THE SENATE

S.B. NO.

2948

TWENTY-SEVENTH LEGISLATURE, 2014

S.D. 1

STATE OF HAWAII

H.D. 1

 

 

 

 

 

A BILL FOR AN ACT

 

 

RELATING TO THE PUBLIC UTILITIES COMMISSION.

 

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 


     SECTION 1.  The legislature finds that the public utilities commission is undergoing a major transition due to increased work complexity and program responsibilities, particularly in the area of energy regulation.  To ensure that the mission of the public utilities commission is adequately supported, the commission should transition from its current administrative status within the department of budget and finance to be a semi-autonomous agency that is administratively attached to the department of commerce and consumer affairs, which can provide the commission with the additional administrative support and resources it needs.

The legislature further finds that the duties and workload of the chairperson and commissioners have significantly increased in recent years in a rapidly changing regulatory environment.  The legislature finds an increase in compensation will ensure that the salaries of the chairperson and commissioners remain competitive with other states' public utilities commissions.

The legislature additionally finds that the commission's internal management capacity needs to be updated.  The chairperson of the commission is in need of an executive officer to assist with managing the operations of the commission.  Converting the position of chief administrator to an executive officer to oversee the management and recruitment of personnel, budget planning and implementation, strategic planning and implementation, procurement and contract administration, and implementation of administrative programs and projects will enable the chairperson of the commission to focus on the growing number and increasingly technical complexity of issues brought before the commission.  Also, to further support the commission in achieving its transition to a semi-autonomous agency, this measure enables the commission to establish a fiscal officer and a personnel officer position.

The legislature also finds that the division of consumer advocacy of the department of commerce and consumer affairs protects and advances the interests of Hawaii's consumers of regulated public utilities.  The executive director and staff members of the division of consumer advocacy attend public hearings held by the public utilities commission to get input from the public, which helps them to better understand the consumer's perspective on utility services and rates.  Because this understanding is an integral part of the division's work, the legislature concludes that the executive director of the division of consumer advocacy, rather than the director of commerce and consumer affairs, should be the consumer advocate in hearings before the public utilities commission.

The purpose of this Act is to adequately support the mission of the public utilities commission, ensure the efficient operation of the public utilities commission, and ensure that important decisions relating to public utilities continue to be made in the public interest by:

(1)    Specifying that the public utilities commission is transferred from its administrative placement within the department of budget and finance to be a semi-autonomous agency that is administratively attached to the department of commerce and consumer affairs, which can provide the commission with the additional administrative support resources it needs;

(2)    Increasing the compensation of the chairperson and commissioners of the public utilities commission;

(3)    Clarifying that notwithstanding section 26-35, Hawaii Revised Statutes, the public utilities commission has authority concerning standard administrative practices, including operational expenditures and the hiring of personnel;

(4)    Changing the position title of the commission's chief administrator to executive officer to reflect the position's increased management responsibilities;

(5)    Enabling the chairperson of the public utilities commission to appoint, employ, and dismiss a fiscal officer and a personnel officer to further support the administrative activities of the commission;

(6)    Establishing the position of executive director of the division of consumer advocacy which shall be the consumer advocate; and

(7)    Appropriating funds to assist with the transition of the public utilities commission and for the hiring of an executive officer, a fiscal officer, and a personnel officer within the public utilities commission.

     SECTION 2.  Section 26-8, Hawaii Revised Statutes, is amended by amending subsection (d) to read as follows:

     "(d)  The [employees] employees' retirement system as constituted by chapter 88 is placed within the department of budget and finance for administrative purposes.  The functions, duties, and powers, subject to the administrative control of the director of finance, and the composition of the board of trustees of the employees retirement system shall be as heretofore provided by law.

     [The public utilities commission is placed within the department of budget and finance for administrative purposes only.]"

     SECTION 3.  Section 26-9, Hawaii Revised Statutes, is amended by amending subsection (c) to read as follows:

     "(c)  The board of acupuncture, board of public accountancy, board of barbering and cosmetology, boxing commission, board of chiropractic examiners, contractors license board, board of dental examiners, board of electricians and plumbers, elevator mechanics licensing board, board of professional engineers, architects, surveyors, and landscape architects, board of massage therapy, Hawaii medical board, motor vehicle industry licensing board, motor vehicle repair industry board, board of naturopathic medicine, board of nursing, board of examiners in optometry, pest control board, board of pharmacy, board of physical therapy, board of psychology, board of private detectives and guards, real estate commission, board of veterinary examiners, board of speech pathology and audiology, and any board, commission, program, or entity created pursuant to or specified by statute in furtherance of the purpose of this section including but not limited to section 26H-4, or chapters 484, 514A, 514B, and 514E shall be placed within the department of commerce and consumer affairs for administrative purposes.

     The public utilities commission shall be a semi-autonomous agency of the State that shall be placed within, for administrative purposes only, the department of commerce and consumer affairs.  Notwithstanding sections 26-9(e), 26-9(f), 26-9(g), 26-9(h), 26-9(j), 26-9(k), 26-9(l), 26-9(m), 26-9(n), 26-9(r), and 26-9(s), the department of commerce and consumer affairs shall not direct or exert authority over the day to day operations or functions of the commission."

     SECTION 4.  Section 269-2, Hawaii Revised Statutes, is amended to read as follows:

     "§269-2  Public utilities commission; number, appointment of commissioners, qualifications; compensation; persons having interest in public utilities[.]; semi-autonomous agency; authority.  (a)  There shall be a public utilities commission of three members, to be called commissioners, and who shall be appointed in the manner prescribed in section 26-34, except as otherwise provided in this section.  All members shall be appointed for terms of six years each, except that the terms of the members first appointed shall be for two, four, and six years, respectively, as designated by the governor at the time of appointment.  The governor shall designate a member to be chairperson of the commission.  Each member shall hold office until the member's successor is appointed and qualified.  Section 26-34 shall not apply insofar as it relates to the number of terms and consecutive number of years a member can serve on the commission; provided that no member shall serve more than twelve consecutive years.

     In appointing commissioners, the governor shall select persons who have had experience in accounting, business, engineering, government, finance, law, or other similar fields.  The commissioners shall devote full time to their duties as members of the commission and no commissioner shall hold any other public office or other employment during the commissioner's term of office.  No person owning any stock or bonds of any public utility corporation, or having any interest in, or deriving any remuneration from, any public utility shall be appointed a commissioner.

     (b)  Effective July 1, [2005,] 2014, the chairperson of the commission shall be paid a salary set at [eighty-seven]          per cent of the salary of the director of human resources development, and each of the other commissioners shall be paid a salary equal to [ninety-five]          per cent of the chairperson's salary.  The commissioners shall be exempt from chapters 76 and 89 but shall be members of the state employees retirement system and shall be eligible to receive the benefits of any state or federal employee benefit program generally applicable to officers and employees of the State, including those under chapter 87A.

     (c)  The commission [is placed within the department of budget and finance for administrative purposes.] shall be a semi-autonomous agency of the State and shall be placed within, for administrative purposes only, the department of commerce and consumer affairs.  The department of commerce and consumer affairs shall not direct or exert authority over the day to day operations or functions of the commission, except as provided in subsection (f) and section 269-3.

     (d)  Notwithstanding section 26-35(a)(5) to the contrary, the commission's operational expenditures, such as the purchase of supplies, equipment, furniture, dues and subscriptions, travel, consultant services, and staff training shall be determined by the chairperson and may be delegated to the executive officer appointed and employed pursuant to section 269-3; provided that such expenditures shall be subject to all applicable procurement laws and procedures.

     (e)  Notwithstanding section 26-35(a)(6) to the contrary, the utilization, allocation, renovation, or other use of space or spaces to be occupied by the commission shall be determined by the chairperson and may be delegated to the executive officer appointed and employed pursuant to section 269-3.

     (f)  Determinations made under subsection (d) or subsection (e) by the chairperson or the executive officer as delegated by the chairperson, may be reviewed by the director of commerce and consumer affairs for completeness and for compliance and conformance with applicable administrative processes and procedures of the department of commerce and consumer affairs."

     SECTION 5.  Section 269-3, Hawaii Revised Statutes, is amended to read as follows:

     "§269-3  Employment of assistants.  (a)  The chairperson of the public utilities commission may appoint and employ professional staff and other assistants for the public utilities commission as the chairperson finds necessary for the performance of the commission's functions and define their powers and duties.  Notwithstanding section 26-35(a)(4) to the contrary and subject to applicable personnel laws, the employment, appointment, applicable salary schedules, promotion, transfer, demotion, discharge, and job descriptions of all officers and employees of or under the jurisdiction of the commission shall be determined by the chairperson and may be delegated to the executive officer appointed and employed pursuant to subsection (b); provided that determinations concerning personnel matters made by the chairperson or the executive officer, as delegated by the chairperson, may be reviewed by the director of commerce and consumer affairs for completeness and for compliance and conformance with applicable administrative processes and procedures of the department of commerce and consumer affairs.  The chairperson may appoint and, at pleasure, dismiss a chief administrator and attorneys as may be necessary, and who shall be exempt from chapter 76.  The chairperson may also appoint other staff, including a fiscal officer and a personnel officer, with or without regard to chapter 76.

     (b)  The chairperson shall appoint, employ, and dismiss, at pleasure, an executive officer who shall be responsible for managing the operations of the commission.  The responsibilities of the executive officer shall include management and recruitment of personnel, budget planning and implementation, strategic planning and implementation, procurement and contract administration, and implementation of administrative programs and projects.  The executive officer shall be exempt from chapter 76.

     [(b)] (c)  Notwithstanding section 91-13, the commission may consult with its assistants appointed under authority of this section in any contested case or agency hearing concerning any issue of facts.  Neither the commission nor any of its assistants shall in such proceeding consult with any other person or party except upon notice and an opportunity for all parties to participate, save to the extent required for the disposition of ex parte matters authorized by law."

     SECTION 6.  Section 269-5, Hawaii Revised Statutes, is amended to read as follows:

     "§269-5  Annual report and register of orders.  The public utilities commission shall prepare and present to the governor[, through the director of finance,] in the month of January in each year a report respecting its actions during the preceding fiscal year.  This report shall include summary information and analytical, comparative, and trend data concerning major regulatory issues acted upon and pending before the commission; cases processed by the commission, including their dispositions; utility company operations, capital improvements, and rates; utility company performance in terms of efficiency and quality of services rendered; financing orders issued, adjustments made to the public benefits fee, and repayments or credits provided to electric utility customers pursuant to part X or chapter 196, part IV; a summary of power purchase agreements, including pricing, in effect during the fiscal year; environmental matters having a significant impact upon public utilities; actions of the federal government affecting the regulation of public utilities in Hawaii; long and short-range plans and objectives of the commission; together with the commission's recommendations respecting legislation and other matters requiring executive and legislative consideration.  Copies of the annual reports shall be furnished by the governor to the legislature.  In addition, the commission shall establish and maintain a register of all its orders and decisions, which shall be open and readily available for public inspection, and no order or decision of the commission shall take effect until it is filed and recorded in this register."

SECTION 7.  Section 269-33, Hawaii Revised Statutes, is amended by amending subsection (a) to read:

"(a)  There is established in the state treasury a public utilities commission special fund to be administered by the public utilities commission.  The proceeds of the fund shall be used by the public utilities commission and the division of consumer advocacy of the department of commerce and consumer affairs for all expenses incurred in the administration of chapters 269, 271, 271G, 269E, and 486J[;], and for costs incurred by the department of commerce and consumer affairs to provide administrative support services to the commission pursuant to this chapter; provided that the expenditures of the public utilities commission shall be in accordance with legislative appropriations.  On a quarterly basis, an amount not exceeding thirty per cent of the proceeds remaining in the fund after the deduction for central service expenses, pursuant to section 36-27, shall be allocated by the public utilities commission to the division of consumer advocacy and deposited in the compliance resolution fund established pursuant to section 26-9(o); provided that all moneys allocated by the public utilities commission from the fund to the division of consumer advocacy shall be in accordance with legislative appropriations."

     SECTION 8.  Section 269-51, Hawaii Revised Statutes, is amended to read as follows:

     "§269-51  Consumer advocate; [director of commerce and consumer affairs.] executive director of the division of consumer advocacy.  The [director of the department of commerce and consumer affairs] executive director of the division of consumer advocacy shall be the consumer advocate in hearings before the public utilities commission.  The consumer advocate shall represent, protect, and advance the interests of all consumers, including small businesses, of utility services.  [The consumer advocate shall not receive any salary in addition to the salary received as director of commerce and consumer affairs.]

     The responsibility of the consumer advocate for advocating the interests of the consumer of utility services shall be separate and distinct from the responsibilities of the public utilities commission and those assistants employed by the commission.  [As] The consumer advocate[, the director of commerce and consumer affairs] shall have full rights to participate as a party in interest in all proceedings before the public utilities commission."

     SECTION 9.  Section 269-52, Hawaii Revised Statutes, is amended to read as follows:

     "§269-52  Division of consumer advocacy; personnel.  There shall be a division of consumer advocacy within the department of commerce and consumer affairs [to provide administrative support to the director of commerce and consumer affairs acting in the capacity of consumer advocate].  The director may [employ and at pleasure dismiss an executive administrator,] appoint an executive director, who shall be exempt from chapter 76[, may define the executive administrator's powers and duties,] and fix the executive [administrator's] director's compensation.  The executive director shall supervise and control the operations and personnel of the division.  The executive director shall be responsible for the performance of the duties imposed upon the division and shall be the consumer advocate as specified in section 269-51.  The executive director may employ engineers, accountants, investigators, clerks, and stenographers as may be necessary for the performance of the consumer advocate's functions, in accordance with chapter 76; provided that:

     (1)  The executive director may employ up to ten utility analysts exempt from chapter 76; and

     (2)  Each analyst shall possess at least the minimum qualifications required of comparable experts in the relevant industry."

     SECTION 10.  Section 269-53, Hawaii Revised Statutes, is amended to read as follows:

     "§269-53  Legal counsel.  The executive director of the division of consumer advocacy may appoint or retain, without regard to chapter 76, attorneys to provide legal services for the division of consumer advocacy.  Nothing in this section precludes the director of commerce and consumer affairs or the executive director of the division of consumer advocacy from requesting and securing legal services from the attorney general and the department of the attorney general."

     SECTION 11.  There is appropriated out of the public utilities commission special fund established pursuant to section 269-33, Hawaii Revised Statutes, the sum of $         or so much thereof as may be necessary for fiscal year 2014-2015 to effectuate the transfer of the public utilities commission from the department of budget and finance to the department of commerce and consumer affairs, to enable the chairperson of the public utilities commission to appoint and employ an executive officer who shall be responsible for managing the operations of the public utilities commission, and to enable the chairperson of the public utilities commission to appoint and employ a fiscal officer and a personnel officer to support the administrative activities of the commission.

     The sum appropriated shall be expended by the public utilities commission for the purposes of this Act.

     SECTION 12.  (a)  No later than July 1, 2015, all rights, powers, functions, and duties of the department of budget and finance as they relate to the public utilities commission are transferred to the department of commerce and consumer affairs in accordance with sections 26-9(c) and 269-2, Hawaii Revised Statutes, as amended by this Act.

     (b)  All officers and employees whose functions are transferred by this Act shall be transferred with their functions and shall continue to perform their regular duties upon their transfer, subject to the state personnel laws and this Act.

     No officer or employee of the State having tenure shall suffer any loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefit or privilege as a consequence of this Act, and such officer or employee may be transferred or appointed to a civil service position without the necessity of examination; provided that the officer or employee possesses the minimum qualifications for the position to which transferred or appointed; and provided that subsequent changes in status may be made pursuant to applicable civil service and compensation laws.

     An officer or employee of the State who does not have tenure and who may be transferred or appointed to a civil service position as a consequence of this Act shall become a civil service employee without the loss of salary, seniority, prior service credit, vacation, sick leave, or other employee benefits or privileges and without the necessity of examination; provided that such officer or employee possesses the minimum qualifications for the position to which transferred or appointed.

     If an office or position held by an officer or employee having tenure is abolished, the officer or employee shall not thereby be separated from public employment, but shall remain in the employment of the State with the same pay and classification and shall be transferred to some other office or position for which the officer or employee is eligible under the personnel laws of the State as determined by the head of the department or the governor.

     SECTION 13.  The chairperson and commissioners serving on the public utilities commission on the date prior to the effective date of this Act shall continue as members of the public utilities commission and their terms shall be unaffected by this Act.

     SECTION 14.  All appropriations, records, equipment, machines, files, supplies, contracts, books, papers, documents, maps, and other personal property heretofore made, used, acquired, or held by the department of budget and finance relating to the functions transferred to the department of commerce and consumer affairs shall be transferred with the functions to which they relate.

     SECTION 15.  All rules, policies, procedures, guidelines, general orders, and other material adopted or developed by the public utilities commission as an administratively attached agency of the department of budget and finance that are applicable to the public utilities commission as a semi-autonomous administratively attached agency of the department of commerce and consumer affairs pursuant to this Act shall remain in full force and effect and unaffected by this Act until amended or repealed by the public utilities commission pursuant to chapter 91, Hawaii Revised Statutes.  Every reference to the department of budget and finance or director of finance in those rules, policies, procedures, guidelines, and other material shall be deemed to refer to the department of commerce and consumer affairs or director of commerce and consumer affairs, as appropriate.

     SECTION 16.  All deeds, leases, contracts, loans, agreements, permits, or other documents executed or entered into by or on behalf of the public utilities commission shall remain in full force and effect regardless of the commission's administrative transfer to the department of commerce and consumer affairs.

     SECTION 17.  All costs and expenses associated with transferring the public utilities commission to become a semi-autonomous agency that is administratively attached to the department of commerce and consumer affairs shall be borne by the public utilities commission or the department of commerce and consumer affairs.  No liabilities or liens arising from such transfer shall accrue to the department of budget and finance.

     SECTION 18.  There shall be a transition period to facilitate the transfer of the public utilities commission from the department of budget and finance to become a semi-autonomous agency that is administratively attached to the department of commerce and consumer affairs.  The fiscal year beginning July 1, 2014, shall serve as a transition period, in which the state agencies affected by this Act shall assist the chairperson of the public utilities commission in implementing the transfer under this Act.  Once the transfer is completed, the department of commerce and consumer affairs shall provide public notice that the transfer is completed in a printed publication or electronic format that is accessible statewide.

     SECTION 19.  The provisions of this Act are to be liberally construed to effectuate its purpose.

     SECTION 20.  All Acts passed by the legislature during the regular session of 2014, whether enacted before or after the effective date of this Act, shall be amended to conform to this Act unless such Acts specifically provide that this Act is being amended.

     SECTION 21.  Statutory material to be repealed is bracketed and stricken.  New statutory material is underscored.

     SECTION 22.  This Act shall take effect on July 1, 2112.


 


 

Report Title:

Public Utilities Commission; Transfer of Attached Agency; Compensation; Personnel; Authority; Expenditures; Division of Consumer Advocacy; Appropriation

 

Description:

Transfers the administrative placement of the Public Utilities Commission from the Department of Budget and Finance to the Department of Commerce and Consumer Affairs.  Authorizes PUC Chairperson to appoint additional management-level employees.  Increases compensation of PUC chairperson and commissioners.  Establishes executive director of the Division of Consumer Advocacy position which shall also serve as the Consumer Advocate.  Makes appropriation.  Effective July 1, 2112.  (SB2948 HD1)

 

 

 

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