California Assembly Bill AB53 Amended / Bill

 BILL NUMBER: AB 53AMENDED BILL TEXT AMENDED IN ASSEMBLY MARCH 21, 2011 INTRODUCED BY Assembly Member Solorio (Coauthors: Assembly Members Davis, Furutani,  and Mendoza   Mendoza,   and Portantino  ) (Coauthor: Senator Price) DECEMBER 6, 2010 An act to add Article 10.2 (commencing with Section 927) to Chapter 1 of Part 2 of Division 1 of the Insurance Code, relating to insurers. LEGISLATIVE COUNSEL'S DIGEST AB 53, as amended, Solorio. Insurers: procurement contracts: women, minority, and disabled veteran business enterprises. Existing law requires each admitted insurer to provide information to the Insurance Commissioner on all of its community development investments and community development infrastructure investments in California. This bill would require that each admitted insurer  , with gross annual revenues exceeding $25,000,000, and their regulated subsidiaries and affiliates,   with California premiums written equal to or in excess of $100,000,000   to  submit annually to the commissioner  , commencing July 1, 2013,  a detailed and verifiable plan for increasing procurement from women, minority, and disabled veteran business enterprises, as specified. The bill would require the commissioner to, among other things, establish guidelines for  all   qualified  admitted insurers to be used in establishing these programs, provide a report  annually on the Department of Insurance's Internet Web site and  to the Legislature on September 1 of each year on the progress of activities undertaken by each  qualified  admitted insurer in the implementation of these programs, and to develop and require admitted insurers subject to this bill  and their regulated subsidiaries and affiliates  to implement an outreach program to inform and recruit eligible business enterprises to apply for procurement contracts. The bill would provide that any person  or   ,  corporation,  or other organization,  through its directors, officers, or agents,  this   that  falsely represents a business as a women, minority, or disabled veteran business enterprise in the procurement of, or attempt to procure, a contract from an admitted insurer subject to this bill  , or a regulated subsidiary or affiliate, be punished by a fine of not more than $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. Because this bill would create a new crime, the bill would impose a state-mandated local program.   would be barred from participating in the program for up to 3 years from the date of the false representation, as provided.   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. State-mandated local program:  yes   no  . THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Article 10.2 (commencing with Section 927) is added to Chapter 1 of Part 2 of Division 1 of the Insurance Code, to read: Article 10.2. Women, Minority, and Disabled Veteran Business Enterprises 927. (a) The Legislature hereby declares that the essence of the American economic system of private enterprise is free competition. Only through full and free 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 in all of the state's communities. The preservation and expansion of that competition is basic to the economic well-being of this state and that well-being cannot be realized unless the actual and potential capacities of women, minority, and disabled veteran business enterprises are encouraged and developed. The state's diverse composition propels economic innovation and growth, and the economy's full employment potential cannot be achieved if these communities are left underutilized. Therefore, it is the declared policy of the state to aid the interests of women, minority, and disabled veteran 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 insurance providers are awarded to women, minority, and disabled veteran business enterprises, and to maintain and strengthen the overall stability and growth of the state's economy. (b) (1) The Legislature declares all of the following: (A) The opportunity for full participation in our free enterprise system by women, minority, and disabled veteran business enterprises is essential if this state is to approach full employment of its human resources and improve economic efficiency and equity in opportunity. (B) Public utilities and telecommunications companies, which have established short- and long-range women, minority, and disabled veteran business enterprise goals, are awarding 30 percent or more of their contracts to these business enterprises. (C) Women, minority, and disabled veteran business enterprises have traditionally received less than a proportionate share of regulated procurement contracts. (D) It is in the state's interest to expeditiously improve the economically disadvantaged position of women, minority, and disabled veteran business enterprises. (E) The position of these businesses can be improved by providing long-range substantial goals for procurement by regulated insurance providers of technology, equipment, supplies, services, materials, and construction work from women, minority, and disabled veteran businesses. (F) That procurement also benefits the regulated insurance companies 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. (2) It is the purpose of this article to do all of the following: (A) Encourage greater economic opportunity for women, minority, and disabled veteran business enterprises in the ninety billion dollar ($90,000,000,000) California insurance market. (B) Promote competition among the suppliers of regulated insurance providers in order to enhance economic efficiency in the procurement of contracts relevant to the insurance industry and contracts of the subsidiaries and affiliates of those insurance providers. (C) Clarify and expand the program for the procurement by regulated insurance providers of technology, equipment, supplies, services, materials, and construction work from women, minority, and disabled veteran business enterprises. 927.1. For the purposes of this article, the following definitions apply: (a) "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. (b) "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 admitted insurer shall presume that minority includes African Americans, Hispanic Americans, Native Americans, and Asian Pacific Americans. (c) "Disabled veteran business enterprise" has the same meaning as defined in subparagraph (A) of paragraph (7) of subdivision (b) of Section 999 of the Military and Veterans Code  , or any successor provision  . (d) To "control" means exercise the power to make policy decisions. (e) To "operate" means to be actively involved in the day-to-day management and not merely officers or directors.  (f) "Women, minority, or disabled veteran business enterprise" or "WMDVBE" means an enterprise as defined in subdivisions (a), (b), or (c), respectively.  927.2. (a) (1) Each insurer admitted in California, with  gross annual revenues exceeding twenty-five million dollars ($25,000,000), and their regulated subsidiaries and affiliates, shall   California premiums written equal to or in excess of one hundred million dollars ($100,000,000) shall  be required to submit annually to the commissioner  , commencing July 1, 2013,  a detailed and verifiable plan for increasing procurement from women, minority, and disabled veteran business enterprises. (2) These annual plans shall include short- and long-term goals and timetables, but not quotas, and shall include methods for encouraging contractors to engage women, minority, and disabled veteran business enterprises in subcontracts in all areas that provide subcontracting opportunities. (b) The commissioner shall establish guidelines for all admitted  insurers with gross annual revenues exceeding twenty-five million dollars ($25,000,000) and their regulated subsidiaries and affiliates,   insurers with California premiums written equal to or in excess of one hundred million dollars ($100,000,000)  to be utilized in establishing programs pursuant to this article. (c) Each admitted insurer, with  gross annual revenues exceeding twenty-five million dollars ($25,000,000)   California premiums written equal to or in excess of one hundred million dollars ($100,000,000)  , shall furnish an annual report to the commissioner regarding the implementation of programs established pursuant to this article in a form that the commissioner shall require, and at the time that the commissioner shall annually designate. (d) (1) Notwithstanding Section 10231.5 of the Government Code, the commissioner shall  annually report on the department's Internet Web site and  provide a report to the Legislature on September 1 of each year on the progress of activities undertaken by each admitted insurer with  gross annual revenues exceeding twenty-five million dollars ($25,000,000)   California premiums written equal to or in excess of one hundred million dollars ($100,000,000)  pursuant to this article in the implementation of women, minority, and disabled  veterans   veteran  business enterprise development programs. The report shall include information about which procurements are made from women, minority, and disabled veteran business enterprises with at least a majority of the enterprise's workforce in California, to the extent that information is readily accessible. The commissioner shall recommend a program for carrying out the policy declared in this article, together with recommendations for legislation that the commissioner deems necessary or desirable to further that policy. (2) In regard to disabled veteran business enterprises, the commissioner shall ensure that the programs and legislation recommended pursuant to paragraph (1) are consistent with the disabled veteran business enterprise certification eligibility requirements imposed by the Department of General Services and that the recommendations address themselves to only those disabled veteran business enterprises certified by the Department of General Services.  The Department of General Services shall, as requested by the Department of Insurance, advise and assist in the administration of this section.  (3) A report to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code. (e) The Legislature declares that each admitted insurer that is not required to submit a plan pursuant to subdivision (a) is encouraged to voluntarily adopt a plan for increasing women, minority, and disabled veteran business enterprise procurement.  The commissioner may publicize participants and nonparticipants in the program.  927.3. (a) (1) The commissioner shall, by regulation, adopt criteria for verifying and determining the eligibility of women and minority business enterprises for procurement contracts. (2) The commissioner 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) The commissioner shall, to the extent possible, coordinate with the Public Utilities Commission for the sharing of WMDVBE identification and verification information.  (b) The commissioner shall develop and require each admitted  insurer with gross annual revenues exceeding twenty-five million dollars ($25,000,000) and their regulated subsidiaries and affiliates   insurer with California premiums written equal to or in excess of one hundred million dollars ($100,000,000)  to implement an outreach program to inform and recruit women, minority, and disabled veteran business enterprises to apply for procurement contracts under this article. 927.4. Any person  or corporation   , corporation, or other organization  , through its directors, officers, or agents, that falsely represents a business as a women, minority, or disabled veteran business enterprise in the procurement of, or attempt to procure, a contract from  an admitted insurer with gross annual revenues exceeding twenty-five million dollars ($25,000,000), or a 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.   a California admitted insurer with California premiums written equal to or in excess of one hundred million dollars ($100,000,000) subject to this article, shall be barred from participating in the program for up to three years from the date of the false representation. In the case of a corporation or other organization, this punishment shall be imposed on the corporation or other organization and every director, officer, or agent responsible for the false statements.  927.5. In order to facilitate the participation of women-owned businesses, minority-owned businesses, disabled veteran-owned businesses, and small businesses in contract procurement, any  corporation   insurer  subject to this article may consider the following measures to include those businesses in all phases of their contracting: (a) Timely or progressive payments to those businesses. (b) 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.  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.