BILL NUMBER: SB 1407	CHAPTERED
	BILL TEXT

	CHAPTER  651
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2010
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2010
	PASSED THE SENATE  AUGUST 30, 2010
	PASSED THE ASSEMBLY  AUGUST 30, 2010
	AMENDED IN ASSEMBLY  AUGUST 20, 2010
	AMENDED IN SENATE  APRIL 12, 2010

INTRODUCED BY   Committee on Banking, Finance and Insurance (Senators
Calderon (Chair), Cogdill, Correa, Cox, Florez, Kehoe, Liu,
Lowenthal, Padilla, Price, and Runner)

                        FEBRUARY 19, 2010

   An act to amend Section 11797 of the Insurance Code, relating to
insurance.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1407, Committee on Banking, Finance and Insurance. Insurance:
State Compensation Insurance Fund: investments.
   Existing law creates the State Compensation Insurance Fund
administered by a 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 requires the board
of directors to invest and reinvest, from time to time, all moneys in
the State Compensation Insurance Fund in excess of current
requirements, in the same manner as is authorized in certain
provisions applicable to private insurance carriers.
   This bill would expand the board's choices for the investment of
excess moneys by allowing the board to invest or reinvest in
additional investments in the same manner as provided for private
insurance carriers, including, but not limited to, interest bearing
obligations issued by a nonaffiliate institution, all deposits and
debt obligations of banks or savings and loan associations whose
accounts are insured by an agency or instrumentality of the federal
government, and bonds issued by any county, municipality, or school
district in this state to represent assessments for local
improvements authorized by law.
   The bill would incorporate additional changes to Section 11797 of
the Insurance Code, proposed by AB 1873 of the 2009-10 Regular
Session, to be operative only if both bills are chaptered and become
effective on or before January 1, 2011, and this bill is chaptered
last.


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

  SECTION 1.  Section 11797 of the Insurance Code is amended to read:

   11797.  (a) The board of directors shall cause all moneys in the
State Compensation Insurance Fund that are in excess of current
requirements to be invested and reinvested, from time to time, in the
same manner as provided for private insurance carriers pursuant to
Article 3 (commencing with Section 1170) and Article 4 (commencing
with Section 1190) of Chapter 2 of Part 2 of Division 1, but
excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6,
1192.7, 1192.9, 1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82,
1194.85, 1198, and 1199.
   (b) (1) Notwithstanding any other provision of law, the State
Compensation Insurance Fund may purchase general obligation bonds or
other evidence of indebtedness issued by the state, including, but
not limited to, notes issued pursuant to Part 5 (commencing with
Section 17300) of Division 4 of Title 2 of the Government Code or
warrants issued pursuant to Part 4 (commencing with Section 17000) of
Division 4 of Title 2 of the Government Code, in any amount and to
enter into purchase contracts with the state for this purpose.
   (2) The bonds or other evidence of indebtedness specified in
paragraph (1), upon delivery to the State Compensation Insurance
Fund, shall, for all purposes, be valid and binding obligations of
the issuer thereof, be validly issued and outstanding in accordance
with their stated terms, and not be deemed to be owned by or on
behalf of the issuer thereof.
  SEC. 1.5.  Section 11797 of the Insurance Code is amended to read:
   11797.  (a) The board of directors shall cause all moneys in the
State Compensation Insurance Fund that are in excess of current
requirements to be invested and reinvested, from time to time, in the
same manner as provided for private insurance carriers pursuant to
Article 3 (commencing with Section 1170) and Article 4 (commencing
with Section 1190) of Chapter 2 of Part 2 of Division 1, but
excluding Sections 1191, 1191.1, 1191.5, 1192.2, 1192.4, 1192.6,
1192.7, 1192.9, 1192.95, 1192.10, 1194.7, 1194.8, 1194.81, 1194.82,
1194.85, 1198, and 1199.
   (b) (1) (A) Notwithstanding any other law, the State Compensation
Insurance Fund may purchase general obligation bonds or other
evidence of indebtedness issued by the state, including, but not
limited to, notes issued pursuant to Part 5 (commencing with Section
17300) of Division 4 of Title 2 of the Government Code or warrants
issued pursuant to Part 4 (commencing with Section 17000) of Division
4 of Title 2 of the Government Code, in any amount and to enter into
purchase contracts with the state for this purpose.
   (B) Notwithstanding any other law, the State Compensation
Insurance Fund may purchase Property Assessed Clean Energy (PACE)
bonds, as defined in Section 26104 of the Public Resources Code.
   (2) The bonds or other evidence of indebtedness specified in
paragraph (1), upon delivery to the State Compensation Insurance
Fund, shall, for all purposes, be valid and binding obligations of
the issuer thereof, be validly issued and outstanding in accordance
with their stated terms, and not be deemed to be owned by or on
behalf of the issuer thereof.
  SEC. 2.  Section 1.5 of this bill incorporates amendments to
Section 11797 of the Insurance Code proposed by both this bill and
Assembly Bill 1873. It shall only become operative if (1) both bills
are enacted and become effective on or before January 1, 2011, (2)
each bill amends Section 11797 of the Insurance Code, and (3) this
bill is enacted after Assembly Bill 1873, in which case Section 1 of
this bill shall not become operative.