Bill Text: CA SB30 | 2017-2018 | Regular Session | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Insurance: climate change.

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Passed) 2018-09-21 - Chaptered by Secretary of State. Chapter 614, Statutes of 2018. [SB30 Detail]

Download: California-2017-SB30-Amended.html

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Amended  IN  Assembly  May 30, 2018

Amended  IN  Assembly  August 31, 2017

Amended  IN  Senate  May 26, 2017

Amended  IN  Senate  April 17, 2017

Amended  IN  Senate  February 16, 2017

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill

No. 30

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Introduced by Senator Lara

December 05, 2016

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An act to add and repeal Chapter 15 (commencing with Section 8900) of Division 1 of Title 2 of the Government Code, and to amend, repeal, and add Section 1103 of the Public Contract Code, relating to infrastructure. Section 12922.5 to the Insurance Code, relating to insurance.

LEGISLATIVE COUNSEL'S DIGEST

SB 30, as amended, Lara. California-Mexico border: federally funded infrastructure. Insurance: climate change.

Existing law creates the Department of Insurance, headed by the Insurance Commissioner, and prescribes the commissioner’s powers and duties, including various duties to regulate the business of insurance in this state and to enforce the execution of those laws.

This bill would require the Insurance Commissioner to convene a working group to recommend policies to use market mechanisms to invest in natural infrastructure to reduce the risks of climate change related to catastrophic events, including the development of insurance products that, among other things, create incentives for investment in natural infrastructure to reduce risks to communities and provide mitigation incentives for private investment in natural lands to lessen exposure and reduce climate risks to public safety, property, utilities, and infrastructure. The bill would require the policies recommended to address specified questions. The bill would also include a statement of legislative findings and declarations.

Existing law establishes the border between the United States and Mexico, which includes the southern border of California.

This bill would make findings and declarations related to a wall on the border between California and Mexico.

This bill, except as specified, would prohibit the state, commencing January 1, 2018, until January 1, 2026, from awarding or renewing any contract with any person that, at the time of bid or proposal for a new contract or renewal of an existing contract, is a prime contractor that is providing or has provided on or after January 1, 2018, goods or services to the federal government for the construction of a federally funded wall, fence, or other barrier along California’s southern border. The bill would define terms for its purposes.

Existing law defines “responsible bidder” for the purposes of public works contracts as a bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity, and experience to satisfactorily perform the public works contract.

This bill, except as specified, would provide that, until January 1, 2026, for purposes of contracts with the state, the term “responsible bidder” does not include a bidder who, at the time of the bid or proposal for a new contract or renewal of an existing contract, is a prime contractor that is providing or has provided goods or services on or after January 1, 2018, to the federal government for the construction of a federally funded wall, fence, or other barrier along California’s southern border, as defined.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

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

SECTION 1.

 The Legislature finds and declares all of the following:

(a) Much of California may have increasing exposure to climate-related events.

(b) California has environmental features that can mitigate damage from climate-related events.

(c) Innovative insurance and reinsurance businesses may provide opportunities to reduce the exposure of local communities and homeowners to these events.

(d) Reinsurance companies are already doing risk assessments and designing insurance policies that incentivize investment in natural resources to mitigate against climate risks.

(e) Swiss Re Ltd. and The Nature Conservancy, a nongovernmental organization, pioneered an insurance policy in Cancun, Mexico. In this policy, local organizations with an interest in coral reef tourism pay into a collective insurance premium. The reef provides protection against storm events. If any destructive storms damage the reef system, the insurer will pay out sums for restoration.

(f) In addition, Swiss Re Ltd. is working with the country of Barbados to proactively invest in protecting and restoring mangrove swamps and coral reefs to mitigate future hurricane losses.

(g) These examples are thought to be the first in the world to tie environmental benefits and the ecosystem services, such as storm protection, provided by natural environmental features to firm monetary costs and rewards.

SEC. 2.

 Section 12922.5 is added to the Insurance Code, to read:

12922.5.

 (a) The commissioner shall convene a working group to recommend policies to use market mechanisms to invest in natural infrastructure to reduce the risks of climate change related to catastrophic events, including the development of insurance products that:

(1) Create incentives for investment in natural infrastructure to reduce risks to communities.

(2) Provide mitigation incentives for private investment in natural lands to lessen exposure and reduce climate risks to public safety, property, utilities, and infrastructure.

(3) Are profitable to insurance and reinsurance companies.

(4) If appropriate, apply to communities or regions, rather than individual land parcels.

(b) The policies recommended pursuant to subdivision (a) shall address all of the following questions:

(1) What are the California analogies to examples in other countries for creating incentives for investment in natural infrastructure as part of insurance policies that mitigate elemental risks?

(2) Can we use insurance to create incentives for wetland restoration to help defend the coast against storm surge?

(3) Can we create incentives for forests to be managed to reduce the risk of major fires?

(4) Can we reduce the exposure of insurance companies to climate change-related losses through innovative state policies or insurance pricing mechanisms that reward good behavior and charge premiums for actions that increase public safety risks or losses of property or environmental attributes?

(5) Can we develop rating systems based on community risk factors to climate events, and use insurance incentives to make a community more resilient?

SECTION 1.Chapter 15 (commencing with Section 8900) is added to Division 1 of Title 2 of the Government Code, to read:

15.Federally Funded Infrastructure on the California-Mexico Border

8900.

The Legislature finds and declares all of the following:

(a)California and Mexico share more than 130 miles of an international border. The border region is home to tremendous cultural history and economic commerce between the United States and Mexico.

(b)In 2015, the value of California’s exports to Mexico was twenty-six billion eight hundred million dollars ($26,800,000,000), making up 17.4 percent of the state’s total exports, and approximately 177,000 California jobs are related to the commercial relationship with Mexico. Commerce, tourism, and foreign direct investment from Mexico support more than 200,000 jobs in California.

(c)California’s border region is also home to numerous threatened and endangered species of plant and animal life, including California’s official state amphibian, the California red-legged frog, and the endangered arroyo toad.

(d)A recent binational agreement between the United States and Mexico aims to address pollution, including sewage, waste tires, and polluted stormwater, in the Tijuana River watershed. The river flows through both California and Baja California, impacting bird and wildlife habitat and water quality at local beaches.

(e)A proposed border wall between California and Mexico would do serious economic, social, and environmental harm to the state.

8900.1.

(a)For purposes of this section:

(1)The term “person” means any individual, partnership, joint venture, or association or any other organization or any combination thereof, whether situated within or outside the state.

(2)The term “prime contractor” means the contractor who contracts directly with the awarding authority and does not include subcontractors, suppliers, or ancillary services, including, but not limited to, technology, transportation, and financial services.

(3)The term “federally funded wall, fence, or other barrier along California’s southern border” does not include a port of entry.

(b)Notwithstanding any other law, commencing January 1, 2018, the state shall not award or renew any contract with any person that, at the time of bid or proposal for a new contract or renewal of an existing contract, is a prime contractor that is providing or has provided on or after January 1, 2018, goods or services to the federal government for the construction of a federally funded wall, fence, or other barrier along California’s southern border. This section shall not preclude the state from awarding or renewing any contract with any person that has provided goods or services to the federal government for the construction of a federally funded wall, fence, or other barrier along California’s southern border on or before December 31, 2017.

(c)(1)The prohibition in subdivision (b) shall not apply to companies that have an existing indefinite delivery, indefinite quantity contract that took effect on or before December 31, 2017.

(2)The prohibition in subdivision (b) shall not apply in any of the following circumstances:

(A)In the case of a state or local emergency.

(B)If the competing bids for the state contract are deemed to be cost-ineffective by the state department or agency.

(C)If there are no other responsive bidders for the state contract.

(D)If the contract is for essential services, such as water, power, gas, transmission, and reliable services.

8900.2.

This chapter shall remain in effect only until January 1, 2026, and as of that date is repealed.

SEC. 2.Section 1103 of the Public Contract Code is amended to read:

1103.

(a)“Responsible bidder,” as used in this part, means a bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity, and experience to satisfactorily perform the public works contract.

The Legislature finds and declares that this section is declaratory of existing law.

(b)(1)For purposes of a contract with the state, a “responsible bidder” does not include a bidder who, at the time of the bid or proposal for a new contract or renewal of an existing contract, is a prime contractor that is providing or has provided on or after January 1, 2018, goods or services to the federal government for the construction of a federally funded wall, fence, or other barrier along California’s southern border. This subdivision shall not exclude a bidder who has provided goods or services to the federal government for the construction of a federally funded wall, fence, or other barrier along California’s southern border on or before December 31, 2017.

(2)For purposes of this subdivision:

(A)The term “prime contractor” means the contractor who contracts directly with the awarding authority and does not include subcontractors, suppliers, or ancillary services, including, but not limited to, technology, transportation, and financial services.

(B)The term “federally funded wall, fence, or other barrier along California’s southern border” does not include a port of entry.

(c)(1)The exclusion from the definition of “responsible bidder” described in paragraph (1) of subdivision (b) shall not apply to companies that have an existing indefinite delivery, indefinite quantity contract that took effect on or before December 31, 2017.

(2)The exclusion from the definition of “responsible bidder” described in paragraph (1) of subdivision (b) shall not apply in any of the following circumstances:

(A)In the case of a state or local emergency.

(B)If the competing bids for the state contract are deemed to be cost-ineffective by the state department or agency.

(C)If there are no other responsive bidders for the state contract.

(D)If the contract is for essential services, such as water, power, gas, transmission, and reliable services.

(d)This section shall remain in effect only until January 1, 2026, and as of that date is repealed.

SEC. 3.Section 1103 is added to the Public Contract Code, to read:

1103.

(a)“Responsible bidder,” as used in this part, means a bidder who has demonstrated the attribute of trustworthiness, as well as quality, fitness, capacity, and experience to satisfactorily perform the public works contract.

(b)The Legislature finds and declares that this section is declaratory of existing law.

(c)This section shall become operative on January 1, 2026.