Amended in Assembly July 7, 2015

Amended in Senate May 6, 2015

Amended in Senate April 15, 2015

Senate Bill No. 660

Introduced by Senators Leno and Hueso

February 27, 2015

An act to amend Sections 305, 307, 308, 309.6, begin insert 311, end insert 1701.1, 1701.2, 1701.3, and 1701.4 of, and to add Sections begin delete 305.5 and 1701.6 end delete begin insert 305.5, 1701.6, and 1701.7 end insert to, the Public Utilities Code, relating to the Public Utilities Commission.

LEGISLATIVE COUNSEL’S DIGEST

SB 660, as amended, Leno. Public Utilities Commission.

(1) The California Constitution establishes the Public Utilities Commission, with jurisdiction over all public utilities. The California Constitution grants the commission certain general powers over all public utilities, subject to control by the Legislature, and authorizes the Legislature, unlimited by the other provisions of the California Constitution, to confer additional authority and jurisdiction upon the commission that is cognate and germane to the regulation of public utilities. Existing law requires the Governor to designate the president of the commission from among its members and requires the president to direct the executive director, the attorney, and other staff of the commission, except for the Office of Ratepayer Advocates. Existing law authorizes the executive director and the attorney to undertake certain actions if directed or authorized by the president, except as otherwise directed or authorized by vote of the commission.

This bill would repeal the requirement that the president direct the executive director, the attorney, and other commission staff. The bill would delete the authority of the president to direct or authorize the executive director and attorney to undertake certain actions, and would instead require that they be directed or authorized to undertake those actions by the commission. The bill would authorize the commission to delegate specific management and internal oversight functions to committees composed of 2 commissioners. The bill would require the commission to vote in an open meeting on the assignment or reassignment of proceeding to one or more commissioners.

(2) Existing law requires the commission, upon initiating a hearing, to assign one or more commissioners to oversee the case and an administrative law judge, where appropriate. Existing law requires the assigned commissioner to prepare and issue, by order or ruling, a scoping memo that describes the issues to be considered and the applicable timetable for resolution. Existing law requires the begin delete commission, end delete begin insert commission end insert to adopt procedures on the disqualification of administrative law judges due to bias or prejudice similar to those of other state agencies and superior courts.

This bill would require the commission to additionally adopt procedures on disqualification of commissioners due to bias or prejudice similar to those of other state agencies and superior courts. For ratesetting or adjudicatory proceedings, the bill would require a commissioner or an administrative law judge to be disqualified if there is an appearance of bias or prejudice based on specified criteria. The bill would begin delete prohibit end delete begin insert require that the end insert commission procedures begin delete from authorizing end delete begin insert prohibit end insert a commissioner or administrative law judge from ruling on a motion made by a party to a proceeding to disqualify the commissioner or administrative law judge due to bias or prejudice.

(3) The Public Utilities Act requires the commission to determine whether a proceeding requires a hearing and, if so, to determine whether the matter requires a quasi-legislative, an adjudication, or a ratesetting hearing. For these purposes, quasi-legislative cases are cases that establish policy rulemakings and investigations, which may establish rules affecting an entire industry, adjudication cases are enforcement cases and complaints, except those challenging the reasonableness of any rates or charges, and ratesetting cases are cases in which rates are established for a specific company, including general rate cases, performance-based ratemaking, and other ratesetting mechanisms. The act regulates communications in hearings before the commission and defines “ex parte communication” to mean any oral or written communication between a decisionmaker and a person with an interest in a matter before the commission concerning substantive, but not procedural, issues that does not occur in a public hearing, workshop, or other public proceeding, or on the official record of the proceeding on the matter. Existing law defines “person with an interest” to mean, among other things, a person with a financial interest in a matter before the commission, or an agent or employee of the person with a financial interest, or a person receiving consideration for representing the person with a financial interest. Existing law requires the commission, by regulation, to adopt and publish a definition of the terms “decisionmaker” and “persons” for those purposes, along with any requirements for written reporting of ex parte communications and appropriate sanctions for noncompliance with any rule proscribing ex parte communications. The act provides that ex parte communications are prohibited in adjudication cases and are prohibited in ratesetting cases, with certain exceptions. The act requires that ex parte communications be permitted in quasi-legislative cases, without any restrictions. The commission’s Rules of Practice and Procedure define a “decisionmaker” as any commissioner, the Chief Administrative Law Judge, any Assistant Chief Administrative Law Judge, the assigned administrative law judge, or the Law and Motion Administrative Law Judge. The Rules of Practice and Procedure provide that communications with a begin delete commissioners’ end delete begin insert commissioner’s end insert personal advisors are subject to all of the restrictions on, and reporting requirements applicable to, ex parte communications, except that oral communications with an advisor in ratesetting proceedings are permitted without the restrictions.

This bill would delete the provision that an ex parte communication concerns a substantive, but not a procedural matter, and instead would provide that an ex parte communication concerns any matter that the commission has not specified begin insert in its Rules of Practice and Procedure end insert as being a procedural begin delete matter that is an appropriate subject for ex parte communication. The bill would require the commission to specify those procedural matters that are appropriate subjects for ex parte communications in its Rules of Practice and Procedure. end delete begin insert matter. The bill would prohibit the commission from considering as a procedural matter communications between an interested person and a decisionmaker regarding which commissioner or administrative law judge may be assigned to a matter before the commission. end insert The bill would define a person involved in issuing credit ratings or advising entities or persons who may invest in the shares or operations of any party to a proceeding as begin delete a person with a financial interest. end delete begin insert an interested person. end insert The bill would require that the commission, by rule, adopt and publish a definition of decisionmakers, that would be required to include begin delete each commissioner, the attorney for the commission, the executive director of the commission, the personal staff of each commissioner, including each advisor to a commissioner, the administrative law judge assigned to the proceeding, the director of the Energy Division, the director of the Communications Division, the director of the Water and Audits Division, and the director of the Safety and Enforcement Division. end delete begin insert certain individuals in the commission. end insert The bill would require begin delete communications between a person with an interest who is not a party to a commission proceeding and a decisionmaker to be reported by the decisionmaker but would not require the communications to be reported by the person with an interest who is not a party to a commission proceeding. end delete begin insert decisionmakers to periodically report summary logs of ex parte communications with interested persons in compliance with rules established by the commission, and included in the commission’s Rules of Practice and Procedure, and would require the commission to post those summary logs on its Internet Web site. end insert

This bill would require that a begin delete decisionmaker end delete begin insert decisionmaker, in an adjudication or ratesetting case, end insert who makes or receives a prohibited ex parte communication, or who begin delete learns that a permissible end delete begin insert receives an end insert ex parte communication begin insert that end insert was not begin delete reported as required, end delete begin insert timely reported, end insert to disclose begin delete the content of end delete begin insert certain information regarding end insert the communication in the record of the begin delete proceeding. end delete begin insert proceeding before the commission takes a vote on the matter. end insert begin delete The bill would require the commission to establish rules for how to handle prohibited ex parte communications, including rules requiring reporting the person initiating the communication and whether the person persisted in continuing the communication after being advised that the communication was prohibited. end delete The bill would require begin insert the commission to render decisions based upon the record in a case and would provide end insert that an ex parte communication not be part of the record of begin delete any proceeding and not be considered, or relied upon, for purposes of the commission’s resolution of contested issues. end delete begin insert the proceeding. end insert

This bill would provide that ex parte communications are permitted in quasi-legislative proceedings, but would require that they be reported within 3 working days of the communication by filing a “Notice of Ex Parte Communication” with the commission in accordance with procedures established by the commission for the service of that begin delete notice. end delete begin insert notice and containing specified information. end insert

This bill would require the commission to additionally prohibit communications concerning procedural issues in adjudication cases between parties or persons with an interest and decisionmakers, except for the assigned administrative law judge.

begin delete

The

end delete

begin insert Under existing law, the end insert exceptions to the prohibition upon ex parte communications in ratesetting proceedings authorize a commissioner to permit oral ex parte communications if all interested parties are invited and given not less than 3 days’ notice. If an ex parte communication meeting is granted to any party, it is required that all other parties also be granted individual ex parte meetings of a substantially equal period of time and that all parties be sent a notice of that authorization at the time the request is granted, at least 3 days prior to the meeting. The exceptions authorize a commissioner to permit written ex parte communications by any party provided that copies of the communication are transmitted to all parties.

This bill would delete the requirement that if an ex parte communication meeting is granted to any party in a ratesetting proceeding, that all other parties also be granted individual ex parte meetings of a substantially equal period of time and that all parties be sent a notice of that authorization at the time the request is granted, at least 3 days prior to the meeting. The bill would prohibit oral communications concerning procedural begin delete issues end delete begin insert matters end insert in ratesetting cases between parties or persons with an interest and decisionmakers other than the assigned administrative law judge, except that a commissioner would be authorized to permit an oral communication relative to procedural begin delete issues end delete begin insert matters end insert if all interested parties are invited and given not less than 3 days’ notice. The bill would prohibit written ex parte communications concerning procedural begin delete issues end delete begin insert matters end insert in ratesetting cases between parties or persons with an interest and decisionmakers other than the assigned administrative law judge, except that a commissioner would be authorized to permit a written communication relative to procedural issues by any party provided that copies of the communication are transmitted to all parties on the same day.

This bill would begin delete make any violation of the ex parte communications requirements by any person punishable by an unspecified fine or by imprisonment, or by both that fine and imprisonment, thereby imposing a state-mandated local program by creating new crimes. end delete begin insert authorize the commission to impose civil sanctions, including civil penalties, on any entity or person, other than a decisionmaker or employee of the commission, that violates ex parte communication requirements. The bill would authorize the Attorney General to bring an enforcement action in the Superior Court of the City and County of San Francisco against a decisionmaker or employee of the commission who violates the ex parte communication requirements. end insert

Under existing law, a violation of the Public Utilities Act or any order, decision, rule, direction, demand, or requirement of the commission is a crime.

Because the provisions of this bill would be a part of the act and because a violation of an order or decision of the commission implementing its requirements would be a crime, the bill would impose a state-mandated local program by expanding the application of a crime.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

Section 305 of the Public Utilities Code is
amended to read:

305.  

The Governor shall designate a president of the
commission from among the members of the commission. The
president shall preside at all meetings and sessions of the
commission.

SEC. 2.  

Section 305.5 is added to the Public Utilities Code, to
read:

305.5.  

(a) The commission shall direct the executive director,
the attorney, and other staff of the commission, except for the staff
of the Office of Ratepayer Advocates described in Section 309.5,
in performance of their duties.

(b) The commission may delegate specific management and
internal oversight functions to committees composed of two
commissioners. Committees shall meet regularly with staff and
shall report to the commission for additional guidance or approval
of decisions pertaining to the operations of the commission.

(c) The commission shall vote in an open meeting on the
assignment or reassignment of any proceeding to one or more
commissioners.

SEC. 3.  

Section 307 of the Public Utilities Code is amended
to read:

307.  

(a) The commission may appoint as attorney to the
commission an attorney at law of this state, who shall hold office
during the pleasure of the commission.

(b) The attorney shall represent and appear for the people of the
State of California and the commission in all actions and
proceedings involving any question under this part or under any
order or act of the commission. If directed to do so by the
commission, the attorney shall intervene, if possible, in any action
or proceeding in which any such question is involved.

(c) The attorney shall commence, prosecute, and expedite the
final determination of all actions and proceedings directed or
authorized by the commission, advise the commission and each
commissioner, when so requested, in regard to all matters in
connection with the powers and duties of the commission and the
members thereof, and generally perform all duties and services as
attorney to the commission that the commission may require of
him or her.

SEC. 4.  

Section 308 of the Public Utilities Code is amended
to read:

308.  

(a) The commission shall appoint an executive director,
who shall hold office during its pleasure. The executive director
shall be responsible for the commission’s executive and
administrative duties and shall organize, coordinate, supervise,
and direct the operations and affairs of the commission and
expedite all matters within the commission’s jurisdiction.

(b) The executive director shall keep a full and true record of
all proceedings of the commission, issue all necessary process,
writs, warrants, and notices, and perform any other duties as the
commission prescribes. The commission may authorize the
executive director to dismiss complaints or applications when all
parties are in agreement thereto, in accordance with rules that the
commission may prescribe.

(c) The commission may appoint assistant executive directors
who may serve warrants and other process in any county or city
and county of this state.

SEC. 5.  

Section 309.6 of the Public Utilities Code is amended
to read:

309.6.  

(a) The commission shall adopt procedures on the
disqualification of commissioners and administrative law judges
due to bias or prejudice similar to those of other state agencies and
superior courts.

(b) (1) For ratesetting and adjudicatory proceedings, a
commissioner or administrative law judge shall be disqualified if
there is an appearance of bias or prejudice based on any of the
following:

(A) Actions taken during the proceeding.

(B) Private communications before the commencement of the
proceeding to influence the request for relief sought by any party
to the proceeding.

(C) Actions demonstrating any commitment to provide relief
to a party.

(2) Past work experience by the commissioner or administrative
law judge shall not be a sufficient basis for demonstrating an
appearance of bias or prejudice pursuant to paragraph (1).

(c) The commission procedures shall begin delete not authorize end delete begin insert prohibit end insert a
commissioner or administrative law judge begin delete to rule end delete begin insert from ruling end insert on
a motion made by a party to a proceeding to disqualify the
commissioner or administrative law judge due to bias or prejudice.

(d) The commission shall develop the procedures with the
opportunity for public review and comment.

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 311 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

311.  

(a) The commission, each commissioner, the executive
director, and the assistant executive directors may administer oaths,
certify to all official acts, and issue subpoenas for the attendance
of witnesses and the production of papers, waybills, books,
accounts, documents, and testimony in any inquiry, investigation,
hearing, or proceeding in any part of the state.

(b) The administrative law judges may administer oaths,
examine witnesses, issue subpoenas, and receive evidence, under
rules that the commission adopts.

(c) The evidence in any hearing shall be taken by the
commissioner or the administrative law judge designated for that
purpose. The commissioner or the administrative law judge may
receive and exclude evidence offered in the hearing in accordance
with the rules of practice and procedure of the commission.

(d) Consistent with the procedures contained in Sections 1701.1,
1701.2, 1701.3, and 1701.4, the assigned commissioner or the
administrative law judge shall prepare and file an opinion setting
forth recommendations, findings, and conclusions. The opinion
of the assigned commissioner or the administrative law judge is
the proposed decision and a part of the public record in the
proceeding. The proposed decision of the assigned commissioner
or the administrative law judge shall be filed with the commission
and served upon all parties to the action or proceeding without
undue delay, not later than 90 days after the matter has been
submitted for decision. The commission shall issue its decision
not sooner than 30 days following filing and service of the
proposed decision by the assigned commissioner or the
administrative law judge, except that the 30-day period may be
reduced or waived by the commission in an unforeseen emergency
situation or upon the stipulation of all parties to the proceeding or
as otherwise provided by law. The commission may, in issuing its
decision, adopt, modify, or set aside the proposed decision or any
part of the decision. Where the modification is of a decision in an
adjudicatory hearing it shall be based upon the evidence in the
record. Every finding, opinion, and order made in the proposed
decision and approved or confirmed by the commission shall, upon
that approval or confirmation, be the finding, opinion, and order
of the commission.

(e)  begin insert (1) end insert begin insert   end insert Any item appearing on the commission’s public agenda
as an alternate item to a proposed decision or to a decision subject
to subdivision (g) shall be served upon all parties to the proceeding
without undue delay and shall be subject to public review and
comment before it may be voted upon. For purposes of this
subdivision, “alternate” means either a substantive revision to a
proposed decision that materially changes the resolution of a
contested issue or any substantive addition to the findings of fact,
conclusions of law, or ordering paragraphs. The commission shall
adopt rules that provide for the time and manner of review and
comment and the rescheduling of the item on a subsequent public
agenda, except that the item may not be rescheduled for
consideration sooner than 30 days following service of the
alternative item upon all parties. The alternate item shall be
accompanied by a digest that clearly explains the substantive
revisions to the proposed decision. The commission’s rules may
provide that the time and manner of review and comment on an
alternate item may be reduced or waived by the commission in an
unforeseen emergency situation.

begin insert

(2) In a proceeding in which both a proposed decision and an
alternate have been served upon the parties and comments have
been received on the proposed decision or alternate, or both, if
substantive revisions are made to the proposed decision or
alternate that was previously served upon the parties and made
available for comment, the substantively revised proposed decision
or substantively revised alternate shall be served upon all parties
to the proceeding and shall be made publicly available on the
commission’s Internet Web site, noted on the docket sheet for the
proceeding, for not less than five full working days prior to it being
acted upon by the commission. Any party to the proceeding or
interested member of the public may file comments with the
commission addressing any substantively revised aspect of the
proposed decision or alternate prior to it being acted upon by the
commission.

end insert

(f) The commission may specify that the administrative law
judge assigned to a proceeding involving an electrical, gas,
telephone, railroad, or water corporation, or a highway carrier,
initiated by customer or subscriber complaint need not prepare,
file, and serve an opinion, unless the commission finds that to do
so is required in the public interest in a particular case.

(g) (1) Prior to voting on any commission decision not subject
to subdivision (d), the decision shall be served on parties and
subject to at least 30 days public review and comment. Any
alternate to any commission decision shall be subject to the same
requirements as provided for alternate decisions under subdivision
(e). For purposes of this subdivision, “decision” also includes
resolutions, including resolutions on advice letter filings.

(2) The 30-day period may be reduced or waived in an
unforeseen emergency situation, upon the stipulation of all parties
in the proceeding, for an uncontested matter in which the decision
grants the relief requested, or for an order seeking temporary
injunctive relief.

(3) This subdivision does not apply to uncontested matters that
pertain solely to water corporations, or to orders instituting
investigations or rulemakings, categorization resolutions under
Sections 1701.1 to 1701.4, inclusive, or orders authorized by law
to be considered in executive session. Consistent with regulatory
efficiency and the need for adequate prior notice and comment on
commission decisions, the commission may adopt rules, after
notice and comment, establishing additional categories of decisions
subject to waiver or reduction of the time period in this section.

(h) Notwithstanding any other provision of law, amendments,
revisions, or modifications by the commission of its Rules of
Practice and Procedure, shall be submitted to the Office of
Administrative Law for prior review in accordance with Sections
11349, 11349.3, 11349.4, 11349.5, 11349.6, and 11350.3 of, and
subdivisions (a) and (b) of Section 11349.1 of, the Government
Code. If the commission adopts an emergency revision to its Rules
of Practice and Procedure based upon a finding that the revision
is necessary for the preservation of the public peace, health and
safety, or general welfare, this emergency revision shall only be
reviewed by the Office of Administrative Law in accordance with
subdivisions (b) to (d), inclusive, of Section 11349.6 of the
Government Code. The emergency revision shall become effective
upon filing with the Secretary of State and shall remain in effect
for no more than 120 days. A petition for writ of review pursuant
to Section 1756 of a commission decision amending, revising, or
modifying its Rules of Practice and Procedure shall not be filed
until the regulation has been approved by the Office of
Administrative Law, the Governor, or a court pursuant to Section
11350.3 of the Government Code. If the period for filing the
petition for writ of review would otherwise have already
commenced under Section 1733 or 1756 at the time of that
approval, then the period for filing the petition for writ of review
shall continue until 30 days after the date of that approval. Nothing
in this subdivision shall require the commission to comply with
Article 5 (commencing with Section 11346) of Chapter 3.5 of Part
1 of Division 3 of Title 2 of the Government Code. This
subdivision is only intended to provide for the Office of
Administrative Law review of procedural commission decisions
relating to commission Rules of Practice and Procedure, and not
general orders, resolutions, or other substantive regulations.

(i) The commission shall immediately notify the Legislature
whenever the commission reduces or waives the time period for
public review and comment due to an unforseen emergency
situation, as provided in subdivision (d), (e), or (g).

begin delete SEC. 6. end delete
begin insert SEC. 7. end insert   

Section 1701.1 of the Public Utilities Code is amended
to read:

1701.1.  

(a) The commission, consistent with due process,
public policy, and statutory requirements, shall determine whether
a proceeding requires a hearing. The commission shall determine
whether the matter requires a quasi-legislative, an adjudication,
or a ratesetting hearing. The commission’s decision as to the nature
of the proceeding shall be subject to a request for rehearing within
10 days of the date of that decision. If that decision is not appealed
to the commission within that time period it shall not be
subsequently subject to judicial review. Only those parties who
have requested a rehearing within that time period shall
subsequently have standing for judicial review and that review
shall only be available at the conclusion of the proceeding. The
commission shall render its decision regarding the rehearing within
30 days. The commission shall establish rules regarding ex parte
communication on case categorization issues.

(b) The commission upon initiating a hearing shall assign one
or more commissioners to oversee the case and an administrative
law judge where appropriate. The assigned commissioner shall
schedule a prehearing conference. The assigned commissioner
shall prepare and issue by order or ruling a scoping memo that
describes the issues to be considered and the applicable timetable
for resolution.

(c) (1) Quasi-legislative cases, for purposes of this article, are
cases that establish policy, including, but not limited to,
rulemakings and investigations which may establish rules affecting
an entire industry.

(2) Adjudication cases, for purposes of this article, are
enforcement cases and complaints except those challenging the
reasonableness of any rates or charges as specified in Section 1702.

(3) Ratesetting cases, for purposes of this article, are cases in
which rates are established for a specific company, including, but
not limited to, general rate cases, performance-based ratemaking,
and other ratesetting mechanisms.

(d) (1)  begin insert (A) end insert begin insert   end insert “Ex parte communication,” for purposes of this
article, means any oral or written communication between a
decisionmaker and begin delete a person with an interest in a matter before the
commission end delete begin insert an interested person end insert concerning any matter that the
commission has not specified begin insert in its Rules of Practice and
Procedure end insert as being a procedural matter begin delete that is an appropriate
subject for ex parte communication, end delete begin insert and end insert that does not occur in a
public hearing, workshop, or other public proceeding, or on the
official record of the proceeding on the matter. The commission
shall specify begin delete those procedural matters that are appropriate subjects
for ex parte communications end delete in its Rules of Practice and begin delete Procedure.
“Person with an interest,” end delete begin insert Procedure, enacted by rulemaking, the
types of communications considered procedural matters under
this article. Any communication between an interested person and
a decisionmaker regarding which commissioner or administrative
law judge may be assigned to a matter before the commission shall
not be deemed to be a procedural matter and shall be an ex parte
communication subject to this article. end insert

begin insert (B) end insert begin insert   end insert begin insert “Interested person,” end insert for purposes of this article, means any
of the following:

begin delete

(A)

end delete

begin insert (i) end insert  Any applicant, an agent or an employee of the applicant, or
a person receiving consideration for representing the applicant, or
a begin delete participant in end delete begin insert party to end insert the proceeding on any matter before the
commission.

begin delete

(B)

end delete

begin insert (ii) end insert  Any person with a financial interest, as described in Article
1 (commencing with Section 87100) of Chapter 7 of Title 9 of the
Government Code, in a matter before the commission, or an agent
or employee of the person with a financial interest, or a person
receiving consideration for representing the person with a financial
interest. A person involved in issuing credit ratings or advising
entities or persons who may invest in the shares or operations of
any party to a proceeding is a person with a financial interest.

begin delete

(C)

end delete

begin insert (iii) end insert  A representative acting on behalf of any civic,
environmental, neighborhood, business, labor, trade, or similar
organization who intends to influence the decision of a commission
member on a matter before the commission.

begin insert

(iv) Other categories of individuals deemed by the commission,
by rule, to be an interested person.

end insert

(2) The commission shall by rule adopt and publish a definition
of decisionmakers and begin insert interested end insert persons for purposes of this
section, along with any requirements for written reporting of ex
parte communications and appropriate sanctions for noncompliance
with any rule proscribing ex parte communications. The definition
of decisionmakers shall include, but is not limited to, each
begin delete commissioner, end delete begin insert commissioner; end insert the attorney for the begin delete commission, end delete
begin insert commission; end insert the executive director of the begin delete commission, end delete begin insert commission; end insert
the personal staff of begin delete each commissioner, including each advisor
to a commissioner, end delete begin insert a commissioner if the staff is acting in a policy
or legal advisory capacity; the Chief Administrative Law Judge
of the commission; end insert the administrative law judge assigned to the
begin delete proceeding, end delete begin insert proceeding; and end insert the director of the Energy Division,
the director of the Communications Division, the director of the
Water and Audits Division, and the director of the Safety and
Enforcement begin delete Division. The end delete begin insert Division, where those directors are
acting in an advisory capacity in the proceeding. end insert

begin insert (3) end insert begin insert   end insert begin insert For quasi-legislative cases, the end insert rules shall provide that
begin delete reportable end delete begin insert ex parte end insert communications begin insert that are required to be
reported end insert shall be reported by the begin delete party, end delete begin insert interested person, end insert whether
the communication was initiated by the begin delete party end delete begin insert interested person end insert or
the decisionmaker. begin delete However, communications between a person
with an interest who is not a party to a commission proceeding
and a decisionmaker shall be reported by the decisionmaker in
accordance with procedures established pursuant to this section
and shall not be required to be reported by the person with an
interest who is not a party to a commission proceeding.
Communications end delete

begin insert (4) end insert begin insert   end insert begin insert For quasi-legislative cases, ex parte communications end insert shall
be reported begin insert by an interested person end insert within three working days of
the communication by filing a “Notice of Ex Parte
Communication” with the commission in accordance with the
procedures established by the commission for the service of that
notice. The notice shall include the following information:

(A) The date, time, and location of the communication, whether
it was oral, written, or a combination, and the communications
medium utilized.

(B) The begin delete identity of the recipient and the end delete person initiating the
communication, begin delete as well as the identity of end delete begin insert including a
decisionmaker, when applicable, and the identity of the recipient
and end insert any persons present during the communication.

(C) A begin insert complete and comprehensive end insert description of the begin delete party’s,
but not the decisionmaker’s, end delete begin insert interested person’s and the
decisionmaker’s end insert communication and its content, to which shall be
attached a copy of any written material or text used during the
communication.

begin delete

(3) Any decisionmaker who makes or receives a prohibited ex
parte communication, or who learns that a permissible ex parte
communication was not reported pursuant to paragraph (2), shall
disclose the content of the communication in the record of the
proceeding. The commission shall establish rules for how to handle
prohibited ex parte communications, including rules requiring
reporting the person initiating the communication and whether the
person persisted in continuing the communication after being
advised that the communication was prohibited.

end delete begin delete

(4) An ex parte communication shall not be part of the record
of any proceeding and shall not be considered, or relied upon, for
purposes of the commission’s resolution of contested issues.

end delete begin insert

(5) For adjudication and ratesetting cases, the rules shall
provide that if a prohibited ex parte communication occurs,
whether initiated by a decisionmaker or an interested person, all
of the following shall be required:

end insert begin insert

(A) The interested person participating in the communication
shall report the communication within one working day of the
communication by filing a Notice of Prohibited Ex Parte
Communication with the commission in accordance with the
procedures established by the commission for the service of that
notice. The notice shall include the information required by
paragraph (4).

end insert begin insert

(B) A decisionmaker who participated in the prohibited
communication shall comply with both of the following:

end insert begin insert

(i) If the interested person who participated in the
communication has not timely submitted the Notice of Prohibited
Ex Parte Communication required by subparagraph (A), the
decisionmaker shall promptly prepare and file a “Decisionmaker’s
Notice of Prohibited Ex Parte Communication” with the
commission in accordance with the procedures established by the
commission for the service of that notice. The notice shall include
the information required by paragraph (4).

end insert begin insert

(ii) If the interested person has timely submitted the Notice of
Prohibited Ex Parte Communication required by subparagraph
(A), the decisionmaker shall review the interested person’s
submitted notice. If the decisionmaker believes that the interested
person’s submitted notice is not accurate or does not meet the
requirements of paragraph (4), the decisionmaker shall promptly
file a notice that corrects or supplements the interested person’s
submitted notice in accordance with the procedures established
by the commission for the service of that notice. If the
decisionmaker believes that the interested person’s submitted
notice is accurate and meets the requirements of paragraph (4),
the decisionmaker shall promptly file a notice that indicates his
or her concurrence with the interested person’s submitted notice
in accordance with the procedures established by the commission.

end insert begin insert

(6) The commission shall not take any vote on a matter to which
a prohibited ex parte communication is known to have occurred
until the notices required by this subdivision have been made and
all parties to the proceeding have been provided a reasonable
opportunity to respond to the prohibited ex parte communication.

end insert begin insert

(7) If the prohibited ex parte communication is not disclosed
as required by this subdivision until after the commission has
issued a decision on the matter to which the prohibited
communication pertained, the commission shall provide a
reasonable time for a party to file a petition to rescind or modify
the decision. The commission shall process the petition in
accordance with the commission’s procedures for petitions for
modification and shall issue a decision on the petition no later
than 180 days after the filing of the petition.

end insert begin insert

(8) A decisionmaker shall periodically report summary logs of
ex parte communications with interested persons in compliance
with rules established by the commission to be included in its Rules
of Practice and Procedure. The commission shall post the summary
logs on its Internet Web site. A summary log, at a minimum, shall
include information required in paragraph (3) and in
subparagraphs (A) and (B) of paragraph (4) and the relevant
proceedings discussed. If a decisionmaker believes that a Notice
of Ex Parte Communication submitted by an interested person in
a quasi-legislative case is inaccurate or fails to meet the
requirements of paragraphs (3) and (4), the decisionmaker may
include corrected or supplemental information in the summary
log and shall also provide notice of any corrected or supplemental
information in the proceeding to which it pertains in accordance
with the procedures established by the commission for the service
of that information. The commission shall enable the posting of
summary logs on its Internet Web site not later than July 1, 2016.

end insert begin insert

(9) (A) Ex parte communications that occur at conferences,
including open session communications, shall be governed by the
provisions of this article and any rules adopted by the commission
pursuant to this article.

end insert begin insert

(B) Notwithstanding subparagraph (A), the commission may
adopt rules for inclusion in the commission’s Rules of Practice
and Procedure specific to open session communications if the rules
do both of the following:

end insert begin insert

(i) Open session communications relating to a pending
adjudication case or a pending ratesetting case shall be prohibited.

end insert begin insert

(ii) Open session communications relating to a pending
quasi-legislative case may be permitted if the commission’s rules
require that permitted open session communications are promptly
disclosed in the proceeding to which the communication relates
and require that parties to the proceeding are allowed a reasonable
opportunity to respond to the communication before the
commission may vote on any matter to which the communication
pertained.

end insert begin insert

(C) For purposes of this section, “open session communication”
means an ex parte communication made in a speech, comment, or
writing delivered to all attendees of a noticed session of a
conference. All other ex parte communications at a conference,
including, but not limited to, communications in a private setting
or during meals, entertainment events, tours, and informal
discussions among conference attendees, are not included in the
definition of open session communication.

end insert begin insert

(10) The commission shall render its decisions based on the
evidence in the record. Ex parte communications shall not be a
part of the record of the proceedings.

end insert

begin delete SEC. 7. end delete
begin insert SEC. 8. end insert   

Section 1701.2 of the Public Utilities Code is amended
to read:

1701.2.  

(a) If the commission pursuant to Section 1701.1 has
determined that an adjudication case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned commissioner or the assigned administrative law judge
shall hear the case in the manner described in the scoping memo.
The scoping memo shall designate whether the assigned
commissioner or the assigned administrative law judge shall preside
in the case. The commission shall provide by rule for peremptory
challenges and challenges for cause of the administrative law judge.
Challenges for cause shall include, but not be limited to, financial
interests and prejudice. The rule shall provide that all parties are
entitled to one peremptory challenge of the assignment of the
administrative law judge in all cases. All parties are entitled to
unlimited peremptory challenges in any case in which the
administrative law judge has within the previous 12 months served
in any capacity in an advocacy position at the commission, been
employed by a regulated public utility, or has represented a party
or has been begin delete a party of interest end delete begin insert an interested person end insert in the case. The
assigned commissioner or the administrative law judge shall
prepare and file a decision setting forth recommendations, findings,
and conclusions. The decision shall be filed with the commission
and served upon all parties to the action or proceeding without
undue delay, not later than 60 days after the matter has been
submitted for decision. The decision of the assigned commissioner
or the administrative law judge shall become the decision of the
commission if no further action is taken within 30 days. Any
begin delete interested end delete party may appeal the decision to the commission,
provided that the appeal is made within 30 days of the issuance of
the decision. The commission may itself initiate a review of the
proposed decision on any grounds. The commission decision shall
be based on the record developed by the assigned commissioner
or the administrative law judge. A decision different from that of
the assigned commissioner or the administrative law judge shall
be accompanied by a written explanation of each of the changes
made to the decision.

(b)  Notwithstanding Section 307, an officer, employee, or agent
of the commission that is personally involved in the prosecution
or in the supervision of the prosecution of an adjudication case
before the commission shall not participate in the decision of the
case, or in the decision of any factually related adjudicatory
proceeding, including participation in or advising the commission
as to findings of fact, conclusions of law, or orders. An officer,
employee, or agent of the commission that is personally involved
in the prosecution or in the supervision of the prosecution of an
adjudication case may participate in reaching a settlement of the
case, but shall not participate in the decision of the commission to
accept or reject the settlement, except as a witness or counsel in
an open hearing or a hearing closed pursuant to subdivision (d).
The Legislature finds that the commission performs both
prosecutorial and adjudicatory functions in an adjudication case
and declares its intent that an officer, employee, or agent of the
commission, including its attorneys, may perform only one of
those functions in any adjudication case or factually related
adjudicatory proceeding.

(c) (1) Ex parte communications shall be prohibited in
adjudication cases.

(2) Any oral or written communications concerning procedural
begin delete issues end delete begin insert matters end insert in adjudication cases between begin delete parties or persons
with an interest end delete begin insert interested persons end insert and decisionmakers, except the
assigned administrative law judge, shall be prohibited.

(d) Notwithstanding any other law, the commission may meet
in a closed hearing to consider the decision that is being appealed.
The vote on the appeal shall be in a public meeting and shall be
accompanied with an explanation of the appeal decision.

(e) Adjudication cases shall be resolved within 12 months of
initiation unless the commission makes findings why that deadline
cannot be met and issues an order extending that deadline. In the
event that a rehearing of an adjudication case is granted, the parties
shall have an opportunity for final oral argument.

(f) (1) The commission may determine that the respondent
lacks, or may lack, the ability to pay potential penalties or fines
or to pay restitution that may be ordered by the commission.

(2) If the commission determines that a respondent lacks, or
may lack, the ability to pay, the commission may order the
respondent to demonstrate, to the satisfaction of the commission,
sufficient ability to pay potential penalties, fines, or restitution that
may be ordered by the commission. The respondent shall
demonstrate the ability to pay, or make other financial
arrangements satisfactory to the commission, within seven days
of the commission commencing an adjudication case. The
commission may delegate to the attorney to the commission the
determination of whether a sufficient showing has been made by
the respondent of an ability to pay.

(3) Within seven days of the commission’s determination of the
respondent’s ability to pay potential penalties, fines, or restitution,
the respondent shall be entitled to an impartial review by an
administrative law judge of the sufficiency of the showing made
by the respondent of the respondent’s ability to pay. The review
by an administrative law judge of the ability of the respondent to
pay shall become part of the record of the adjudication and is
subject to the commission’s consideration in its order resolving
the adjudication case. The administrative law judge may enter
temporary orders modifying any financial requirement made of
the respondent pending the review by the administrative law judge.

(4) A respondent that is a public utility regulated under a rate
of return or rate of margin regulatory structure or that has gross
annual revenues of more than one hundred million dollars
($100,000,000) generated within California is presumed to be able
to pay potential penalties or fines or to pay restitution that may be
ordered by the commission, and, therefore, paragraphs (1) to (3),
inclusive, do not apply to that respondent.

begin delete SEC. 8. end delete
begin insert SEC. 9. end insert   

Section 1701.3 of the Public Utilities Code is amended
to read:

1701.3.  

(a) If the commission pursuant to Section 1701.1 has
determined that a ratesetting case requires a hearing, the procedures
prescribed by this section shall be applicable. The assigned
commissioner shall determine prior to the first hearing whether
the commissioner or the assigned administrative law judge shall
be designated as the principal hearing officer. The principal hearing
officer shall be present for more than one-half of the hearing days.
The decision of the principal hearing officer shall be the proposed
decision. An alternate decision may be issued by the assigned
commissioner or the assigned administrative law judge who is not
the principal hearing officer. The commission shall establish a
procedure for any party to request the presence of a commissioner
at a hearing. The assigned commissioner shall be present at the
closing arguments of the case. The principal hearing officer shall
present the proposed decision to the full commission in a public
meeting. The alternate decision, if any, shall also be presented to
the full commission at that public meeting. The alternate decision
shall be filed with the commission and shall be served on all parties
simultaneously with the proposed decision.

The presentation to the full commission shall contain a record
of the number of days of the hearing, the number of days that each
commissioner was present, and whether the decision was completed
on time.

(b) The commission shall provide by regulation for peremptory
challenges and challenges for cause of the administrative law judge.
Challenges for cause shall include, but not be limited to, financial
interests and prejudice. All parties shall be entitled to unlimited
peremptory challenges in any case in which the administrative law
judge has within the previous 12 months served in any capacity
in an advocacy position at the commission, been employed by a
regulated public utility, or has represented a party or has been begin delete a
party of interest end delete begin insert an interested person end insert in the case.

(c) (1) Ex parte communications are prohibited in ratesetting
cases. begin delete However, oral ex parte end delete

begin insert (A) end insert begin insert   end insert begin insert Oral end insert communications may be permitted begin insert without any
reporting obligation end insert at any time by any begin delete commissioner end delete
begin insert decisionmaker end insert if all begin delete interested end delete parties are invited and given not
less than three begin insert working end insert days’ notice. begin delete Written ex parte end delete

begin insert (B) end insert begin insert   end insert begin insert Written ex parte end insert communications begin insert by any interested person end insert
may be permitted begin delete by any party end delete begin insert without any reporting requirement end insert
provided that copies of the communication are transmitted to all
parties on the same begin delete day. end delete begin insert day as the original communication.
Written ex parte communications shall not be part of the record
of the proceeding. end insert

(2) Oral communications concerning begin delete procedural issues end delete begin insert a
procedural matter end insert in ratesetting cases between begin delete parties or persons
with an interest end delete begin insert interested persons end insert and decisionmakers, except the
assigned administrative law judge, are prohibited, except that an
oral communication may be permitted at any time by any
begin delete commissioner end delete begin insert decisionmaker end insert if all begin delete interested end delete parties are invited
and given not less than three begin insert working end insert days’ notice.

(3) Written communications concerning begin delete procedural issues end delete begin insert a
procedural matter end insert in ratesetting cases between begin delete parties or persons
with an interest end delete begin insert interested persons end insert and decisionmakers, except the
assigned administrative law judge, are prohibited, except that a
begin delete commissioner end delete begin insert decisionmaker end insert may permit a written communication
by any party if copies of the communication are transmitted to all
parties on the same day.

(d) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled
in a timely manner. A quorum of the commission shall be present
for the final oral arguments.

(e) The commission may, in issuing its decision, adopt, modify,
or set aside the proposed decision or any part of the decision based
on evidence in the record. The final decision of the commission
shall be issued not later than 60 days after the issuance of the
proposed decision. Under extraordinary circumstances the
commission may extend this date for a reasonable period. The
60-day period shall be extended for 30 days if any alternate
decision is proposed pursuant to Section 311.

begin delete SEC. 9. end delete
begin insert SEC. 10. end insert   

Section 1701.4 of the Public Utilities Code is amended
to read:

1701.4.  

(a) If the commission pursuant to Section 1701.1 has
determined that a quasi-legislative case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned administrative law judge shall act as an assistant to the
assigned commissioner in quasi-legislative cases. The assigned
commissioner shall be present for formal hearings. The assigned
commissioner shall prepare the proposed rule or order with the
assistance of the administrative law judge. The assigned
commissioner shall present the proposed rule or order to the full
commission in a public meeting. The report shall include the
number of days of hearing and the number of days that the
commissioner was present.

(b) Ex parte communications shall be permitted. Any ex parte
communication shall be reported begin delete within three working days of the
communication by filing a “Notice of Ex Parte Communication”
with the commission end delete begin insert by an interested person end insert in accordance with
begin insert subdivision (d) of Section 1701.1 and the end insert procedures established
by the commission for the service of that notice. begin insert No reporting shall
be required for written ex parte communications that are
transmitted to all parties on the same day as the original
communication. end insert

(c) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled
in a timely manner. A quorum of the commission shall be present
for the final oral arguments.

(d) The commission may, in issuing its rule or order, adopt,
modify, or set aside the proposed decision or any part of the rule
or order. The final rule or order of the commission shall be issued
not later than 60 days after the issuance of the proposed rule or
order. Under extraordinary circumstances the commission may
extend this date for a reasonable period. The 60-day period shall
be extended for 30 days if any alternate rule or order is proposed
pursuant to Section 311.

begin delete

SEC. 10  

Section 1701.6 is added to the Public Utilities Code,
to read:

1701.6.  

A violation of the ex parte communications
requirements of this article by any person is punishable by a fine
not to exceed ____, or by imprisonment, or by both that fine and
imprisonment.

end delete

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 1701.6 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

begin insert

begin insert 1701.6. end insert   

(a) In addition to any penalty, fine, or other
punishment applicable pursuant to Article 11 (commencing with
Section 2100), the commission may assess civil sanctions upon
any entity or person, other than a decisionmaker or employee of
the commission, who violates, fails to comply with, or procures,
aids, or abets any violation of, the ex parte communication
requirements of this article or those adopted by the commission
pursuant to this article. The civil sanctions may include civil
penalties, adverse consequences in commission proceedings, or
other appropriate commission orders directed at the entity, person,
or both the entity and person, committing the violation.

(b) (1) Except as provided in paragraph (2), a civil penalty
assessed shall not exceed fifty thousand dollars ($50,000) per
violation. Each day of a continuing violation is a separate
violation. If the violation consists of engaging in a communication
that is prohibited by the ex parte communication requirements,
each day that the violation is not disclosed to the commission and
to parties of record in the formal proceeding in which the
communication occurred shall constitute a separate violation. If
the violation consists of failing to file a required notice of a
permissible ex parte communication or filing a notice of a
permissible ex parte communication that is inaccurate or
incomplete, each day that the violation is not remedied shall
constitute a separate violation.

(2) If the entity or person may obtain, by violating the ex parte
communication requirements, financial benefits that exceed the
maximum amount of civil penalty allowable pursuant to paragraph
(1), the commission may impose a civil penalty up to the amount
of those financial benefits.

(c) Civil penalties assessed pursuant to subdivision (b) upon
entities whose rates are determined by the commission shall be in
the form of credits to the customers of that entity. Civil penalties
collected from other entities shall be deposited in the General
Fund.

(d) In determining the appropriate civil sanctions, the
commission shall consider the following factors:

(1) The severity of the violation.

(2) The conduct of the entity or person, including the level of
experience of the entity or person in participating in commission
proceedings.

(3) The financial resources of the entity or person.

(4) The totality of the circumstances in furtherance of the public
interest.

end insert

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 1701.7 is added to the end insert begin insert Public Utilities Code end insert begin insert ,
to read: end insert

begin insert

begin insert 1701.7. end insert   

(a) The Attorney General may bring an enforcement
action in the Superior Court for the City and County of San
Francisco against a decisionmaker or employee of the commission
who violates, fails to comply with, or procures, aids, or abets any
violation of, the ex parte communication requirements in this
article or those adopted by the commission pursuant to this article.
The court shall expedite its review of the action to provide effective
and timely relief.

(b) (1) Notwithstanding Section 1759, in an enforcement action
brought pursuant to this section, the court may grant appropriate
relief, including disqualification of the decisionmaker from one
or more proceedings and civil penalties not to exceed fifty thousand
dollars ($50,000) for each violation.

(2) If the decisionmaker or employee may obtain, by violating
the ex parte communication requirements, financial benefits that
exceed the civil penalties provided in paragraph (1), the court may
impose a civil penalty up to the amount of those financial benefits.

(c) In determining the appropriate relief, the court may consider
the following factors:

(1) The severity of the violation.

(2) The conduct of the decisionmaker or employee, including
whether the decisionmaker or employee knowingly violated the ex
parte communication requirements.

(3) The financial resources of the decisionmaker or employee.

(4) The totality of the circumstances in furtherance of the public
interest.

(d) The Attorney General may compromise the enforcement
action subject to approval by the court.

(e) Civil penalties collected pursuant to this section shall be
deposited into the Litigation Deposits Fund established pursuant
to Article 9 (commencing with Section 16425) of Chapter 2 of Part
2 of Division 4 of Title 2 of the Government Code.

end insert

begin delete SEC. 11. end delete
begin insert SEC. 13. end insert   

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.