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  ****