BILL NUMBER: AB 1406 INTRODUCED
BILL TEXT
INTRODUCED BY Assembly Member Gordon
FEBRUARY 27, 2015
An act to add Section 1824 to the Insurance Code, relating to
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 1406, as introduced, Gordon. Insurance: bail licenses.
(1) Existing law provides for the issuance of bail licenses under
the jurisdiction of the Insurance Commissioner. Existing law requires
persons soliciting or negotiating the execution or delivery of an
undertaking of bail on behalf of a surety insurer to be licensed as a
bail agent.
This bill would require each surety insurer or bail permittee to
pay a fee, not to exceed $30 per bail bond transaction. These fees
would go to the Bail Investigation and Prosecution Fund, created as a
special account in the Insurance Fund. This bill would provide that
moneys in the Bail Investigation and Prosecution Fund be distributed
by the commissioner, upon appropriation, to fund the reasonable costs
incurred in regulating entities involved in the undertaking of bail,
as specified. This bill would provide that if the total amount in
the Bail Investigation and Prosecution Fund ever exceeds $8,000,000,
then the commissioner shall reduce the amount of the assessment, as
specified. This bill would authorize the commissioner to develop
guidelines to implement or clarify these provisions. This bill would
require the commissioner to provide an annual report on the
department's Internet Web site including various information, as
specified.
(2) Existing constitutional provisions require that a statute that
limits the public's right of access to the meetings of public bodies
or the writings of public officials and agencies be adopted with
findings demonstrating the interest protected by the limitation and
the need for protecting that interest.
This bill would make legislative findings to that effect.
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 1824 is added to the Insurance Code, to read:
1824. (a) The Bail Investigation and Prosecution Fund is hereby
created as a special account within the Insurance Fund. Each surety
insurer or bail permittee admitted and authorized to execute an
undertaking of bail in this state through a licensed bail licensee
shall pay a fee per bail bond transaction, not to exceed thirty
dollars ($30), for each bail bond posted in this state. The revenue
from this fee shall be deposited into the Bail Investigation and
Prosecution Fund.
(b) Moneys in the Bail Investigation and Prosecution Fund shall be
distributed, upon appropriation by the Legislature, to fund the
reasonable costs incurred in regulating entities involved in the
undertaking of bail as described in this section. Moneys in the Bail
Investigation and Prosecution Fund shall not be used for any other
purpose. Moneys in the Bail Investigation and Prosecution Fund shall
be distributed by the commissioner as follows:
(1) Seventy percent of these funds shall be distributed within the
department for consumer enforcement and protection purposes related
to bail transactions, including, but not limited to:
(A) Investigating and prosecuting unlawful conduct by bail
licensees, or a person or entity purporting to solicit or negotiate
in respect to execution or delivery of an undertaking of bail or bail
bond, or execute or deliver an undertaking of bail or bail bond, or
matters subsequent to the execution of an undertaking of bail or bail
bond contract and arising out of it.
(B) Responding to consumer inquiries and complaints related to
bail transactions.
(C) Regulating and overseeing bail bond products, solicitation,
and advertising directed toward consumers.
(D) The cost of any fiscal audit performed pursuant to this
section.
(2) Thirty percent of the funds shall be distributed to county
district attorneys and city attorneys, for investigating and
prosecuting surety insurer and bail abuse cases involving licensees,
or any person or entity engaged in the solicitation or negotiation in
respect to execution or delivery of an undertaking of bail or bail
bond, or execution or delivery of an undertaking of bail or bail
bond.
(A) The commissioner shall distribute funds to county district
attorneys and city attorneys who show a likely positive outcome that
will benefit consumers in the local jurisdiction based on specific
criteria promulgated by the commissioner. Each local district
attorney and city attorney desiring a portion of those funds shall
submit to the commissioner an application, including, at a minimum,
all of the following:
(i) The proposed use of the moneys and the anticipated outcome.
(ii) A list of all prior relevant cases or projects and a copy of
the final accounting for each. If cases or projects are ongoing, the
most recent accounting shall be provided.
(iii) A detailed budget, including salaries and general expenses,
specifically identifying the cost of purchase or rental of equipment
or supplies.
(B) Each district attorney and city attorney that receives funds
pursuant to this section shall submit a final detailed accounting at
the conclusion or closure of each case or project. For cases or
projects that continue longer than six months, interim accountings
shall be submitted every six months, or as otherwise directed by the
commissioner.
(C) Each district attorney and city attorney that receives funds
pursuant to this section shall submit a final report to the
commissioner, which may be made public, as to the success of the
cases or projects conducted. The report shall provide information and
statistics on the number of active investigations, arrests,
indictments, and convictions. The applications for moneys, the
distribution of moneys, and the annual reports shall be public
documents.
(c) Notwithstanding any other provision of this section,
information submitted to the commissioner pursuant to this section
concerning criminal investigations, whether active or inactive, shall
be confidential.
(d) The commissioner may conduct a fiscal audit of the programs
administered under this subdivision. If conducted, this fiscal audit
shall be conducted by an internal audit unit of the department.
(e) If the commissioner determines that a district attorney or
city attorney is unable or unwilling to investigate or prosecute a
relevant bail abuse case, the commissioner may discontinue
distribution of funds allocated for that matter and may redistribute
those funds to other eligible district attorneys or city attorneys.
(f) If, as of June 30 of any calendar year, the total amount in
the Bail Investigation and Prosecution Fund exceeds eight million
dollars ($8,000,000), the commissioner shall reduce the amount of the
assessment accordingly for the following year to eliminate that
excess. A surety insurer, upon receipt of an invoice, shall transmit
payment to the department for deposit in the Bail Investigation and
Prosecution Fund. Any balance remaining in the Bail Investigation and
Prosecution Fund at the end of the fiscal year shall be retained in
the account, to be available in the next fiscal year.
(g) The commissioner may develop guidelines for implementing or
clarifying these provisions, including guidelines for the allocation,
distribution, and potential return of unused funds. The commissioner
may, from time to time, issue regulations for implementing or
clarifying these provisions. Regulations adopted pursuant to this
section shall not be subject to the requirements of the
Administrative Procedure Act (Chapter 3.5 (commencing with Section
11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(h) The commissioner shall provide a consolidated report annually
on the department's Internet Web site, which shall include, but is
not limited to, the following information:
(1) The number of consumer complaints regarding to bail bond
transactions.
(2) The number of investigations initiated relating to bail bond
transactions.
(3) The number of investigations related to bail and bail bond
transactions referred to and reported by prosecuting agencies.
(4) The number of administrative or regulatory cases related to
bail and bail bond transactions referred to the department's legal
division.
(5) The number of administrative or regulatory enforcement actions
taken in cases related to bail and bail bond transactions.
(i) A violation of this section is not a crime pursuant to Section
1814.
SEC. 2. The Legislature finds and declares that this act imposes
limits on the public's right of access to meetings of public bodies
or the writings of public officials and agencies within the meaning
of Section 3 of Article I of the California Constitution. Pursuant to
that constitutional provision, the Legislature makes the following
finding to demonstrate the interest protected by this limitation and
the need for protecting that interest:
In order to ensure that criminal investigations are not frustrated
or hindered, it is necessary to limit the public's right of access
to information submitted to the Insurance Commissioner pursuant to
this act concerning criminal investigations.