BILL ANALYSIS                                                                                                                                                                                                    Ó



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          SENATE THIRD READING


          SB  
          661 (Hill)


          As Amended  August 19, 2016


          Majority vote


          SENATE VOTE:  35-3


           ------------------------------------------------------------------ 
          |Committee       |Votes|Ayes                   |Noes               |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |----------------+-----+-----------------------+-------------------|
          |Utilities       |10-2 |Gatto, Burke, Eggman,  |Patterson, Dahle   |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |                |     |Cristina Garcia,       |                   |
          |                |     |Hadley,                |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |                |     |Roger Hernández,       |                   |
          |                |     |Quirk, Santiago, Ting, |                   |
          |                |     |Williams               |                   |
          |                |     |                       |                   |
          |----------------+-----+-----------------------+-------------------|
          |Appropriations  |12-1 |Gonzalez, Bloom,       |Obernolte          |
          |                |     |Bonilla, Bonta, Chang, |                   |
          |                |     |Eggman,                |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |








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          |                |     |Eduardo Garcia, Quirk, |                   |
          |                |     |Santiago, Weber, Wood, |                   |
          |                |     |McCarty                |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
          |----------------+-----+-----------------------+-------------------|
          |Utilities       |12-1 |Gatto, Patterson,      |Obernolte          |
          |                |     |Burke, Chávez, Eggman, |                   |
          |                |     |Cristina Garcia,       |                   |
          |                |     |Eduardo Garcia,        |                   |
          |                |     |Hadley, Holden, Quirk, |                   |
          |                |     |Santiago, Ting         |                   |
          |                |     |                       |                   |
          |                |     |                       |                   |
           ------------------------------------------------------------------ 


          SUMMARY:  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.  
          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  








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            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  
            California Public Utilities Commission (CPUC), 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:
             a)   The Registrar of Contractors of the CSLB enforces  
               violations by licensed contractors.
             b)   The CPUC enforces violations by investor-owned electric  
               and gas operators, 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  








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            education and outreach, as specified.


          7)Defines terms used in the article in statute.


          8)Establishes an "area of continual excavation" ticket of one  
            year in length for areas in which excavation is the business  
            of the property, including agriculture and flood control  
            facilities.


          9)Directs the Board to determine through regulation how to  
            address "area of continual excavation" ticket renewal in areas  
            in which no subsurface installations are present.


          10)Prohibits the regional notification centers from charging an  
            excavator to provide a ticket.


          11)Provides that, during a meeting between an excavator and an  
            operator before digging near a high priority subsurface  
            installation, the information that the operator shall provide  
            to the excavator to verify the installation's location shall  
            be discussed.


          12)States that the CPUC existing authority over a public utility  
            is not affected.


          13)States the CSLB is the enforcement entity for a telephone  
            corporation, when the telephone corporation is acting as  
            contractor.


          14)Provides that one Governor appointee of the Board shall have  
            an agricultural background, and that the locator position is a  








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            Senate appointee.


          15)Provides that excavation using pneumatic hand tools for the  
            purpose of locating a gas facility does not require three day  
            notification if in the vicinity of a school or hospital.


          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:


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


          2)Increased first-year costs of $5.8 million (23 personnel year)  
            and ongoing costs of $3.6 million for OSFM/California  
            Department of Forestry and Fire Protection 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.  CSLB notes there  
            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 CPUC costs.


          COMMENTS:










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          1)Background:  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.


            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. 


            California relies on the AG and district attorneys to enforce  
            the one-call law, though regulatory authorities such as the  
            CPUC, 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 CPUC investigation into  
            Pacific, Gas and Electric Company recordkeeping practices on  
            its distribution system, which explores excavation issues.  


          2)Prior Legislation:  Last year, the Governor vetoed SB 119  
            (Hill) of 2015 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  








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            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.


          3)Continual Excavation:  This bill includes a definition of  
            "continual excavation" to mean a location where excavation is  
            part of the normal business activities of that location,  
            including, but not limited to, agricultural operations and  
            flood control facilities.  Agricultural groups expressed  
            concern that the current language requiring an onsite meeting  
            with the owners of subsurface installations is too broad and  
            should be amended to limit the scope of the on-site meeting to  
            excavation that is planned within 10 feet of a high priority  
            subsurface installation and within five feet of a subsurface  
            installation that is not a high priority. 
            According to agricultural groups, this bill, as written, would  
            mandate procedures to be followed prior to commencing  
            excavation regardless of whether it will be conducted in an  
            area that is known, or reasonably should be known, to contain  
            subsurface installations.


            While the agricultural groups would prefer to have this  
            particular language in this bill clarified, they have agreed  








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            to pursue this through the stakeholder group process rather  
            than amending this bill at this time. 




          Analysis Prepared by:                                             
                          Sue Kateley / U. & C. / (916) 319-2083  FN:  
          0005021