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Last Friday was the final day of the 2011 legislative session. Both houses met until approximately 1:30 am on Saturday, debating some of the most controversial bills of the year. Below is a summary of bills and their status prepared by Norwood and Associates for IBA West members. The Governor has until October 12th to sign or veto all legislation.
AB 22 (Mendoza): This bill would prohibit the use of consumer credit reports for employment purposes unless the position sought falls into at least one of several categories specified by the bill, including 1) a managerial position (as defined under Wage Order 4 of the Industrial Welfare Commission), 2) a peace officer, 3) a position in the Department of Justice, or 4) a position where the information in the report is required by law to be disclosed or obtained. Additional categories of positions, as established by recent amendments, include 5) a position that involves regular access to specified personal information for any purpose other than the routine solicitation and processing of credit card applications in a retail establishment, 6) a position in which the person is or would be a named signatory on the employer's bank or credit card account, or authorized to transfer money or enter into financial contracts on the employer's behalf, 7) a position that involves access to confidential or proprietary information, as specified, or 8) a position that involves regular access to cash of $10,000 or more of an employer, customer or client, during the workday. In addition, this bill would require any person using a credit report for employment purposes to identify the specific basis for use of the report within the existing written notification that is currently sent to the subject of the credit report alerting him or her to the fact that a credit report will be used. Finally, this bill would exempt from these provisions banking and financial institutions already subject to privacy requirements under federal law.
AB 22 passed the Assembly with a vote of 48-28 and the Senate with a vote of 21-17.
AB 211 (Cedillo): This bill would provide, for injuries that cause permanent partial disability and occur on or after January 1, 2012, for a supplemental job displacement benefit in the form of a voucher for up to $6,000 to cover various reeducation and skill enhancement expenses which would expire two years after the date the voucher is furnished to the employee or five years after the date of injury, whichever is later. This bill would exempt employers who make an offer of reemployment or continued employment from providing vouchers. Lastly, this bill would require the Administrative Director of the Division of Workers' Compensation within the Department of Industrial Relations to adopt regulations implementing the program.
AB 211 passed the Assembly with a vote of 54-21 and the Senate with a vote of 24-13.
AB 228 (Fuentes): This bill would expand the authority for State Compensation Insurance Fund (SCIF) to provide workers' compensation coverage to out of state employees. However, this expansion would be limited to employers whose principal place of business is in California, with the majority of its operations and employees in California. AB 228 would state that SCIF may provide this coverage only as a reinsurer, and through an insurer that is admitted in both California and the state where the employees work. This bill would also require the insurer with which SCIF may contract to be rated at least A minus by A.M. Best Company, have substantial experience transacting workers' compensation insurance on another insurer's behalf, and have minimum surplus of at least $100,000,000. Under this bill, SCIF would be prohibited from initiating paid advertising or soliciting sponsorship of marketing campaigns to promote its authority to cover out-of-state employees. The provisions of AB 228 would sunset this authority on December 31, 2016. Lastly, this measure would require the Department of Insurance, by March 1, 2015, to file a report with the Secretary of the Senate and the Chief Clerk of the Assembly assessing SCIF's experience covering out of state employees, with recommendations concerning continuing, expanding, or limiting SCIF's authority to cover out of state employees.
AB 228 passed the Assembly with a vote of 50-26 and the Senate with a vote of 23-13.
AB 325 (Lowenthal): This bill would authorize employees to take four days of unpaid time off in the event of the death of certain relatives. AB 325 would prohibit an employer from refusing to grant a request for bereavement leave (rather than prohibiting an employer from discharging, disciplining or discriminating against such an employee). This bill would specify that an employer may not interfere with or restrain the exercise or attempted exercise of the right of an employee to take bereavement leave. Lastly, the measure would provide that the bereavement leave must be completed within three months (rather than 13 months) of the date of the death of the family member.
AB 325 passed the Assembly with a vote of 52-27 and the Senate with a vote of 22-13.
AB 335 (Solorio): This bill would requires the Administrative Director (AD) of the Division of Workers Compensation, in consultation with the Commission on Health and Safety and Workers' Compensation (CHSWC) to prescribe reasonable rules and regulations including notice of the right to consult with an attorney, where appropriate, for serving workers' compensation claims notices on an employee. This bill would require the AD, in consultation with the CHSWC, to make available on the Department of Industrial Relations' Internet Web site, and make available at district offices, informational material that describes the overall workers' compensation claims process. AB 335 passed the Assembly with a vote of 79-0 and the Senate for 35-0.
AB 378 (Solorio): This bill would: (1) prohibit physicians from referring a patient for pharmacy goods if that physician has a financial interest in the entity that receives the referral; (2) prohibit the maximum reasonable fees paid for pharmacy services and drugs from including specified reductions in the relevant Medi-Cal payment system; (3) require any compounded drug product, as defined, to be billed by the compounding pharmacy or dispensing physician at the ingredient level, as prescribed, and in accordance with regulations adopted by the California State Board of Pharmacy, and sets specified maximum reimbursement for a dangerous drug, dangerous device, or other pharmacy goods, dispensed by a physician, and would define related terms; (4) prohibit a provision concerning physician-dispensed pharmacy goods from being superseded by any provision of the official medical fee schedule adopted by the Administrative Director unless the official medical fee schedule provision is expressly applicable, and also require the provision adopted by the administrative director to govern if a provision concerning physician-dispensed pharmacy goods is inconsistent with the prescribed official medical fee schedule; and (5) delete obsolete provisions relating to the adoption of a medical fee schedule for patient facility fees for burn cases.
AB 378 passed the Assembly with a vote of 77-2 and the Senate with a vote of 38-0.
AB 456 (Wagner): This bill would clarify the procedure for mechanics liens claims. Specifically, this bill would clarify that mechanics' lien claimants in construction disputes shall specify in the required affidavit indicating service of the notice of mechanics lien that the notice was served on the owner or reputed owner of the property, consistently with existing obligations regarding service of these claims.
AB 456 passed the Assembly with a vote of 79-0 and the Senate with a vote of 35-0.
AB 469 (Swanson): This bill would: (1) provide that in addition to being subject to a civil penalty, any employer who pays or causes to be paid to any employee a wage less than the minimum fixed by an order of the Labor Commission shall be subject to paying restitution of wages to the employee; (2) make it a misdemeanor if an employer willfully violates specified wage statutes or orders, or willfully fails to pay a final court judgment or final order of the Labor commission for wages due; (3) extend the period within which the division may commence a collection action, as defined, from one year to three years, (4) extend the time required for a subsequently convicted employer to maintain a bond from six months to two years and requires that a subsequently convicted employer provide an accounting of assets to the Labor Commissioner; (5) require an employer to provide each employee, at the time of hiring, with a notice that specifies the rate and the basis, whether hourly, salary, commission, or otherwise, of the employee's wages and to notify each employee in writing of any changes to the information set forth in the notice within seven calendar days of the changes unless such changes are reflected on a timely wage statement or another writing. No notice is required for an employee who is employed by the state or any subdivision thereof, exempt from the payment of overtime, or covered by a collective bargaining agreement containing specified information; (6) in addition to the crime and employer obligations imposed by this bill, the Labor Code provides for other work-related standards and duties that, upon violation, are subject to specified penalties; (7) state that the Labor Code establishes minimum penalties for failure to comply with wage-related statutes and regulations.
AB 469 passed the Assembly with a vote of 51-27 and the Senate with a vote of 21-14.
AB 584 (Fong): AB 584 would require psychologists, for purposes of workers' compensation, to be licensed by California law. In addition, AB 584 would require physicians who authorize medical treatment, for purposes of workers' compensation utilization review, to be licensed by California law. This bill would also revise the Unemployment Insurance Code in order to provide that medical eligibility for state disability insurance benefits administered by the Employment Development Department may also be supported by a certificate of a health professional.
AB 584 passed the Assembly with a vote of 54-22 and the Senate with a vote of 24-14.
AB 585 (Fong): This bill would provide that certain workers who serve as firefighters at facilities of the National Aeronautics and Space Administration (NASA) shall receive the benefit that other firefighters have that establishes a rebuttable presumption that cancer was contracted on the job.
AB 585 passed the Assembly with a vote of 72-2 and the Senate with a vote of 33-3.
AB 621 (Calderon): This bill would provide that when a rental company enters into a rental agreement in the state for the rental of a vehicle to any renter who is not a resident of this country and, as part of, or associated with, the rental agreement, the renter purchases liability insurance, as defined, from the rental company in its capacity as a rental car agent for an authorized insurer, the rental company shall be authorized to accept, and, if served as set forth in this subdivision, shall accept, service of a summons and complaint and any other required documents against the foreign renter for any accident or collision resulting from the operation of the rental vehicle within the state during the rental period. If the rental company has a registered agent for service of process on file with the Secretary of State, process shall be served on the rental company's registered agent, either by first class mail, return receipt requested, or by personal service.
AB 621 passed the Assembly with a vote of 66-13 and the Senate with a vote of 40-0.
AB 624 (J. Perez): This bill would extend the Community Development Financial Institution investments tax credit until January 1, 2017. AB 624 would, however, prohibit the California Organized Investment Network (COIN) from certifying investments for the credit after January 1, 2015, and makes the following changes to the program: (1) eliminate limits on the amount that may be invested with a single CDFI and requirements to reserve specified amounts for insurance companies and small investments; (2) delete provisions that require investments to be certified on a first-come, first-served basis; and (3) specify that if aggregate investments exceed available amounts, priority would be given to investments by insurance companies for projects that benefit low-income persons and prioritize certain types of housing over single-family owned housing. This bill would also authorize the Insurance Commissioner to establish a COIN Advisory Board until January 1, 2015 to advise COIN on methods to increase insurance industry investments, facilitate contacts among entities qualified for the CDFI credit, and recommend programmatic guidelines.
AB 624 passed the Assembly with a vote of 73-2 and the Senate with a vote of 37-1.
AB 922 (Monning): This bill would transfer the Department of Managed Health Care (DMHC) from the California Business, Transportation and Housing Agency (BTH) to the California Health and Human Services Agency (CHHS). In addition, the bill would transfer the Office of the Patient Advocate (OPA) from DMHC to CHHS effective July 1, 2012, and revise OPA's current purpose and duties, and assigns new duties consistent with requirements of the Patient Protection and Affordable Care Act (PPACA).
AB 922 passed the Assembly with a vote of 51-28 and the Senate with a vote of 21-12.
AB 947 (Solorio): This bill would authorize up to 240 weeks of temporary disability benefits for workers who (1) on the advice of a workers’ compensation system physician, delayed surgery while less expensive or invasive treatment was tried, (2) used up to 104 weeks of temporary disability benefits during that time, and (3) required surgery and post-surgery recovery period exhausted any remaining weeks of temporary disability benefits.
AB 947 passed the Assembly with a vote of 49-27 and the Senate with a vote of 23-14.
AB 1024 (Hueso): This bill would authorize insurance agents and brokers to sell low-cost auto insurance through an Internet website, and requires the California Automobile Assigned Risk Plan to create a website for referring consumers to certified agents or brokers for the purchase of low-cost automobile insurance. The bill would additionally require the Department of Motor Vehicles to update the insert regarding the low-cost automobile insurance program that is included in registration renewals to reflect the online program established by this bill.
AB 1024 passed the Assembly with a vote of 77-0 and the Senate with a vote of 33-3.
AB 1155 (Alejo): This bill states the intent of the Legislature to prohibit the use of risk factors and specified characteristics to deny an injured worker his/her rightful benefit when disabled in the workplace. This bill would specify that the approximate percentage of a permanent disability of an injured employee caused by other factors not directly arising out of the industrial injury of the employee shall not include consideration of race, religious creed, color, national origin, age, gender, marital status, sex, sexual orientation, or genetic characteristics, in the determination of worker's compensation benefit.
AB 1155 passed the Assembly with a vote of 51-27 and the Senate with a vote of 24-14.
AB 1168 (Pan): This bill would require the Administrative Director of the Division of Workers' Compensation to adopt a fee schedule for services and testimony by vocational experts in the workers' compensation system.
AB 1168 passed the Assembly with a vote of 78-0 and the Senate with a vote of 38-0.
AB 1215 (Blumenfield): This bill would require dealers of new motor vehicle to participate in the electronic vehicle registration program of the Department of Motor Vehicles (DMV). Additionally, the bill would require license plates to be attached upon receipt by the vehicle owner. AB 1215 would also increase the maximum dealer document preparation charge that dealers may charge. Dealers would be required for used vehicles to obtain National Motor Vehicle Title Information System (NMVTIS) reports.
AB 1215 passed the Assembly with a vote of 72-4 and the Senate with a vote of 30-4.
AB 1369 (Gatto): This bill would disallow any deductions from gross income taxes any expenses attributed to income derived by a taxpayer from any criminal profiteering activity, including insurance fraud.
AB 1369 passed the Assembly with a vote of 75-0 and the Senate with a vote of 39-0.
AB 1416 (Committee on Insurance): This insurance omnibus bill is recommended by the Insurance Commissioner and the Department of Insurance to remove inconsistencies within existing laws governing the business of insurance, and to clarify and clean-up several code sections.
AB 1416 passed the Assembly with a vote of 78-0 and the Senate with a vote of 38-0.
AB 1423 (Perea): This bill would conform several provisions of state income tax laws to the federal Regulated Investment Company (RIC) Modernization Act of 2010.
AB 1423 passed the Assembly with a vote of 64-9 and the Senate with a vote of 38-0.
AB 1425 (Committee on Insurance): This bill would require regulations adopted by the Insurance Commissioner relating to life settlements and the low-cost automobile insurance program to be adopted pursuant to the Administrative Procedure Act , and would clarify how workers' compensation insurers may comply with recently enacted notice requirements.
AB 1425 passed the Assembly with a vote of 79-0 and the Senate with a vote of 38-0.
AB 1426 (Solorio): This bill would eliminate the appointed position of Court Administrator (CA) within the Division of Workers' Compensation (DWC)and reassigns the CA's duties to the Workers' Compensation Appeals Board (WCAB) or Administrative Director of the DWC, as appropriate.
AB 1426 passed the Assembly with a vote of 78-0 and the Senate with a vote of 35-0.
SB 6 (Calderon): This bill would update California’s Real Estate Law, Appraisal Law, and Civil Code, to reflect recent changes enacted at the federal level, pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank).
SB 6 passed the Assembly with a vote of 78-0 and the Senate with a vote of 40-0.
SB 51 (Alquist): This bill would establish enforcement authority in California law to implement provisions of the federal Patient Protection and Affordable Care Act (PPACA) related to Medical Loss Ratio (MLR) requirements on health plans and health insurers and prohibitions on annual and lifetime benefits.
SB 51 passed the Assembly with a vote of 53-26 and the Senate with a vote of 25-14.
SB 127 (Emmerson): This bill would require the Administrative Director of the Division of Workers' Compensation to annually adopt the Current Procedural Terminology (CPT) codes, descriptors, and modifiers published by the American Medical Association.
SB 127 passed the Assembly with a vote of 79-0 and the Senate with a vote of 39-0.
SB 131 (Gaines): This bill would clarify the allocation of Department of Insurance reporting requirements under the surplus lines law when multiple brokers are involved in a single surplus lines transaction by permitting delegation of the responsibility by mutual agreement among the brokers as a recognized option.
SB 131 passed the Assembly with a vote of 78-0 and the Senate with a vote of 38-0.
SB 217 (Vargas): This bill, as recently amended, would allow persons to exempt company registration under the California Finance Lenders Law in order to comply with the Secure and Fair Enforcement of Mortgage Licensing Act of 2008. Furthermore, this bill would provide clarification on the issuance of mortgage loan originator licenses with the existence of expunged or pardoned felony convictions. SB 217 contains two separate provisions, both of which are intended to update California's SAFE Act laws. One provision would update California law to reflect changes contained in recently-released final rules issued by HUD. The other provision helps alleviate SAFE Act compliance challenges being experienced by State Farm and Primerica Insurance Companies relative to the licensure of mortgage loan originators.
SB 217 passed the Assembly with a vote of 78-0 and the Senate with a vote of 40-0.
SB 299 (Evans): This bill would prohibit employers from refusing to maintain and pay for insurance coverage for the duration of maternity leave up to four months. This bill would authorize employers to recover insurance premiums from the employee if the employee fails to return from maternity leave provided that the employee's failure to return from maternity leave is not due to leave taken under the Moore-Brown-Roberti Family Rights Act, for a health condition that entitles the employee leave, or for another circumstance beyond the control of the employee. This bill would require the collective bargaining agreements of state agencies govern maternity coverage specified in this bill.
SB 299 passed the Assembly with a vote of 52-26 and the Senate with a vote of 27-9.
SB 364 (Yee): This bill would impose a penalty on a qualified taxpayer that claims a business tax credit, enacted after January 1, 2012, but fails to maintain the requisite number of full-time equivalent employees in subsequent years, as provided.
SB 364 passed the Assembly with a vote of 42-28 and the Senate with a vote of 22-15.
SB 457 (Calderon): This bill would require the Workers’ Compensation Appeals Board to determine, on the basis of liens filed, reimbursement for benefits paid or services provided by a self-insured employee welfare benefit plan, notwithstanding the Official Medical Fee Schedule, when an award is made for reimbursement for self-procured medical costs for the effects of an injury or illness arising out of and in the course of employment. This bill states that its provisions do not modify in any way the rights of any health care provider to file and prosecute a lien.
SB 457 passed the Assembly with a vote of 75-0 and the Senate with a vote of 39-0.
SB 459 (Corbett): This bill would prohibit willful misclassification of individuals as independent contractors. The bill also would prohibit charging individuals who have been mischaracterized as independent contractors a fee or making deductions from compensation where those acts would have violated the law if the individuals had not been mischaracterized. The bill would authorize the Labor and Workforce Development Agency to assess specified civil penalties from, and would require the agency to take other specified disciplinary actions against, persons or employers violating these prohibitions. It would also require the agency to notify the Contractors' State License Board of a violator that is a licensed contractor, and require the board to initiate an action against the licensee. The bill would authorize an individual to file a complaint to request the Labor Commissioner to issue a determination that a person or employer has violated these prohibitions with regard to the individual filing the complaint. The bill would authorize the Labor Commissioner to assess civil and liquidated damages against a person or employer based on a determination that the person or employer has violated these prohibitions. This bill would provide that a person who, for money or other valuable consideration, knowingly advises an employer to treat an individual as an independent contractor to avoid employee status for the individual shall be jointly and severally liable with the employer if the individual is not found to be an independent contractor. This bill would exempt from the provisions regarding joint and several liability a person who provides advice to his or her employer or an attorney who provides legal advice in the course of practicing law.
SB 459 passed the Assembly with a vote of 51-26 and the Senate with a vote of 22-14.
SB 474 (Evans): This bill would, except in certain instances, place restrictions on commercial construction agreements, and insurance provisions associated therewith, that require a promisor to indemnify, release, hold harmless, insure, or defend another person against the actual or claimed liability, damage, or expense arising, in whole or in part, from the negligence, willful misconduct, defective design, violation of law, or other fault of that person or that person's agents, employees, independent contractors, subcontractors, or representatives. This bill would thus provide that contract and insurance requirements that shift indemnity away from at-fault parties to non-fault parties would be void and unenforceable.
SB 474 passed the Assembly with a vote of 69-1 and the Senate with a vote of 39-1.
SB 507 (DeSaulnier): This bill would increase the penalty for new owners failing to file a Change in Ownership Statement upon request from the assessor or the Board of Equalization (BOE) from $2,500 to $5,000 for property eligible for the homeowners' exemption, and from $5,000 to $20,000 for property not eligible for the homeowners' ex-emption. This bill would extend the deadline from 45 days to 90 days for new owners to file a change of ownership statement with either the assessor or BOE, and to comply with the request without penalty. This bill would apply to statements law requires new owners file with assessors for locally-assessed property, or with BOE, which collects the statement when a legal entity changes ownership or control.
SB 507 passed the Assembly with a vote of 47-28 and the Senate with a vote of 21-15.
SB 590 (Calderon): This bill would exempt the sale of certain life insurance policies for funeral and burial expenses from the requirement that the agent provide the senior with a notice at least 24 hours prior to the initial meeting, provided a 60-day cancellation period is allowed.
SB 590 passed the Assembly with a vote of 71-5 and the Senate with a vote of 27-12.
SB 621 (Calderon): This bill would invalidate any provision in a life insurance or disability insurance policy that provides discretionary authority to the insurer to determine eligibility for benefits or coverage. Specifically, this bill would provide that if any life insurance or disability insurance policy reserves discretionary authority to the insurer or agent to determine eligibility for benefits or coverage, or provides standards of interpretation that are inconsistent with the laws of this state, then that provision is void and unenforceable. Additionally, this bill would define discretionary authority to be a policy provision that has the effect of conferring discretion on an insurer or other administrator to determine entitlement to benefits or to interpret policy language that could lead to a deferential standard of review by a court.
SB 621 passed the Assembly with a vote of 78-0 and the Senate with a vote of 40-0.
SB 712 (Committee on Insurance): This bill would require every admitted property and casualty insurer, unless exempt, to annually submit a Statement of Actuarial Opinion with supporting documents and an Actuarial Opinion Summary, as specified, and exempts from public disclosure, required under the California Public Records Act, all actuarial reports, workpapers, or opinion summaries submitted in support of the Statement of Actuarial Opinion, and such records would not be subject to subpoena or discovery, or be admissible in evidence in any private party civil action. In addition, this bill would extend, from January 1, 2013 to January 1, 2023, the time for bonds to be issued on behalf of the California Insurance Guarantee Association to pay the claims of insolvent workers' compensation insurers.
SB 712 passed the Assembly with a vote of 78-1 and the Senate with a vote of 36-0.
SB 715 (Calderon): This bill would require that insurance producers and insurers selling annuities have reasonable grounds to believe the products they are recommending are suitable for consumers. Specifically, this bill states the bill's purpose is to require insurers to establish a system to supervise recommendations and to set forth standards and procedures for the recommendations of annuity products to consumers so the needs and financial objectives of consumers are appropriately addressed. SB 715 would require insurer producers to complete a one-time eight-hour annuity training course approved by the Insurance Commissioner and to satisfactorily complete four continuing education credits prior to license renewal every two years. This bill would specify that insurers are responsible for compliance with this bill. Lastly, the bill would require the Insurance Commissioner to adopt reasonable rules and regulations as necessary to administer this bill.
SB 715 passed the Assembly with a vote of 78-0 and the Senate with a vote of 39-0.
SB 757 (Lieu): This bill would require every group health care service plan contract and every policy or certificate of group health insurance marketed, issued, or delivered to a resident of this state, regardless of the situs of the contract to comply with existing law that provides for equal coverage for registered domestic partners.
AB 757 passed the Assembly with a vote of 50-24 and the Senate with a vote of 24-13.
SB 869 (Yee): This bill would increase the penalty for a person who, after preparing a written estimate to repair a deployed airbag, fails to properly repair and restore that airbag to its original condition.
SB 869 passed the Assembly with a vote of 77-0 and the Senate with a vote of 40-0.