BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                       AB 853


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          6/22/2015:  Changes per consultant


          ASSEMBLY THIRD READING


          AB  
          853 (Roger Hernández)


          As Amended  April 30, 2015


          Majority vote


           ----------------------------------------------------------------- 
          |Committee       |Votes |Ayes                |Noes                |
          |                |      |                    |                    |
          |                |      |                    |                    |
          |----------------+------+--------------------+--------------------|
          |Utilities       |10-4  |Rendon, Bonilla,    |Patterson,          |
          |                |      |Burke, Eggman,      |Achadjian, Hadley,  |
          |                |      |Cristina Garcia,    |Obernolte           |
          |                |      |Roger Hernández,    |                    |
          |                |      |Quirk, Santiago,    |                    |
          |                |      |Ting, Williams      |                    |
          |                |      |                    |                    |
          |----------------+------+--------------------+--------------------|
          |Appropriations  |12-5  |Gomez, Bonta,       |Bigelow, Chang,     |
          |                |      |Calderon, Daly,     |Gallagher, Jones,   |
          |                |      |Eggman,             |Wagner              |
          |                |      |                    |                    |
          |                |      |                    |                    |
          |                |      |Eduardo Garcia,     |                    |
          |                |      |Gordon, Holden,     |                    |
          |                |      |Quirk, Rendon,      |                    |
          |                |      |Weber, Wood         |                    |
          |                |      |                    |                    |








                                                                       AB 853


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          |                |      |                    |                    |
           ----------------------------------------------------------------- 


          SUMMARY:  Requires an electrical or gas corporation to utilize  
          direct employees for any work associated with its infrastructure  
          and computer systems, as specified.  Specifically, this bill:  


          1)Requires an electrical or gas corporation, to the extent  
            feasible, utilize direct employees for any work associated with  
            the design, engineering, and operation of its nuclear,  
            electrical, and gas infrastructure, including all computer and  
            information technology systems.


          2)Defines "direct employees" for construction or maintenance work  
            to include the employees of a contractor or subcontractor  
            licensed in California and working under the direct supervision  
            of the electrical or gas corporation.


          3)Requires an electrical or gas corporation, before utilizing  
            non-direct employees, to file a Tier 3 advice letter with the  
            California Public Utilities Commission (CPUC) that demonstrates  
            that the work can be performed safely and securely, and without  
            jeopardizing the security of its nuclear, electrical, and gas  
            infrastructure.


          4)Requires the CPUC to open a proceeding, or expand the scope of  
            an existing proceeding, to evaluate the advice letter and hold  
            at least one duly noticed public hearing for the proceeding.


          5)Requires the CPUC to issue a written decision determining  
            whether the electrical or gas corporation may utilize persons  
            that are not direct employees for the described work.









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          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee, increased costs in the $200,000 range (special fund)  
          for the CPUC to review advice letters and conduct proceedings.


          COMMENTS:  


          1)Author's Statement:  "Protecting the security of nuclear,  
            electric and natural gas utility systems (as well as the privacy  
            of ratepayer personal information) is a paramount state  
            interest.  However, recent intrusions into major corporate  
            computer systems such as Sony and Anthem Blue Cross and theft of  
            information from those systems have demonstrated the  
            vulnerability of those systems ? Electrical corporations and gas  
            corporations should make every reasonable effort to protect  
            their computer systems from unauthorized intrusions.   
            Unfortunately, recent events have raised concerns about the  
            safety and security of such systems ? AB 853 will prohibit an  
            electric or gas corporation from outsourcing critical nuclear,  
            electrical and gas infrastructure work, including computer and  
            information technology systems, without first obtaining approval  
            from the Public Utilities Commission."


          2)Background:  Recently, Southern California Edison (SCE)  
            announced plans to lay off hundreds of employees and hire  
            foreign workers.  SCE announced that it was laying off about 400  
            information technology employees, with an additional 100 leaving  
            voluntarily.  SCE said that it was outsourcing some tech-related  
            work to two Indian companies, Infosys in Bangalore and Tata  
            Consultancy Services in Mumbai, after looking at multiple firms.  
             


            In addition, some of the foreign workers hired by SCE are in the  
            United States because of the H-1B visa.  In March 2015, the  
            United States Senate Judiciary Committee held a hearing on  








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            problems with the H-1B and other visa programs.  The hearing  
            noted that the visas are used to bring high-skilled workers into  
            the United States so that companies can continue to attract  
            world-class talent and continue to lead on the global stage.   
            However, the hearing highlighted troubling stories of abuses  
            that have caused the displacement of American workers, and noted  
            that these visa programs are to be used to complement the United  
            States workforce, not displace it.


          3)Security of Utility Infrastructure:  In light of the recent  
            intrusions into major corporate computer systems, the bill notes  
            that the part of any computer system that is most vulnerable to  
            being compromised is the personnel who operate the system.  This  
            bill would require an electrical or gas corporation to use  
            direct employees for any work associated with the design,  
            engineering, and operation of its nuclear, electrical, and gas  
            infrastructure, including all computer and information systems,  
            to the extent feasible.  Furthermore, this bill would prohibit  
            an electrical or gas corporation from using a non-direct  
            employee, unless it files a Tier 3 advice letter with the CPUC  
            that demonstrates that the work can be performed safely and  
            securely, and without jeopardizing the security of the utilities  
            infrastructure.  The CPUC then must open or expand the scope of  
            a proceeding to evaluate the advice letter over at least one  
            public hearing and issue a written decision determining whether  
            the electrical or gas corporation may utilize the non-direct  
            employee for the described work. 




          Analysis Prepared by:                                               
                          Edmond Cheung / U. & C. / (916) 319-2083  FN:  
          0000607












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