BILL NUMBER: AB 2578 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Lieu
FEBRUARY 22, 2008
An act to amend Sections 688.020 and 688.030 of the Code of Civil
Procedure, and to amend Sections 1701.2 and 2104 of the Public
Utilities Code, relating to the Public Utilities Commission.
LEGISLATIVE COUNSEL'S DIGEST
AB 2578, as introduced, Lieu. Public Utilities Commission:
procedures and remedies.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities and can establish its own
procedures, subject to statutory limitations or directions and
constitutional requirements of due process. Existing law authorizes
the commission to determine whether a proceeding requires a hearing,
authorizes the commission to assign one or more commissioners and
administrative law judges to oversee cases, and prescribes separate
procedures for proceedings that the commission determines are either
quasi-legislative, adjudication, or ratesetting cases. Existing law
authorizes the commission to impose various remedies upon finding a
violation of the Public Utilities Act or certain other violations,
and makes any public utility and any corporation other than a public
utility, that violates the act, or that fails to comply with any part
of any order, decision, rule, direction, demand, or requirement of
the commission guilty of a crime.
This bill would authorize the commission, when the commission
institutes an investigation on its own motion in an adjudication
case, to determine that the respondent lacks, or may lack, the
ability to pay potential penalties or fines or to pay restitution
that may be ordered by the commission, and if so found, to order the
respondent to demonstrate, to the satisfaction of the commission,
sufficient ability to pay potential penalties, fines, or restitution.
The bill would require the respondent to demonstrate the ability to
pay, or make other financial arrangements satisfactory to the
commission, within 7 days of the commission adopting an investigation
order. The bill would authorize the commission to delegate to the
attorney for the commission the authority to determine whether a
sufficient showing has been made by the respondent of an ability to
pay and would authorize the respondent to request impartial review by
an administrative law judge.
This bill would provide that if the commission determines that an
individual or another corporation has used a corporation regulated by
the commission to perpetrate a fraud, circumvent a statute, or
accomplish some other wrongful or inequitable purpose, penalties not
recovered from the regulated corporation would be authorized to be
recovered from the individual or other corporation. The bill would
authorize the commission to enjoin the sale of a public utility's or
common carrier's assets to satisfy unpaid fines and penalties, would
authorize the commission to bring and action pursuant to the Uniform
Fraudulent Transfer Act, and make the fraudulent transfer of assets
to avoid paying a commission imposed fine or penalty subject to
prosecution under certain existing criminal provisions. By expanding
the definition of a crime, the bill would impose a state-mandated
local program.
This bill would extend certain existing authorizations for the
state or a department or agency of the state to levy on property by
warrant or notice of levy pursuant to any provision of the Public
Resources Code, Revenue and Taxation Code, or Unemployment Insurance
Code, to any provision of the Public Utilities Code.
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 688.020 of the Code of Civil Procedure is
amended to read:
688.020. (a) Except as otherwise provided by statute,
whenever if a warrant may properly be issued by
the state, or by a department or agency of the state, pursuant to any
provision of the Public Resources Code, Public Utilities Code,
Revenue and Taxation Code, or Unemployment Insurance Code, and
the warrant may be levied with the same effect as a levy pursuant to
a writ of execution, the state or the department or agency of the
state authorized to issue the warrant may use any of the remedies
available to a judgment creditor, including but not limited to, those
provided in Chapter 6 (commencing with Section 708.010) of Division
2.
(b) The proper court for the enforcement of such
those remedies is a court of any of the
following counties:
(1) The county where the debtor resides.
(2) The county where the property against which enforcement is
sought is located.
(3) If the debtor does not reside in this state, any county of
this state.
SEC. 2. Section 688.030 of the Code of Civil Procedure is amended
to read:
688.030. (a) Whenever If pursuant
to any provision of the Public Resources Code, Public Utilities
Code, Revenue and Taxation Code (excluding Sections 3201 to
3204, inclusive), or Unemployment Insurance Code, property is levied
upon pursuant to a warrant or notice of levy issued by the state or
by a department or agency of the state for the collection of a
liability:
(1) If the debtor is a natural person, the debtor is entitled to
the same exemptions to which a judgment debtor is entitled. Except as
provided in subdivisions (b) and (c), the claim of exemption shall
be made, heard, and determined as provided in Chapter 4 (commencing
with Section 703.010) of Division 2 in the same manner as if the
property were levied upon under a writ of execution.
(2) A third person may claim ownership or the right to possession
of the property or a security interest in or lien on the property.
Except as provided in subdivisions (b) and (c) or as otherwise
provided by statute, the third-party claim shall be made, heard, and
determined as provided in Division 4 (commencing with Section
720.010) in the same manner as if the property were levied upon under
a writ of execution.
(b) In the case of a levy pursuant to a notice of levy:
(1) The claim of exemption or the third-party claim shall be filed
with the state department or agency that issued the notice of levy.
(2) The state department or agency that issued the notice of levy
shall perform the duties of the levying officer, except that the
state department or agency need not give itself the notices that the
levying officer is required to serve on a judgment creditor or
creditor or the notices that a judgment creditor or creditor is
required to give to the levying officer. The state department or
agency in performing the duties of the levying officer under this
paragraph has no obligation to search public records or otherwise
seek to determine whether any lien or encumbrance exists on property
sold or collected.
(c) A claim of exemption or a third-party claim pursuant to this
section shall be heard and determined in the superior court in the
county where the property levied upon is located.
SEC. 3. Section 1701.2 of the Public Utilities Code is amended to
read:
1701.2. (a) If the commission pursuant to Section 1701.1 has
determined that an adjudication case requires a hearing, the
procedures prescribed by this section shall be applicable. The
assigned commissioner or the assigned administrative law judge shall
hear the case in the manner described in the scoping memo. The
scoping memo shall designate whether the assigned commissioner or the
assigned administrative law judge shall preside in the case. 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. The regulation shall provide that all parties are entitled
to one peremptory challenge of the assignment of the administrative
law judge in all cases. All parties are 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. The assigned commissioner or the administrative
law judge shall prepare and file a decision setting forth
recommendations, findings, and conclusions. The decision shall be
filed with the commission and served upon all parties to the action
or proceeding without undue delay, not later than 60 days after the
matter has been submitted for decision. The decision of the assigned
commissioner or the administrative law judge shall become the
decision of the commission if no further action is taken within 30
days. Any interested party may appeal the decision to the commission,
provided that the appeal is made within 30 days of the issuance of
the decision. The commission may itself initiate a review of the
proposed decision on any grounds. The commission decision shall be
based on the record developed by the assigned commissioner or the
administrative law judge. A decision different from that of the
assigned commissioner or the administrative law judge shall be
accompanied by a written explanation of each of the changes made to
the decision.
(b) Ex parte communications shall be prohibited in adjudication
cases.
(c) Notwithstanding any other provision of law, the commission may
meet in a closed hearing to consider the decision that is being
appealed. The vote on the appeal shall be in a public meeting and
shall be accompanied with an explanation of the appeal decision.
(d) Adjudication cases shall be resolved within 12 months of
initiation unless the commission makes findings why that deadline
cannot be met and issues an order extending that deadline. In the
event that a rehearing of an adjudication case is granted the parties
shall have an opportunity for final oral argument.
(e) (1) If the commission institutes an investigation on its own
motion in an adjudication case, the commission may determine that the
respondent lacks, or may lack, the ability to pay potential
penalties or fines or to pay restitution that may be ordered by the
commission.
(2) If the commission determines that a respondent lacks, or may
lack, the ability to pay, the commission may order the respondent to
demonstrate, to the satisfaction of the commission, sufficient
ability to pay potential penalties, fines, or restitution that may be
ordered by the commission. The respondent shall demonstrate the
ability to pay, or make other financial arrangements satisfactory to
the commission, within seven days of the commission adopting an
investigation order. The commission may delegate to the attorney the
determination of whether a sufficient showing has been made by the
respondent of an ability to pay.
(3) If within seven days of the commission adopting an
investigation order, the respondent makes a request for impartial
review, the respondent shall be entitled to review by an
administrative law judge, of the sufficiency of the showing made by
the respondent of the respondent's ability to pay. The administrative
law judge may enter temporary orders modifying any financial
requirement made of the respondent pending the final review by the
administrative law judge.
SEC. 4. Section 2104 of the Public Utilities Code is amended to
read:
2104. Except as provided by Sections 2100 and 2107.5, and in
addition to the remedies provided in Section 688.020 or 688.030 of
the Code of Civil Procedure, 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. In any action, all
All fines and penalties incurred up to the time
of commencing the action may be sued for and recovered.
If the commission has determined, after notice and an
opportunity to be heard, that an individual or another corporation
has used a corporation regulated by the commission to perpetrate a
fraud, circumvent a statute, or accomplish some other wrongful or
inequitable purpose, penalties not recovered from the regulated
corporation may be recovered from the individual or other
corporation. 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 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.
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.