BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 119| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 119 Author: Hill (D) Amended: 6/1/15 Vote: 21 SENATE BUS, PROF. & ECON. DEV. COMMITTEE: 8-0, 4/6/15 AYES: Hill, Bates, Berryhill, Block, Galgiani, Jackson, Mendoza, Wieckowski NO VOTE RECORDED: Hernandez SENATE GOVERNMENTAL ORG. COMMITTEE: 9-2, 4/14/15 AYES: Hall, Berryhill, Block, Galgiani, Hernandez, Hill, Hueso, Lara, McGuire NOES: Gaines, Vidak SENATE JUDICIARY COMMITTEE: 5-1, 4/28/15 AYES: Jackson, Hertzberg, Leno, Monning, Wieckowski NOES: Anderson NO VOTE RECORDED: Moorlach SENATE APPROPRIATIONS COMMITTEE: 5-2, 5/28/15 AYES: Lara, Beall, Hill, Leyva, Mendoza NOES: Bates, Nielsen SUBJECT: Protection of subsurface installations SOURCE: Author DIGEST: This bill modifies call before you dig laws governing excavations near subsurface installations. Among other things, this bill enhances the existing enforcement powers of specified state entities, revises liability provisions that apply to the SB 119 Page 2 pre-excavation notification and subsurface installation marking requirements for operators and excavators, and establishes the California Underground Facilities Safe Excavation Authority to enforce laws relating to the protection of underground infrastructure, as specified. ANALYSIS: Existing law: 1) Licenses and regulates more than 300,000 contractors under the Contractors State License Law (Contractors Law) by the Contractors State License Board (CSLB) within the Department of Consumer Affairs. The CSLB is under the direction of the registrar of contractors (Registrar). (Business and Professions Code (BPC) § 7000 et seq.) 2) Requires all owners of subsurface infrastructure (such as gas, oil, and water pipes, electrical and telecommunications conduits, etc.-except the Department of Transportation) to participate in and fund regional notification ("one-call") centers. (Government Code (GC) § 4216.1) 3) Exempts owners of non-pressurized sewer lines and storm drains from needing to become members of the one-call centers. (GC § 4216) 4) Requires persons performing excavations to call one-call centers to have the locations of underground facilities marked before starting an excavation (GC § 4216.2), but exempts homeowners and other private property owners from this requirement for excavations on their own property. (GC § 4216.8) 5) Requires owners of subsurface installations to mark their underground facilities within two working days of receiving a notification. (GC § 4216.3) 6) Requires excavators to use hand tools within two feet on each side of a marked line indicating a subsurface facility to determine where that facility is before using any power excavating equipment. (GC § 4216.4) SB 119 Page 3 7) Provides that an excavator or operator who violates excavation requirements to be subject to the following: a) A civil penalty up to $10,000 for negligent violations. b) A civil penalty up to $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. (GC § 4216.6) 1) States that operators and excavators are liable for damages caused from violations of the one-call law, and that operators who fail to participate in the one-call centers cannot claim damages from an excavator who has complied with the law. (GC § 4216.7) 2) Authorizes CSLB to issue a citation for a violation of Contractors Law in lieu of license denial, suspension, or revocation. (BPC § 7099, 16 CCR § 884) 3) Requires 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. (BPC § 7110.5). 4) Authorizes the Department of Industrial Relations Division of Occupational Safety and Health (CalOSHA) to adopt occupational safety and health standards. (Labor Code § 142.3) This bill: 1) Requires an excavator to delineate the area of excavation prior to notifying a one-call center, and authorizes an operator to withhold locating and marking subsurface facilities until the digging area has been delineated by an excavator. The path or location of a proposed excavation is SB 119 Page 4 marked in white or pink, if marking in white may be misleading or could be misinterpreted, as specified. 2) Provides that agricultural excavations of less than 16 inches and certain landscape maintenance activities performed with hand tools do not count as "excavation" for purposes of the one-call laws. 3) Provides that landscape maintenance activity that is performed with hand tools at a depth of no more than 12 inches do not count as "excavation" for purposes of the one-call laws until 2020, as specified. 4) Makes excavators liable for failure to request re-marking of facilities when those marks are no longer visible, and for failure to re-delineate the area to be re-marked. 5) Adds to and clarifies statutory definitions pertaining to the one-call laws. 6) Prohibits an excavator from digging until receiving a positive response from all operators that they have responded to a one-call center ticket, and until after completion of an on-site meeting in the case of a high-priority subsurface installation, except in an emergency situation. 7) Requires an excavator to eliminate or camouflage any temporary markings that remain for 45 days or more. 8) Requires an operator to provide information on the location of active and inactive subsurface installations, mark abandoned facilities with an "A" inside a circle, and advise the excavator if it operates no subsurface installations in the area. 9) Requires an operator or local agency that has subsurface installations embedded in pavement to contact the excavator before excavation to plan for protection of those installations. 10)Requires an operator to amend, update, maintain and preserve all plans and records of its subsurface installations, and to keep records of abandoned facilities beginning on January 1, 2016. SB 119 Page 5 11)Requires CSLB to adopt a program to enforce contractor violations for failure of excavators to delineate the area of excavation prior to notifying a one-call center. For a first violation, CSLB will require contractors to undergo a training program conducted by a one-call center relating to compliance. A subsequent violation within one year, or failure to attend training or pay fines, may result in license suspension. 12)Authorizes the California Public Utilities Commission (CPUC) to enforce specified provisions against operators of natural gas and electric underground infrastructure, and authorizes the Fire Marshal to enforce those provisions against operators of hazardous liquid pipelines, unless the facilities are owned by municipal utilities. 13)Specifies that an excavator in compliance with one-call laws that damages underground facilities due to an inaccurate field mark by an operator is not liable for damages, costs, or expenses, and the excavator may be awarded attorney's fee. 14)Requires a residential property owner doing work on his or her property to comply with the one-call laws, unless there is no easement or right-of-way for subsurface installations and the owner only uses hand tools for excavation. 15)Requires the owner of a high-priority subsurface installation to make specified notifications to a landowner if agricultural activities cannot be safely performed due to the depth of those facilities, and to mark the location and depth of those facilities. 16)Requires CalOSHA to revise regulations to clarify best practices used by excavators, and to convene an advisory committee hearing to seek input from affected parties on best practices when excavating in urban areas with a high density of installations. 17)Creates the California Underground Facilities Safe Excavation Authority (Authority), with specified membership, to enforce the one-call laws, hold hearings, contract for professional services, and conduct any necessary investigations. SB 119 Page 6 18)Requires the Authority to meet at least every three months, as specified, and authorizes the Authority to: apply for grants, contributions, and appropriations; award grants; and conduct public education and outreach programs to promote safe excavation and demolition in the area of subsurface installations, as specified. 19)Authorizes the Authority to receive funding from federal or state grants, fees charged to members of one-call centers, fines and penalties assessed by the Authority in enforcement actions, or any other source. 20)Authorizes the Authority, upon making a finding of violation, to assess an unspecified civil penalty, reach a settlement in lieu of a civil penalty and require remedial education relevant to the violation. 21)Requires the Authority to submit an annual report to the Legislature and Governor on its activities and any recommendations, beginning January 1, 2017. 22)Establishes the Safe Energy Infrastructure and Excavation Fund (Safe Fund) in the State Treasury. Limit Safe Fund expenditures on public education and outreach, and workforce development purposes to $500,000 per year, and limit expenditures on workforce development to $150,000 from that amount. 23)Requires any remaining funds to be deposited into the General Fund, after funding the Authority's administrative costs, and specified education, outreach, and workforce development. 24)Specifies funds for training are to supplement any existing state and federal requirements. 25)Requires gas corporations to collect data on damages that occurred during performance of landscaping activities, as specified, and any other information the CPUC requires, and to annually report excavation damage data and analyses to the CPUC. 26)Requires the CPUC to report an analysis of excavation SB 119 Page 7 damages to CPUC-regulated pipeline facilities to the Legislature by February 1, 2019. 27)Requires any moneys collected by the CPUC as a result of citations issued in relation to safety enforcement programs applicable to gas and electrical corporations be deposited into the Safe Fund. Background 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 CPUC, 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 in Walnut Creek struck a high-pressure petroleum pipeline operated by Kinder Morgan, killing five 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. SB 1359 (Torlakson, Chapter 651, Statutes of 2006) required onsite meetings between excavators and operators when an excavation was to take place near the most dangerous lines, such as 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 bill 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. SB 119 Page 8 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 AG 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 AG and district attorneys to enforce the one-call law, though regulatory authorities such as the CPUC, 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 PIPES 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 published an Advance Notice of Proposed Rulemaking on this subject on October 29, 2009. In the notice of proposed rulemaking, PHMSA sought comment on a number of proposed criteria. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes SB 119 Page 9 According to the Senate Appropriations Committee: Penalty revenue diversion: Unknown diversion of penalty revenues, likely in the range of $1.5 million annually, from the General Fund to the Safe Fund, created by this bill. In recent years, the CPUC reports it has imposed penalties related to its enforcement programs of $16.8 million in 2011-12, $8.4 million in 2013-14, and $11.9 million to date in 2014-15, which are currently deposited into the General Fund. This bill instead requires penalty revenues to be deposited into the Safe Fund for administrative costs of the Authority and up to $500,000 for specified purposes. The remainder would be transferred to the General Fund. The Authority: Unknown administrative costs for the following activities: establish and staff the nine-member Authority, hold quarterly public meetings, establish and conduct enforcement activities, conduct audits and investigations of incidents and near misses, provide for administrative adjudication hearings, and conduct public education and outreach activities Estimates the Authority could require 5-7 PY of permanent staff, and incur total administrative costs in the range of $700,000 to $1 million annually. (Safe Fund) CalOSHA: One-time costs ranging from $100,000 to $200,000 to convene an advisory committee hearing and adopt regulations defining best practices used by excavators when digging near subsurface installations. (Occupational Safety and Health Fund) CSLB: Estimated ongoing costs of approximately $91,000 SB 119 Page 10 annually for staff time to administer and enforce training requirements for excavation violators. Additional enforcement costs, estimated at $240,000 annually in reimbursements, for cases referred to the AG for discipline. (Contractors License Fund) Fire Marshal: Minor and absorbable costs for enforcement related to hazardous liquid pipeline operators' locating and marking facilities. (General Fund) CPUC: Minor and absorbable costs for enforcement related to natural gas and underground electric infrastructure operators' locating and marking facilities. (Public Utilities Reimbursement Account) SUPPORT: (Verified6/1/15) AT&T Pacific Gas and Electric Company San Diego Gas and Electric Company Southern California Gas Company OPPOSITION: (Verified6/1/15) Associated General Contractors of California Association of California Water Agencies California Association of Realtors California State Council of Laborers California-Nevada Conference of Operating Engineers DigAlert Los Angeles County Board of Supervisors National Electric Contractors Association SB 119 Page 11 Southern California Contractors Association United Contractors Western Line Constructors ARGUMENTS IN SUPPORT: According to the Sempra Energy Utilities (San Diego Gas and Electric Company and Southern California Gas Company), "while SB 119 continues to be a work in progress, the Sempra Utilities look forward to continuing to work with the Author and stakeholders to ensure legislation that enhances safety around excavation sites, ensures proper attribution of liability, and fair and consistent enforcement. For these reasons, the Sempra Utilities have a support if amended position on SB 119, and respectfully request an Aye vote." ARGUMENTS IN OPPOSITION:According to the Associated General Contractors of CA, "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." Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-1868 6/1/15 15:56:50 **** END ****