BILL NUMBER: AB 1846	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 17, 2012
	AMENDED IN ASSEMBLY  MAY 1, 2012
	AMENDED IN ASSEMBLY  MARCH 29, 2012

INTRODUCED BY   Assembly Member Gordon

                        FEBRUARY 22, 2012

   An act  to add Article 11.1 (commencing with Section 1399.80)
to Chapter 2.2 of Division 2 of the Health and Safety Code, and 
to add Chapter 9.8 (commencing with Section 10961) to Part 2 of
Division 2 of the Insurance Code, relating to health care coverage.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1846, as amended, Gordon. Consumer operated and oriented plans.

   Existing law, the federal Patient Protection and Affordable Care
Act (PPACA), requires the Secretary of the United States Department
of Health and Human Services to establish the Consumer Operated and
Oriented Plan program for the purpose of fostering the creation of
qualified nonprofit health insurance issuers to offer qualified
health plans in the individual and small group markets in the states
in which they are licensed to offer those plans  and makes
start-up and solvency loans available for those purposes, as
specified  .  Existing law, the Knox-Keene Health Care
Service Plan Act of 1975, provides for the licensure and regulation
of health care service plans by the Department of Managed Health
  Care and makes a willful violation of that act a crime.
 Existing law  also  provides for the regulation of
various forms of insurance by the Insurance Commissioner and requires
insurers to obtain a certificate of authority from the commissioner
in order to be admitted to transact insurance business in the state.
   This bill would authorize the  commissioner  
Director of the Department of Managed Health Care to issue a health
care service plan license, and the Insurance Commissioner  to
issue a certificate of authority  ,  to a consumer operated
and oriented plan (CO-OP) established consistent with PPACA, as
specified. The bill would specify that a CO-OP issued a  license
or a  certificate of authority is subject to all other
provisions of law relating to  health care service plans or 
insurance  , respectively,  and would further specify that
a CO-OP insurer and any solvency loan obtained by the CO-OP 
from the federal Centers for Medicare and Medicaid Services 
 pursuant to PPACA  are subject to certain requirements
imposed on mutual insurers. The bill would authorize the 
director and the  commissioner to request documentation relating
to a CO-OP's solvency or start-up loan. The bill would prohibit a
CO-OP from converting or selling to a for-profit or
nonconsumer-operated entity after receiving a solvency loan, would
 prohibit a CO-OP from implementing a governance structure
that does not meet PPACA standards   require a CO-OP to
comply with specified governance standards  , and would
authorize  the director to revoke a CO-OP health care  
service plan's license, and  the commissioner to revoke a CO-OP
insurer's certificate of authority  ,  for violating those
prohibitions. The bill would authorize the  Department of
Insurance   departments  to enact regulations
implementing these provisions and would enact other related
provisions.  Because a willful violation of the bill's
requirements by a health care service   plan would be a
crime, the bill would impose a state-mandated local program. 

   Existing law creates the California Health Benefit Exchange
(Exchange) to facilitate the purchase of qualified health plans by
qualified individuals and qualified small employers by January 1,
2014. Existing law requires the Exchange to use a competitive process
to select carriers to participate in the Exchange.  
   This bill would specify that a CO-OP health care service plan or
insurer that enters into a contract to offer qualified health plans
in the Exchange is subject to the same requirements, terms, and
conditions imposed on other carriers participating in the Exchange.
The bill would authorize the Exchange to impose terms, conditions,
and price on a CO-OP health care service plan or insurer if an
agreement cannot be reached and would also authorize the Exchange to
impose contract sanctions and take any other actions authorized by
federal law if a CO-OP health care service plan or insurer fails to
comply with any contractual provisions. To the extent permitted under
federal law, the bill would authorize the Exchange to limit
enrollment in the qualified health plans of a CO-OP health care
service plan or insurer offered in the Exchange if the carrier fails
to comply with Exchange contract specifications.  
   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.  
   The bill would also declare the intent of the Legislature in this
regard. 
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program:  no  yes  .



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

  SECTION 1.  (a) It is the intent of the Legislature in enacting
this act to ensure all of the following:
   (1) That all insureds in a consumer operated and oriented plan
(CO-OP) be afforded the numerous consumer protections available to
all other individuals covered by health insurance.
   (2) That a CO-OP operated in California be subject to all state
requirements applicable to health insurers, including, but not
limited to, the requirements of certificates of authority, state
reserves, risk-based capital, and financial statements filings.
   (3) That before a CO-OP may offer a qualified health plan through
the California Health Benefit Exchange, that CO-OP must adhere to
California-specific standards established by the California Health
Benefit Exchange.
   (4) That a CO-OP be subject to the California Health Benefit
Exchange's selective contracting requirements, including rate
negotiations.
   (b) The Legislature intends and declares that a CO-OP must comply
with the same state and federal standards as other health insurers.
   SEC. 2.    Article 11.1 (commencing with Section
1399.80) is added to Chapter 2.2 of Division 2 of the  
Health and Safety Code   , to read:  

      Article 11.1.  Consumer Operated and Oriented Plans


   1399.80.  For purposes of this article, the following definitions
shall apply:
   (a) "Consumer operated and oriented plan" means a nonprofit member
organization or nonprofit member corporation that has been
established consistent with the requirements of Section 1322 of PPACA
and Subpart F (commencing with Section 156.500) of Part 156 of
Subchapter B of Subtitle A of Title 45 of the Code of Federal
Regulations and remains in full compliance with those requirements. A
consumer operated and oriented plan shall also be known as a "CO-OP."

   (b) "Exchange" means the California Health Benefit Exchange
established under Section 100500 of the Government Code.
   (c) "Formation board" means the initial board of directors of a
CO-OP before it has begun accepting enrollment and had an election by
the members of the CO-OP to the board of directors.
   (d) "Member" includes all individuals, including dependents, 18
years of age or older covered under health care service plan
contracts issued by the CO-OP health care service plan.
   (e) "Operational board" means the board of directors elected by
the members of the CO-OP after it has begun accepting enrollment
under its health care service plan contracts.
   (f) "PPACA" means the federal Patient Protection and Affordable
Care Act (Public Law 111-148), as amended by the Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), and any
rules or regulations issued thereunder.
   (g) "Nonprofit member organization" or "nonprofit member
corporation" means a nonprofit public benefit corporation organized
under Part 2 (commencing with Section 5110) of Division 2 of Title 1
of the Corporations Code, a nonprofit mutual benefit corporation
organized under Part 3 (commencing with Section 7110) of Division 2
of Title 1 of the Corporations Code, or a similar entity organized
under applicable provisions of the Corporations Code, or in the case
of a foreign corporation, a nonprofit public benefit corporation, a
mutual benefit corporation, or a similar entity organized under
nonprofit laws in a state other than California.
   (h) "Solvency loan" means a loan provided by the federal Centers
for Medicare and Medicaid Services to a nonprofit member organization
or nonprofit member corporation seeking to become licensed as a
CO-OP health care service plan, to be used to assist in meeting the
state's fiscal soundness and solvency requirements.
   (i) "Start-up loan" means a loan provided by the federal Centers
for Medicare and Medicaid Services to a nonprofit member organization
or nonprofit member corporation seeking to become licensed as a
CO-OP health care service plan, to be used for allowed expenses
associated with establishing a CO-OP, as further specified by PPACA.
   1399.81.  The director shall have the authority to issue a license
to act as a health care service plan to a CO-OP that has been
organized as a nonprofit member organization or nonprofit member
corporation under the laws of this state. The director may also issue
a license to act as a health care service plan to a foreign CO-OP
that has been organized as a nonprofit member organization or
nonprofit member corporation under the laws of another state,
provided that the entity meets the requirements governing CO-OPs
under PPACA and this article. A CO-OP seeking or maintaining a
license pursuant to this article shall be subject to the same fees
that are imposed on other health care service plans pursuant to
Article 3 (commencing with Section 1349).
   1399.83.  (a) A domestic or foreign CO-OP licensed as a health
care service plan pursuant to this article shall be subject to all of
the provisions of this chapter and all applicable rules and
regulations of the director, including, but not limited to, the
general provisions governing the issuance of a license in Article 3
(commencing with Section 1349), the operation and renewal provisions
in Article 6 (commencing with Section 1375), and the financial
responsibility requirements in Article 9 (commencing with Section
1300.75) of Chapter 2 of Division 1 of Title 28 of the California
Code of Regulations. The provisions of this chapter and the rules and
regulations of the director shall be construed in consideration of
the fundamental nature of a CO-OP health care service plan. In the
event of any direct conflict between the other provisions of this
chapter and the provisions of this article, the provisions of this
article shall prevail.
   (b) In compliance with Section 1322(c)(5) of PPACA (42 U.S.C. Sec.
18042(c)(5)), and any rules or regulations issued under that
section, a domestic or foreign CO-OP licensed as a health care
service plan shall be subject to any state laws that do not prevent
the application of requirements under PPACA.
   (c) (1) A CO-OP health care service plan that contracts with the
Exchange to offer qualified health plans in the Exchange shall be
subject to the same requirements, terms, and conditions as those
imposed on other carriers participating in the Exchange pursuant to
Title 22 (commencing with Section 100500) of the Government Code.
   (2) If a CO-OP health care service plan is unable to reach
agreement with the Exchange on terms, conditions, or price, the
Exchange may impose terms, conditions, or price on the CO-OP health
care service plan. If a CO-OP health care service plan fails to
comply with any of the provisions of its contract with the Exchange,
the Exchange may impose contract sanctions, including monetary
penalties, consistent with due process requirements, and take any
other actions permitted under federal law. To the extent permitted
under federal law, the Exchange may limit enrollment in the qualified
health plans offered by a CO-OP health care service plan through the
Exchange if the plan fails to comply with Exchange contract
specifications.
   1399.84.  The director may request any documentation relating to a
CO-OP's start-up loan or solvency loan.
   1399.86.  (a) A CO-OP shall be subject at all times to the
prohibitions in PPACA against converting or selling to a for-profit
or nonconsumer-operated entity at any time after receiving a solvency
loan.
   (b) A CO-OP shall do all of the following, in addition to any
other requirements imposed under Section 156.515 of Title 45 of the
Code of Federal Regulations:
   (1) Implement policies and procedures to foster and ensure member
control of the organization. For purposes of this paragraph, a CO-OP
shall meet the following requirements:
   (A) The CO-OP shall have governing documents that incorporate
governing rules that ensure that the directors of the operational
board are elected by a majority vote of a quorum of the CO-OP
members.
   (B) All members of the CO-OP shall be eligible to vote for each
director on the CO-OP's operational board.
   (C) Each member of the CO-OP shall have one vote in the election
of each director of the CO-OP's operational board.
   (D) The first elected directors of the CO-OP's operational board
shall be elected no later than one year after the effective date on
which the CO-OP provides coverage to its first member; the entire
operational board shall be elected no later than two years after the
same date.
   (E) Elections of the directors on the CO-OP's operational board
shall be contested so that the total number of candidates for vacant
positions on the operational board exceeds the number of vacant
positions, except in cases where a seat is vacated midterm due to
death, resignation, or removal.
   (F) A two-thirds majority of the voting directors on the
operational board shall be members of the CO-OP.
   (2) Have an operational board of directors that meets the
following requirements:
   (A) Each director shall have one vote unless he or she is a
nonvoting director.
   (B) Positions on the board of directors may be designated for
individuals with specialized expertise, experience, or affiliation
(for example, providers, employers, including small business
consortia, and unions); however, those positions shall not constitute
a majority of the operational board even if the individuals in those
positions are also members of the CO-OP.
   (C) No representative of any federal, state, or local government,
or of any political subdivision or instrumentality thereof, and no
representative of any organization described in Section 156.510(b)(1)
(i) of Title 45 of the Code of Federal Regulations may serve on the
CO-OP's formation board or operational board.
   (D) Each member of the formation or operational board of a CO-OP
shall publicly disclose on the Internet Web site of the CO-OP his or
her financial interest in any health-related entity in excess of one
thousand dollars ($1,000), including, but not limited to, his or her
ownership of stocks or bonds of a health-related entity in excess of
one thousand dollars ($1,000).
   (3) Have governing documents that incorporate ethics, conflict of
interest, and disclosure standards. These standards shall protect
against health care coverage industry involvement and interference.
In addition, these standards shall ensure that each director acts in
the sole interest of the CO-OP, its members, and its local geographic
community, as appropriate, and acts consistently with the terms of
the CO-OP's governance documents and applicable state and federal
law. At a minimum, these standards shall include the following:
   (A) A mechanism to identify potential ethical or other conflicts
of interest.
   (B) A duty on the CO-OP's executive officers and directors to
publicly disclose all potential conflicts of interest pursuant to the
same standards required for state boards or commissions.
   (C) A process to determine the extent to which a conflict exists.
   (D) A process to address any conflict of interest.
   (E) A process to be followed in the event a director or executive
officer of the CO-OP violates the standards described in this
paragraph.
   (c) A violation of any of the requirements of this section shall
constitute grounds for revocation of the license of the CO-OP health
care service plan, in addition to any other grounds in this chapter
for revocation of the license.
   1399.88.  In addition to any applicable requirements in this
chapter for maintaining a license, a CO-OP is required at all times
to be in full compliance with the requirements of PPACA governing
CO-OPs. The department may request the federal government's
certification that a CO-OP is in compliance with the requirements of
PPACA governing CO-OPs, as well as the status of the CO-OP's
compliance with its obligations under any loan or loan modification
agreement.
   1399.89.  The department may adopt regulations implementing this
article pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code). 
  SEC. 2.   SEC. 3.   Chapter 9.8
(commencing with Section 10961) is added to Part 2 of Division 2 of
the Insurance Code, to read:
      CHAPTER 9.8.  CONSUMER OPERATED AND ORIENTED PLANS


   10961.   (a)     For
purposes of this chapter, the following definitions shall apply:

    (a)  "Consumer operated and oriented plan" means a
nonprofit member organization or nonprofit member corporation that
has been established consistent with the requirements of Section 1322
of PPACA and Subpart F (commencing with Section 156.500) of Part 156
of Subchapter B of Subtitle A of Title 45 of the Code of Federal
Regulations and remains in full compliance with those requirements. A
consumer operated and oriented plan shall also be known as a "CO-OP."

   (b) "Exchange" means the California Health Benefit Exchange
established under Section 100500 of the Government Code.  
   (c) "Formation board" means the initial board of directors of a
CO-OP before it has begun accepting enrollment and had an election by
the members of the CO-OP to the board of directors. 
   (d) "Member" includes all individuals, including dependents, 18
years of age or older covered under health insurance policies issued
by the CO-OP insurer.  
   (e) "Operational board" means the board of directors elected by
the members of the CO-OP after it has begun accepting enrollment
under its health insurance policies.  
   (b) 
   (f)  "PPACA" means the federal Patient Protection and
Affordable Care Act (Public Law 111-148), as amended by the Health
Care and Education Reconciliation Act of 2010 (Public Law 111-152),
and any rules or regulations issued thereunder. 
   (c) 
    (g)  "Nonprofit member organization" or "nonprofit
member corporation" means a nonprofit public benefit corporation
organized under Part 2 (commencing with Section 5110) of Division 2
of Title 1 of the Corporations Code, a nonprofit mutual benefit
corporation organized under Part 3 (commencing with Section 7110) of
Division 2 of Title 1 of the Corporations Code, or a similar entity
organized under applicable provisions of the Corporations Code, or in
the case of a foreign corporation, a nonprofit public benefit
corporation, a mutual benefit corporation, or a similar entity
organized under nonprofit laws in a state other than California.

   (d) 
    (h)  "Solvency loan" means a loan provided by the
federal Centers for Medicare and Medicaid Services to a nonprofit
member organization or nonprofit member corporation seeking to become
licensed as a CO-OP insurer, to be used to assist in meeting the
state's solvency and reserve requirements. 
   (e) 
    (i)  "Start-up loan" means a loan provided by the
federal Centers for Medicare and Medicaid Services to a nonprofit
member organization or nonprofit member corporation seeking to become
licensed as a CO-OP insurer, to be used for allowed expenses
associated with establishing a CO-OP, as further specified by PPACA.
   10961.1.  The commissioner shall have the authority to issue a
certificate of authority to a CO-OP that has been organized as a
nonprofit member organization or nonprofit member corporation under
the laws of this state. The commissioner may also issue a certificate
of authority to a foreign CO-OP that has been organized as a
nonprofit member organization or nonprofit member corporation under
the laws of another state, provided that the entity meets the
requirements governing CO-OPs under PPACA and this chapter. A CO-OP
seeking or maintaining a certificate of authority pursuant to this
chapter shall be subject to the same fees that are imposed on mutual
insurers.
   10961.2.  A domestic or foreign insurer admitted as a CO-OP
insurer shall be subject to the same "paid-in capital" or "capital
paid-in" requirements as are imposed on domestic and foreign mutual
insurers pursuant to Sections 36 and 4011.
   10961.3.   (a)    A domestic or foreign 
insurer   CO-OP  admitted as a CO-OP insurer shall
be subject to all of the provisions of this code and all applicable
rules and regulations of the commissioner, including, but not limited
to, the general provisions governing issuance of a certificate of
authority in Article 3 (commencing with Section 699) of, the
examination provisions in Article 4 (commencing with Section 729) of,
the risk-based capital requirements in Article 4.1 (commencing with
Section 739) of, and the financial statement filing requirements in
Article 10 (commencing with Section 900) of, Chapter 1 of Part 2 of
Division 1. The provisions of this code and the rules and regulations
of the commissioner shall be construed in consideration of the
fundamental nature of a CO-OP insurer. In the event of any direct
conflict between the other provisions of this code and the provisions
of this chapter, the provisions of this chapter shall prevail. 
   (b) In compliance with Section 1322(c)(5) of PPACA (42 U.S.C. Sec.
18042(c)(5)), and any rules or regulations issued under that
section, a domestic or foreign CO-OP admitted as a CO-OP insurer
shall be subject to any state laws that do not prevent the
application of requirements under PPACA.  
   (c) (1) A CO-OP insurer that contracts with the Exchange to offer
qualified health plans in the Exchange shall be subject to the same
requirements, terms, and conditions as those imposed on other
carriers participating in the Exchange pursuant to Title 22
(commencing with Section 100500) of the Government Code.  
   (2) If a CO-OP insurer is unable to reach agreement with the
Exchange on terms, conditions, or price, the Exchange may impose
terms, conditions, or price on the CO-OP insurer. If a CO-OP insurer
fails to comply with any of the provisions of its contract with the
Exchange, the Exchange may impose contract sanctions, including
monetary penalties, consistent with due process requirements, and
take any other actions permitted under federal law. To the extent
permitted under federal law, the Exchange may limit enrollment in the
qualified health plans offered by a CO-OP insurer through the
Exchange if the insurer fails to comply with Exchange contract
specifications. 
   10961.4.  (a) A solvency loan obtained by a CO-OP shall be treated
as a surplus note and shall be subject to the same requirements as
are imposed on mutual insurers pursuant to Article 4 (commencing with
Section 4040) of Chapter 4 of Part 1 of Division 2. The commissioner
may request any documentation relating to a CO-OP's start-up loan or
solvency loan.
   (b) A CO-OP shall be subject to the same securities permit
requirements as are imposed upon mutual insurers pursuant to Section
4042; however, the commissioner shall have the authority to waive the
requirements under Section 4042 upon a determination that they are
not applicable following a full review of the CO-OP's plan of
operations and any other documents as requested by the commissioner
prior to the admission of the CO-OP.
   10961.5.  The provisions of Section 699.5 shall apply to any
insurer admitted as a CO-OP insurer; however, any loans received by
the CO-OP in the form of a solvency or start-up loan shall not be
construed as any form of subsidy, ownership, or financial control of
the CO-OP insurer within the meaning of Section 699.5.
   10961.6.   (a)    A CO-OP shall be subject at
all times to the prohibitions in PPACA against converting or selling
to a for-profit or nonconsumer-operated entity at any time after
receiving a solvency loan.  Furthermore, a CO-OP shall not
undertake any transaction that would result in the CO-OP implementing
a governance structure that does not meet the standards contained in
PPACA. Any violation of these prohibitions shall constitute grounds
for revocation of the CO-OP insurer's certificate of authority, in
addition to any other grounds in this code for revocation of the
certificate.  
   (b) A CO-OP shall do all of the following, in addition to any
other requirements imposed under Section 156.515 of Title 45 of the
Code of Federal Regulations:  
   (1) Implement policies and procedures to foster and ensure member
control of the organization. For purposes of this paragraph, a CO-OP
shall meet the following requirements:  
   (A) The CO-OP shall have governing documents that incorporate
governing rules that ensure that the directors of the operational
board are elected by a majority vote of a quorum of the CO-OP
members.  
   (B) All members of the CO-OP shall be eligible to vote for each
director on the CO-OP's operational board.  
   (C) Each member of the CO-OP shall have one vote in the election
of each director of the CO-OP's operational board.  
   (D) The first elected directors of the CO-OP's operational board
shall be elected no later than one year after the effective date on
which the CO-OP provides coverage to its first member; the entire
operational board shall be elected no later than two years after the
same date.  
   (E) Elections of the directors on the CO-OP's operational board
shall be contested so that the total number of candidates for vacant
positions on the operational board exceeds the number of vacant
positions, except in cases where a seat is vacated midterm due to
death, resignation, or removal.  
   (F) A two-thirds majority of the voting directors on the
operational board shall be members of the CO-OP.  
   (2) Have an operational board of directors that meets the
following requirements:  
   (A) Each director shall have one vote unless he or she is a
nonvoting director.  
   (B) Positions on the board of directors may be designated for
individuals with specialized expertise, experience, or affiliation
(for example, providers, employers, including small business
consortia, and unions); however, those positions shall not constitute
a majority of the operational board even if the individuals in those
positions are also members of the CO-OP.  
   (C) No representative of any federal, state, or local government,
or of any political subdivision or instrumentality thereof, and no
representative of any organization described in Section 156.510(b)(1)
(i) of Title 45 of the Code of Federal Regulations may serve on the
CO-OP's formation board or operational board.  
   (D) Each member of the formation or operational board of a CO-OP
shall publicly disclose on the Internet Web site of the CO-OP his or
her financial interest in any health-related entity in excess of one
thousand dollars ($1,000), including, but not limited to, his or her
ownership of stocks or bonds of a health-related entity in excess of
one thousand dollars ($1,000).  
   (3) Have governing documents that incorporate ethics, conflict of
interest, and disclosure standards. These standards shall protect
against insurance industry involvement and interference. In addition,
these standards shall ensure that each director acts in the sole
interest of the CO-OP, its members, and its local geographic
community, as appropriate, and acts consistently with the terms of
the CO-OP's governance documents and applicable state and federal
law. At a minimum, these standards shall include the following: 

   (A) A mechanism to identify potential ethical or other conflicts
of interest.  
   (B) A duty on the CO-OP's executive officers and directors to
publicly disclose all potential conflicts of interest pursuant to the
same standards required for state boards or commissions.  
   (C) A process to determine the extent to which a conflict exists.
 
   (D) A process to address any conflict of interest.  
   (E) A process to be followed in the event a director or executive
officer of the CO-OP violates the standards described in this
paragraph.  
   (c) A violation of any of the requirements of this section shall
constitute grounds for revocation of the CO-OP insurer's certificate
of authority, in addition to any other grounds in this code for
revocation of the certificate. 
   10961.7.  A CO-OP insurer is insolvent if its surplus becomes less
than the amount of paid-in capital required of a capital stock
company to qualify to transact the class
                of disability and health insurance. The conservation
and liquidation provisions of Article 14 (commencing with Section
1010) of Chapter 1 of Part 2 of Division 1 shall apply to CO-OP
insurers.
   10961.8.  In addition to any applicable requirements in this code
for maintaining a certificate of authority, a CO-OP is required at
all times to be in full compliance with the requirements of PPACA
governing CO-OPs. The commissioner may request the federal government'
s certification that a CO-OP is in compliance with the requirements
of PPACA governing CO-OPs, as well as the status of the CO-OP's
compliance with its obligations under any loan or loan modification
agreement.
   10961.9.  The department may adopt regulations implementing this
chapter pursuant to the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code).
   SEC. 4.    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.