ASSEMBLYMEMBER TED LIEU
53RD ASSEMBLY DISTRICT
For Immediate Release: February 22, 2008
Contact: David Ford
Phone: (916) 319-2053

Lieu Introduces Legislation to Improve the California Public Utilities Commission’s Enforcement and Collection Process

Sacramento, CA – Assemblymember Ted Lieu (D-Torrance), Chair of the State Assembly Banking and Finance Committee, today introduced legislation to allow the CPUC to better collect delinquent fines and restitutions from negligent companies.

In 2007, the State Controller audited the CPUC’s accounting and collection procedures and found that more than $32 million in fines and restitution have gone uncollected since 1999. The State Controller’s audit found that the CPUC did not aggressively pursue collection efforts. A vast majority of the uncollected fines, which is approximately $29.2 million, were levied against telecommunication companies that either ceased to operate or filed for bankruptcy immediately after the CPUC launched investigations or imposed fines for fraudulent or questionable activities.

“At a time when California is dealing with a huge budget deficit that could cripple our state, we cannot afford to let utility companies get away without paying their fair share” said Assemblymember Ted Lieu. “It is not acceptable for these companies to skate any responsibility by declaring bankruptcy or simply closing shop.

AB 2578 would improve the CPUC’s ability to collect fines and restitution from public utilities and common carriers by:

• Granting the CPUC judgment creditor status.
• Allowing the CPUC to collect fines and restitution directly from the individuals who engaged in fraudulent or malicious activities.
  
• Requiring companies to demonstrate their ability to pay fines and restitution.
  

"In certain circumstances it is inherently difficult for the CPUC to collect fines and restitutions from companies engaging in fraudulent or inappropriate practices because the companies are either no longer operating or have filed for bankruptcy," said Paul Clanon, Executive Director of the California Public Utilities Commission. "When a company refuses to pay a fine, the CPUC has to obtain a court judgment, which can be a lengthy process and further compromises our ability to collect. This legislation will enable us to improve our collection efficiency, will benefit California's consumers, and is in line with what the State Controller's Office suggested in their audit."

This bill is in direct response to the State Controller’s audit and recommendations, as well as media investigations, that the CPUC improve its collection process for delinquent fines and restitutions.