BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 118
                                                                  Page  1

          Date of Hearing:   July 2, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                     SB 118 (Bowen) - As Amended:  June 19, 2003 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            13-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill:

          1)Requires a Public Utilities Commission (PUC) commissioner to  
            forfeit their office if they voluntarily acquire a financial  
            interest in a corporation or person that the commissioner  
            knows or should have known is subject to PUC regulation. 

          2)Requires the PUC to adopt an updated Conflict of Interest Code  
            and Statement of Incompatible Activities, consistent with the  
            above, by February 28, 2004.

           FISCAL EFFECT  

          Minor absorbable special fund costs to the PUC.  [Public  
          Utilities Reimbursement Account]

           COMMENTS  

           Purpose  .  In April 2002, a San Francisco Superior Court judge  
          fined then PUC Commissioner Henry Duque $5,000 and ordered him  
          removed from the PUC after finding Duque invested $27,000 in  
          Nextel, a mobile phone company regulated by the PUC.  

          On January 3, 2003, the First Appellate District of the  
          California Court of Appeals overturned that order, ruling that  
          that because of a "critical gap" in the wording of the current  
          statute governing this subject, the law doesn't specify any  
          penalty for commissioners who voluntarily invest in a regulated  
          company.
          (The law only provides for forfeiture of office if a  








                                                                  SB 118
                                                                  Page  2

          commissioner involuntarily acquires an interest in a regulated  
          company and fails to divest of this financial interest within a  
          reasonable period of time.)  

          This bill is intended to address the Appellate Court Decision  
          and close the gap in the current statute. 
          
          Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081