BILL ANALYSIS Ó AB 1678 Page 1 ASSEMBLY THIRD READING AB 1678 (Gordon) As Amended May 1, 2014 Majority vote UTILITIES & COMMERCE 10-3 APPROPRIATIONS 12-5 ----------------------------------------------------------------- |Ayes:|Bradford, Bonilla, |Ayes:|Gatto, Bocanegra, | | |Buchanan, Fong, Garcia, | |Bradford, | | |Roger Hernández, Mullin | |Ian Calderon, Campos, | | |Quirk, Rendon, Skinner | |Eggman, Gomez, Holden, | | | | |Pan, Quirk, | | | | |Ridley-Thomas, Weber | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Dahle, Beth Gaines, Jones |Nays:|Bigelow, Donnelly, Jones, | | | | |Linder, Wagner | | | | | | ----------------------------------------------------------------- SUMMARY : Extends provisions of the utilities' Supplier Diversity Program to Lesbian, Gay, Bisexual and/or Transgender (LGBT) business enterprises. FISCAL EFFECT : According to the Assembly Appropriations Committee, minor, absorbable costs for the California Public Utilities Commission (PUC) to expand the Supplier Diversity Program to include LGBT business enterprises. 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." AB 1678 Page 2 1)Background: In response to legislation authored by former Assembly Member Gwen Moore, the PUC adopted General Order 156 (GO 156) in 1988 which created Women 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% of their products and services purchased within a five-year period from W/MBEs (15% from minority-owned businesses and 5% from women-owned businesses). 2)Inclusion of LGBT business enterprises: This bill would extend provisions of the utilities' Supplier Diversity Program that is administered by the PUC to 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 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. 3)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 AB 1678 Page 3 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: a) Certified copy of domestic partnership registration, civil union certification, or marriage certification. b) Proof of domestic partnership health insurance utilization. c) Evidence of completed or attempted parenting and family building efforts made by LGBT applicant and same sex partner. d) Apartment lease, automobile title, financing agreement, or utility bills with name of applicant and partner listed. e) Proof of joint property ownership. f) Physician or attorney letter on official letterhead attesting to the LGBT status of the applicant. g) Legal petition for name change (for transgender applicants). 4)Related legislation: AB 2593 (Bradford) of the current legislative session, 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. This bill is pending in the Assembly Appropriations Committee. Analysis Prepared by : DaVina Flemings / U. & C. / (916) 319-2083 FN: 0003258 AB 1678 Page 4