016 Regular Session
SB 119 (Hill)
Version: April 20, 2015
Hearing Date: April 28, 2015
Fiscal: Yes
Urgency: No
TH
SUBJECT
Protection of Subsurface Installations
DESCRIPTION
This bill would make several changes to laws governing
subsurface excavations, including prohibiting an excavator that
damages a subsurface installation due to an inaccurate field
mark by an operator from being liable for damages, replacement
costs, or other expenses arising from damage to the subsurface
installation, provided the excavator complied with all
pre-excavation notification requirements and procedures. This
bill would also, among other things, direct specified state
agencies to adopt programs to enforce violations of provisions
relating to excavation, and would create the California
Underground Facilities Safe Excavation Authority, which would
enforce laws relating to the protection of underground
infrastructure by hearing complaints and assessing civil
penalties for violations of relevant laws.
BACKGROUND
In 1986, a Southern California excavating crew assumed that no
subsurface infrastructure existed at their construction site.
They were wrong, and a gas main was struck and exploded, killing
a 23-year old crewmember. The incident was the impetus for the
"Call Before You Dig" Law (Gov. Code Sec. 4216 et seq.), which
requires anyone undertaking an excavation to contact a Regional
Notification Center and requires any utility or other operator
with subsurface installations in the vicinity of where the
excavation is planned to go to the site and clearly mark and
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identify all underground infrastructure. Despite being a part
of California law for almost 30 years, excavators and operators
of subsurface installations regularly damage these
installations, either by failing to follow the required
notification procedures or by failing to adequately mark
underground infrastructure prior to excavation. The Pacific Gas
and Electric Company, an operator of subsurface installations
throughout central and northern California, reports that in 2014
it experienced 1,910 third-party "dig-in" incidents resulting in
an estimated $8 million in damage. Sempra Utilities, another
operator of subsurface installations, reports that it had 3,173
dig-in incidents in 2013, and that roughly 50 percent of the
incidents could be attributed to excavators that failed to
follow California's required excavation notification laws.
Indeed, just one week ago, a tractor operator allegedly
punctured a 12-inch natural gas pipeline near Fresno, injuring
at least 11 people and temporarily closing down Highway 99.
(San Francisco Chronicle, PG&E Gas Pipeline Explodes Near
Fresno; At Least 11 Hurt [as of Apr. 24, 2015].) While it is not clear whether
the tractor had been excavating at the time of the explosion,
Pacific Gas and Electric stated that it had not received notice
that excavation was planned near the pipeline.
This bill would modify California's existing laws governing
subsurface excavations by clarifying the actions both excavators
and operators must perform before an excavation is begun. Among
other things, the bill would remove exemptions that allow
certain private property owners to not provide notice before
excavating, and would modify liability provisions that apply to
operators and excavators who follow the mandated pre-excavation
notification and marking requirements. This bill would also
enhance the enforcement powers of certain state agencies to
bring proceedings against operators and excavators who fail to
follow subsurface excavation laws, and would create the
California Underground Facilities Safe Excavation Authority,
which would enforce laws relating to the protection of
underground infrastructure by hearing complaints and assessing
civil penalties for violations of relevant laws.
This bill was approved by the Senate Business, Professions and
Economic Development Committee on April 6, 2015, and the Senate
Governmental Organization Committee on April 14, 2015.
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CHANGES TO EXISTING LAW
1.Existing law vests the Contractors' State License Board with
all functions and duties relating to the administration of the
Contractors' State License Law. (Bus. & Prof. Code Sec. 7000
et seq.)
This bill would direct the Contractors' State License Board to
adopt a program to enforce violations of the certain laws
governing subsurface excavations through training
requirements, levying of fines, and licensure actions.
2.Existing law requires every operator of a subsurface
installation, except the Department of Transportation, to
become a member of, participate in, and share in the costs of,
a regional notification center. (Gov. Code Sec. 4216.1.)
Existing law states that except in an emergency, any person
planning to conduct any excavation shall contact the
appropriate regional notification center, at least two working
days, but not more than 14 calendar days, 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. (Gov. Code Sec.
4216.2(a).)
Existing law provides that where an excavation is proposed
within 10 feet of a high priority subsurface installation, the
operator of the high priority subsurface installation shall
notify the excavator of the existence of the high priority
subsurface installation prior to the excavation start date and
time, and the excavator and operator or its representative
shall conduct an onsite meeting at a mutually-agreed-on time
to determine actions or activities required to verify the
location of the high priority subsurface installations prior
to start time. (Gov. Code Sec. 4216.2(a).)
Existing law provides that any operator of a subsurface
installation who receives timely notification of any proposed
excavation work shall, within two working days of that
notification, excluding weekends and holidays, or before the
start of the excavation work, or at a later time mutually
agreeable to the operator and the excavator, locate and field
mark the approximate location and, if known, the number of
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subsurface installations that may be affected by the
excavation. (Gov. Code Sec. 4216.3(a).)
Existing law states that if a subsurface installation is
damaged by an excavator as a result of failing to comply with
the above requirements, or as a result of failing to comply
with the operator's requests to protect the subsurface
installation as specified by the operator prior to the start
of excavation, the excavator shall be liable to the operator
of the subsurface installation for resulting damages, costs,
and expenses to the extent the damages, costs, and expenses
were proximately caused by the excavator's failure to comply.
(Gov. Code Sec. 4216.7(a).)
Existing law states that if the operator of a subsurface
installation has failed to comply with the regional
notification center system requirements, that operator shall
forfeit his or her claim for damages to his or her subsurface
installation, arising from the excavation, against an
excavator who has complied with the above requirements to the
extent damages were proximately caused by the operator's
failure to comply. (Gov. Code Sec. 4216.7(b).)
Existing law states that if an operator of a subsurface
installation fails to comply with the above provisions, the
operator shall be liable to the excavator who has complied
with these provisions for damages, costs, and expenses
resulting from the operator's failure to comply with these
specified requirements to the extent the damages, costs, and
expenses were proximately caused by the operator's failure to
comply. (Gov. Code Sec. 4216.7(c).)
This bill would delete the exception for the Department of
Transportation not to become a member of, participate in, and
share in the costs of, a regional notification center.
This bill would provide that before notifying the appropriate
regional notification center, an excavator planning to conduct
an excavation shall delineate the area to be excavated. If
the area is not delineated, an operator may, at the operator's
discretion, choose not to locate and field mark until the area
to be excavated has been delineated.
This bill would require an operator to indicate with an "A"
inside a circle the presence of any abandoned subsurface
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installations within the delineated area. This bill would
state that there shall be no liability associated with marking
abandoned subsurface installations.
This bill would state that if an operator or local agency
knows that it has a subsurface installation embedded or
partially embedded in the pavement that is not visible from
the surface, the operator or local agency shall contact the
excavator before pavement removal to communicate and determine
a plan of action to protect that subsurface installation and
excavator.
This bill would state that an excavator shall not be
responsible for a traffic signal detector loop, even if the
excavator is notified that it is embedded in the pavement,
unless there is a local ordinance or permit requirement to the
contrary.
This bill would provide that if an operator has failed to
become a member of, participate in, or share in the costs of,
a regional notification center, that operator shall forfeit
his or her claim for damages to his or her subsurface
installation arising from an excavation against an excavator
who has called at least two working days in advance to the
extent damages were proximately caused by the operator's
failure to be a member.
This bill would provide that if an operator of a subsurface
installation has failed to comply with the provisions above,
including, but not limited to, the requirement to field mark
the appropriate location of subsurface installations within
two working days of notification, the operator shall be liable
to the excavator who has complied with the above provisions
for damages, including liquidated damages, liability, losses,
costs, and expenses resulting from the operator's failure to
comply with these specified requirements to the extent the
damages, costs, and expenses were proximately caused by the
operator's failure to comply.
This bill would provide that an excavator who damages a
subsurface installation due to an inaccurate field mark by an
operator, or by a third party under contract to perform field
marking for the operator, shall not be liable for damages,
replacement costs, or other expenses arising from damages to
the subsurface installation if the excavator complied with the
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above provisions.
This bill would provide that in any actions for reimbursement
or indemnification for a claim arising from damage to a
subsurface installation in which the court or arbitrator finds
that the excavator complied with the above requirements, the
excavator shall be awarded reasonable attorney's fees and
expenses.
This bill would authorize the Contractors' State License
Board, the Public Utilities Commission, and the Office of the
State Fire Marshal to enforce certain provisions of the laws
pertaining to subsurface infrastructure.
This bill would make other conforming and clarifying changes.
This bill would make several findings related to excavation
and subsurface installations.
3.This bill would create the California Underground Facilities
Safe Excavation Authority and would require the authority to
enforce laws relating to the protection of underground
infrastructure by hearing complaints and assessing civil
penalties for violations of these provisions.
This bill would provide that 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.
This bill would state that the cost of the judicial review,
including the cost of preparing a record and transcript, shall
be paid by the party filing the request for judicial review.
Notwithstanding this provision, this bill would provide that
if the party filing the request for judicial review prevails,
the court may require that the cost of the judicial review,
including the cost of preparing a record and transcript, be
paid by the authority, unless the authority waives the award
of attorney's fees.
COMMENT
1.Stated need for the bill
The author writes:
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Excavation activities accounted for more than 25 percent of
pipeline-related fatalities in the U.S. between 2002 and 2011.
Nationwide data provided by the Common Ground Alliance, a
national nonprofit created by the federal pipeline safety
regulator to promulgate best practices in safe excavation,
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 call before
excavating.
Data collected by [Pacific Gas and Electric] supports this
conclusion. Contract excavators have challenged this
assertion, instead suggesting that mismarked utilities are the
greater danger, but none challenge the need to improve
excavation safety around underground facilities in California.
SB 119 proposes to emulate other states' successes in reducing
excavation damage by creating a central enforcement board,
composed of excavation stakeholders, to enforce California's
one-call laws.
2.Changes to Existing Liabilities and Immunities
Immunities from liability are generally disfavored as a matter
of public policy. By their nature, they prevent an injured
party from seeking recovery for damages caused by the wrongful
acts of another. They also dis-incentivize careful behavior by
parties who, because of their immunity, cannot be held liable
for their wrongful acts. California law, to the contrary, has
generally provided recourse for those injured by the acts of
another. Civil Code Section 3281, for example, provides that
"every person who suffers detriment from the unlawful act or
omission of another, may recover from the person in fault a
compensation therefor in money, which is called damages." This
and other sections that provide recourse and compensation for
wrongful injuries help to ensure that all people adhere to a
certain standard of care in their conduct.
However, in limited situations, the Legislature has approved
measured immunity from liability to promote other policy goals
beneficial to the public. These limited immunities often
incentivize actors to behave according to a set standard in
order to obtain its benefits. Existing law pertaining to
excavation near subsurface infrastructure contains such an
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immunity. The law provides that if an operator of a subsurface
installation fails to comply with such things as pre-excavation
marking requirements, that operator forfeits his or her claim
for damages to the subsurface installation arising from the
excavation, provided the excavator both complied with the law's
requirements and the damages were caused by the operator's
failure to comply. (See Gov. Code Sec. 4216.7(b).)
The Legislature also uses exposure to civil liability - the
inverse of immunity - as a mechanism for promoting public policy
goals. The subsurface excavation law contains provisions of
this type as well. One such provision renders an operator
liable in certain circumstances to an excavator for damages,
costs, and expenses resulting from the operator's failure to
comply with the law to the extent the damages, costs, and
expenses were proximately caused by the operator's failure to
comply. (See Gov. Code Sec. 4216.7(c).) Another provides that
if a subsurface installation is damaged by an excavator as a
result of failing to comply with the law's requirements, such as
notifying a regional notification center before excavating, the
excavator is liable to the operator for resulting damages,
costs, and expenses to the extent those damages, costs, and
expenses were caused by the excavator's failure to comply with
the law. (See Gov. Code Sec. 4216.7(a).) This set of liability
and limited immunity provisions incentivize excavators and
operators of subsurface infrastructure to comply with the
subsurface excavation law's pre-excavation notification and
marking requirements. This bill would modify the existing
liability structure of the subsurface excavation law in several
ways. First, it would require an operator to become a member
of, participate in, or share in the costs of, a regional
notification center, in order to avoid forfeiting damage claims
against excavators who comply with the law. This bill would
also create a new immunity for excavators who damage subsurface
installations due to an inaccurate field mark by an operator,
and would specifically authorize excavators to receive damages
including liquidated damages, liability, and losses when
operators fail to comply with the law's pre-excavation marking
requirements. These changes, while expanding certain
liabilities, do not fundamentally alter the subsurface
excavation law's existing liability structure.
Three other changes proposed by this bill, however, would
fundamentally alter the existing liability structure. First,
this bill would amend existing law to state that "there shall be
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no liability associated with marking abandoned subsurface
installations." A blanket immunity of this sort could
potentially immunize an operator who recklessly mislabels an
active high pressure gas line with an abandoned marking,
disregarding the possibility that such mislabeling could
seriously injure excavation workers. Second, this bill would
provide that new owners "will assume full responsibility of [a]
subsurface installation" when a change of ownership occurs.
This provision could operate as an indemnity of sorts,
transferring all possible liability associated with the
subsurface installation to the new owner. This provision begs
the question; would the new owner be responsible for such things
as environmental contamination associated with the subsurface
installation? Finally, this bill would provide that "an
excavator shall not be responsible for a traffic signal detector
loop, even if the excavator is notified that it is embedded in
the pavement, unless there is a local ordinance or permit
requirement to the contrary." It is unclear why excavators
should be given blanket immunity from damages related to traffic
signal detector loops, given that the cost associated with these
losses would fall entirely on public agencies through no fault
of their own. To address these concerns, the author offers the
following amendments to remove those immunity provisions:
Author's Amendments :
On page 14, lines 18 and 19, strike "There shall be no
liability associated with marking abandoned subsurface
installations."
On page 14, strike line 32.
On page 15, strike lines 32 through 35.
3.Impact to Third Parties
The subsurface excavation law limits the scope of its immunity
and liability provisions by imposing certain equitable
constraints on those provisions and by explicitly requiring
parties to mitigate their damages. Specifically, existing law
provides that these liability and immunity provisions do not:
affect claims including, but not limited to, third-party
claims brought against the excavator or operator by other
parties for damages arising from the excavation;
exempt the excavator or operator from his or her duty to
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mitigate any damages as required by common or other applicable
law; or
exempt the excavator or operator from liability to each other
or third parties based on equitable indemnity or comparative
or contributory negligence. (Gov. Code Sec. 4216.7(d).)
The Consumer Attorneys of California have expressed concern
that, despite these explicit restrictions which are not modified
by this bill, the proposed changes to the immunity and liability
provisions of the subsurface excavation law may unintentionally
impact the rights of third parties injured as a result of
noncompliance with this law. To address this concern, the
author offers the following amendment:
Author's Amendment :
On page 19, between lines 20 and 21, insert "This section is
not intended to create any presumption or to affect the burden
of proof in any action for personal injuries or property
damage, other than damage to the subsurface installation, nor
is this section intended to affect, create or eliminate any
remedy for personal injury or property damage, other than
damage to the subsurface installation."
1.Judicial Review of Administrative Decisions
This bill would create a new governmental agency called the
California Underground Facilities Safe Excavation Authority
(Authority), which would be tasked with enforcing laws relating
to the protection of underground infrastructure. The Authority
would be given explicit power to hear complaints and assess
civil penalties, and aggrieved parties would have the right to
judicial review of the Authority's acts in superior court.
However, this bill would provide that, in order to exercise that
right, the party filing a request for judicial review would have
to pay all associated costs, including transcription and
administrative record preparation costs, except under certain
circumstances. This significant financial burden would likely
dissuade many aggrieved parties from seeking judicial review,
thereby insulating the Authority's decisionmaking from judicial
scrutiny. To remove this financial burden, the author offers
the following amendment to remove the requirement to pay those
costs.
Author's Amendment :
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On page 24, strike lines 32 through 39
2.Other Stakeholder Concerns
Staff notes that the Committee has received several opposition
letters from various stakeholders regarding other aspects of
this bill. The California Landscape Contractors Association
(CLCA), for example, writes that the definition of "excavation"
in the bill:
is so broad that it would apply to landscape maintenance
activities such as mowing a lawn or trimming edges - both of
which entail the movement of materials between the air and the
existing surface of the ground. In addition, this bill would
require landscapers to call 811 when installing or changing
plants and flower beds with hand tools at low depths. CLCA
does not believe that these types of maintenance activities
pose a threat to underground installations or public safety
and we respectfully request an amendment that would exempt
landscape maintenance performed with hand tools within 12
inches in depth from the provisions of the bill.
United Contractors and a coalition of other contractor and labor
groups raise concerns about the proposed California Underground
Facilities Safe Excavation Authority, stating that enforcement
actions by this new authority, when combined with other
enforcement provisions in the bill, may subject contractors to
multiple inconsistent enforcement actions arising out of the
same excavation activity. They write:
To create a new and additional enforcement agency, and to
layer this new authority and its processes on top of the
multiple enforcement options that already exist against
contractors only adds complexity and costs. Under this bill,
a contractor who has had the misfortune of striking a
subsurface installation, whether they were at fault or not,
could face a multi-tiered process of enforcement by a number
of different entities. This could include the new agency,
coupled with the existing jurisdictional agencies and the
judicial process; all of which could have different and/or
conflicting outcomes for the contractor.
The Association of California Water Agencies also expressed
opposition to the bill, citing concerns by its members over
expansion of response requirements to excavations on private
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property and other issues.
3.Other Technical and Clarifying Amendments
The author offers the following amendments to clarify when an
operator shall forfeit damages to subsurface installations due
to noncompliance with the subsurface excavation law.
Author's Amendments :
On page 18, line 40, strike "called at least two working days
in advance" and insert "complied with this article
On page 19, line 2, strike "be a member" and insert "comply
with this article"
The author offers the following amendments to clarify when
attorney's fees and expenses may be awarded to an excavator in
actions for reimbursement or indemnification arising from damage
to a subsurface installation.
Author's Amendments :
On page 19, line 23, strike "the court or arbitrator" and
insert "a court"
On page 19, line 24, strike "for Sections 4216.2 and 4216.4,
the excavator shall" and insert "of this article, the
excavator may"
The author offers the following amendment to clarify that the
residential real property exemption applies only to subsurface
easements or rights-of-way.
Author's Amendment :
On page 20, line 10, after "right-of-way" insert "for a
subsurface installation"
Support : Underground Service Alert of Southern California
Opposition : Agricultural Council of California; Association of
California Water Agencies; Associated General Contractors of
California; California Citrus Mutual; California Cotton Ginners
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and Growers Association; California Farm Bureau Federation;
California Fresh Fruit Association; California Landscape
Contractors Association; California Legislative Conference of
the Plumbing, Heating, and Piping Industry; California-Nevada
Conference of Operating Engineers; California State Council of
Laborers; National Electric Contractors Association; Southern
California Contractors Association; United Contractors; Western
Agricultural Processors Association; Western Growers; Western
Line Constructors Chapter, Inc.
HISTORY
Source : Author
Related Pending Legislation : None Known
Prior Legislation :
AB 811 (Lowenthal, Ch. 250, Stats. 2013) required regional
notification centers to post on their Internet Web sites,
information provided by operators and excavators relating to
violations of specified state laws governing subsurface
excavations.
AB 1514 (Lowenthal, 2012) would have increased civil penalties
for violations of excavations laws, and authorized the Public
Utilities Commission to provide a copy of an investigation
report to prosecutors following an excavation-related violation.
This bill died in the Assembly Appropriations Committee.
SB 1359 (Torlakson, Ch. 651, Stats. 2006) requires an onsite
meeting to determine the location of high priority subsurface
installations prior to the start of an excavation, specifies who
can determine the location of a high priority subsurface
installation, and assigns liability for damages resulting from
an excavator's and operator's failure to comply with its legal
obligations.
AB 1264 (Benoit, Ch. 77, Stats. 2004) exempted providers of
leased or rented excavation equipment and their employees from
specified state laws governing subsurface excavations if the
equipment is rented to a licensed contractor and the rental
agreement includes a provision stating that the contractor who
receives the equipment accepts certain liabilities. This bill
also extended the validity of an inquiry identification number
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from 14 days to 28 days, affording contractors more time to
complete excavations and reducing the number of calls to the
regional notification centers.
AB 73 (Elder, Ch. 928, Stats. 1989), among other things,
clarified requirements in state law governing subsurface
excavations regarding identifying an area to be excavated.
This bill specified that excavators are liable for any damages
resulting from their failure to comply with notification
requirements, and precluded, to a specified extent, damage
claims by those owners or operators who themselves fail to
comply with notification requirements. This bill also provided
that an operator or excavator who negligently violates the
subsurface excavation law would be subject to civil penalties
not to exceed $10,000, and that an operator or excavator who
knowingly and willfully violates the provisions would be subject
to civil penalties not to exceed $50,000, as specified. This
bill required that if more than one agency is involved in
enforcement, the penalties and fines collected shall be
apportioned between them by the court in a manner that will
fairly offset the relative costs or losses incurred by the
public agencies.
Prior Vote :
Senate Governmental Organization Committee (Ayes 9, Noes 2)
Senate Business, Professions and Economic Development Committee
(Ayes 8, Noes 0)
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