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AB-1693 Public utilities: contracting.(2019-2020)

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Date Published: 04/09/2019 09:00 PM
AB1693:v98#DOCUMENT

Amended  IN  Assembly  April 09, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1693


Introduced by Assembly Member Cervantes

February 22, 2019


An act to amend Section 8282 Sections 910.3, 8281, 8282, 8283, 8284, 8285, and 8286 of the Public Utilities Code, relating to public utilities.


LEGISLATIVE COUNSEL'S DIGEST


AB 1693, as amended, Cervantes. Public utilities: contracting.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities. Existing law requires the commission to require every electrical, gas, water, wireless telecommunications service provider, and telephone corporation with annual gross revenues exceeding $25,000,000, and their regulated subsidiaries and affiliates, to annually submit a detailed and verifiable plan for increasing procurement from women, minority, disabled veteran, and LGBT business enterprises, as defined, in all categories, including, but not limited to, renewable energy, wireless telecommunications, broadband, smart grid, and rail projects. The commission, by its rulemaking authority, has adopted General Order 156, applicable to certain electrical, gas, and telephone corporations, to effectuate these and related requirements. Existing law requires the commission, by September 1 of each year, to report certain information relative to those activities undertaken in the implementation of those plans.
This bill would revise the definitions of replace the term “LGBT business enterprise,” “minority business enterprise,” and “women business enterprise” for those purposes. Those revised definitions would require, for a business enterprise to qualify as one of those categories of business enterprises, (1) it have its principal office located in California, (2) its officers all be domiciled in California, (3) either it is at least 51% owned by members of the applicable demographic group or, in the case of any publicly owned business, at least 51% of the business enterprise’s stock is owned by members of the group, and (4) its management and daily business operations are controlled by one or more members of the group who are also owners. enterprise” with “LGBTQ business enterprise” for those purposes, and would make conforming changes. The bill would require the report to also include information that differentiates the outreach, contracting, and other activities implementing those plans that are directed towards business enterprises that have at least a majority of their workforce in California from those activities that are directed towards out-of-state business enterprises, business enterprises that do not have at least a majority of their workforce within California, and business enterprises for which information is not readily accessible.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of the commission’s order or decision implementing the bill’s requirements would be a crime, the bill would impose a state-mandated local program.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

The people of the State of California do enact as follows:


SECTION 1.

 The Legislature finds and declares all of the following:
(a) The purpose of the Utilities Supplier Diversity Program, as stated in subdivision (a) of Section 8281 of Public Utilities Code, is to aid the interests of women, minority, disabled veteran, and LGBT business enterprises in order to preserve reasonable and just prices and a free competitive enterprise, to ensure that a fair proportion of the total purchases and contracts or subcontracts for commodities, supplies, technology, property, and services for regulated public utilities are awarded to these business enterprises, and to maintain and strengthen the overall economy of the state.
(b) The Legislature has further declared its finding, as expressed in subparagraph (A) of paragraph (1) of subdivision (b) of Section 8281 of the Public Utilities Code, that “[t]he opportunity for full participation in our free enterprise system by women, minority, disabled veteran, and LGBT business enterprises is essential if this state is to attain social and economic equality for those businesses and improve the functioning of the state economy.”
(c) Given that California has the largest economy of any state in the United States of America and that economy is larger than all but four countries in the world, there is a significant range of businesses owned and operated by women and minority, disabled veteran, and LGBT individuals in the state.
(d) To the extent that ratepayer moneys are used to contract with businesses outside of California, the purpose of the Utility Supplier Diversity Program is diluted.
(e) To the extent that regulated public utilities use California ratepayer moneys to fund contracts with business that do not have a substantial presence in California, ratepayer moneys are financing the operations and expansion of out-of-state businesses that may directly compete with California businesses.
(f) To the extent that regulated public utilities use California ratepayer moneys to fund contracts with businesses that do not have a substantial presence in California, these moneys are strengthening the economies of, and paying taxes to, other states that directly compete with California to attract manufacturing jobs, Fortune 500 companies, direct foreign investment, and foreign-owned enterprises.
(g) It is therefore appropriate and necessary that the Utility Supplier Diversity Program, administered by the California Public Utilities Commission, have data, consistent with its foundational purpose, that clearly differentiates contract awards to business enterprises with a majority of workers in California from those businesses that primarily operate out-of-state or out-of-the country.

SEC. 2.

 Section 910.3 of the Public Utilities Code is amended to read:

910.3.
 (a) The commission shall provide a report to the Legislature on September 1 of each year, on the progress of activities undertaken by each electrical, gas, water, wireless telecommunications service provider, and telephone corporation with gross annual revenues exceeding twenty-five million dollars ($25,000,000), in the implementation of women, minority, disabled veteran, and LGBT LBGTQ business enterprise development programs pursuant to Article 5 (commencing with Section 8281) of Chapter 7 of Division 4. The report shall include information about which procurements are made with women, minority, disabled veteran, and LGBT LGBTQ business enterprises with at least a majority of the enterprise’s workforce in California, to the extent that information is readily accessible. Beginning with the report provided in 2021, the report shall include information that differentiates outreach, contracting, and other activities implementing programs established pursuant to Article 5 (commencing with Section 8281) of Chapter 7 of Division 4 that are directed towards business enterprises that have at least a majority of their workforce in California from those activities that are directed towards out-of-state business enterprises, business enterprises that do not have at least a majority of their workforce within California, and business enterprises for which information is not readily accessible. The commission shall recommend a program for carrying out the policy declared in Article 5 (commencing with Section 8281) of Chapter 7 of Division 4, together with recommendations for legislation that it deems necessary or desirable to further that policy. The commission shall make the report available on its Internet Web site. internet website.
(b) In regard to disabled veteran business enterprises, the commission shall ensure that the programs and legislation recommended pursuant to subdivision (a) are consistent with the disabled veteran business enterprise certification eligibility requirements imposed by the Department of General Services and that the recommendations include only those disabled veteran business enterprises certified by the Department of General Services.
(c) The commission shall include the information about LGBT LGBTQ business enterprises required by subdivision (a) beginning with the report due on September 1, 2016. 2020.

SEC. 3.

 Section 8281 of the Public Utilities Code is amended to read:

8281.
 (a) The Legislature hereby finds and declares that the essence of the American economic system of private enterprise is free, open, and transparent competition. Only through free, open, and transparent competition can free markets, reasonable and just prices, free entry into business, and opportunities for the expression and growth of personal initiative and individual judgment be ensured. The preservation and expansion of that competition are basic to the economic well-being of this state and that well-being cannot be realized unless the actual and potential capacity of women, minority, disabled veteran, and LGBT LGBTQ business enterprises is encouraged and developed. Therefore, it is the declared policy of the state to aid the interests of women, minority, disabled veteran, and LGBT LGBTQ business enterprises in order to preserve reasonable and just prices and a free competitive enterprise, to ensure that a fair proportion of the total purchases and contracts or subcontracts for commodities, supplies, technology, property, and services for regulated public utilities, including, but not limited to, renewable energy, wireless telecommunications, broadband, smart grid, and rail projects, are awarded to women, minority, disabled veteran, and LGBT LGBTQ business enterprises, and to maintain and strengthen the overall economy of the state.
(b) (1) The Legislature finds all of the following:
(A) The opportunity for full participation in our free enterprise system by women, minority, disabled veteran, and LGBT LGBTQ business enterprises is essential if this state is to attain social and economic equality for those businesses and improve the functioning of the state economy.
(B) Public agencies and some regulated utilities that have established short- and long-range women, minority, disabled veteran, and LGBT LGBTQ business enterprise goals are awarding 30 percent or more of their contracts to these business enterprises.
(C) Women, minority, disabled veteran, and LGBT LGBTQ business enterprises have traditionally received less than a proportionate share of regulated public utility procurement contracts, especially in renewable energy, wireless telecommunications, broadband, smart grid, and rail projects.
(D) It is in the state’s interest to expeditiously improve the economically disadvantaged position of women, minority, disabled veteran, and LGBT LGBTQ business enterprises.
(E) The position of these businesses can be substantially improved by providing long-range substantial goals for procurement by regulated public utilities of technology, equipment, supplies, services, materials, and construction work, especially in renewable energy, wireless telecommunications, broadband, smart grid, and rail projects, from women, minority, disabled veteran, and LGBT LGBTQ businesses.
(F) That procurement also benefits the regulated public utilities and consumers of the state by encouraging the expansion of the number of suppliers for procurements, thereby encouraging competition among the suppliers and promoting economic efficiency in the process.
(G) That the long-term economic viability of this state depends substantially upon the ability of renewable energy, wireless telecommunications, broadband, smart grid, and rail projects to incorporate women, minority, disabled veteran, and LGBT LGBTQ businesses into those projects.
(2) It is the purpose of this article to do all of the following:
(A) Encourage greater economic opportunity for women, minority, disabled veteran, and LGBT LGBTQ business enterprises.
(B) Promote competition among regulated public utility suppliers in order to enhance economic efficiency in the procurement of electrical, gas, water, wireless telecommunications service provider, and telephone corporation contracts and contracts of their commission-regulated subsidiaries and affiliates.
(C) Clarify and expand the program for the procurement by regulated public utilities of technology, equipment, supplies, services, materials, and construction work from women, minority, disabled veteran, and LGBT LGBTQ business enterprises.

SEC. 4.

 Section 8282 of the Public Utilities Code is amended to read:

8282.
 For the purposes of this article, the following definitions apply:
(a) “Control” means exercising the power to make policy decisions.
(b) “Disabled veteran business enterprise” has the same meaning as defined in Section 999 of the Military and Veterans Code.
(c) “LGBT “LGBTQ business enterprise” means a business enterprise that is at least 51-percent owned by a lesbian, gay, bisexual, or transgender transgender, or queer person or persons; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more lesbian, gay, bisexual, or transgender transgender, or queer persons; and whose management and daily business operations are controlled by one or more of those individuals.
(d) “Minority business enterprise” means a business enterprise that is at least 51-percent owned by a minority group or groups; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more minority groups, and whose management and daily business operations are controlled by one or more of those individuals. The contracting utility shall presume that minority includes African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans.
(e) To “operate” means to be actively involved in the day-to-day management. It is not enough to merely be an officer or director.
(f) “Renewable energy project” means a project for the development and operation of an eligible renewable energy resource meeting the requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1).
(g) “Women business enterprise” means a business enterprise that is at least 51-percent owned by a woman or women; or, in the case of any publicly owned business, at least 51 percent of the stock of which is owned by one or more women; and whose management and daily business operations are controlled by one or more of those individuals.

SEC. 5.

 Section 8283 of the Public Utilities Code is amended to read:

8283.
 (a) The commission shall require each electrical, gas, water, wireless telecommunications service provider, and telephone corporation with gross annual revenues exceeding twenty-five million dollars ($25,000,000) and their commission-regulated subsidiaries and affiliates, to submit annually, a detailed and verifiable plan for increasing procurement from women, minority, disabled veteran, and LGBT LGBTQ business enterprises in all categories, including, but not limited to, renewable energy, wireless telecommunications, broadband, smart grid, and rail projects.
(b) These annual plans shall include short- and long-term goals and timetables, but not quotas, and shall include methods for encouraging both prime contractors and grantees to engage women, minority, disabled veteran, and LGBT LGBTQ business enterprises in subcontracts in all categories that provide subcontracting opportunities, including, but not limited to, renewable energy, wireless telecommunications, broadband, smart grid, and rail projects.
(c) The commission shall establish guidelines for all electrical, gas, water, wireless telecommunications service providers, and telephone corporations with gross annual revenues exceeding twenty-five million dollars ($25,000,000) and their commission-regulated subsidiaries and affiliates, to be utilized in establishing programs pursuant to this article.
(d) Every electrical, gas, water, wireless telecommunications service provider, and telephone corporation with gross annual revenues exceeding twenty-five million dollars ($25,000,000) shall furnish an annual report to the commission regarding the implementation of programs established pursuant to this article in a form that the commission shall require, and at the time that the commission shall annually designate. The report shall include the information about LGBT LGBTQ business enterprises beginning with the 2016 report.
(e) (1) The Legislature declares that each electrical, gas, water, mobile telephony service provider, and telephone corporation that is not required to submit a plan pursuant to subdivision (a) is encouraged to voluntarily adopt a plan for increasing women, minority, disabled veteran, and LGBT LGBTQ business enterprise procurement in all categories.
(2) The Legislature declares that each cable television corporation and direct broadcast satellite provider is encouraged to voluntarily adopt a plan for increasing women, minority, disabled veteran, and LGBT LGBTQ business enterprise procurement and to voluntarily report activity in this area to the Legislature on an annual basis.

SEC. 6.

 Section 8284 of the Public Utilities Code is amended to read:

8284.
 (a) (1) The commission shall, by rule or order, adopt criteria for verifying and determining the eligibility of women, minority, and LGBT LGBTQ business enterprises for procurement contracts.
(2) The commission shall adopt the Department of General Services’ disabled veteran business enterprise certification eligibility requirements for verifying and determining the eligibility of disabled veteran business enterprises for procurement contracts, and shall not deem eligible those disabled veteran business enterprises that are not certified by the Department of General Services.
(3) In initially adopting criteria for verifying and determining the eligibility of LGBT LGBTQ business enterprises for procurement contracts pursuant to paragraph (1), the commission shall adopt the LGBT LGBTQ status qualifiers created by the National Gay and Lesbian Chamber of Commerce. The commission may update these LGBT LGBTQ status qualifiers as appropriate.
(b) The commission shall develop, and require every electrical, gas, water, wireless telecommunications service provider, and telephone corporation with gross annual revenues exceeding twenty-five million dollars ($25,000,000) and their commission-regulated subsidiaries and affiliates to implement, an outreach program to inform and recruit women, minority, disabled veteran, and LGBT LGBTQ business enterprises to apply for procurement contracts under this article.

SEC. 7.

 Section 8285 of the Public Utilities Code is amended to read:

8285.
 (a) Any person or corporation, through its directors, officers, or agents, which falsely represents a business as a women, minority, or LGBT LGBTQ business enterprise in the procurement of, or the attempt to procure, contracts from an electrical, gas, water, wireless telecommunications service provider, or telephone corporation with gross annual revenues exceeding twenty-five million dollars ($25,000,000), or a commission-regulated subsidiary or affiliate subject to this article, shall be punished by a fine of not more than five thousand dollars ($5,000), by imprisonment in a county jail for not more than one year or in the state prison, or by both that fine and imprisonment. In the case of a corporation, the fine or imprisonment, or both, shall be imposed on every director, officer, or agent responsible for the false statements.
(b) Any person or corporation, through its directors, officers, or agents, which falsely represents a business as a disabled veteran business enterprise in the procurement of, or the attempt to procure, contracts from an electrical, gas, water, wireless telecommunications service provider, or telephone corporation with gross annual revenues exceeding twenty-five million dollars ($25,000,000), or a commission-regulated subsidiary or affiliate subject to this article, shall be punished according to the penalties established pursuant to subdivision (b) of Section 999.9 of the Military and Veterans Code. In the case of a corporation, the fine or imprisonment, or both, shall be imposed on every director, officer, or agent responsible for the false statements.

SEC. 8.

 Section 8286 of the Public Utilities Code is amended to read:

8286.
 (a) In order to facilitate the participation of women-owned businesses, minority-owned businesses, disabled veteran-owned businesses, and LGBT-owned LGBTQ-owned businesses and small businesses in contract procurement, any corporation subject to this article may consider the following measures to include those businesses in all phases of their contracting:
(1) Timely or progressive payments to those businesses.
(2) An amendment of the performance bond requirements so that bond requirements of electrical, gas, and telephone corporations do not prohibitively burden those businesses from procuring the corporation’s business.
(3) The provision of assistance to those businesses by securing contract payments to those businesses with letters of credit, negotiable securities, or other financing arrangements or measures.
(b) This section does not restrict a corporation’s ability to require a bond.

SEC. 9.

 No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.
SECTION 1.Section 8282 of the Public Utilities Code is amended to read:
8282.

For the purposes of this article, the following definitions apply:

(a)“Control” means exercising the power to make policy decisions.

(b)“Disabled veteran business enterprise” has the same meaning as defined in Section 999 of the Military and Veterans Code.

(c)“LGBT business enterprise” means a business enterprise that meets all of the following requirements:

(1)The business enterprise’s principal office is located in California.

(2)The business enterprise’s officers are all domiciled in California.

(3)Either the business enterprise is at least 51-percent owned by a lesbian, gay, bisexual, or transgender person or persons, or, in the case of any publicly owned business, at least 51 percent of the business enterprise’s stock is owned by one or more lesbian, gay, bisexual, or transgender persons.

(4)The business enterprise’s management and daily business operations are controlled by one or more of those individuals described in paragraph (3).

(d)(1)“Minority business enterprise” means a business enterprise that meets all of the following requirements:

(A)The business enterprise’s principal office is located in California.

(B)The business enterprise’s officers are all domiciled in California.

(C)Either the business enterprise is at least 51-percent owned by one or more individuals who are of a minority group or groups, or, in the case of any publicly owned business, at least 51 percent of the business enterprise’s stock is owned by persons who are of one or more minority groups.

(D)The business enterprise’s management and daily business operations are controlled by one or more of those individuals described in subparagraph (C).

(2)The contracting utility shall presume that minority includes African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans.

(e)To “operate” means to be actively involved in the day-to-day management. It is not enough to merely be an officer or director.

(f)“Renewable energy project” means a project for the development and operation of an eligible renewable energy resource meeting the requirements of the California Renewables Portfolio Standard Program (Article 16 (commencing with Section 399.11) of Chapter 2.3 of Part 1 of Division 1).

(g)“Women business enterprise” means a business enterprise that meets all of the following requirements:

(1)The business enterprise’s principal office is located in California.

(2)The business enterprise’s officers are all domiciled in California.

(3)Either the business enterprise is at least 51-percent owned by a woman or women, or, in the case of any publicly owned business, at least 51 percent of the business enterprise’s stock is owned by one or more women.

(4)The business enterprise’s management and daily business operations are controlled by one or more of those individuals described in paragraph (3).

SEC. 2.

No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.