Bill Text: CA AB1552 | 2017-2018 | Regular Session | Amended
Bill Title: Large public utilities: timely payment of subcontractors: women, minority, disabled veteran, and LGBT business enterprise procurement: late payment penalties.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2018-05-23 - From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on E., U. & C. [AB1552 Detail]
Download: California-2017-AB1552-Amended.html
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Amended
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Senate
May 23, 2018 |
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Amended
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Assembly
January 22, 2018 |
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Amended
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Assembly
January 04, 2018 |
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Amended
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Assembly
September 12, 2017 |
CALIFORNIA LEGISLATURE—
2017–2018 REGULAR SESSION
| Assembly Bill | No. 1552 |
| Introduced by Assembly Member Quirk-Silva |
February 17, 2017 |
An act to amend Section 8281 Sections 910.3 and 8283 of, and to add Section 8287 to, Article 4.5 (commencing with Section 800) to Chapter 4 of Part 1 of Division 1 of, the Public Utilities Code, relating to public utilities.
LEGISLATIVE COUNSEL'S DIGEST
AB 1552, as amended, Quirk-Silva.
Women, Large public utilities: timely payment of subcontractors: women, minority, disabled veteran, and LGBT business enterprise procurement: late payment penalties.
Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including electrical, gas, water, and telephone corporations. Existing law requires each electrical, gas, water, wireless telecommunications service provider, or telephone corporation with gross annual revenues exceeding $25,000,000, and its commission-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, and to implement an outreach program to inform and recruit those business enterprises to apply for procurement contracts, as specified. Existing law includes a declaration by the Legislature that each electrical, gas, water, mobile telephony service provider, and telephone corporation that is not required to submit a plan, and each cable
television corporation and direct broadcast satellite provider, is encouraged to voluntarily adopt a plan for increasing procurement from those business enterprises. Existing law requires the commission, by rule or order, to adopt criteria for verifying and determining eligibility of women, minority, and LGBT business enterprises for procurement contracts. defined. Existing law requires the commission to report certain information relative to the activities undertaken by those public utilities by September 1 of each year.
This bill would require each electrical, gas, water, mobile telephony service provider, or telephone corporation, with gross annual revenues exceeding $25,000,000, and its commission-regulated subsidiaries and affiliates, to pay an undisputed invoice by its required payment approval
date, as defined. If the payment is not made by that date, the bill would require the utility to pay a late payment penalty to a certified small business, as defined, that is a disabled veteran, minority, women, or LGBT business enterprise claimant, or to a nonsmall-business claimant another business that has committed to having at least 25% of the contracted work undertaken by a certified small business, at a rate of 10% above the United States Prime Rate. The bill would require each of the specified utilities to annually provide the commission with information concerning its late payment penalties. The bill would require the commission to encourage all public utilities to adopt policies and practices that encourage certified small businesses to promptly pay their
subcontractors and suppliers, especially those that are small businesses. the payment terms of its contracts with certified disabled veteran, minority, women, or LGBT small business enterprises and late payment penalties that it paid to certified disabled veteran, minority, women, or LGBT small business enterprises. The bill would revise the commission’s reporting requirements to the Legislature to require the report to include information on contracts entered into and payments made during the report period to certified disabled veteran, minority, women, or LGBT small business enterprises.
Under existing law, a violation of any order, decision, rule, direction, demand, or requirement of the commission is a crime.
Because a violation of an order or decision of the commission implementing the requirements of the
bill would be a crime, the bill would impose a state-mandated local program by creating a new crime.
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.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YESBill Text
The people of the State of California do enact as follows:
SECTION 1.
(a) The Legislature finds and declares that it is in the best interests of the state and its citizens to ensure that all materials, equipment, technology, and construction and other services provided to a public utility be paid for in full and in a timely manner.(b) It is the intent of the Legislature that the authority granted to the Public Utilities Commission pursuant to Section 792 of the Public Utilities Code and
other related sections in the Public Utilities Act (Part 1 (commencing with Section 201) of Division 1 of the Public Utilities Code) includes the authority to establish and prescribe the forms, accounts, records, and memorandum to be kept by public utilities, including those concerning the expenditures of moneys to pay contractors.
(c) It is the Legislature's intent that the Public Utilities Commission use its authority to adopt rules, policies, and practices that encourage both of the following:
(1) That public utilities promptly review and pay invoices, refunds, and payments in a timely fashion. The rules, policies, and practices may include, but are not limited to, transparent payment processes that allow prime contractors to track receipt, approval, and payment for invoices and refunds.
(2) That prime contractors
promptly pay their subcontractors and suppliers, especially those subcontractors and suppliers that are small businesses. The policies and practices may include, but are not limited to, expedited payment processes and transparent payment practices that allow a subcontracting business to track when a subcontractor or supplier has been paid.
SEC. 2.
Article 4.5 (commencing with Section 800) is added to Chapter 4 of Part 1 of Division 1 of the Public Utilities Code, to read:Article 4.5. Prompt Payment of Small Business Contractors
800.
The Legislature finds and declares that a public utility with gross annual revenues exceeding twenty-five million dollars ($25,000,000) is of a reasonable size for the commission to responsibly expect that the utility and its commission-regulated subsidiaries and affiliates have the administrative capacity to pay the amounts of properly submitted, undisputed invoices, refunds, or other undisputed payments that are owed to certified small businesses.801.
For purposes of this article, the following terms have the following meanings:(a) “Certified small business” means a business certified by the State of California as meeting the requirements of subdivision (d) of Section 14837 of the Government Code.
(b) “Invoice” means a bill, claim, or other document that requests payment on a contractual agreement under which a public utility described in subdivision (a) of Section 803 agrees to purchase a good or service. If the contractual agreement specifies a specific form or format for invoicing, the invoice shall meet the terms of the contractual agreement.
(c) “Reasonable cause” means a
determination by a public utility described in subdivision (a) of Section 803 that any of the following conditions is present:
(1) There is a discrepancy between the invoiced or claimed amount and the provisions of the contractual agreement for the goods or services.
(2) There is a discrepancy between the invoiced or claimed amount and either the goods or services delivered by the certified small business to the public utility or the goods or services accepted by the public utility.
(3) The public utility requires the certified small business to provide additional evidence supporting the validity of the invoiced or claimed amount.
(4) The certified small business has improperly executed or needs to correct the invoice.
(5) There is a discrepancy between the refund or other payment due as calculated by the party to whom the money is owed and by the public utility.
(d) The date an invoice is “received by the public utility” means the date an invoice is delivered and received by the public utility described in subdivision (a) of Section 803 or by a party specified in the contract to receive the invoice.
(e) “Required payment date” means the date on which payment is due as specified in a contractual agreement. If a date is not specified in the contractual agreement, the required payment date is 30 calendar days following the date upon which an undisputed invoice is received by the public utility described in subdivision (a) of Section 803 or a party specified in the contract to receive the invoice, or, if 30 days falls on a weekend or
holiday, the following business day.
803.
(a) The late payment penalty requirements in this article shall apply only to an electrical, gas, water, or telephone corporation, including a mobile telephony service provider, with gross annual revenues exceeding twenty-five million dollars ($25,000,000), and its commission-regulated subsidiaries and affiliates.(b) A public utility described in subdivision (a) shall pay an undisputed invoice issued by a certified small business, or another business that has committed to having at least 25 percent of the contractual work undertaken by a certified small business, by the required payment date, but may dispute an invoice for reasonable cause if the public utility notifies the certified small business or other business within 15 working days from
receipt of the invoice, or delivery of goods or services, whichever is later. An employee of the public utility shall not dispute an invoice on the basis of minor or technical defects to circumvent or avoid the general intent, or any of the specific provisions, of this section.
(c) (1) If a public utility described in subdivision (a) fails to comply with the requirement of subdivision (b), it shall pay a late payment penalty, as described in this subdivision, without requiring the certified small business or other business to submit an additional invoice for that amount. The penalty shall begin to accrue 15 days following the required due date and cease to accrue on the date the public utility issues the payment.
(2) The late payment penalty required to be paid pursuant to this subdivision shall be at a rate of 10 percent above the United States Prime Rate on
June 30 of the prior fiscal year of the amount of the late undisputed invoice. The late payment penalty shall cease to accrue on the date full payment or full refund is made. If the amount of the late payment penalty is ten dollars ($10) or less, it shall be waived and not paid by the public utility.
SEC. 3.
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 business enterprise development programs pursuant to Article 5 (commencing with Section 8281) of Chapter 7 of Division 4. The report shall include information about(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 business enterprises required by subdivision (a) beginning with the report due on September 1, 2016.
SEC. 4.
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 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 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) (1) 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 all of the following:
(A) The implementation of programs established pursuant to this article article.
(B) Information on the payment terms of contracts with certified disabled veteran, minority, women, or LGBT small business enterprises, including the number and aggregate dollar amount of contracts with 30-day or less payment periods, 31- to 45-day payment periods, 46- to 60-day payment periods, and more than 60-day payment periods following the submittal of an undisputed invoice.
(C) Information concerning late payment penalties that it paid to certified disabled veteran, minority, women, or LGBT small business enterprises, in accordance with Article 4.5 (commencing with section 800).
(2) The report shall be 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 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 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 business enterprise procurement and to voluntarily report activity in this area to the Legislature on an annual basis.
