BILL ANALYSIS
AB 1918
Page 1
ASSEMBLY THIRD READING
AB 1918 (Davis)
As Amended April 5, 2010
Majority vote
ECONOMIC DEVELOPMENT 4-2 APPROPRIATIONS 11-5
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|Ayes:|V. Manuel Perez, Beall, |Ayes:|Fuentes, Ammiano, |
| |Block, Salas | |Bradford, Coto, Davis, |
| | | |Hill, Hall, Skinner, |
| | | |Solorio, Torlakson, |
| | | |Torrico |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Logue, Bill Berryhill |Nays:|Conway, Harkey, Miller, |
| | | |Nielsen, Norby |
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SUMMARY : Requires the Public Utilities Commission (PUC) to
require specified wireless telecommunications service providers
to annually report on their progress in increasing contracting
with women- and minority-owned businesses and disabled veteran
business enterprises (DVBEs). Specifically, this bill :
1)Requires the PUC to require wireless telecommunications
service providers, with gross annual revenues exceeding $25
million and their commission-regulated subsidiaries and
affiliates, to adopt a detailed and verifiable plan for
increasing women- and minority-owned businesses and DVBEs
contract participation rates and to report annually on its
implementation.
2)Adds wireless telecommunications service providers to the list
of business entities that can be prosecuted for false
representation of a women- and minority-owned business or a
DVBE in the procurement of a contract.
EXISTING LAW :
1)Requires the PUC to require each electrical, gas, water, and
telephone corporation with revenues over $25 million and their
commission-regulated subsidiaries and affiliates to submit
annually a detailed and verifiable plan for increasing women-
AB 1918
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and minority-owned business and DVBE procurement in all
categories.
2)Requires the PUC to establish guidelines for the annual women-
and minority-owned business and DVBE procurement plans.
3)Requires the PUC to adopt criteria for determining and
verifying the eligibility of a women- and minority-owned
business and DVBE for procurement contracts.
4)Encourages 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-
and minority-owned business and DVBE procurement in all
categories.
5)Establishes as a crime for false representation of a women,
minority, or DVBE in the procurement of a contract, punishable
by a fine of $5,000, or by imprisonment in the county jail or
state prison, not to exceed one year, or by both fine and
imprisonment. In the case of a corporation, the fine or
imprisonment shall be imposed on every director, officer, or
agent for the false statements.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, implementation of the bill would cause the state to
incur minor and absorbable costs.
COMMENTS :
1)PUC General Order 156: In 1986, the PUC adopted General Order
156 (GO 156), which created the Women-owned and Minority-owned
Business Enterprise program to increase diversity in various
utility operations and procurement processes. GO 156 requires
the PUC-regulated electrical, gas, and telephone corporations
with gross annual revenues exceeding $25 million to submit
annual reports on their progress in meeting the short- and
long-term goals and timelines set in their diversity plan for
increasing the participation of women- and minority-owned
businesses in all procurement categories.
GO 156 includes rules and regulations for the utilities'
compliance with the women- and minority-owned business
program, and it requires participating utilities to inform,
AB 1918
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recruit, and obtain at least 20% of their products and
services purchased within a five-year period from women- and
minority-owned businesses. The targets are 15% for
minority-owned businesses and 5% for women-owned businesses.
In 1990, DVBEs were included in GO 156 in SB 2398 (Dills)
Chapter 516, Statutes of 1990. In implementing the bill the
PUC adopted (D. 95-12-045) which set a 1.5% goal for DVBEs.
2)Wireless service providers: The chart below describes the
women- and minority-owned business and DVBE contract
participation rates for three wireless telecommunication
providers in 2008 and 2009.
-------------------------------------------------
| Women and Minority Owned Business and DVBE |
| Contract Participation Rates |
-------------------------------------------------
|------------+-----------+-----------+------------|
| Service | Women, | | |
| Provider | Minority, | 2008 | 2009 |
| | or DVBE | | |
|------------+-----------+-----------+------------|
|AT&T |Women | 1.31% |0.62% |
|Mobility | | | |
|------------+-----------+-----------+------------|
| |Minority | 4.33% | 6.14% |
|------------+-----------+-----------+------------|
| |DVBE | 0.01% | 0.003% |
|------------+-----------+-----------+------------|
| | | | |
| |TOTAL | 5.65% | 6.77% |
|------------+-----------+-----------+------------|
|Verizon |Women | 9.11% | 2.75% |
|Wireless | | | |
|------------+-----------+-----------+------------|
| |Minority | 3.43% | 3.43% |
|------------+-----------+-----------+------------|
| |DVBE | 0.18% | 0.11% |
|------------+-----------+-----------+------------|
| | | | |
| |TOTAL | 17.5% | 6.29% |
|------------+-----------+-----------+------------|
AB 1918
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|Sprint |Women | | 4.90% |
|------------+-----------+-----------+------------|
| |Minority | | 8.49% |
|------------+-----------+-----------+------------|
| |DVBE | | 0.55% |
|------------+-----------+-----------+------------|
| |TOTAL | | |
| | | | 13.93% |
-------------------------------------------------
-------------------------------------------------
|Source: According to author information for AT&T |
|and Verizon Wireless and Sprint was excerpted |
|from the yearly reports to the CPUC. |
| |
-------------------------------------------------
As the chart indicates, the largest percentage of contracts
went to minority business owners (8.49%). Women and DVBE
contracts were awarded at a much smaller percentage rate
(3.43% and 0.18% respectively). In 2008 Verizon Wireless was
the only one to exceed the 5% goal for women-owned businesses
with 0.11% of contracts being awarded. However, all three
companies did not meet their DVBE goal. In all cases, DVBEs
were awarded contracts at less than 1% in each year reported.
Concerns have been raised that meeting the procurement
participation goals may be difficult. AB 1918 encourages this
challenge and requires the PUC to assist in designing an
outreach program to assist the wireless telecommunication
providers in reaching their goal. In addition, organizations
such as the California Hispanic Chamber of Commerce have
established their own outreach programs for corporate
contracts with small business.
4) Women-owned businesses: While the number of women on
corporate boards and in upper management of Fortune 500
companies significantly lags behind women's overall
representation in the workforce, women-owned businesses are an
increasingly important segment of the small business
community. Below are some facts on women-owned businesses
from the Center for Women's Business Research (Center).
a) As of 2004, there are an estimated 1,249,343 privately
AB 1918
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held, women-owned firms in California, accounting for
48.6% of all privately held firms in the state;
b) Between 1997 and 2004, the Center estimates that the
number of privately held, women-owned firms in California
increased by 7.1%, employment grew by 31%, and sales
increased by 47.2%;
c) Among the 50 states and Washington, D.C., California
ranked first in the number of privately held, women-owned
firms in 2004, first in employment, and first in sales;
d) California ranked 47th in the growth of privately
held, women-owned firms between 1997 and 2004, 19th in
employment growth, and 24th in sales growth among the 50
states and Washington, D.C.;
e) Woman-owned firms, particularly among ethnic women,
increased at a rate five times greater than all firms.
The rate of African-American women-owned firms increased
by 12% annually, as compared to 2% for all firms and just
under 4% for all woman-owned firms; and,
f) Although women own approximately 40% of all businesses
in the U.S., they receive less than 5% of all venture
capital.
Analysis Prepared by : Mercedes Flores / J., E.D. & E. / (916)
319-2090
FN: 0004352