BILL ANALYSIS Ó
AB 1678
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 1678 (Gordon) - As Introduced: February 12, 2014
SUBJECT : Utilities' Supplier Diversity Program
SUMMARY : Extends provisions of the utilities' Supplier
Diversity Program to Lesbian, Gay, Bisexual and/or Transgender
(LGBT) business enterprises.
EXISTING LAW :
1)States the California Public Utilities Commission (PUC) has
regulatory authority over public utilities, including
electrical, gas, water, and telephone corporations.
2)Authorizes the PUC to establish rules for all public
utilities, subject to control by the Legislature.
3)States the PUC 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 business enterprises in all
categories, including, but not limited to, renewable energy,
wireless telecommunications, broadband, smart grid, and rail
projects. (Public Utilities Code §8283 (a))
4)Requires the PUC to provide a report to the Legislature on
September 1 of 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 the implementation of the woman, minority, and
disabled veteran business enterprise development programs.
(Public Utilities Code §8283 (e)(1))
5)States the PUC shall, by rule or order, adopt criteria for
verifying and determining the eligibility of woman and
minority business enterprises for procurement contracts
(Public Utilities Codes §8284 (a)(1)).
AB 1678
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FISCAL EFFECT : Unknown.
COMMENTS : According to the author, "the LGBT movement has made
remarkable progress in securing rights enjoyed by their
heterosexual counterparts. Still, LGBT-owned businesses report
discrimination and loss of business as a result of their sexual
orientation.
While we have much more to do in working towards full equality
for all, immediate action can be taken to ensure LGBT
entrepreneurs are afforded the same economic opportunities made
available to other minority-owned business enterprises. This
bill emphasizes the state's role in supporting LGBT
entrepreneurs and their invaluable contributions to our state's
economy."
1)Background : In response to legislation authored by
Assemblymember Gwen Moore (ret.), the
California Public Utilities Commission (PUC) adopted General
Order 156 (GO 156) in 1988 which created Women-Owned and
Minority-Owned Business Enterprise (W/MBE) program to increase
diversity in various utility operations and procurement
processes. GO 156 requires PUC-regulated electrical, gas, and
telephone corporations with gross annual revenues exceeding $25
million to submit annual detailed and verifiable plans that
includes short- and long-term goals and timetables for
increasing W/MBE procurement in all procurement categories.
GO 156 includes rules and regulations for the utilities'
compliance with the W/MBE program, and requires participating
utilities to inform, recruit, and obtain at least 20 percent of
their products and services purchased within a five-year period
from W/MBEs (15 percent from minority-owned businesses and 5
percent from women-owned businesses).
AB 3678 (Moore) Chapter 1259, Statutes of 1986, codified the
broader parameters of GO 156, and requires each electrical, gas,
and telephone corporations (with gross annual revenues exceeding
$25 million) to annually submit a detailed and verifiable plan
for increasing W/MBE procurement in all categories that includes
short- and long-term goals and timetables, and furnish an annual
report. It also required the PUC to establish guidelines for
the plans.
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SB 2398 (Dills) Chapter 516, Statutes of 1990, later included
disabled veteran business enterprises in the classes of entities
eligible under W/MBE programs. A subsequent PUC decision
includes disabled veteran-owned business enterprises (D.
95-12-045) and establishes a 1.5-percent goal for disabled
veteran-owned businesses.
AB 2758 (Bradford) Chapter 475, Statutes of 2010, required cable
corporations (with gross annual revenues exceeding $25 million)
to annually submit a detailed and verifiable plan for increasing
W/M/DVBE procurement. It specifies that renewable energy,
wireless telecommunications, broadband, smart grid and rail
projects should be projects of focus for utility procurement
with M/W/DVBE.
2)Utilities' report card : Reports detailing the utilities' 2013
spending were submitted to the
PUC on March 3, 2014, and show an approximate $500 million
increase in procurement over 2012. Of the more than 30
companies participating in the Supplier Diversity Program, those
doing the most business with diverse firms in 2013 include:
Pacific Gas and Electric Company: $2.3
billion, or 42.1 percent
Southern California Edison: $1.4 billion, or
40.99 percent
AT&T: $1.2 billion, or 51.57 percent
AT&T Wireless: $999 million, or 27.74 percent
Sprint: $546 million, or 41.88 percent
San Diego Gas & Electric: $453 million, or
44.88 percent
Southern California Gas Company: $428 million,
or 45.38 percent
Verizon: $115 million, or 48.84 percent
Comcast $64 million, or 22.35 percent
1)Inclusion of LGBT business enterprises: AB 1678 would extend
provisions of the utilities'
Supplier Diversity Program that is administered by the PUC to
Lesbian, Gay, Bisexual or
Transgender (LGBT) business enterprises with gross annual
revenues exceeding $25 million. According to the National Gay &
Lesbian Chamber of Commerce (NGLCC), there is an estimated 1.4
million LGBT-owned businesses in the United States. The NGLCC
reports less than 10% of LGBT-owned businesses contract with
state or local governments currently, although a vast majority
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of LGBT-owned businesses would like the opportunity. According
to NGLCC, there are currently 96 certified LGBT Business
Enterprises and approximately 60 in the process to be certified.
Pacific Gas & Electric Company (PG&E) leadership decided to
include LGBT-owned business enterprises certified by the NGLCC
to its Supplier Diversity Program at the end of 2012. Last
October, PG&E hosted the first Supplier Diversity business
development workshop for LGBT business owners in collaboration
with the Golden Gate Business Association and the NGLCC. Panel
experts shared details regarding the certification process for
LGBT firms.
2)How to certify LGBT-owned businesses : This bill would require
the PUC to, by rule or
order, adopt criteria for verifying and determining the
eligibility of LGBT business enterprises for procurement
contracts. The NGLCC created an independent third party
certification process which has a similar rigor as the third
party certifications for women and minority owned businesses. To
obtain "LGBT status", certain qualifiers include but are not
limited to:
Certified copy of domestic partnership registration, civil
union certification, or marriage certification.
Proof of domestic partnership health insurance utilization
Evidence of completed or attempted parenting and family
building efforts made by LGBT applicant and same sex partner
Apartment lease, automobile title, financing agreement, or
utility bills with name of applicant and partner listed
Proof of joint property ownership
Physician or attorney letter on official letterhead attesting
to the LGBT status of the applicant
Legal petition for name change (for transgender applicants)
1)Related legislation: AB 2593 (Bradford) requires large
businesses participating in programs
funded through the State's Cap-and-Trade Program to report on
efforts to increase procurement from women, minority, and
disabled veteran enterprises.
REGISTERED SUPPORT / OPPOSITION :
AB 1678
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Support
A Womyn's Touch, LLC
American Federation of State, County, and Municipal Employees
(AFSCME)
Blue Wave Solutions, Inc.
California Communities United Institute
California Small Business Association
Desert Business Association
Envirolution, Inc.
Golden Gate Business Association (GGBA)
Green Viking Consulting, LLC
Individual Letters (3)
InSight Consulting Partners, Inc.
Landis Communications Inc.
Long Beach Gay & Lesbian Chamber of Commerce (LBGLCC)
Los Angeles Gay & Lesbian Chamber of Commerce (LAGLCC)
National Gay & Lesbian Chamber of Commerce (NGLCC)
OutSmart Office Solutions, Inc.
OutThink Partners
Rainbow Chamber of Commerce Silicon Valley (RCCSV)
Riviera Advisors, Inc.
Sacramento Rainbow Chamber of Commerce
Small Business California
Southern California Edison
Vaughan Benz
Opposition
None on file.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083