BILL ANALYSIS                                                                                                                                                                                                    Ó



                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular Session


          SB 661 (Hill)
          Version: January 4, 2016
          Hearing Date: January 12, 2016
          Fiscal: Yes
          Urgency: No
          TH   


                                        SUBJECT
                                           
                       Protection of Subsurface Installations

                                      DESCRIPTION  

          This bill would establish the "Dig Safe Act of 2016" and make  
          several changes to existing laws governing subsurface  
          excavations, including prohibiting an excavator that damages a  
          subsurface installation due to an inaccurate field mark by an  
          operator from being liable for damages, replacement costs, or  
          other expenses arising from damage to the subsurface  
          installation, provided the excavator complied with all  
          pre-excavation notification requirements and procedures.  This  
          bill would also, among other things, direct specified state  
          agencies to enforce violations of the bill's provisions related  
          to excavation, and would create the California Underground  
          Facilities Safe Excavation Advisory Committee, which would  
          investigate alleged violations of specified laws relating to the  
          protection of underground infrastructure and develop standards  
          relevant to safety practices in excavating around subsurface  
          installations.

                                      BACKGROUND  

          In 1986, a Southern California excavating crew assumed that no  
          subsurface infrastructure existed at their construction site.   
          They were wrong, and during excavation, a gas main was struck  
          and exploded, killing a 23-year old crewmember.  That incident,  
          and several others like it across the country, were the impetus  
          for California's 1989 "Call Before You Dig" law (Gov. Code Sec.  
          4216 et seq.), which requires most individuals to contact a  
          Regional Notification Center prior to commencing planned  
          excavations, and requires any utility or other operator with  
          subsurface installations in the vicinity of a planned excavation  
          to go to the site and clearly identify and mark all underground  







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          infrastructure.  Despite being a part of California law for  
          almost 30 years, excavators and operators of subsurface  
          installations regularly damage these installations, either by  
          failing to follow the required notification procedures or by  
          failing to adequately mark underground infrastructure prior to  
          excavation.  The Pacific Gas and Electric Company ("PG&E"), an  
          operator of subsurface installations throughout central and  
          northern California, reports that in 2014 it experienced 1,910  
          third-party "dig-in" incidents resulting in an estimated $8  
          million in damage.  Sempra Utilities, another operator of  
          subsurface installations, reports that it had 3,173 dig-in  
          incidents in 2013, and that roughly 50 percent of the incidents  
          could be attributed to excavators that failed to follow  
          California's required excavation notification laws.

          During a dig-in incident this past April in Fresno, an excavator  
          punctured a 10-inch natural gas pipeline while operating heavy  
          equipment at a road construction site, killing one person,  
          injuring 12 others, and temporarily closing down Highway 99.   
          (See King, Baker, Williams, PG&E Gas Pipeline Explodes Near  
          Fresno; At Least 11 Hurt 
          San Francisco Chronicle (Apr. 18, 2015)  
           [as of Jan. 5, 2016]; Exponent  
          Failure Analysis Assoc., PG&E Line 118B Fresno In-Service  
          Rupture Analysis (July 2015)  
           [as of Jan. 5,  
          2016].)  More recently, in Bakersfield during November of last  
          year, one person died and three others were injured when an  
          individual thought to be a farmer struck a natural gas  
          transmission line with a piece of heavy equipment.  It is  
          unclear at this point whether the parties involved had complied  
          with California's "Call Before You Dig" Law prior to the  
          incident.  (Mayer, Burch, Burger, Cox, One Dead and Three  
          Injured in PG&E Natural Gas Line Explosion Southwest of  
          Bakersfield, Bakersfield Californian (Nov. 13, 2015)  
           [as of Jan. 5, 2016].)

          This bill is substantially similar to SB 119 (Hill, 2015), which  
          passed out of this Committee on a vote of 5-1.  After the bill  
          passed out of this Committee, SB 119 was amended to redirect  








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          certain enforcement and oversight functions to specified state  
          agencies and the California Underground Facilities Safe  
          Excavation Advisory Committee, limited certain exceptions  
          pertaining to excavations undertaken by owners of residential  
          real property, and made other technical changes.  SB 119 was  
          subsequently vetoed by Governor Brown because he believed the  
          Public Utilities Commission should be the enforcing and  
          regulating entity responsible for excavation activities near  
          subsurface installations.

          This bill would modify California's existing subsurface  
          excavation laws by clarifying the actions both excavators and  
          operators must perform before an excavation is begun.  Among  
          other things, the bill would clarify circumstances in which  
          excavators must call a Regional Notification Center before  
          undertaking routine excavations, such as those normally  
          performed during agricultural operations, and would modify  
          liability and immunity provisions that apply to operators and  
          excavators who follow the mandated pre-excavation notification  
          and marking requirements.  This bill would also enhance the  
          enforcement powers of certain state agencies to bring  
          proceedings against operators and excavators who fail to follow  
          subsurface excavation laws, and would create the California  
          Underground Facilities Safe Excavation Advisory Committee.

          This bill was approved by the Senate Business, Professions, and  
          Economic Development Committee on January 11, 2016.

                                CHANGES TO EXISTING LAW
           
           1.Existing law  vests the Contractors' State License Board with  
            all functions and duties relating to the administration of the  
            Contractors' State License Law.  (Bus. & Prof. Code Sec. 7000  
            et seq.)

             This bill  would create the California Underground Facilities  
            Safe Excavation Advisory Committee, to be assisted by the  
            staff of the Contractors' State License Board in the  
            Department of Consumer Affairs, subject to appropriation of  
            funds.

             This bill  would direct the California Underground Facilities  
            Safe Excavation Advisory Committee to:
                 coordinate education and outreach activities that  








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               encourage safe excavation practices;
                 develop standards relevant to safety practices in  
               excavating around subsurface installations; and 
                 investigate possible violations of specified laws  
               relating to the protection of underground infrastructure.

             This bill  would, in addition to other enforcement measures,  
            authorize the California Underground Facilities Safe  
            Excavation Advisory Committee to issue non-binding  
            recommendations to other state or local agencies pertaining to  
            the enforcement of laws relating to the protection of  
            underground infrastructure, including recommended sanctions  
            against excavators and operators who violate these laws.

           1.Existing law,  the "Call Before You Dig" law, requires every  
            operator of a subsurface installation, except the Department  
            of Transportation, to become a member of, participate in, and  
            share in the costs of, a regional notification center.  (Gov.  
            Code Sec. 4216.1.)

             Existing law  states that except in an emergency, any person  
            planning to conduct any excavation shall contact the  
            appropriate regional notification center at least two working  
            days, but not more than 14 calendar days, prior to commencing  
            that excavation, if the excavation will be conducted in an  
            area that is known, or reasonably should be known, to contain  
            subsurface installations other than the underground facilities  
            owned or operated by the excavator.  (Gov. Code Sec.  
            4216.2(a).)

             Existing law  provides that where an excavation is proposed  
            within 10 feet of a high priority subsurface installation, the  
            operator of the high priority subsurface installation shall  
            notify the excavator of the existence of the high priority  
            subsurface installation prior to the excavation start date and  
            time, and the excavator and operator or its representative  
            shall conduct an onsite meeting at a mutually-agreed-on time  
            to determine actions or activities required to verify the  
            location of the high priority subsurface installation prior to  
            start time.  (Gov. Code Sec. 4216.2(a).)

             Existing law  provides that any operator of a subsurface  
            installation who receives timely notification of any proposed  
            excavation work shall, within two working days of that  








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            notification, excluding weekends and holidays, or before the  
            start of the excavation work, or at a later time mutually  
            agreeable to the operator and the excavator, locate and field  
            mark the approximate location and, if known, the number of  
            subsurface installations that may be affected by the  
            excavation.  (Gov. Code Sec. 4216.3(a).)

             Existing law  states that if a subsurface installation is  
            damaged by an excavator as a result of failing to comply with  
            the above requirements, or as a result of failing to comply  
            with the operator's requests to protect the subsurface  
            installation as specified by the operator prior to the start  
            of excavation, the excavator shall be liable to the operator  
            of the subsurface installation for resulting damages, costs,  
            and expenses to the extent the damages, costs, and expenses  
            were proximately caused by the excavator's failure to comply.   
            (Gov. Code Sec. 4216.7(a).)

             Existing law  states that if the operator of a subsurface  
            installation has failed to comply with the regional  
            notification center system requirements, that operator shall  
            forfeit his or her claim for damages to the subsurface  
            installation arising from the excavation against an excavator  
            who has complied with the above requirements to the extent  
            damages were proximately caused by the operator's failure to  
            comply.  (Gov. Code Sec. 4216.7(b).)

             Existing law  states that if an operator of a subsurface  
            installation fails to comply with the above provisions, the  
            operator shall be liable to the excavator who has complied  
            with these provisions for damages, costs, and expenses  
            resulting from the operator's failure to comply to the extent  
            the damages, costs, and expenses were proximately caused by  
            the operator's failure to comply.  (Gov. Code Sec. 4216.7(c).)

             Existing law  exempts an owner of real property who contracts  
            for an excavation project on the property with a licensed  
            contractor or subcontractor, or an owner of residential real  
            property, not engaged as a licensed contractor or  
            subcontractor, who as part of improving his or her principal  
            residence or appurtenances thereto is performing or having  
            performed excavation work, from the "Call Before You Dig" law  
            if the excavation work does not require a permit from a state  
            or local agency.  (Gov. Code Sec. 4216.8.)








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             This bill  would establish the "Dig Safe Act of 2016" and,  
            except as specified, require a person planning to conduct an  
            excavation to contact the appropriate regional notification  
            center prior to commencing that excavation regardless of  
            whether the excavation will be conducted in an area that is  
            known, or reasonably should be known, to contain subsurface  
            installations.

             This bill  , until January 1, 2020, would exempt excavations  
            performed as a landscape or operator maintenance activity, as  
            specified, or routine operations, as specified, in a flood  
            control area.

             This bill  would provide that before notifying the appropriate  
            regional notification center, an excavator planning to conduct  
            an excavation shall delineate the area to be excavated.  If  
            the area is not delineated, an operator may, at the operator's  
            discretion, choose not to locate and field mark until the area  
            to be excavated has been delineated.

             This bill  would specify that, except in an emergency, an  
            excavator shall not begin excavation until the excavator  
            receives a response from all operators of known subsurface  
            installations within the delineated boundaries of the proposed  
            area of excavation.

            This bill  would require an operator to indicate with an "A"  
            inside a circle the presence of any abandoned subsurface  
            installations within the delineated area.  This bill would  
            state that there shall be no liability associated with marking  
            abandoned subsurface installations.

             This bill  would require operators of subsurface installations  
            to retain records on abandoned subsurface installations, as  
            specified.

             This bill  would state that if an operator or local agency  
            knows that it has a subsurface installation embedded or  
            partially embedded in the pavement that is not visible from  
            the surface, the operator or local agency shall contact the  
            excavator before pavement removal to communicate and determine  
            a plan of action to protect both the subsurface installation  
            and the excavator.








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             This bill  would provide that if an operator has failed to  
            become a member of, participate in, or share in the costs of,  
            a regional notification center, that operator shall forfeit  
            his or her claim for damages to his or her subsurface  
            installation arising from an excavation against an excavator  
            who has complied with the requirements of this bill to the  
            extent the damages were proximately caused by the operator's  
            failure to be a member of, participate in, or share in the  
            costs of, a regional notification center.

             This bill  would provide that if an operator of a subsurface  
            installation has failed to comply with the requirements of  
            this bill without a reasonable basis, as determined by a court  
            of competent jurisdiction, including, but not limited to, the  
            requirement to field mark the appropriate location of  
            subsurface installations within two working days of  
            notification, the operator shall be liable to the excavator  
            who has complied with the above provisions for damages,  
            including liquidated damages, liability, losses, costs, and  
            expenses actually incurred by the excavator resulting from the  
            operator's failure to comply with these specified requirements  
            to the extent the damages, costs, and expenses were  
            proximately caused by the operator's failure to comply.

             This bill  would provide that an excavator who damages a  
            subsurface installation due to an inaccurate field mark by an  
            operator, or by a third party under contract to perform field  
            marking for the operator, shall not be liable for damages,  
            replacement costs, or other expenses arising from damages to  
            the subsurface installation if the excavator complied with the  
            requirements of this bill.

             This bill  would specify that the above provision is not  
            intended to create any presumption or to affect the burden of  
            proof in any action for personal injuries or property damage,  
            other than damage to the subsurface installation, nor is it  
            intended to affect, create, or eliminate any remedy for  
            personal injury or property damage, other than damage to the  
            subsurface installation.

             This bill  would strike the existing exemption for an owner of  
            real property who contracts for an excavation project on the  
            property with a licensed contractor or subcontractor, and  








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            limit the existing exemption for an owner of residential real  
            property, not engaged as a licensed contractor or  
            subcontractor, who as part of improving his or her principal  
            residence or appurtenances thereto is performing or having  
            performed excavation work using hand tools only.

             This bill  would authorize the Registrar of Contractors of the  
            Contractors' State License Board, the Public Utilities  
            Commission, and the Office of the State Fire Marshal to  
            enforce certain provisions of the laws pertaining to  
            subsurface infrastructure.

             This bill  would make other conforming and clarifying changes.

             This bill  would make various legislative findings and  
            declarations related to excavation and subsurface  
            installations.
          
                                        COMMENT
           
          1.Stated need for the bill
           
          The author writes:

            California has the ignominy of having the country's two most  
            recent pipeline fatalities.  On April 17, 2015, a front loader  
            in Fresno came into contact with a 12-inch high pressure  
            natural gas transmission pipe, causing an explosion that  
            injured fourteen people.  One person died as a result, and the  
            operator of the front loader was hospitalized for 53 days.  On  
            November 13, the operator of a bulldozer preparing a field for  
            orchard planting south of Bakersfield struck one of Pacific  
            Gas and Electric's backbone transmission natural gas  
            pipelines, killing himself and seriously burning two people  
            nearby.  Accidents such as these are the result of unsafe  
            practices that people undertake all the time.  Roughly 7,000  
            of California's natural gas pipelines are hit every year, and  
            it is estimated that roughly half of them occur because the  
            excavator failed to use the free 8-1-1 service so that pipes  
            can be located and marked before digging.  The safety hazard  
            associated with digging into natural gas pipelines has hung  
            over the Legislature for a long time-at least since 2004, when  
            five laborers were killed in Walnut Creek when a petroleum  
            pipeline exploded after it was struck with a backhoe.








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            The strategy that SB 661 takes to finally tackle this problem  
            is to:
                 Improve enforcement;
                 Clarify the law; and
                 Develop a venue for discussions to improve excavation  
               safety.

            SB 661 proposes to emulate other states' successes in reducing  
            excavation damage by creating a central enforcement board,  
            composed of excavation stakeholders, to enforce California's  
            one-call laws.

           1.Changes to Existing Liabilities and Immunities
           
          Existing law, California's "Call Before You Dig" law, renders  
          excavators and operators of subsurface installations liable for  
          damages proximately caused by a failure to comply with the law's  
          provisions, such as failing to contact a regional notification  
          center or failing to properly identify and mark subsurface  
          installations prior to the commencement of certain excavation  
          activities.  This bill would modify that liability structure by  
          clarifying the liability for, or immunity from, damages  
          resulting from non-compliance.

          Immunities from liability are generally disfavored as a matter  
          of public policy.  By their nature, they prevent an injured  
          party from seeking recovery for damages caused by the wrongful  
          acts of another.  They also dis-incentivize careful behavior by  
          parties who, because of their immunity, cannot be held liable  
          for their wrongful acts.  California law, to the contrary, has  
          generally provided recourse for those injured by the acts of  
          another.  Civil Code Section 3281, for example, provides that  
          "every person who suffers detriment from the unlawful act or  
          omission of another, may recover from the person in fault a  
          compensation therefor in money, which is called damages."  This  
          and other sections that provide recourse and compensation for  
          wrongful injuries help to ensure that all people adhere to a  
          certain standard of care in their conduct.

          However, in limited situations, the Legislature has approved  
          measured immunity from liability to promote other policy goals  
          beneficial to the public.  These limited immunities often  
          incentivize actors to behave according to a set standard in  








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          order to obtain its benefits.  Existing law pertaining to  
          excavation near subsurface infrastructure contains such  
          immunities.  The law provides that if an operator of a  
          subsurface installation fails to comply with such things as  
          pre-excavation marking requirements, that operator forfeits his  
          or her claim for damages to the subsurface installation arising  
          from the excavation, provided the excavator both complied with  
          the law's requirements and the damages were caused by the  
          operator's failure to comply.  (See Gov. Code Sec. 4216.7(b).)

          The Legislature also uses exposure to civil liability - the  
          inverse of immunity - as a mechanism for promoting public policy  
          goals.  The subsurface excavation law contains provisions of  
          this type as well.  One such provision renders an operator  
          liable in certain circumstances to an excavator for damages,  
          costs, and expenses resulting from the operator's failure to  
          comply with the law to the extent the damages, costs, and  
          expenses were proximately caused by the operator's failure to  
          comply.  (See Gov. Code Sec. 4216.7(c).)  Another provides that  
          if a subsurface installation is damaged by an excavator as a  
          result of failing to comply with the law's requirements, such as  
          notifying a regional notification center before excavating, the  
          excavator is liable to the operator for resulting damages,  
          costs, and expenses to the extent those damages, costs, and  
          expenses were caused by the excavator's failure to comply with  
          the law.  (See Gov. Code Sec. 4216.7(a).)  This set of liability  
          and limited immunity provisions incentivize excavators and  
          operators of subsurface infrastructure to comply with the  
          subsurface excavation law's pre-excavation notification and  
          marking requirements.

          This bill would modify the existing liability structure of the  
          subsurface excavation law in several ways.  First, it would  
          require an operator to become a member of, participate in, or  
          share in the costs of, a regional notification center, in order  
          to avoid forfeiting damage claims against excavators who comply  
                                                                                    with the law.   This bill would also create a new immunity for  
          excavators who damage subsurface installations due to an  
          inaccurate field mark by an operator, and would specifically  
          authorize excavators to receive damages including liquidated  
          damages, liability, and losses when operators fail to comply  
          with the law's pre-excavation marking requirements.  These  
          changes, while expanding certain liabilities, do not  
          fundamentally alter the subsurface excavation law's existing  








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          liability structure.

           2.Impact to Third Parties
           
          The "Call Before You Dig" law limits the scope of its immunity  
          and liability provisions by imposing certain equitable  
          constraints on those provisions and by explicitly requiring  
          parties to mitigate their damages.  Specifically, existing law  
          provides that these liability and immunity provisions do not:
           affect claims including, but not limited to, third-party  
            claims brought against the excavator or operator by other  
            parties for damages arising from the excavation;
           exempt the excavator or operator from his or her duty to  
            mitigate any damages as required by common or other applicable  
            law; or
           exempt the excavator or operator from liability to each other  
            or third parties based on equitable indemnity or comparative  
            or contributory negligence.  (Gov. Code Sec. 4216.7(d).)

          To ensure that the proposed changes to the immunity provisions  
          of the subsurface excavation law related to liability for  
          improperly marked underground infrastructure do not  
          unintentionally impact the rights of third parties injured as a  
          result of noncompliance with the law, this bill explicitly  
          states that it "[does not] create any presumption or . . .  
          affect the burden of proof in any action for personal injuries  
          or property damage, other than damage to the subsurface  
          installation, [or] affect, create, or eliminate any remedy for  
          personal injury or property damage, other than damage to the  
          subsurface installation."  By so doing, this bill ensures that  
          third parties injured by the negligent acts of an operator or  
          excavator remain free to pursue recourse for their injuries.

           1.Governor Brown's Veto of SB 119
           
          This bill is substantially similar to the enrolled version of SB  
          119 (Hill, 2015).  In vetoing SB 119, Governor Brown stated:

            This bill would create the California Underground Facilities  
            Safe Excavation Advisory Committee, within the Contractors'  
            State Licensing Board, in order to enforce existing and new  
            provisions related to safe excavation.

            I understand that the telecommunications and cable companies  








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            have resisted providing explicit enforcement authority to the  
            Public Utilities Commission over excavation safety.  However,  
            it is the Public Utilities Commission, and not the  
            Contractors' State Licensing Board, that has the technical  
            expertise and funds and should be given full authority to  
            enforce and regulate excavation activities near subsurface  
            installations.

          The author states that the Governor's veto of SB 119 was not  
          based upon a rejection of the bill's underlying policy of  
          fostering safer excavations near underground infrastructure, and  
          that he is working with the Governor's office to determine which  
          state agencies should enforce California's "Call Before You Dig"  
          law.


           Support  :  Associated General Contractors of California;  
          California Legislative Conference of the Plumbing, Heating and  
          Piping Industry; California Landscape Contractors Association;  
          California State Council of Laborers; National Electric  
          Contractors Association; Southern California Contractors  
          Association; Underground Service Alert of Southern California;  
          United Contractors; Western Line Constructors Chapter, Inc.

           Opposition  :  None Known
                                        HISTORY
           
           Source  :  Author

           Related Pending Legislation  :  None Known

           Prior Legislation  :

          SB 119 (Hill, 2015) See Background, Comment 4.
          AB 811 (Lowenthal, Ch. 250, Stats. 2013) required regional  
          notification centers to post on their Internet Web sites  
          information provided by operators and excavators relating to  
          violations of specified state laws governing subsurface  
          excavations.

          AB 1514 (Lowenthal, 2012) would have increased civil penalties  
          for violations of excavations laws and authorized the Public  
          Utilities Commission to provide a copy of an investigation  
          report to prosecutors following an excavation-related violation.  








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           AB 1514 died in the Assembly Appropriations Committee.

          SB 1359 (Torlakson, Ch. 651, Stats. 2006) requires an onsite  
          meeting to determine the location of high priority subsurface  
          installations prior to the start of an excavation, specifies who  
          can determine the location of a high priority subsurface  
          installation, and assigns liability for damages resulting from  
          an excavator's and operator's failure to comply with its legal  
          obligations.

          AB 1264 (Benoit, Ch. 77, Stats. 2004) exempted providers of  
          leased or rented excavation equipment and their employees from  
          specified state laws governing subsurface excavations if the  
          equipment is rented to a licensed contractor and the rental  
          agreement includes a provision stating that the contractor who  
          receives the equipment accepts certain liabilities.  AB 1264  
          also extended the validity of an inquiry identification number  
          from 14 days to 28 days, affording contractors more time to  
          complete excavations and reducing the number of calls to the  
          regional notification centers.

          AB 73 (Elder, Ch. 928, Stats. 1989), among other things,  
          clarified requirements in state law governing subsurface  
          excavations regarding identifying an area to be excavated.   AB  
          73 specified that excavators are liable for any damages  
          resulting from their failure to comply with notification  
          requirements, and precluded, to a specified extent, damage  
          claims by those owners or operators who themselves fail to  
          comply with notification requirements.  AB 73 also provided that  
          an operator or excavator who negligently violates the subsurface  
          excavation law would be subject to civil penalties not to exceed  
          $10,000, and that an operator or excavator who knowingly and  
          willfully violates the provisions would be subject to civil  
          penalties not to exceed $50,000, as specified.  AB 73 required  
          that if more than one agency is involved in enforcement, the  
          penalties and fines collected shall be apportioned between them  
          by the court in a manner that will fairly offset the relative  
          costs or losses incurred by the public agencies.

           Prior Vote  :  Senate Business, Professions, and Economic  
          Development Committee (Ayes 8, Noes 0)

                                   **************









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