BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1918| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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 AB 1918 Page 2 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. AB 1918 Page 3 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, AB 1918 Page 4 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 **** END ****