PRIOR PRINTER'S NOS. 180, 488 PRINTER'S NO. 648
No. 175 Session of 1975
INTRODUCED BY MESSRS. SCHMITT, RENNINGER, MRS. GILLETTE, MESSRS. BRUNNER, A. K. HUTCHINSON, ZEARFOSS, MRS. TOLL, MESSRS. MANDERINO, SHANE, FINEMAN, ROMANELLI, LAUGHLIN, COHEN, TRELLO, ROSS, ABRAHAM, SCHEAFFER, IRVIS, SCHWEDER, TAYLOR, WOJDAK, DOYLE, GEORGE, GREENFIELD, MORRIS, BERLIN, PIEVSKY, MUSTO, SHUPNIK, GREEN, O'KEEFE, PERRY, LEDERER, LETTERMAN, MRS. KERNICK, MESSRS. COWELL, ZORD, REED, FEE, MILLIRON, PRATT, MENHORN, ZEARFOSS, BENNETT, KOWALYSHYN, WARGO, RUGGIERO, TADDONIO, O'DONNELL, MRKONIC AND DOMBROWSKI, JANUARY 28, 1975
AS RE-REPORTED FROM COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, FEBRUARY 26, 1975
AN ACT 1 Creating the Department of Consumer Advocate, establishing its 2 powers and duties, and providing the method of its financing. 3 The General Assembly of the Commonwealth of Pennsylvania 4 hereby enacts as follows: 5 Section 1. Short Title.--This act shall be known and may be 6 cited as the "Consumer Advocate Act." 7 Section 2. Definitions.--As used in this act: 8 "Commission" means the Pennsylvania Public Utility 9 Commission. 10 "Consumer" means any person (i) who makes a direct use or is 11 the ultimate recipient of a product or a service supplied by any 12 person subject to a regulatory agency or (ii) who may be a 13 direct user or ultimate recipient of a product or service 14 supplied by any person subject to a regulatory agency and may be
1 affected in any way by any action within the authority of a 2 regulatory agency. The term "consumer" includes any "consumer" 3 as defined in the act of April 28, 1937 (P.L.417, No.105), known 4 as the "Milk Marketing Law," and any "insured" as used in the 5 act of June 11, 1947 (P.L.538, No.246), known as "The Casualty 6 and Surety Rate Regulatory Act," and the act of June 11, 1947 7 (P.L.551, No.247), known as "The Fire, Marine and Inland Marine 8 Rate Regulatory Act," and any "person" or "corporation" as 9 defined in section 2 of the act of May 28, 1937 (P.L.1053, 10 No.286), known as the "Public Utility Law." 11 "Department" means the Department of Consumer Advocate. 12 "Public utility" means public utility as defined in section 13 2(17), act of May 28, 1937 (P.L.1053, No.286), known as the 14 "Public Utility Law." 15 "Regulatory agencies" means the Milk Marketing Board, the 16 Pennsylvania Public Utility Commission and the Insurance 17 Department. 18 Section 3. Department of Consumer Advocate Established.-- 19 There is hereby established the Department of Consumer Advocate 20 to represent the interest of consumers before State Regulatory 21 Agencies of this Commonwealth. 22 Section 4. Department of Consumer Advocate.--The Department 23 of Consumer Advocate shall be headed by the Consumer Advocate 24 who shall be appointed by the Governor and shall serve at the 25 pleasure of the Governor. The Consumer Advocate shall be a 26 person who by reason of training, experience and attainment is 27 qualified to represent the interest of consumers. His 28 compensation shall be set by the Executive Board as defined in 29 sections 204 and 709, act of April 9, 1929 (P.L.177, No.175), 30 known as "The Administrative Code of 1929." 19750H0175B0648 - 2 -
1 Section 5. Assistant Consumer Advocates; Employees.--The 2 Consumer Advocate shall appoint with the approval of the 3 Governor, attorneys as assistant consumer advocates and such 4 additional clerical, technical and professional staff as may be 5 appropriate, and may contract for such additional services as 6 shall be necessary for the performance of his function. The 7 compensation of assistant consumer advocates and such clerical, 8 technical and professional staff shall be set by the Executive 9 Board. 10 Section 6. Powers and Duties of the Consumer Advocate.--(a) 11 The Consumer Advocate shall have the power and the duty to 12 represent the interest of consumers before the regulatory 13 agencies in any matter properly before such agencies, initiating 14 proceedings if in his judgment such may be necessary, and before 15 any court in connection with any matter involving regulation by 16 the regulatory agencies, whether on appeal or otherwise 17 initiated. Specifically and without limitation, the Consumer 18 Advocate shall be an affected party before each regulatory 19 agency and an aggrieved party on appeal from any action or 20 decision by a regulatory agency. 21 (b) The Consumer Advocate may exercise discretion in 22 determining the interests of consumers which will be advocated 23 in any particular proceeding and in determining whether or not 24 to participate in or initiate any particular proceeding and in 25 so determining, shall consider the public interest, the 26 resources available and the substantiality of the effect of the 27 proceeding on the interest of consumers. The Consumer Advocate 28 may refrain from intervening when in the judgment of the 29 Consumer Advocate such is not necessary to represent adequately 30 the interest of consumers. Upon petition of 20% or 2,500 of the 19750H0175B0648 - 3 -
1 consumers, whichever is less, who make direct use or are 2 ultimate recipients of a product or service supplied by a person 3 subject to a regulatory agency, the Consumer Advocate shall 4 participate in a proceeding involving such person or provide a 5 written statement of his reasons for refraining from 6 intervening. 7 (c) Any action brought by the Consumer Advocate before a 8 court or an agency of this Commonwealth shall be brought in the 9 name of the person serving as Consumer Advocate and shall not be 10 brought in the name of the Commonwealth. The Consumer Advocate 11 may name a consumer or group of consumers in whose name the 12 action may be brought or may join with a consumer or group of 13 consumers in bringing the action. 14 Section 7. Reports.--The Consumer Advocate shall annually 15 transmit to the Governor and the General Assembly and shall make 16 available to the public an annual report on the conduct of the 17 department. The Consumer Advocate shall make recommendations as 18 may from time to time be necessary or desirable to protect the 19 interest of consumers. 20 Section 8. Subpoenas.--(a) Whenever the Consumer Advocate 21 has reason to believe that any person may have knowledge, or be 22 in possession, custody or control of any documentary material, 23 pertinent to a pending proposal or proceeding before a 24 regulatory agency, the Consumer Advocate may issue in writing 25 and cause to be served upon the person a subpoena which: 26 (1) compels the attendance of such person and requires that 27 person to submit to examination and give testimony under oath; 28 (2) requires the production of documentary material 29 pertinent to the investigation for inspection or copying; and 30 (3) requires answers to written interrogatories to be 19750H0175B0648 - 4 -
1 furnished under oath. 2 (b) The Consumer Advocate may issue successive subpoenas to 3 the same person in order to obtain additional information 4 pertinent to an ongoing proceeding. 5 (c) Any subpoena issued hereunder shall be subject to 6 invalidation by the appropriate regulatory agency upon good and 7 proper cause shown filed within ten days of its service, except 8 that any such invalidation shall be subject to immediate appeal 9 by the Department of Consumer Advocate to the Commonwealth 10 Court. 11 Section 9. Duties of Regulatory Agencies.--In dealing with 12 any proposed action which may substantially affect the interest 13 of consumers, including but not limited to a proposed change of 14 rates and the adoption of rules, regulations, guidelines, 15 orders, standards or final policy decisions, each regulatory 16 agency shall: 17 (1) Notify the Consumer Advocate when notice of the proposed 18 action is given to the public or at a time fixed by agreement 19 between the Consumer Advocate and the regulatory agency in a 20 manner to assure the Consumer Advocate reasonable notice and 21 adequate time to determine whether to intervene in such matter. 22 (2) Consistent with its other statutory responsibilities, 23 take such action with due consideration to the interest of 24 consumers. 25 Section 10. Savings Provision; Construction.--(a) Nothing 26 contained herein shall in any way limit the right of any 27 consumer to bring a proceeding before either a regulatory agency 28 or a court. 29 (b) Nothing contained herein shall be construed to impair 30 the statutory authority or responsibility of any regulatory 19750H0175B0648 - 5 -
1 agency to protect and promote the interest of consumers.
2 Section 11. Assessment Upon Public Utilities, Disposition,
3 Appropriation and Disbursement of Such Assessments.--(a) Before
4 July 1 of each year, the Consumer Advocate shall estimate its
5 total expenditures in the administration of this act in so far
6 as it relates to public utilities for the fiscal year beginning
7 that date, which estimate shall not exceed .02% TWO-HUNDREDTHS <--
8 OF ONE PERCENT (.02%) of the total gross intrastate operating
9 revenues of the public utilities under the jurisdiction of the
10 Pennsylvania Public Utility Commission for the preceding
11 calendar year. Such estimate shall be submitted to the Governor,
12 and to the appropriation committees of the House and Senate
13 through their respective chairmen, for their respective
14 approvals of such estimate in the amount submitted or such
15 lesser amount as each of them may determine: Provided, That if
16 the Governor or either committee, through its chairman, shall
17 not notify the Consumer Advocate in writing of his or its action
18 within 30 days after such submission, the estimate as submitted
19 shall be deemed approved by him or by such committee, as the
20 case may be. The least of the amounts so approved by the three
21 approving authorities shall be the final estimate; and approval
22 of such least amount shall constitute compliance with section
23 604 of the act of April 9, 1929 (P.L.177, No.175), known as "The
24 Administrative Code of 1929." The Department of Consumer
25 Advocate shall subtract from the final estimate, the estimated
26 balance of the appropriation to be carried over into such fiscal
27 year from the preceding one. The remainder so determined, herein
28 called the total assessment, shall be allocated to, and paid by,
29 such public utilities in the manner hereafter prescribed. The
30 Consumer Advocate or its designated representative shall, when
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1 requested, appear before the Senate and the House appropriation 2 committees. 3 (b) For each fiscal year beginning with the fiscal year 4 following the first full calendar year of the operation of the 5 Department of Consumer Advocate, the allocation shall be made as 6 follows: 7 (1) The Department of Consumer Advocate shall determine for 8 the preceding calendar year the amount of expenditures directly 9 attributable, or in its judgment properly allocable to its 10 activities in connection with each group of utilities furnishing 11 the same kind of service, and debit the amount so determined to 12 such group. For each prior fiscal year the aforesaid allocation 13 shall be based upon the expenditure experience if any of the 14 Department of Consumer Advocate and its expenditure estimate for 15 the balance of the first 12 months of its operation. 16 (2) The Department of Consumer Advocate shall then allocate 17 the total assessment prescribed by subsection (a) to each group 18 in the proportion which the sum of the debits made to it bears 19 to the sum of the debits made to all groups. The Department of 20 Consumer Advocate shall transmit to the Pennsylvania Public 21 Utility Commission the result of the aforesaid allocation. 22 (c) The Pennsylvania Public Utility Commission shall 23 thereafter complete the assessment procedure and collect the 24 assessments as follows: Each public utility within a group shall 25 then be assessed for and shall pay to the Pennsylvania Public 26 Utility Commission such proportion of the amount allocated to 27 its group as the gross intrastate operating revenues of the 28 public utility for the preceding calendar year bear to the total 29 gross intrastate operating revenues of its group for that year. 30 The Pennsylvania Public Utility Commission shall give notice by 19750H0175B0648 - 7 -
1 registered or certified mail to each public utility of the 2 amount lawfully charged against it under the provisions of this 3 section, which amount shall be paid by the public utility within 4 30 days of receipt of such notice, unless the commission 5 specifies on the notices sent to all public utilities an 6 installment plan of payment, in which case each public utility 7 shall pay each installment on or before the date specified 8 therefor by the commission. Within 15 days after receipt of such 9 notice, the public utility against which such assessment has 10 been made may file with the commission objections setting out in 11 detail the grounds upon which the objector regards such 12 assessment to be excessive, erroneous, unlawful or invalid. The 13 commission, after notice to the objector, shall hold a hearing 14 upon such objections. After such hearing, the commission shall 15 record upon its minutes its findings on the objections and shall 16 transmit to the objector, by registered or certified mail, 17 notice of the amount, if any, charged against it in accordance 18 with such findings, which amount or any installment thereof then 19 due, shall be paid by the objector within ten days after receipt 20 of notice of the findings of the commission with respect to such 21 objections. If any payment prescribed by this subsection is not 22 made as aforesaid, the commission may suspend or revoke 23 certificates of public convenience, certify automobile 24 registrations to the Secretary of Transportation for suspension 25 or revocation or, through the Department of Justice, may 26 institute an appropriate action at law for the amount lawfully 27 assessed, together with any additional cost incurred by the 28 commission or the Department of Justice by virtue of such 29 failure to pay. 30 (d) No suit or proceeding shall be maintained in any court 19750H0175B0648 - 8 -
1 for the purpose of restraining or in anywise delaying the 2 collection or payment of any assessment made under subsections 3 (a), (b) and (c), but every public utility against which an 4 assessment is made shall pay the same as provided in subsection 5 (c) of this section. Any public utility making any such payment 6 may, at any time within two years from the date of payment, sue 7 the Commonwealth in an action at law to recover the amount paid, 8 or any part thereof, upon the ground that the assessment was 9 excessive, erroneous, unlawful, or invalid, in whole or in part, 10 provided objections, as hereinbefore provided, were filed with 11 the commission, and payment of the assesssment was made under 12 protest either as to all or part thereof. In any action for 13 recovery of any payments made under this section, the claimant 14 shall be entitled to raise every relevant issue of law, but the 15 findings of fact made by the commission, pursuant to this 16 section, shall be prima facie evidence of the facts therein 17 stated. Any records, books, data, documents, and memoranda 18 relating to the expenses of the commission shall be admissible 19 in evidence in any court, and shall be prima facie evidence of 20 the truth of their contents. If it is finally determined in any 21 such action that all or any part of the assessment for which 22 payment was made under protest was excessive, erroneous, 23 unlawful, or invalid, the Department of Consumer Advocate shall 24 make a refund to the claimant out of the appropriation specified 25 herein as directed by the court. 26 (e) The procedure in this section providing for the 27 determination of the lawfulness of assessments and the recovery 28 back of payments made pursuant to such assessments shall be 29 exclusive of all other remedies and procedures. 30 (f) It is the intent and purpose of this section that each 19750H0175B0648 - 9 -
1 public utility shall advance to the Department of Consumer 2 Advocate its reasonable share of the cost of administering this 3 act. The Department of Consumer Advocate shall keep records of 4 the costs incurred in connection with the administration and 5 enforcement of this act, or any other act. The Department of 6 Consumer Advocate and the Pennsylvania Public Utility Commission 7 shall also keep a record of the manner in which it shall have 8 computed the amount assessed against every public utility. Such 9 records shall be open to inspection by all interested parties. 10 The determination of such costs and assessments by the 11 Department of Consumer Advocate and the Pennsylvania Public 12 Utility Commission, and the records and data upon which the same 13 are made, shall be considered prima facie correct; and in any 14 proceeding instituted to challenge the reasonableness of 15 correctness of any assessment under this section, the party 16 challenging the same shall have the burden of proof. 17 (g) All assessments received, collected, or recovered under 18 this act shall be paid by the commission into the General Fund 19 of the State Treasury through the Department of Revenue. 20 (h) All such assessments having been advanced by public 21 utilities for the purpose of defraying the cost of the 22 administration and performance of the duties of the Consumer 23 Advocate relating to proceedings before the Pennsylvania Public 24 Utility Commission, related judicial proceedings and other such 25 matters handled by the Department of Consumer Advocate shall be 26 held in trust solely for that purpose, and shall be earmarked 27 for the use of, and are hereby appropriated to, the Department 28 of Consumer Advocate for disbursement solely for that purpose. 29 (i) All requisitions upon such appropriation shall be signed 30 by the Consumer Advocate or such deputies as he may designate in 19750H0175B0648 - 10 -
1 writing to the State Treasurer, and shall be presented to the
2 State Treasurer and dealt with by him and the Treasury
3 Department in the manner prescribed by The Fiscal Code.
4 Section 12. General Fund Appropriation.--In addition to the
5 moneys appropriated in section 11, the sum of $1,800,000 <--
6 $200,000 FOR THE FISCAL YEAR ENDING JUNE 30, 1975 is hereby <--
7 appropriated to the Department of Consumer Advocate.
8 Section 13. Effective Date.--This act shall take effect
9 immediately.
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