BILL ANALYSIS �
SB 434
Page 1
SENATE THIRD READING
SB 434 (Hill)
As Amended January 6, 2014
Majority vote
SENATE VOTE :26-2
UTILITIES & COMMERCE 14-0
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|Ayes:|Bradford, Patterson, | | |
| |Bonilla, Buchanan, | | |
| |Ch�vez, Dahle, Fong, Beth | | |
| |Gaines, Garcia, | | |
| |Roger Hern�ndez, Jones, | | |
| |Mullin, Quirk, Rendon | | |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Expands the prohibition of a sitting California 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. Specifically, this bill :
1)Expands the prohibition of a sitting PUC Commissioner from
acting as an owner, director, or officer of a non-state entity
created before January 1, 2014, to those by future actions of
the PUC.
2)Provides that, beginning June 1, 2014, a Commissioner who acts
as an owner, director, or office of a non-state entity 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 or her duty and may be
removed pursuant to the California Constitution, irrespective
of when the non-state entity was established.
3)Specifies a two-thirds vote of both houses of the Legislature
is needed to remove a Commissioner of the PUC, in the event
that a Commissioner violates specified prohibitions.
FISCAL EFFECT : Unknown. This bill is keyed non-fiscal by the
Legislative Counsel.
SB 434
Page 2
COMMENTS : According to the author, "The purpose of the bill is
to enhance state oversight over moneys approved by the
California Public Utilities Commission. Current law prohibits a
commissioner from sitting on a non-state entity that he or she
had a hand in creating as a commissioner, but only if the
non-state entity was created before January 1, 2014 (active June
1, 2014). This bill would instead ensure that the policy is
forward-looking and would apply to all current and future
commissioners upon the operative date of the legislation, which
would be January 1, 2015 if enacted and signed by the Governor."
1)Why is the prohibition needed. Within this capacity, the PUC
reviews current policy and attempts to set rates in a manner
that is forward thinking and in compliance with the terms of
state law. In recent years, the PUC has extended its reach a
number of times beyond its rate-making capabilities, spending
considerable time and effort to create entities that use
ratepayer funds but are outside the state budget process. It
is common for Commissioners or their designees to serve on
these nonprofits as board members, officers, or advisors.
In many of these cases, the Legislature has stepped in to stop
these practices. This issue was highlighted in 2008, where
the Legislature required the PUC to report on expenditures
from specific non-budget entities established by the PUC
(Public Utilities Code Section 326.5).
The provision contained in this bill draws a bright line
between the PUC and the entities it oversees and regulates as
it ensures no current or future commissioners can serve on
non-state entities that are not subject to the Legislature's
oversight.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0004329