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Legislative Update: July 19, 2019 - Commissioner Dispels Confusion Before Next Big Earthquake

Commissioner Ricardo Lara Notices of Earthquake Insurance Misinformation

The recent earthquakes centered around Ridgecrest and Trona in Southern California have led to reports that some insurers and agents may be declining to write earthquake policies in various areas of the state. Insurance Commissioner Ricardo Lara and California Earthquake Authority (CEA) Chief Executive Officer Glenn Pomeroy jointly held a conference call to provide information and dispel confusion before the next big earthquake strikes.

Commissioner Lara will issue a notice to insurers advising them that refusing to write CEA earthquake insurance coverage for an existing residential policyholder is not in compliance with state law. Both Commissioner Lara and Mr. Pomeroy believe some insurers may be confusing the 15-day waiting period after a seismic event with an outright moratorium on the purchase of a CEA policy. The Department of Insurance and the CEA will continue to work together to make sure Californians are informed and prepared in the event of another major earthquake. 

“Our first major earthquakes in years have Californians asking if earthquake insurance is right for them. I am concerned about reports that some insurers and agents are telling consumers there is a moratorium, when in fact you can buy earthquake insurance today,” said Commissioner Lara. “While we have Californians’ attention, insurers should not create barriers to homeowners or renters who want to protect their assets from earthquakes.” 

“CEA policies can be purchased anywhere in California, at any time, and by anyone who has a home insurance policy with one of our participating insurers,” CEA CEO Glenn Pomeroy said. “However, for new policies purchased after an event, we do not provide coverage for the next 360 hours, or 15 days, for earthquakes that are seismically related to the initial event.” 

Further, Commissioner Lara announced his intent to issue a notice to insurers to ensure that all agents and brokers who sell earthquake insurance follow California law. 

New President Appointed to the Public Utilities Commission

Governor Newsom last week announced the appointment of Marybel Batjer as President of the California Public Utilities Commission (CPUC). 

“Marybel’s deep experience in government administration and sound judgment make her uniquely qualified to take on this important role,” said Governor Newsom. “I am confident she will protect the best interest of all Californians by challenging utilities to embrace reform while providing safe, reliable and affordable service.” 

Batjer currently serves as the first-ever Secretary of the California Government Operations Agency. In this role, she has led forward-looking efforts to revamp the way the state approaches data and technology, modernized the civil service system, and has led the implementation of key initiatives to green state government and promote renewable energy. 

Prior to taking office at CPUC, Batjer will complete her work later this month as head of Governor Newsom’s DMV Strike Team, which has already begun implementation of key changes to transition the California Department of Motor Vehicles into a more customer-friendly and user-centered culture, to better serve Californians. In appointing Batjer to lead the Strike Team, Newsom called her “one of the most accomplished management experts in state government.” 

Before heading the Government Operations Agency, Batjer was Vice President for Public Policy and Corporate Social Responsibility at Caesars Entertainment Inc., where she developed and promoted corporate social responsibility policy and initiatives and counseled the senior executive team during a public merger on issues pertaining to reputation management and public policy. 

Batjer’s successful and collaborative management style has gained her the respect of leaders in both the public and private sectors, where she has served on several boards and commissions, including as the former Vice-Chair of the State of Nevada Colorado River Commission. 

Batjer served as Cabinet Secretary to Governor Arnold Schwarzenegger from 2003 to 2005, Chief of Staff to Nevada Governor Kenny Guinn from 2000 to 2003 and Undersecretary at the California Business, Transportation and Housing Agency from 1997 to 1998. Prior to that, Batjer was Chief Deputy Director of the California Department of Fair Employment and Housing from 1992 to 1997, special assistant to the U.S. Secretary of the Navy from 1989 to 1992, a national security affairs special assistant for President Ronald Reagan, deputy executive secretary for the National Security Council from 1987 to 1989, assistant to the U.S. Secretary of Defense and deputy secretary of defense from 1981 to 1987, and director of political planning for the National Women’s Political Caucus from 1980 to 1981. 

The Governor also thanked outgoing CPUC President Michael Picker for his decades of dedicated public service saying, “Michael has brought deep expertise in energy policy and a commitment to advancing the state’s climate goals. His knowledge, vision and commitment has been critical as the state examines the role of utilities following recent catastrophic wildfires, and necessary changes in an era of climate change.” 

Five CalChamber Job Killers Still Alive Going into Recess

Five job killer bills that will significantly increase costs for California businesses continued to move through the legislative process as lawmakers headed home for the summer recess last week.

This year, the California Chamber of Commerce identified 31 job killer bills that would harm California’s economic growth and creation should they become law. Opposition from the CalChamber and allied groups successfully stopped, stalled or amended 26 of these 31 job killer bills.

The Legislature will reconvene from the summer break on Monday, August 12. Bill summaries below were written by CalChamber.

Active Job Killer Bills:

AB 51 (Gonzalez) Ban on Arbitration Agreements: Significantly expands employment litigation and increases costs for employers and employees by banning arbitration agreements made as a condition of employment, which is likely preempted under the Federal Arbitration Act and will only delay the resolution of claims. Banning such agreements benefits the trial attorneys, not the employer or employee. Governor Brown vetoed a similar measure last year and stated it “plainly violates federal law.” In Senate Appropriations.

AB 1066 (Gonzalez) Unemployment During Trade Disputes: Significantly increases costs on employers engaged in a trade dispute by allowing employees on strike to receive unemployment benefits if the strike lasts more than four weeks, incentivizing strikes, raising costs for employers, and potentially affecting the solvency of California’s UI fund. In Senate Appropriations.

AB 1080 (Gonzalez) Unprecedented Product Regulation In California: Substantially increases the cost to manufacture and ship consumer products sold in California by providing CalRecycle with broad authority to develop and impose costly and unrealistic new mandates on manufacturers of all single-use packaging and certain single-use plastic consumer products under an unrealistic compliance time frame that fails to address California’s lack of recycling and composting infrastructure. In Senate Appropriations.

SB 1 (Atkins) Negatively Impacts Water Management and Increases Litigation: Creates significant regulatory uncertainty and litigation risks to regulated entities by giving certain state agencies unfettered authority to adopt rules and regulations without any of the Administrative Procedure Act safeguards when the agency, in its discretion, determines that the federal rules and regulations in effect on January 19, 2017 are “less protective” than existing federal law. It also undermines current state efforts to utilize science-based decision-making to manage and provide reliable water supplies for California and protect, restore, and enhance the ecosystems of the Bay-Delta and its tributaries. It further increases the potential for costly litigation by creating new private rights of action under California law. In Assembly Appropriations.

SB 54 (Allen) Unprecedented Product Regulation In California: Substantially increases the cost to manufacture and ship consumer products sold in California by providing CalRecycle with broad authority to develop and impose costly and unrealistic new mandates on manufacturers of all single-use packaging and certain single-use plastic consumer products under an unrealistic compliance time frame that fails to address California’s lack of recycling and composting infrastructure. In Assembly Appropriations.

Four job killer bills are currently stalled:

AB 755 (Holden) Targeted Tax on Purchase of Tires: Imposes a $1.50 targeted tax on the purchase of new tires, that will unfairly raise prices on California residents, including employers, in order to fund the mitigation of zinc in storm water for all. Placed on Assembly Inactive File on May 29 at author’s request. 

AB 1468 (McCarty) Targeted Tax on Opioids: Unfairly imposes an excise tax on opioid distributors in California, which will increase their costs and force them to adopt measures that include reducing workforce and increasing drug prices for ill patients who need these medications the most, in order to fund drug prevention and rehabilitation programs that will benefit all of California. On Assembly Floor. 

SB 246 (Wieckowski) Targeted Tax on Oil and Gas Operators: Unfairly targets one industry by imposing a 10% oil and gas severance tax onto an oil and gas operator, adding another layer of taxes onto this industry that will significantly increase the costs of doing business, thereby increasing prices paid by consumers for goods and services in this expensive state as well. In Senate Rules Committee. 

SCA 5 (Hill and Allen) Lowers Voter Threshold for New Tax Increase: Unnecessarily reduces the voter threshold from two-thirds to 55% for school districts and community college districts to enact a discriminatory parcel tax against disfavored industries and commercial property owners. Placed on Senate Inactive File on May 21 at author’s request. 

A tax or constitutional amendment is not subject to the same procedural requirements as other bills and still could move at some point this year.

Governor Newsom Acts on Legislation as Legislators Break

As legislators kicked off their Summer Recess, Governor Gavin Newsom took official action on a number of bills. The Governor signed the following bills: 

AB 57 (Low) – Elections: names of candidates.

AB 239 (Salas) – Community colleges: registered nursing programs.

AB 255 (Limón) – Coastal resources: oil spills: grants.

AB 293 (Garcia) – Greenhouse gases: offset protocols.

AB 361 (Voepel) – Military Department: support programs.

AB 381 (Reyes) – Postsecondary education: sexual assault and sexual violence prevention training: intimate partner and dating violence.

AB 453 (Chau) – Emergency medical services: training.

AB 487 (Gallagher) – Department of Water Resources: dams and reservoirs: fees and penalty plus interest.

AB 494 (Berman) – CalFresh: eligibility: shelter expense deductions.

AB 566 (Berman) – Elections: official canvass period.

AB 608 (Petrie-Norris) – Property taxation: exemption: low-value properties.

AB 619 (Chiu) – Retail food: reusable containers: multiuse utensils.

AB 631 (McCarty) – Sacramento Regional Transit District: voting threshold.

AB 634 (Salas) – Traffic control devices: roundabouts: memorial and dedication signs.

AB 644 (Committee on Public Employment and Retirement) – State teachers’ retirement: compensation.

AB 669 (Holden) – Attorney General: assurance of voluntary compliance.

AB 672 (Cervantes) – Public employees’ retirement: disability retirement: reinstatement.

AB 693 (Berman) – Conditional voter registration: voting.

AB 706 (Low) – Community colleges: academic employees.

AB 743 (Garcia) – Pupil health: self-administration of prescribed asthma medication.

AB 903 (Levine) – Political Reform Act of 1974.

AB 988 (Berman) – Teacher credentialing: out-of-state prepared teachers: education specialist credential.

AB 998 (Aguiar-Curry) – State scenic highways: State Route 128.

AB 1032 (Quirk) – Ticket sellers: equitable ticket buying process: use or sale of services.

AB 1044 (Irwin) – Elections: Secretary of State.

AB 1089 (Stone) – Santa Cruz Metropolitan Transit District.

AB 1160 (Dahle) – Forestry: timber operations: sustained yield plans.

AB 1183 (Ramos) – Vessel operator: definition.

AB 1292 (Bauer-Kahan) – Firearms.

AB 1421 (Bauer-Kahan) – Supervised release: revocation.

AB 1662 (Ramos) – Native Americans: repatriation.

AB 1802 (Committee on Health) – Health care service plans.

AB 1803 (Committee on Health) – Pharmacy: health care coverage: claims for prescription drugs sold for retail price.

AB 1817 (Committee on Judiciary) – Family law omnibus.

AB 1821 (Committee on Judiciary) – Contracts.

AB 1830 (Gonzalez) – State claims.

SB 103 (Committee on Budget and Fiscal Review) – State employees: memorandum of understanding.

SB 224 (Grove) – Grand theft: agricultural equipment. 

The Governor also announced he has vetoed the following bills:

AB 603 (Melendez) – Firearms: retired peace officers.

AB 618 (Stone) – Transactions and use taxes: City of Scotts Valley: City of Emeryville.