BILL ANALYSIS �
AB 2593
Page 1
GOVERNOR'S VETO
AB 2593 (Bradford)
As Amended August 21, 2014
2/3 vote
-----------------------------------------------------------------
|ASSEMBLY: |53-22|(May 28, 2014) |SENATE: |21-12|(August 25, |
| | | | | |2014) |
-----------------------------------------------------------------
-----------------------------------------------------------------
|ASSEMBLY: |54-22|(August 27, | | | |
| | |2014) | | | |
-----------------------------------------------------------------
Original Committee Reference: U. & C.
SUMMARY : Requires large businesses participating in programs
administered by the Air Resources Board (ARB) and funded via
Cap-and-Trade proceeds to report annually to the ARB 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 (GHG) Reduction Fund.
2)Require business enterprises to submit reports to the ARB in an
electronic format determined by the ARB, and requires the ARB to
post the reports on its Internet Web site.
3)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.
The Senate amendments:
1)Require business enterprises to submit reports to the ARB in an
electronic format determined by the ARB.
AB 2593
Page 2
2)Require ARB to post the reports on its Internet Web site.
3)Clarify that this bill does not apply to governmental agencies
that are not the ARB.
FISCAL EFFECT : According to the Senate Appropriations Committee,
annual costs ranging from $150,000 to $300,000 from the General Fun
to the ARB to collect the required information.
COMMENTS :
1)Purpose. According to the author, women and minority-owned
businesses participating 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.
2)Cap-and-Trade Revenues. The California Global Warming Solutions
Act of 2006 [AB 32 (N��ez), Chapter 488, Statutes of 2006]
requires ARB to adopt a statewide GHG emissions limit equivalent
to 1990 levels by 2020, and adopt regulations, including
market-based compliance mechanisms, to achieve maximum
technologically feasible and cost-effective GHG emission
reductions.
All moneys collected by ARB from the auction or sale of allowances
pursuant to a market-based compliance mechanism (i.e., the
cap-and-trade program adopted by ARB under AB 32) are deposited
into the GHG Reduction Fund and are available for appropriation by
the Legislature. The local and regional agencies defined in this
bill are eligible for funding under this program.
For the 2014-15 budget, the Governor has proposed spending $850
million on a variety of programs, including $100 million for
grants to local governments to support implementation of
AB 2593
Page 3
Sustainable Communities Strategies, $50 million for inter-city
rail grants, $30 million for organic waste diversion
infrastructure, and $20 million for water and energy saving
projects.
3)Public Utilities Commission Supplier Diversity Reporting. In
response to legislation authored by former Assembly Member Gwen
Moore, 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% 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).
4)California Energy Commission (CEC) Diversity Reporting. In
response to AB 340 (Bradford) of 2009, which was vetoed by the
Governor, the CEC is voluntarily implementing a program to report
on diversity within its Electricity Program Investment Charge
(EPIC) research and development program.
GOVERNOR'S VETO MESSAGE :
This bill would require a business enterprise with gross
annual revenue exceeding $25 million, participating in a
program administered by the Air Resources Board that is
funded from the from the Greenhouse Gas Reduction Fund, to
report annually to the Air Board regarding supplier
diversity procurement.
Without question, I support the general goal, but this
bill establishes a burdensome and expensive requirement
for businesses with no clear way to ensure supplier
diversity would actually increase. Furthermore, State
AB 2593
Page 4
agencies are already taking action to report on diversity
procurement and currently report to both the State and
Federal governments on supplier diversity procurement
contracts.
Analysis Prepared by : Brandon Gaytan / U. & C. / (916)
319-2083 FN:
0005630