BILL ANALYSIS                                                                                                                                                                                                    Ó          1





                SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
                                 ALEX PADILLA, CHAIR
          

          AB 1386 -  Bradford                               Hearing Date:  
          July 5, 2011               A
          As Amended: June 13, 2011               FISCAL           B

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

           Current law  requires each electrical, gas, water, and telephone 
          corporation, and each wireless telecommunications service 
          provider, with gross annual revenues exceeding $25 million, to 
          submit an annual report to the CPUC regarding implementation of 
          its WMDVBE program.

           This bill states the declaration of the Legislature that each 
          cable television corporation and direct broadcast satellite 
          provider is encouraged to voluntarily adopt a plan for 
          increasing WMDVBE procurement and to voluntarily report activity 
          in this area to the Legislature on an annual basis.  

           Current law  requires the CPUC to annually report to the 
          Legislature on the progress of utilities in implementing their 
          WMDVBE programs.

           This bill  requires the CPUC to make this annual report available 
          on its Internet Web site.

                                      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.  AB 1918 (Davis, 2010) expressly added 
          wireless telecommunications service providers, although, as 
          telephone corporations, they already were required to 
          participate.  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.  GO 156 specifies 
          guidelines for the utilities to follow in meeting WMDVBE 
          requirements, including the following procurement goals:  5% of 
          all procurement from woman-owned business 
          enterprises; 15% from minority-owned business enterprises, and 
          1.5% for disabled veteran-owned businesses enterprises.  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.

          Cable television corporations and direct broadcast satellite 
          providers are not utilities generally subject to the CPUC's 
          jurisdiction and, therefore, are not subject to WMDVBE 
          requirements.

          On May 6, 2011, the CPUC issued a decision (D.11-05-019) 
          reaffirming its support of the policy goals of GO 156, 
          particularly the economic benefits to ratepayers and 
          communities, and amended GO 156 to enhance transparency and 
          accountability of the program.  The transparency changes include 
          requiring utilities to file GO 156 annual reports electronically 
          and requiring the CPUC to post those reports on its website.

                                       COMMENTS
           
              1.   Author's Purpose  .  According to the author, minority and 
               women-owned businesses historically have not been at the 
               contracting table within emerging technology industries.  
               The state and federal government have made broadband 
               deployment a priority and have made nearly a billion 










               dollars available in grants and loans to expand broadband 
               nationwide.  Participation of minority and women-owned 
               businesses in the broadband industry will be critical to 
               job recovery because these businesses are more likely to 
               hire diverse workers, which represent more than half of 
               California's population.

              2.   Transparency  .  The requirement in this bill that the 
               CPUC make its annual report to the Legislature available on 
               its web site is consistent with the transparency 
               requirements the CPUC adopted in May 2011.

              3.   Broadband Deployment  .  Deployment of broadband 
               infrastructure in California's unserved areas will require 
               a variety of technologies, including satellite service in 
               areas with rough and remote terrain.  To the extent that 
               cable television corporations and direct broadcast 
               satellite providers voluntarily adopts a WMDVBE plan and 
               reports to the CPUC its progress on implementing its plan, 
               the CPUC will be able to track the degree to which these 
               entities contract with WMDVBEs in their deployment of 
               broadband and in provision of other services.

                                    ASSEMBLY VOTES
           
          Assembly Floor                     (53-21)
          Assembly Utilities and Commerce Committee                      
          (11-0)

                                       POSITIONS
           
           Sponsor:
           
          Author


           Support:
           
          Santa Maria League of United Latin American Citizens, Council 
          #3187
          The Greenlining Institute

           Oppose:
           










          None on file

          

































          Jacqueline Kinney 
          AB 1386 Analysis
          Hearing Date:  July 5, 2011