SB1366 - Public Utilities Commission: report.

Amended IN Senate April 28, 2026 Amended IN Senate March 23, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 1366 Introduced by Senator Rubio February 20, 2026 An act to add Section 25213.5 to the Public Resources Code, and to add Sections 701.7 and 910.11 to the Public Utilities Code, relating to state government. LEGISLATIVE COUNSEL'S DIGEST SB 1366, as amended, Rubio. State government: California Prompt Payment Act: Public Utilities Commission: State Energy Resources Conservation and Development Commission. Commission: report. The California Prompt Payment Act requires a state agency that awards a grant or that acquires property or services pursuant to a contract to make timely payments pursuant to the grant or contract. If a state agency fails to take certain timely actions and payment is not issued within 45 calendar days from the state agency’s receipt of an undisputed invoice, the act requires the state agency to pay certain penalties. Existing law vests the Public Utilities Commission (PUC) with regulatory authority over public utilities, including every common carrier, toll bridge corporation, pipeline corporation, gas corporation, electrical corporation, telephone corporation, telegraph corporation, water corporation, sewer system corporation, and heat corporation, as specified. Existing law requires each state agency, including the commission, to provide the Director of General Services with an annual report on late payment penalties that were paid by the agency, as provided. Existing law vests the State Energy Resources Conservation and Development Commission (Energy Commission) with various responsibilities for developing and implementing the state’s energy policies. This bill would require the PUC and the Energy Commission, in administering or approving programs, to comply with the California Prompt Payment Act and to ensure that payment timelines, advance payment structures, and accountability measures required under the act are incorporated into program designs, implementation plans, and cost recovery authorizations. The bill would require the PUC and the Energy Commission to provide a minimum advance payment of 25%, and, if the nonprofit organization has been in good standing with the state for at least 3 years, to provide an advanced payment of 100%, except as provided. The bill would prohibit the PUC and the Energy Commission from structuring procurement or payment terms in a way that unreasonably restricts participation by small businesses, nonprofit organizations, community-based organizations, or certain certified suppliers, as specified. The bill would require the PUC and the Energy Commission the commission to annually submit a report to the Legislature with information related to the payment of invoices. invoices, as provided. Under existing law, a violation of an order, decision, rule, direction, demand, or requirement of the PUC is a crime. Because a violation of a PUC action implementing this bill’s requirements would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 25213.5 is added to the Public Resources Code , to read: 25213.5. (a) In administering or approving any program, the commission shall comply with the California Prompt Payment Act (Chapter 4.5 (commencing with Section 927) of Part 3 of Division 3.6 of Title 1 of the Government Code). (b) (1) The commission shall ensure that payment timelines, advance payment structures, and accountability measures required under the California Prompt Payment Act are incorporated into program designs, implementation plans, and cost recovery authorizations. (2) Notwithstanding any other law, payment shall be made within 45 calendar days from receipt of an invoice. An invoice shall not be disputed on the basis of a minor or technical defect in order to circumvent or avoid the general intent of any of the specifics of this section. (3) Interest on late payment penalties shall accrue automatically and shall not be waived by contract terms. (4) The commission shall provide a minimum advance payment of 25 percent, unless a written justification is provided. If the nonprofit organization has been in good standing with the state for at least three years, the commission shall provide an advanced payment of 100 percent, unless a written justification is provided. (c) The commission shall not structure procurement or payment terms in a way that unreasonably restricts participation by small businesses, nonprofit organizations, community-based organizations, or suppliers certified pursuant to General Order 156. (d) (1) The commission shall annually submit a report to the Legislature that includes all of the following: (A) The information provided in the report required pursuant to Section 927.9 of the Government Code. (B) The number of invoices submitted to the commission that were considered disputed. (C) The number of invoices that were paid by the commission more than 45 days after receipt. (D) Steps taken to mitigate cashflow barriers to the entities identified in subdivision (c) during procurement design. (2) A report to be submitted pursuant to paragraph (1) shall be submitted in compliance with Section 9795 of the Government Code. SEC. 2. Section 701.7 is added to the Public Utilities Code , to read: 701.7. (a) In administering or approving any ratepayer-funded program, the commission shall comply with the California Prompt Payment Act (Chapter 4.5 (commencing with Section 927) of Part 3 of Division 3.6 of Title 1 of the Government Code). (b) (1) The commission shall ensure that payment timelines, advance payment structures, and accountability measures required under the California Prompt Payment Act are incorporated into program designs, implementation plans, and cost recovery authorizations. (2) Notwithstanding any other law, payment shall be made within 45 calendar days from receipt of an invoice. An invoice shall not be disputed on the basis of a minor or technical defect in order to circumvent or avoid the general intent of any of the specifics of this section. (3) Interest on late payment penalties shall accrue automatically and shall not be waived by contract terms. (4) The commission shall provide a minimum advance payment of 25 percent, unless a written justification is provided. If the nonprofit organization has been in good standing with the state for at least three years, the commission shall provide an advanced payment of 100 percent, unless a written justification is provided. (c) The commission shall not structure procurement or payment terms in a way that unreasonably restricts participation by small businesses, nonprofit organizations, community-based organizations, or suppliers certified pursuant to General Order 156. (d) This section does not alter the commission’s ratemaking authority or obligation to protect ratepayers. SEC. 3. SECTION 1. Section 910.11 is added to the Public Utilities Code, to read: 910.11. The commission shall annually submit a report to the Legislature that includes all of the following: (a) The information provided in the report required pursuant to Section 927.9 of the Government Code. (b) The number of invoices submitted to the commission that were considered disputed. (c) The number of invoices that were paid by the commission more than 45 days after receipt. (d) Steps taken to mitigate cashflow barriers to the entities identified in subdivision (c) of Section 701.7 during procurement design. of small businesses and diverse suppliers participating in programs administered by the commission. SEC. 4. No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.