BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                        AB 865|
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                                   THIRD READING 

          Bill No:  AB 865
          Author:   Alejo (D), et al.
          Amended:  9/1/15 in Senate
          Vote:     21  

           SENATE ENERGY, U. & C. COMMITTEE:  9-2, 7/13/15
           AYES:  Hueso, Cannella, Hertzberg, Hill, Lara, Leyva, McGuire,  
            Pavley, Wolk
           NOES:  Fuller, Morrell

           AYES:  Lara, Beall, Hill, Leyva, Mendoza
           NOES:  Bates, Nielsen

           ASSEMBLY FLOOR:  59-16, 6/2/15 - See last page for vote

           SUBJECT:   State Energy Resources Conservation and Development  
                     Commission: contracts, grants, and loans: diversity

          SOURCE:    The Greenlining Institute
          DIGEST:   This bill requires the California Energy Commission  
          (CEC) to develop an outreach program to inform women,  
          minorities, disabled veterans, and lesbian, gay, bisexual, and  
          transgender (LGBT) individuals of CEC funding programs and  
          procurement opportunities.  

          Existing law:

          1)Establishes the State Energy Resources Conservation and  


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            Development Commission, otherwise known as the CEC.  (Public  
            Resources Code §25000 et seq.)

          2)Requires the CEC to administer various grants and loan  
            programs.  (Public Resources Code §25412.5)

          3)Directs the CEC to oversee much of the state's investments in  
            clean energy research, clean transportation, and energy  
            efficiency.  (Public Resources Code §§§25007, 25008, 25400)

          4)Declares that is the policy of California to aid in the  
            interests of women, minority, disabled veteran, and LGBT  
            business enterprises, encourages greater economic opportunity  
            for these groups and promotes competition among utilities to  
            procure contracts with diverse businesses.  (Public Utilities  
            Code §8281)

          This bill:

          1)Requires the CEC to develop and implement an outreach program  
            to inform potential applicants of CEC loans, grants and  
            contracts (including women, minority, disabled veteran, and  
            LGBT business enterprises).

          2)Requires that a component of the outreach program include a  
            process for tracking the diversity of contractors, loan and  
            grant recipients. 

          3)Requires the outreach program to include a strategy to inform  
            and encourage participation of certified women, minority,  
            disabled veteran, and LGBT business enterprises about CEC  
            workshops, trainings, and funding opportunities, and to  
            consider including these enterprises in capacity building  

          4)Provides that the CEC may consider establishing a Diversity  
            Task Force to consider and make recommendations about  
            diversity in the energy industry, including diversity of  
            corporate governing boards and procurement from diverse  
            businesses, and addressing and promoting local and targeted  



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          Diversity at the California Public Utilities Commission (CPUC).   
          Beginning in 1986, the Legislature enacted a series of statutes,  
          resulting in the CPUC adopting General Order (GO) 156, which  
          established the Supplier Diversity Program for the purpose of  
          encouraging greater participation in utility contracts by women  
          and minority-owned businesses. Disabled veteran-owned business  
          enterprises were added in 1990, and in 2014, LGBT business  
          enterprises were added through statute. 

          GO 156 currently applies to regulated utilities including  
          electrical, gas, water, wireless telecommunications service  
          providers, and telephone corporations with gross annual revenues  
          over $25 million including CPUC-regulated subsidiaries and  
          affiliates.  These regulated entities must participate in the  
          Supplier Diversity Program.  Regulated entities are required to  
          annually submit a detailed and verifiable plan, with goals and  
          timetables, for increasing participation from these  
          aforementioned demographic groups in all categories of  
          procurement, including technology, equipment, supplies,  
          services, materials, and construction.  Although there is no  
          penalty for failure of a utility to meet its goals, each utility  
          is required to report annually on its progress.  The CPUC, in  
          turn, is required to make an annual progress report to the  

          Showing signs of success.  In March 2014, the CPUC reported that  
          companies participating in the Supplier Diversity Program  
          achieved a new record in 2013, procuring approximately $8.5  
          billion in goods and services from qualified diverse suppliers,  
          an increase of about $500 million over 2012 procurement.   
          According to the CPUC, more than 30 companies continue to  
          participate in the program, including Pacific Gas and Electric,  
          Southern California Edison, AT&T and several others. 

          CEC resolution.  On April 8, 2015, the CEC adopted a resolution  
          to implement a policy to reflect the CEC's commitment to  
          diversity outreach for all its programs, including grants, loans  
          and procurement opportunities.  The resolution notes the unique  
          ability of the CEC to promote diversity by providing  
          opportunities for increased participation in CEC programs of  
          small businesses and women, disabled veteran, minority, and LGBT  
          owned businesses.  AB 865 further bolsters the CEC's efforts by  
          providing more specificity regarding how the CEC will achieve  
          and measure its commitment to support more diversity. 


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          Prior Legislation
          AB 2593 (Bradford, 2014) would have required a business  
          enterprise with gross annual revenues exceeding $25 million  
          participating in a program administered by the California Air  
          Resources Board to increase procurement from women, minority,  
          and disabled veteran business enterprises.  The bill was vetoed  
          by the Governor. 

          AB 1678 (Gordon, Chapter 633, Statutes of 2014) extended  
          provisions of the CPUC's Supplier Diversity Program to LGBT  
          business enterprises.                             

          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  
          procurement from diverse businesses.  It specified that  
          renewable energy, wireless telecommunications, broadband, smart  
          grid and rail projects should be projects of focus for utility  
          procurement with diverse businesses. 

          AB 873 (Davis, Chapter 316, Statutes of 2008) required each  
          water corporation with 10,000 or more service connections to  
          submit annual plans for increasing procurement from women- and  
          minority-owned businesses and disabled veteran business  
          enterprises to encourage each electrical, gas, water, and  
          telephone corporation that is not required to submit a plan  
          under current law to voluntarily adopt a plan for increasing  
          women, minority, and disabled veteran business enterprises  
          procurement in all categories. 

          AB 3678 (Moore, Chapter 1259, Statutes of 1986) codified the  
          broader parameters of GO 156, and required each electrical, gas,  
          and telephone corporations, with gross annual revenues exceeding  
          $25 million, to annually submit a detailed and verifiable plan  
          for increasing diverse business procurement in all categories  
          that includes short- and long-term goals and timetables, and  
          furnish an annual report.  

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No            

          According to the Senate Appropriations Committee, up to $150,000  


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          annually to the Energy Resources Program Account (General Fund)  
          to the CEC for implementation its outreach program.

          SUPPORT:   (Verified8/31/15)

          The Greenlining Institute (source)
          American GI Forum
          Asian Business Association
          Asian Business Association - Inland Empire
          Asian Pacific Environmental Network
          California Black Chamber of Commerce
          City of Oakland
          Coalition for Clean Air
          Environment California
          Environmental Defense Fund
          Equality California
          Green Technical Education & Employment
          National Latina Business Women Association
          Natural Resources Defense Council
          Small Business California
          Small Business Majority
          West Angeles Community Development Corporation

          OPPOSITION:   (Verified8/31/15)

          None received

          ARGUMENTS IN SUPPORT:  The Greenlining Institute, the sponsor of  
          the bill, states:  "The CEC provides almost $800 million a year  
          in funding for clean energy projects, and there are currently no  
          policies in place to promote diversity in these procurement  
          pipelines.  Small and ethnic businesses must be part of the  
          clean energy economy if California is to meet its economic and  
          environmental goals.  This is because entrepreneurship is key to  
          the American Dream, and if we are to build a healthy state  
          economy, it is vitally important that California's diverse  
          communities have access to entrepreneurial opportunities.


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          "This bill aims to increase the rate of entrepreneurship  
          opportunities among minorities, women, LGBT-identified  
          individuals, and disabled veterans.  In doing so, this bill  
          recognizes the demographic shifts of the California marketplace  
          and helps to nurture the new and next generation of energy  
          technology leaders.

          "AB 865 will help to ensure that the growing clean energy  
          economy is transparent, competitive, diverse and inclusive of  
          all Californians."

          ASSEMBLY FLOOR:  59-16, 6/2/15
          AYES:  Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown,  
            Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,  
            Dababneh, Daly, Dodd, Frazier, Cristina Garcia, Eduardo  
            Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger  
            Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine,  
            Linder, Lopez, Low, Maienschein, Mathis, McCarty, Medina,  
            Mullin, Nazarian, O'Donnell, Olsen, Perea, Quirk, Rendon,  
            Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,  
            Thurmond, Ting, Waldron, Weber, Williams, Wood, Atkins
          NOES:  Travis Allen, Bigelow, Brough, Beth Gaines, Gallagher,  
            Grove, Hadley, Harper, Jones, Kim, Melendez, Obernolte,  
            Patterson, Steinorth, Wagner, Wilk
          NO VOTE RECORDED:  Chang, Chávez, Dahle, Eggman, Mayes

          Prepared by:Nidia Bautista / E., U., & C. / (916) 651-4107
          9/1/15 21:30:33

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