Amended in Assembly April 13, 2015

California Legislature—2015–16 Regular Session

Assembly Bill No. 1072

Introduced by Assembly Member Daly

February 27, 2015

An act to begin delete repeal and add Chapter 10A (commencing with Section 11400) of Part 2 of Division 2 of end delete begin insert add and repeal Section 11401.5 of end insert the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL’S DIGEST

AB 1072, as amended, Daly. Insurance: firefighters or police officers’ benefit and relief associations.

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Existing law generally provides for the regulation of insurers by the Department of Insurance pursuant to laws set forth in the Insurance Code. Existing law authorizes the Insurance Commissioner to make certain examinations, investigations, and prosecutions and, upon making a determination of the existence of certain conduct, conditions, or grounds, to issue orders reasonably necessary to correct, eliminate, or remedy the conduct, conditions, or grounds.

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Existing law exempts from the requirements set forth in the Insurance Code firemen’s, policemen’s, and peace officers’ benefit and relief associations that comply with specified criteria, including, among other things, a requirement that the membership consist solely of peace officers, members of police or fire departments, and emergency medical personnel employed by fire departments, as specified. Existing law prohibits an association from operating or doing business in the state without a certificate of authority.

end insert begin insert

This bill would require every association that holds a certificate of authority to submit to the commissioner the opinion, as specified, of a qualified actuary as to whether the reserves and related actuarial items that support the policies or contracts issued are based on assumptions that satisfy contractual provisions, are consistent with prior reported amounts, and are based on specified actuarial standards and procedures. The bill would also require an association seeking a certificate of authority to file an opinion that meets specified requirements and that establishes that it would have adequate resources to provide benefits, as specified, as required to satisfy its proposed contractual obligations. The bill would require the commissioner to notify the association of the deficiencies in the filing if the association fails to provide an opinion and supporting memoranda to the commissioner that meets the requirements of the bill, as specified. The bill would also require the commissioner, if he or she determines that the laws governing these associations are inadequate to protect the interests of the members of the associations, to develop and deliver recommendations to the Assembly Committee on Insurance and the Senate Committee on Insurance regarding changes in the law that would better protect the interests of members of the associations. The provisions of the bill would remain in effect only until December 31, 2018, and as of that date are repealed.

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(1) Existing law generally provides for the regulation of insurers by the Department of Insurance pursuant to laws set forth in the Insurance Code. Existing law authorizes the Insurance Commissioner to make certain examinations, investigations, and prosecutions and, upon making a determination of the existence of certain conduct, conditions, or grounds, to issue orders reasonably necessary to correct, eliminate, or remedy the conduct, conditions, or grounds. Existing law also prohibits insurers from engaging in unfair or deceptive acts or practices, including advertising insurance that an insurer will not sell. A violation of that prohibition is a misdemeanor.

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Existing law exempts from the requirements set forth in the Insurance Code firemen’s, policemen’s, and peace officers’ benefit and relief associations that comply with specified criteria, including, among other things, a requirement that the membership consist solely of peace officers, members of police or fire departments, and emergency medical personnel employed by fire departments, as specified. Existing law prohibits an association from operating or doing business in the state without a certificate of authority, and imposes a filing fee of $590 for the application for that certificate.

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This bill would repeal those provisions and would enact new provisions governing those entities. Among other things, the bill would revise requirements governing membership, by authorizing these associations to consist of a majority of the members described above.

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The bill would also impose new reporting, reserve, and disclosure requirements upon certain associations that offer long-term benefits, as defined. The bill would authorize the commissioner to examine the operations, affairs, transactions, conduct, and financial condition of an association, and to carry out other enforcement duties with respect to these associations. The bill would require these associations to pay a filing fee of $590 for the application for the certificate, and an annual fee of $350, thereby imposing taxes, and would require these associations to pay $347 for filing financial information. The bill would also make these associations subject to the prohibitions against unfair or deceptive acts or practices. By expanding the scope of a crime, the bill would impose a state-mandated local program.

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(2) 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.

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This bill would provide that no reimbursement is required by this act for a specified reason.

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(3) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2⁄3 of the membership of each house of the Legislature.

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Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program:  begin delete yes end delete begin insert no end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 11401.5 is added to the end insert begin insert Insurance Code end insert begin insert ,
to read: end insert

begin insert

begin insert 11401.5. end insert   

(a) (1) Each association that holds a certificate of
authority pursuant to this chapter shall submit to the commissioner
the opinion of a qualified actuary as to whether the reserves and
related actuarial items that support the policies or contracts issued
pursuant to this chapter, including policies and contracts issued
by entities established by these associations that provide benefits
described in this chapter, are based on assumptions that satisfy
contractual provisions, are consistent with prior reported amounts,
and are based on actuarial standards and procedures established
by the American Academy of Actuaries and the Actuarial Standards
Board. An association that holds a certificate of authority pursuant
to this chapter shall file its initial opinion no later than July 1,
2016, and each July 1 thereafter.

(2) An association seeking a certificate of authority pursuant
to this chapter shall file an opinion, to the extent feasible, that
establishes that it would have adequate resources to provide
benefits described in this chapter as required to satisfy its proposed
contractual obligations.

(b) The opinion required by subdivision (a) shall include an
opinion with supporting memoranda consistent with the same
qualified actuary as to whether the reserves and related actuarial
items held in support of the policies and contracts, when considered
in light of the assets held by the association with respect to the
reserves and related actuarial items, including, but not limited to,
the investment earnings on the assets and the considerations
anticipated to be received and retained under the policies and
contracts, and shall make adequate provision for the association’s
obligations under the policies and contracts, including, but not
limited to, the benefits under any expenses associated with the
policies and contracts.

(c) The opinion required by subdivision (b) shall be governed
by the following provisions:

(1) It shall include a memorandum, in form and substance,
consistent with actuarial standards and procedures established
by the American Academy of Actuaries and the Actuarial Standards
Board, in support of the opinion.

(2) If the association fails to provide an opinion and supporting
memoranda to the commissioner that meets the requirements of
this section, the commissioner shall notify the association of the
deficiencies in the filing, and shall make a specific request that
identifies the issues that should be addressed in an amended filing.

(d) If the commissioner determines, after a review of the filings
from the associations that the laws governing these associations
are inadequate to protect the interests of the members of the
associations, he or she shall develop and deliver recommendations
to the Assembly Committee on Insurance and the Senate Committee
on Insurance regarding changes in the law that would better
protect the interests of members of the associations.

(e) This section shall remain in effect only until December 31,
2018, and as of that date is repealed, unless a later enacted statute,
that is enacted before December 31, 2018, deletes or extends that
date.

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SECTION 1.  

Chapter 10A (commencing with Section 11400)
of Part 2 of Division 2 of the Insurance Code is repealed.

SEC. 2.  

Chapter 10A (commencing with Section 11400) is
added to Part 2 of Division 2 of the Insurance Code, to read:

 

Chapter  10A. Firefighters’, Police Officers’, or Peace
Officers’ Benefit and Relief Associations

 

Article 1.  Definitions and Scope

 

11400.  

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

(1) “ERISA” refers to the Employee Retirement Income Security
Act of 1974 (Public Law 93-406).

(2) “Long-term benefits” means scheduled member benefits
that are eligible to be paid for a period exceeding one year in
duration. These benefits include, without limitation, any benefit
providing coverage for loss of income as a result of disability, as
described in Section 799.01, or for long-term care insurance, as
defined in Section 10231.2, or any similar coverage or benefit
providing for payments which may last for a period longer than
one year.

(b) Firefighters’, police officers’, or peace officers’ benefit and
relief associations now existing, or which may be formed on and
after January 1, 2016, for the purpose of aiding their members or
dependents of their members in case of sickness, accident, distress,
or death, shall be subject to the provisions of this chapter.

(c) An association that offers benefits, and that operates in, and
accepts members as described in Section 11403 only from a single
government entity, shall comply with this article, but is not subject
to Article 2 (commencing with Section 11408). If an association
operates strictly in accordance with this article, it shall not be
subject to any other provision of this code, nor to any law of this
state relating to insurance, whether now existing or hereafter
enacted, except as expressly provided in this chapter.

(d) (1) An association that either offers long-term benefits, or
operates in and accepts members as described in Section 11403
from more than one government entity, or that does both, shall
comply with this chapter, except that the association may receive
support from bona fide employee organizations which represent
a majority of 50 percent of the membership plus one member of
the association’s members in negotiations with their employers.

(2) An association described in paragraph (1) shall also comply
with Article 2 (commencing with Section 11408), except as
otherwise provided in paragraph (3).

(3) An association that arranges at all times to have all long-term
benefits provided completely and continuously by an insurer
admitted in this state for the class of benefits offered shall not be
subject to Article 2 (commencing with Section 11408).

(e) The commissioner may take regulatory action pursuant to
any remedy specified in this code against any association which
fails to comply with the applicable provisions of this chapter.

(f) The commissioner may adopt reasonable rules and
regulations for the implementation and administration of this
chapter.

(g) This chapter shall not be construed in a manner that conflicts
with ERISA. Associations governed by ERISA, as amended, shall
also comply with this chapter, except to the extent that the
association reasonably believes that compliance with this chapter
would conflict or interfere with or unduly burden the association’s
obligation to comply with ERISA.

11401.  

An association shall not operate or do business in this
state without a certificate of authority. The commissioner shall
issue a certificate of authority to an association unless he or she
determines, after examination, that it does not comply with the
applicable provisions of this chapter. The filing fee for the
application for the certificate of authority shall be five hundred
ninety dollars ($590). An association shall apply for a certificate
no later than 18 months after its establishment or the effective date
of this chapter, whichever is later. An association shall be permitted
to operate or do business in this state during the first 18 months
of its establishment and while its application for a certificate of
authority is pending, provided the association complies in good
faith with this chapter.

11402.  

The association may be incorporated or unincorporated,
but, if incorporated, it shall neither issue nor be authorized to issue
shares of stock.

11403.  

The membership of an association shall consist solely
of the following or any combination thereof:

(a) (1) A majority consisting of at least 50 percent of the
membership plus one member of the association’s members of
police departments of municipal or public corporations or districts.

(2) Other associations that are each comprised of a majority
consisting of at least 50 percent of the membership plus one
member of police departments of municipal or public corporations
or districts that meet the eligibility criteria to participate in an
association and that satisfy the criteria to participate in an
association that intends to comply with the requirements of this
chapter and has been admitted to participate by the association.

(b) (1) A majority consisting of at least 50 percent of the
membership plus one member of the association’s members of fire
departments of municipal or public corporations or districts.

(2) Other associations that are each comprised of a majority
consisting of at least 50 percent of the membership plus one
member of the association’s members of fire departments of
municipal or public corporations or districts and that satisfy the
criteria to participate in an association that intends to comply with
the requirements of this chapter and has been admitted to
participate by the association.

(c) (1) A majority consisting of at least 50 percent of the
membership plus one member of the association’s peace or law
enforcement officers who are regular and salaried officers or
employees of the state or of a single county or other political
subdivision or public or municipal corporation.

(2) Other associations that are each comprised of a majority
consisting of at least 50 percent of the membership plus one
member of the peace or law enforcement officers who are regular
and salaried officers or employees of the state or of a single county
or other political subdivision or public or municipal corporation
and that satisfy the criteria to participate in an association that
intends to comply with the requirements of this chapter and has
been admitted to participate by the association.

(d) (1) A majority consisting of at least 50 percent of the
membership plus one member of the association’s persons who
are emergency medical services personnel and employed by a fire
department of a city, county, or district.

(2) Other associations that are each comprised of a majority
consisting of at least 50 percent of the membership plus one
member of the peace or law enforcement officers who are
emergency medical services personnel and employed by a fire
department of a city, county, or district and that satisfy the criteria
to participate in an association that intends to comply with the
requirements of this chapter and has been admitted to participate
by the association.

(e) A majority consisting of at least 50 percent of the
membership plus one member of the association’s persons who at
the time of becoming members of the association were qualified
pursuant to subdivision (a), (b), (c), or (d).

11404.  

The association shall not pay or promise or agree to
pay, either directly or indirectly, any consideration of any nature
for the solicitation or procuring of members or applications for
membership.

11405.  

The membership of the association who are eligible to
vote shall elect the trustees or directors, or the governing body of
the association, by whatever name their office is known or
designated.

11406.  

Moneys or property directly or indirectly contributed
to the association by its members shall not be paid out as benefits
to any persons other than its members, their dependents, or
beneficiaries nominated in writing by the members or as provided
by a written plan document governing the payment of that benefit.

11407.  

The association shall be supported mainly by
contributions from its members, whether in the form of fees, dues,
assessments, or otherwise, and by donations made to it from time
to time and from any investment earnings on those contributions.

 

Article 2.  Benefit and Relief Associations Providing Long-Term
Benefits or Comprised of Multiple Government Subdivisions:
Reserve Requirements

 

11408.  

An association that is subject to this article shall do all
of the following:

(a) Operate in accordance with sound actuarial principles, and
be able to meet its obligation to provide the benefits that it promises
to its members.

(b) Establish and maintain appropriate loss and loss adjustment
reserves determined by sound actuarial principles as provided in
Section 11410 to adequately fund the present value of expected
future payments provided that the reserve on all policies to which
the method or basis applied is not less in the aggregate than the
required reserves as determined in Section 11409 or as determined
by a qualified actuary that satisfies the requirements of Section
10489.15 and is based on the standards adopted by the Actuarial
Standards Board.

(c) Maintain a contingency reserve of not less than 20 percent
of the greater of the past 12 months’ premium or the expected
annual premium for the next 12 months.

(d) Hold all reserves and other funds for the payment and
administration of benefits provided pursuant to this chapter in trust,
to be used for the exclusive purpose for which they were intended,
which may include necessary and reasonable administrative costs.

11409.  

(a) Reserves required by this article shall be invested
as prescribed in this subdivision and subdivision (b). An association
shall maintain at least 25 percent of the contingency reserve
required by subdivision (d) of Section 11408 in investments
specified in Article 3 (commencing with Section 1170) of Chapter
2 of Part 2 of Division 1 and in Section 1192.5.

(b) The balance of the assets of the association in an amount
equal to the reserves may be invested in assets permissible for
investment by multiple employer welfare arrangements pursuant
to subdivision (b) of Section 742.245.

(c)  The commissioner may, after a hearing, by written order,
require the disposal of any investment made pursuant to subdivision
(b) if the association has failed to maintain cash or liquid assets
sufficient to meet its claims and any other contractual obligations.

11410.  

(a) Each association that is subject to this article shall
file with the commissioner, no later than the last day of the
11-month period after the end of each calendar year, or the last
day of the 11-month period after the end of each fiscal year not
on a calendar year basis, or within 30 days of the filing of the
association’s annual return with the United States Department of
Labor, whichever is earlier, financial statements audited by a
certified public accountant. Furthermore, no later than May 1 of
every third calendar year or the first day of the fifth month after
the end of each third fiscal year not on a calendar year basis,
beginning January 1, 2014, an actuarial opinion shall be rendered
by a qualified actuary that satisfies the requirements of Section
10489.15. The opinion shall be based on standards adopted from
time to time by the Actuarial Standards Board and on any
additional standards that the commissioner may by regulation
prescribe. For the purposes of this section, “qualified actuary”
means a member in good standing of the American Academy of
Actuaries who meets the requirements set forth in regulations of
the commissioner.

(b) Each association that is subject to this article shall provide
to its members a summary annual report within the meaning of
ERISA detailing the association’s year-end financial condition.
The report shall be provided to members in the time and manner
required by ERISA. The association shall also provide a copy of
the report to the commissioner.

11411.  

The commissioner or any persons designated by the
commissioner shall have the power to examine the operations,
affairs, transactions, conduct, and financial condition of an
association, and for that purpose shall have access to all books,
records, and documents that relate to the business of the association
that is regulated by this chapter during the normal and regular
business hours of the association, and may examine under oath its
trustees, officers, agents, and employees in relation to the
operations, affairs, transactions, conduct, and condition of the
association. If, after a duly noticed hearing with the association
during which the association is given a full and fair opportunity
to address the written issues or concerns raised by the
commissioner following his or her examination of the association’s
operations, affairs, transactions, conduct, and financial condition
of the association, the commissioner determines that the
association’s operations, affairs, transactions, conduct, or financial
condition do not comply with requirements of this chapter, the
commissioner may apply any remedies authorized by this code.
Examinations will be conducted at the expense of the department.

11412.  

(a) Upon reasonable request of the commissioner, and
at reasonable intervals as prescribed by him or her, any association
that reasonably appears to the commissioner to require immediate
regulatory attention based on written evidence or other information
shall provide to the commissioner supplemental accounting,
financial, and actuarial information. The commissioner shall
provide all written evidence or other information that forms the
basis of the commissioner’s request to an association at the time
the request is made. The commissioner may request that an
association select and retain an independent certified public
accountant, a certified public accountant corporation, an actuarial
corporation, or an independent actuary satisfactory to the
commissioner, if the association has not already retained experts
of this type who meet the then-current regulatory standards of the
actuarial society. The commissioner, at the expense of the
association, may select or retain an independent certified public
accountant, a certified public accountant corporation, an actuarial
corporation, or an independent actuary, if the association does not
within a reasonable time make the selection as requested by the
commissioner.

(b) The provisions of Sections 925.1 to 925.4, inclusive, shall
apply to all proceedings under this section.

11413.  

Books, records, and documents pertaining to the
business of an association that is subject to this article shall be
maintained either by the association or by its administrator if any,
or both, for a period of five years after the end of the year when
the transaction evidenced thereby ends. “Administrator,” as used
in this section, has the same meaning as that contained in Section
1002(16)(A) of Title 29 of the United States Code.

11414.  

An association that is subject to this article shall not
avoid the applicability of this article by making statements in any
contract for benefits, or by any other means, to the effect that
payment of benefits to any member when eligible for benefits
based on the date of injury (and provided the member has satisfied
the association’s reasonable claims procedure) is contingent upon
the availability of assets, moneys, or other financial resources
sufficient to make the payment. This article does not provide for
the vesting of any benefit that is not already in pay status and does
not affect an association’s right to amend or terminate a plan in
whole or in part.

11415.  

(a) All contracts that are not regulated by the
department for benefits, and certificates evidencing coverage
thereunder, shall include the following disclosure, in capital letters
and in a minimum of 12-point font:

THE ASSOCIATION DOES NOT PARTICIPATE IN ANY
OF THE INSURANCE GUARANTEE FUNDS CREATED BY
CALIFORNIA LAW. THEREFORE, THESE FUNDS WILL
NOT PAY YOUR CLAIMS OR PROTECT YOUR BENEFITS
IF THE ASSOCIATION BECOMES INSOLVENT AND IS
UNABLE TO MAKE PAYMENTS AS PROMISED.

THE ASSOCIATION IS NOT REGULATED BY THE STATE
OF CALIFORNIA TO THE SAME EXTENT AS INSURERS
THAT PARTICIPATE IN ANY OF THE INSURANCE
GUARANTEE FUNDS CREATED BY CALIFORNIA LAW,
AND ARE LICENSED UNDER OTHER PROVISIONS OF THE
CALIFORNIA INSURANCE CODE.

(b) An association shall, upon written request from any member,
provide to that member a copy of the contract for benefits,
certificate evidencing coverage, or other plan document that
describes the benefits being provided to that member, within 30
days of the request.

(c) Members shall be given notice of any material benefit plan
amendment within the time and in the manner required for
Summary Material Modifications under ERISA.

(d) If an association maintains an Internet Web site, the
association shall provide an electronic link within that Internet
Web site where both members and prospective members can see
the most current benefit plan documents and the most recent
certified audited financial statements that the association is required
to file with the United States Department of Labor, Internal
Revenue Service, or the Franchise Tax Board.

11416.  

(a) An association that elects to cease operation in this
state shall be governed by and comply with the provisions of
Sections 1070 to 1076, inclusive.

(b) Notwithstanding subdivision (a), if an association is a
tax-exempt voluntary employee benefit association (VEDA), it
shall cease operations in accordance with the rules applicable to
VEDA’s and ERISA plans.

11417.  

An association shall owe and pay the following annual
fees, in addition to any other remuneration required by law:

(a) An annual fee of three hundred fifty dollars ($350) in
advance, that shall be due on each March 1, and shall be delinquent
on and after April 1.

(b) An annual fee of three hundred forty-seven dollars ($347)
for filing of financial information, due when the information is
filed pursuant to Section 11410.

11418.  

The commissioner may exercise stop order power over
an association that is subject to this article, pursuant to Sections
1065.1 to 1065.7, inclusive.

11419.  

(a) An association shall continue to provide long-term
benefits to any individual or entity that is no longer a member but
became entitled to benefits prior to the end of membership, as if
that individual or entity remained a member, provided the member
satisfied the association’s reasonable claims procedure.

(b) Benefits may be limited to the duration of the benefit period,
if any, or to payment of the maximum benefits, and may be subject
to any policy waiting period, and all other applicable provisions
of the policy consistent with this section, including any reasonable
claims procedure.

(c) An association may stop providing benefits to an individual
or entity specified in subdivision (a) upon receipt of written
confirmation from a successor association or admitted insurer that
the individual or entity will begin receiving those benefits without
lapse. Notwithstanding the foregoing, an association may reduce
or coordinate the member’s benefit with the successor association’s
plan or insurer’s policy if the association has a reasonable belief
that the member is receiving or is eligible for benefits under the
successor plan or insurance policy.

(d) Notwithstanding any other provision of this chapter, any
individual or entity that is no longer a member of the association,
but, while still a member, paid all funds or contributions necessary
to be entitled to paid-up, long-term benefits, shall be entitled to
receive benefits as if that individual or entity remained a member,
unless the obligation to pay those benefits is assumed by a
successor association or admitted insurer.

11419.5.  

An association that is subject to this article is subject
to the provisions of Sections 790 to 790.09, inclusive.

11419.6.  

(a) (1) Any individual or entity aggrieved by an
action taken by an association regarding payment of benefits, or
entitlement to benefits, or eligibility to participate in a plan
sponsored by an association, may file a complaint or submit an
inquiry to the commissioner pursuant to the applicable provisions
of Sections 12921.1 to 12921.4, inclusive.

(2) Notwithstanding paragraph (1), for an association whose
plan provides benefits that are subject to this chapter that are also
subject to ERISA, an individual or entity may not file a complaint
or submit an inquiry regarding the payment of those benefits, or
entitlement to benefits, or eligibility to participate in a plan
sponsored by an association, to the commissioner until the
individual or entity has exhausted the association’s internal claims
and appeals procedure.

(b) An individual or entity may file a complaint or submit an
inquiry to the commissioner regarding an association’s compliance
with Section 11401, 11402, 11403, 11404, 11405, 11406, 11407,
11408, 11409, 11410, or 11415 pursuant to the applicable
provisions of Sections 12921.1 to 12921.4, inclusive.

11419.7.  

If, upon sufficient complaint or inquiry as provided
in subdivision (a) or (b) of Section 11419.6, the commissioner has
good cause to believe that an association has violated any of the
provisions of this chapter, the commissioner may hold a public
hearing in connection with those violations. This hearing may be
in accordance with the administrative adjudication provisions of
the Administrative Procedure Act (Chapter 4.5 (commencing with
Section 11400) of, and Chapter 5 (commencing with Section
11500) of, Part 1 of Division 3 of Title 2 of the Government Code),
and the commissioner shall have all the powers granted pursuant
to these provisions. For any complaint or inquiry as provided in
subdivision (a) of Section 11419.6 regarding the payment of
benefits, or entitlement to benefits, the commissioner shall not
have the power to direct the payment of any benefit to a member
unless the terms of the plan governing the benefit expressly allows
for that payment.

11419.8.  

If, after a hearing pursuant to Section 11419.7
regarding a complaint or inquiry as provided in Section 11419.6
and the administrative adjudication provisions of the
Administrative Procedure Act (Chapter 4.5 (commencing with
Section 11400) of, and Chapter 5 (commencing with Section
11500) of, Part 1 of Division 3 of Title 2 of the Government Code),
the commissioner finds that an association has violated the
provisions of this chapter, the commissioner may, in addition to
other penalties and remedies provided in this code, suspend or
revoke, in whole or in part, the certificate of authority of any
association granted pursuant to Section 11401.

SEC. 3.  

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.

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