AB 1874 Assembly Bill

BILL NUMBER: AB 1874	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 25, 2008

INTRODUCED BY   Assembly Member Coto

                        FEBRUARY 4, 2008

   An act to amend Sections 11770 and 11785 of, and to repeal Section
11770.5 of, the Insurance Code, relating to workers' compensation
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1874, as amended, Coto. State Compensation Insurance Fund.
   Existing law provides for the existence of the State Compensation
Insurance Fund to be administered by its board of directors for the
purpose of transacting workers' compensation insurance, and insurance
against the expense of defending any suit for serious and willful
misconduct, against an employer or his or her agent, and insurance to
employees and other persons of the compensation fixed by the workers'
compensation laws for employees and their dependents. Existing law
provides that the board of directors of the State Compensation
Insurance Fund is composed of 5 members, one of whom shall be from
organized labor, appointed by the Governor. Existing law provides
that the Governor shall appoint the chairperson who shall serve at
the pleasure of the Governor, and makes the Director of Industrial
Relations, the Speaker of the Assembly, and the President pro Tempore
of the Senate, or their designees, ex officio, nonvoting members of
the board. Existing law requires each board member to have been a
policyholder or an employee or member of a policyholder in the fund,
as specified, and to remain in that status during board membership.
   This bill would provide that the board of directors of the State
Compensation Insurance Fund is composed of 9 members, 7 of whom shall
be appointed by the Governor  , 2 of whom shall be from
organized labor  .  The members appointed by the
Governor would be required to have substantial experience in private
sector positions, as specified. The Governor would appoint the
chairperson.  The Speaker of the Assembly would appoint one
member  who would represent organized labor,  and the Senate
Committee on Rules would appoint one member  who shall have been
a policyholder of the State Compensation Insurance Fund, as
specified  . This bill would provide for the terms of office of
board members, as specified  , and provide that a majority of
board members, other than the ex officio members, shall have been
policyholders or the employees or members of a policyholder in the
fund for one year immediately preceding the appointment, and must
continue in this status during the period of his or her membership.
This bill would provide that the lack of a majority of members who
are policyholders or the employees or members of a policyholder in
the fund, as specified, does not prevent the board of directors of
the fund from meeting and conducting business so long as a quorum is
present  . 
   Existing law provides that members of the board shall receive
their actual and necessary traveling expenses incurred while
performing their duties, and with the exception of ex officio
members, $100 per day they attend meetings.  
   This bill would provide that members appointed by the Governor
receive compensation fixed by the California Citizens Compensation
Commission, as specified. 
   Existing law provides that the board of directors shall appoint a
president of the fund and fix his or her salary. The president shall
manage and conduct the business and affairs of the fund under the
general direction and subject to the approval of the board of
directors, and shall perform other duties as the board of directors
prescribes.
   This bill would provide that the board of directors shall appoint
 a general counsel, a chief technology officer,  a chief
financial officer  ,  and a chief investment officer and fix
their salaries. Each officer would perform duties as the board
directs.
   Existing law provides that the board of directors of the fund is
not a "state body," as defined.
   This bill would repeal that provision.
   Existing law, the Bagley-Keene Open Meeting Act, provides that the
meetings of state bodies, as defined, generally be open to the
public, noticed, and provides, among other things, the public the
opportunity to address the state body on agenda items. Existing law,
the California Public Records Act, provides for public access to the
records of state agencies, as specified. Existing law exempts the
board from each of these acts.
   This bill would repeal those exemptions, and would explicitly make
the board subject to the Bagley-Keene Open Meeting Act.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 11770 of the Insurance Code is amended to read:

   11770.  (a) The State Compensation Insurance Fund is continued in
existence, to be administered by its board of directors for the
purpose of transacting workers' compensation insurance, and insurance
against the expense of defending any suit for serious and willful
misconduct, against an employer or his or her agent, and insurance to
employees and other persons of the compensation fixed by the workers'
compensation laws for employees and their dependents. Any
appropriation made therefrom or thereto before the effective date of
this code shall continue to be available for the purposes for which
it was made.
   (b)  (1)    The board of directors of the State
Compensation Insurance Fund is composed of nine members, seven of
whom shall be appointed by the  Governor, including two who
shall be from organized labor   Governor  . The
Governor shall appoint the  chairperson who shall serve at
the pleasure of the Governor.   chairperson. The members
appointed by the Governor shall have substantial experience in
private sector positions involving workers' compensation, legal
investment, investment, financial, corporate governance and
management, accounting, or auditing responsibilities with companies
of sufficient size as to make their qualifications relevant to an
enterprise of the financial   and operational size of the
State Compensation Insurance Fund. 
    (2)    The Speaker of the Assembly shall
appoint one member  who shall represent organized labor, 
and the Senate Committee on Rules shall appoint one member  who
shall have been a policyholder of the State Compensation Insurance
Fund for one year immediately preceding the appointment, and must
continue in this status during the period of his or her membership
 .  The 
    (3)     The  Director of Industrial
Relations, the Speaker of the Assembly, and the President pro Tempore
of the Senate, or their designees, shall be ex officio, nonvoting
members of the board, and shall not be counted as members of the
board for quorum purposes or any other purpose. 
   (4) Notwithstanding subdivision (c), the initial term of two of
the directors appointed by the Governor shall be five years, the
initial term of two of the directors appointed by the Governor shall
be six years, and the initial term of one of the directors appointed
by the Governor shall be eight years. 
   (c) The term of office of the members of the board, other than
that of the director, the Speaker of the Assembly, and the President
pro Tempore of the Senate, shall be  five  
seven  years and they shall hold office until the appointment
and qualification of their  successors.  successors,
except for the following:  
   (1) The term of office of the first additional member from
organized labor appointed by the Governor pursuant to amendment of
this section effective January 1, 2009, shall expire on January 15,
2011.  
   (2) The term of office of the second additional member from
organized labor appointed by the Governor pursuant to amendment of
this section effective January 1, 2009, shall expire on January 15,
2012.  
   (3) The term of office of the member first appointed by the Senate
Committee on Rules pursuant to this section effective January 1,
2009, shall expire on January 15, 2013.  
   (4) The term of office of the member first appointed by the
Speaker of the Assembly pursuant to this section effective January 1,
2009, shall expire on January 15, 2014. 
   (d)  (1)    Each member of the board 
appointed pursuant to paragraphs (2) and (3) of subdivision (b) 
shall receive his or her actual and necessary traveling expenses
incurred in the performance of his or her duty as a member and, with
the exception of the ex officio members, one hundred dollars ($100)
for each day of his or her actual attendance at meetings of the
board.  In order to qualify for membership on the board, a
majority of the members, other than the ex officio members, shall
have been policyholders or the employees or members of a policyholder
in the State Compensation Insurance Fund for one year immediately
preceding the appointment, and must continue in this status during
the period of his or her membership. However, the lack of a majority
of members who are policyholders or the employees or members of a
policyholder in the State Compensation Insurance Fund for one year
immediately preceding the appointment, and who must continue in this
status during the period of his or her membership, does not prevent
the board of directors of the fund from meeting and conducting
business so long as a quorum is present.  
   (2) (A) Each member of the board appointed pursuant to paragraph
(1) of subdivision (b) shall receive his or her actual and necessary
traveling expenses incurred in the performance of his or her duty as
a member, and the compensation fixed pursuant to subparagraph (B).
 
   (B) The compensation for members of the board appointed pursuant
to paragraph (1) of subdivision (b) shall be fixed by the California
Citizens Compensation Commission established by Section 8 of Article
III, and any costs incurred by the commission in carrying out this
requirement shall be paid by the State Compensation Insurance Fund.
In determining the compensation for members of the board, the
commission shall give due consideration to the factors specified in
the California Constitution, to the extent relevant, but shall also
give due consideration to the compensation paid to directors of
entities similar to the State Compensation Insurance Fund, and to
directors of private companies of similar size as the State
Compensation Insurance Fund. 
   (e) The board shall be subject to the Bagley-Keene Open Meeting
Act, Article 9 (commencing with Section 11120) of Chapter 1 of Part 1
of Division 3 of Title 2 of the Government Code.
  SEC. 2.  Section 11770.5 of the Insurance Code is repealed.
  SEC. 3.  Section 11785 of the Insurance Code is amended to read:
   11785.  The board of directors shall appoint a president,  a
general counsel, a chief technology officer,  chief financial
officer, and a chief investment officer of the fund and fix their
salaries. The president shall manage and conduct the business and
affairs of the fund under the general direction and subject to the
approval of the board of directors. Each of these officers shall
perform duties as the board of directors prescribes.