Brief ⁽¹⁾

SB 514 would amend the statute pertaining to civil penalties levied for violations of the Natural Gas Pipeline Safety Act and the Kansas Underground Utility Damage Prevention Act. Under existing law, the Kansas Corporation Commission may determine an amount for the penalty that results from a compromise agreement with the violator. The Commission may consider several factors in determining the amount. The bill would authorize the Commission to approve a remedy, in lieu of a civil penalty, that would require the person charged with the violation to make payments to or spend money for a project related to pipeline safety or underground utility damage prevention. Such project must benefit the industry or community as a whole.

Background

SB 514 was requested by the Kansas Corporation Commission. Leo Haynos, Chief of Pipeline Safety, Kansas Corporation Commission, testified that the bill would give the Commission an additional enforcement tool in addressing violations that might generate little revenue from fines but could be used instead to enhance compliance or promote public awareness. An example of an alternative penalty might be required funding of community awareness initiatives pertaining to the One-Call Center, which is authorized by the Kansas Underground Utility Damage Prevention Act. Another example might be the required purchase of safety equipment.

The law currently requires moneys remitted for penalties for violations of the Natural Gas Pipeline Safety Act and the Kansas Underground Utility Damage Prevention Act to be remitted to the state treasury. The deposited money is subsequently apportioned as follows: 20 percent is credited to the State General Fund and 80 percent is credited to the Gas Pipeline Inspection Fee Fund. The proposed bill would give the Commission the option of requiring revenues from penalties to be applied to projects rather than requiring such moneys to be deposited in the state treasury and credited to the funds referenced above.

According to the Division of the Budget's fiscal note, the Kansas Corporation Commission and the Citizens' Utility Ratepayer Board concluded that passage of SB 514 would not have an effect on state revenues or expenditures.

The Senate Committee on Utilities amended the bill to realize the Commission's intent.

The House Committee amended the bill to provide some guidance on the type of projects that may be financed by the proposed remedy. The Committee also amended the bill to delete the requirement that the Commission staff enter into a consent agreement as a precondition for the Commission's approval of the proposed remedy. The other amendment is technical.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html