SB 378 OUPS Client Advisory form (K0447763x7AC2A)

To Our Clients and Friends
Amended Substitute Senate Bill 378:
Ohio Underground Protection Service
Enforcement Law
A Legal Update
By
Luther L. Liggett, Jr.
Kohrman Jackson & Krantz PLL
Attorneys at Law
March, 2015
One Cleveland Building
1375 East Ninth St., 29th Floor
Cleveland OH 44114
(216) 696-8700
One Columbus Building
10 W. Broad Street
Columbus OH 43215
(614) 561-2892
www.KJK.com
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KOHRMAN JACKSON & KRANTZ
Amended Substitute Senate Bill 378:
Ohio Underground Protection Service
Enforcement Law
Introduction
In only six weeks from introduction to the Governor’s signature, Ohio’s “lame
duck” session of the General Assembly passed enforcement legislation for the Ohio
Underground Protection Service’s “Call Before You Dig” law.
Ohio gas and oil trade associations urged passage to avoid the possibility of
federal Department of Transportation enforcement, Ohio being in the minority of states
without a statutory enforcement mechanism.
Current Law
With recent amendments effective March 27, 2013, Ohio adopted revised
provisions of the underground utilities law, including a requirement that a contractor
notify the protection service and utility owners no more than ten working days prior to
commencing any public works construction ”which may involve underground utility
facilities,” Revised Code 153.64(C).
Not limited to public works, all “commercial excavators” must follow certain
protocols under the current law, including the requirement to obtain training. See R. C.
3781.25 et seq.
(O) “Commercial Excavator” means any excavator, excluding a
utility as defined in this section, that satisfies both of the following:
(1) For compensation, performs, directs, supervises, or is
responsible for the excavation, construction, improvement, renovation,
repair, or maintenance on a construction project and holds out or
represents oneself as qualified or permitted to act as such;
(2) Employs tradespersons who actually perform excavation,
construction, improvement, renovation, repair, or maintenance on a
construction project.
Senator Bill Coley (R, Middletown) introduced this most recent enforcement
legislation, explaining that the federal PIPES Act (Pipelines, Inspection, Protection,
Enforcement, and Safety Act of 2006) requires an enforcement mechanism for any state
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one-call system. Failure to comply might involve alternative enforcement by the U.S.
Pipeline and Hazardous Materials Safety Administration. 49 U.S.C. 60101.
While the federal law is directed at preventing damage to oil and gas pipelines,
the Ohio enforcement covers all utilities, of any sort.
The New Law
Compliance: Effective next year, January 1, 2016, each utility, excavator,
developer, and designer participating in the one-call system must register with the
Public Utilities Commission of Ohio; failure results in a fine of up to $2,500.00.
The PUCO is empowered with exclusive jurisdiction to enforce Revised Code
sections 153.64, 3781.26(A) and (B), 3781.27 through 3781.32, and the new enforcement
Chapter 4913. By example, these sections previously impose the following duties:
R.C. 153.64: A public authority shall notify in writing all owners of
underground utility facilities known to be located in the construction area of a
public improvement; a contractor or subcontractor shall cause notice to be given
to a protection service and to the owners of underground utility facilities shown
on the plans and specifications who are not members of a protection service.
R.C. 3781.26(A): Each utility that owns or operates underground utility
facilities shall participate in and register the location of its underground utility
facilities with a protection service.
R.C. 3781.26(B): Protection services, utilities, commercial excavators,
excavation equipment dealers, the public utilities commission of Ohio, the board
of building standards, local law enforcement agencies, and fire departments
should publicize the importance of ascertaining the location of underground
utility facilities before excavating and the use of protection services.
R.C. 3781.27: Any developer who is planning a project that will require
excavation, or the designer employed by the developer for the project, shall
notify a protection service of the location of the proposed excavation site.
R.C. 3781.28: At least forty-eight hours but not more than ten working
days before commencing excavation, the excavator shall notify a protection
service of the location of the excavation site and the date on which excavation is
planned to commence.
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R.C. 3781.29: Prior to notifying a protection service of the proposed
excavation, an excavator shall define and pre-mark the approximate location.
Within forty-eight hours of receiving notice, each utility shall locate and mark its
underground utility facilities at the excavation site. Any indications of the depth
of the facility shall be treated as estimates only.
R.C. 3781.30: When making excavations, the excavator shall do all of the
following: *** Conduct the excavation within the tolerance zone of underground
utility facilities in a careful, prudent, and nondestructive manner, when
necessary, in order to prevent damage; Excavate up to the total depth of the
excavation to either determine the precise location of underground utility
facilities or verify that the total depth of excavation is free of such facilities; *** As
soon as any damage is discovered, including gouges, dents, or breaks to coatings,
cable sheathes, and cathodic protection anodes or wiring, report the type and
location of the damage to the utility ****
R.C. 3781.31: The utility may request that the excavator provide prior
notice to the utility of the actual commencement of the excavation. If the
markings … are destroyed or removed before excavation is completed, the
excavator shall notify the utility …, and the utility shall remark the facilities.
R.C. 3781.32: A developer or the designer … shall not require, as a
condition for entering into a contract for a project that will require excavation,
that responsibility for performance of duties imposed … shall be assumed by a
person other than the person on whom those duties are imposed under those
sections.
Enforcement: Within 90 days of discovery, any “aggrieved person” may request
the PUCO for an inquiry seeking a fine on the person responsible for any “compliance
failure.” R.C. 4913.05. The “aggrieved person” means a person directly involved with
duties or obligations under the same sections. R.C. 4913.01(A). “Compliance failure”
is defined as failure to comply with any of the duties outlined in the sections above.
R.C. 4913.01(B).
Merely because a person is fined by the PUCO does not prevent the right of any
party to obtain civil damages for personal injury or property damage in a private cause
of action. R.C. 4913.50.
Procedure: The new law creates an Underground Technical Committee to hear
enforcement complaints. The Committee will include 17 members; four members from
the “commercial excavator industry,” eight members of underground utilities
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(particularly pipelines,) one member representing an underground utility “locator,” one
member representing municipalities, one member from the Ohio Department of
Transportation, one designer, developer, or surveyor, and one member of the general
public.
Within 10 days after receiving a complaint, the PUCO staff shall notify the
subject party.
Within 30 days after notice, the subject party shall respond.
PUCO Staff shall investigate and make a recommendation to the Underground
Technical Committee as to whether there was a compliance failure. R.C. 4913.09. Staff
has no time deadline to report, and may or may not recommend a fine.
Within 90 days of the Staff Report, the Underground Technical Committee shall
recommend to the PUCO a fine, determine no enforcement is required, or request a
hearing before the PUCO. If the Committee fails to vote, then the Staff recommends to
the PUCO whether a fine should be imposed.
Penalties:
The PUCO may impose the following penalties upon the
recommendation of the Committee:
If the Compliance Failure is the first for the party, a penalty of training,
education, nonmonetary penalty, or a fine up to $2,500.00.
If the Compliance Failure is a second or subseqeunt event, a penalty of training,
education, nonmonetary penalty, or a fine up to $5,000.00.
If the Committee finds the party to be a “persistent noncomplier,” a penalty up
to $10,000.00.
If the Committee believes that any person should be penalized in excess of
$10,000.00, the Committee may request an administrative hearing before the PUCO.
It is unclear that the PUCO has any discretion once the Committee imposes a
penalty, as R.C. 4913.21 states that the PUCO “shall impose every recommendation
made” by the Committee.
Appeal: Within 30 days of any notice of fine or penalty imposed, a party may
file a written application for reconsideration before the PUCO.
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The new statute does not describe any appeal from the PUCO. But it is clear that
the normal Administrative Appeal procedure of Ohio Revised Code Chapter 119 is not
applicable, given the unique appellate structure of the statute.
It is likely that the courts will apply the ordinary appeal process from any PUCO
decision, directly to the Ohio Supreme Court, R.C. 4903.13.
Alternatively, the courts may allow a subject party to bring an action in
mandamus, to require the public authority to revise its procedure. This is the process
used by pensioners in the public pension system from which there is no appellate
process.
Rules: The PUCO must develop administrative rules to implement this new
process. Accordingly, the PUCO opened Case No. 15-282-AU-ORD for the purpose of
considering public testimony and comment on implementation of Am. Sub. Senate Bill
378.
The PUCO scheduled a Workshop for March 19, 2015, with subsequent meetings
likely.
Conclusion
The new legislation imposing penalties for compliance failure of underground
excavation represents a significant impact on the construction industry. Administrative
Rules and the appeals process will follow PUCO Staff recommendations in the early
cases, likely initiated by Ohio utilities. The construction industry will need to become
educated and involved in the process to avoid unwelcome disruption to many small
businesses across the state.
For more information, contact:
Luther L. Liggett, Jr.
Kohrman Jackson & Krantz
10 W. Broad Street
Columbus OH 43215
(614) 561-2892
lll@kjk.com
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