BILL ANALYSIS                                                                                                                                                                                                    Ó



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          Date of Hearing:  August 3, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 661  
          (Hill) - As Amended June 28, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill enacts the Dig Safe Act of 2016 to modify laws  
          governing excavations near subsurface installations.  Among  
          other things, this bill:


          1)Requires a person planning to conduct an excavation to contact  
            the appropriate regional notification center prior to  
            commencing the excavation regardless of whether it will be  
            conducted in an area that is known, or reasonably should be  
            known, to contain subsurface installations.  










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          2)Requires an excavator to delineate the area to be excavated  
            before notifying the regional notification center.  Specifies  
            the amount of time required for notification prior to an  
            excavation.  



          3)Prohibits an excavator who damages a subsurface installation  
            due to an inaccurate field mark by an operator from being  
            liable for damages and other specified costs and expenses.
          4)Establishes the California Underground Facilities Safe  
            Excavation Advisory Board (the Board), within the Office of  
            the State Fire Marshall (OSFM), to investigate violations of  
            the state's excavation and subsurface installation laws,  
            coordinate education and outreach, and develop standards.  The  
            board may obtain funding for its operational expenses from:


             a)   A federal or state grant.
             b)   A fee charged to members of the regional notification  
               centers.


             c)   Any other source.





          5)Authorizes the Contractor's State Licensing Board (CSLB), the  
            Public Utilities Commission (PUC), the OSFM, and local  
            governments to accept, amend, or reject the recommendations of  
            the Board to enforce specific provisions related to operators  
            and excavators whose activities or business fall within the  
            agency's statutorily defined enforcement jurisdiction as  
            follows:










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             a)   The Registrar of Contractors of the CSLB enforces  
               violations by licensed contractors.
          b)The PUC enforces violations by investor-owned electric and gas  
            operators,                                              
            telecommunication companies, and water corporations.
          c)OFSM enforces violations by operators of hazardous liquid  
            pipeline facilities.
          d)Local governments may enforce against local agencies under  
            their jurisdictions.








          6)Creates a Safe Energy Infrastructure and Excavation Fund and  
            requires penalties to be deposited in the fund, for  
            appropriation by the Legislature, for operational expenses and  
            education and outreach, as specified.
          FISCAL EFFECT:


          1)Unknown diversion of penalty revenues, in the millions  
            annually, from the GF to the Safe Energy Infrastructure and  
            Excavation Fund, created by this bill.


          2)Increased first-year costs of $5.8 million (23 PY) and ongoing  
            costs of $3.6 million for OSFM/CalFire to support the Board  
            with potential minor offsets from fee revenue generated from  
            regional notification centers (GF/Special Fund).


          3)Increased CSLB first year costs of $190,000 and ongoing annual  
            costs of $175,000 to process Advisory Committee  
            recommendations for disciplinary actions.  CLSB notes there  








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            will also be increased Attorney General (AG) costs to  
            prosecute the most egregious actions.  Using the current  
            referral rate to the AG of 3%  (approximately 150 cases) and  
            $5,000 per case, estimated annual ongoing costs are $750,000.


          4)Minor, absorbable PUC costs.


          COMMENTS:


          1)Purpose.  According to the author, 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 author contends 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.


            This bill seeks to improve enforcement, clarify the law, and  
            develop strategies for improving excavation safety.


          2)Background.  Both the National Transportation Safety Board and  
            the federal pipeline safety regulator, Pipeline and Hazardous  
            Materials Safety Administration (PHMSA), have identified  
            call-before-you-dig laws as a means of improving excavation  
            safety.  PHMSA, in adopting regulations requiring distribution  
            pipeline companies to develop comprehensive risk-based  
            pipeline safety programs, explored best practices in  
            excavation enforcement.  In 2005, its working group found the  
            states that have had the most success house enforcement in a  
            centralized agency responsible for pipeline safety. 









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            California relies on the Attorney General and district  
            attorneys to enforce the one-call law, though regulatory  
            authorities such as the PUC, OFSM, and CSLB have broad  
            jurisdiction over gas pipeline and electric operators,  
            hazardous liquid operators, and contractors, respectively, and  
            thus have the ability to enforce safe operations on those  
            entities within their jurisdictions. 

            However, according to the author, existing authorities have  
            rarely been used, except for a recent PUC investigation into  
            PG&E recordkeeping practices on its distribution system, which  
            explores excavation issues.  

          3)Prior Legislation.  Last year, the Governor vetoed SB 119  
            (Hill) that would have created the California Underground  
            Facilities Safe Excavation Advisory Committee, within  CSLB,  
            to enforce existing and new provisions related to safe  
            excavation.  The Governor's veto message included the  
            following:


               "I understand that the telecommunications and cable  
               companies 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. 



               This is a matter of public safety, and I look forward to  
               working closely with the author to achieve our mutual  
               goal."











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          Analysis Prepared by:Jennifer Galehouse / APPR. / (916)  
          319-2081