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
19750H0175B0648 - 6 -
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.
A24L54RLC/19750H0175B0648 - 11 -