BILL ANALYSIS
SB 118
Page 1
SENATE THIRD READING
SB 118 (Bowen)
As Amended June 19, 2003
Majority vote
SENATE VOTE :37-0
UTILITIES AND COMMERCE 13-0 APPROPRIATIONS 23-0
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|Ayes:|Reyes, Richman, Calderon, |Ayes:|Steinberg, Bates, Berg, |
| |Campbell, Diaz, | |Calderon, Corbett, |
| |Longville, La Malfa, La | |Correa, Daucher, Diaz, |
| |Suer, Levine, Maddox, | |Goldberg, Haynes, Leno, |
| |Nunez, Ridley-Thomas, | |Maldonado, Nation, |
| |Wolk | |Negrete McLeod, Nunez, |
| | | |Pacheco, Pavley, |
| | | |Ridley-Thomas, Runner, |
| | | |Samuelian, Simitian, |
| | | |Wiggins, Yee |
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1)SUMMARY : Requires a California Public Utilities Commission
(PUC) Commissioner (Commissioner) to forfeit his or her office
if he or she voluntarily acquires a financial interest in a
corporation or person that the Commissioner knows or should
have known is subject to regulation by PUC. Requires PUC to
adopt an updated Conflict of Interest Code (CIC) and Statement
of Incompatible Activities (SOIA) by February 28, 2004.
EXISTING LAW :
1)Prohibits a Commissioner from holding a financial interest in
a person or corporation that is regulated by PUC.
2)Provides that if a Commissioner involuntarily acquires a
financial interest in a person or corporation that is
regulated by PUC, his or her office shall become vacant unless
he or she divest himself or herself of that interest within a
reasonable time.
3)Requires PUC to adopt a CIC and SOIA.
FISCAL EFFECT : Minor absorbable special fund costs to PUC.
[Public Utilities Reimbursement Account].
SB 118
Page 2
COMMENTS : In April 2002, a San Francisco Superior Court judge
fined then PUC Commissioner Henry Duque $5,000 and ordered him
removed from PUC after finding Duque invested $27,000 in Nextel,
a mobile phone company that is regulated by PUC. Commissioner
Duque had acquired the stock in 1999 believing that Nextel was
regulated by the Federal Communications Commission (FCC) and not
subject to PUC jurisdiction. In fact, Nextel is subject to both
FCC and PUC jurisdiction. Duque disclosed the stock ownership
on his 1999 and 2000 statements of economic interest. Duque
sold the stock in 2000, after receiving a call from a reporter
about the stock.
On January 3, 2003, the First Appellate District of the
California Court of Appeals overturned that order and ruled that
under the plain meaning of the statute 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 the Commissioner involuntarily acquires an interest in
a regulated company. The court stated that "we must limit
ourselves to interpreting the law as written and leave for the
people and the Legislature the task of revising it as the deem
wise." ( People v. Duque , 105 Cal. App 4th 259, 266.) This bill
is intended to address the Appellate Court Decision and close
the gap in the statute's wording.
Analysis Prepared by : Edward Randolph / U. & C. / (916)
319-2083
FN: 0002209