BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1386
                                                                  Page  1

          Date of Hearing:   May 9, 2011

                    ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
                               Steven Bradford, Chair
                   AB 1386 (Bradford) - As Amended:  March 31, 2011
           
          SUBJECT  :   Women, minority, and disabled business enterprise 
          development

           SUMMARY  :  This bill encourages cable television corporations and 
          direct broadcast satellite providers to voluntarily adopt a plan 
          for increasing women, minority, and disabled veteran business 
          enterprise procurement and to voluntarily report activity in 
          this area to the Legislature on an annual basis.

           EXISTING LAW 

          Requires investor owned utilities to annually report to the 
          California Public Utilities Commission (PUC) on procurement 
          activities with diverse businesses (ethnicity, gender and 
          disabled veteran status) in all business categories, including, 
          but not limited to, renewable energy, wireless 
          telecommunications, broadband, smart grid, and rail projects.

          Established voluntary procurement goals of 5 percent from woman 
          owned, 15 percent from minority owned, and 1.5 percent for 
          disabled veteran-owned business enterprises, equaling 21.5 
          percent of total procurement for public utilities.


          Requires wireless telecommunications service providers with 
          gross annual revenues of more than $25,000,000 to meet 
          procurement requirements for minority-, women-, and disabled 
          veteran owned business enterprises and encourage these providers 
          to voluntarily submit plans to the PUC.


           FISCAL EFFECT  :   Unknown

           COMMENTS  :   

          According to the author, women and minority-owned business 
          participation in the broadband industry will be critical to job 
          recovery in California. Small businesses are critical sources of 
          new employment. 








                                                                  AB 1386
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          In the most recent CPUC report to the legislature, utility 
          spending on diverse procurement increased from $3.47 billion in 
          2008 to $4.27 billion in 2009, an increase of 23.05 percent. 
          There was also an increase as a percentage of total utility 
          procurement; amounts from diverse firms increased from 13.19 
          percent in 2008 to 16.72 percent in 2009. The same potential for 
          reporting and achievement may exist with cable television 
          corporations and direct broadcast satellite providers.

          In California, women and minority-owned businesses represent the 
          bulk of small businesses. Since diverse business owners are much 
          more likely to hire diverse workers, the success of women and 
          minority-owned businesses translates into jobs for women and 
          minorities.

          More than twenty years ago, the CPUC created Government Order 
          156 (GO156) to encourage a fair proportion of total utility 
          contracts and subcontracts for products and services to be 
          awarded to women, minority, and disabled veteran business 
          enterprises. GO156 currently requires general reporting of 
          diverse business procurement statistics in the utility and 
          telecom sectors. This reporting has encouraged major companies 
          to work with California's diverse business owners to achieve 
          greater profits.  As a result of this information, California's 
          largest utility and telecommunications companies have increased 
          their diverse procurement by more than 300% for women, minority 
          and disabled veteran-owned businesses. 

          Cable television corporations and direct broadcast satellite 
          providers are not under the jurisdiction of the CPUC and are not 
          required to report on their procurement with diverse businesses. 


          The state, as well as the federal government, has placed 
          priority on the expansion of broadband particularly in rural and 
          underserved communities. The state and the federal government 
          have made nearly a billion dollars available in grants and loans 
          to help expand broadband service across the country. Cable 
          companies have and continue to make significant infrastructure 
          investments in this area. Direct broadcast satellite providers 
          also support broadband applications and have begun to petition 
          the government for the opportunity to compete for these public 
          broadband funds. 









                                                                  AB 1386
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          Historically, minority and women-owned businesses have not been 
          at the contracting table within emerging technology industries. 
          Diversity in growing businesses is vital to California's 
          success. In a majority-minority state, where women represent 
          over 50% of California's population and people of color 
          represent 60%, economic recovery cannot happen without 
          diversity.  

          The extent to which women and minority-owned businesses are 
          being included in certain emerging sectors is largely unknown. 
          This bill will encourage cable television corporations and 
          direct broadcast satellite providers to voluntarily adopt a plan 
          for increasing women, minority, and disabled veteran business 
          enterprise procurement and to voluntarily report activity in 
          this area to the Legislature on an annual basis.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file

           Opposition 
           
          None on file
           
          Analysis Prepared by  :    Susan Kateley / U. & C. / (916) 
          319-2083