BILL NUMBER: AB 1678	CHAPTERED
	BILL TEXT

	CHAPTER  633
	FILED WITH SECRETARY OF STATE  SEPTEMBER 26, 2014
	APPROVED BY GOVERNOR  SEPTEMBER 26, 2014
	PASSED THE SENATE  AUGUST 25, 2014
	PASSED THE ASSEMBLY  AUGUST 27, 2014
	AMENDED IN SENATE  AUGUST 20, 2014
	AMENDED IN SENATE  JULY 1, 2014
	AMENDED IN SENATE  JUNE 4, 2014
	AMENDED IN ASSEMBLY  MAY 1, 2014

INTRODUCED BY   Assembly Member Gordon
   (Principal coauthor: Assembly Member Dickinson)
   (Coauthors: Assembly Members Fong and Ting)

                        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, 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,
mobile telephony 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. In initially adopting criteria for verifying
and determining the eligibility of LGBT business enterprises for
procurement contracts, the bill would require the commission to adopt
the LGBT status qualifiers created by the National Gay and Lesbian
Chamber of Commerce. The bill would authorize the commission to
update the LGBT status qualifiers as appropriate.
   (2) This bill would incorporate additional changes in Section 8282
of the Public Utilities Code, proposed by AB 2760, to be operative
only if AB 2760 and this bill are chaptered and become effective on
or before January 1, 2015, and this bill is chaptered last.
   (3) 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.
   (4) 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.


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, Disabled 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, disabled 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, disabled 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, disabled 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, disabled 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, disabled veteran,
and LGBT business enterprise goals are awarding 30 percent or more of
their contracts to these business enterprises.
   (C) Women, minority, disabled 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, disabled
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, disabled 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, disabled 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,
disabled 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,
disabled 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 African Americans, Hispanic Americans, Native
Americans, and Asian Pacific Americans.
   (c) "Disabled veteran business enterprise" has the same meaning as
defined in 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 or
more of those individuals.
   (e) "Control" means exercising the power to make policy decisions.

   (f) To "operate" means to be actively involved in the day-to-day
management. It is not enough to merely be an officer or director.
  SEC. 3.5.  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 African Americans, Hispanic Americans, Native
Americans, and Asian Pacific Americans.
   (c) "Disabled veteran business enterprise" has the same meaning as
defined in 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 or
more of those individuals.
   (e) "Control" means exercising the power to make policy decisions.

   (f) To "operate" means to be actively involved in the day-to-day
management. It is not enough to merely be an officer or director.
   (g) "Renewable energy project" means a project for the development
and operation of an eligible renewable energy resource meeting the
requirements of the California Renewables Portfolio Standard Program
(Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1
of Division 1).
  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, disabled 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, disabled 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. The report shall include the
information about LGBT business enterprises beginning with the 2016
report.
   (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, disabled veteran,
and LGBT business enterprise development programs. The report shall
include information about which procurements are made with women,
minority, disabled 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.
   (3) The commission shall include the information about LGBT
business enterprises required by paragraph (1) beginning with the
report due on September 1, 2016.
   (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, disabled 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, disabled
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,
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.
   (3) In initially adopting criteria for verifying and determining
the eligibility of LGBT business enterprises for procurement
contracts pursuant to paragraph (1), the commission shall adopt the
LGBT status qualifiers created by the National Gay and Lesbian
Chamber of Commerce. The commission may update these LGBT status
qualifiers as appropriate.
   (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, disabled
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,
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.  Section 3.5 of this bill incorporates amendments to
Section 8282 of the Public Utilities Code proposed by both this bill
and Assembly Bill 2760. It shall only become operative if (1) both
bills are enacted and become effective on or before January 1, 2015,
(2) each bill amends Section 8282 of the Public Utilities Code, and
(3) this bill is enacted after Assembly Bill 2760, in which case
Section 3 of this bill shall not become operative.
  SEC. 9.  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.