BILL ANALYSIS AB 1389 Page 1 Date of Hearing: April 28, 2003 ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE Sarah Reyes, Chair AB 1389 (Ridley-Thomas) - As Amended: April 22, 2003 SUBJECT : Public utilities: rights and obligations: hiring purchases of goods and services. SUMMARY : Requires the California Public Utilities Commission (PUC) to annually collect and report to the Legislature employment information and capital investments made into California from all public utilities in the state. Specifically, this bill : 1)States in intent language that public utilities in exchange for the state's granting monopoly or near-monopoly status bear a heightened responsibility for contributing to the public interest. Furthermore, the policy of the State of California is to promote the employment of California residents when it's exercising its proprietary role as a purchaser of goods and services from public utilities. 2)Declares that it is the policy of the State of California, consistent with the federal and state constitutions, that the state, when exercising its proprietary role as a purchaser of telecommunications goods and service, act to promote the employment of California residents. 3)Requires PUC to annually collect and report to the Legislature, and make available on its Internet web site, the following information from all public utilities in the state: a) The number of customers served in California by a public utility. b) The percentage of the public utilities total domestic customer base that resides in California. c) The number of California residents employed full-time or part-time by a public utility. d) The percentage of the public utilities total domestic workforce, calculated on a full-time or part-time basis that resides in California. AB 1389 Page 2 e) The amount of capital investment made by the public utility in California over the prior 12-month period. EXISTING LAW : 1)Subjects public utilities to regulation by PUC. 2)Requires telecommunications utilities to furnish reasonable service and to maintain such facilities as are necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public. FISCAL EFFECT : Unknown. COMMENTS : Background : According to the author the need for this bill is due to the fact that public utilities in California have been increasingly utilizing out-of-state workers for the provision of utility services to California residents. This has a negative impact on the workforce in California and the state's economy. In light of the significant benefits that public utilities enjoy in California for the use of the public right-of-way, a reciprocal benefit must be obtained for the residents of the state. With the increasing rates of unemployment being experienced in California, coupled with a general economic downturn, it is appropriate for the State to utilize its proprietary powers to encourage the employment of California residents by public utilities operating within the state. Information should be delivered to a more appropriate body : This bill requires that PUC provide this information annually to the Legislature. A more appropriate body would seem to be the respective policy committees in each house, thereby reducing printing costs by PUC. What is the purpose of gathering this information? This bill requires that this information be provided to the Legislature on an annual basis but doesn't specify what the information will be used for. Furthermore, this bill establishes a statewide policy implying that companies should employ only in-state workers but fails to address what the ramifications could be if other states follow suit by developing their own policy preferences for employing their workers. Finally, is the purpose of this bill AB 1389 Page 3 to promote employment preferences for in state workers for all companies or just telecommunications companies, and if so, why only telecommunications. Previous legislation : House Resolution 92 by Assemblymember Jackie Goldberg was read and adopted by the Assembly on August 28, 2002. The resolution resolved that is was necessary and proper state policy to encourage the employment of Californians and discourage the employment of non-Californians by California's telephone corporations. AB 2467 (Goldberg) - stated that it was the policy of the State of California that tasks and duties necessary for the rendering of local telephone service within the state be performed by residents in California. This bill failed passage in the Assembly Utilities and Commerce Committee in the 2002 legislative year. REGISTERED SUPPORT / OPPOSITION : Support California Labor and Telecommunications Coalition Coalition of Utility Employees Los Angeles County Federation of Labor San Diego - Imperial Counties Labor Council California Teamsters Public Affairs Council California Conference Board of the Amalgamated Transit Union Hotel Employees & Restaurant Employees International Union California Conference of Machinist United Food & Commercial Workers Region & States Council Engineers & Scientists of California, Local 20, IFPTE< AFL-CIO Professional & Technical Engineers, Local 21, IFPTE< AFL-CIO Communications Workers of America, AFL-CIO Local 9000 Communications Workers of America, AFL-CIO Local 9404 Communications Workers of America, AFL-CIO Local 9586 Communications Workers of America, AFL-CIO Local 9587 Communications Workers of America, AFL-CIO Local 9415 Communications Workers of America, AFL-CIO Local 9421 Communications Workers of America, AFL-CIO Local 9400 Communications Workers of America, AFL-CIO Local 9417 Communications Workers of America, AFL-CIO Local 9423 Communications Workers of America, AFL-CIO Local 9412 AB 1389 Page 4 Communications Workers of America, AFL-CIO District 9 Utility Workers Union of America, AFL-CIO Local 132 Opposition AT&T California Association of Competitive Telecommunication Companies California Cable & Telecommunications Association MCI Worldcom Verizon Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083