BILL NUMBER: AB 1678	INTRODUCED
	BILL TEXT


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:

  SECTION 1.  The heading of Article 5 (commencing with Section 8281)
of Chapter 7 of Division 4 of the Public Utilities Code is amended
to read:

      Article 5.  Women, Minority,  and  Disabled
 Veteran   Veteran, and LGBT  Business
Enterprises


  SEC. 2.  Section 8281 of the Public Utilities Code is amended to
read:
   8281.  (a) The Legislature hereby finds and declares that the
essence of the American economic system of private enterprise is
free, open, and transparent competition. Only through free, open, and
transparent competition can free markets, reasonable and just
prices, free entry into business, and opportunities for the
expression and growth of personal initiative and individual judgment
be ensured. The preservation and expansion of that competition are
basic to the economic well-being of this state and that well-being
cannot be realized unless the actual and potential capacity of women,
minority,  and  disabled  veteran 
 veteran, and LGBT  business enterprises is encouraged and
developed. Therefore, it is the declared policy of the state to aid
the interests of women, minority,  and  disabled
 veteran   veteran, and LGBT  business
enterprises in order to preserve reasonable and just prices and a
free competitive enterprise, to ensure that a fair proportion of the
total purchases and contracts or subcontracts for commodities,
supplies, technology, property, and services for regulated public
utilities, including, but not limited to, renewable energy, wireless
telecommunications, broadband, smart grid, and rail projects, are
awarded to women, minority,  and  disabled 
veteran   veteran, and LGBT  business enterprises,
and to maintain and strengthen the overall economy of the state.
   (b) (1) The Legislature finds all of the following:
   (A) The opportunity for full participation in our free enterprise
system by women, minority,  and  disabled 
veteran   veteran, and LGBT  business enterprises
is essential if this state is to attain social and economic equality
for those businesses and improve the functioning of the state
economy.
   (B) Public agencies and some regulated utilities that have
established short- and long-range women, minority,  and
 disabled  veteran   veteran, and LGBT
 business enterprise goals are awarding 30 percent or more of
their contracts to these business enterprises.
   (C) Women, minority,  and  disabled 
veteran   veteran, and LGBT  business enterprises
have traditionally received less than a proportionate share of
regulated public utility procurement contracts, especially in
renewable energy, wireless telecommunications, broadband, smart grid,
and rail projects.
   (D) It is in the state's interest to expeditiously improve the
economically disadvantaged position of women, minority,  and
 disabled  veteran   veteran, and LGBT
 business enterprises.
   (E) The position of these businesses can be substantially improved
by providing long-range substantial goals for procurement by
regulated public utilities of technology, equipment, supplies,
services, materials, and construction work, especially in renewable
energy, wireless telecommunications, broadband, smart grid, and rail
projects, from women, minority,  and  disabled
 veteran   veteran, and LGBT  businesses.
   (F) That procurement also benefits the regulated public utilities
and consumers of the state by encouraging the expansion of the number
of suppliers for procurements, thereby encouraging competition among
the suppliers and promoting economic efficiency in the process.
   (G) That the long-term economic viability of this state depends
substantially upon the ability of renewable energy, wireless
telecommunications, broadband, smart grid, and rail projects to
incorporate women, minority,  and  disabled 
veteran   veteran, and LGBT  businesses into those
projects.
   (2) It is the purpose of this article to do all of the following:
   (A) Encourage greater economic opportunity for women, minority,
 and  disabled  veteran  
veteran, and LGBT  business enterprises.
   (B) Promote competition among regulated public utility suppliers
in order to enhance economic efficiency in the procurement of
electrical, gas, water, wireless telecommunications service provider,
and telephone corporation contracts and contracts of their
commission-regulated subsidiaries and affiliates.
   (C) Clarify and expand the program for the procurement by
regulated public utilities of technology, equipment, supplies,
services, materials, and construction work from women, minority,
 and  disabled  veteran 
veteran, and LGBT  business enterprises.
  SEC. 3.  Section 8282 of the Public Utilities Code is amended to
read:
   8282.  For the purposes of this article, the following definitions
apply:
   (a) "Women business enterprise" means a business enterprise that
is at least 51 percent owned by a woman or women; or, in the case of
any publicly owned business, at least 51 percent of the stock of
which is owned by one or more women; and whose management and daily
business operations are controlled by one or more of those
individuals.
   (b) "Minority business enterprise" means a business enterprise
that is at least 51 percent owned by a minority group or groups; or,
in the case of any publicly owned business, at least 51 percent of
the stock of which is owned by one or more minority groups, and whose
management and daily business operations are controlled by one or
more of those individuals. The contracting utility shall presume that
minority includes Black Americans, Hispanic Americans, Native
Americans, and Asian Pacific Americans.
   (c) "Disabled veteran business enterprise" has the same meaning as
defined in  subdivision (g) of  Section 999 of the
Military and Veterans Code. 
   (d) "LGBT business enterprise" means a business enterprise that is
at least 51 percent owned by a lesbian, gay, bisexual, or
transgender person or persons; or, in the case of any publicly owned
business, at least 51 percent of the stock of which is owned by one
or more lesbian, gay, bisexual, or transgender persons; and whose
management and daily business operations are controlled by one ore
more of those individuals.  
   (d) 
    (e)  "Control" means exercising the power to make policy
decisions. 
   (e) 
    (f)  "Operate" means being actively involved in the
day-to-day management and not merely officers or directors.
  SEC. 4.  Section 8283 of the Public Utilities Code is amended to
read:
   8283.  (a) The commission shall require each electrical, gas,
water, wireless telecommunications service provider, and telephone
corporation with gross annual revenues exceeding twenty-five million
dollars ($25,000,000) and their commission-regulated subsidiaries and
affiliates, to submit annually, a detailed and verifiable plan for
increasing procurement from women, minority,  and 
disabled  veteran  veteran, and LGBT 
business enterprises in all categories, including, but not limited
to, renewable energy, wireless telecommunications, broadband, smart
grid, and rail projects.
   (b) These annual plans shall include short- and long-term goals
and timetables, but not quotas, and shall include methods for
encouraging both prime contractors and grantees to engage women,
minority,  and  disabled  veteran 
 veteran, and LGBT  business enterprises in subcontracts in
all categories that provide subcontracting opportunities, including,
but not limited to, renewable energy, wireless telecommunications,
broadband, smart grid, and rail projects.
   (c) The commission shall establish guidelines for all electrical,
gas, water, wireless telecommunications service providers, and
telephone corporations with gross annual revenues exceeding
twenty-five million dollars ($25,000,000) and their
commission-regulated subsidiaries and affiliates, to be utilized in
establishing programs pursuant to this article.
   (d) Every electrical, gas, water, wireless telecommunications
service provider, and telephone corporation with gross annual
revenues exceeding twenty-five million dollars ($25,000,000) shall
furnish an annual report to the commission regarding the
implementation of programs established pursuant to this article in a
form that the commission shall require, and at the time that the
commission shall annually designate.
   (e) (1) The commission shall provide a report to the Legislature
on September 1 of each year, on the progress of activities undertaken
by each electrical, gas, water, wireless telecommunications service
provider, and telephone corporation with gross annual revenues
exceeding twenty-five million dollars ($25,000,000) pursuant to this
article in the implementation of women, minority,  and
 disabled  veteran   veteran, and LGBT
 business enterprise development programs. The report shall
include information about which procurements are made with women,
minority,  and  disabled  veteran 
 veteran, and LGBT  business enterprises with at least a
majority of the enterprise's workforce in California, to the extent
that information is readily accessible. The commission shall
recommend a program for carrying out the policy declared in this
article, together with recommendations for legislation that it deems
necessary or desirable to further that policy. The commission shall
make the report available on its Internet Web site.
   (2) In regard to disabled veteran business enterprises, the
commission shall ensure that the programs and legislation recommended
pursuant to paragraph (1) are consistent with the disabled veteran
business enterprise certification eligibility requirements imposed by
the Department of General Services and that the recommendations
include only those disabled veteran business enterprises certified by
the Department of General Services.
   (f) (1) The Legislature declares that each electrical, gas, water,
mobile telephony service provider, and telephone corporation that is
not required to submit a plan pursuant to subdivision (a) is
encouraged to voluntarily adopt a plan for increasing women,
minority,  and  disabled  veteran 
 veteran, and LGBT  business enterprise procurement in all
categories.
   (2) The Legislature declares that each cable television
corporation and direct broadcast satellite provider is encouraged to
voluntarily adopt a plan for increasing women, minority,  and
 disabled  veteran   veteran, and LGBT
 business enterprise procurement and to voluntarily report
activity in this area to the Legislature on an annual basis.
  SEC. 5.  Section 8284 of the Public Utilities Code is amended to
read:
   8284.  (a) (1) The commission shall, by rule or order, adopt
criteria for verifying and determining the eligibility of 
women and minority   women, minority, and LGBT 
business enterprises for procurement contracts.
   (2) The commission shall adopt the Department of General Services'
disabled veteran business enterprise certification eligibility
requirements for verifying and determining the eligibility of
disabled veteran business enterprises for procurement contracts, and
shall not deem eligible those disabled veteran business enterprises
that are not certified by the Department of General Services.
   (b) The commission shall develop, and require every electrical,
gas, water, wireless telecommunications service provider, and
telephone corporation with gross annual revenues exceeding
twenty-five million dollars ($25,000,000) and their
commission-regulated subsidiaries and affiliates to implement, an
outreach program to inform and recruit women, minority,  and
 disabled  veteran   veteran, and LGBT
 business enterprises to apply for procurement contracts under
this article.
  SEC. 6.  Section 8285 of the Public Utilities Code is amended to
read:
   8285.  (a) Any person or corporation, through its directors,
officers, or agents, which falsely represents a business as a
women or minority   women, minority, or LGBT 
business enterprise in the procurement of, or the attempt to procure,
contracts from an electrical, gas, water, wireless
telecommunications service provider, or telephone corporation with
gross annual revenues exceeding twenty-five million dollars
($25,000,000), or a commission-regulated subsidiary or affiliate
subject to this article, shall be punished by a fine of not more than
five thousand dollars ($5,000), by imprisonment in a county jail for
not more than one year or in the state prison, or by both that fine
and imprisonment. In the case of a corporation, the fine or
imprisonment, or both, shall be imposed on every director, officer,
or agent responsible for the false statements.
   (b) Any person or corporation, through its directors, officers, or
agents, which falsely represents a business as a disabled veteran
business enterprise in the procurement of, or the attempt to procure,
contracts from an electrical, gas, water, wireless
telecommunications service provider, or telephone corporation with
gross annual revenues exceeding twenty-five million dollars
($25,000,000), or a commission-regulated subsidiary or affiliate
subject to this article, shall be punished according to the penalties
established pursuant to subdivision (b) of Section 999.9 of the
Military and Veterans Code. In the case of a corporation, the fine or
imprisonment, or both, shall be imposed on every director, officer,
or agent responsible for the false statements.
  SEC. 7.  Section 8286 of the Public Utilities Code is amended to
read:
   8286.  (a) In order to facilitate the participation of women-owned
businesses, minority-owned businesses, disabled veteran-owned
businesses,  and LGBT-owned businesses  and small businesses
in contract procurement, any corporation subject to this article may
consider the following measures to include those businesses in all
phases of their contracting:
   (1) Timely or progressive payments to those businesses.
   (2) An amendment of the performance bond requirements so that bond
requirements of electrical, gas, and telephone corporations do not
prohibitively burden those businesses from procuring the corporation'
s business.
   (3) The provision of assistance to those businesses by securing
contract payments to those businesses with letters of credit,
negotiable securities, or other financing arrangements or measures.
   (b) This section does not restrict a corporation's ability to
require a bond.
  SEC. 8.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.