BILL NUMBER: SB 660	AMENDED
	BILL TEXT

	AMENDED IN SENATE  APRIL 15, 2015

INTRODUCED BY   Senator Hueso

                        FEBRUARY 27, 2015

   An act to amend  Section 1701.1 of   Sections
1701.1, 1701.3, and 1701.4 of, and to add Section 1701.6 to, 
the Public Utilities Code, relating to the Public Utilities
Commission.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 660, as amended, Hueso. Public Utilities Commission:
proceedings: ex parte communications.
   The California Constitution establishes the Public Utilities
Commission, with jurisdiction over all public utilities. The
California Constitution authorizes the commission to establish rules
for all public utilities, subject to control by the Legislature, and
to establish its own procedures, subject to statutory limitations or
directions and constitutional requirements of due process.
   The Public Utilities Act requires the commission to determine
whether a proceeding requires a hearing and, if so, to determine
whether the matter requires a quasi-legislative, an adjudication, or
a ratesetting hearing. For these purposes, quasi-legislative cases
are cases that establish policy rulemakings and investigations  ,
 which may establish rules affecting an entire industry,
adjudication cases are enforcement cases and complaints  , 
except those challenging the reasonableness of any rates or charges,
and ratesetting cases are cases in which rates are established for a
specific company, including general rate cases, performance-based
ratemaking, and other ratesetting mechanisms. Existing law requires
the commission, upon initiating a hearing, to assign one or more
commissioners to oversee the case and an administrative law judge,
where appropriate. The act regulates communications in hearings
before the commission and defines "ex parte communication" to mean
any oral or written communication between a decisionmaker and a
person with an interest in a matter before the commission concerning
substantive, but not procedural, issues that does not occur in a
public hearing, workshop, or other public proceeding, or on the
official record of the proceeding on the matter. Existing law
requires the commission, by regulation, to adopt and publish
requirements for written reporting of ex parte communications and
appropriate sanctions for noncompliance with any rule proscribing ex
parte communications. The act provides that ex parte communications
are prohibited in adjudication cases and are prohibited in
ratesetting cases, with certain exceptions. The act requires that ex
parte communications be permitted in quasi-legislative cases, without
any restrictions. The commission's Rules of Practice and Procedure
define a "decisionmaker" as any commissioner, the Chief
Administrative Law Judge, any Assistant Chief Administrative Law
Judge, the assigned administrative law judge, or the Law and Motion
Administrative Law Judge. The Rules of Practice and Procedure provide
that communications with a commissioners' personal advisors are
subject to all of the restrictions on, and reporting requirements
applicable to, ex parte communications, except that oral
communications with an advisor in ratesetting proceedings are
permitted without the restrictions.
   This bill would require that the commission, by rule, adopt and
publish a definition of decisionmakers, that would be required to
include commissioners, each advisor to a commissioner, and an
administrative law judge assigned to the proceeding, thereby making
the restrictions on ex parte communications applicable to an advisor
to a commissioner in a ratesetting proceeding. 
   This bill would require that a decisionmaker who makes or receives
a prohibited ex parte communication, or who learns that a
permissible ex parte communication was not reported as required, to
disclose the content of the communication in the record of the
proceeding.  
   This bill would provide that ex parte communications are permitted
in quasi-legislative proceedings, but would require that they be
reported within 3 working days of the communication by filing a
"Notice of Ex Parte Communication" with the commission in accordance
with procedures established by the commission for the service of that
notice.  
   The exceptions to the prohibition upon ex parte communications in
ratesetting proceedings authorize a commissioner to permit oral ex
parte communications if all interested parties are invited and given
not less than 3 days' notice. If an ex parte communication meeting is
granted to any party, it is required that all other parties also be
granted individual ex parte meetings of a substantially equal period
of time and that all parties be sent a notice of that authorization
at the time the request is granted, at least 3 days prior to the
meeting. The exceptions authorize a commissioner to permit written ex
parte communications by any party provided that copies of the
communication are transmitted to all parties.  
   This bill would delete the requirement that if an ex parte
communication meeting is granted to any party, that all other parties
also be granted individual ex parte meetings of a substantially
equal period of time and that all parties be sent a notice of that
authorization at the time the request is granted, at least 3 days
prior to the meeting. The bill would prohibit oral communications
concerning procedural issues in ratesetting cases between parties or
persons with an interest and decisionmakers other than the assigned
administrative law judge, except that a commissioner would be
authorized to permit an oral communication relative to procedural
issues if all interested parties are invited and given not less than
3 days' notice. The bill would prohibit written ex parte
communications concerning procedural issues in ratesetting cases
between parties or persons with an interest and decisionmakers other
than the assigned administrative law judge, except that a
commissioner would be authorized to permit a written communication
relative to procedural issues by any party provided that copies of
the communication are transmitted to all parties on the same day.
 
   This bill would make any violation of the ex parte communications
requirements by any person punishable by an unspecified fine or by
imprisonment, or by both that fine and imprisonment, thereby imposing
a state-mandated local program by creating new crimes. 
   Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
   Because the provisions of this bill would be a part of the act and
because a violation of an order or decision of the commission
implementing its requirements would be a crime, the bill would impose
a state-mandated local program by expanding the application of a
crime.
   The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.


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

  SECTION 1.  Section 1701.1 of the Public Utilities Code is amended
to read:
   1701.1.  (a) The commission, consistent with due process, public
policy, and statutory requirements, shall determine whether a
proceeding requires a hearing. The commission shall determine whether
the matter requires a quasi-legislative, an adjudication, or a
ratesetting hearing. The commission's decision as to the nature of
the proceeding shall be subject to a request for rehearing within 10
days of the date of that decision. If that decision is not appealed
to the commission within that time period it shall not be
subsequently subject to judicial review. Only those parties who have
requested a rehearing within that time period shall subsequently have
standing for judicial review and that review shall only be available
at the conclusion of the proceeding. The commission shall render its
decision regarding the rehearing within 30 days. The commission
shall establish rules regarding ex parte communication on case
categorization issues.
   (b) The commission upon initiating a hearing shall assign one or
more commissioners to oversee the case and an administrative law
judge where appropriate. The assigned commissioner shall schedule a
prehearing conference. The assigned commissioner shall prepare and
issue by order or ruling a scoping memo that describes the issues to
be considered and the applicable timetable for resolution.
   (c) (1) Quasi-legislative cases, for purposes of this article, are
cases that establish policy, including, but not limited to,
rulemakings and investigations which may establish rules affecting an
entire industry.
   (2) Adjudication cases, for purposes of this article, are
enforcement cases and complaints except those challenging the
reasonableness of any rates or charges as specified in Section 1702.
   (3) Ratesetting cases, for purposes of this article, are cases in
which rates are established for a specific company, including, but
not limited to, general rate cases, performance-based ratemaking, and
other ratesetting mechanisms.
   (d) (1) "Ex parte communication," for purposes of this article,
means any oral or written communication between a decisionmaker and a
person with an interest in a matter before the commission concerning
substantive, but not procedural issues, that does not occur in a
public hearing, workshop, or other public proceeding, or on the
official record of the proceeding on the matter. "Person with an
interest," for purposes of this article, means any of the following:
   (A) Any applicant, an agent or an employee of the applicant, or a
person receiving consideration for representing the applicant, or a
participant in the proceeding on any matter before the commission.
   (B) Any person with a financial interest, as described in Article
1 (commencing with Section 87100) of Chapter 7 of Title 9 of the
Government Code, in a matter before the commission, or an agent or
employee of the person with a financial interest, or a person
receiving consideration for representing the person with a financial
interest.
   (C) A representative acting on behalf of any civic, environmental,
neighborhood, business, labor, trade, or similar organization who
intends to influence the decision of a commission member on a matter
before the commission.
   (2) The commission shall by rule adopt and publish a definition of
decisionmakers and persons for purposes of this section, along with
any requirements for written reporting of ex parte communications and
appropriate sanctions for noncompliance with any rule proscribing ex
parte communications. The rules shall provide that reportable
communications shall be reported by the party, whether the
communication was initiated by the party or the decisionmaker. The
definition of decisionmakers shall include, but is not limited to,
commissioners, each advisor to a commissioner appointed pursuant to
Section 309.1, and an administrative law judge assigned to the
proceeding. Communications shall be reported within three working
days of the communication by filing a "Notice of Ex Parte
Communication" with the commission in accordance with the procedures
established by the commission for the service of that notice. The
notice shall include the following information:
   (A) The date, time, and location of the communication, whether it
was oral, written, or a combination, and the communications medium
utilized.
   (B) The identity of the recipient and the person initiating the
communication, as well as the identity of any persons present during
the communication.
   (C) A description of the party's, but not the decisionmaker's,
communication and its content, to which shall be attached a copy of
any written material or text used during the communication. 
   (3) Any decisionmaker who makes or receives a prohibited ex parte
communication, or who learns that a permissible ex parte
communication was not reported pursuant to paragraph (2), shall
disclose the content of the communication in the record of the
proceeding. 
   SEC. 2.    Section 1701.3 of the   Public
Utilities Code   is amended to read: 
   1701.3.  (a) If the commission pursuant to Section 1701.1 has
determined that a ratesetting case requires a hearing, the procedures
prescribed by this section shall be applicable. The assigned
commissioner shall determine prior to the first hearing whether the
commissioner or the assigned administrative law judge shall be
designated as the principal hearing officer. The principal hearing
officer shall be present for more than one-half of the hearing days.
The decision of the principal hearing officer shall be the proposed
decision. An alternate decision may be issued by the assigned
commissioner or the assigned administrative law judge who is not the
principal hearing officer. The commission shall establish a procedure
for any party to request the presence of a commissioner at a
hearing. The assigned commissioner shall be present at the closing
arguments of the case. The principal hearing officer shall present
the proposed decision to the full commission in a public meeting. The
alternate decision, if any, shall also be presented to the full
commission at that public meeting. The alternate decision shall be
filed with the commission and shall be served on all parties
simultaneously with the proposed decision.
   The presentation to the full commission shall contain a record of
the number of days of the hearing, the number of days that each
commissioner was present, and whether the decision was completed on
time.
   (b) The commission shall provide by regulation for peremptory
challenges and challenges for cause of the administrative law judge.
Challenges for cause shall include, but not be limited to, financial
interests and prejudice. All parties shall be entitled to unlimited
peremptory challenges in any case in which the administrative law
judge has within the previous 12 months served in any capacity in an
advocacy position at the commission, been employed by a regulated
public utility, or has represented a party or has been a party of
interest in the case.
   (c)  (1)    Ex parte communications are
prohibited in ratesetting cases. However, oral ex parte
communications may be permitted at any time by any commissioner if
all interested parties are invited and given not less than three days'
notice. Written ex parte communications may be permitted by any
party provided that copies of the communication are transmitted to
all parties on the same day.  If an ex parte communication
meeting is granted to any party, all other parties shall also be
granted individual ex parte meetings of a substantially equal period
of time and shall be sent a notice of that authorization at the time
that the request is granted. In no event shall that notice be less
than three days. The commission may establish a period during which
no oral or written ex parte communications shall be permitted and may
meet in closed session during that period, which shall not in any
circumstance exceed 14 days. If the commission holds the decision, it
may permit ex parte communications during the first half of the
interval between the hold date and the date that the decision is
calendared for final decision. The commission may meet in closed
session for the second half of that interval.  
   (2) Oral communications concerning procedural issues in
ratesetting cases between parties or persons with an interest and
decisionmakers, except the assigned administrative law judge, are
prohibited, except that an oral communication may be permitted at any
time by any commissioner if all interested parties are invited and
given not less than three days' notice.  
   (3) Written communications concerning procedural issues in
ratesetting cases between parties or persons with an interest and
decisionmakers, except the assigned administrative law judge, are
prohibited, except that a commissioner may permit a written
communication by any party if copies of the communication are
transmitted to all parties on the same day. 
   (d) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled in
a timely manner. A quorum of the commission shall be present for the
final oral arguments.
   (e) The commission may, in issuing its decision, adopt, modify, or
set aside the proposed decision or any part of the decision based on
evidence in the record. The final decision of the commission shall
be issued not later than 60 days after the issuance of the proposed
decision. Under extraordinary circumstances the commission may extend
this date for a reasonable period. The 60-day period shall be
extended for 30 days if any alternate decision is proposed pursuant
to Section 311.
   SEC. 3.    Section 1701.4 of the   Public
Utilities Code   is amended to read: 
   1701.4.  (a) If the commission pursuant to Section 1701.1 has
determined that a quasi-legislative case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned administrative law judge shall act as an assistant to the
assigned commissioner in quasi-legislative cases. The assigned
commissioner shall be present for formal hearings. The assigned
commissioner shall prepare the proposed rule or order with the
assistance of the administrative law judge. The assigned commissioner
shall present the proposed rule or order to the full commission in a
public meeting. The report shall include the number of days of
hearing and the number of days that the commissioner was present.
   (b) Ex parte communications shall be  permitted without
any restrictions.   permitted. Any ex parte
communication shall be reported within three working days of the
communication by filing a "Notice of Ex Parte Communication" with the
commission in accordance with procedures established by the
commission for the service of that notice. 
   (c) Any party has the right to present a final oral argument of
its case before the commission. Those requests shall be scheduled in
a timely manner. A quorum of the commission shall be present for the
final oral arguments.
   (d) The commission may, in issuing its rule or order, adopt,
modify, or set aside the proposed decision or any part of the rule or
order. The final rule or order of the commission shall be issued not
later than 60 days after the issuance of the proposed rule or order.
Under extraordinary circumstances the commission may extend this
date for a reasonable period. The 60-day period shall be extended for
30 days if any alternate rule or order is proposed pursuant to
Section 311.
   SEC. 4.    Section 1701.6 is added to the 
Public Utilities Code   , to read:  
   1701.6.  A violation of the ex parte communications requirements
of this article by any person is punishable by a fine not to exceed
____, or by imprisonment, or by both that fine and imprisonment.

   SEC. 2.   SEC. 5.   No reimbursement is
required by this act pursuant to Section 6 of Article XIII B of the
California Constitution because the only costs that may be incurred
by a local agency or school district will be incurred because this
act creates a new crime or infraction, eliminates a crime or
infraction, or changes the penalty for a crime or infraction, within
the meaning of Section 17556 of the Government Code, or changes the
definition of a crime within the meaning of Section 6 of Article XIII
B of the California Constitution.