BILL ANALYSIS
AB 84
Page A
Date of Hearing: April 1, 2003
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 84 (Cogdill) - As Amended: March 18, 2003
SUBJECT : Public utilities: common carrier fees: annual audit.
SUMMARY : Reinstates an annual audit by the Bureau of State
Audits (BSA) of rail safety accounts at the California Public
Utilities Commission (PUC) that expired in 2000. Specifically,
this bill :
1)Requires the BSA to conduct an annual audit of the expenditure
of funds received by the PUC for enforcement of railroad
safety regulations.
2)Directs BSA to report the results of its audit, annually, to
the appropriate policy and budget committees of the respective
houses of the Legislature.
EXISTING LAW :
1)Requires PUC to establish fees to be paid by every common
carrier<1> equal to the amount of PUC's annual budget,
pro-rated to the extent of PUC's regulatory duties with
respect to each class of carrier for which the fee is
established.
2)Directs PUC, beginning in the 1993-94 fiscal year, until the
1999-2000 fiscal year, to conduct an audit of the expenditure
of funds received for regulation of the common carriers.
3)Specifies that, beginning with the 1996-97 fiscal year the
audit was to be conducted by BSA, with PUC reimbursing BSA for
the cost of the audit.
4)Provides that the safety division within PUC is responsible
for inspection, surveillance, and investigation of the
rights-of-way, facilities, equipment, and operations of
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<1> Common carriers subject to the annual fee include railroad
corporations, commercial air operators, for-hire vessel
operators, charter-party carriers of passengers, and pipeline
corporations.
AB 84
Page B
railroads and public mass transit ways, and for enforcing
state and federal laws, regulations, orders, and directives
relating to transportation of persons or commodities by rail.
FISCAL EFFECT: Unknown, however, the audit and the railroad
safety program are industry fee supported.
COMMENTS : Shortly after the Dunsmuir derailment and other rail
accidents in 1991, several bills were passed to enhance and
ensure the safety of California's railroads. One of these bills
provided PUC with the authority to collect fees<2> from
railroads to fund enhanced rail safety inspection and
enforcement of railroad safety standards. Until 2000, PUC was
required to report annually to the Legislature regarding the
activities and expenditures of the safety division in order to
ensure that fees are, indeed, being spent for railroad safety
programs.
Information reported led to a concern among railroad
corporations that fees were redirected to pay for costs
unrelated to rail safety purposes. This resulted in passage of
SB 546 (Killea),<3> which among other things required PUC to
conduct an annual audit of railroad fee expenditures. That bill
also prohibited the use of railroad fees for planning or
ratepayer advocacy personnel and limited expenditures for PUC
overhead.
The railroad industry, sponsors of this measure, is concerned
that PUC merged the Rail Safety and Carrier Division into a new
Consumer Protection and Safety Division that combines safety
inspection and enforcement functions related to freight
railroads with other utility regulatory functions. The industry
fears that PUC is not capable of adequately segregating its rail
safety expenditures as a result of these recent changes.
The author and the sponsor believe that reinstatement of the
audit will enhance public safety by ensuring that individuals
who are employed as railroad safety inspectors are dedicated
full time to performing those duties and are not performing
other work of PUC.
REGISTERED SUPPORT / OPPOSITION :
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<2> Rail safety inspection and enforcement was previously paid
for by the General Fund.
<3> Chapter 123, Statutes of 1993.
AB 84
Page C
Support
Burlington Northern Santa Fe Railway Co.
California Shortline Railroad Association
Union Pacific Railroad
United Transportation Union
California State Employees Association
Opposition
None on file.
Analysis Prepared by : Paul Donahue / U. & C. / (916) 319-2083