Bill Text: CA SB18 | 2015-2016 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Public Utilities Commission: outside counsel.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Vetoed) 2016-04-25 - Last day to consider Governors veto pursuant to Joint Rule 58.5. [SB18 Detail]

Download: California-2015-SB18-Introduced.html

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BILL NUMBER: SB 18	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Hill

                        DECEMBER 1, 2014

   An act to amend Sections 2104 and 2104.5 of the Public Utilities
Code, relating to gas corporations, making an appropriation therefor,
and declaring the urgency thereof, to take effect immediately.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 18, as introduced, Hill. Gas Corporations: fines and penalties.

   Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, as defined. The Public Utilities
Act requires the commission to investigate the cause of all accidents
occurring upon the property of any public utility or directly or
indirectly arising from or connected with its maintenance or
operation, resulting in loss of life or injury to person or property
and requiring, in the judgment of the commission, investigation by
it, and authorizes the commission to make any order or recommendation
with respect to the investigation that it determines to be just and
reasonable. The act provides that any public utility that violates
any provision of the California Constitution or the act, or that
fails or neglects to comply with any order, decision, decree, rule,
direction, demand, or requirement of the commission, where a penalty
has not otherwise been provided, is subject to a penalty of not less
than $500 and not more than $50,000 for each offense. Existing law
requires that any fine or penalty imposed by the commission and
collected from a public utility be paid to the State Treasury to the
credit of the General Fund. The act includes provisions that are
specific to gas corporations that involve safety standards for
pipeline facilities or the transportation of gas in the state.
   This bill would revise the provisions that are specific to gas
corporations that involve safety standards for pipeline facilities or
the transportation of gas in the state, to authorize the commission
to order that all or a portion of a fine or penalty levied against a
gas corporation in three specified proceedings be held in a separate
account by the gas corporation to offset investments for pipeline
replacement to be undertaken within the service territory of the
corporation that would otherwise be recovered from the corporation's
ratepayers. The bill would require that moneys ordered by the
commission to be held in a separate account be used only for the
purpose of offsetting investments by the gas corporation for pipeline
replacement to be undertaken within the service territory of the
corporation, and only if the investments would otherwise be recovered
in rates from the utility's ratepayers. The bill would require that
any moneys not used for these purposes be paid to the General Fund 5
years after the date of their deposit into the account. The bill
would require the commission to allocate $30,000,000 from the
separate account to fund an independent monitor for a period of no
less than 5 years to oversee the pipeline operations of the gas
corporation and the effectiveness of the commission's regulatory
oversight of those pipeline operations and would require the
commission to allocate $50,000,000 in seed money from the separate
account to fund the operations of a pipeline safety trust. By
authorizing specified uses of state penalty moneys, this bill would
make an appropriation. The bill would also require the commission to
allocate $300,000,000 from the separate account to the General Fund.
The bill would authorize the commission to adjust the above-described
allocations from the separate account if the fines and penalties
levied against the gas corporation in the three specified proceedings
are less than $950,000,000 in total.
    This bill would declare that it is to take effect immediately as
an urgency statute.
   Vote: 2/3. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2104 of the Public Utilities Code is amended to
read:
   2104.  (a) Except as provided by Sections 2100 and 2107.5, actions
to recover penalties under this part shall be brought in the name of
the people of the State of California, in the superior court in and
for the county, or city and county, in which the cause or some part
thereof arose, or in which the corporation complained of has its
principal place of business, or in which the person complained of
resides. The action shall be commenced and prosecuted to final
judgment by the attorney or agent of the commission. All fines and
penalties may be sued for and recovered. The commission may enjoin
the sale of a public utility's or common carrier's assets to satisfy
unpaid fines and penalties. The commission may use any of the
remedies afforded to a creditor under the Uniform Fraudulent Transfer
Act (Chapter 1 (commencing with Section 3439) of Title 2 of Part 2
of Division 4 of the Civil Code). Respondents who fraudulently
transfer assets to avoid paying commission-imposed fines or penalties
are subject to prosecution under Sections 154, 531, and 531a of the
Penal Code. In all of these actions, the procedure and rules of
evidence shall be the same as in ordinary civil actions, except for
prosecutions under the Penal Code or as otherwise herein provided.
 All   Except as provided in Section 2104.5, all
 fines and penalties recovered by the state in any action,
together with the costs thereof, shall be paid into the State
Treasury to the credit of the General Fund. Any action may be
compromised or discontinued on application of the commission upon the
terms the court approves and orders.
   (b) This section shall become operative on January 1, 2014.
  SEC. 2.  Section 2104.5 of the Public Utilities Code is amended to
read:
   2104.5.   (a)    Any penalty for violation of
any provision of this act, or of any rule, regulation, general order,
or order of the commission, involving safety standards for pipeline
facilities or the transportation of gas in the State of 
California   California,  may be compromised by the
commission. In determining the amount of  such 
 the  penalty, or the amount agreed upon in compromise, the
appropriateness of  such   the  penalty to
the size of the business of the person charged, the gravity of the
violation, and the good faith of the person charged in attempting to
achieve compliance, after notification of a violation, shall be
considered. The amount of any  such  penalty, when
finally determined, or the amount agreed upon in compromise, may be
recovered in a civil action in the name of the  People
  people  of the State of California in the
superior court in and for the county, or city and county in which the
cause or some part thereof arose, or in which the corporation
complained of has its principal place of business or the person
complained of resides. In any such action, all penalties incurred, or
amounts agreed upon in compromise for violations committed up to the
time of commencing the  action   action, 
may be sued for and recovered. In all  such  
those  actions, the procedure and rules of evidence shall be the
same as in ordinary civil actions, except as otherwise herein
provided. All fines and penalties recovered by the state in any
 such  action, together with the costs thereof,
shall be paid into the State Treasury to the credit of the General
 Fund.   Fund, except upon order of the
commission pursuant to subdivision (b).  
   (b) The commission shall order that any fine or penalty levied
against a gas corporation in Investigation 11-02-016, Investigation
11-11-009, or Investigation 12-01-007, be held in a separate account
by the gas corporation to offset investments for pipeline replacement
to be undertaken within the service territory of the corporation and
that would otherwise be recovered from the corporation's ratepayers.
 
   (c) The commission shall set a rate of interest for an account
established pursuant to subdivision (b).  
   (d) Any moneys ordered by the commission to be held in a separate
account pursuant to subdivision (b) shall be used only for the
purpose of offsetting investments by the gas corporation for pipeline
replacement to be undertaken within the service territory of the
corporation, and only if the investments would otherwise be recovered
in rates from the utility's ratepayers. Any moneys not used for
these purposes shall, five years after the date of their deposit into
the account, be paid to the General Fund.  
   (e) Notwithstanding subdivision (d), funds held in a separate
account pursuant to subdivision (b) shall be allocated by the
commission in the following manner:  
   (1) Thirty million dollars ($30,000,000) to fund an independent
monitor for a period of no less than five years to oversee both the
pipeline operations of the gas corporation described in subdivision
(b) and the effectiveness of the commission's regulatory oversight of
those pipeline operations.  
   (2) Fifty million dollars ($50,000,000) in seed money to fund the
operations of a pipeline safety trust to represent and advocate on
behalf of the interests of the public utility customers and
subscribers within the jurisdiction of the commission in all
appropriate venues.  
   (3) Three hundred million dollars ($300,000,000) to the General
Fund.  
   (f) If any fines or penalties levied against a gas corporation
pursuant to the investigations specified in subdivision (b) are less
than nine hundred fifty million dollars ($950,000,000) in total, the
commission may adjust the amount of the allocations specified in
subdivision (e). 
  SEC. 3.   This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
   In order to address and resolve significant financial issues
presented by ongoing proceedings before the Public Utilities
Commission, it is necessary for this act to take effect immediately.