BILL ANALYSIS �
AB 2593
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Date of Hearing: April 7, 2014
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Steven Bradford, Chair
AB 2593 (Bradford) - As Introduced: February 21, 2014
SUBJECT : Greenhouse gases: diversity reporting
SUMMARY : This bill 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. Specifically, this bill :
1)Applies to business enterprises with gross annual revenues
exceeding $25 million, funded in whole or in part from the
Greenhouse Gas Reduction Fund.
2)Defines "control", "operate", "women business enterprise", and
"minority business enterprise" consistent with similar
provisions already in statute that are used in a similar
program to report on procurement efforts by regulated
utilities.
EXISTING LAW
1)Defines woman-, minority-, and disabled veteran enterprises.
(Government Code 8790.81)
2)Requires the California Public Utilities Commission (PUC) to
require electrical, gas, water, wireless telecommunication
providers, and telephone corporations with gross annual
revenues to submit annual plans for increasing procurement
from diverse suppliers and to implement an outreach program to
women-, minority-, and disabled veteran enterprises for
procurement contracts. (Public Utilities Code 8283 and 8284).
3)Authorizes the California Air Resources Board (ARB) to
implement regulations to reduce Greenhouse gas emissions and
establish a market based declining aggregate emission limit
(known as cap-and-trade). (Health and Safety Code 38550)
4)Allows the PUC to allocate up to 15 percent of the revenues,
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received by an electrical corporation as a result of the
direct allocation of greenhouse gas allowances to electric
utilities pursuant including any accrued interest, for clean
energy and energy efficiency projects established pursuant to
statute that are administered by the electrical corporation
and that are not otherwise funded by another funding source.
(Public Utilities Code 748.5)
FISCAL EFFECT : Uknown
COMMENTS :
1)Author's statement: According to the author, women and
minority-owned business participation in programs to reduce
greenhouse gas emissions should factor in inclusion of diverse
sectors within California's economy to ensure that access to
new job opportunities are available to all Californians. In
California, women and minority-owned businesses represent the
bulk of small businesses. Since diverse business owners are
more likely to hire diverse workers, the success of women-,
minority-, and disabled veteran owned businesses translates
into jobs for women, minorities, and disabled veterans.
1)Supplier Diversity . 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).
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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.
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.
1)Cap and Trade Revenues . Between November 2012 and November
2013, the Air Resources Board conducted 5 auctions that
generated a total of $532 million in state revenue. The
2013-14 Budget Act included a provision to loan $500 million
of this amount to the State's General Fund and allocated
$578,000 to the Office of Environmental Health and Hazard
Assessment for the development of a method to identify
disadvantaged communities. A portion of the Cap and Trade
Regulation Revenues are being returned to California
electricity ratepayers, beginning in 2014. The remaining
Cap-and-Trade funds are likely to be allocated to various
programs. For example, the Governor's 2014-15 proposed budget
appropriates $850 million in auction revenue to various state
programs, including programs related to sustainable
communities, clean transportation, energy efficiency, natural
resources, and waste diversion.
To the extent that these funds result in contracts with
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businesses with revenues in excess of $25 million, it is
currently unknown whether these businesses will procure from
women-, minority-, or disabled-veteran enterprises. An annual
reporting requirement will help provide a baseline of
information regarding the extent to which programs funded in
whole or in part through the Cap-and-Trade program is
including diversity.
2)Related Legislation . AB 1678 (Gordon, 2014) extends an
existing utility supplier diversity program to Lesbian, Gay,
Bisexual, and/or Transgender (LGBT) business enterprises.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Brandon Gaytan / U. & C. / (916)
319-2083