BILL ANALYSIS �
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|SENATE RULES COMMITTEE | SB 434|
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THIRD READING
Bill No: SB 434
Author: Hill (D)
Amended: 1/6/14
Vote: 21
PRIOR VOTES NOT RELEVANT
SUBJECT : Public Utilities Commission: Removal of a
commissioner
SOURCE : Author
DIGEST : This bill expands the prohibition of a sitting Public
Utilities Commission (PUC) Commissioner from acting as an owner,
director, or officer of a non-state entity of existing non-state
entities created before January 1, 2014 to those created by
future actions of the PUC.
Senate Floor Amendments of 1/6/14 delete the current version of
the bill which dealt with personal income and corporation taxes,
and instead add the current language.
ANALYSIS : Existing law declares that a sitting PUC
Commissioner who acts as an owner, director, or officer of a
non-state entity created by the PUC before January 1, 2014, and
is negligent of his/her duty, as specified, may be removed from
office by a two-thirds vote of both houses of the Legislature.
This bill provides that, beginning June 1, 2014, a Commissioner
who acts as an owner, director, or office of a non-state entity
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that was established as a result of an order, decision, motion,
settlement, or other action by the PUC in which the Commissioner
participated, neglects his/her duty and may be removed pursuant
to the California Constitution, irrespective of when the
non-state entity was established.
Background
SB 96 (Senate Budget and Fiscal Review, Chapter 358, Statues of
2013), the Resources Budget Trailer Bill for the Budget Act of
2013, contained reforms directed at the PUC regarding the
creation of non-profits and the reduction conflicts of interests
in contracting with and sitting on non-state entities.
SB 96 made the following prohibitions:
1.The PUC may not create non-profit entities, unless it does so
with shareholder funds, and that decision has received
scrutiny by the Joint Legislative Budget Committee.
2.The PUC may not contract with a non-state entity in which a
sitting commissioner acts as an owner, director, or officer.
If, after a contract is made to a non-state entity, a sitting
commissioner becomes an owner, director, or officer of that
non-state entity, the contract shall become void.
3.A sitting PUC Commissioner may not sit on a non-state entity
created by the PUC in a decision in which that Commissioner
participated. This only applies for non-state entities
created before January 1, 2014.
Comments
According to the author's office, the last two provisions are
narrow, and do not prohibit a Commissioner from sitting on
PUC-contracted or PUC-established entities after he or she
leaves office.
The third prohibition applies only to non-state entities created
before January 1, 2014. As such, it only applies to one
Commissioner, as there is only one Commissioner currently
sitting who has participated in a decision to create a
non-profit.
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This prohibition should apply to all Commissioners current and
future, as non-state entities are not subject to oversight by
the Legislature or Department of Finance. The Legislature
should not create personal incentives for Commissioners to use
the broad powers granted to the PUC by the Legislature to move
money outside the state's purview.
This bill cleans up the PUC Commissioner conflict of interest
provision in last year's Resources Budget Trailer Bill by
prohibiting a current or future Commissioners from sitting on
the PUC-created non-state entity (if that Commissioner was
involved in creating the entity).
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
JG:d 1/8/14 Senate Floor Analyses
SUPPORT/OPPOSITION: NONE RECEIVED
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