Bill to Ban Fine Write-Offs Fails in CA Senate

     SACRAMENTO, Calif. (CN) – PG&E can write off the historic $1.6 billion fine for the 2010 San Bruno pipeline explosion after a bill that would have required the utility pay full taxes was nixed in the state Senate.
     Senate Bill 681 missed the required two-thirds margin, failing 25-14 in a Senate floor vote last Thursday due to a lack of Republican support. The bill requiring PG&E to pay full taxes on its record fine, issued in April by the California Public Utilities Commission, did not receive a single Republican vote and missed passage by two votes.
     The bill proposed by Sen. Jerry Hill, D-San Mateo, who represents the district where the explosion that killed 38 people took place, would have prohibited gas companies from claiming tax deductions on fines issued by the CPUC.
     Hill implored the 14 Republican senators to hold PG&E and other gas companies liable for penalties and “find their moral compass.”
     “I didn’t think we lived in a state that condoned writing off manslaughter,” Hill testified.
     The CPUC had concerns about the state’s second-largest natural gas provider using a tax loophole to write off the fine and inspired Hill to create the bill. Hill said PG&E imposes “safety” fees on its customers that eventually fill the bonuses of its executives and pointed to a study by the Institute on Taxation and Public Policy that found PG&E paid no income taxes from 2008 to 2010.
     “The [CPUC] has clearly stated that the penalty is intended to be punitive, not compensatory, and intended to deter future violations,” Hill said.
     Last year lawmakers passed a similar bill banning professional sports team owners from deducting league-issued penalties from their taxes, inspired by then-Los Angeles Clippers owner Donald Sterling. Assembly Bill 877 prevented Sterling from writing off a $2.5 million fine by the National Basketball Association.
     Republicans caucused before voting down SB 681 without comment.
     Hill will bring the bill up for reconsideration this week per Senate rules.

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