BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 2746|
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THIRD READING
Bill No: AB 2746
Author: Blakeslee (R)
Amended: 6/15/10 in Senate
Vote: 27
SENATE BANKING, FINANCE, AND INS. COMMITTEE : 10-0, 6/30/10
AYES: Calderon, Cogdill, Correa, Florez, Kehoe, Liu,
Lowenthal, Padilla, Price, Runner
NO VOTE RECORDED: Cox
SENATE APPROPRIATIONS COMMITTEE : 9-0, 8/2/10
AYES: Kehoe, Alquist, Ashburn, Corbett, Emmerson, Price,
Wolk, Wyland, Yee
NO VOTE RECORDED: Leno, Walters
ASSEMBLY FLOOR : 74-0, 5/6/10 (Consent) - See last page for
vote
SUBJECT : California Earthquake Authority: mitigation
officer
SOURCE : Author
DIGEST : This bill authorizes the California Earthquake
Authority (CEA) to contract for the services of a chief
mitigation officer, whose duties shall be established and
directed by the CEA board to support and enhance the CEA's
various mitigation programs, including collaborative
efforts with public and private entities, and subjects this
post to the Fair Political Practice Commission Form 700
CONTINUED
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filing.
ANALYSIS :
Existing law
1. Established in 1996 the CEA as a privately financed
publicly managed entity regulated as a monoline private
earthquake insurer by the Department of Insurance (DOI).
2. Provides for the CEA to be operated as a private
monocline insurer, regulated by the DOI, including in
the matter of rate approvals, but under the guidance of
a governing board that is obligated to comply with
California's open meeting laws.
3. Establishes in the CEA an earthquake loss mitigation
fund to support programs to retrofit homes to protect
against earthquake damage, with funds set aside annually
, except insofar as the set aside would impair the
actuarial soundness of the CEA.
4. The CEA is authorized to contract for a Chief Executive
officer, a Chief Financial Officer, an operations
manager and numerous other specialized positions not
classified as civil service positions.
5. Requires the members of the CEA Board and the
Authority's CEO, CFO and operations manager to file
financial disclosure statements with the Fair Political
Practices Commission.
This bill:
1. Authorizes the CEA to contract for the services of a
Chief Mitigation Officer (CMO).
2. Makes the CMO's duties subject to establishment and
direction of the CEA board.
3. States the CMO's duties are to include programs and
efforts supporting and enhancing appropriate CEA efforts
to create and maintain:
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A. Programs mitigating seismic risk for the benefit
of homeowners, other property owners (including
landlords with smaller holdings), and the
California public.
B. Collaboration with academic institutions,
nonprofit entities, and commercial business
entities in joint efforts to conduct
mitigation-related research and educational
activities, and for program activities mitigating
seismic risk.
C. Programs providing financial assistance in the
form of loans, grants, credits, rebates or other
financial incentives that further mitigation of
seismic risk, including, but not limited to,
structural and contents retrofitting of residential
structures.
D. Collaborations and joint programs with
subdivisions and programs of local, state, and
federal governments.
E. Other programs, support efforts, and activities
the board deems appropriate to further the
authority's mitigation and mitigation-related
goals.
4. Subjects this position to Fair Political Practices Act
conflict of interest (form 700) filing.
Background
In 2001, a California Bureau of State Audits study of the
CEA notes that its mitigation program was having limited
success. Since the CEA's inception, the mitigation program
has slowly grown and the CEA's 2006 strategic plan goals
includes one to "Encourage Californians to protect
themselves and their property from earthquake damage
through preparedness and mitigation".
The addition of a CMO is consistent with sharpening the
CEA's focus on mitigation consistent with the 2001 BSA
general perspective.
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Prior/Related Legislation
AB 43 (Blakeslee), 2009-10 Session, proposed to remove a 25
person cap on the number of civil service exempt CEA
employees in addition to addition the Chief Mitigation
Officer post as proposed by this bill. AB 43 was vetoed by
the Governor who objected to removal of the 25 person cap
but indicated support for the Chief Mitigation Officer
portion, The Veto Message states:
I am returning Assembly Bill 43 without my signature.
While I am supportive of the California Earthquake
Authority (CEA) contracting for the services of a
Chief Mitigation Officer to be responsible for the
mitigation activities of the CEA, I cannot support the
provision in this bill eliminating the limit on the
number of civil service employees that can be employed
by the CEA. For these reasons, I am unable to sign
this bill.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12
2012-13 Fund
CEA contract for $65 $130 $130
Private*
chief mitigation officer
*Fully supported by premiums
SUPPORT : (Verified 8/3/10)
United Policyholders
ARGUMENTS IN SUPPORT : According to the author's office,
the CEA's retrofit programs to date have been unsuccessful.
However with over $12 millions dollars currently in the
CEA's Loss Mitigation Fund, there is a great opportunity to
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protect California homeowners by establishing a successful
retrofit program.
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De
Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Hagman, Hall, Harkey, Hayashi, Hernandez, Hill,
Huber, Huffman, Jeffries, Jones, Knight, Lieu, Logue,
Bonnie Lowenthal, Ma, Miller, Monning, Nava, Nestande,
Niello, Nielsen, Norby, V. Manuel Perez, Portantino,
Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio,
Audra Strickland, Swanson, Torlakson, Torres, Torrico,
Tran, Villines, Yamada, John A. Perez
NO VOTE RECORDED: Bass, Block, De La Torre, Gilmore,
Mendoza, Vacancy
JJA:do 8/3/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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