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AB-65 Electricity : illegal business practices.(2001-2002)

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AB65:v96#DOCUMENT

Amended  IN  Assembly  June 26, 2001
Amended  IN  Assembly  July 20, 2001
Amended  IN  Assembly  September 04, 2001

CALIFORNIA LEGISLATURE— 2001–2002 2nd Ext.

Assembly Bill
No. 65


Introduced  by  Assembly Member Cardoza, Alquist, Chavez, Cohn, Goldberg, Havice, Keeley, Kehoe, Koretz, Longville, Matthews, Negrete McLeod
(Coauthor(s): Senator Chesbro, Ortiz, Scott, Soto)

May 31, 2001


An act to add Sections 2120, 2121, and 2122 to the Public Utilities Code, relating to fuel.


LEGISLATIVE COUNSEL'S DIGEST


AB 65, as amended, Cardoza. Electricity and natural gas: illegal business practices.
(1) Existing law imposes various criminal penalties for a violation of the Public Utilities Act.
This bill would make it a felony crime for any person, firm, corporation, or business, whose principal business is the generation or sale of electricity, or combination thereof, to perform any act, or aid, abet, solicit, or conspire to perform any act, that creates a shortage of electricity or natural gas in California with the intent to raise electricity or natural gas prices, materially adversely affect competition, or in any way violate the antitrust laws or other laws of the state regulating illegal business practices that results in market power, as defined.The bill would impose penalties as specified, including a fine not to exceed 10% of the violator’s gross assets. By creating a new crime, the bill would impose a state-mandated local program.
This bill would establish a procedure whereby any person who provides information that materially contributes to the imposition of a criminal fine against any person, firm, business, or corporation for violation of the felony provisions described above to be paid a reward equal to 10% of the amount of the criminal fine pursuant to regulations adopted by the Attorney General. The bill would exempt qualifying small power production facilities, as defined, qualifying cogeneration facilities, as defined, and other specified generation units from application of the above provisions. Because the bill would increase the level of services provided by district attorneys in administering this procedure, the bill would impose a state-mandated local program.
This bill would prohibit a person, firm, corporation, or business that sells electricity or natural gas to the state or a public utility in the state, whose principal business is the generation or sale of electricity from directly or indirectly intimidating, bribing, threatening, retaliating, coercing, commanding, or attempting to intimidate, bribe, threaten, retaliate, coerce, or command any person for the purpose of interfering with the right of that person to disclose the unlawful activities described above. The bill would provide for a civil cause of action for a violation of this prohibition by making any person, firm, corporation, or business violating the prohibition liable for civil damages to the offended party. (2) 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, including the creation of a State Mandates Claims Fund to pay the costs of mandates that do not exceed $1,000,000 statewide and other procedures for claims whose statewide costs exceed $1,000,000.
This bill would provide that with regard to certain mandates no reimbursement is required by this act for a specified reason.
With regard to any other mandates, this bill would provide that, if the Commission on State Mandates determines that the bill contains costs so mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 2120 is added to the Public Utilities Code, to read:

2120.
 (a) No It is a crime for a person, firm, corporation, business or business, whose principal business is the generation or sale of electricity, or combination thereof, shall to perform any act, or aid, abet, solicit, or conspire to perform any act, that creates a shortage of fuel in this state with the intent to raise fuel prices, or materially adversely affect competition in this state, or in any way violate the antitrust laws or other laws of this state regulating illegal business practices.

(b)Any person, firm, corporation, business, or combination thereof, who violates any provisions of subdivision (a), is guilty of a felony and may be punished by state prison and a fine not to exceed 10 percent of it’s gross assets.

(c)“Fuel,” as used in this section, means electricity or natural gas.

(d)“Creating a fuel shortage” means any of the following:

(1)The diminution by contrivance or artificial means of the supply of fuel to a point below that needed to meet consumer demand.

(2)Restricting output or withholding capacity from bidding into the market.

(3)Economic withholding by submitting bids at prices above the producers’ marginal cost. results in market power. For purposes of this section, “market power” is the profitable maintenance of wholesale electricity prices above the prices that would occur in the wholesale market if that market were competitive.
(b) A violation of subdivision (a) shall be punishable by imprisonment in the county jail, or by imprisonment in the state prison and a fine not to exceed 10 percent of the violator’s gross assets. A violation of subdivision (a) during a Stage 1, 2, or 3 electrical emergency, as determined by the Independent System Operator, is punishable as a felony and a fine not to exceed 10 percent of the violator’s gross assets.
(c) This section does not apply to a qualifying small power production facility or a qualifying cogeneration facility within the meaning of Section 201 and 210 of Title II of the federal Public Utility Regulatory Policies Act of 1978 (16 U.S.C. Secs. 796, 796, and 824a-3), and the regulations adopted pursuant to those sections by the Federal Energy Regulatory Commission (18 C.F.R. 292.101 to 292.602), inclusive, and other generation units installed, operated, and maintained at or adjacent to a customer site to serve that facility’s electric or steam load.

SEC. 2.

 Section 2121 is added to the Public Utilities Code, to read:

2121.
 (a) Any person who provides information that materially contributes to the imposition of a criminal fine against any person, firm, business, or corporation for violating Section 2120 shall be paid a reward pursuant to regulations adopted by the Attorney General under subdivision (f). The reward shall be equal to 10 percent of the amount of the criminal fine collected by the Attorney General or district attorney, or imposed by a court. The court, the Attorney General, or a district attorney shall pay, or order the payment of, the award to the person who provides information that results in the imposition of the fine.
(b) An informant is not eligible for a reward unless the information materially contributes to the imposition of criminal penalties for a violation of Section 2120.
(c) If there is more than one informant for a single violation, the first notification received by a state or local law enforcement agency, the Attorney General or a district attorney shall be eligible for the reward. If the notifications are postmarked on the same day or telephoned notifications are received on the same day, the reward shall be divided equally among those informants.
(d) Public officers and employees of the United States, the State of California, or counties and cities in California are not eligible for the reward pursuant to subdivision (a), unless reporting those violations does not relate in any manner to their responsibilities as public officers or employees.
(e) An informant who is an employee of a firm, business, or corporation that sells fuel and who provides information of a violation of subdivision (a) of Section 2120 is not eligible for a reward if the employee intentionally or negligently caused the violation or if the employee’s primary and regular responsibilities include investigating the violation, unless the business knowingly caused the violation.
(f) The Attorney General shall adopt regulations that establish procedures for the receipt and review of claims for payment of rewards. All decisions concerning the eligibility for a reward and the materiality of the provided information shall be made pursuant to these regulations. In each case brought under subdivision (a), the Attorney General or the district attorney, whichever office brings the action, shall determine whether the information materially contributed to the imposition of criminal penalties for violations of Section 2120.
(g) The Attorney General shall continuously publicize the availability of the rewards pursuant to this section for persons who provide information pursuant to this section.

SEC. 3.

 Section 2122 is added to the Public Utilities Code, to read:

2122.
 (a) A person, firm, corporation, or business described in subdivision (a) of Section 2120 may not, directly or indirectly, intimidate, bribe, threaten, retaliate, coerce, command, or attempt to intimidate, bribe, threaten, retaliate, coerce, or command any person for the purpose of interfering with the right of that person to disclose to a state or local law enforcement agency, the Attorney General, or a county district attorney an alleged violation of Section 2120.
(b) Any person, firm, corporation, or business who violates subdivision (a) may be liable in an action for civil damages brought against the corporation or person by the offended party, which may include, but need not be limited to, an employee of the corporation.
(c) Nothing in this section shall be construed to authorize an individual to disclose information otherwise prohibited by law.
(d) Nothing in this section shall be construed to abrogate or limit any other theory of liability or any other remedy that is otherwise available at law.

SEC. 4.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution for certain costs that may be incurred by a local agency or school district because in that regard 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.
However, notwithstanding Section 17610 of the Government Code, if the Commission on State Mandates determines that this act contains other costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. If the statewide cost of the claim for reimbursement does not exceed one million dollars ($1,000,000), reimbursement shall be made from the State Mandates Claims Fund.

SEC. 5.

 The provisions of this act are severable. If any provision of this act or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.