Bill Text: CA AB1011 | 2009-2010 | Regular Session | Amended

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

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Bill Title: Insurance: green investments.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Passed) 2010-09-28 - Chaptered by Secretary of State - Chapter 418, Statutes of 2010. [AB1011 Detail]

Download: California-2009-AB1011-Amended.html

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BILL NUMBER: AB 1011	AMENDED
	BILL TEXT

	AMENDED IN SENATE  SEPTEMBER 3, 2009
	AMENDED IN SENATE  JUNE 29, 2009
	AMENDED IN ASSEMBLY  JUNE 1, 2009
	AMENDED IN ASSEMBLY  APRIL 15, 2009

INTRODUCED BY   Assembly Member Jones

                        FEBRUARY 27, 2009

    An act to add Section 14167.40 to the Welfare and
Institutions Code, relating to Medi-Cal.   An act to add
Division 4 (commencing with Section 13900) to the Insurance Code,
relating to green insurance. 



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1011, as amended, Jones.  Medi-Cal: hospitals.
  Insurance: green incentives.  
   Existing law generally regulates the business of insurance in this
state.  
   This bill would require the Insurance Commissioner to hold public
hearings, collect certain information, and study the effects of
environmentally friendly practices on insurance products, as
specified. This bill would also require property insurers to offer
green replacement coverage, as defined, to an insured after a loss.
This bill would require property insurers to offer coverage for solar
and wind distributed generation, as specified. This bill would also
authorize insurers to claim a 20-percent credit for investments in
environmental financial institutions against the amount of gross
premiums tax owed by the insurer, as specified.  
   Existing law establishes the Medi-Cal program, administered by the
State Department of Health Care Services, under which basic health
care services are provided to qualified low-income persons. Under
existing law, the Medi-Cal Hospital/Uninsured Care Demonstration
Project Act, specified hospital reimbursement methodologies are
applied in order to maximize the use of federal funds consistent with
federal Medicaid law and stabilize the distribution of funding for
hospitals that provide care to Medi-Cal beneficiaries and uninsured
patients.  
   This bill would declare the intent of the Legislature to enact
legislation that would implement supplemental payments to hospitals,
impose a coverage dividend fee on hospitals, provide funding for
coverage for children, establish direct grants to designated public
hospitals, and impose other requirements necessary to implement the
provisions of AB 1383 of the 2009-10 Regular Session and to obtain
necessary federal approvals, waivers, and waiver modifications.

   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Division 4 (commencing with Section
13900) is added to the   Insurance Code   , to
read:  

      DIVISION 4.  CALIFORNIA GREEN INSURANCE



      PART 1.  GENERAL PROVISIONS


   13900.  This division shall be known, and may be cited, as the
California Green Insurance Act of 2010.
   13901.  The Legislature finds and declares all of the following:
   (a) Global warming poses a serious threat to the economic
well-being, public health, natural resources, and environment of
California. The potential adverse impacts of global warming include
the exacerbation of air quality problems, a reduction in the quality
and supply of water to the state from the Sierra snowpack, a rise in
sea levels resulting in the displacement of thousands of coastal
businesses and residences, damage to marine ecosystems and the
natural environment, an increase in the incidences of infectious
diseases, asthma, and other human health-related problems, and an
increase in the occurrence and severity of natural catastrophes.
   (b) Global warming will have detrimental effects on some of
California's largest industries, including the insurance industry. It
will also increase the strain on energy and natural resources
necessary to rebuild and restore property after losses.
   (c) By increasing incentives for the use of low-emission vehicles,
reduced driving, the building of "green buildings," investments in
renewable energy projects, and the conservation of natural resources,
the insurance industry can help reduce greenhouse gas emissions.
   (d) California has long been a national and international leader
on energy conservation and environmental stewardship efforts,
including efforts regarding air quality protection, energy efficiency
requirements, renewable energy standards, natural resource
conservation, and greenhouse gas emission standards for passenger
vehicles. The program established by this division will continue this
tradition of environmental leadership by continuing to place
California at the forefront of national and international efforts to
reduce emissions of greenhouse gases.
   (e) National and international actions are necessary to fully
address the issue of global warming. However, actions taken by
California to reduce emissions of greenhouse gases will have
far-reaching effects by encouraging other states, the federal
government, and other countries to act.
   (f) By exercising a global leadership role, California will also
position its economy, technology centers, financial institutions, and
businesses to benefit from national and international efforts to
reduce emissions of greenhouse gases. More importantly, investing in
the development of innovative and pioneering technologies will assist
California in achieving the 2020 statewide limit on emissions of
greenhouse gases established by this division and will provide an
opportunity for the state to take a global economic and technological
leadership role in reducing emissions of greenhouse gases.
   (g) It is the intent of the Legislature that the Insurance
Commissioner coordinate with state agencies, as well as consult with
the environmental justice community, industry sectors, business
groups, academic institutions, environmental organizations, and other
stakeholders in implementing this division.
   (h) It is the intent of the Legislature that the Insurance
Commissioner consult with the Public Utilities Commission, the State
Air Resources Board, the California Environmental Protection Agency,
and the National Association of Insurance Commissioners in the
development of emissions standards for low-emission vehicles for
insurance rating purposes.
   (i) It is the intent of the Legislature that the Insurance
Commissioner consult with the Public Utilities Commission, the State
Air Resources Board, the California Environmental Protection Agency,
and the National Association of Insurance Commissioners in the
development of green building standards for insurance rating purposes
in a manner that minimizes costs and maximizes benefits for
California's economy, improves and modernizes California's energy
infrastructure and maintains electric system reliability, maximizes
additional environmental and economic cobenefits for California, and
complements the state's efforts to protect the natural environment
and reduce global warming.
   (j) There are specialized financial institutions in California
that are specifically dedicated to, and whose core purpose is to,
provide financial products and services designed to protect the
natural environment and reduce global warming. These environmental
financial institutions (EFIs) more readily offer financing for
environmental and renewal energy projects than traditional financial
institutions. In addition, they serve a critical role in addressing
issues of protecting natural resources, reduction of greenhouse gas
emissions, and expansion of renewable energy sources.
   (k) These green-driven financial institutions require additional
capital in order to expand their ability to provide financial
products and services for businesses and projects that protect the
environment and reduce global warming.
   (l) In carrying out their mission, funding environmentally sound
development is given priority by EFIs over providing high returns to
investors.
   (m) It is the intent of the Legislature to provide an incentive in
the form of California tax credits to attract much needed additional
private capital investments that would not otherwise be available to
EFIs without the benefit of that incentive. It is the expectation of
the Legislature that EFIs will leverage these new investment dollars
for the direct benefit of the natural environment and renewable
energy sources in California.
   (n) California maintains a multibillion dollar insurance industry
that uses considerable natural resources and energy while transacting
its business. If all admitted insurers engaged in specified
environmental mitigation conduct, in the aggregate, this would result
in the protection of the natural environment and the reduction of
greenhouse gases.

      PART 2.  GREEN AUTOMOBILE INSURANCE PROVISIONS


   13910.  Insurers admitted to transact insurance in this state that
offer automobile insurance shall, via electronic transmission,
notify the Insurance Commissioner whether or not they offer a premium
reduction for low-emission vehicles, and if so, the cost and claims
of those vehicles compared to high-emission vehicles.
   13911.  The Insurance Commissioner shall conduct public hearings
comparing and contrasting the risk, costs, and claims experience
between low-emission and non-low-emission vehicles.
   13912.  The Insurance Commissioner may develop instructions,
procedures, and standards for applications under this part. The
Insurance Commissioner may, from time to time, issue regulations to
implement the provisions of this part.

      PART 3.  GREEN BUILDING INSURANCE PROVISIONS


   13920.  Insurers admitted to transact insurance in this state that
offer property insurance shall offer "Green Replacement Coverage"
which would allow an insured, after a loss, to replace conventional
building materials with specified green alternative materials such as
nontoxic paints and carpeting, energy-efficient lighting systems,
and water-efficient interior plumbing.
   13921.  Insurers admitted to transact insurance in this state that
offer property insurance shall, via electronic transmission, notify
the Insurance Commissioner whether or not they offer a premium
reduction for green upgrades or coverage, and if so, the cost and
claims of those policies compared to conventional policies.
   13922.  Insurers admitted to transact insurance in this state that
offer property insurance shall offer coverage for solar and wind
distributed generation as part of, or in addition to, a residential
property policy.
   13923.  The Insurance Commissioner shall conduct public hearings
comparing and contrasting the risks, costs, and claims experience
associated with green buildings and buildings with solar and wind
distributed generation, and the development of insurance products and
derivatives to support those projects.
   13924.  The Insurance Commissioner may develop instructions,
procedures, and standards for applications under this part. The
Insurance Commissioner may, from time to time, issue regulations to
implement the provisions of this part.

      PART 4.  GREEN WORKERS COMPENSATION INSURANCE PROVISIONS


   13930.  The Insurance Commissioner shall conduct public hearings
regarding the health impacts, including, but not limited to, absentee
worker rates, on workers in green buildings, and use the information
in establishing the appropriate workers' compensation claims cost
benchmark.

      PART 5.  GREEN INSURANCE TAX CREDIT AND INVESTMENT PROVISIONS


   13940.  (a) For each year, beginning on or after January 1, 2011,
there shall be allowed, as a credit against the amount of tax, as
defined in Section 28 of Article XIII of the California Constitution,
an amount equal to 20 percent of the amount of each qualified
investment made by a taxpayer during the taxable year into an
environmental financial institution that is certified by the
Department of Insurance.
   (b) For purposes of determining any tax that may be imposed under
Section 685 on a taxpayer not organized under the laws of this state,
the amount of the credit allowed by subdivision (a) shall be treated
as a tax paid under Section 12201 or Section 28 of Article XIII of
the California Constitution.
   (c) Notwithstanding any other provision of this part, no credit
shall be allowed under this section unless the Department of
Insurance certifies that the investment qualifies for the credit
under this section and certifies the total amount of the credit
allocated to the taxpayer pursuant to this section.
   (d) No credit shall be allowed by this section unless the
applicant for certification as an environmental financial institution
and the taxpayer provide satisfactory substantiation to, and in the
form and manner requested by, the Department of Insurance.
   (e) An environmental financial institution shall do all of the
following:
   (1) Apply to the Department of Insurance for certification of its
status as an environmental financial institution.
   (2) Apply to the Department of Insurance, on behalf of the
taxpayer, for certification of the amount of the investment and the
credit amount allocated to the taxpayer, obtain the certification,
and retain a copy of the certification.
   (3) Obtain the taxpayer's California company identification number
for tax administration purposes and provide that information to the
Department of Insurance, with the application required in paragraph
(2).
   (4) Provide an annual listing to the State Board of Equalization,
in the form and manner agreed upon by the State Board of Equalization
and the Department of Insurance, of the names and taxpayer's
California company identification numbers of any taxpayer who makes
any withdrawal or partial withdrawal of a qualified investment before
the expiration of 60 months from the date of the qualified
investment.
   (f) The Insurance Commissioner may develop instructions,
procedures, and standards for applications, and for administering the
criteria for the evaluation of applications, under this section. The
Insurance Commissioner may, from time to time, issue regulations to
implement the provisions of this section.
   (g) In the case where the credit allowed by this section exceeds
the "tax," the excess may be carried over to reduce the "tax" for the
next four years, or until the credit has been exhausted, whichever
occurs first.
   (h) The State Board of Equalization shall, as requested by the
Department of Insurance and the California Organized Investment
Network or its successor, advise and assist in the administration of
this section.

      PART 6.  GREEN INSURANCE INDUSTRY MITIGATION PROVISIONS


   13950.  Insurers admitted to transact insurance in this state
shall, via electronic transmission, notify the Insurance Commissioner
whether or not they submit documents to insureds on an electronic
basis, and any cost savings associated with that practice.
   13951.  The Insurance Commissioner shall conduct public hearings
to gather information that would assist in better understanding the
nature and magnitude of damages and risks from natural disasters
triggered by climate change in advance in an effort to minimize the
impact of a disaster.
   13952.  The Insurance Commissioner shall conduct public hearings
to assess the insurance industry's consumption of paper and
electricity, and develop industrywide mitigation measures.
   13953.  The Insurance Commissioner may develop instructions,
procedures, and standards for applications, and for administering the
criteria for the evaluation of applications under this part. The
Insurance Commissioner may, from time to time, issue regulations to
implement the provisions of this part.  
  SECTION 1.    Section 14167.40 is added to the
Welfare and Institutions Code, immediately following Section
14167.39, to read:
   14167.40.  It is the intent of the Legislature to enact
legislation that would implement supplemental payments to hospitals,
impose a coverage dividend fee on hospitals, provide funding for
coverage for children, establish direct grants to designated public
hospitals, and impose other requirements necessary to implement
Article 5.21 (commencing with Section 14167.1) and Article 5.22
(commencing with Section 14167.31), as contained in Assembly Bill
1383 of the 2009-10 Regular Session, and to obtain necessary federal
approvals, waivers, and waiver modifications.