BILL ANALYSIS
SENATE COMMITTEE ON BANKING, FINANCE,
AND INSURANCE
Senator Ronald Calderon, Chair
AB 2151 (Torres) Hearing Date: June 30,
2010
As Amended: March 24, 2010
Fiscal: Yes
Urgency: No
VOTES: Asm. Floor.(05/20/10)72-0/Pass
Asm. Appr. (05/12/10)16-0/Pass
Asm. Ins. (04/21/10)12-0/Pass
SUMMARY Would grant protections to peace officers, members of
the California Highway Patrol, and firefighters, who use their
private vehicles in the performance of their duty, during their
hours of employment, as specified.
DIGEST
Existing law
1. Provides that no peace officer, member of the California
Highway Patrol (CHP), or firefighter is required to report, to
his or her private automobile insurance carrier, any accident in
which he or she is involved, while operating an authorized
emergency vehicle or any employer-leased or employer-rented
vehicle, in the performance of his or her duty, during the hours
of his or her employment (Insurance Code Section 557.5);
2. Provides that no insurer may increase the premium on a private
automobile insurance policy, or deny renewal of the private
automobile insurance policy, of a peace officer, member of the
CHP, or firefighter, due to an accident in which that individual
was involved, while operating an authorized emergency vehicle in
the performance of his or her duty, during the hours of his or
her employment (Insurance Code Section 488.5);
3. Provides that, if an employee or former employee of a public
entity asks that public entity to defend him or her against any
claim or action for an injury arising out of an act or omission
occurring within the scope of his or her employment, as
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specified, and if the employee or former employee cooperates in
good faith in the defense of that claim or action, the public
entity must pay any judgment or any compromise or settlement of
the claim or action to which the public entity agrees
(Government Code Section 825);
4. Requires the driver of a motor vehicle that is involved in an
accident, which results in property damage in excess of $750, or
in bodily injury or death, to report the accident to the
Department of Motor Vehicles (DMV), as specified, but specifies
that a report is not required, if the motor vehicle involved in
the accident is owned or leased by, or under the direction of,
the United States, California, another state, or a local agency
(Vehicle Code Section 16000);
5. Requires every driver or employer that is involved in an
accident and is required to report that accident pursuant to
Vehicle Code Section 16000 to provide evidence of financial
responsibility to DMV, and states that evidence may be
established by filing a report with DMV, indicating that the
motor vehicle involved in the accident was owned, rented, or
leased by or under the direction of the United States,
California, or any political subdivision of California or a
California municipality (Vehicle Code Section 16051).
This bill
1. Would extend the exemption from having to report a
vehicular accident to one's private insurance carrier to any
peace officer, member of the CHP, or firefighter, who is
involved in an accident when operating any private vehicle
at the request or direction of their employer, while in the
performance of their duty;
2. Would prohibit any private insurance carrier from
increasing the premium on a private automobile insurance
policy, or denying renewal of the private automobile
insurance policy, of a peace officer, member of the CHP, or
firefighter, due to an accident in which that individual was
involved, while operating a private vehicle at the direction
of their employer, while in the performance of their duty;
3. Would require peace officers, members of the CHP, and
firefighters to be indemnified by their employers for all
losses experienced by them or by a third party, which result
from an accident in which they are involved, when driving an
AB 2151 (Torres), Page 3
authorized emergency vehicle, any employer-leased or
employer-rented vehicle, or any private vehicle, if that
vehicle is operated at the request or direction of the
individual's employer;
4. Would further provide that no private automobile or other
private insurance policy covering an employee shall be
required to provide defense or indemnification, when the
employee is using a private vehicle at the request or
direction of his or her employer, while in the performance
of his or her duty;
5. Would authorize a peace officer, member of the CHP, or
firefighter, who is involved in a vehicular accident while
operating their private vehicle at the request of, or under
the direction of the United States, California, or any
political subdivision of California or a California
municipality, to provide evidence of financial
responsibility to the DMV following that accident, by filing
a report indicating that they were operating that privately
owned motor vehicle in the performance of their duty and at
the request of, or under the direction of the United States,
California, or any political subdivision of California or a
California municipality.
COMMENTS
1. Purpose of the bill To ensure that peace officers, members
of the CHP, and firefighters are held financially harmless,
if they are involved in an accident while operating a
private vehicle at the request or direction of their
employer.
2. Background Existing California law protects peace officers,
members of the CHP, and firefighters who are involved in
vehicular accidents, while on the job. These public safety
personnel are not required to report accidents in which they
are involved while on the job to their private automobile
insurance carriers, nor are their private automobile
insurance carriers allowed to increase their rates, or
refuse to renew their policies, as a result of an on-the-job
accident. However, existing law limits this protection to
situations in which the peace officer, member of the CHP, or
firefighter is operating an authorized emergency vehicle or
an employer-leased or employer-rented vehicle at the
AB 2151 (Torres), Page 4
direction of his or her employer. The operation of a
private vehicle at the direction of his or her employer is
not protected, something this bill seeks to change.
3. Support The California Professional Firefighters (CPF) is
sponsoring AB 2151 to ensure that firefighters do not place
their own personal finances at risk, when engaging in an
on-duty, employer-directed activity. CPF observes that the
number of daily details for California firefighters is on
the rise. With more "detailing out," there is an increased
demand on fire departments to provide transportation. In
some cases, there is increased pressure on firefighters to
use their privately-owned vehicles, when department-provided
transportation is not authorized or available. In a few
instances, where firefighters have been ordered or pressured
to use their personal vehicles when on detail, a handful of
employers have refused to indemnify firefighters who are
involved in accidents, while using their personal vehicles
to conduct fire department business. Some firefighters have
been left financially on the hook by their private insurance
carriers, in instances when they were using their personal
vehicles and were involved in a crash, while detailed out.
AB 2151 will ensure that, in cases where department
transportation is needed but not available, and where
private vehicles are used, employers must assume any
liability for expenses resulting from an accident involving
that vehicle.
Several sheriffs', firefighters', and peace officers'
associations sent identical letters of support, asserting
that it is inappropriate for an employee to put his or her
personal finances at risk, when engaging in an on-duty,
employer-directed activity.
4. Opposition The California State Association of Counties
(CSAC), League of California Cities (LCC), and Regional
Council of Rural Counties (RCRC) believe that it is both
inappropriate and unnecessary to shift the liability for
accidents involving personal vehicles from individuals to
public employers. If this bill is enacted, employers of
public safety personnel will face increased liability for
employees who drive their personal vehicles for work
purposes, which, in turn, will increase the employers'
insurance costs.
When employees use their personal vehicles for work purposes,
AB 2151 (Torres), Page 5
they are typically reimbursed at the Internal Revenue
Service (IRS)-established mileage reimbursement rate, or, in
some cases, at mileage rates that are negotiated with their
employers. The IRS mileage reimbursement rate includes
insurance costs among the items for which it is intended to
reimburse those who drive their personal vehicles for work
purposes.
CSAC, LCC, and RCRC also note that local jurisdictions have
adopted policies and memoranda of understanding which
reflect local priorities and circumstances, to address
liability for accidents involving personal vehicles. These
policies very by jurisdiction. "This range of approaches
suggests that a statewide, one-size-fits-all solution is
unnecessary. If represented employees believe there is a
problem, the local bargaining table is the appropriate place
to address it."
CSAC-Excess Insurance Authority (CSAC-EIA), a joint powers
authority that is the largest property and casualty public
entity risk pool in the nation, is also opposed to AB 2151.
CSAC-EIA's membership includes 93% of California's counties,
80% of its cities, and 8% of all school districts and other
special districts. The organization observes that AB 2151
will have a significant financial impact on its membership
and their constituents, at a time when most public entities
are already facing significant financial challenges. "Our
Members have an obligation to their constituents to limit
their financial exposures through contractual agreements and
the use of collateral sources to ease financial burdens on
the constituency. Through the passage of AB 2151, our
public entity members, and their constituents, would be
partially or fully funding the cost of insurance on the
privately owned vehicle and prevented from shifting the
financial burden of any losses to that private insurer.
Effectively, AB 2151 requires public entities and their
constituency to fund the cost of private insurance as well
as the cost of any subsequent losses, which amounts to a
'double taxation' to our Members and their constituency."
Peace officers and firefighters are already paid a mileage
stipend, when utilizing their personal vehicles at the
request of their employers, in the performance of their
duty. A portion of that stipend, which is paid for through
public funding, is intended to offset the cost of
maintaining insurance on the privately-owned vehicle.
AB 2151 (Torres), Page 6
The California Emergency Management Agency (Cal EMA) is opposed
to the bill, because of its potential fiscal impact on the
state. By allowing specified employees to avoid reporting
accidents to their personal insurance carriers when
operating their personal vehicles on state time, AB 2151
will shift financial liability for any costs incurred as a
result of the accident to the state. Cal EMA states that
there are already provisions in place to protect employees
who use their personal vehicles during official state time.
5. Questions
a. How would this bill impact contracts and
memoranda of understanding that were entered into by
public entities prior to the effective date of the
bill, and which are in conflict with this bill's
provisions? Would the contracts and memoranda remain
in effect, until they expire? Or would they be
overridden by AB 2151's changes?
b. Will it always be clear when public safety
personnel are using their personal vehicles at the
request of their employers? Could this bill set up
disagreements between employees and their employers
about when the use of a personal vehicle was requested
by an employer, versus when such use was volunteered
by an employee?
c. Could this bill lead to fraudulent claims by
some peace officers, members of the CHP, or
firefighters, who are involved in vehicular accidents
while driving their personal vehicles on their
personal time, yet who claim they were doing so at the
request of their employers, while on the job?
6. Suggested Amendments
a. When Insurance Code Section 557.5 was amended
in 2008 to include employer-leased and employer-rented
vehicles, a conforming change was never made to
Insurance Code Section 488.5. Because AB 2151
proposes to amend Section 488.5, staff suggests adding
the conforming amendment that was inadvertently
excluded, when this section was last amended in 2008.
This amendment would ensure that both sections cover
AB 2151 (Torres), Page 7
the same three situations (use of emergency vehicles,
employer-rented or employer-leased vehicles, and
private vehicles).
Page 3, line 5, after the comma, insert: any
employer-leased or employer-rented vehicle,
b. The June 21, 2010 amendments to AB 2151
expanded the bill to include any private vehicle
operated at the request or direction of an employer.
The prior version of the bill had included any private
vehicle of the employee operated at the request or
direction of an employer. According to the sponsor of
the bill, this change was not intended. Because it is
unclear why the bill was broadened, and because the
broadening appears to go beyond the stated intent of
the author and sponsor, staff suggests re-amending
this portion of the bill, so that it covers private
vehicles which are owned, leased, or rented by an
employee, and which are operated by the employee at
the request or direction of his or her employer, in
the performance of his or her duty (Page 3, line 34,
after "private vehicle," insert: , which is owned,
leased, or rented by the employee);
c. Staff additionally recommends deleting the
sentence, which runs from page 3, line 39 through page
4, line 3 as unnecessary. Those lines merely restate
protections, which are already provided to employees
by Section 825 of the Government Code.
7. Prior Legislation
a. AB 1115 (S. Runner), Chapter 85, Statutes of
2008: Expanded the definition of an authorized
emergency vehicle used in the performance of duty by a
peace officer, member of the CHP, or firefighter to
include vehicles that are rented or leased by the
employer for official purposes;
b. SB 629 (Correa), Chapter 211, Statutes of
2007: Repealed the requirement that peace officers
and firefighters involved in a vehicular accident
submit a written statement, under penalty of perjury,
or a copy of the incident report filed with their
AB 2151 (Torres), Page 8
employer, to their private automobile insurer.
POSITIONS
Support
California Professional Firefighters (sponsor)
Association for Los Angeles Deputy Sheriffs
California Association of Highway Patrolmen
Los Angeles Police Protective League
Orange County Professional Firefighters Association
Peace Officers Research Association of California
Riverside Sheriffs' Association
Oppose
California Emergency Management Agency
California State Association of Counties
CSAC-Excess Insurance Authority
League of California Cities
Regional Council of Rural Counties
Consultant: Eileen Newhall (916) 651-4102