BILL ANALYSIS Ó SB 661 Page 1 Date of Hearing: August 3, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 661 (Hill) - As Amended June 28, 2016 ----------------------------------------------------------------- |Policy |Utilities and Commerce |Vote:|10 - 2 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- 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. SB 661 Page 2 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: SB 661 Page 3 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 SB 661 Page 4 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. SB 661 Page 5 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." SB 661 Page 6 Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081