Capitol Alert

Bill banning PG&E penalty tax write-off fails in Senate

In this Sept. 9, 2010 file photo, a massive fire roars through a mostly residential neighborhood in San Bruno, Calif. Legislation that would prohibit PG&E from taking a tax writeoff on a $1.6 billion penalty related to the blaze failed Thursday in the state Senate.
In this Sept. 9, 2010 file photo, a massive fire roars through a mostly residential neighborhood in San Bruno, Calif. Legislation that would prohibit PG&E from taking a tax writeoff on a $1.6 billion penalty related to the blaze failed Thursday in the state Senate. AP

Legislation prohibiting Pacific Gas & Electric Co. from taking a tax write-off on a $1.6 billion penalty related to the 2010 San Bruno pipeline explosion fell short Thursday in the Senate when it failed to to receive any Republican support.

Senate Bill 681 would require PG&E to pay taxes on the record-setting fine, handed down by the California Public Utilities Commission in April for safety violations that led to the gas explosion that killed eight people. It failed by a vote of 25-14, two votes short of the necessary two-thirds margin, and was granted reconsideration.

“I’m very upset about this,” Sen. Jerry Hill, the San Mateo Democrat who authored the bill, said following the vote. “PG&E is getting away with murder.”

In an impassioned 10-minute speech, Hill, whose district encompasses San Bruno, urged his colleagues to find their “moral compass” and not allow PG&E to deduct “criminal negligence” as a normal business expense.

“I didn’t think we lived in a state that condoned writing off manslaughter,” he said. He added that SB 681 was not about “any tax policy. It’s about justice.”

But the argument failed to sway enough of his colleagues. After a lengthy caucus, the 14 Republican members returned to the floor and voted against SB 681 without comment.

“That was telling that they couldn’t give a compelling reason” to oppose the bill, Hill said. “It speaks to the influence of PG&E.”

Sen. Cathleen Galgiani, D-Manteca, who abstained, was the only Democrat not to support SB 681. She said it was a “separation of powers issue” that would set a bad precedent.

“I don’t want to see the Legislature start to take responsibility for meting out penalties to companies,” she said.

Alexei Koseff: 916-321-5236, @akoseff

  Comments