California Legislature—2013–14 Regular Session

Assembly BillNo. 1678


Introduced by Assembly Member Gordon

February 12, 2014


An act to amend Sections 8281, 8282, 8283, 8284, 8285, and 8286 of, and to amend the heading of Article 5 (commencing with Section 8281) of Chapter 7 of Division 4 of, the Public Utilities Code, relating to public utilities.

LEGISLATIVE COUNSEL’S DIGEST

AB 1678, as introduced, Gordon. Women, minority, disabled veteran, and LGBT business enterprise procurement.

(1) Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, water, and telephone corporations. Existing law authorizes the commission to establish rules for all public utilities, subject to control by the Legislature.

Existing law directs the commission to require every electrical, gas, water, wireless telecommunications service provider, and telephone corporation with annual gross revenues exceeding $25,000,000, and their regulated subsidiaries and affiliates, to implement a program developed by the commission to encourage, recruit, and utilize minority-, women-, and disabled veteran-owned business enterprises, as defined, in the procurement of contracts from those corporations or from their regulated subsidiaries and affiliates, and to require the reporting of certain information. The commission, by its rulemaking authority, has adopted General Order 156, applicable to certain electrical, gas, and telephone corporations, to effectuate these requirements. Existing law includes the declaration by the Legislature that each electrical, gas, water, wireless telecommunications service provider, and telephone corporation that is not required to submit a plan, and each cable television corporation and direct broadcast satellite provider, is encouraged to voluntarily adopt a plan for increasing women, minority, and disabled veteran business enterprise procurement in all categories. Existing law requires the commission, by rule or order, to adopt criteria for verifying and determining eligibility of women and minority business enterprises for procurement contracts. Existing law requires the commission to provide to the Legislature a specified report on the progress of activities undertaken by certain entities in the implementation of women, minority, and disabled business enterprise development programs. Existing law requires the commission to recommend a program and legislation for carrying out the policy of aiding the interests of women, minority, and disabled veteran business enterprises.

This bill would extend these provisions to LGBT business enterprises, as defined.

(2) Under existing law, a violation of any provision of any rules or orders of the commission is a crime. In addition, any person or corporation who falsely represents a business as a women, minority, or disabled veteran business enterprise for the purposes of the program discussed above is subject to criminal penalties.

This bill would also subject any person or corporation who falsely represents a business as an LGBT business enterprise for the purposes of the program discussed above to criminal penalties. Because a violation of the requirements of the bill would be a crime under those provisions, this bill would impose a state-mandated local program.

(3) 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.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

The heading of Article 5 (commencing with
2Section 8281) of Chapter 7 of Division 4 of the Public Utilities
3Code
is amended to read:

 

P3    1Article 5.  Women, Minority,begin delete andend delete Disabledbegin delete Veteranend deletebegin insert Veteran,
2and LGBTend insert
Business Enterprises
3

 

4

SEC. 2.  

Section 8281 of the Public Utilities Code is amended
5to read:

6

8281.  

(a) The Legislature hereby finds and declares that the
7essence of the American economic system of private enterprise is
8free, open, and transparent competition. Only through free, open,
9and transparent competition can free markets, reasonable and just
10prices, free entry into business, and opportunities for the expression
11and growth of personal initiative and individual judgment be
12ensured. The preservation and expansion of that competition are
13basic to the economic well-being of this state and that well-being
14cannot be realized unless the actual and potential capacity of
15women, minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business
16enterprises is encouraged and developed. Therefore, it is the
17declared policy of the state to aid the interests of women, minority,
18begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business enterprises in
19order to preserve reasonable and just prices and a free competitive
20enterprise, to ensure that a fair proportion of the total purchases
21and contracts or subcontracts for commodities, supplies,
22technology, property, and services for regulated public utilities,
23including, but not limited to, renewable energy, wireless
24telecommunications, broadband, smart grid, and rail projects, are
25awarded to women, minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and
26LGBTend insert
business enterprises, and to maintain and strengthen the
27overall economy of the state.

28(b) (1) The Legislature finds all of the following:

29(A) The opportunity for full participation in our free enterprise
30system by women, minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and
31LGBTend insert
business enterprises is essential if this state is to attain social
32and economic equality for those businesses and improve the
33functioning of the state economy.

34(B) Public agencies and some regulated utilities that have
35established short- and long-range women, minority,begin delete andend delete disabled
36begin delete veteranend deletebegin insert veteran, and LGBTend insert business enterprise goals are awarding
3730 percent or more of their contracts to these business enterprises.

38(C) Women, minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert
39 business enterprises have traditionally received less than a
40proportionate share of regulated public utility procurement
P4    1contracts, especially in renewable energy, wireless
2telecommunications, broadband, smart grid, and rail projects.

3(D) It is in the state’s interest to expeditiously improve the
4economically disadvantaged position of women, minority,begin delete andend delete
5 disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business enterprises.

6(E) The position of these businesses can be substantially
7improved by providing long-range substantial goals for
8procurement by regulated public utilities of technology, equipment,
9supplies, services, materials, and construction work, especially in
10renewable energy, wireless telecommunications, broadband, smart
11grid, and rail projects, from women, minority,begin delete andend delete disabledbegin delete veteranend delete
12begin insert veteran, and LGBTend insert businesses.

13(F) That procurement also benefits the regulated public utilities
14and consumers of the state by encouraging the expansion of the
15number of suppliers for procurements, thereby encouraging
16competition among the suppliers and promoting economic
17efficiency in the process.

18(G) That the long-term economic viability of this state depends
19substantially upon the ability of renewable energy, wireless
20telecommunications, broadband, smart grid, and rail projects to
21incorporate women, minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and
22LGBTend insert
businesses into those projects.

23(2) It is the purpose of this article to do all of the following:

24(A) Encourage greater economic opportunity for women,
25 minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business
26enterprises.

27(B) Promote competition among regulated public utility
28suppliers in order to enhance economic efficiency in the
29procurement of electrical, gas, water, wireless telecommunications
30service provider, and telephone corporation contracts and contracts
31of their commission-regulated subsidiaries and affiliates.

32(C) Clarify and expand the program for the procurement by
33regulated public utilities of technology, equipment, supplies,
34services, materials, and construction work from women, minority,
35begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business enterprises.

36

SEC. 3.  

Section 8282 of the Public Utilities Code is amended
37to read:

38

8282.  

For the purposes of this article, the following definitions
39apply:

P5    1(a) “Women business enterprise” means a business enterprise
2that is at least 51 percent owned by a woman or women; or, in the
3case of any publicly owned business, at least 51 percent of the
4stock of which is owned by one or more women; and whose
5management and daily business operations are controlled by one
6or more of those individuals.

7(b) “Minority business enterprise” means a business enterprise
8that is at least 51 percent owned by a minority group or groups;
9or, in the case of any publicly owned business, at least 51 percent
10of the stock of which is owned by one or more minority groups,
11and whose management and daily business operations are
12controlled by one or more of those individuals. The contracting
13utility shall presume that minority includes Black Americans,
14Hispanic Americans, Native Americans, and Asian Pacific
15Americans.

16(c) “Disabled veteran business enterprise” has the same meaning
17as defined inbegin delete subdivision (g) ofend delete Section 999 of the Military and
18Veterans Code.

begin insert

19(d) “LGBT business enterprise” means a business enterprise
20that is at least 51 percent owned by a lesbian, gay, bisexual, or
21transgender person or persons; or, in the case of any publicly
22owned business, at least 51 percent of the stock of which is owned
23by one or more lesbian, gay, bisexual, or transgender persons;
24and whose management and daily business operations are
25controlled by one ore more of those individuals.

end insert
begin delete

26(d)

end delete

27begin insert(e)end insert “Control” means exercising the power to make policy
28decisions.

begin delete

29(e)

end delete

30begin insert(f)end insert “Operate” means being actively involved in the day-to-day
31management and not merely officers or directors.

32

SEC. 4.  

Section 8283 of the Public Utilities Code is amended
33to read:

34

8283.  

(a) The commission shall require each electrical, gas,
35water, wireless telecommunications service provider, and telephone
36corporation with gross annual revenues exceeding twenty-five
37million dollars ($25,000,000) and their commission-regulated
38subsidiaries and affiliates, to submit annually, a detailed and
39verifiable plan for increasing procurement from women, minority,
40begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business enterprises in
P6    1all categories, including, but not limited to, renewable energy,
2wireless telecommunications, broadband, smart grid, and rail
3 projects.

4(b) These annual plans shall include short- and long-term goals
5and timetables, but not quotas, and shall include methods for
6encouraging both prime contractors and grantees to engage women,
7minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business
8enterprises in subcontracts in all categories that provide
9subcontracting opportunities, including, but not limited to,
10renewable energy, wireless telecommunications, broadband, smart
11grid, and rail projects.

12(c) The commission shall establish guidelines for all electrical,
13gas, water, wireless telecommunications service providers, and
14telephone corporations with gross annual revenues exceeding
15twenty-five million dollars ($25,000,000) and their
16commission-regulated subsidiaries and affiliates, to be utilized in
17establishing programs pursuant to this article.

18(d) Every electrical, gas, water, wireless telecommunications
19service provider, and telephone corporation with gross annual
20revenues exceeding twenty-five million dollars ($25,000,000) shall
21furnish an annual report to the commission regarding the
22implementation of programs established pursuant to this article in
23a form that the commission shall require, and at the time that the
24commission shall annually designate.

25(e) (1) The commission shall provide a report to the Legislature
26on September 1 of each year, on the progress of activities
27undertaken by each electrical, gas, water, wireless
28telecommunications service provider, and telephone corporation
29with gross annual revenues exceeding twenty-five million dollars
30($25,000,000) pursuant to this article in the implementation of
31women, minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business
32enterprise development programs. The report shall include
33information about which procurements are made with women,
34minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business
35enterprises with at least a majority of the enterprise’s workforce
36in California, to the extent that information is readily accessible.
37The commission shall recommend a program for carrying out the
38policy declared in this article, together with recommendations for
39legislation that it deems necessary or desirable to further that
P7    1policy. The commission shall make the report available on its
2Internet Web site.

3(2) In regard to disabled veteran business enterprises, the
4commission shall ensure that the programs and legislation
5recommended pursuant to paragraph (1) are consistent with the
6disabled veteran business enterprise certification eligibility
7requirements imposed by the Department of General Services and
8that the recommendations include only those disabled veteran
9business enterprises certified by the Department of General
10Services.

11(f) (1) The Legislature declares that each electrical, gas, water,
12mobile telephony service provider, and telephone corporation that
13is not required to submit a plan pursuant to subdivision (a) is
14encouraged to voluntarily adopt a plan for increasing women,
15minority,begin delete andend delete disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business
16enterprise procurement in all categories.

17(2) The Legislature declares that each cable television
18corporation and direct broadcast satellite provider is encouraged
19to voluntarily adopt a plan for increasing women, minority,begin delete andend delete
20 disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business enterprise
21procurement and to voluntarily report activity in this area to the
22Legislature on an annual basis.

23

SEC. 5.  

Section 8284 of the Public Utilities Code is amended
24to read:

25

8284.  

(a) (1) The commission shall, by rule or order, adopt
26criteria for verifying and determining the eligibility ofbegin delete women and
27minorityend delete
begin insert women, minority, and LGBTend insert business enterprises for
28procurement contracts.

29(2) The commission shall adopt the Department of General
30Services’ disabled veteran business enterprise certification
31eligibility requirements for verifying and determining the eligibility
32of disabled veteran business enterprises for procurement contracts,
33and shall not deem eligible those disabled veteran business
34enterprises that are not certified by the Department of General
35Services.

36(b) The commission shall develop, and require every electrical,
37gas, water, wireless telecommunications service provider, and
38telephone corporation with gross annual revenues exceeding
39twenty-five million dollars ($25,000,000) and their
40commission-regulated subsidiaries and affiliates to implement, an
P8    1outreach program to inform and recruit women, minority,begin delete andend delete
2 disabledbegin delete veteranend deletebegin insert veteran, and LGBTend insert business enterprises to apply
3for procurement contracts under this article.

4

SEC. 6.  

Section 8285 of the Public Utilities Code is amended
5to read:

6

8285.  

(a) Any person or corporation, through its directors,
7officers, or agents, which falsely represents a business as abegin delete women
8or minorityend delete
begin insert women, minority, or LGBTend insert business enterprise in the
9procurement of, or the attempt to procure, contracts from an
10electrical, gas, water, wireless telecommunications service provider,
11or telephone corporation with gross annual revenues exceeding
12twenty-five million dollars ($25,000,000), or a
13commission-regulated subsidiary or affiliate subject to this article,
14shall be punished by a fine of not more than five thousand dollars
15($5,000), by imprisonment in a county jail for not more than one
16year or in the state prison, or by both that fine and imprisonment.
17In the case of a corporation, the fine or imprisonment, or both,
18shall be imposed on every director, officer, or agent responsible
19for the false statements.

20(b) Any person or corporation, through its directors, officers,
21or agents, which falsely represents a business as a disabled veteran
22business enterprise in the procurement of, or the attempt to procure,
23contracts from an electrical, gas, water, wireless
24telecommunications service provider, or telephone corporation
25with gross annual revenues exceeding twenty-five million dollars
26($25,000,000), or a commission-regulated subsidiary or affiliate
27subject to this article, shall be punished according to the penalties
28established pursuant to subdivision (b) of Section 999.9 of the
29Military and Veterans Code. In the case of a corporation, the fine
30or imprisonment, or both, shall be imposed on every director,
31officer, or agent responsible for the false statements.

32

SEC. 7.  

Section 8286 of the Public Utilities Code is amended
33to read:

34

8286.  

(a) In order to facilitate the participation of
35women-owned businesses, minority-owned businesses, disabled
36veteran-owned businesses,begin insert and LGBT-owned businessesend insert and small
37businesses in contract procurement, any corporation subject to this
38article may consider the following measures to include those
39businesses in all phases of their contracting:

40(1) Timely or progressive payments to those businesses.

P9    1(2) An amendment of the performance bond requirements so
2that bond requirements of electrical, gas, and telephone
3corporations do not prohibitively burden those businesses from
4procuring the corporation’s business.

5(3) The provision of assistance to those businesses by securing
6contract payments to those businesses with letters of credit,
7negotiable securities, or other financing arrangements or measures.

8(b) This section does not restrict a corporation’s ability to require
9a bond.

10

SEC. 8.  

No reimbursement is required by this act pursuant to
11Section 6 of Article XIII B of the California Constitution because
12the only costs that may be incurred by a local agency or school
13district will be incurred because this act creates a new crime or
14infraction, eliminates a crime or infraction, or changes the penalty
15for a crime or infraction, within the meaning of Section 17556 of
16the Government Code, or changes the definition of a crime within
17the meaning of Section 6 of Article XIII B of the California
18Constitution.



O

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