Bill Text: CA AB366 | 2013-2014 | Regular Session | Amended
Bill Title: Women, minority, and disabled veteran business enterprises.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-02-03 - From committee: Filed with the Chief Clerk pursuant to Joint Rule 56. [AB366 Detail]
Download: California-2013-AB366-Amended.html
BILL NUMBER: AB 366 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MAY 13, 2013
AMENDED IN ASSEMBLY MAY 1, 2013
AMENDED IN ASSEMBLY APRIL 16, 2013
AMENDED IN ASSEMBLY APRIL 1, 2013
INTRODUCED BY Assembly Member Holden
FEBRUARY 14, 2013
An act to add and repeal Sections 8282.1 and 8282.2 of
the Public Utilities Code, relating to women, minority,
and disabled veteran business enterprises.
LEGISLATIVE COUNSEL'S DIGEST
AB 366, as amended, Holden. Women, minority, and disabled veteran
business enterprises.
(1) Under
Under existing law, the Public Utilities Commission has
regulatory authority over public utilities, including electrical,
gas, water, and telephone corporations. Existing law authorizes the
commission to establish rules for all public utilities, subject to
control by the Legislature.
Existing law directs 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
implement a program developed by the commission to encourage,
recruit, and utilize minority-, women-, and disabled veteran-owned
business enterprises, as defined, in the procurement of contracts
from those corporations or from their regulated subsidiaries and
affiliates, and to require the reporting of certain information.
Existing law requires the commission, by rule or order, to adopt
criteria for verifying and determining eligibility of women,
minority, and disabled veteran business enterprises for procurement
contracts. The commission, by its rulemaking authority, has adopted
General Order 156, applicable to certain electrical, gas, and
telephone corporations, to effectuate these requirements.
For the purposes of these provisions, existing law defines a minority
business enterprise, women business enterprise, and disabled veteran
business enterprise.
This bill would, until January 1, 2019, additionally authorize a
publicly owned business enterprise that provides financial or legal
services to qualify as a women, minority, or disabled veteran
business enterprise if it meets separate specified definitions for a
women, minority, or disabled veteran business enterprise,
respectively. This bill would, until January 1, 2020, require the
commission to require every electrical, gas, water, wireless
telecommunications service provider, and telephone corporation with
gross annual revenues exceeding $25,000,000 and their
commission-regulated subsidiaries and affiliates to separately
identify procurement contracts entered into with women, minority, and
disabled veteran business enterprises, as defined in these
provisions, in their annual plans. This bill would, until January 1,
2020, require the commission to separately identify procurement
contracts entered into pursuant to these provisions in a specified
annual report to the Legislature. This bill would provide that these
provisions do not provide authority for the creation of any corporate
structure not authorized under existing law.
(2) Under existing law, a violation of any provision of the Public
Utilities Act or any rules or orders of the commission is a crime.
In addition, any person or corporation that falsely represents a
business as a woman, minority, or disabled veteran business
enterprise for the purposes of the programs discussed above is
subject to criminal penalties.
Because a violation of the requirements of the bill would be a
crime under those provisions, this 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.
This bill would make findings and declarations regarding women,
minority, and disabled veteran business enterprises. This bill would
state the intent of the Legislature to promote diverse lending
institutions to increase the availability of access to capital for
women, minority, and disabled veteran-owned businesses consistent
with the original intent of the supplier diversity program and to
continue these efforts in the procurement of legal services and
financial services.
Vote: majority. Appropriation: no. Fiscal committee: yes
no . State-mandated local program: yes
no .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and
declares all of the following:
(a)
( 1) In 1986, the Public Utilities
Commission adopted General Order 156 to promote competition among
utility suppliers and to encourage greater economic opportunity for
women, minority, and disabled veteran-owned businesses.
(b)
( 2) General Order 156 states that "each
utility shall make special efforts to increase utilization and
encourage entry into the marketplace of women, minority, and disabled
veteran-owned businesses in product or service categories where
there has been low utilization such as legal and financial services,
fuel procurement , and areas that are considered technical
in nature."
(c)
( 3) From 2010 to 2011, inclusive, utility
procurement from women, minority, and disabled veteran business
enterprises increased from $5.17 billion to $7.20
billion. However, the percentage of total procurement from women,
minority, and disabled veteran business enterprises that provide
financial or legal services continues to lag behind procurement from
other types of women, minority, and disabled veteran business
enterprises.
(4) Women, minority, and disabled veteran-owned businesses
continue to be the engine of employment in emerging communities.
Their business growth depends on a variety of capital, from funding
to establish new firms, to working capital and business loans to
expand their businesses, to private equity for acquiring and merging
with other firms.
(5) Historically, discriminatory practices existed in the banking
and lending industries, instituting a redlining policy that used
racial criteria to categorize lending risks. Inadequate access to
financial capital continues to be a significant constraint limiting
the growth of women, minority, and disabled veteran-owned businesses.
National and regional studies over several decades indicate that
racial discrimination as well as limited financial and human capital
are primarily responsible for the disparities in women, minority, and
disabled veteran-owned business performances.
(6) Capital access remains the most important factor limiting the
establishment, expansion and growth of women, minority, and disabled
veteran-owned businesses. Given this well established constraint, the
current financial environment has placed a greater burden on women,
minority, and disabled veteran-owned enterprises that are trying to
keep their businesses thriving in today's economy.
(7) Women, minority, and disabled veteran-owned firms are found to
have less than half the average amount of recent equity investments
and loans than nonminority firms. Across the nation, women, minority,
and disabled veteran-owned businesses face the obstacles of access
to capital and access to markets, both of which are essential for any
business to increase in size and scale.
(d) Women represent more than 50 percent of our population, and
minorities together make up more than 35 percent of our population
combined. Out of a total United States population of 308 million,
African Americans number more than 37 million, Asian Pacific
Americans number more than 13 million, and Hispanic Americans number
more than 45 million. Yet, those numbers are hardly reflected in the
leadership of our nation's top corporations.
(e) Only one out of every five board members is a woman; only one
out of every seven board members is a minority; only one out of every
28 board members is a minority woman; only one out of every 11 board
members is African American; only one out of every 48 board members
is Asian Pacific American; and only one out of every 28 board members
is Hispanic American.
(f) Minorities have less representation in executive management
than they do on corporate boards, representing 10.44 percent of
executive managers, compared to the 35 percent of their actual
proportion in the United States population. Only one out of every
five executive managers is a woman; only one out of every nine
executive managers is minority; only one out of every 24 executive
managers is African American; only one out of every 30 executive
managers is Hispanic American; and only one out of every 35 executive
managers is Asian Pacific American.
(g) It is the intent of the Legislature to promote corporate
diversity consistent with the original intent of the supplier
diversity program and to continue these efforts in the procurement of
legal services and financial services from women, minority, and
disabled veteran business enterprises.
(b) It is the intent of the Legislature to promote diverse lending
institutions to increase the availability of access to capital for
women, minority, and disabled veteran-owned businesses consistent
with the original intent of the supplier diversity program and to
continue these efforts in the procurement of legal services and
financial services.
SEC. 2. Section 8282.1 is added to the Public
Utilities Code, to read:
8282.1. (a) The Legislature finds and declares all of the
following:
(1) Shareowners elect the directors of a corporation pursuant to
Section 301 of the Corporations Code.
(2) Under Section 309 of the Corporations Code, a director of a
corporation is required to perform the duties of a director in good
faith and in a manner that the director believes to be in the best
interests of the corporation and its shareowners, and with the care
of an ordinarily prudent person.
(b) For the purposes of this section, "executive management team"
means controlling officers, as defined in the articles of
incorporation or bylaws of the publicly owned business.
(c) In addition to Section 8282, a publicly owned business
enterprise that provides financial or legal services may also qualify
as a women, minority, or disabled veteran business enterprise if it
meets any of the following definitions:
(1) "Women business enterprise" means a business enterprise that
has a board of directors that consists of at least 51 percent women
and has an executive management team that consists of at least 51
percent women. The membership of the board of directors must consist
of at least 51 percent women for at least five years prior to the
certification of a publicly owned business as a women business
enterprise.
(2) "Minority business enterprise" means a business enterprise
that has a board of directors that consists of at least 51 percent
minority individuals and has an executive management team that
consists of at least 51 percent minority individuals. The membership
of the board of directors shall consist of at least 51 percent
minority individuals for at least five years prior to the
certification of a publicly owned business as a minority business
enterprise. The contracting utility shall presume that minority
includes Asian Pacific Americans, African Americans, Hispanic
Americans, and Native Americans.
(3) "Disabled veteran business enterprise" means a business
enterprise that has a board of directors that consists of at least 51
percent disabled veterans and has an executive management team that
consists of at least 51 percent disabled veterans. The membership of
the board of directors must consist of at least 51 percent disabled
veterans for at least five years prior to the certification of a
publicly owned business as a disabled veteran business enterprise.
(d) The commission shall establish guidelines for calculating how
the requirement that the board of directors and executive management
team consist of at least 51 percent women, minority individuals, or
disabled veterans can be met, including how to calculate the
percentage when an individual fits within two or more of the
categories described in the definitions in subdivision (c) or when
the board of directors or executive management team consists of a
combination of women, minority individuals, or disabled veterans.
(e) This section shall become inoperative on January 1, 2019, and,
as of January 1, 2020, is repealed, unless a later enacted statute,
that becomes operative on or before January 1, 2020, deletes or
extends the dates on which it becomes inoperative and is repealed.
SEC. 3. Section 8282.2 is added to the Public
Utilities Code, to read:
8282.2. (a) The commission shall 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 separately identify procurement contracts entered into
with women, minority, and disabled veteran business enterprises, as
defined in Section 8282.1, in their annual plans required by
subdivision (a) of Section 8283.
(b) The commission shall separately identify procurement contracts
entered into pursuant to Section 8282.1 in its annual report
required by subdivision (e) of Section 8283.
(c) This section shall remain in effect only until January 1,
2020, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2020, deletes or extends
that date.
SEC. 4. Subdivision (c) of Section 8282.1 of
the Public Utilities Code does not provide authority for the creation
of any corporate structure not authorized under existing law.
SEC. 5. 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.
