BILL ANALYSIS                                                                                                                                                                                                    Ó




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          |SENATE RULES COMMITTEE            |                        SB 661|
          |Office of Senate Floor Analyses   |                              |
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                                UNFINISHED BUSINESS 


          Bill No:  SB 661
          Author:   Hill (D) 
          Amended:  8/19/16  
          Vote:     21 

           PRIOR VOTE NOT RELEVANT

           SENATE BUS., PROF. & ECON. DEV. COMMITTEE:  8-0, 1/11/16
           AYES:  Hill, Bates, Berryhill, Block, Galgiani, Hernandez,  
            Jackson, Wieckowski
           NO VOTE RECORDED:  Mendoza

           SENATE JUDICIARY COMMITTEE:  5-1, 1/12/16
           AYES:  Jackson, Hertzberg, Leno, Monning, Wieckowski
           NOES:  Moorlach
           NO VOTE RECORDED:  Anderson

           SENATE APPROPRIATIONS COMMITTEE:  6-1, 1/21/16
           AYES:  Lara, Bates, Beall, Hill, Leyva, Mendoza
           NOES:  Nielsen

           SENATE FLOOR:  35-3, 1/26/16
           AYES:  Allen, Anderson, Beall, Berryhill, Block, Cannella, De  
            León, Fuller, Gaines, Galgiani, Glazer, Hall, Hancock,  
            Hernandez, Hertzberg, Hill, Hueso, Huff, Jackson, Lara, Leno,  
            Leyva, Liu, McGuire, Mendoza, Mitchell, Monning, Nielsen, Pan,  
            Pavley, Roth, Runner, Stone, Vidak, Wieckowski
           NOES:  Moorlach, Morrell, Nguyen
           NO VOTE RECORDED:  Bates, Wolk

           ASSEMBLY FLOOR:  Not available

           SUBJECT:   Protection of subsurface installations










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          SOURCE:    Author


          DIGEST:  This bill enacts the Dig Safe Act of 2016 to modify  
          laws governing excavations near subsurface installations.


          Assembly Amendments add the definition of "area of continual  
          excavation", return the definition of excavation to current law,  
          create a California Underground Facilities Safe Excavation  
          Advisory Board (Board) under the Office of the State Fire  
          Marshall (OSFM), extend the term of the Board members from two  
          to four years, sunset the Board until January 1, 2019, and make  
          other technical and minor changes.  




          ANALYSIS:


          Existing law:


           1) Licenses and regulates more than 300,000 contractors under  
             the Contractors State License Law (Contractors Law) by the  
             Contractors State License Board (CSLB) within the Department  
             of Consumer Affairs.  The CSLB is under the direction of the  
             registrar of contractors. (Business and Professions Code  
             (BPC) § 7000 et seq.)

           2) Requires all owners of subsurface infrastructure, such as  
             gas, oil, and water pipes, electrical and telecommunications  
             conduits, etc., (except the Department of Transportation) to  
             participate in and fund regional notification ("one-call")  
             centers.  (Government Code (GC) § 4216.1)

           3) Exempts owners of non-pressurized sewer lines and storm  
             drains from needing to become members of the one-call  
             centers.  (GC § 4216)

           4) Requires persons performing excavations to call one-call  








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             centers to have the locations of underground facilities  
             marked before starting an excavation (GC § 4216.2), but  
             exempts homeowners and other private property owners from  
             this requirement for excavations on their own property.  (GC  
             § 4216.8)

           5) Requires owners of subsurface installations to mark their  
             underground facilities within two working days of receiving a  
             notification.  (GC § 4216.3)

           6) Requires excavators to use hand tools within two feet on  
             each side of a marked line indicating a subsurface facility  
             to determine where that facility is before using any power  
             excavating equipment.  (GC § 4216.4)

           7) Provides that an excavator or operator who violates  
             excavation requirements to be subject to the following: 

              a)    A civil penalty up to $10,000 for negligent  
                violations.

              b)    A civil penalty up to $50,000 for knowing and willful  
                violations.

              c)    Additional civil remedies provided for in law for  
                personal injury and property damages.

              d)    Any actions brought forth by the Attorney General  
                (AG), district attorney, or local or state agency that  
                issued the excavation permit, to enforce the civil  
                penalties listed above.  (GC § 4216.6)

           1) States that operators and excavators are liable for damages  
             caused from violations of the one-call law, and that  
             operators who fail to participate in the one-call centers  
             cannot claim damages from an excavator who has complied with  
             the law.  (GC § 4216.7)

           2) Authorizes CSLB to issue a citation for a violation of  
             Contractors Law in lieu of license denial, suspension, or  
             revocation.  (BPC § 7099, 16 CCR § 884)









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           3) Requires CSLB to initiate a disciplinary action against a  
             licensee within 
           30 days of receipt of a certified copy of the Labor  
             Commissioner's finding of a willful or deliberate violation  
             of the Labor Code by a licensee.  (BPC § 7110.5)

          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 Board within the 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 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:









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              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, telecommunication companies,  
                and water corporations.

              c)    OSFM 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.

           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  








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             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 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.

          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, OSFM, 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  








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          Pacific, Gas and Electric Company recordkeeping practices on its  
          distribution system, which explores excavation issues.  

          Prior Legislation.  Last year, the Governor vetoed SB 119 (Hill,  
          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 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 CSLB, 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."


          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 the agricultural groups, this bill, as written,  
          mandates 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  








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          subsurface installations.

          While the agricultural groups would prefer to have this  
          particular language in this bill clarified, they have agreed to  
          pursue this through the stakeholder group process rather than  
          amending this bill at this time.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Assembly Appropriations Committee analysis on  
          August 3, 2016, this bill will create unknown diversion of  
          penalty revenues, in the millions annually, from the General  
          Fund to the Safe Energy Infrastructure and Excavation Fund,  
          increased first year and ongoing costs to support the Board with  
          potential minor offsets from fee revenue generated from regional  
          notification centers, and increased costs to support first year  
          and ongoing costs to process Advisory Committee recommendations  
          for disciplinary actions.


          SUPPORT:   (Verified8/31/16)


           American Subcontractors Association
           Associated General Contractors of California
           AT&T
           California Labor Federation
           California Legislative Conference of the Plumbing, Heating and  
            Piping Industry
           California State Council of Laborers
           Construction Employers' Association
           National Electrical Contractors Association
           Pacific Gas and Electric Company
           United Contractors


          OPPOSITION:   (Verified8/31/16)


          None received








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          ARGUMENTS IN SUPPORT:  AT&T writes in support that "SB 661 is a  
          compromise: Interested parties, including communications  
          companies, contractors, labor, public and private facilities  
          owners, and others, have worked together to create a system that  
          will increase public safety, reduce instances of damage and  
          increase collaboration between excavators and owners of  
          underground facilities."
           


          Prepared by:Mark Mendoza / B., P. & E.D. / (916) 651-4104
          8/31/16 22:02:18


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