BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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                                 THIRD READING


          Bill No:  AB 1918
          Author:   Davis (D)
          Amended:  6/29/10 in Senate
          Vote:     21

           
           SENATE ENERGY, U.&C. COMMITTEE  :  7-2, 6/15/10
          AYES:  Padilla, Corbett, Florez, Kehoe, Lowenthal,  
            Simitian, Wright
          NOES:  Dutton, Strickland
          NO VOTE RECORDED:  Cox, Oropeza

           SENATE VETERANS AFFAIRS COMMITTEE  :  3-0, 6/22/10
          AYES:  Correa, Negrete McLeod, Cedillo
          NO VOTE RECORDED:  Denham, Wyland

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  45-26, 5/20/10 - See last page for vote


           SUBJECT  :    Telecommunications

           SOURCE  :     Author


          DIGEST  :    This bill requires each wireless  
          telecommunications service provider with annual revenues  
          exceeding $25 million to submit annually to the California  
          Public Utilities Commission a plan-consistent with those  
          already submitted by electrical, gas, water, and telephone  
          corporations-to increase procurement from women, minority,  
          and disabled veteran business enterprises.
                                                           CONTINUED





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           ANALYSIS  :    Current law requires the California Public  
          Utilities Commission (CPUC) to require each electrical,  
          gas, water, and telephone corporation with gross annual  
          revenues exceeding $25 million, and their  
          commission-regulated subsidiaries and affiliates, to submit  
          annually a detailed and verifiable plan for increasing  
          women, minority, and disabled veteran business enterprise  
          (WMDVBE) procurement.

          This bill adds wireless telecommunications service  
          providers to the list of entities subject to these  
          requirements.

           Background
           
          Beginning in 1986, the Legislature enacted a series of  
          statutes, and the CPUC adopted General Order (GO) 156, to  
          encourage the award of a fair proportion of all utility  
          contracts for products and services to WMDVBEs.   
          Commission-regulated water utilities originally were not  
          required to participate in the program but were added in  
          2009.  These entities are required to annually submit a  
          detailed and verifiable plan, with goals and timetables,  
          for increasing WMDVBE procurement in all categories of  
          procurement, including technology, equipment, supplies,  
          services, materials, and construction.  A separate annual  
          report on progress made in meeting those goals also is  
          required. There is no penalty for failure of a utility to  
          meet its goals.  The CPUC is required to make an annual  
          report to the Legislature on utility progress in meeting  
          WMDVBE goals.

          GO 156 specifies guidelines for the utilities to follow in  
          meeting WMDVBE requirements, including the following  
          procurement goals:  five percent of all procurement from  
          woman-owned business enterprises; 15 percent from  
          minority-owned business enterprises, and one-and-a-half  
          percent for disabled veteran-owned businesses enterprises.   
          To count toward these goals, woman- and minority-owned  
          business enterprises must be certified by the CPUC's  
          Utility Diversity Supplier Program, and disabled  
          veteran-owned businesses enterprises must be certified by  
          the Department of General Services.







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          The CPUC currently has an open rulemaking to review the  
          impact of GO 156 and its success in encouraging regulated  
          utilities to seek the full and fair participation of  
          WMDVBEs in their procurement programs (R.09-07-027).

          The California Constitution prohibits the State from  
          discriminating against, or granting preferential treatment  
          to any individual or group on the basis of race, sex,  
          color, ethnicity, or national origin in the operation of  
          public employment, public education, or public contracting.  
           According to the CPUC, nothing in GO 156 authorizes or  
          permits a utility to use set-asides, preferences, or quotas  
          in administration of its WMDVBE program and utilities  
          retain the authority to use legitimate business judgment to  
          select a supplier for a particular contract.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

           ARGUMENTS IN SUPPORT  :    According to the author's office  
          this bill ensures that wireless telecommunications service  
          providers are required to comply with WMDVBE requirements  
          specified in statute and in General Order 156.  This  
          purpose recognizes the dramatic growth of wireless service  
          in the telecommunications marketplace and the shift away  
          from traditional landline voice service.  The CPUC reports  
          that the total number of landline access lines in  
          California has decreased from 24.77 million in 2001 to  
          20.25 million in 2008.  The number of wireless subscribers  
          in California has grown from 14.8 million in 2001 to 31.7  
          million in 2008.

           ASSEMBLY FLOOR  : 
          AYES:  Ammiano, Arambula, Bass, Beall, Block, Blumenfield,  
            Bradford, Brownley, Buchanan, Caballero, Charles  
            Calderon, Carter, Chesbro, Davis, De Leon, Eng, Feuer,  
            Fong, Fuentes, Furutani, Galgiani, Hall, Hayashi,  
            Hernandez, Hill, Huber, Huffman, Jones, Lieu, Bonnie  
            Lowenthal, Ma, Mendoza, Monning, V. Manuel Perez,  
            Portantino, Ruskin, Salas, Saldana, Skinner, Solorio,  
            Swanson, Torlakson, Torres, Torrico, Yamada
          NOES:  Adams, Anderson, Bill Berryhill, Tom Berryhill,  
            Blakeslee, Conway, Cook, DeVore, Emmerson, Fuller,  







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            Gaines, Garrick, Gilmore, Hagman, Jeffries, Knight,  
            Logue, Miller, Nestande, Niello, Nielsen, Norby, Silva,  
            Smyth, Audra Strickland, Tran
          NO VOTE RECORDED:  Coto, De La Torre, Evans, Fletcher,  
            Harkey, Nava, Villines, John A. Perez, Vacancy


          DLW:do  8/3/10   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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