BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 1389
                                                                  Page  1

          Date of Hearing:   May 14, 2003

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                              Darrell Steinberg, Chair

                 AB 1389 (Ridley-Thomas) - As Amended:  May 5, 2003 

          Policy Committee:                              UtilitiesVote:9-4

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill:

          1)Declares that it is the policy of the state, when purchasing  
            telecommunications goods and services and when purchasing  
            goods and services from public utilities, to take actions that  
            promote the employment of California residents. 

          2)Requires the Public Utilities Commission (PUC) to annually  
            report to the Legislature and make available on its website,  
            the following information about each public utility:  (a)  
            number of customers served in California; (b) percentage of  
            total domestic customer base residing in California, (c)  
            number of California residents employed full-time or  
            part-time, (d) percentage of the total domestic workforce  
            residing in California, and (e) amount of capital investment  
            made in California over the prior 12-month period. 

           FISCAL EFFECT  

          1)It is unclear how a state procurement policy of promoting  
            employment of California residents when contracting for  
            telecommunications or with public utilities will be  
            implemented, but to the extent that it results in the state  
            awarding contracts to other than the lowest responsible  
            bidder, the state will incur additional procurement costs,  
            which could result in hundreds of thousands or millions of  
            dollars in any year.

          2)The PUC's costs to collect and report the required information  
            should be minor (less than $20,000).









                                                                  AB 1389
                                                                  Page  2

           COMMENTS  

           Purpose  .  According to the author, this bill is needed because  
          public utilities in California have been increasingly using  
          out-of-state workers to provide utility services to California  
          residents. The author maintains this has a negative impact on  
          the state's workforce and economy.  In light of the significant  
          benefits public utilities enjoy for the use of the public  
          right-of-way, a reciprocal benefit must be obtained for the  
          state residents.  With the increasing unemployment rates in  
          California, coupled with a general economic downturn, the author  
          believes 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. 

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081