BILL NUMBER: AB 125	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  FEBRUARY 22, 2011

INTRODUCED BY    Assembly Member   Solorio
  Committee on Insurance 

                        JANUARY 10, 2011

    An act to add Section 1720.5 to the Labor Code, relating
to public works.   An act to amend Section 1758.992 of
the Insurance Code, relating to insurance. 


	LEGISLATIVE COUNSEL'S DIGEST


   AB 125, as amended,  Solorio   Committee on
Insurance  .  Public works: prevailing wages. 
 Insurance: guaranteed automobile protection.  
   Existing law defines guaranteed automobile protection (GAP)
insurance as insurance in which a person agrees to indemnify a
vehicle purchaser or lessee for any of the difference between the
actual cash value of the insured's vehicle at the time of an
unrecovered theft or total loss and the amount owed on the vehicle
pursuant to the terms of a loan, lease agreement, or installment
sales contract used to purchase or lease the vehicle.  
   This bill would define GAP insurance to also cover the difference
between money received from the purchaser's or lessee's automobile
insurer and some or all of the amount owed on the vehicle at the time
of the unrecovered theft or total loss.  
   Existing law provides that the following is not GAP insurance and
does not require an insurance license to sell: (1) a promise
contained in a conditional sales contract for the sale of a vehicle
by a licensed motor vehicle dealer or a promise contained in a lease
agreement for the lease of a vehicle by a licensed motor vehicle
dealer or leasing company to waive all or a portion of the difference
between the actual cash value of the insured's vehicle at the time
of an unrecovered theft or total loss and the amount owed on the
vehicle pursuant to the terms of a loan, lease agreement, or
installment sales contract used to purchase or lease the vehicle; and
(2) a promise by a lender, as part of a debt obligation, to purchase
or lease a vehicle in which the lender agrees to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.  
   This bill would expand the contractual promises exempt from the
definition of GAP insurance, and from requiring an insurance license
to sell, to include the amount owed on the vehicle at the time of an
unrecovered theft or total loss, after credit for money received from
the purchaser's or lessee's automobile insurer or from a 3rd-party
liability insurer, and that the promise may also include a promise to
waive some or all of the amount of the purchaser's or lessee's
deductible.  
   Existing law requires that the above contractually promised
coverage may not include a promise to pay money to a vehicle
purchaser or lessee in addition to waiving the difference between the
actual cash value and the amount owed.  
   This bill would additionally prohibit coverage resulting in a
credit balance in favor of the purchaser or lessee.  
   The bill would also make conforming and related changes. 

   Existing law defines "public works," for purposes of regulating
public works contracts, as, among other things, construction,
alteration, demolition, installation, or repair work done under
contract and paid for, in whole or in part, out of public funds.
Existing law further requires that, except as specified, not less
than the general prevailing rate of per diem wages be paid to workers
employed on public works and imposes misdemeanor penalties for a
violation of this requirement. Existing law provides that for the
purposes of provisions of law relating to the payment of prevailing
wages, "public works" includes specified types of construction,
alteration, demolition, installation, and repair work. 

   This bill would revise the definition of "public works" for these
purposes to include the construction, alteration, demolition,
installation, and repair work done under private contract when
specified conditions are met, including the requirement that the work
is performed in connection with the construction or maintenance of
renewable energy generation capacity, located on property wholly or
partially owned by a school district or community college district,
or on public property, specifically to serve a school district or
community college district.  
   Because the violation of prevailing wage requirements by local
public entities when engaged in these public works projects would
result in the imposition of misdemeanor penalties, this bill would
impose a state-mandated local program.  
   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
  no  . State-mandated local program:  yes
  no  .


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

   SECTION 1.    Section 1758.992 of the  
Insurance Code   is amended to read: 
   1758.992.  As used in this article, the following definitions have
the following meanings:
   (a) "Enrollment" means the process of soliciting or accepting
enrollments or applications from a debtor under a credit insurance
policy, which includes informing the debtor of the availability of
coverage, calculating the insurance charge, preparing and delivering
the certificate of insurance or notice of proposed insurance,
answering questions regarding the coverage, or otherwise assisting
the debtor in making an informed decision whether or not to elect to
purchase credit insurance.
   (b) "Creditor" means a lender of money or a vendor or lessor of
goods, services, property, rights, or privileges, for which payment
is arranged through a credit transaction, or any successor to the
right, title, or interest of that lender, vendor, or lessor, and any
affiliate, associate, subsidiary, subcontractor, director, officer,
or employee of any of them or any other person in any way associated
with any of them.
   (c) "Credit insurance agent license" means an agent license issued
to an individual or organization for the enrollment and sale of
credit insurance.
   (d)  (1)    "Credit insurance" includes credit
life insurance, credit disability insurance, credit involuntary
unemployment insurance, credit loss-of-income insurance, credit
property insurance, or guaranteed automobile protection (GAP)
insurance. 
    Credit 
    (2)     Credit  insurance also
includes any other form of insurance offered in connection with an
extension of credit that is limited to partially or wholly
extinguishing that credit obligation that the commissioner determines
should be designated a form of credit insurance. 
    The 
    (3)     The  commissioner may adopt,
pursuant to Chapter 3.5 (commencing with Section 11340) of Part 1 of
Division 3 of Title 2 of the Government Code, reasonable rules and
regulations necessary to carry out this subdivision.
   (e) (1) "Credit life insurance" means insurance on the life of a
debtor pursuant to or in connection with a specific loan or other
credit transaction, exclusive of any insurance procured at no expense
to the debtor. Insurance shall be deemed procured at no expense to
the debtor unless the cost of the credit transaction to the debtor
varies depending on whether or not the insurance is procured.
   (2) "Credit disability insurance" means insurance on a debtor to
provide indemnity for payments becoming due on a specific loan or
other credit transaction while the debtor is disabled, as defined in
the policy, exclusive of any insurance procured at no expense to the
debtor. Insurance shall be deemed to have been procured at no expense
to the debtor unless the cost of the credit transaction to the
debtor varies depending on whether or not the insurance is procured.
   (f) "Credit involuntary unemployment insurance" or "credit
loss-of-income insurance" means insurance issued to provide indemnity
for payments becoming due on a specific loan or other credit
transaction while the debtor is involuntarily unemployed, as defined
in the policy.
   (g) "Credit property insurance" means insurance that provides
coverage (1) on personal property pledged or offered as collateral
for securing a personal or consumer loan, or (2) on personal property
purchased under an installment sales agreement or through a consumer
credit transaction, but does not include any insurance that provides
theft, collision, liability, property damage, or comprehensive
insurance coverage in any automobile or any other self-propelled
vehicle that is designed primarily for operation in the air or on the
highways, waterways, or sea, and its operating equipment, or that is
necessitated by reason of the liability imposed by law for damages
arising out of the ownership, operation, maintenance, or use of those
vehicles. However, that excluded insurance does include single
interest coverage on any of those vehicles that insures the interest
of the creditor in the same manner as collateral secures a loan.
   (h) (1) "Guaranteed automobile protection" (GAP) insurance means
insurance in which a person agrees to indemnify a vehicle purchaser
or lessee for  any of the difference between the actual cash
value of the insured's vehicle at the time of an unrecovered theft or
total loss and the amount owed on the vehicle pursuant to the terms
of a loan, lease agreement, or installment sales contract used to
purchase or lease the vehicle. GAP insurance may also include a
promise to pay up to five thousand dollars ($5,000) to an insured, in
addition to the sum needed to indemnify the insured for the
difference between the actual cash value and the outstanding debt, to
purchase or lease another vehicle   some or all of the
amount owed on the vehicle at the time of an unrecovered theft or
total loss, after credit for money received from the purchaser's or
lessee's physical damage insurer, pursuant to the terms of a loan,
lease agreement, or conditional sales contract used to purchase or
lease the vehicle. GAP insurance, whether sold by a credit insurance
agent or another type of licensee authorized to sell GAP insurance,
may also include a promise to pay up to five thousand dollars
($5,000) to an insured, in addition to the sum needed to indemnify
the insured for the amount owed, to purchase or lease another vehicle
 .
   (2) GAP insurance does not include, and no insurance license of
any type under this code is required to offer, any of the following:

   (A) A promise contained in a conditional sales contract for the
sale of a vehicle by a licensed motor vehicle dealer or a promise
contained in a lease agreement for the lease of a vehicle by a
licensed motor vehicle dealer or leasing company to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.  
   (B) A promise by a lender as part of a debt obligation to purchase
or lease a vehicle in which the lender agrees to waive all or a
portion of the difference between the actual cash value of the
insured's vehicle at the time of an unrecovered theft or total loss
and the amount owed on the vehicle pursuant to the terms of a loan,
lease agreement, or installment sales contract used to purchase or
lease the vehicle.  
   (C) Coverage under subparagraphs (A) and (B) may not include a
promise to pay money to a vehicle purchaser or lessee in addition to
waiving the difference between the actual cash value and the amount
owed. For purposes of this paragraph, a promise to pay money does not
include, and a dealer shall be allowed to offer, a discount or
credit provided to a consumer as an incentive for purchasing or
leasing a new vehicle if the consumer is required to use the discount
or credit on a purchase or lease from the dealer that sold or leased
the original vehicle to the consumer.  
   (A) A promise contained in a conditional sales contract for the
sale of a vehicle by a licensed motor vehicle dealer, or a promise
contained in a lease agreement for the lease of a vehicle by a
licensed motor vehicle dealer or leasing company, to waive some or
all of either of the following:  
   (i) The difference between the actual cash value of the purchaser'
s or lessee's vehicle at the time of an unrecovered theft or total
loss and the amount owed on the vehicle pursuant to the terms of a
lease agreement or conditional sales contract used to purchase or
lease the vehicle.  
   (ii) The amount owed on the vehicle at the time of an unrecovered
theft or total loss, after credit for money received from the
purchaser's or lessee's physical damage insurer or from a third-party
liability insurer. Such a promise may also include a promise to
waive some or all of the amount of the purchaser's or lessee's
deductible.  
   (B) A promise by a lender as part of a debt obligation to purchase
or lease a vehicle in which the lender agrees to waive some or all
of either of the following:  
   (i) The difference between the actual cash value of the purchaser'
s or lessee's vehicle at the time of an unrecovered theft or total
loss and the amount owed on the vehicle pursuant to the terms of the
debt obligation used to purchase or lease the vehicle.  
   (ii) The amount owed on the vehicle at the time of an unrecovered
theft or total loss, after credit for money received from the
purchaser's or lessee's physical damage insurer or from a third-party
liability insurer. Such a promise may also include a promise to
waive some or all of the amount of the purchaser's or lessee's
deductible.  
   (C) Coverage under subparagraphs (A) and (B) may not result in a
credit balance in favor of the vehicle purchaser or lessee or include
a promise to pay money to a vehicle purchaser or lessee in addition
to waiving some or all of the amount owed, including some or all of
the amount of the purchaser's or lessee's deductible. For purposes of
this paragraph, a promise to pay money does not include, and a
dealer, creditor, or lender shall be allowed to offer, a discount or
credit to a purchaser or lessee as an incentive for purchasing,
leasing, or financing a replacement vehicle. However, the purchaser
or lessee shall be required to use the discount or credit on a
purchase or lease from the dealer or lessor that sold or leased the
original vehicle to the purchaser or lessee, or with the creditor or
lender that financed the purchase or lease of the original vehicle.
 
  SECTION 1.    Section 1720.5 is added to the Labor
Code, to read:
   1720.5.  For the limited purposes of Article 2 (commencing with
Section 1770), "public works" also means the construction,
alteration, demolition, installation, and repair work done under
private contract when both of the following conditions are met:
   (a) The work is performed in connection with the construction or
maintenance of renewable energy generation capacity, located on
property wholly or partially owned by a school district or community
college district, or on public property, specifically to serve a
school district or community college district.
   (b) The work is performed in connection with a long-term
arrangement for the purchase of partially or fully exported power by
or for the benefit of the school district or community college
district. For purposes of this section, a "long-term arrangement"
means an arrangement that will last at least five years. 

  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.