HomeMy WebLinkAboutCity Council Position on Legislation Pending Before the Fede (19) Council/Agency Meeting Held: 91 5/Lo�
Deferred/Continued to:
XAppro ed ❑ Conditionally Approved ❑ Denied CI rk' Sign t e
Council Meeting Date: 08/04/08 Departmen Number: AD 08-12
CITY OF HUNTINGTON BEACH
REQUEST FOR COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Jill Hardy, Council Member, Chair on behalf of Intergovernmental Relations
Committee mbe rs Mayor Pro Tem Keith Bohr, and Councilman Don
Hanseny4)V
PREPARED BY: Patricia Dapkus, Department Analyst, Senio
SUBJECT: APPROVE A CITY COUNCIL POSITION ON LEGISLATION PENDING
BEFORE THE FEDERAL, STATE, OR REGIONAL GOVERNMENTS AS
RECOMMENDED BY THE CITY COUNCIL INTERGOVERNMENTAL
RELATIONS COMMITTEE (IRC)
Statement of Issue,Funding Source,Recommended Action,Alternative Action(s),Analysis,Environmental Status,Attachment(s)
Statement of Issue: Approval of City Council positions as recommended by the City Council
Intergovernmental Relations Committee (IRC) on legislation or budget issues pending before a
federal, state, or regional government; and approval of the city's federal funding agenda for this year.
Funding Source: N/A
Recommended Action: Motion to:
1. OPPOSE HR 3121 (Waters) — Flood Plain: Flood Insurance—As Amended May 13, 2008
2. SUPPORT AB 2466 with suggested amendments (Laird) Public Utilities — Local government
energy producers —As Amended June 12, 2008
3. OPPOSE AB 2716 (Laird) — Employment: Sick Days —As Amended June 19, 2008
4. OPPOSE SB 1016 Unless Amended (Wiggins) Diversion: Compliance: per capita disposal
rate—As Amended July 2, 2008
5. SUPPORT SB1146 (Cedillo) - Disclosure: Franchise Tax Board and Cities —As Amended July
2, 2008
Alternative Action(s):
Do not take the recommended action on one or all of the above and provide direction to staff on a
possible city position.
REQUEST FOR COUNCIL ACTION
MEETING DATE: 08/04/08 DEPARTMENT ID NUMBER: AD 08-12
Analysis:
1. OPPOSE HR 3121 (Waters) — Flood Plain / Flood Insurance
HR 3121 sponsored by Congresswoman Maxine Waters was introduced in response to the
catastrophic damage caused by hurricane Katrina. It would amend the National Flood Insurance
Program (NFIP) under which flood-prone areas are identified and flood insurance is made available to
participating communities.
The House and Senate approved two separate versions of the Flood Insurance Reform &
Modernization Act of 2007. These are now in conference and have the same bill number HR 3121.
Both will reauthorize the NFIP through September 30, 2013. They will restore the financial solvency of
the program by bringing more consumers into the system. It would increase premiums for non-
residential and non-primary residence properties to actuarial levels by 2011. It would direct NFIP to
assess an additional 15 percent increase for those properties until the actuarial rate is achieved. It
would increase the limit for FEMA to insure damages attributable to floods or windstorms, and it would
increase rates on policies within a specified risk category by an average of up to 15 percent per year
rather than the current 10 percent.
Further, NFIP currently requires those who do not have 100-year flood protection to carry flood
insurance. HR 3121 would add to this group those whose protection is provided by a levee or a dam
thereby substantially increasing the number of homes and businesses in Orange County that need
flood insurance. The Santa Ana River Flood Protection Agency has requested that cities oppose this
legislation.
The Intergovernmental Relations Committee is recommending that the City Council take a position
opposing HR 3121.
2. SUPPORT AB 2466 (Laird) Public Utilities— Local government energy producers
Under existing law there are several programs which encourage customers to meet their own
generation needs. Each legislative year brings additional proposals to facilitate different types of
distributed generation. There is a common theme with these laws and measures - each generally
involves a customer installing small scale renewable power on the customer's side of the meter to
offset their load and in some instances generate excess power. The distinction between measures is
usually the type of customer (e.g. local government, agriculture, residential) and the type of renewable
generation (e.g. solar, fuel cells, wind). Each mandated program generally requires a new rulemaking
by the CPUC resulting in a complicated network of renewable generation and compensation programs
to be navigated by customers, the investor-owned-utilities (IOUs), the Legislature and the CPUC.
AB 2466 creates a new program which would authorize a local government to receive a bill credit
against electricity it has consumed at one or more sites for electricity it has generated and supplied to
the grid at one or more renewable generating facilities by establishing a "benefiting account."
The author's intent is to allow local government entities to credit energy produced from renewable
resources owned by the local entity against their electricity usage on more than just the facility where
the renewable generator is located. The author believes that current law does not allow a local
government entity to maximize renewable electricity potential at some locations because the current
program that would allow the local government to sell its excess power back to the utility under a FIT
is not as economically beneficial to the local government as using the renewable electricity to offset
the government's own demand at other locations.
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REQUEST FOR COUNCIL ACTION
MEETING DATE: 08/04/08 DEPARTMENT ID NUMBER: AD 08-12
The Intergovernmental Relations Committee is recommending the city take a position in support of AB
2466 with the following amendments:
2830 (a) (3) excludes renewable facilities hosted by local governments, also known as power
purchase agreements. Suggest revising the language to state "owned, operated or 100% of the
electrical output purchased by a local government."
2830 (b) (5) requires all interconnection costs to be born by the local government. Interconnection
(Rule 21) can be used by utilities to deter/defeat distributed generation projects. Suggest insertion of
substitute language used in the renewable net energy metering rules rather than Rule 21.
2830 (b) (7) caps the renewable facility size at 1 MW. This makes sense for the rules as of today, but
there is significant commitment in Sacramento to raise the 1 MW cap across the board. Suggest
inserting language that ties the cap on project size to the cap on project size contained in the
California Solar Initiative (CSI) and the Self-Generation Incentive Programs (SGIP).
2830 (c) (5) (h) causes the statute to sunset once the utilities reach the 250 MW renewable project
goal. Suggest that current goals are an inadequate response to the energy and climate challenges
facing society; and eliminate the sunset clause.
3. OPPOSE AB 2716 (Laird) — Employment: Sick Days
AB 2716 would create the Healthy Families, Healthy Workplaces Act of 2008, which would require
employers to provide paid sick days to employees who work seven or more days in a calendar year.
Specifically, this bill would make several findings and declarations related to employees and the need
for paid sick days, and it would provide that an employee who works in California for seven or more
days in a calendar year is entitled to paid sick days, compensated at the same wage the employee
normally earns during regular work hours. AB 2716 would also require employers to track employees'
accrual of sick leave even after they have separated from service.
This legislation would create an unprecedented administrative burden, particularly for public sector
employers like Huntington Beach who hire many temporary and recurring employees each year. If
approved, AB 2716 will severely restrict the use of extra or seasonal employees. This loss of flexibility
will increase the cost to taxpayers and reduce efficiencies in delivery of services to the public.
The Intergovernmental Relations Committee is recommending the City Council take a position
opposing AB 2716.
4. OPPOSE SB 1016 unless amended (Wiggins) Diversion: Compliance: per capita disposal
rate
SB 1016 is intended to streamline the existing jurisdiction annual reporting system as well as the
process for determining whether or not a local jurisdiction is in compliance with the 50 per cent solid
waste diversion requirement.
Under current law each city, county, or regional agency must submit a report to the California
Integrated Waste Board summarizing its progress in meeting this requirement by providing certain
information (e.g. calculations of annual disposal reduction, information on changes in waste
generated, and progress in diverting construction and demolition waste material).
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REQUEST FOR COUNCIL ACTION
MEETING DATE: 08/04/08 DEPARTMENT ID NUMBER: AD 08-12
SB 1016 would among other things require that after January 1, 2009 compliance will be determined
by comparing each jurisdiction's per capita disposal rate with that jurisdictions 50 per cent equivalent
per capita disposal rate on January 1, 2007.
Use of a per capita system is problematic because per capita disposal amounts are based on the
disposal reporting system used by each county and their ability to accurately identify the appropriate
source for tonnage. The current tracking system is essentially an honor system which allows the
haulers and self-haulers to declare the city or jurisdiction from which the waste originated. Reporting
errors, "ghost" tonnage, and tonnage sourced to other jurisdictions is not unusual. This creates an
incentive for haulers from non-compliant jurisdictions to attribute tonnage to another jurisdiction.
Huntington Beach is already absorbing thousands of tons annually that most likely originated in
another city or an unincorporated area.
The Intergovernmental Relations Committee is recommending that the City Council take a position of
oppose unless amended on SB 1016. Public Works staff will provided the recommended
amendments.
5. SUPPORT SB1146 (Cedillo) - Disclosure: Franchise Tax Board and Cities
Existing income tax laws authorize tax officials of a political subdivision of the state to request
information from the Franchise Tax Board by using an affidavit, as provided. Existing law also
authorizes the Franchise Tax Board, until December 31, 2011, to disclose to tax officials of any city
that executed an agreement with the Franchise Tax Board, subject to certain specified requirements,
a taxpayer's name, address, social security or taxpayer identification number, and business activity
code, as provided, but limits the use of that information to employees of the taxing authority of a city.
SB 1146 would revise those provisions by extending that repeal date to January 1, 2014, by
authorizing a city that has entered into a reciprocal agreement, as defined, with the Franchise Tax
Board to exchange tax information, as provided, and by allowing a city to request any other
information from the Franchise Tax Board by using an affidavit, as provided. This bill would also
require cities to annually furnish to the Franchise Tax Board specified information that is collected in
the course of administration of the city's business tax program, and it would repeal these provisions on
January 1, 2014.
Strategic Goals:
Action on this legislation meets the strategic goal under City Services of providing quality public
services with the highest professional standards to meet community expectations and needs, assuring
that the city is sufficiently staffed and equipped overall.
Environmental Status: NA
Attachment(s):
City Clerk's
Page Number No. Description
-` ,..,.. 1. HR 3121 05/13/08 National Flood Insurance Program
.., 2. Email from the Santa Ana River Flood Protection Agency Requesting
cities contact their legislators regarding HR 3121
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REQUEST FOR COUNCIL ACTION
MEETING DATE: 08/04/08 DEPARTMENT ID NUMBER: AD 08-12
3. Orange County Public Works Analysis of HR 3121
`4 4. AB 2466 Local Government EnergyProducers
N 5. Staff Analysis of AB 2466
€ ` r 6. AB 2716 Employer Paid Sick Days
7. Email from the League of California Cities Urging Cities to Oppose AB
'.E 2716
8. SB 1016 Diversion Compliance: Per Capita Disposal Rate
9. Staff Analysis of SB 1016
..
10. SB 1146 Tax Administration: Disclosure of Information
11. Letter from the California Municipal Revenue & Tax Association in
support of SB 1146
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Vie LIBRARY of CONGRPI-3S iHC?MA'-.)
HR 3121 EAS
In the Senate of the United States,
May 13, 2008.
Resolved, That the bill from the House of Representatives (H.R. 3121) entitled
' An Act to restore the financial solvency of the national flood insurance program
and to provide for such program to make available multiperil coverage for damage
resulting from windstorms and floods, and for other purposes.', do pass with the
following
MENDMENT:
Strike out all after the enacting clause and insert:
I
SECTION 1. TABLE F CONTENTS.
i The table of contents for this Act is as follows:
Sec. 1. Table of contents.
TITLE 1--FLOOD INSURANCE REFORM AND MODERNIZATION
Sec. 101. Short title.
Sec. 102. Findings.
Sec. 103. Definitions.
Sec. 104. Extension of National Flood Insurance Program.
Sec. 105. Availability of insurance for multifamily properties.
I Sec. 106. Reform of premium rate structure.
Sec. 107. Mandatory coverage areas.
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Sec. 108. Premium adjustment.
Sec. 109. State chartered financial institutions.
Sec. 110. Enforcement.
Sec. 111. Escrow of flood insurance payments.
Sec. 112. Borrowing authority debt forgiveness.
Sec. 113. Minimum deductibles for claims under the National Flood
Insurance Program.
Sec. 114. Considerations in determining chargeable premium rates.
Sec. 115. Reserve fund.
Sec. 116. Repayment plan for borrowing authority.
Sec. 117. Payment of condominium claims.
Sec. 118. Technical Mapping Advisory Council.
Sec. 119. National Flood Mapping Program.
Sec. 120. Removal of limitation on State contributions for updating
flood maps.
Sec. 121. Coordination,
Sec. 122. Interagency coordination study.
Sec. 123. Nonmandatory participation.
Sec. 124. Notice of flood insurance availability under RESPA.
Sec. 125. Testing of new flood proofing technologies.
Sec. 126. Participation in State disaster claims mediation programs.
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Sec. 127. Reiteration of FEMA responsibilities under the 2004 Reform
Act.
Sec. 128. Additional authority of FEMA to collect information on claims
payments.
Sec. 129. Expense reimbursements of insurance companies.
Sec. 130. Extension of pilot program for mitigation of severe repetitive
loss properties.
Sec. 131. Flood insurance advocate.
Sec. 132. Studies and Reports.
Sec. 133. Feasibility study on private reinsurance.
Sec. 134. Policy disclosures.
Sec. 135. Report on inclusion of building codes in floodplain
management criteria.
TITLE II-COMMISSION ON NATURAL CATASTROPHE RISK
MANAGEMENT AND INSURANCE
Sec. 201. Short title.
Sec. 202. Findings.
Sec. 203. Establishment.
Sec. 204. Membership.
Sec. 205. Duties of the Commission.
Sec. 206. Report.
Sec. 207. Powers of the Commission.
Sec. 208. Commission personnel matters.
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Sec. 209. Termination.
Sec. 210. Authorization of appropriations.
TITLE III--MISCELLANEOUS
Sec. 301. Big Sioux River and Skunk Creek, Sioux Falls, South Dakota.
Sec. 302. Suspension of petroleum acquisition for Strategic Petroleum
Reserve.
TITLE 1--FLOOD INSURANCE REFORM AND MODERNIZATION
SEC. 101. SHORT TITLE.
This title may be cited as the 'Flood Insurance Reform and Modernization
Act of 2008'.
SEC. 102. FINDINGS.
Congress finds that--
(1) the flood insurance claims resulting from the hurricane season of
2005 will likely exceed all previous claims paid by the National Flood
Insurance Program;
(2) in order to pay the legitimate claims of policyholders from the
hurricane season of 2005, the Federal Emergency Management Agency
has borrowed over $20,000,000,000 from the Treasury;
(3) the interest alone on this debt, is almost $1,000,000,000 annually,
and that the Federal Emergency Management Agency has indicated
that it will be unable to pay back this debt;
(4) the flood insurance program must be strengthened to ensure it can
pay future claims;
(5) while flood insurance is mandatory in the 100-year floodplain,
substantial flooding occurs outside of existing special flood hazard
areas;
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(6) recent events throughout the country involving areas behind man-
made structures, known as residual risk' areas, have produced
catastrophic losses;
(7) although such man-made structures produce an added element of
safety and therefore lessen the probability that a disaster will occur,
they are nevertheless susceptible to catastrophic loss, even though
such areas at one time were not included within the 100-year
floodplain; and
(8) voluntary participation in the National Flood Insurance Program has
been minimal and many families residing outside the 100-year
floodplain remain unaware of the potential risk to their lives and
property.
SEC. 103. DEFINITIONS.
(a) In General- In this title, the following definitions shall apply:
(1) DIRECTOR- The term ' Director' means the Administrator of the
Federal Emergency Management Agency.
(2) NATIONAL FLOOD INSURANCE PROGRAM- The term ' National
Flood Insurance Program' means the program established under the
National Flood Insurance Act of 1968 (42 U.S.C. 4011 et seq.).
(3) 100-year FLOODPLAIN- The term ' 100-year floodplain' means that
area which is subject to inundation from a flood having a 1 percent
chance of being equaled or exceeded in any given year.
(4) 500-year FLOODPLAIN- The term '500-year floodplain' means that
area which is subject to inundation from a flood having a 0.2 percent
chance of being equaled or exceeded in any given year.
(5) WRITE YOUR OWN- The term ' Write Your Own' means the
cooperative undertaking between the insurance industry and the Flood
Insurance Administration which allows participating property and
casualty insurance companies to write and service standard flood
insurance policies.
(b) Common Terminology- Except as otherwise provided in this title, any
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terms used in this title shall have the meaning given to such terms under
section 1370 of the National Flood Insurance Act of 1968 (42 U.S.C. 4121).
SEC. 104. EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM.
Section 1319 of the National Flood Insurance Act of 1968 (42 U.S.C. 4026),
is amended by striking '2008' and inserting '2013. '.
SEC. 105. AVAILABILITY OF INSURANCE FOR MULTIFAMILY
PROPERTIES.
Section 1305 of the National Flood Insurance Act of 1968 (42 U.S.C. 4012)
is amended by adding at the end the following:
' (d) Availability of Insurance for Multifamily Properties-
' (1) IN GENERAL- The Director shall make flood insurance available to
cover residential properties of more than 4 units. Notwithstanding.any
other provision of law, the maximum coverage amount that the
Director may make available under this subsection to such residential
properties shall be equal to the coverage amount made available to
commercial properties.
(2) RULE OF CONSTRUCTION- Nothing in this subsection shall be
construed to limit the ability of individuals residing in residential
properties of more than 4 units to obtain insurance for the contents
and personal articles located in such residences. '.
SEC. 106. REFORM OF PREMIUM RATE STRUCTURE.
(a) To Exclude Certain Properties From Receiving Subsidized Premium
Rates-
(1) IN GENERAL- Section 1307 of the National Flood Insurance Act of
1968 (42 U.S.C. 4014) is amended--
(A) in subsection (a)--
(i) in paragraph (2), by striking and' and inserting a
semicolon;
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(ii) in paragraph (3), by striking the period at the end and
inserting '; and ; and
(iii) by adding at the end the following:
(4) the exclusion of prospective insureds from purchasing flood
insurance at rates less than those estimated under paragraph (1), as
required by paragraph (2), for certain properties, including for--
' (A) any property which is not the primary residence of an
individual;
(B) any severe repetitive loss property, as defined in section
1361A(b);
(C) any property that has incurred flood-related damage in
which the cumulative amounts of payments under this title
equaled or exceeded the fair market value of such property;
(D) any business property, and
(E) any property which on or after the date of enactment of the
Flood Insurance Reform and Modernization Act of 2008 has
experienced or sustained--
(i) substantial damage exceeding 50 percent of the fair
market value of such property; or
' (ii) substantial improvement exceeding 30 percent of the
fair market value of such property. '; and
(B) by adding at the end the following:
(g) No Extension of Subsidy to New Policies or Lapsed Policies- The Director
shall not provide flood insurance to prospective insureds at rates less than
those estimated under subsection (a)(1), as required by paragraph (2) of
that subsection, for--
' (1) any property not insured by the flood insurance program as of the
date of enactment of the Flood Insurance Reform and Modernization
Act of 2008;
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' (2) any policy under the flood insurance program that has lapsed in
coverage, as a result of the deliberate choice of the holder of such
policy; and
' (3) any prospective insured who refuses to accept any offer for
mitigation assistance by the Administrator (including an offer to
relocate), including an offer of mitigation assistance--
' (A) following a major disaster, as defined in section 102 of the
Robert T. Stafford Disaster Relief and Emergency Assistance Act
(42 U.S.C. 5122); or
' (8) in connection with--
' (i) a repetitive loss property; or
' (ii) a severe repetitive loss property, as that term is
defined under section 1361A. '.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall
become effective 90 days after the date of the enactment of this title.
(b) Increase in Annual Limitation on Premium Increases- Section 1308(e) of
the National Flood Insurance Act of 1968 (42 U.S.C. 4015(e)) is amended--
(1) by striking ' under this title for any properties within any single'
and inserting the following: ' under this title for any properties--
' (1) within any single'; and
(2) by striking ' 10 percent' and inserting ' 15 percent'; and
(3) by striking .the period at the end and inserting the following: ' and
' (2) described in section 1307(a)(4) shall be increased by 25 percent
each year, until the average risk premium rate for such properties is
equal to the average of the risk premium rates for properties described
under paragraph (1). '.
SEC. 107. MANDATORY COVERAGE AREAS.
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(a) Special Flood Hazard Areas- Not later than 90 days after the date of
enactment of this title, the Director shall issue final regulations establishing
a revised definition of areas of special flood hazards for purposes of the
National Flood Insurance Program.
(b) Residual Risk Areas- The regulations required by subsection (a) shall--
(1) include any area previously identified by the Director as an area
having special flood hazards under section 102 of the Flood Disaster
Protection Act of 1973 (42 U.S.C. 4012a); and
(2) require the expansion of areas of special flood hazards to include
areas of residual risk, including areas that are located behind levees,
dams, and other man-made structures.
(c) Mandatory Participation in National Flood Insurance Program-
(1) IN GENERAL- Any area described in subsection (b) shall be subject
to the mandatory purchase requirements of sections 102 and 202 of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a, 4106).
(2) LIMITATION- The mandatory purchase requirement under
paragraph (1) shall have no force or effect until the mapping of all
residual risk areas in the United States that the Director determines
essential in order to administer the National Flood Insurance Program,
as required under section 119, are in the maintenance phase.
(3) ACCURATE PRICING- In carrying out the mandatory purchase
requirement under paragraph (1), the Director shall ensure that the
price of flood insurance policies in areas of residual risk accurately
reflects the level of flood protection provided by any levee, dam, or
other the man-made structure in such area.
(d) Decertification- Upon decertification of any levee, dam, or man-made
structure under the jurisdiction of the Army Corp of Engineers, the Corp
shall immediately provide notice to the Director of the National Flood
Insurance Program.
SEC. 108. PREMIUM ADJUSTMENT.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 4015)
is amended by adding at the end the following:
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' (g) Premium Adjustment To Reflect Current Risk of Flood- Notwithstanding
subsection (f), and upon completion of the updating of any flood insurance
rate map under this Act, the Flood Disaster Protection Act of 1973, or the
Flood Insurance Reform and Modernization Act of 2008, any property located
in an area that is participating in the national flood insurance program shall
have the risk premium rate charged for flood insurance on such property
adjusted to accurately reflect the current risk of flood to such property,
subject to any other provision of this Act. Any increase in the risk premium
rate charged for flood insurance on any property that is covered by a flood
insurance policy on the date of completion of such updating or remapping
that is a result of such updating or remapping shall be phased in over a 2-
year period at the rate of 50 percent per year.
' (h) Use of Maps to Establish Rates for Certain Counties-
(1) IN GENERAL- Until such time as the updating of flood insurance
rate maps under section 19 of the Flood Modernization Act of 2007 is
completed (as determined by the district engineer) for all areas located
in the St. Louis District of the Mississippi Valley Division of the Corps of
Engineers, the Director shall not--
' (A) adjust the chargeable premium rate for flood insurance
under this title for any type or class of property located in an
area in that District; and
' (B) require the purchase of flood insurance for any type or class
of property located in an area in that District not subject to such
purchase requirement prior to the updating of such national flood
insurance program rate map.
' (2) RULE OF CONSTRUCTION- For purposes of this subsection, the
term 'area' does not include any area (or subdivision thereof) that has
chosen not to participate in the flood insurance program under this
title as of the date of enactment of this subsection. '.
SEC. 109. STATE CHARTERED FINANCIAL INSTITUTIONS.
Section 1305(c) of the National Flood Insurance Act of 1968 (42 U.S.C. 4012
(c)) is amended--
(1) in paragraph (1), by striking '; and' and inserting a semicolon;
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(2) in paragraph (2), by striking the period at the end and inserting
and', and
(3) by adding at the end the following:
(3) given satisfactory assurance that by December 31, 2008, lending
institutions chartered by a State, and not insured by the Federal
Deposit Insurance Corporation, shall be subject to regulations by that
State that are consistent with the requirements of section 102 of the
Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a). '.
SEC. 110, ENFORCEMENT.
Section 102(f)(5) of the Flood Disaster Protection Act of 1973 (42 U.S.C.
4012a(f)(5)) is amended—
(1) in the first sentence, by striking ' $350' and inserting ' $2,000'; and
(2) by striking the second sentence.
SEC. 111. ESCROW OF FLOOD INSURANCE PAYMENTS.
(a) In General- Section 102(d) of the Flood Disaster Protection Act of 1973
(42 U.S.C. 4012a(d)) is amended--
(1) by amending paragraph (1) to read as follows:
(1) REGULATED LENDING INSTITUTIONS-
(A) FEDERAL ENTITIES RESPONSIBLE FOR LENDING
REGULATIONS- Each Federal entity for lending regulation (after
consultation and coordination with the Federal Financial
Institutions Examination Council) shall, by regulation, direct that
any premiums and fees for flood insurance under the National
Flood Insurance Act of 1968, on any property for which a loan
has been made for acquisition or construction purposes, shall be
paid to the mortgage lender, with the same frequency as
payments on the loan are made, for the duration of the loan.
Upon receipt of any premiums or fees, the lender shall deposit
such premiums and fees in an escrow account on behalf of the
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borrower. Upon receipt of a notice from the Director or the
provider of the flood insurance that insurance premiums are due,
the remaining balance of an escrow account shall be paid to the
provider of the flood insurance.
(B) STATE ENTITIES RESPONSIBLE FOR LENDING
REGULATIONS- In order to continue to participate in the flood
insurance program, each State shall direct that its entity or
agency with primary responsibility for the supervision of lending
institutions in that State require that premiums and fees for flood
insurance under the National Flood Insurance Act of 1968, on
any property for which a loan has been made for acquisition or
construction purposes shall be paid to the mortgage lender, with
the same frequency as payments on the loan are made, for the
duration of the loan. Upon receipt of any premiums or fees, the
lender shall deposit such premiums and fees in an escrow
account on behalf of the borrower. Upon receipt of a notice from
such State entity or agency, the Director, or the provider of the
flood insurance that insurance premiums are due, the remaining
balance of an escrow account shall be paid to the provider of the
flood insurance. '; and
(2) by adding at the end the following:
(6) NOTICE UPON LOAN TERMINATION- Upon final payment of the
mortgage, a regulated lending institution shall provide notice to the
policyholder that insurance coverage may cease with such final
payment. The regulated lending institution shall also provide direction
as to how the homeowner may continue flood insurance coverage after
the life of the loan.
(b) Applicability- The amendment made by subsection (a)(1) shall apply to
any mortgage outstanding or entered into on or after the expiration of the 2-
year period beginning on the date of enactment of this title.
SEC. 112. BORROWING AUTHORITY DEBT FORGIVENESS.
(a) In General- The Secretary of the Treasury relinquishes the right to any
repayment of amounts due from the Director in connection with the exercise
of the authority vested to the Director to borrow such sums under section
1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016), to the
extent such borrowed sums were used to fund the payment of flood
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insurance claims under the National Flood Insurance Program for any
damage to or loss of property resulting from the hurricanes of 2005.
(b) Certification- The debt forgiveness described under subsection (a) shall
only take effect if the Director certifies to the Secretary of Treasury that all
authorized resources or funds available to the Director to operate the
National Flood Insurance Program--
(1) have been otherwise obligated to pay claims under the National
Flood Insurance Program; and
(2) are not otherwise available to make payments to the Secretary on
any outstanding notes or obligations issued by the Director and held by
the Secretary. ,
(c) Decrease in Borrowing Authority- The first sentence of subsection (a) of
section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016
(a)) is amended by striking '; except that, through September 30, 2008,
clause (2) of this sentence shall be applied by substituting
$20,775,000,000' for '$1,500,000,000 .
SEC. 113. MINIMUM DEDUCTIBLES FOR CLAIMS UNDER THE NATIONAL
FLOOD INSURANCE PROGRAM.
Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019)
is amended--
(1) by striking ' The Director is' and inserting the following:
(a) In General- The Director is'; and
(2) by adding at the end the following:
' (b) Minimum Annual Deductible-
(1) PRE-FIRM PROPERTIES- For any structure which is covered by
flood insurance under this title, and on which construction or
substantial improvement occurred on or before December 31, 1974, or
before the effective date of an initial flood insurance rate map
published by the Director under section 1360 for the area in which
such structure is located, the minimum annual deductible for damage
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to such structure shall be--
(A) $1,500, if the flood insurance coverage for such structure
covers loss of, or physical damage to, such structure in an
amount equal to or less than $100,000; and
' (B) $2,000, if the flood insurance coverage for such structure
covers loss of, or physical damage to, such structure in an
amount greater than $100,000.
' (2) POST-FIRM PROPERTIES- For any structure which is covered by
flood insurance under this title, and on which construction or
substantial improvement occurred after December 31, 1974, or after
the effective date of an initial flood insurance rate map published by
the Director under section 1360 for the area in which such structure is
located, the minimum annual deductible for damage to such structure
shall be--
' (A) $750, if the flood insurance coverage for such structure
covers loss of, or physical damage to, such structure in an
amount equal to or less than $100,000; and
' (B) $1,000, if the flood insurance coverage for such structure
covers loss of, or physical damage to, such structure in an
amount greater than $100,000. '.
SEC. 114. CONSIDERATIONS IN DETERMINING CHARGEABLE PREMIUM
TES.
Section 1308 of the National Flood Insurance Act of 1968 (42 U.S.C. 4015
(b)) is amended--
(1) in subsection (a), by striking ', after consultation with' and all that
follows through 'by regulation' and inserting 'prescribe, after
providing notice';
(2) in subsection (b)--
(A) in paragraph (1), by striking the period at the end and
inserting a semicolon;
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(B) in paragraph (2), by striking the comma at the end and
inserting a semicolon;
(C) in paragraph (3), by striking `, and' and inserting a
semicolon;
(D) in paragraph (4)1, by striking the period and inserting `; and',-
and
(E) by adding at the end the following:
' (S) adequate, on the basis of accepted actuarial principles, to cover
the average historical loss year obligations incurred by the National
Flood Insurance Fund. '; and
(3) by adding at the end the following:
` (h) Rule of Construction- For purposes of this section, the calculation of an
average historical loss year'--
` (1) includes catastrophic loss years; and
` (2) shall be computed in accordance with generally accepted actuarial
principles. '.
SEC. 115. RESERVE FUND.
Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et
seq.) is amended by inserting after section 1310 the following:
SEC. 1310A. RESERVE FUND.
' (a) Establishment of Reserve Fund- In carrying out the flood insurance
program authorized by this chapter, the Director shall establish in the
Treasury of the United States a National Flood Insurance Reserve Fund (in
this section referred to as the ' Reserve Fund') which shall--
` (1) be an account separate from any other accounts or funds
available to the Director, and
' (2) be available for meeting the expected future obligations of the
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flood insurance program.
' (b) Reserve Ratio- Subject to the phase-in requirements under subsection
(d), the Reserve Fund shall maintain a balance equal to--
' (1) 1 percent of the sum of the total potential loss exposure of all
outstanding flood insurance policies in force in the prior fiscal year, or
' (2) such higher percentage as the Director determines to be
appropriate, taking into consideration any circumstance that may raise
a significant risk of substantial future losses to the Reserve Fund.
' (c) Maintenance of Reserve Ratio-
' (1) IN GENERAL- The Director shall.have the authority to establish,
increase, or decrease the amount of aggregate annual insurance
premiums to be collected for any fiscal year necessary--
' (A) to maintain the reserve ratio required under subsection (b);
and
' (e) to achieve such reserve ratio, if the actual balance of such
reserve is below the amount required under subsection (b).
(2) CONSIDERATIONS- In exercising the authority granted under
paragraph (1), the Director shall consider--
' (A) the expected operating expenses of the Reserve Fund;
' (e) the insurance loss expenditures under the flood insurance
program;
' (C) any investment income generated under the flood insurance
program; and
' (D) any other factor that the Director determines appropriate.
' (3) LIMITATIONS- In exercising the authority granted under
paragraph (1), the Director shall be subject to all other provisions of
this Act, including any provisions relating to chargeable premium rates
or annual increases of such rates.
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' (d) Phase-In Requirements- The phase-in requirements under this
subsection are as follows:
' (1) IN GENERAL- Beginning in fiscal year 2008 and not ending until
the fiscal year in which the ratio required under subsection (b) is
achieved, in each such fiscal year the Director shall place in the
Reserve Fund an amount equal to not less than 7.5 percent of the
reserve ratio required under subsection (b).
(2) AMOUNT SATISFIED As soon as the ratio required under
subsection (b) is achieved, and except as provided in paragraph (3),
the Director shall not be required to set aside any amounts for the
Reserve Fund.
' (3) EXCEPTION- If at any time after the ratio required under
subsection (b) is achieved, the Reserve Fund falls below the required
ratio under subsection (b), the Director shall place in the Reserve Fund.
for that fiscal year an amount equal to not less than 7.5 percent of the
reserve ratio required under subsection (b).
' (e) Limitation on Reserve Ratio- In any given fiscal year, if the Director
determines that the reserve ratio required under subsection (b) cannot be
achieved, the Director shall submit a report to Congress that--
' (1) describes and details the specific concerns of the Director
regarding such consequences;
' (2) demonstrates how such consequences would harm the long-term
financial soundness of the flood insurance program and
' (3) indicates the maximum attainable reserve ratio for that particular
fiscal year. '.
SEC. 116. REPAYMENT PLAN FOR BORROWING AUTHORITY.
Section 1309 of the National Flood Insurance Act of 1968 (42 U.S.C. 4016)
is amended by adding at the end the following:
' (c) Any funds borrowed by the Director under the authority established in
subsection (a) shall include a schedule for repayment of such amounts which
shall be transmitted to the--
,
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(1) Secretary of the Treasury;
' (2) Committee on Banking, Housing, and Urban Affairs of the Senate;
and
(3) Committee on Financial Services of the House of Representatives.
` (d) In addition to the requirement under subsection (c), in connection with
any funds borrowed by the Director under the authority established in
subsection (a), the Director, beginning 6 months after the date on which
such borrowed funds are issued, and continuing every 6 months thereafter
until such borrowed funds are fully repaid, shall submit a report on the
progress of such repayment to the--
' (1) Secretary of the Treasury;
' (2) Committee on Banking, Housing, and Urban Affairs of the Senate;
and
(3) Committee on Financial Services of the House of Representatives. '.
SEC. 117. PAYMENT OF CONDOMINIUM CLAIMS.
Section 1312 of the National Flood Insurance Act of 1968 (42 U.S.C. 4019),
as amended by section 113, is further amended by adding at the end the
following:
' (c) Payment of Claims to Condominium Owners- The Director may not deny
payment for any damage to or loss of property which is covered by flood
insurance to condominium owners who purchased such flood insurance
separate and apart from the flood insurance purchased by the condominium
association in which such owner is a member, based, solely or in any part,
on the flood insurance coverage of the condominium association or others
on the overall property owned by the condominium association.
Notwithstanding any regulations, rules, or restrictions established by the
Director relating to appeals and filing deadlines, the Director shall ensure
that the requirements of this subsection are met with respect to any claims
for damages resulting from flooding in 2005 and 2006. '.
SEC. 118. TECHNICAL MAPPING ADVISORY COUNCIL.
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(a) Establishment- There is established a council to be known as the
Technical Mapping Advisory Council (in this section referred to as the
Council').
(b) Membership-
(1) IN GENERAL- The Council shall consist of the Director, or the
designee thereof, and 12 additional members to be appointed by the
Director or the designee of the Director, who shall be--
(A) the Under Secretary of Commerce for Oceans and
Atmosphere (or the designee thereof);
(8) a member of a recognized professional surveying association
or organization
(C) a member of a recognized professional mapping association
or organization;
(D) a member of a recognized professional engineering
association or organization;
(E) a member of a recognized professional association or
organization representing flood hazard determination firms;
(F) a representative of the United States Geological Survey;
(G) a representative of a recognized professional association or
organization representing State geographic information;
(H) a representative of State national flood insurance
coordination offices;
(I) a representative of the Corps of Engineers;
(1) the Secretary of the Interior (or the designee thereof);
(K) the Secretary of Agriculture (or the designee thereof);
(L) a member of a recognized regional flood and storm water
management organization;
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(M) a representative of a State agency that has entered into a
cooperating technical partnership with the Director and has
demonstrated the capability to produce flood insurance rate
maps; and
(N) a representative of a local government agency that has
entered into a cooperating technical partnership with the Director
and has demonstrated the capability to produce flood insurance
rate maps.
(2) QUALIFICATIONS- Members of the Council shall be appointed
based on their demonstrated knowledge and competence regarding
surveying, cartography, remote sensing, geographic information
systems, or the technical aspects of preparing and using flood
insurance rate maps.
(c) Duties- The Council shall--
(1) recommend to the Director how to improve in a cost-effective
manner the--
(A) accuracy, general quality, ease of use, and distribution and
dissemination of flood insurance rate maps and risk data; and
(e) performance metrics and milestones required to effectively
and efficiently map flood risk areas in the United States;
(2) recommend to the Director mapping standards and guidelines for--
(A) flood insurance rate maps; and
(8) data accuracy, data quality, data currency, and data
eligibility;
(3) recommend to the Director how to maintain on an ongoing basis
flood insurance rate maps and flood risk identification;
(4) recommend procedures for delegating mapping activities to State
and local mapping partners;
(5) recommend to the Director and other Federal agencies
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participating in the Council--
(A) methods for improving interagency and intergovernmental
coordination on flood mapping and flood risk determination; and
(B) a funding strategy to leverage and coordinate budgets and
expenditures across Federal agencies; and
(6) submit an annual report to the Director that contains--
(A) a description of the activities of the Council;
(B) an evaluation of the status and performance of flood
insurance rate maps and mapping activities to revise and update
flood insurance rate maps, as required under section 119; and
(C) a summary of recommendations made by the Council to the
Director.
(d) Future Conditions Risk Assessment and Modeling Report-
(1) IN GENERAL- The Council shall consult with scientists and technical
experts, other Federal agencies, States, and local communities to--
(A) develop recommendations on how to--
(i) ensure that flood insurance rate maps incorporate the
best available climate science to assess flood risks; and
(ii) ensure that the Federal Emergency Management
Agency uses the best available methodology to consider the
impact of--
(I) the rise in the sea level; and
(II) future development on flood risk; and
(B) not later than 1 year after the date of enactment of this title,
prepare written recommendations in a future conditions risk
assessment and modeling report and to submit such
recommendations to the Director.
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(2) RESPONSIBILITY OF THE DIRECTOR- The Director, as part of the
ongoing program to review and update National Flood Insurance
Program rate maps under section 119, shall incorporate any future risk
assessment submitted under paragraph (1)(B) in any such revision or
update.
(e) Chairperson- The members of the Council shall elect 1 member to serve
as the chairperson of the Council (in this section referred to as the
Chairperson').
(f) Coordination- To ensure that the Council's recommendations are
consistent, to the maximum extent practicable, with national digital spatial
data collection and management standards, the Chairperson shall consult
with the Chairperson of the Federal Geographic Data Committee (established
pursuant to OMB Circular A-16).
(g) Compensation- Members of the Council shall receive no additional
compensation by reason of their service on the Council.
(h) Meetings and Actions-
(1) IN GENERAL- The Council shall meet not less frequently than twice
each year at the request of the Chairperson or a majority of its
members, and may take action by a vote of the majority of the
members.
(2) INITIAL MEETING- The Director, or a person designated by the
Director, shall request and coordinate the initial meeting of the Council.
(i) Officers- The Chairperson may appoint officers to assist in carrying out
the duties of the Council under subsection (c).
(j) Staff-
(1) STAFF OF FEMA- Upon the request of the Chairperson, the Director
may detail, on a nonreimbursable basis, personnel of the Federal
Emergency Management Agency to assist the Council in carrying out
its duties.
(2) STAFF OF OTHER FEDERAL AGENCIES- Upon request of the
Chairperson, any other Federal agency that is a member of the Council
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I may detail, on a non-reimbursable basis, personnel to assist the
Council in carrying out its duties.
(k) Powers- In carrying out this section, the Council may hold hearings,
receive evidence and assistance, provide information, and conduct research,
as it considers appropriate.
(l) Report to Congress- The Director, on an annual basis, shall report to the
Committee on Banking, Housing, and Urban Affairs of the Senate, the
Committee on Financial Services of the House of Representatives, and the
Office of Management and Budget on the--
(1) recommendations made by the Council; and
(2) actions taken by the Federal Emergency Management Agency to
address such recommendations to improve flood insurance rate maps
and flood risk data.
SEC. 119. NATIONAL FLOOD MAPPING PROGRAM.
(a) Reviewing, Updating, and Maintaining Maps- The Director, in
coordination with the Technical Mapping Advisory Council established under
section 118, shall establish an ongoing program under which the Director
shall review, update, and maintain National Flood Insurance Program rate
maps in accordance with this section.
(b) Mapping-
(1) IN GENERAL- In carrying out the program established under
subsection (a), the Director shall--
(A) identify, review, update, maintain, and publish National Flood
Insurance Program rate maps with respect to--
(i) all areas located within the 100-year floodplain;
(ii) all areas located within the 500-year floodplain;
(iii) areas of residual risk that have not previously been
identified, including areas that are protected levees, dams,
and other man-made structures; and
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(iv) areas that could be inundated as a result of the failure
of a levee, dam, or other man-made structure;
(v) the level of protection provided by man-made
structures.
(B) establish or update flood-risk zone data in all such areas, and
make estimates with respect to the rates of probable flood
caused loss for the various flood risk zones for each such area;
and
(C) use, in identifying, reviewing, updating, maintaining, or
publishing any National Flood Insurance Program rate map
required under this section or under the National Flood Insurance
Act of 1968, the most accurate topography and elevation data
available.
(2) MAPPING ELEMENTS- Each map updated under this section shall:
(A) GROUND ELEVATION DATA- Assess the accuracy of current
ground elevation data used for hydrologic and hydraulic modeling
of flooding sources and mapping of the flood hazard and
wherever necessary acquire new ground elevation data utilizing
the most up-to-date geospatial technologies in accordance with
the existing guidelines and specifications of the Federal
Emergency Management Agency.
(B) DATA ON A WATERSHED BASIS- Develop National Flood
Insurance Program flood data on a watershed basis--
(i) to provide the most technically effective and efficient
studies and hydrologic and hydraulic modeling; and
(ii) to eliminate, to the maximum extent possible,
discrepancies in base flood elevations between adjacent
political subdivisions.
(3) OTHER INCLUSIONS- In updating maps under this section, the
Director shall include--
(A) any relevant information on coastal inundation from--
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(r) an applicable inundation map of the Corps of Engineers;
and
(ii) data of the National Oceanic and Atmospheric
Administration relating to storm surge modeling;
(8) any relevant information of the United States Geological
Survey on stream flows, watershed characteristics, and
topography that is useful in the identification of flood hazard
areas, as determined by the Director;
(C) any relevant information on land subsidence, coastal erosion
areas, and other floor-related hazards;
(D) any relevant information or data of the National Oceanic and
Atmospheric Administration and the United States Geological
Survey relating to the best available climate science and the
potential for future inundation from sea level rise, increased
precipitation, and increased intensity of hurricanes due to global
warming; and
(E) any other relevant information as may be recommended by
the Technical Mapping Advisory Committee.
(c) Standards- In updating and maintaining maps under this section, the
Director shall--
(1) establish standards to--
(A) ensure that maps are adequate for--
(i) flood risk determinations; and
(ii) use by State and local governments in managing
development to reduce the risk of flooding; and
(8) facilitate identification and use of consistent methods of data
collection and analysis by the Director, in conjunction with State
and local governments, in developing maps for communities with
similar flood risks, as determined by the Director, and
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(2) publish maps in a format that is--
(A) digital geospatial data compliant;
(B) compliant with the open publishing and data exchange
standards established by the Open Geospatial Consortium; and
(C) compliant with the North American Vertical Datum of 1998
for New Hydrologic and Hydraulic Engineering.
(d) Communication and Outreach-
(1) IN GENERAL- The Director shall--
(A) work to enhance communication and outreach to States, local
communities, and property owners about the effects of--
(i) any potential changes to National Flood Insurance
Program rate maps that may result from the mapping
program required under this section; and
(ii) that any such changes may have on flood insurance
purchase requirements; and
(B) engage with local communities to enhance communication
and outreach to the residents of such communities on the
matters described under subparagraph (A).
(2) REQUIRED ACTIVITIES- The communication and outreach activities
required under paragraph (1) shall include--
(A) notifying property owners when their properties become
included in, or when they are excluded from, an area having
special flood hazards and the effect of such inclusion or exclusion
on the applicability of the mandatory flood insurance purchase
requirement under section 102 of the Flood Disaster Protection
Act of 1973 (42 U.S.C. 4012a) to such properties;
(B) educating property owners regarding the flood risk and
reduction of this risk in their community, including the continued
flood risks to areas that are no longer subject to the flood
insurance mandatory purchase requirement,
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(C) educating property owners regarding the benefits and costs
of maintaining or acquiring flood insurance, including, where
applicable, lower-cost preferred risk policies under the National
Flood Insurance Act of 1968 (42 U.S.C. 4011 et seq.) for such
properties and the contents of such properties;
(D) educating property owners about flood map revisions and the
process available such owners to appeal proposed changes in
flood elevations through their community; and
(E) encouraging property owners to maintain or acquire flood
insurance coverage.
(e) Authorization of Appropriations- There is authorized to be appropriated
to the Director to carry out this section $400,000,000 for each of fiscal years
2008 through 2013.
SEC. 120. REMOVAL OF LIMITATION ON STATE CONTRIBUTIONS FOR
UPDATING FLOOR MAPS.
Section 1360(f)(2) of the National Flood Insurance Act of 1968 (42 U.S.C.
4101(f)(2)) is amended by striking but which may not exceed 50 percent
of the cost of carrying out the requested revision or update'.
SEC. 121. COORDINATION.
(a) Interagency Budget Crosscut Report-
(1) IN GENERAL- The Secretary of Homeland Security, the Director,
the Director of the Office of Management and Budget, and the heads of
each Federal department or agency carrying out activities under
sections 118 and 119 shall work together to ensure that flood risk
determination data and geospatial data are shared among Federal
agencies in order to coordinate the efforts of the Nation to reduce its
vulnerability to flooding hazards.
(2) REPORT- Not later than 30 days after the submission of the budget
of the United States Government by the President to Congress, the
Director of the Office of Management and Budget, in coordination with
the Federal Emergency Management Agency, the United States
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Geological Survey, the National Oceanic and Atmospheric
Administration, the Corps of Engineers, and other Federal agencies, as
appropriate, shall submit to the appropriate authorizing and
appropriating committees of the Senate and the House of
Representatives a financial report, certified by the Secretary or head of
each such agency, an interagency budget crosscut report that displays
the budget proposed for each of the Federal agencies working on flood
risk determination data and digital elevation models, including any
planned interagency or intraagency transfers.
(b) Duties of the Director- In carrying out sections 118 and 119, the Director
shall--
(1) participate, pursuant to section 216 of Public Law 107-347 (116
Stat. 2945), in the establishment of such standards and common
protocols as are necessary to assure the interoperability of geospatial
data for all users of such information;
(2) coordinate with; seek assistance and cooperation of, and provide
liaison to the Federal Geographic Data Committee pursuant to Office of
Management and Budget Circular A-16 and Executive Order 12906 for
the implementation of and compliance with such standards;
(3) integrate with, leverage, and coordinate funding of, to the
maximum extent practicable, the current flood mapping activities of
each unit of State and local government;
(4) integrate with, leverage, and coordinate, to the maximum extent
practicable, the current geospatial activities of other Federal agencies
and units of State and local government, and
(5) develop a funding strategy to leverage and coordinate budgets and
expenditures, and.to establish joint funding mechanisms with other
Federal agencies and units of State and local government to share the
collection and utilization of geospatial data among all governmental
users.
SEC. 122. INTERAGENCY COORDINATION STUDY.
(a) In General- The Director shall enter into a contract with the National
Academy of Public Administration to conduct a study on how the Federal
Emergency Management Agency--
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(1) should improve interagency and intergovernmental coordination on
flood mapping, including a funding strategy to leverage and coordinate
budgets and expenditures; and
(2) can establish joint funding mechanisms with other Federal agencies
and units of State and local government to share the collection and
utilization of data among all governmental users.
(b) Timing- Not later than 180 days after the date of enactment of this title,
the National Academy of Public Administration shall report the findings of the
study required under subsection (a) to the--
(1) Committee on Banking, Housing, and Urban Affairs of the Senate;
(2) Committee on Financial Services of the House of Representatives;
(3) Committee on Appropriations of the Senate; and
(4) Committee on Appropriations of the House of Representatives.
SEC. 123. N®NMAN®ATORY PARTICIPATION.
(a) Nonmandatory Participation in National Flood Insurance Program for 500-
Year Floodplain- Any area located within the 500-year floodplain shall not be
subject to the mandatory purchase requirements of sections 102 or 202 of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a, 4106).
(b) Notice-
(1) BY DIRECTOR- In carrying out the National Flood Insurance
Program, the Director shall provide notice to any community located in
an area within the 500-year floodplain.
(2) TIMING OF NOTICE- The notice required under paragraph (1) shall
be made not later than 6 months after the date of completion of the
initial mapping of the 500-year floodplain, as required under section
118.
(3) LENDER REQUIRED NOTICE-
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(A) REGULATED LENDING INSTITUTIONS- Each Federal or State
entity for lending regulation (after consultation and coordination
with the Federal Financial Institutions Examination Council) shall,
by regulation, require regulated lending institutions, as a
condition of making, increasing, extending, or renewing any loan
secured by property located in an area within the 500-year
floodplain, to notify the purchaser or lessee (or obtain
satisfactory assurances that the seller or lessor has notified the
purchaser or lessee) and the servicer of the loan that such
property is located in an area within the 500-year floodplain, in a
manner that is consistent with and substantially identical to the
notice required under section 1364(a)(1) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4104a(a)(1)).
(8) FEDERAL OR STATE AGENCY LENDERS- Each Federal or State
agency lender shall, by regulation, require notification in the
same manner as provided under subparagraph (A) with respect
to any loan that is made by a Federal or State agency lender and
secured by property located in an area within the 500-year
floodplain.
(C) PENALTY FOR NONCOMPLIANCE- Any regulated lending
institution or Federal or State agency lender that fails to comply
with the notice requirements established by this paragraph shall
be subject to the penalties prescribed under section 102(f)(5) of
the Flood Disaster Protection Act of 1973 (42 U.S.C. 4012a(f)(5)).
SEC. 124. NOTICE OF FLOOD INSURANCE AVAILABILITY UNDER RESPA,
Section 5(b) of the Real Estate Settlement Procedures Act of 1974 (12 U.S.
C. 2604(b)) is amended--
(1) in paragraph (4), by striking and' and inserting a semicolon;
(2) in paragraph (5), by striking the period and inserting '; and'; and
(3) by adding at the end the following:
(6) an explanation of flood insurance and the availability of flood
insurance under the National Flood Insurance Program, whether or not
the real estate is located in an area having special flood hazards. '.
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SEC. 125. TESTING OF NEW FLOODPROOFING TECHNOLOGIES.
(a) Permissible Testing- A temporary residential structure built for the
purpose of testing a new flood proofing technology, as described in
subsection (b), in any State or community that receives mitigation
assistance under section 1366 of the National Flood Insurance Act of 1968
(42 U.S.C. 4104c) may not be construed to be in violation of any flood risk
mitigation plan developed by that State or community and approved by the
Director of the Federal Emergency Management Agency.
(b) Conditions on Testing- Testing permitted under subsection (a) shall--
(1) be performed on an uninhabited residential structure;
(2) require dismantling of the structure at the conclusion of such
testing; and
(3) require that all costs associated with such testing and dismantling
be covered by the individual or entity conducting the testing, or on
whose behalf the testing is conducted.
(c) Rule of Construction- Nothing in this section shall be construed to alter,
limit, or extend the availability of flood insurance to any structure that may
employ, utilize, or apply any technology tested under subsection (b).
SEC. 126. PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION
PROGRAMS.
Chapter I of the National Flood Insurance Act of 1968 (42 U.S.C. 4011 et
seq.) is amended by inserting after section 1313 the following:
'SEC. 1314. PARTICIPATION IN STATE DISASTER CLAIMS MEDIATION
PROGRAMS.
(a) Requirement to Participate- In the case of the occurrence of a major
disaster, as defined in section 102 of the Robert T. Stafford Disaster Relief
and Emergency Assistance Act (42 U.S.C. 5122) that may have resulted in
flood damage under the flood insurance program established under this
chapter and other personal lines residential property insurance coverage
offered by a State regulated insurer, upon request made by the insurance
commissioner of a State (or such other official responsible for regulating the
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business of insurance in the State) for the participation of representatives of
the Director in a program sponsored by such State for nonbinding mediation
of insurance claims resulting from a major disaster, the Director shall cause
representatives of the flood insurance program to participate in such a State
program where claims under the flood insurance program are involved to
expedite settlement of flood damage claims resulting from such disaster.
' (b) Extent of Participation- In satisfying the requirements of subsection (a),
the Director shall require that each representative of the Director--
' (1) be certified for purposes of the flood insurance program to settle
claims against such program resulting from such disaster in amounts
up to the limits of policies under such program;
' (2) attend State-sponsored mediation meetings regarding flood
insurance claims resulting from such disaster at such times and places
as may be arranged by the State;
' (3) participate in good faith negotiations toward the settlement of
such claims with policyholders of coverage made available under the
flood insurance program; and
' (4) finalize the settlement of such claims on behalf of the flood
insurance program with such policyholders.
' (c) Coordination- Representatives of the Director shall at all times
coordinate their activities with insurance officials of the State and
representatives of insurers for the purposes of consolidating and expediting
settlement of claims under the national flood insurance program resulting
from such disaster.
' (d) Qualifications of Mediators- Each State mediator participating in State-
sponsored mediation under this section shall be--
' (1)(A) a member in good standing of the State bar in the State in
which the mediation is to occur with at least 2 years of practical
experience; and
' (e) an active member of such bar for at least 1 year prior to the year
in which such mediator's participation is sought; or
' (2) a retired trial judge from any United States jurisdiction who was a
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member in good standing of the bar in the State in which the judge
presided for at least 5 years prior to the year in which such mediator's
participation is sought.
(e) Mediation Proceedings and Documents Privileged- As a condition of
participation, all statements made and documents produced pursuant to
State-sponsored mediation involving representatives of the Director shall be
deemed privileged and confidential settlement negotiations made in
anticipation of litigation.
(f) Liability, Rights, or Obligations Not Affected- Participation in State-
sponsored mediation, as described in this section does not--
' (1) affect or expand the liability of any party in contract or in tort; or
' (2) affect the rights or obligations of the parties, as established--
' (A) in any regulation issued by the Director, including any
regulation relating to a standard flood insurance policy;
' (B) under this Act; and
(C) under any other provision of Federal law.
(g) Exclusive Federal Jurisdiction- Participation in State-sponsored
mediation shall not alter, change, or modify the original exclusive
jurisdiction of United States courts, as set forth in this Act.
(h) Cost Limitation- Nothing in this section shall be construed to require the
Director or a representative of the Director to pay additional mediation fees
relating to flood insurance claims associated with a State-sponsored
mediation program in which such representative of the Director participates.
(i) Exception- In the case of the occurrence of a major disaster that results
in flood damage claims under the national flood insurance program and that
does not result in any loss covered by a personal lines residential property
insurance policy--
' (1) this section shall not apply; and
' (2) the provisions of the standard flood insurance policy under the
national flood insurance program and the appeals process established
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under section 205 of the Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act of 2004 (42 U.S.C. 4011 note) and the
regulations issued pursuant to such section shall apply exclusively.
` (j) Representatives of the Director- For purposes of this section, the term
`representatives of the Director' means representatives of the national flood
insurance program who participate in the .appeals process established under
section 205 of the Bunning-Bereuter-Blumenauer Flood Insurance Reform
Act of 2004 (42 U.S.C. 4011 note). '.
SEC. 127. REITERATION OF FEMA RESPONSIBILITIES UNDER THE 2004
REFORM ACT.
(a) Minimum Training and Education Requirements- The Director shall
continue to work with the insurance industry, State insurance regulators,
and other interested parties to implement the minimum training and
education standards for all insurance agents who sell flood insurance
policies, as such standards were determined by the Director in the notice
published in the.Federal Register on September 1, 2005 (70 Fed. Reg.
52117) pursuant to section 207 of the Bunning-Bereuter-Blumenauer Flood
Insurance Reform Act of 2004 (42 U.S.C. 4011 note).
(b) Report on the Overall Implementation of the Reform Act of 2004- Not
later than 3 months after the date of the enactment of this title, the Director
shall submit a report to Congress—
(1) describing the implementation of each provision of the Bunning-
Bereuter-Blumenauer Flood Insurance Reform Act of 2004 (Public Law
108-264; 118 Stat. 712);
(2) identifying each regulation, order, notice, and other material issued
by the Director in implementing each provision of that Act;
(3) explaining any statutory or implied deadlines that have not been
met; and
(4) providing an estimate of when the requirements of such missed
deadlines will be fulfilled.
SEC. 128. ADDITIONAL AUTHORITY OF FE A TO COLLECT
INFORMATION ON CLAIMS PAYMENTS.
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(a) In General- The Director shall collect, from property and casualty
insurance companies that are authorized by the Director to participate in the
Write Your Own program any information and data needed to determine the
accuracy of the resolution of flood claims filed on any property insured with
a standard flood insurance policy obtained under the program that was
subject to a flood.
(b) Type of Information To Be Collected- The information and data to be
collected under subsection (a) may include--
(1) any adjuster estimates made as a result of flood damage, and if
the insurance company also insures the property for wind damage--
(A) any adjuster estimates for both wind and flood damage;
(B) the amount paid to the property owner for wind and flood
claims;
(C) the total amount paid to the policyholder for damages as a
result of the event that caused the flooding and other losses;
(2) any amounts paid to the policyholder by the insurance company for
damages to the insured property other than flood damages; and
(3) the total amount paid to the policyholder by the insurance
company for all damages incurred to the insured property as a result
of the flood.
SEC, 129. EXPENSE REIMBURSEMENTS OF INSURANCE COMPANIES.
(a) Submission of Biennial Reports-
(1) TO THE DIRECTOR- Not later than 20 days after the date of
enactment of this title, each property and casualty insurance company
that is authorized by the Director to participate in the Write Your Own
program shall submit to the Director any biennial report prepared in
the prior 5 years by such company.
(2) TO GAO- Not later than 10 days after the submission of the
biennial reports under paragraph (1), the Director shall submit all such
reports to the Comptroller General of the United States.
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(3) NOTICE TO CONGRESS OF FAILURE TO COMPLY- The Director shall
notify and report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the
House of Representatives on any property and casualty insurance
company participating in the Write Your Own program that failed to
submit its biennial reports as required under paragraph (1).
(4) FAILURE TO COMPLY- A property and casualty insurance company
that is authorized by the Director to participate in the Write Your Own
program which fails to comply with the reporting requirement under
this subsection or the requirement under section 62.23(j)(1) of title
44, Code of Federal Regulations (relating to biennial audit of the flood
insurance financial statements) shall be subject to a civil penalty in an
amount equal to $1,000 per day for each day that the company
remains in noncompliance with either such requirement.
(b) FEMA Rulemaking on Expenses of WYO Program- Not later than 180
days after the date of enactment of this title, the Director shall conduct a
rulemaking proceeding to devise a data collection methodology to allow the
Federal Emergency Management Agency to collect consistent information on
the expenses (including the-operating and administrative expenses for
adjustment of claims) of property and casualty insurance companies
participating in the Write Your Own program for selling, writing, and
servicing, standard flood insurance policies.
(c) Submission of Expense Reports- Not later than 60 days after the
effective date of the final rule established pursuant to subsection (b), each
property and casualty insurance company participating in the Write Your
Own program shall submit a report to the Director that details for the prior 5
years the expense levels of each such company for selling, writing, and
servicing standard flood insurance policies based on the methodologies
established under subsection (b).
(d) FEMA Rulemaking on Reimbursement of Expenses Under the WYO
Program- Not later than 15 months after the date of enactment of this title,
the Director shall conduct a rulemaking proceeding to formulate revised
expense reimbursements to property and casualty insurance companies
participating in the Write Your Own program for their expenses (including
their operating and administrative expenses for adjustment of claims) in
selling, writing, and servicing standard flood insurance policies, including
how such companies shall be reimbursed in both catastrophic and non-
catastrophic years. Such reimbursements shall be structured to ensure
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reimbursements track the actual expenses, including standard business
costs and operating expenses, of such companies as close as practicably
possible.
(e) Report of the Director- Not later than 60 days after the effective date of
any final rule established pursuant to subsection (b) or subsection (d), the
Director shall submit to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of the House
of Representatives a report containing—
(1) the specific rationale and purposes of such rule;
(2) the reasons for the adoption of the policies contained in such rule;
and
(3) the degree to which such rule accurately represents the true
operating costs and expenses of property and casualty insurance
companies participating in the Write Your Own program.
(f) GAO Study and Report on Expenses of WYO Program-
(1) STUDY- Not later than 180 days after the effective date of the final
rule established pursuant to subsection (d), the Comptroller General of
the United States shall--
(A) conduct a study on the efficacy, adequacy, and sufficiency of
the final rules established pursuant to subsections (b) and (d);
and
(B) report to the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services of
the House of Representatives on the findings of the study
conducted under subparagraph (A).
(2) GAO AUTHORITY- In conducting the study and report required
under paragraph (1), the Comptroller General--
(A) may use any previous findings, studies, or reports that the
Comptroller General previously completed on the Write Your Own
program;
(B) shall determine if--
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(i) the final rules established pursuant to subsections (b)
and (d) allow the Federal Emergency Management Agency
to access adequate information regarding the actual
expenses of property and casualty insurance companies
participating in the Write Your Own program; and
(ii) the actual reimbursements paid out under the final rule
established in subsection (d) accurately reflect the
expenses reported by property and casualty insurance
companies participating in the Write Your Own program,
including the standard business costs and operating
expenses of such companies; and
(C) shall analyze the effect of such rules on the level of
participation of property and casualty insurers in the Write Your
Own program.
SEC. 130. EXTENSION OF PILOT PROGRAM FOR MITIGATION OF
SEVERE REPETITIVE LOSS PROPERTIES.
(a) In General- Section 1361A of the National Flood Insurance Act of 1968
(42 U.S.C. 4102a) is amended—
(1) in subsection (k)(1)--
(A) in the first sentence, by striking 'in each of fiscal years 2005,
2006, 2007, 2008, and 2009' and inserting 'in each fiscal year
.through fiscal year 2013'; and
(B) by adding at the end the following new sentence: 'For fiscal
years 2008 through the 2013, the total amount that the Director
may use to provide assistance under this section shall not exceed
$240,000,000. '., and
(2) by striking subsection (l).
(b) Report to Congress on Implementation Status- Not later than 6 months
after the date of enactment of this title, the Director shall report to the
Committee on Banking, Housing, and Urban Affairs of the Senate and the
Committee on Financial Services of the House of Representatives on the
status of the implementation of the pilot program for severe repetitive loss
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properties authorized under section 1361A of the National Flood Insurance
Act of 1968 (42 U.S.C. 4102a).
(c) Rulemaking- No later than 90 days after the date of enactment of this
title, the Director shall issue final rules to carry out the severe repetitive loss
pilot program authorized under section 1361A of the National Flood
Insurance Act of 1968 (42 U.S.C. 4102a).
SEC. 131. FLOOD INSURANCE ADVOCATE.
Chapter II of the National Flood Insurance Act of 1968 is amended by
inserting after section 1330 (42 U.S.C. 4041) the following new section:
SEC. 1330A. OFFICE OF THE FLOOD INSURANCE ADVOCATE.
' (a) Establishment of Position-
(1) IN GENERAL- There shall be in the Federal Emergency
Management Agency an Office of the Flood Insurance Advocate which
shall be headed by the National Flood Insurance Advocate. The
National Flood Insurance Advocate shall--
' (A) to the extent amounts are provided pursuant to subsection
(n), be compensated at the same rate as the highest rate of
basic pay established for the Senior Executive Service under
section 5382 of title 5, United States Code, or, if the Director so
determines, at a rate fixed under section 9503 of such title;
(8) be appointed by the Director without regard to political
affiliation;
(C) report to and be under the general supervision of the
Director, but shall not report to, or be subject to supervision by,
any other officer of the Federal Emergency Management Agency;
and
(D) consult with the Assistant Administrator for Mitigation or
any successor thereto, but shall not report to, or be subject to
the general supervision by, the Assistant Administrator for
Mitigation or any successor thereto.
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(2) QUALIFICATIONS- An individual appointed under paragraph (1)
(B) shall have a background in customer service, or experience
representing insureds, as well as experience in investigations or audits.
(3) RESTRICTION ON EMPLOYMENT- An individual may be appointed
as the National Flood Insurance Advocate only if such individual was
not an officer or employee of the Federal Emergency Management
Agency with duties relating to the national flood insurance program
during the 2-year period ending with such appointment and such
individual agrees not to accept any employment with the Federal
Emergency Management Agency for at least 2 years after ceasing to
be the National Flood Insurance Advocate. Service as an employee of
the National Flood Insurance Advocate shall not be taken into account
in applying this paragraph.
(4) STAFF- To the extent amounts are provided pursuant to
subsection (n), the National Flood Insurance Advocate may employ
such personnel as may be necessary to carry out the duties of the
Office.
(5) INDEPENDENCE- The Director shall not prevent or prohibit the
National Flood Insurance Advocate from initiating, carrying out, or
completing any audit or investigation, or from issuing any subpoena or
summons during the course of any audit or investigation.
(6) REMOVAL- The President and the Director shall have the power to
remove, discharge, or dismiss the National Flood Insurance Advocate.
Not later than 15 days after the removal, discharge, or dismissal of the
Advocate, the President or the Director shall report to the Committee
on Banking of the Senate and the Committee on Financial Services of
the House of Representatives on the basis for such removal, discharge,
or dismissal.
` (b) Functions of Office- It shall be the function of the Office of the Flood
Insurance Advocate to--
(1) assist injure under the national flood insurance program in
resolving problems with the Federal Emergency Management Agency
relating to such program;
(2) identify areas in which such injure have problems in dealings with
the Federal Emergency Management Agency relating to such program;
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' (3) propose changes in the administrative practices of the Federal
Emergency Management Agency to mitigate problems identified under
paragraph (2);
' (4) identify potential legislative, administrative, or regulatory changes
which may be appropriate to mitigate such problems;
' (5) conduct, supervise, and coordinate—
'(A) systematic and random audits and investigations of
insurance companies and associated entities that sell or offer
policies under the National Flood Insurance Program to determine
whether such insurance companies or associated entities are
allocating only flood losses under such insurance policies to the
National Flood Insurance Program; and
' (B) audits and investigations to determine if an insurance
company or associated entity described under subparagraph (A)
is negotiating on behalf of the National Flood Insurance Program
with third parties in good faith;
' (6) conduct, supervise, and coordinate investigations into the
operations of the national flood insurance program for the purpose of--
' (A) promoting economy and efficiency in the administration of
such program;
' (B) preventing and detecting fraud and abuse in the program;
and
' (C) identifying, and referring to the Attorney General for
prosecution, any participant in such fraud or abuse; and
' (7) identify and investigate conflicts of interest that undermine the
economy and efficiency of the national flood insurance program.
' (c) Authority of the National Flood Insurance Advocate- The National Flood
Insurance Advocate may--
' (1) have access to all records, reports, audits, reviews, documents,
papers, recommendations, or other material available to the Director
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which relate to administration or operation of the national flood
insurance program with respect to which the National Flood Insurance
Advocate has responsibilities under this section, including information
submitted pursuant to Section 128 of this Act;
(2) undertake such investigations and reports relating to the
administration or operation of the national flood insurance program as
are, in the judgment of the National Flood Insurance Advocate,
necessary or desirable;
(3) request such information or assistance as may be necessary for
carrying out the duties and responsibilities provided by this section
from any Federal, State, or local governmental agency or unit thereof;
(4) request the production of information, documents, reports,
answers, records (including phone records), accounts, papers, emails,
hard drives, backup tapes, software, audio or visual aides, and any
other data and documentary evidence necessary in the performance of
the functions assigned to the National Flood Insurance Advocate by
this section;
(5) request the testimony of any person in the employ of any
insurance company or associated entity participating in the National
Flood Insurance Program, described under subsection (b)(5)(A), or any
successor to such company or entity, including any member of the
board of such company or entity, any trustee of such company or
entity, any partner in such company or entity, or any agent or
representative of such company or entity;
(6) select, appoint, and employ such officers and employees as may
be necessary for carrying out the functions, powers, and duties of the
Office subject to the provisions of title 5, United States Code,
governing appointments in the competitive service, and the provisions
of chapter 51 and subchapter III of chapter 53 of such title relating to
classification and General Schedule pay rates;
(7) obtain services as authorized by section 3109 of title 5, United
States Code, at daily rates not to exceed the equivalent rate
prescribed for the rate of basic pay for a position at level IV of the
Executive Schedule; and
(8) to the extent and in such amounts as may be provided in advance
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by appropriations Acts, enter into contracts and other arrangements
for audits, studies, analyses, and other services with public agencies
and with private persons, and to make such payments as may be
necessary to carry out the provisions of this section.
' (d) Additional Duties of the NFIA- The National Flood Insurance Advocate
shall--
' (1) monitor the coverage and geographic allocation of regional offices
of flood insurance advocates;
' (2) develop guidance to be distributed to all Federal Emergency
Management Agency officers and employees having duties with respect
to the national flood insurance program, outlining the criteria for
referral of inquiries by insureds under such program to regional offices
of flood insurance advocates;
'(3) ensure that the local telephone number for each regional office of
the flood insurance advocate is published and available to such
insureds served by the office; and
' (4) establish temporary State or local offices where necessary to
meet the needs of qualified insureds following a flood event.
' (e) Other Responsibilities-
' (1) ADDITIONAL REQUIREMENTS RELATING TO CERTAIN AUDITS-
Prior to conducting any audit or investigation relating to the allocation
of flood losses under subsection (b)(S)(A), the National Flood
Insurance Advocate may--
' (A) consult with appropriate subject-matter experts to identify
the data necessary to determine whether flood claims paid by
insurance companies or associated entities on behalf the national
flood insurance program reflect damages caused by flooding;
' (B) collect or compile the data identified in subparagraph (A),
utilizing existing data sources to the maximum extent
practicable; and
' (C) establish policies, procedures, and guidelines for application
of such data in all audits and investigations authorized under this
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section. '
(2) ANNUAL REPORTS-
' (A) ACTIVITIES- Not later than December 31 of each calendar
year, the National Flood Insurance Advocate shall report to the
Committee on Banking, Housing, and Urban Affairs of the Senate
and the Committee on Financial Services of the House of
Representatives on the activities of the Office of the Flood
Insurance Advocate during the fiscal year ending during such
calendar year. Any such report shall contain a full and
substantive analysis of such activities, in addition to statistical
information, and shall--
'(i) identify the initiatives the Office of the Flood Insurance
Advocate has taken on improving services for insureds
under the national flood insurance program and
responsiveness of the Federal Emergency Management
Agency with respect to such initiatives;
' (ii) describe the nature of recommendations made to the
Director under subsection (i);
' (iii) contain a summary of the most serious problems
encountered by such insureds, including a description of the
nature of such problems;
' (iv) contain an inventory of any items described in clauses
(i), (ii), and (iii) for which action has been taken and the
result of such action;
' (v) contain an inventory of any items described in clauses
(i), (ii), and (iii) for which action remains to be completed
and the period during which each item has remained on
such inventory;
' (vi) contain an inventory of any items described in clauses
(i), (ii), and (iii) for which no action has been taken, the
period during which each item has remained on such
inventory and the reasons for the inaction;
' (vii) identify any Flood Insurance Assistance
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Recommendation which was not responded to by the
Director in a timely manner or was not followed, as
specified under subsection (i);
(viii) contain recommendations for such administrative
and legislative action as may be appropriate to resolve
problems encountered by such insureds;
(ix) identify areas of the law or regulations relating to the
national flood insurance program that impose significant
compliance burdens on such insureds or the Federal
Emergency Management Agency, including specific
recommendations for remedying these problems;
(x) identify the most litigated issues for each category of
such insureds, including recommendations for mitigating
such disputes;
(xi) identify ways to promote the economy, efficiency, and
effectiveness in the administration of the national flood
insurance program;
(xii) identify fraud and abuse in the national flood
insurance program; and
(xiii) include such other information as the National Flood
Insurance Advocate may deem advisable.
(B) DIRECT SUBMISSION OF REPORT- Each report required
under this paragraph shall be provided directly to the committees
identified in subparagraph (A) without any prior review or
comment from the Director, the Secretary of Homeland Security,
or any other officer or employee of the Federal Emergency
Management Agency or the Department of Homeland Security, or
the Office of Management and Budget.
(3) INFORMATION AND ASSISTANCE FROM OTHER AGENCIES-
(A) IN GENERAL- Upon request of the National Flood Insurance
Advocate for information or assistance under this section, the
head of any Federal agency shall, insofar as is practicable and
not in contravention of any statutory restriction or regulation of
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the Federal agency from which the information is requested,
furnish to the National Flood Insurance Advocate, or to an
authorized designee of the National Flood Insurance Advocate,
such information or assistance.
(B) REFUSAL TO COMPLY- Whenever information or assistance
requested under this subsection is, in the judgment of the
National Flood Insurance Advocate, unreasonably refused or not
provided, the National Flood Insurance Advocate shall report the
circumstances to the Director without delay.
(f) Compliance With GAO Standards- In carrying out the responsibilities
established under this section, the National Flood Insurance Advocate shall--
' (1) comply with standards established by the Comptroller General of
the United States for audits of Federal establishments, organizations,
programs, activities, and functions;
' (2) establish guidelines for determining when it shall be appropriate
to use non-Federal auditors;
' (3) take appropriate steps to assure that any work performed by non-
Federal auditors complies with the standards established by the
Comptroller General as described in paragraph (1); and
' (4) take the necessary steps to minimize the publication of
proprietary and trade secrets information.
' (g) Personnel Actions-
' (1) IN GENERAL- The National Flood Insurance Advocate shall have
the responsibility and authority to--
' (A) appoint regional flood insurance advocates in a manner that
will provide appropriate coverage based upon regional flood
insurance program participation; and
' (B) hire, evaluate, and take personnel actions (including
dismissal) with respect to any employee of any regional office of
a flood insurance advocate described in subparagraph (A).
(2) CONSULTATION- The National Flood Insurance Advocate may
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consult with the appropriate supervisory personnel of the Federal
Emergency Management Agency in carrying out the National Flood
Insurance Advocate's responsibilities under this subsection.
(h) Operation of Regional Offices-
(1) IN GENERAL- Each regional flood insurance advocate appointed
pursuant to subsection (d)--
(A) shall report to the National Flood Insurance Advocate or
delegate thereof;
(e) may consult with the appropriate supervisory personnel of
the Federal Emergency Management Agency regarding the daily
operation of the regional office of the flood insurance advocate;
(C) shall, at the initial meeting with any insured under the
national flood insurance program seeking the assistance of a
regional office of the flood insurance advocate, notify such
insured that the flood insurance advocate offices operate
independently of any other Federal Emergency Management
Agency office and report directly to Congress through the
National Flood Insurance Advocate; and
(D) may, at the flood insurance advocate's discretion, not
disclose to the Director contact with, or information provided by,
such insured.
(2) MAINTENANCE OF INDEPENDENT COMMUNICATIONS- Each
regional office of the flood insurance advocate shall maintain a
separate phone, facsimile, and other electronic communication access.
(i) Flood Insurance Assistance Recommendations-
' (1) AUTHORITY TO ISSUE- Upon application filed by a qualified
insured with the Office of the Flood Insurance Advocate (in such form,
manner, and at such time as the Director shall by regulation
prescribe), the National Flood Insurance Advocate may issue a Flood
Insurance Assistance Recommendation, if the Advocate finds that the
qualified insured is suffering a significant hardship, such as a
significant delay in resolving claims where the insured is incurring
significant costs as a result of such delay, or where the insured is at
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risk of adverse action, including the loss of property, as a result of the
manner in which the flood insurance laws are being administered by
the Director.
' (Z) TERMS OF A FLOOD INSURANCE ASSISTANCE
RECOMMENDATION- The terms of a Flood Insurance Assistance
Recommendation may recommend to the Director that the Director,
within a specified time period, cease any action, take any action as
permitted by law, or refrain from taking any action, including the
payment of claims, with respect to the qualified insured under any
other provision of law which is specifically described by the National
Flood Insurance Advocate in such recommendation.
' (3) DIRECTOR RESPONSE- Not later than 15 days after the receipt of
any Flood Insurance Assistance Recommendation under this
subsection, the Director shall respond in writing as to--
' (A) whether such recommendation was followed;
' (B) why such recommendation was or was not followed, and
' (C) what, if any, additional actions were taken by the Director
to prevent the hardship indicated in such recommendation.
' (4) RESPONSIBILITIES OF DIRECTOR- The Director shall establish
procedures requiring a formal response consistent with the
requirements of paragraph (3) to all recommendations submitted to
the Director by the National Flood Insurance Advocate under this
subsection.
' (j) Reporting of Potential Criminal Violations- In carrying out the duties and
responsibilities established under this section, the National Flood Insurance
Advocate shall report expeditiously to the Attorney General whenever the
National Flood Insurance Advocate has reasonable grounds to believe there
has been a violation of Federal criminal law.
' (k) Coordination-
' (1) WITH OTHER FEDERAL AGENCIES- In carrying out the duties and
responsibilities established under this section, the National Flood
Insurance Advocate--
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' (A) shall give particular regard to the activities of the Inspector
General of the Department of Homeland Security with a view
toward avoiding duplication and insuring effective coordination
and cooperation; and
' (B) may participate, upon request of the Inspector General of
the Department of Homeland Security, in any audit or
investigation conducted by the Inspector General.
' (2) WITH STATE REGULATORS- In carrying out any investigation or
audit under this section, the National Flood Insurance Advocate shall
coordinate its activities and efforts with any State insurance authority
that is concurrently undertaking a similar or related investigation or
audit.
' (3) AVOIDANCE OF REDUNDANCIES IN THE RESOLUTION OF
PROBLEMS- In providing any assistance to a policyholder pursuant to
paragraphs (1) and (2) of subsection (b), the National Flood Insurance
Advocate shall consult with the Director to eliminate, avoid, or reduce
any redundancies in actions that may arise as a result of the actions of
the National Flood Insurance Advocate and the claims appeals process
described under section 62.20 of title 44, Code of Federal Regulations.
(1) Authority of the Director To Levy Penalties- The Director and the
Advocate shall establish procedures to take appropriate action against an
insurance company, including monetary penalties and removal or suspension
from the program, when a company refuses to cooperate with an
investigation or audit under this section or where a finding has been made of
improper conduct.
'(m) Definitions- For purposes of this subsection:
' (1) ASSOCIATED ENTITY- The term 'associated entity' means any
person, corporation, or other legal entity that contracts with the
Director or an insurance company to provide adjustment services,
benefits calculation services, claims services, processing services, or
record keeping services in connection with standard flood insurance
policies made available under the national flood insurance program.
' (2) INSURANCE COMPANY- The term 'insurance company' refers to
any property and casualty insurance company that is authorized by the
Director to participate in the Write Your Own program under the
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national flood insurance program.
(3) NATIONAL FLOOD INSURANCE ADVOCATE- The term 'National
Flood Insurance Advocate' includes any designee of the National Flood
Insurance Advocate.
' (4) QUALIFIED INSURED- The term 'qualified insured' means an
insured under coverage provided under the national flood insurance
program under this title.
(n) Funding- Pursuant to section 1310(a)(8), the Director may use
amounts from the National Flood Insurance Fund to fund the activities of the
Office of the Flood Advocate in each of fiscal years 2009 through 2014,
except that the amount so used in each such fiscal year may not exceed
$5,000,000 and shall remain available until expended. Notwithstanding any
other provision of this title, amounts made available pursuant to this
subsection shall not be subject to offsetting collections through premium
rates for flood insurance coverage under this title. '.
SEC. 132. STUDIES AND REPORTS.
(a) Report on Expanding the National Flood Insurance Program- Not later
than 1 year after the date of the enactment of this title, the Comptroller
General of the United States shall conduct a study and submit a report to
the Committee on Banking, Housing, and Urban Affairs of the Senate and
the Committee on Financial Services of the House of Representatives, on--
(1) the number of flood insurance policy holders currently insuring--
(A) a residential structure up to the maximum available coverage
amount, as established in section 61.6 of title 44, Code of
Federal Regulations, of--
(i) $250,000 for the structure; and
(ii) $100,000 for the contents of such structure; or
(B) a commercial structure up to the maximum available
coverage amount, as established in section 61.6 of title 44, Code
of Federal Regulations, of $500,000;
(2) the increased losses the National Flood Insurance Program would
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have sustained during the 2004 and 2005 hurricane season if the
National Flood Insurance Program had insured all policyholders up to
the maximum conforming loan limit for fiscal year 2006 of $417,000,
as established under section 302(b)(2) of the Federal National
Mortgage Association Charter Act (12 U.S.C. 1717(b)(2));
(3) the availability in the private marketplace of flood insurance
coverage in amounts that exceed the current limits of coverage
amounts established in section 61.6 of title 44, Code of Federal
Regulations; and
(4) what effect, if any--
(A) raising the current limits of coverage amounts established in
section 61.6 of title 44, Code of Federal Regulations, would have
on the ability of private insurers to continue providing flood
insurance coverage; and
(B) reducing the current limits of coverage amounts established
in section 61.6 of title 44, Code of Federal Regulations, would
have on the ability of private insurers to provide sufficient flood
insurance coverage to effectively replace the current level of
flood insurance coverage being provided under the National Flood
Insurance Program.
(b) Report of the Director on Activities Under the National Flood Insurance
Program-
(1) IN GENERAL- The Director shall, on an annual basis, submit a full
report on the operations, activities, budget, receipts, and expenditures
of the National Flood Insurance Program for the preceding 12-month
period to the Committee on Banking, Housing, and Urban Affairs of the
Senate and the Committee on Financial Services of the House of
Representatives.
(2) TIMING- Each report required under paragraph (1) shall.be
submitted to the committees described in paragraph (1) not later than
3 months following the end of each fiscal year.
(3) CONTENTS- Each report required under paragraph (1) shall
include--
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(A) the current financial condition and income statement of the
National Flood Insurance Fund established under section 1310 of
the National Flood Insurance Act of 1968 (42 U.S.C. 4017),
including—
(i) premiums paid into such Fund;
(ii) policy claims against such Fund; and
(iii) expenses in administering such Fund,
(8) the number and face value of all policies issued under the
National Flood Insurance Program that are in force;
(C) a description and summary of the losses attributable to
repetitive loss structures;
(D) a description and summary of all losses incurred by the
National Flood Insurance Program due to--
(i) hurricane related damage; and
.(ii) nonhurricane related damage;
(E) the amounts made available by the Director for mitigation
assistance under section 1366(e)(5) of the National Flood
Insurance Act of 1968 (42 U.S.C. 4104c(e)(5)) for the purchase
of properties substantially damaged by flood for that fiscal year,
and the actual number of flood damaged properties purchased
and the total cost expended to purchase such properties;
(F) the estimate of the Director as to the average historical loss
year, and the basis for that estimate;
(G) the estimate of the Director as to the maximum amount of
claims that the National Flood Insurance Program would have to
expend in the event of a catastrophic year;
(H) the average—
(i) amount of insurance carried per flood insurance policy;
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(ii) premium per flood insurance policy; and
(iii) loss per flood insurance policy; and
(I) the number of claims involving damages in excess of the
maximum amount of flood insurance available under the National
Flood Insurance Program and the sum of the amount of all
damages in excess of such amount.
(c) GAO Study on Pre-FIRM Structures- Not later than 1 year after the date
of the enactment of this title, the Comptroller General of the United States
shall conduct a study and submit a report to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on Financial
Services of the House of Representatives, on the--
(1) composition of the remaining pre-FIRM structures that are
explicitly receiving discounted premium rates under section 1307 of
the National Flood Insurance Act of 1968 (42 U.S.C. 4104), including
the historical basis for the receipt of such subsidy and whether such
subsidy has outlasted its purpose;
(2) number and fair market value of such structures;
(3) respective income level of each owner of such structure;
(4) number of times each such structure has been sold since 1968,
including specific dates, sales price, and any other information the
Secretary determines appropriate;
(5) total losses incurred by such structures since the establishment of
the National Flood Insurance Program compared to the total losses
incurred by all structures that are charged a nondiscounted premium
rate;
(6) total cost of foregone premiums since the establishment of the
National Flood Insurance Program, as a result of the subsidies provided
to such structures;
I (7) annual cost to the taxpayer, as a result of the subsidies provided to
such structures;
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(8) the premium income collected and the losses incurred by the
National Flood Insurance Program as a result of such explicitly
subsidized structures compared to the premium income collected and
the losses incurred by such Program as result of structures that are
charged a nondiscounted premium rate, on a State-by-State basis; and
(9) the most efficient way to eliminate the subsidy to such structures.
(d) GAO Review of FEMA Contractors- The Comptroller General of the United
States, in conjunction with the Department of Homeland Security's
Inspectors general Office, shall--
(1) conduct a review of the 3 largest contractors the Director uses in
administering the National Flood Insurance Program; and
(2) not later than 18 months after the date of enactment of this title,
submit a report on the findings of such review to the Director, the
Committee on Banking, Housing, and Urban Affairs of the Senate, and
the Committee on Financial Services of the House of Representatives.
SEC. 13.3. FEASIBILITY STUDY ON PRIVATE REINSURANCE.
Not later than 1 year after the date of enactment of this Act, the Comptroller
General of the United States shall conduct and submit a report to Congress
on--
(1) the feasibility of requiring the Director, as part of carrying out the
responsibilities of the Director under the National Flood Insurance
Program, to purchase private reinsurance or retrocessional coverage,
in addition to any such reinsurance coverage required under section
1335 of the National Flood Insurance Act of 1968 (42 U.S.C. 4055), to
underlying primary private insurers for losses arising due to flood
insurance coverage provided by such insurers;
(2) the feasibility of repealing the reinsurance requirement under such
section 1335, and requiring the Director, as part of carrying out the
responsibilities of the Director under the National Flood Insurance
Program, to purchase private reinsurance or retrocessional coverage to
underlying primary private insurers for losses arising due to flood
insurance coverage provided by such insurer; and
(3) the estimated total savings to the taxpayer of taking each such
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action described in paragraph (1) or (2).
SEC. 134. POLICY DISCLOSURES.
(a) In General- Notwithstanding any other provision of law, in addition to
any other disclosures that may be required, each policy under the National
Flood Insurance Program shall state all conditions, exclusions, and other
limitations pertaining to coverage under the subject policy, regardless of the
underlying insurance product, in plain English, in boldface type, and in a font
size that is twice the size of the text of the body of the policy.
(b) Violations- Any person that violates the requirements of this section shall
be subject to a fine of not more than $50,000 at the discretion of the
Director.
SEC. 135. REPORT ON INCLUSION OF BUILDING CODES IN
ELOODPLAIIN MANAGEMENT" CRITERIA.
Not later than 6 months after the date of the enactment of this Act, the
Director of the Federal Emergency Management Agency shall conduct a
study and submit a report to the Committee on Financial Services of the
House of Representatives and the Committee on Banking, Housing, and
Urban Affairs of the Senate regarding the impact, effectiveness, and
feasibility of amending section 1361 of the National Flood Insurance Act of
1968 (42 U.S.C. 4102) to include widely used and nationally recognized
building codes as part of the floodplain management criteria developed
under such section, and shall determine--
(1) the regulatory, financial, and economic impacts of such a building
code requirement on homeowners, States and local communities, local
land use policies, and the Federal Emergency Management Agency;
(2) the resources required of State and local communities to
administer and enforce such a building code requirement;
(3) the effectiveness of such a building code requirement in reducing
flood-related damage to buildings and contents;
(4) the impact of such a building code requirement on the actuarial
soundness of the National Flood Insurance Program;
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(5) the effectiveness of nationally recognized codes in allowing
innovative materials and systems for flood-resistant construction; and
(6) the feasibility and effectiveness of providing an incentive in lower
premium rates for flood insurance coverage under such Act for
structures meeting whichever of such widely used and nationally
recognized building code or any applicable local building code provides
greater protection from flood damage.
TITLE II--COMMISSION ON NATURAL CATASTROPHE RISK MANAGEMENT AND
INSURANCE
SEC. 201. SHORT TITLE.
This title may be cited as the ' Commission on Natural Catastrophe Risk
Management and Insurance Act of 2008'.
SEC. 202. FINDINGS.
Congress finds that--
(1) Hurricanes Katrina, Rita, and Wilma, which struck the United
States in 2005, caused, by some estimates, in excess of
$200,000,000,000 in total economic losses;
(2) many meteorologists predict that the United States is in a period of
increased hurricane activity;
(3) the Federal Government and State governments have provided
billions of dollars to pay for losses from natural catastrophes, including
hurricanes, earthquakes, volcanic eruptions, tsunamis, tornados,
flooding, wildfires, droughts, and other natural catastrophes;
(4) many Americans are finding it increasingly difficult to obtain and
afford property and casualty insurance coverage;
(5) some insurers are not renewing insurance policies, are excluding
certain risks, such as wind damage, and are increasing rates and
deductibles in some markets;
(6) the inability of property and business owners in vulnerable areas to
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obtain and afford property and casualty insurance coverage endangers
the national economy and public health and safety;
(7) almost every State in the United States is at risk of a natural
catastrophe, including hurricanes, earthquakes, volcanic eruptions,
tsunamis, tornados, flooding, wildfires, droughts, and other natural
catastrophes;
(8) building codes and land use regulations play an indispensable role
in managing catastrophe risks, by preventing building in high risk
areas and ensuring that appropriate mitigation efforts are completed
where building has taken place;
(9) several proposals have been introduced in Congress to address the
affordability and availability of natural catastrophe insurance across
the United States, but there is no consensus on what, if any, role the
Federal Government should play; and
(10) an efficient and effective approach to assessing natural
catastrophe risk management and insurance is to establish a
nonpartisan commission to study the management of natural
catastrophe risk, and to require such commission to timely report to
Congress on its findings.
SEC. 203. ESTABLISHMENT.
There is established a nonpartisan Commission on Natural Catastrophe Risk
Management and Insurance (in this title referred to as the ' Commission').
SEC. 204. MEMBERSHIP.
(a) Appointment- The Commission shall be composed of 16 members, of
whom--
(1) 2 members shall be appointed by the majority leader of the Senate;
(2) 2 members shall be appointed by the minority leader of the Senate;
(3) 2 members shall be appointed by the Speaker of the House of
Representatives;
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(4) 2 members shall be appointed by the minority leader of the House
of Representatives;
(S) 2 members shall be appointed by the Chairman of the Committee
on Banking, Housing, and Urban Affairs of the Senate;
(6) 2 members shall be appointed by the Ranking Member of the
Committee on Banking, Housing, and Urban Affairs of the Senate;
(7) 2 members shall be appointed by the Chairman of the Committee
on Financial Services of the House of Representatives; and
(8) 2 members shall be appointed by the Ranking Member of the
Committee on Financial Services of the House of Representatives.
(b) Qualification of Members-
(1) IN GENERAL- Members of the Commission shall be appointed under
subsection (a) from among persons who--
(A) have expertise in insurance, reinsurance, insurance
regulation, policyholder concerns, emergency management, risk
management, public finance, financial markets, actuarial
analysis, flood mapping and planning, structural engineering,
building standards, land use planning, natural catastrophes,
meteorology, seismology, environmental issues, or other
pertinent qualifications or experience; and
(B) are not officers or employees of the United States
Government or of any State government.
(2) DIVERSITY- In making appointments to the Commission--
(A) every effort shall be made to ensure that the members are
representative of a broad cross section of perspectives within the
United States; and
(B) each member of Congress described in subsection (a) shall
appoint not more than 1 person from any single primary area of
expertise described in paragraph (1)(A) of this subsection.
(c) Period of Appointment-
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1
(1) IN GENERAL- Each member of the Commission shall be appointed
for the duration of the Commission.
(2) VACANCIES A vacancy on the Commission shall not affect its
powers, but shall be filled in the same manner as the original
appointment.
(d) Quorum-
(1) MAJORITY- A majority of the members of the Commission shall
constitute a quorum, but a lesser number, as determined by the
Commission, may hold hearings.
(2) APPROVAL ACTIONS- All recommendations and reports of the
Commission required by this title shall be approved only by a majority
vote of all of the members of the Commission.
(e) Chairperson- The Commission shall, by majority vote of all of the
members, select 1 member to serve as the Chairperson of the Commission
(in this title referred to as the ' Chairperson ).
(f) Meetings- The Commission shall meet at the call of its Chairperson or a
majority of the members.
SEC. 205. DUTIES CAE THE COMMISSION.
The Commission shall examine the risks posed to the United States by
natural catastrophes, and means for mitigating those risks and for paying for
losses caused by natural catastrophes, including assessing--
(1) the condition of the property and casualty insurance and
reinsurance markets prior to and in the aftermath of Hurricanes
Katrina, Rita, and Wilma in 2005, and the 4 major hurricanes that
struck the United States in 2004;
(2) the current condition of, as well as the outlook for, the availability
and affordability of insurance in all regions of the country;
(3) the current ability of States, communities, and individuals to
mitigate their natural catastrophe risks, including the affordability and
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feasibility of such activities;
(4) the ongoing exposure of the United States to natural catastrophes,
including hurricanes, earthquakes, volcanic eruptions, tsunamis,
tornados, flooding, wildfires, droughts, and other natural catastrophes;
(5) the catastrophic insurance and reinsurance markets and the
relevant practices in providing insurance protection to different sectors
of the American population;
(6) implementation of a catastrophic insurance system that can resolve
key obstacles currently impeding broader implementation of
catastrophic risk management and financing with insurance;
(7) the financial feasibility and sustainability of a national, regional, or
other pooling mechanism designed to provide adequate insurance
coverage and increased underwriting capacity to insurers and
reinsurers, including private-public partnerships to increase insurance
capacity in constrained markets;
(8) methods to promote public insurance policies to reduce losses
caused by natural catastrophes in the uninsured sectors of the
American population;
(9) approaches for implementing a public or private insurance scheme
for low-income communities, in order to promote risk reduction and
insurance coverage in such communities;
(10) the impact of Federal and State laws, regulations, and policies
(including rate regulation, market access requirements, reinsurance
regulations, accounting and tax policies, State residual markets, and
State catastrophe funds) on--
(A) the affordability and availability of catastrophe insurance;
(B) the capacity of the private insurance market to cover losses
inflicted by natural catastrophes;
(C) the commercial and residential development of high-risk
areas; and
(D) the costs of natural catastrophes to Federal and State
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taxpayers;
(11) the present. and long-term financial condition of State residual
markets and catastrophe funds in high-risk regions, including the
likelihood of insolvency following a natural catastrophe, the
concentration of risks within such funds, the reliance on post-event
assessments and State funding, and the adequacy of rates;
(12) the role that innovation in financial services could play in
improving the affordability and availability of natural catastrophe
insurance, specifically addressing measures that would foster the
development of financial products designed to cover natural
catastrophe risk, such as risked-linked securities;
(13) the need for strengthened land use regulations and building codes
in States at high risk for natural catastrophes, and methods to
strengthen the risk assessment and enforcement of structural
mitigation and vulnerability reduction measures, such as zoning and
building code compliance;
(14) the benefits and costs of proposed Federal natural catastrophe
insurance programs (including the Federal Government providing
reinsurance to State catastrophe funds, private insurers, or other
entities), specifically addressing the costs to taxpayers, tax equity
considerations, and the record of other government insurance
programs (particularly with regard to charging actuarially sound
prices);
(15) the ability of the United States private insurance market--
(A) to cover insured losses caused by natural catastrophes,
including an estimate of the maximum amount of insured losses
that could be.sustained during a single year and the probability
of natural catastrophes occurring in a single year that would
inflict more insured losses than the United States insurance and
reinsurance markets could sustain; and
(8) to recover after covering substantial insured losses caused by
natural catastrophes;
(16) the impact that demographic trends could have on the amount of
insured losses inflicted by future natural catastrophes;
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(17) the appropriate role, if any, for the Federal Government in
stabilizing the property and casualty insurance and reinsurance
markets; and
(18) the role of the Federal, State, and local governments in providing
incentives for feasible risk mitigation efforts.
SEC. 206. REPORT.
(a) In General- Not later than 9 months after the date of enactment of this
title, the Commission shall submit to the Committee on Banking, Housing,
and Urban Affairs of the Senate and the Committee on Financial Services of
the House of Representatives a final report containing—
(1) a detailed statement of the findings and assessments conducted by
the Commission pursuant to section 205; and
(2) any recommendations for legislative, regulatory, administrative, or
other actions at the Federal, State, or local levels that the Commission
considers appropriate, in accordance with the requirements of section
205.
(b) Extension of Time- The Commission may request Congress to extend the
period of time for the submission of the report required under subsection (a)
for an additional 3 months.
SEC. 207. POWERS OF THE COMMISSION.
(a) Meetings; Hearings- The Commission may hold such hearings, sit and
act at such times and places, take such testimony, and receive such
evidence as the Commission considers necessary to carry out the purposes
of this title. Members may attend meetings of the Commission and vote in
person, via telephone conference, or via video conference.
(b) Authority of Members or Agents of the Commission- Any member or
agent of the Commission may, if authorized by the Commission, take any
action which the Commission is authorized to take by this title.
(c) Obtaining Official Data-
(1) AUTHORITY- Notwithstanding any provision of section 552a of title
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5, United States Code, the Commission may secure directly from any
department or agency of the United States any information necessary
to enable the Commission to carry out this title.
(2) PROCEDURE- Upon request of the Chairperson, the head of such
department or agency shall furnish to the Commission the information
requested.
(d) Postal Services- The Commission may use the United States mails in the
same manner and under the same conditions as other departments and
agencies of the Federal Government.
(e) Administrative Support Services- Upon the request of the Commission,
the Administrator of General Services shall provide to the Commission, on a.
reimbursable basis, any administrative support services necessary for the
Commission to carry out its responsibilities under this title.
(f) Acceptance of Gifts- The Commission may accept, hold, administer, and
utilize gifts, donations, and bequests of property, both real and personal, for
the purposes of aiding or facilitating the work of the Commission. The
Commission shall issue internal guidelines governing the receipt of donations
of services or property.
(g) Volunteer Services- Notwithstanding the provisions of section 1342 of
title 31, United States Code, the Commission may accept and utilize the
services of volunteers serving without compensation. The Commission may
reimburse such volunteers for local travel and office supplies, and for other
travel expenses, including per diem in lieu of subsistence, as authorized by
section 5703 of title 5, United States Code:
(h) Federal Property and Administrative Services Act of 1949- Subject to the
Federal Property and Administrative Services Act of 1949, the Commission
may enter into contracts with Federal and State agencies, private firms,
institutions, and individuals for the conduct of activities necessary to the
discharge of its duties and responsibilities.
(i) Limitation on Contracts- A contract or other legal agreement entered into
by the Commission may not extend beyond the date of the termination of
the Commission.
SEC. 208. COMMISSION PERSONNEL MATTERS.
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(a) Travel Expenses- The members of the Commission shall be allowed
travel expenses, including per diem in lieu of subsistence, at rates
authorized for employees of agencies under subchapter I of chapter 57 of
title 5, United States Code, while away from their homes or regular places of
business in the performance of services for the Commission.
(b) Subcommittees- The Commission may establish subcommittees and
appoint members of the Commission to such subcommittees as the
Commission considers appropriate.
(c) Staff- Subject to such policies as the Commission may prescribe, the
Chairperson may appoint and fix the pay of such additional personnel as the
Chairperson considers appropriate to carry out the duties of the
Commission. The Commission shall confirm the appointment of the
executive director by majority vote of all of the members of the Commission.
(d) Applicability of Certain Civil Service Laws- Staff of the Commission may
be--
(1) appointed without regard to the provisions of title 5, United States
Code, governing appointments in the competitive service; and
(2) paid without regard to the provisions of chapter 51 and subchapter
III of chapter 53 of that title relating to classification and General
Schedule pay rates, except that an individual so appointed may not
receive pay in excess of the annual rate of basic pay prescribed for GS-
15 of the General Schedule under section 5332 of that title.
(e) Experts and Consultants- In carrying out its objectives, the Commission
may procure temporary and intermittent services of consultants and experts
under section 3109(b) of title 5, United States Code, at rates for individuals
which do not exceed the daily equivalent of the annual rate of basic pay
prescribed for GS-15 of the General Schedule under section 5332 of that
title.
(f) Detail of Government Employees- Upon request of the Chairperson, any
Federal Government employee may be detailed to the Commission to assist
in carrying out the duties of the Commission—
(1) on a reimbursable basis; and
(2) such detail shall be without interruption or loss of civil service
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status or privilege.
SEC. 209. TERMINATION.
The Commission shall terminate 90 days after the date on which the
Commission submits its report under section 206.
SEC. 210. AUTHORIZATION OF APPROPRIATIONS.
There are authorized to be appropriated to the Commission, such sums as
may be necessary to carry out this title, to remain available until expended.
TITLE III--MISCELLANEOUS
SEC. 301. RICE SIOUX RIVER AND SKUNK CREEK, SIOUX FALLS, SOUTH
DAKOTA.
The project for flood control, Big Sioux River and Skunk Creek, Sioux Falls,
South Dakota, authorized by section 101(a)(28) of the Water Resources
Development Act of 1996 (110 Stat. 3666), is modified to authorize the
Secretary to reimburse the non-Federal interest for funds advanced by the
non-Federal interest for the Federal share of the project, only if additional
Federal funds are appropriated for that purpose.
SEC. 302. SUSPENSION OF PETROLEUM ACQUISITION FOR STRATEGIC
PETROLEUM RESERVE.
(a) In General- Except as provided in subsection (b) and notwithstanding
any other provision of law, during the period beginning on the date of
enactment of this Act and ending on December 31, 2008--
(1) the Secretary of the Interior shall suspend acquisition of petroleum
for the Strategic Petroleum Reserve through the royalty-in-kind
program; and
(2) the Secretary of Energy shall suspend acquisition of petroleum for
the Strategic Petroleum Reserve through any other acquisition method.
(b) Resumption- Not earlier than 30 days after the date on which the
President notifies Congress that the President has determined that the
weighted average price of petroleum in the United States for the most
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recent 90-day period is $75 or less per barrel--
(1) the Secretary of the Interior may resume acquisition of petroleum
for the Strategic Petroleum Reserve through the royalty-in-kind
program; and
(2) the Secretary of Energy may resume acquisition of petroleum for
the Strategic Petroleum Reserve through any other acquisition method.
(c) Existing Contracts- In the case of any oil scheduled to be delivered to the
Strategic Petroleum Reserve pursuant to a contract entered into by the
Secretary of Energy prior to, and in effect on, the date of enactment of this
Act, the Secretary shall, to the maximum extent practicable, negotiate a
deferral of the delivery of the oil for a period of not less than 1 year, in
accordance with procedures of the Department of Energy in effect on the
date of enactment of this Act for deferrals of oil.
Attest:
Secretary.
110th CONGRESS
2d Session
H.R. 3121
AMENDMENT
END
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WRTHOMAS Home ( contact ��AccessibItyLegal USA gov E
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Page 1 of 2
Dapkus, Pat
From: Fikes, Cathy
Sent: Wednesday, July 09, 2008 4:22 PM
To: Dapkus, Pat
Subject: FW: SARFPA Members - Important Message from Don Martinson, Executive Director of SARFPA
Attachments: oledata.mso; image001.gif; oledata.mso; image002.jpg; image001.png; oledata.mso; image002.jpg-,
image001.png; FINAL SAMPLE FOR SARFPA.doc
FYI
From: Nilda Avina [mailto:Nilda.Avina@rdmd.ocgov.com]
Sent: Wednesday, July 09, 2008 3:43 PM
To: Gardner@aol.com; ccavecche@cityoforange.org; gorsha@aol.com; ffry@ci.westminister.ca.us; acastellano@yorba-linda.org;
sray@anaheim.net; cdavis@buenapark.com; astadlma@ci.cypress.ca.us; mary.bowron@fountainvalley.org;
edy.gautschy@fountainvalley.org; council@ci.fullerton.ca.us; joa n Reva k@ci.costa-mesa.ca.us; pkyle@ocsd.com;
jherberg@ocsd.com; jdurant@ocwd.com; Phil.anthony@verizon.net; irvingpickler@sbcglobal.net; pamha@ci.garden-grove.ca.us;
Fikes, Cathy; pota@cityofirvine.org; administration@placentia.org; jdelesssantos@placentia.org;jross@ci.santa-ana.ca.us;
tsimpson@ci.stanton.ca.us
Cc: Leslie Gray
Subject: SARFPA Members - Important Message from Don Martinson, Executive Director of SARFPA
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Page 2 of 2
Nilda.Silva
Coun[v gl'Orange
OC Public Works/Flood Control Division
714-834-5618
1viviv.oCllood Corti
7/21/2008
Sample Letter to Congressional Delegation
Date:
Name of Representative:
The Honorable (Full Name)
United States Senate or United States House of Representatives
Washington DC 20510
Subject: HR 3121, as amended by the Senate on May 13, 2008: Mandatory
Coverage Areas
Dear :
As a community that will be directly affected by HR 3121 (as amended by the
Senate) to extend the National Flood Insurance Program (NFIP), we are greatly
troubled and shocked by the provisions of the bill as adopted by the Senate to
require mandatory flood insurance for areas protected by levees, dams and man-
made structures. We find this provision ironic since FEMA, from the inception of
the NFIP, has encouraged communities to seek the 100-year level of protection.
We in Orange County have worked with the U. S. Army Corps of Engineers
(Corps) for more than 20 years to construct levees and dams along the Santa
Ana River to provide a 200-year level of protection to our community. Passage of
HR 3121 will negate 20 years of hard work by our community to provide more
than the minimum level of protection required by the currently adopted NFIP.
HR 3121,, as amended by the Senate, will force hundreds of thousands of
residents and businesses to purchase mandatory flood insurance, many of whom
were never required to purchase flood insurance due to the 100-year level of
flood protection provided to them by levees, dams and man-made facilities along
the Santa Ana River.
We are informed that HR 3121 will move to conference within the next few
weeks. We urge you to return HR 3121's original language, as introduced by
Congress Member Waters, and remove altogether the mandatory flood insurance
requirement in areas with greater than 100-year level of protection provided by
levees, dams and man-made facilities.
Sincerely,
City of x0000oa
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OC Public Works Analysis of HR 3121
Flood Insurance Reform and Modernization Act of 2007
Background
After the catastrophic damage caused by Katrina it was projected that the FEMA-
managed National Flood Insurance Program (NFIP) could not sustain its mission without
a new infusion of cash. HR 3121 was introduced as a means to provide this funding.
The NFIP is a program under which flood-prone areas are identified and flood insurance
is made available in participating communities. The NFIP also provides information
about the risks of flooding and allows citizens to purchase flood insurance to protect them
from the financial risks of flooding.
HR 3121(M. Waters) Flood Insurance Reform and Modernization Act of 2007, as
introduced on September 28, 2007
HR 3121 would initially direct the Government Accountability Office (GAO) to perform
and report back to Congress on the following studies:
***A pre-FIRM(Flood Insurance Rate Map)structure is one that was not constructed or substantially
improved after the latter of 1)December 31, 1974; or 2) the effective date of the initial rate map published
by the Director of FEMA under the NFIP Act of 1968 for the area in which the structure is located.
■ The flood insurance coverage status of pre-FIRM properties;
■ Assessment of impacts of amending the Flood Disaster Protection Act of 1973 to
include mandatory flood insurance for properties secured by non-federally related
loans;
■ Economic effects of charging full actuarial risk premiums on non-primary
residence or non-residential pre-FIRM structures;
■ Feasibility of expanding the mandatory flood insurance purchase requirement to
include properties in areas of residual risk that would flood if not for the presence
of structural flood control measures such as levees, floodwalls, and dams.
HR 3121 will also:
■ Increase premiums for nonresidential and non-primary residence properties to
actuarial levels by 2011.
• Direct the NFIP to assess an additional 15 percent increase for those properties
until the actuarial rate is achieved (or until 2011).
■ Increases limit.for FEMA to insure damages attributable to floods or windstorms.
■ Increase rates on policies within a specified risk category by an average of up to
15 percent per year rather than the 10 percent currently allowed.
Recent Developments
• May 13, 2008, Senate took a floor vote on HR 3121 and struck all language after the
Enacting Clause and substituted the language of S.2284 (Dodd) as amended.
1
o Senate version does not include study elements included in House version.
o Senate version forgives $17 billion Katrina debt.
• HR 3121 (both Senate and House versions) will be going to conference committee in
late July. Conferees have not been named. Senior Staff will likely perform most of
the negotiating and the official Committee members are expected to meet at least
once and approve staff s efforts when the committee is convened.
*General note: Recent discussions with a committee consultant familiar with
discussions surrounding this bill revealed the need to ensure that members and
consultants are better informed as to the potential impacts of the bill's proposed
actions. This consultant admitted that he did not know there were differences in the
way structures for water storage or flood protection were constructed and that his
colleagues were similarly uninformed. With the studies directed by HR 3121 as
introduced, the County and stakeholders would have an opportunity to educate both
members and consultants to identify, address and resolve issues to ensure that new
law reflected the facts and needs on the ground. Only with the House version does
that opportunity appear to exist at this time.
OC Public Works Recommendations
HR 3121 (Waters)
Status: Amended by Senate May 13, 2008 with most language from S 2284; conference
anticipated in July or August.
Recommendation: OPPOSE UNLESS AMENDED
Action(s) needed:
■ Include GAO studies to accurately assess the current status and potential impacts
of amending the NFIP to include mandatory purchase of flood insurance for areas
with greater than 100-year flood protection.
Reasoning:
■ The House approved bill language requires studies first to determine impacts of
amending NFIP;
■ GAO studies afford Orange and other counties and stakeholder organizations such
as NACo and NAFSMA (National Association of Flood and Stormwater
Management Agencies) to make the case for a risk-based formula rather than the
cookie cutter approach offered in the Senate version.
■ Areas with greater than 100-year flood protection should only be considered as
residual risk areas if the risk is extremely high (such as the failure of two or more
man-made flood protection structures as occurred in New Orleans).
Situation in County of Oranize
The County of Orange Flood Control District (OCFCD) is currently partnering with the
US Army Corps of Engineers (Corps) and two neighboring counties to complete the
construction of the $1.8 billion Santa Ana River Project (SARP). The remaining portions
of this project include raising Prado Dam and improving capacity of its outlet and the
2
river in a segment along the 91 freeway. Once completed this project will afford 190-year
flood protection for the tri-county area of Orange, Riverside and San Bernardino. As.a
consequence of the already completed improvements and considerable expense by the
OCFCD and its partners, a majority of north Orange County is currently out of the
floodplain. The OCFCD is also working to eliminate 100-year floodplains as delineated
on the FEMA FIRMS through construction of regional flood control improvements and
subsequent processing of Letters of Map Revisions for such improvements.
HR 3121 holds the potential for reversing the gains attributed to OCFCD's efforts with
the SARP and its local flood control projects, and would revert most of north County
back into the floodplain from which they have been removed for many years; thus,
requiring property owners to purchase costly flood insurance. Recent FEMA records
reveal that Orange County property owners pay approximately $15 million annually in
flood insurance premiums.
3
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AB 2466 Assembly Bill - AMENDED Page 1 of 4
BILL NUMBER: AB 2466 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 12, 2008
AMENDED IN ASSEMBLY MAY 23, 2008
AMENDED IN ASSEMBLY APRIL 16, 2008
INTRODUCED BY Assembly Members Laird and Huffman
FEBRUARY 21, 2008
An act to add Chapter 7.5 (commencing with Section 2830) to Part 2
of Division 1 of the Public Utilities Code, relating to energy.
LEGISLATIVE COUNSEL'S DIGEST
AB 2466, as amended, Laird. Local government energy producers.
Under existing law, the Public Utilities Commission is vested with
regulatory authority over public utilities. Existing law permits a
private energy producer to generate electricity not generated from
conventional sources, as defined, solely for its own use or the use
of its tenants, or to or for any electrical corporation, state
agency, city, county, district, or an association thereof, but not
the public, without becoming a public utility subject to the general
jurisdiction of the commission. Existing law requires the commission
to review the charges paid by electrical corporations to private
energy producers for electricity not generated from conventional
power sources and to review standby and transmission charges made by
electrical corporations to private energy producers and, after the
review, to adjust those charges to encourage the generation of
electricity from other than conventional power sources. Existing law
authorizes the City of Davis to receive a bill credit, as defined, to
a benefiting account, as defined, for electricity supplied to the
electric grid by a photovoltaic facility located within and partially
owned by the city and requires the commission to adopt a rate tariff
for the benefiting account.
This bill would authorize a local government, as defined, to
receive a bill credit, as defined, to a designated benefiting
account, as defined, for electricity supplied to the electric grid by
an eligible renewable generating facility, as defined, and requires
the commission to adopt a rate tariff for the benefiting account.
Under existing law, a violation of the Public Utilities Act or an
order or direction of the commission is a crime. Because the
provisions of this bill would require an order or other action of the
commission to implement and a violation of that order or action
would be a crime, the bill would impose a state-mandated local
program by creating a new crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Chapter 7.5 (commencing with Section 2830) is added to
Part 2 of Division 1 of the Public Utilities Code, to read:
CHAPTER 7.5 LOCAL GOVERNMENT ENERGY PRODUCERS
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AB 2466 Assembly Bill - AMENDED Page 2 of 4
2830. (a) As used in this section, the following terms have the
following meanings:
(1) "Benefiting account" means an electricity account, or more
than one account, mutually agreed upon by a local government and an
electrical corporation.
(2) "Bill credit" means credits calculated based upon the
electricity generation component of the rate schedule applicable to a
benefiting account, as applied to the quantities of electricity
generated by an eligible renewable generating facility.
(3) "Eligible renewable generating facility" means a generation
facility that is an eligible renewable energy resource pursuant to
the California Renewables Portfolio Standard Program that is owned or
operated by a local government.
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(4) "Local government" means a city, county, whether
general law or chartered, city and county, town, special district,
school district, municipal corporation, political subdivision, joint
powers authority or agency created pursuant to Chapter 5 (commencing
with Section 6500) of Division 7 of Title 1 of the Government Code,
or other local public agency, if authorized by law to generate
electricity, but shall not mean the state or any agency or department
of the state.
(b) Subject to the limitation in subdivision (h) , a local
government may elect to designate a benefiting account, or more than
one account, to receive bill credit for the electricity generated by
an eligible renewable generating facility, if all of the following
conditions are met:
(1) A benefiting account receives service under a time-of-use rate
schedule.
(2) The benefiting account is the responsibility of, and serves
property that is owned or occupied by, the same local government that
owns the eligible renewable generating facility.
(3) The electrical output of the eligible renewable generating
facility is metered for time of use to allow allocation of each bill
credit to correspond to the time-of-use period of a benefiting
account.
(4) All costs associated with the metering requirements of
paragraphs (1) and (3) are the responsibility of the local
government.
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(5) All costs associated with interconnection are the
responsibility of the local government. For purposes of this
paragraph, "interconnection" has the same meaning as defined in
Section 2803, except that it applies to the interconnection of an
eligible renewable generating facility rather than the energy source
of a private energy producer.
(6) The local government does not sell electricity delivered to
the electrical grid to a third party.
(7) The generating facility has a capacity of not more than one
megawatt and is located on property owned or under the control of the
local government. Premises that are leased by the local government
are under the control of the local government for purposes of this
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AB 2466 Assembly Bill - AMENDED Page 3 of 4
requirement.
(8) The ownership of the renewable
energy credits, as defined in Section 399.12, shall be the same
as the ownership of the environmental attributes associated with
electricity that is net metered pursuant to Section 2827.
(c) A benefiting account shall be billed on a monthly basis, as
follows:
(1) For all electricity usage, the rate schedule applicable to the
benefiting account shall be the rate schedule of the benefiting
account, including any cost-responsibility surcharge or other cost
recovery mechanism, as determined by the commission, to reimburse the
Department of Water Resources for purchases of electricity, pursuant
to Division 27 (commencing with Section 80000) of the Water Code.
(2) The rate schedule for the benefiting account shall also
provide credit for the generation component of the .time-of-use rates
for the electricity generated by the eligible renewable generating
facility that is delivered to the electrical grid. The generation
component credited to the benefiting account may not include the
cost-responsibility surcharge or other cost recovery mechanism, as
determined by the commission, to reimburse the Department of Water
Resources for purchases of electricity, pursuant to Division 27
(commencing with Section 80000) of the Water Code.
(3) If in any billing cycle, the charge pursuant to paragraph (1)
for electricity usage exceeds the billing credit pursuant to
paragraph (2) , the local government shall be charged for the
difference.
(4) If in any billing cycle, the billing credit pursuant to
paragraph (2) exceeds the charge for electricity usage pursuant to
paragraph (1) , the difference shall be carried forward as a credit to
the next billing cycle.
(5) After the electricity usage charge pursuant to paragraph (1)
and the credit pursuant to paragraph (2) are determined for the last
billing cycle of a y@aa; 12-month
period , any remaining credit resulting from the application of
this section shall be reset to zero.
(d) The commission shall ensure that the transfer of a bill credit
to a benefit account does not result in a shifting of costs to
bundled service subscribers.
(e) Not more frequently than once per year, and upon providing the
electrical corporation with a minimum of 60 days ' notice, the local
government may elect to change a benefiting account. Any credit
resulting from the application of this section earned prior to the
change in a benefiting account that has not been used as of the date
of the change in the benefit account, shall be applied, and may only
be applied, to a benefiting account as changed.
(f) A local government shall provide the electrical corporation to
which the eligible renewable generating facility will be
interconnected with not less than 60 days ' notice prior to the
eligible renewable generating facility becoming operational. The
electrical corporation shall file an advice letter with the
commission, that complies with this section, not later than 30 days
after receipt of the notice, proposing a rate tariff for a benefiting
account. The commission, within 30 days of the date of filing, shall
approve the proposed tariff, or specify conforming changes to be
made by the electrical corporation to be filed in a new advice
letter.
(g) The local government may terminate its election pursuant to
subdivision (b) , upon providing the electrical corporation with a
minimum of 60 days ' notice. Should the local government sell its
interest in the eligible renewable generating facility, or sell the
electricity generated by the eligible renewable generating facility,
in a manner other than required by this section, upon the date of
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AB 2466 Assembly Bill - AMENDED Page 4 of 4
either event, and the earliest date if both events occur, no further
bill credit pursuant to paragraph (3) of subdivision (b) may be
earned. Only credit earned prior to that date shall be made to a
benefiting account.
(h) An electrical corporation is not obligated to provide a bill
credit to a benefiting account that is not designated by a local
government prior to the point in time that the combined statewide
cumulative rated generating capacity of all eligible renewable
generating facilities within the service territories of the state's
three largest electrical corporations reaches --"8
2 50 megawatts. Only those eligible renewable
generating facilities that are providing bill credits to benefiting
accounts pursuant to this section shall count toward reaching this
IQQ megawatts llmitati^ 250 megawatts
limitation. Each electrical corporation shall only be required to
offer service or contracts under this section until that electrical
corporation reaches its proportionate share of the 250 megawatts
limitation based on the ratio of its peak demand to the total
statewide peak demand of all electrical corporations.
SEC: 2 . No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
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.3.... ...... ..
AB 2466 Bill Analysis
It is a good bill but not great.
I propose a mild support position for Huntington Beach on AB 2466.
AB 946 passed in the Summer of 2007 with similar provisions for water& wastewater
agencies. I haven't seen the utilities or PUC approve an appropriate tariff as directed by
AB 946(2007).
http://www.leginfo.ca.gov/pub/07-08/bill/asm/ab 2451-
2500/ab 2466 bill 20080612 amended sen v96.html
The following amendments to the bill would improve the bill significantly. The most-
important amendment is 2830 (a) (3), followed by 2830 (c) (5) (h).
2830 (a) (3)excludes Renewable facilities hosted by local governments, also known as
power purchase agreements. Suggest revising the language to state"owned, operated or
100%of the electrical output purchased by a local government".
2830 (b) (5)requires all interconnection costs to be born by the local government.
Interconnection(Rule 2 1)can be used by utilities to deter/defeat distributed generation
projects. Suggest insertion of substitute language used in the renewable net energy
metering rules rather than Rule 21.
2830 (b) (7) caps the renewable facility size at 1 MW. This makes sense for the rules as
of today, but there is significant commitment in Sacramento to raise the 1 MW cap across
the board. Suggest inserting language that ties the cap on project size to the cap on
project size contained in the California Solar Initiative (CSI)and the Self-Generation
Incentive Programs(SGIP).
2830 (c) (5) (h) causes the statute to sunset once the utilities reach the 250 MW
renewable project goal. Suggest that current goals are an inadequate response to the
energy&climate challenges facing society and eliminate the sunset clause.
' MR, 5 33 333
3
AB 2716 Assembly Bill - AMENDED Page 1 of 9
BILL NUMBER: AB 2716 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 19, 2008
AMENDED IN ASSEMBLY MARCH 24, 2008
INTRODUCED BY Assembly Member Ma
( Coauthors: Assembly Members
Laird, Swanson, and Torrico )
FEBRUARY 22, 2008
An act to amend Sections 226, 233, and 234 of, and to add Article
1.5 (commencing with Section 245) to Chapter 1 of Part 1 of Division
2 of, the Labor Code, relating to employment.
LEGISLATIVE COUNSEL'S DIGEST
AB 2716, as amended, Ma. Employment: paid sicks
days .
Existing law authorizes employers to provide their employees paid
sick leave.
This bill would provide that an employee who works in California
for 7 or more days in a calendar year is entitled to paid sick days,
as defined, which shall be accrued at a rate of no less
than one hour for every 30 hours worked. An employee would be
entitled to use accrued sick days beginning on the 90th calendar day
of employment. The bill would require employers to provide paid sick
days, upon the request of the employee, for diagnosis, care, or
treatment of health conditions of the employee or an employee's
family member, or for leave related to domestic violence or sexual
assault. An employer would be prohibited from discriminating or
retaliating against an employee who requests paid sick days. The bill
would require employers to satisfy specified posting and notice, and
recordkeeping requirements. The bill would also make conforming
changes.
This bill would require the Q9
Labor Commissioner to administer and
enforce these requirements, including the promulgation of
regulations, investigation, mitigation, and relief of violations of
these requirements. This bill would authorize the department to
impose specified administrative fines for violations and would
authorize an aggrieved person, the
commissioner , the Attorney General, or an entity a member of
which is aggrieved to bring an action to recover specified civil
penalties against an offender, as well as attorney's fees, costs, and
interest.
The bill would specify that it does not apply to employees covered
by a collective bargaining agreement that provides for paid sick
days, nor does it lessen any other obligations of the employer to
employees. This bill would further specify that it does not apply to
employees in the construction industry covered by a collective
bargaining agreement if the agreement expressly waives the
requirements of this article in clear and unambiguous terms.
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. The Legislature finds and declares the following:
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AB 2716 Assembly Bill - AMENDED Page 2 of 9
(a) Nearly every worker in the State of California will at some
time during the year need some time off from work to take care of his
or her own health or the health of family members.
(b) Many workers in California do not have any paid sick days, or
have an inadequate number of paid sick days, to care for their own
health or the health of family members.
(c) Low-income workers are significantly less likely to have paid
sick time than other workers.
(d) Providing workers time off to attend to their own health care
and the health care of family members will ensure a healthier and
more productive workforce in California.
(e) Paid sick days will have an enormously positive impact on the
public health of Californians by allowing sick workers paid time off
to care for themselves when ill, thus lessening their recovery time
and reducing the likelihood of spreading illness to other members of
the workforce.
(f) Paid sick days will allow parents to provide personal care for
their sick children. Parental care ensures children's speedy
recovery, prevents more serious illnesses, and improves children's
overall mental and physical health.
(g) Providing paid sick days is affordable for employers and good
for business.
(h) Employers who provide paid sick days enjoy greater employee
retention and reduce the likelihood of employees coming to work sick.
Studies have shown that costs of decreased productivity caused by
sick workers exceed the costs of employee absenteeism.
(i) Many adults have significant elder care responsibilities
requiring them to take time off from work or to work reduced hours.
(j) Employees frequently lose their jobs or are disciplined for
taking sick days to care for sick family members or to recover from
their own illnesses.
(k) Workers whose jobs involve significant contact with the
public, such as service workers and restaurant workers, are very
unlikely to have paid sick days. Often, these workers have no choice
but to come to work when they are ill, thereby spreading illness to
coworkers and customers.
(1) Domestic violence and sexual assault affect many persons
without regard to age, race, national origin, sexual orientation, or
socioeconomic status.
(m) Domestic violence is a crime that has a devastating effect on
families, communities, and the workplace. It impacts productivity,
effectiveness, absenteeism, and employee turnover in the workplace.
The National Crime Survey estimates that 175, 000 days of work each
year are missed due to domestic violence.
(n) Survivors of domestic violence and sexual assault may be
vulnerable at work when trying to end an abusive relationship because
the workplace may be the only place where the perpetrator knows to
contact the victim. Studies show that up to one-half of domestic
violence victims experience job loss. Forty percent reported
on-the-job harassment. Nearly 50 percent of sexual assault survivors
lose their jobs or are forced to quit in the aftermath of the
assaults.
(o) Affording survivors of domestic violence and sexual assault
paid sick days is vital to their independence and recovery.
SEC. 2 . In enacting this act, it is the intent of the Legislature
to do the following:
(a) Ensure that workers in California can address their own health
needs and the health needs of their families by requiring employers
to provide a minimum level of paid sick days including time for
family care.
(b) Decrease public and private health care costs in California by
enabling workers to seek early and routine medical care for
themselves and their family members and to address domestic violence
or sexual assault.
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AB 2716 Assembly Bill - AMENDED Page 3 of 9
(c) Protect employees in California from losing their jobs while
they use sick days to care for themselves or their families.
(d) Provide economic security to employees in California who take
time off work for reasons related to domestic violence or sexual
assault.
(e) Safeguard the welfare, health, safety, and prosperity of the
people of and visitors to California.
SEC. 3 . Section 226 of the Labor Code is amended to read:
226. (a) An employer shall, semimonthly or at the time of each
payment of wages, furnish to each employee, either as a detachable
part of the check, draft, or voucher paying the employee's wages, or
separately if wages are paid by personal check or cash, an accurate
itemized statement in writing showing (1) gross wages earned, (2)
total hours worked by the employee, unless the employee' s
compensation is solely based on a salary and the employee is exempt
from payment of overtime under subdivision (a) of Section 515 or any
applicable order of the Industrial Welfare Commission, (3) the number
of piece-rate units earned and any applicable piece rate if the
employee is paid on a piece-rate basis, (4) all deductions, provided
that all deductions made on written orders of the employee may be
aggregated and shown as one item, (5) net wages earned, (6) the
inclusive dates of the period for which the employee is paid, (7) the
name of the employee and his or her social security number, except
that by January 1, 2008, only the last four digits of his or her
social security number or an employee identification number other
than a social security number may be shown on the itemized statement,
(8) the name and address of the legal entity that is the employer,
(9) paid sick leave accrued and used pursuant to Article 1.5
(commencing with Section 245) , and (10) all applicable hourly rates
in effect during the pay period and the corresponding number of hours
worked at each hourly rate by the employee. The deductions made from
payments of wages shall be recorded in ink or other indelible form,
properly dated, showing the month, day, and year, and a copy of the
statement or a record of the deductions shall be kept on file by the
employer for at least three years at the place of employment or at a
central location within the State of California.
(b) An employer that is required by this code or any regulation
adopted pursuant to this code to keep the information required by
subdivision (a) shall afford current and former employees the right
to inspect or copy the records pertaining to that current or former
employee, upon reasonable request to the employer. The employer may
take reasonable steps to assure the identity of a current or former
employee. If the employer provides copies of the records, the actual
cost of reproduction may be charged to the current or former
employee.
(c) An employer who receives a written or oral request to inspect
or copy records pursuant to subdivision (b) pertaining to a current
or former employee shall comply with the request as soon as
practicable, but no later than 21 calendar days from the date of the
request. A violation of this subdivision is an infraction.
Impossibility of performance, not caused by or a result of a
violation of law, shall be an affirmative defense for an employer in
any action alleging a violation of this subdivision. An employer may
designate the person to whom a request under this subdivision should
be made.
(d) This section does not apply to any employer of any person
employed by the owner or occupant of a residential dwelling whose
duties are incidental to the ownership, maintenance, or use of the
dwelling, including the care and supervision of children, or whose
duties are personal and not in the course of the trade, business,
profession, or occupation of the owner or occupant.
(e) An employee suffering injury as a result of a knowing and
intentional failure by an employer to comply with subdivision (a) is
entitled to recover the greater of all actual damages or fifty
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AB 2716 Assembly Bill - AMENDED Page 4 of 9
dollars ($50) for the initial pay period in which a violation occurs
and one hundred dollars ($100) per employee for each violation in a
subsequent pay period, not exceeding an aggregate penalty of four
thousand dollars ($4, 000) , and is entitled to an award of costs and
reasonable attorney' s fees.
(f) A failure by an employer to permit a current or former
employee to inspect or copy records within the time set forth in
subdivision (c) entitles the current or former employee or the Labor
Commissioner to recover a seven-hundred-fifty-dollar ($750) penalty
from the employer.
(g) An employee may also bring an action for injunctive relief to
ensure compliance with this section, and is entitled to an award of
costs and reasonable attorney' s fees.
(h) This section does not apply to the state, to any city, county,
city and county, district, or to any other governmental entity,
except that if the state or a city, county, city and county,
district, or other governmental entity furnishes its employees with a
check, draft, or voucher paying the employee's wages, the state or a
city, county, city and county, district, or other governmental
entity shall, by January 1, 2008, use no more than the last four
digits of the employee's social security number or shall use an
employee identification number other than the social security number
on the itemized statement provided with the check, draft, or voucher.
SEC. 4 . Section 233 of the Labor Code is amended to read:
233 . (a) Any employer who provides sick leave for employees shall
permit an employee to use in any calendar year the employee's
accrued and available sick leave entitlement, in an amount not less
than the sick leave that would be accrued during six months at the
employee's then-current rate of entitlement, to attend to an illness
of a child, parent, spouse, or domestic partner of the employee. All
conditions and restrictions placed by the employer upon the use by an
employee of sick leave also shall apply to the use by an employee of
sick leave to attend to an illness of his or her child, parent,
spouse, or domestic partner. This section does not extend the maximum
period of leave to which an employee is entitled under Article 1.5
(commencing with Section 245) of this chapter, Section 12945.2 of the
Government Code, or the federal Family and Medical Leave Act of 1993
(29 U.S.C. Sec. 2606 et seq. ) , regardless of whether the employee
receives sick leave compensation during that leave.
(b) As used in this section:
(1) "Child" means a biological, foster, or adopted child, a
stepchild, a legal ward, a child of a domestic partner, or a child of
a person standing in loco parentis.
(2) "Employer" means a person employing another under an
appointment or contract of hire and includes the state, political
subdivisions of the state, and municipalities.
(3) "Parent" means a biological, foster, or adoptive parent, a
stepparent, or a legal guardian.
(4) (A) "Sick leave" means accrued increments of compensated leave
provided by an employer to an employee as a benefit of the
employment for use by the employee during an absence from the
employment for any of the following reasons:
(i) The employee is physically or mentally unable to perform his
or her duties due to illness, injury, or a medical condition of the
employee.
(ii) The absence is for the purpose of obtaining professional
diagnosis or treatment for a medical condition of the employee.
(iii) The absence is for other medical reasons of the employee,
such as pregnancy or obtaining a physical examination.
(B) "Sick leave" includes paid sick days as defined in Section
245.5 .
(C) "Sick leave" does not include any benefit provided under an
employee welfare benefit plan subject to the federal Employee
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AB 2716 Assembly Bill - AMENDED Page 5 of 9
Retirement Income Security Act of 1974 (P.L. 93-406, as amended) and
does not include any insurance benefit, workers ' compensation
benefit, unemployment compensation disability benefit, or benefit not
payable from the employer's general assets.
(c) An employer shall not deny an employee the right to use sick
leave or discharge, threaten to discharge, demote, suspend, or in any
manner discriminate against an employee for using, or attempting to
exercise the right to use, sick leave to attend to an illness of a
child, parent, spouse, or domestic partner of the employee.
(d) Any employee aggrieved by a violation of this section shall be
entitled to reinstatement and actual damages or one day' s pay,
whichever is greater, and to appropriate equitable relief.
(e) Upon the filing of a complaint by an employee, the Labor
Commissioner shall enforce the provisions of this section in
accordance with the provisions of Chapter 4 (commencing with Section
79) of Division 1, including, but not limited to, Sections 92, 96.7,
98, and 98.1 to 98.8, inclusive. Alternatively, an employee may bring
a civil action for the remedies provided by this section in a court
of competent jurisdiction. If the employee prevails, the court may
award reasonable attorney' s fees.
(f) The rights and remedies specified in this section are
cumulative and nonexclusive and are in addition to any other rights
or remedies afforded by contract or under other provisions of law.
SEC. 5. Section 234 of the Labor Code is amended to read:
234 . An employer absence control policy that counts sick leave
taken pursuant to Section 233 or Article 1.5 (commencing with Section
245) as an absence that may lead to or result in discipline,
discharge, demotion, or suspension is a per se violation of Section
233 . An employee working under this policy is entitled to appropriate
legal and equitable relief pursuant to Section 233 .
SEC. 6. Article 1.5 (commencing with Section 245) is added to
Chapter 1 of Part 1 of Division 2 of the Labor Code, to read:
Article 1.5 . Paid Sick Days
245. This article shall be known and may be cited as the Healthy
Families, Healthy Workplaces Act of 2008.
245.5. For the purposes of this article, the following terms have
the following meanings :
T�(�i��FRO$� A�6caaiv— der
(a) "Family member" means any of the following:
(1) A biological, adopted, or foster child, stepchild, legal ward,
or a child to whom the employee stands in loco parentis.
(2) A biological, adoptive, or foster parent, stepparent, or legal
guardian of an employee or the employee's spouse or registered
domestic partner, or a person who stood in loco parentis when the
employee was a minor child.
(3) A spouse.
(4) A registered domestic partner.
(5) A grandparent.
(6) A grandchild.
(7) A sibling.
a`layo ev�sv�svv vee'-tee Z'•• �1'�—F,ee,po oe og tla}6 a!r-&9N&p14, ai4 Q;Rploy&N
014all 6mP!1Qy@@ wke Bear. i48 spokise 8 ��,•",•� •a.-,,.,e,.t;
days to 94;9*;.7e ,,r7.a;4-;.-, tr. the __ga,.,; l.L i„c.r,her l ..#,,.7 ip
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•.,L•se:i ha @K4PJ!Qy@@ a6 FJ6 1-@G1 a8 1i913r-6 a&;@
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AB 2716 Assembly Bill - AMENDED Page 6 of 9
vnirr^vZ-"v�na7� ee�'� e1 ze eAee^e=s—i a4161;}
GhalaqQ a pa;GN d@61914atlG14 lg ae em le s tail s
tg ;ao a~ to made a khe shai!
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G•;Gir. iaayr. �^/ \a—Fa/ `se otl;-- --ate -- mem— 14 4-4^
perk 9rap1a rlyr(� 7 t g f-1 C G Y-1 oi; (Z) , m14 t
o mp,, 5,@@ 1 6 ado, a.,,a Oball ];emaip sG—G1es19;latad
owe ggpg -t„rjty f:er eke emp1Q5,@e to Ghaz4ge his e;z I;ea; der.;9 -,t;,.
e-
P3;QGed TGalendar=rear-
(b) "Health care provider" has the same meaning as
defined in paragraph (6) of subdivision (c) of Section 12945.2 of the
Government Code.
()
(c) "Paid sick days" means time that is compensated at
the same wage as the employee normally earns during regular work
hours and is provided by an employer to an employee for the purposes
described in Section 246.5.
(d) "Small business" mean an employer who employs 10 or fewer
employees during 20 or more calendar workweeks in the current or
preceding calendar year.
246. (a) An employee who works in California for seven or more
days in a calendar year is entitled to paid sick —tiFgo
days as specified in this section.
(b) (1) An employee shall accrue paid sick days at the rate of no
less than one hour for every 30 hours worked, beginning at the
commencement of employment or the operative date of this article,
whichever is first.
(2) An employee who is exempt from overtime requirements as an
administrative, executive, or professional employee under any Wage
Order of the Industrial Welfare Commission is deemed to work 40 hours
per workweek for the purposes of this section, unless the employee' s
normal workweek is less than 40 hours, in which case the employee
will accrue paid sick days based upon that normal workweek.
(c) An employee shall be entitled to use accrued paid sick days
beginning on the 90th calendar day of employment, after which the
employee may use paid sick days as they are accrued.
(d) Paid sick days shall be carried over to the following calendar
year. However, an employer may limit an employee's use of paid sick
days as follows:
(1) A small business employer may limit an employee's use to 40
hours or five days in each calendar year.
(2) All other employers may limit an employee's use to 72 hours or
nine days in each calendar year.
(e) An employer is not required to provide additional paid sick
days pursuant to this section if the employer has a paid leave
or paid time off policy and the employer makes available an
amount of leave that satisfies the accrual requirements of this
section and that may be used for the same purposes and under the same
conditions as specified in this section.
(f) (1) Except as specified in paragraph (2) , an employer shall
not be required to provide compensation to an employee for accrued,
unused paid sick days upon termination, resignation, retirement, or
other separation from employment.
(2) If an employee separates from and is rehired by the same
employer within one year, any previously accrued, unused paid sick
days shall be reinstated. The employee shall be entitled to use those
accrued sick days and to accrue additional sick days upon rehiring.
(g) An employer may lend paid sick days to an employee in advance
of accrual, at the employer's discretion and with proper
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AB 2716 Assembly Bill - AMENDED Page 7 of 9
documentation.
246.5. (a) Upon the oral or written request of an employee, an
employer shall provide paid sick days for the following purposes :
(1) Diagnosis, care, or treatment of an existing health condition
of, or preventive care for, an employee or an employee's family
member.
(2) For an employee who is a victim of domestic violence or sexual
assault, the .purposes described in subdivision (c) of Section 230
and subdivision (a) of Section 230.1 Q4I;e;r
(b) An employer shall not require as a condition of taking paid
sick days that the employee search for or find a replacement worker
to cover the days during which the employee is on paid sick days.
(c) (1) An employer shall not deny an employee the right to use
sick days, discharge, threaten to discharge, demote, suspend, or in
any manner discriminate against an employee for using sick days,
attempting to exercise the right to use sick days, filing a complaint
with the department or in a court alleging a violation of this
article, cooperating in an investigation or prosecution of an alleged
violation of this article, or opposing any policy or practice or act
that is prohibited by this article.
(2) There shall be a rebuttable presumption of unlawful
retaliation if an employer denies an employee the right to use sick
days, discharges, threatens to discharge, demotes, suspends, or in
any manner discriminates against an employee within 90 days of any of
the following:
(A) The employee files a complaint with the
Labor Commissioner or in a court alleging a
violation of this article.
(B) The employee cooperates with an investigation or prosecution
of any alleged violation of this article.
(C) The employee opposes any policy, practice, or act that is
prohibited by this article.
247. (a) An employer shall give each employee written notice of
the requirements of this article in English, Spanish, Chinese, and
any other language spoken by at least 5 percent of the employees. The
written notice must state the following:
(1) That employees are entitled to accrue, request, and use paid
sick days.
(2) The amount of paid sick days provided for by this article.
(3) The terms of use of paid sick days.
(4) That retaliation or discrimination against an employee who
requests paid sick days or uses paid sick days, or both is prohibited
and that an employee has the right under this article to file a
complaint or bring a civil action against an employer who retaliates
or discriminates against the employee.
(b) In each workplace, the employer shall display a poster in a
conspicuous place containing all the information specified in
subdivision (a) . The Labor
Commissioner shall create these posters and make them available
to employers.
(c) An employer who willfully violates the notice and posting
requirements of this section shall be subject to a civil fine of not
more than one hundred dollars ($100) for each offense.
247.5 . Employers shall keep for five years records documenting
hours worked and paid sick days accrued and used by employees.
Employers shall allow the Labor
Commissioner access to these records with appropriate notice
and at a mutually agreeable time to monitor compliance with this
article. Employers shall make these records available to employees
pursuant to Section 226. If an employer does not maintain adequate
records pursuant to this section, it shall be presumed that the
employee is entitled to the maximum number of hours accruable under
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AB 2716 Assembly Bill - AMENDED Page 8 of 9
this article, unless the employer can show otherwise by clear and
convincing evidence.
248 . The Labor Commissioner
is authorized and directed to coordinate implementation and
enforcement of this article and to promulgate guidelines and
regulations for those purposes.
248.5 . (a) The Labor
Commissioner is authorized and directed to enforce this
article, including investigating an alleged violation, and ordering
appropriate temporary relief to mitigate the violation or to maintain
the status quo pending the completion of a full investigation or
hearing.
(b) If the -Fl@PagtM@a;} commissioner ,
after a hearing that affords due process, determines that a
violation has occurred, it may order any appropriate relief,
including reinstatement, back pay, the payment of sick days
unlawfully withheld, and the payment of an additional sum as an
administrative penalty to each employee or person whose rights under
this article were violated. If paid sick days were unlawfully
withheld, the dollar amount of paid sick days withheld from the
employee multiplied by three, or two hundred fifty dollars ($250) ,
whichever amount is greater, shall be included in the administrative
penalty paid to the employee. In addition, if a violation of this
article results in other harm to the employee or another person, such
as discharge from employment, or otherwise results in a violation of
the rights of an employee or another person, the administrative
penalty shall include fifty dollars ($50) to. each employee or person
whose rights under this article were violated for each day or portion
thereof that the violation occurred or continued.
(c) Where prompt compliance by an employer is not forthcoming, the
commissioner may take any
appropriate enforcement action to secure compliance, including filing
a civil action. In compensation to the state for the costs of
investigating and remedying the violation, the
commissioner may order the violating employer or
person to pay to the state a sum of not more than fifty dollars
($50) for each day or portion of a day a violation occurs or
continues for each employee or person as to whom the violation
applies. These funds shall be allocated to the
commissioner to offset the costs of implementing
and enforcing this article.
(d) An employee or other person may report to the
commissioner a suspected violation of
this article. The commissioner
shall encourage reporting pursuant to this subdivision by
keeping confidential, to the maximum extent permitted by applicable
laws, the name and other identifying information of the employee or
person reporting the violation. However, the
commissioner may disclose that person's name and
identifying information as necessary to enforce this article or for
other appropriate purposes, upon the authorization of that person.
(e) The d@ agt;a@A commissioner ,
the Attorney General, a person aggrieved by a violation of this
article, or an entity a member of which is aggrieved by a violation
of this article may bring a civil action in a court of competent
jurisdiction against the employer or other person violating this
article and, upon prevailing, shall be entitled to such legal or
equitable relief as may be appropriate to remedy the violation,
including reinstatement, backpay, the payment of any sick days
unlawfully withheld, the payment of an additional sum as liquidated
damages in the amount of fifty dollars ($50) to each employee or
person whose rights under this article were violated for each day or
portion thereof that the violation occurred or continued, plus, if
the employer has unlawfully withheld paid sick days to an employee,
http://info.sen.ca.gov/pub/07-08/bill/asm/ab_2701-2750/ab_2716_bill_20080619_amended sen v97.html 7/21/2008
AB 2716 Assembly Bill - AMENDED Page 9 of 9
the dollar amount of paid sick days withheld from the employee
multiplied by three; or two hundred fifty dollars ($250) , whichever
amount is greater; and reinstatement in employment or injunctive
relief; and further shall be awarded reasonable attorney' s fees and
costs, provided, however, that any person or entity enforcing this
article on behalf of the public as provided for under applicable
state law shall, upon prevailing, be entitled only to equitable,
injunctive, or restitutionary
relief, and reasonable attorney's fees and costs.
(f) In any administrative or civil action brought under this
article, the commissioner or
court, as the case may be, shall award interest on all amounts due
and unpaid at the rate of interest specified in subdivision (b) of
Section 3289 of the Civil Code.
(g) The remedies, penalties, and procedures provided under this
article are cumulative.
249. (a) This article does not limit or affect any laws
guaranteeing the privacy of health information, or information
related to domestic violence or sexual assault, regarding an employee
or employee's family member. That information shall be treated as
confidential and shall not be disclosed to any person except to the
affected employee, or as required by law.
(b) This article shall not be construed to discourage or prohibit
an employer from the adoption or retention of a paid sick days policy
more generous than the one required herein.
(c) This article does not lessen the obligation of an employer to
comply with a contract, collective bargaining agreement, employment
benefit plan, or other agreement providing more generous sick days to
an employee than required herein.
(d) This article establishes minimum requirements pertaining to
paid sick days and does not preempt, limit, or otherwise affect the
applicability of any other law, regulation, requirement, policy, or
standard that provides for greater accrual or use by employees of
sick days, whether paid or unpaid, or that extends other protections
to employees.
249.5. This article does not apply to an employee covered by a
valid collective bargaining agreement if the agreement expressly
provides for the wages, hours of work, and working conditions of
employees, and expressly provides for paid sick days or a paid
leave or paid time off policy that permits the use of sick days
for those employees, final and binding arbitration of disputes
concerning the application of its paid sick days provisions, premium
wage rates for all overtime hours worked, and regular hourly rate of
pay of not less than 30 percent more than the state minimum wage
rate.
249.6. (a) This article does not apply to an employee in the
construction industry covered by a valid collective bargaining
agreement if the agreement expressly provides for the wages, hours of
work, and working conditions of employees, premium wage rates for
all overtime hours worked, and regular hourly pay of not less than 30
percent more than the state minimum wage rate, and the agreement
expressly waives the requirements of this article in clear and
unambiguous terms.
(b) For purposes of this section, "employee in the construction
industry" means an employee performing onsite work associated with
construction, including work involving alteration, demolition,
building, excavation, renovation, remodeling, maintenance,
improvement, repair work, and any other work as described by Chapter
9 (commencing with Section 7000) of Division 3 of the Business and
Professions Code, and other similar or related occupations or trades.
http://info.sen.ca.gov/pub/07-08/bill/asm/ab_2701-2750/ab_2716_bill_20080619_amended_sen_v97.html 7/21/2008
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Page 1 of 1
Dapkus, Pat
From: Tony Cardenas [tardenas@cacities.org]
Sent: Wednesday, July 09, 2008 2:18 PM
To: Aaron France; Alisha Farnell; Alma Flores; Andrew Tse; Ann Shultz; Ben Siegel; Brian Starr; Calina Hon;
Candy Penate; Carol Proctor; Chester Simmons; Chris Macon; Dave Adams; Dave Reynolds; Dave Simpson;
Debra Reed; Eleanor Torres; Glenn Yasui; Greg Garcia; Homer Bludau; Irma Hernandez; Jake Wager; Jamie
Canedo; Jennifer Cervantes; June Yotsuya; Karen Wylie; Kathy Ward; Ken Domer; Lacy Kelly; Laura
Ferguson; Laura Lopez; Laurie Murray; Les Jones; Lisa Woolery; Lucinda Williams; Manuel Leon; Maria Mejia;
Maria Stripe; Mark Aalders; Marty DeSollar; Matt Mogensen; Megan Walz; Melanie Eustice; Mike Gold; Molly
McLaughlin; Pamela Baird; Dapkus, Pat; Rob Ferrier; Robert Dominguez; Tami Piscotty; Weiping Yang
Subject: AB 2716 (Ma) OPPOSE
Attachments: Scan 1110.pdf
Legislative Network Members,
AB 2716 (Ma)would mandate sick leave to all part-time city staff members, and remove it from the local collective bargaining
table. Our lobbyists have met with Assembly Member Ma and the sponsors, Service Employees International Union (SEIU), and
have asked them to exempt public agencies from the bill. After several attempts, the author and sponsor have rejected our
request.
AB 2716 has passed out of the Senate Labor and Industrial Relations Committee, and is now waiting for a hearing date with the
Senate Appropriations Committee. Attached is our letter of opposition to the Chair of Senate Appropriations Tom Torlakson.
Down below are links to the text and analysis of the bill.
Please forward this to your Human Resources and Finance Directors to determine the fiscal and part time staff(swimming guards,
parks and recreation staff) impacts to your city. If you have not submitted a letter of opposition, I strongly encourage you to do
so. The more cities we have on record opposing AB 2716, the better. Please let me know if you have any questions.
Text: ham://info.sen.ca.aov/pub/07-08/bill/asm/ab 2701-2750/ab 2716 bill 20080619 amended_sen_v97.pdf
Analysis: ham://info.sen.ca.gov/pub/07-08/bill/asm/ab_2701-2750/ab_2716_cfa_20080623_171318_sen_comm.html
TONY CARDENAS
Public Affairs Regional Manager
Orange County Division
League of California Cities
(714) 425-5558
Tcardenas@—cacities.org
7/21/2008
Date: July 8, 2008
CALIFORNIA STATE To: The Honorable Tom Torlakson
ASSOCIATION OF Chair, Senate Appropriations Committee
COUNTIES State Capitol, Room 5050
LEAGUE Sacramento, CA 95814
`
C 1.TIE S From: Eraina Ortega, California State Association of Counties
LEAGUE OF CALIFORNIA P. Anthony Thomas, League of California Cities
CITIES Paul A. Smith, Regional Council of Rural Counties
Julianne Broyles, California Association of Joint
,,, .• _ a Powers Authorities
�s��t=caaRt�s Tom Vu, California Special Districts Association
Whitnie Henderson, Association of California Water Districts
REGIONAL COUNCIL OF Amber Wiley, Association of California Healthcare Districts
RURAL COUNTIES
Re: AB 2716 (Ma) — Employment: paid sick leave
As amended June 19, 2008 — Oppose
RA43
CALIFORNIA The California State Association of Counties (CSAC), the League of
ASSOCIATION OF JOINT California Cities (LCC), the Regional Council of Rural Counties (RCRC), the
POWERS AUTHORITIES California Association of Joint Powers Authorities (CAJPA), the California
Special Districts Association (CSDA), the Association of California Water
Districts, and the Association of California Healthcare Districts (ACHD) regret
that we must oppose AB 2716, which requires employers, including cities,
counties, and special districts to provide one hour of paid sick leave for every
- 30 hours worked.
Asu:w.ti:'n
CALIFORNIA SPECIAL As public sector employers, we believe that leave policies are part of total
DISTRICTS compensation and benefits packages that should be determined locally. This
ASSOCIATION is especially true for employees covered by collective bargaining
agreements, as many in the public sector are. By mandating new levels of
sick leave, AB 2716 undermines local control and the integrity of the
collective bargaining process. While AB 2716 excludes some employees
_''' covered by collective bargaining agreements, we believe proposed section
w1'' 249.5 of the Labor Code is written so narrowly as to what the collective
y�I � bargaining agreement must include, that most employees covered by
collective bargaining agreements would still be affected by AB 2716
ASSOCIATION OF
CALIFORNIA WATER AB 2716 also requires employers to track employees' accrual of sick leave
AGENCIES even after they have separated from service; this is an unprecedented
administrative burden, requiring every employer to program their human
resources systems to track employees that they no longer employ.
A C H D Both because of the administrative burdens and the additional cost to provide
sick leave, we believe that AB 2716 will severely restrict the use of extra help
ASSOCIATION OF
CALIFORNIA and seasonal employees. This loss of flexibility will increase costs and
HEALTHCARE reduce efficiencies in the delivery of services to the public.
DISTRICTS
July 8, 2008
AB 2716 (Ma)
Page 2
For counties, AB 2716 poses a particular problem for In-Home Supportive
Services (IHSS) employees who do not work a traditional scheduled work
week. IHSS providers are paid for services provided and calculated by the
hours they work. This program is funded by a mix of federal, state, and local
funds. Federal reimbursement would not be available for sick leave hours
used and it is not clear to us what portion of the cost burden the state will
share. We estimate the annual statewide liability for providing paid sick days
to IHSS providers to be $13.3 million. This is based on about 36 million
hours worked last year and using a statewide average salary of$11.06 per
hour.
For the reasons above, we respectfully request your"no" vote on AB 2716.
We are available to discuss these issues with you or your staff at your
convenience. Eraina Ortega (CSAC) may be reached at 327-7500 ext. 521,
P. Anthony Thomas (LCC) at 658-8279, Paul A. Smith (RCRC) at 447-4806,
Whitnie Henderson (ACWA) at 441-4545, and Amber Wiley (ACHD) at 498-
6233.
cc: Members, Senate Appropriations Committee
The Honorable Fiona Ma, Member of the Assembly
Bob Franzoia, Staff Director, Senate Appropriations Committee
Consultant, Republican Fiscal Office
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SB 1016 Senate Bill - AMENDED Page 1 of 14
BILL NUMBER: SB 1016 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY DULY 2, 2008
AMENDED IN ASSEMBLY JUNE 10, 2008
AMENDED IN SENATE APRIL 10, 2007
INTRODUCED BY Senator Wiggins
FEBRUARY 23, 2007
An act to amend Sections —4GI91-, 40183, 40184,
41780, 41783, 41820.6, 41821, 41850, 42921, and 42926 of, to amend
the headings of Article 4 (commencing with Section 41825) and Article
5 (commencing with Section 41850) of Chapter 7 of Part 2 of Division
30 of, to add Sections 40127, 40144, 40150. 1, 41780.05, 42921. 5, and
42927 to, and to repeal and add Section 41825 of, the Public
Resources Code, relating to solid waste.
LEGISLATIVE COUNSEL'S DIGEST
SB 1016, as amended, Wiggins. Diversion: compliance: per capita
disposal rate.
(1) The California Integrated Waste Management Act of 1989, which
is administered by the California Integrated Waste Management Board,
requires each city, county, and regional agency, if any, to develop a
source reduction and recycling element of an integrated waste
management plan containing specified components. Those entities are
required to divert, from disposal or transformation, 50% of the solid
waste through source reduction, recycling, and composting subject to
the element, except as specified. A city, county, or regional agency
is required to submit an annual report to the board summarizing its
progress in reducing solid waste. Existing law requires the board to
review, a least once every 2 years, a jurisdiction's source reduction
and recycling element and household hazardous waste element. The
board is required to issue an order of compliance if the board finds
that a jurisdiction has failed to implement its source reduction and
recycling element or its household hazardous waste element, pursuant
to a specified procedure. If, after issuing an order of compliance,
the board finds the city, county, or regional agency has failed to
make a good faith effort to implement those elements, the board is
authorized to impose administrative civil penalties upon the city,
county, or regional agency.
This bill would define the terms "diversion program, "
"jurisdiction, " and "multicounty regional agency, " for purposes of
the act and would revise the definitions of the terms "rural city"
and "rural county. " The bill would delete the condition that the
solid waste subject to source reduction, recycling, and composting
under these provisions, be diverted from landfill disposal or
transformation.
The bill would repeal the board' s existing 2-year process and
instead require the board to make a finding whether each jurisdiction
was in compliance with the act' s diversion requirements for calendar
year 2006 and to review a jurisdiction' s compliance with those
diversion requirements in accordance with a specified schedule, which
would be conditioned upon the board finding that the jurisdiction is
in compliance with those requirements or has made a good faith
effort to implement its source reduction and recycling element and
household hazardous waste element.
The bill would require the board to issue an order of compliance
if the board finds that the jurisdiction has failed to make a good
faith effort to implement its source reduction and recycling element
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SB 1016 Senate Bill - AMENDED Page 2 of 14
or its household hazardous waste element, pursuant to a specified
procedure. The board would be required to comply with certain
requirements, in making this determination.
The bill would revise the information required to be included in
the jurisdiction' s annual report to the board and would require the
report to be submitted to the board electronically. The bill would
make conforming changes regarding the compliance order and related
enforcement provisions. The bill would impose a state-mandated local
program by imposing new duties upon local agencies.
(2) Existing law requires each state agency, as defined, to
develop and adopt, in consultation with the board, an integrated
waste management plan. Each state agency and large state facility is
required to divert at least 50% of the solid waste generated by the
state agency or large state facility from landfill disposal or
transformation facilities. "State agency" is defined, for purposes of
these requirements, to include the California Community Colleges.
This bill would require the board to determine if a state agency
or large state facility is in compliance with the 50% diversion
requirement by comparing the annual per capita disposal rate of the
state agency or large state facility with the per capita disposal
rate that 414e age;;Gy er €aG1114z— would be
necessary to comply with the
50a diversion requirement. The board would be authorized to
consider an agency's or facility' s per capita disposal rate as a
factor in determining whether the agency or facility is adequately
implementing its integrated waste management plan.
The bill would require a community college district to expend the
revenues derived from the sale _of recyclable materials for the
purposes of offsetting recycling program costs and to expend all cost
savings that result from implementation of the district' s integrated
waste management plan to fund the continued implementation of the
plan. A community college district would also be required to expend
the revenues and cost savings to offset recycling program costs
incurred from the initial date when the community college district
became subject to these requirements. A community college district
would be required to provide information to the board at least
annually, on- the quantities of recyclable materials collected for
recycling, according to a schedule determined by the board and the
district. The bill would impose a state-mandated local program by
imposing new duties upon community colleges.
(3) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes .
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS :
SECTION 1. Section 40127 is added to the Public Resources Code, to
read:
40127. "Diversion program" means a program in the source
reduction and recycling element of a jurisdiction's integrated waste
management plan, specified in Chapter 2 (commencing with Section
41000) of, or Chapter 3 (commencing with Section 41300) of, Part 2
and that has the purpose of diverting solid waste from landfill
disposal or transformation through source reduction, recycling, and
composting activities. "Diversion program" additionally includes any
amendments, revisions, or updates to the element, and any programs
set forth in a time extension, alternative requirement, or compliance
order approved by the board pursuant to Part 2 (commencing with
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SB 1016 Senate Bill - AMENDED Page 3 of 14
Section 40900) .
SEC. 2 . Section 40144 is added to the Public Resources Code, to
read:
40144 . "Jurisdiction" means a city, county, or regional agency,
that is approved by the board pursuant to Section 40975.
SEC. 3 . Section 40150. 1 is added to the Public Resources Code, to
read:
40150. 1. "Multicounty regional agency" means a regional agency,
as defined in Section 40181, that includes all of the jurisdictions
that are located in at least two or more rural counties.
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SEC. 4. Section 40183 of the
Public Resources Code is amended to read:
40183 . (a) "Rural city" or "rural regional agency" means a city
or regional agency that is located within a rural county as defined
in Section 40184 .
(b) (1) Unless the board takes action pursuant to paragraph (2) ,
this section does not affect any reduction granted to a rural city
Ya! by the board pursuant to Section
41787 prior to January 1, 2008 .
(2) The board may review and take action regarding any reduction
granted to a rural city tar r -@, ^ i4ty I by the
board in accordance with subdivision (b) of Section 41787...
-2TI:C: 6; SEC. S. Section 40184 of the
Public Resources Code is amended to read:
40184. (a) "Rural county" means a county or multicounty regional
agency that annually disposes of no more that 200, 000 tons of solid
waste.
(b) (1) Unless the board takes action pursuant to paragraph (2) ,
this section does not affect any reduction granted to a
^; t-y rural county by the board pursuant to Section
41787 prior to January 1, 2008 .
(2) The board may review and take action regarding any reduction
granted to a rural county in accordance with subdivision (b) of
Section 41787 .
—SRG, 7 SEC. 6. Section 41780 of the
Public Resources Code is amended to read:
41780 . (a) Each jurisdiction' s source reduction and recycling
element shall include an implementation schedule that shows both of
the following:
(1) For the initial element, the jurisdiction shall divert 25
percent of all solid waste by January 1, 1995, through source
reduction, recycling, and composting activities.
(2) Except as provided in Sections 41783 and 41784, for the first,
and each subsequent revision of the element, the jurisdiction shall
divert 50 percent of all solid waste on and after January 1, 2000,
through source reduction, recycling, and composting activities.
(b) This section does not prohibit a jurisdiction from
implementing source reduction, recycling, and composting activities
designed to exceed the requirements of this division.
—5-=.- 2 SEC. 7. Section 41780. 05 is
added to the Public Resources Code, to read:
41780 .05 . (a) On and after January 1, 2009, pursuant to the
review authorized by Section 41825, the board shall determine each
jurisdiction' s compliance with Section 41780 for the years commencing
with January 1, 2007, by comparing each jurisdiction' s change in its
per capita disposal rate in subsequent years with the equivalent per
capita disposal rate that would have been necessary for the
jurisdiction to meet the requirements of Section 41780 on January 1,
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SB 1016 Senate Bill - AMENDED Page 4 of 14
2007, as calculated pursuant to subdivisions (c) and (d) .
(b) (1) For purposes of paragraph (5) of subdivision (e) of
Section 41825, in making a determination whether a jurisdiction has
made a good faith effort to implement its source reduction and
recycling element or its household hazardous waste element, the
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board shall consider, but is not limited to the consideration of,
the jurisdiction's per capita disposal rate and whether the
jurisdiction adequately implemented its diversion programs.
(2) When determining whether a jurisdiction has made a good faith
effort pursuant to Section 41825 to implement its source reduction
and recycling element or its household hazardous waste element, the
board shall consider that an increase in the per capita disposal rate
is the result of the amount of the jurisdiction' s disposal
increasing faster than the jurisdiction' s growth. The board shall use
this increase in the per capita disposal rate that is in excess of
the equivalent per capita disposal rate as a factor in determining
whether the board is required, pursuant to Section 41825, to more
closely examine a jurisdiction' s program implementation efforts. This
examination may indicate that a jurisdiction is required to expand
existing programs or implement new programs, in accordance with the
procedures specified in Article 4 (commencing with Section 41825) and
in Article 5 (commencing with Section 41850) .
(3) When reviewing the level of program implementation pursuant to
Sections 41825 and 41850, the board shall use, as a factor in
determining compliance with Section 41780, the amount determined
pursuant to subdivision (d) when comparing a jurisdiction' s per
capita disposal rate in subsequent years.
(c) (1) Except as otherwise provided in this subdivision, for
purposes of this section, "per capita disposal" or "per capita
disposal rate" means the total annual disposal, in pounds, from a
jurisdiction divided by the total population in a jurisdiction, as
reported by the Department of Finance, divided by 365 days.
(2) (A) If a jurisdiction is predominated by commercial or
industrial activities and by solid waste generation from those
sources, the board may alternatively calculate per capita disposal to
reflect those differing conditions.
(B) When making a calculation for a jurisdiction subject to this
paragraph, "per capita disposal" or "per capita disposal rate" means
the total annual disposal, in pounds, from a jurisdiction divided by
total industry employment in a jurisdiction, as reported by the
Employment Development Department, divided by 365 days.
(C) The board shall calculate the per capita disposal rate for a
jurisdiction subject to this paragraph using the level of industry
employment in a jurisdiction instead of the level of population in a
jurisdiction.
(3) If the board determines that the method for calculating the
per capita disposal rate for a jurisdiction provided by paragraph (1)
or (2) does not accurately reflect that jurisdiction's disposal
reduction, the board may use an alternative method of calculating the
per capita disposal rate that more accurately reflects the
jurisdiction' s efforts to divert solid waste.
(d) The board shall calculate the equivalent per capita disposal
rate for each jurisdiction as follows:
(1) Except as otherwise provided in this subdivision, the
equivalent per capita disposal rate for a jurisdiction shall be
determined using the method specified in this paragraph.
(A) The calculated generation tonnage for each year from 2003 to
2006, inclusive, shall be multiplied by 0 .5 to yield the 50 percent
equivalent disposal total for each year.
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SB 1016 Senate Bill - AMENDED Page 5 of 14
(B) The 50 percent equivalent disposal total for each year shall
be multiplied by 2, 000, divided by the population of the jurisdiction
in that year, and then divided by 365 to yield the 50 percent
equivalent per capita disposal for each year.
(C) The four 50 percent equivalent per capita disposal amounts
from the years 2003 to 2006, inclusive, shall be averaged to yield
the equivalent per capita disposal rate.
(2) If a jurisdiction is predominated by commercial or industrial
activities and by solid waste generation from those sources, the
board may alternatively calculate the equivalent per capita disposal
rate to reflect those conditions by using the level of industry
employment in a jurisdiction instead of the level of population in
that jurisdiction.
(3) If the board determines that the method for collecting the
equivalent per capita disposal rate for a jurisdiction pursuant to
this subdivision does not accurately reflect a jurisdiction' s per
capita disposal rate that would be equivalent to the amount required
to meet the 50 percent diversion requirements of Section 41780, the
board may use an alternative method for calculating the equivalent
per capita disposal rate that more accurately reflects the
jurisdiction' s diversion efforts.
(4) The board shall modify the percentage used in paragraph (1)
to maintain the diversion requirements approved by the board for a
rural jurisdiction pursuant to Section 41787 .
(5) The board may modify the years included in making a
calculation pursuant to this subdivision for an individual
jurisdiction to eliminate years in which the calculated generation
amount is shown not to be representative or accurate, based upon a
generation study completed in one of the four years 2003 to 2006,
inclusive. In these cases, the board shall not allow the use of an
additional year other than 2003, 2004, 2005, or 2006 .
(6) The board may modify the method of calculating the equivalent
per capita disposal rate for an individual jurisdiction to
accommodate the incorporation of a new city, the formation of a new
regional agency, or changes in membership of an existing regional
agency. These modifications shall ensure that a new entity has a new
equivalent per capita disposal rate and that the existing per capita
disposal rate of an existing entity is adjusted to take into account
the disposal amounts lost by the creation of the new entity.
(7) The board shall not incorporate generation studies or new base
year calculation for a year commencing after 2006 into the
equivalent per capita disposal rate.
(8) If the board determines that the equivalent per capita
disposal rate cannot accurately be determined for a jurisdiction, or
that the rate is no longer representative of a jurisdiction' s waste
stream, the board shall evaluate trends in the jurisdiction's per
capita disposal to establish a revised equivalent per capita disposal
rate for that jurisdiction.
2RC 9 SEC. 8. Section 41783 of the
Public Resources Code is amended to read:
41783 . (a) For a jurisdiction' s source reduction and recycling
element submitted to the board after January 1, 1995, and on or
before January 1, 2009, the 50 percent diversion requirement
specified in paragraph (2) of subdivision (a) of Section 41780 may
include not more than 10 percent through transformation, as defined
in Section 40201, if all of the following conditions are met :
(1) The transformation project is in compliance with Sections
21151 . 1 and 44150 of this code and Section 42315 of the Health and
Safety Code.
(2) The transformation project uses front-end methods or programs
to remove all recyclable materials from the waste stream prior to
transformation to the maximum extent feasible.
(3) The ash or other residue generated from the transformation
project is routinely tested at least once quarterly, or on a more
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SB 1016 Senate Bill - AMENDED Page 6 of 14
frequent basis as determined by the agency responsible for regulating
the testing and disposal of the ash or residue, and, notwithstanding
Section 25143 .5 of the Health and Safety Code, if hazardous wastes
are present, the ash or residue is sent to a class 1 hazardous waste
disposal facility.
(4) The board holds a public hearing in the city, county, or
regional agency jurisdiction within which the transformation project
is proposed, and, after the public hearing, the board makes both of
the following findings, based upon substantial evidence on the
record:
(A) The city, county, or regional agency is, and will continue to
be, effectively implementing all feasible source reduction,
recycling, and composting measures.
(B) The transformation project will not adversely affect public
health and safety or the environment.
(5) The transformation facility is permitted and operational on or
before January 1, 1995.
(6) The city, county, or regional agency does not include biomass
conversion, as authorized pursuant to Section 41783, in its source
reduction and recycling element.
(b) On and after January 1, 2009, for purposes of the review
authorized by Section 41825, with regard to a jurisdiction's
compliance with Section 41780 for each year commencing January 1,
2007, the board may reduce the per capita disposal rate for a
jurisdiction, as calculated pursuant to subdivision (d) of Section
41780. 05, by no more than 10 percent of the average of the calculated
per capita generation tonnage amount that is subject to
transformation pursuant to this section.
V,, ;- I9 SEC. 9. Section 41820 .6 of
the Public Resources Code is amended to read:
41820.6 . (a) In addition to its authority under Section 41820,
the board may, after a public hearing, grant a time extension from
the requirements of Section 41780 to a city if both of the following
conditions exist:
(1) The city was incorporated pursuant to Division 3 (commencing
with Section 56000) of Title 5 of the Government Code on or after
January 1, 2001.
(2) The county within which the city is located did not include
provisions in its franchises that ensured that the now incorporated
area would comply with the requirements of Section 41780.
(b) The board may authorize a city that meets the requirements of
subdivision (a) to submit a source reduction and recycling element
that includes an implementation schedule that shows that the city
shall comply with the requirements of Section 41780, within three
years from the date on which the source reduction and recycling
element is due pursuant to subdivision (b) of Section 41791.5,
through source reduction, recycling, and composting activities.
2R-G, 31i — SEC. 10. Section 41821 of
the Public Resources Code is amended to read:
41821. (a) (1) Each year following the board' s approval of a
jurisdiction' s source reduction and recycling element, household
hazardous waste element, and nondisposal facility element, the
jurisdiction shall submit a report to the board summarizing its
progress in reducing solid waste as required by Section 41780, in
accordance with the schedule set forth in this subdivision.
(2) The annual report shall be due on or before August 1 of the
year following board approval of the source reduction and recycling
element, the household hazardous waste element, and the nondisposal
facility element, and on or before August 1 in each subsequent year.
The information in this report shall encompass the previous calendar
year, January 1 to December 31, inclusive.
(b) Each jurisdiction' s annual report to the board shall, at a
minimum, include the following:
(1) Calculations of annual disposal reduction.
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SB 1016 Senate Bill - AMENDED Page 7 of 14
(2) A summary of progress made in implementing the source
reduction and recycling element and the household hazardous waste
element.
(3) An update of the jurisdiction' s source reduction and recycling
element and household hazardous waste element to include any new or
expanded programs the jurisdiction has implemented or plans to
implement.
(4) An update of the jurisdiction's nondisposal facility element
to reflect any new or expanded nondisposal facilities the
jurisdiction is using or planning to use.
(5) A summary of progress made in diversion of construction and
demolition of waste material, including information on programs and
ordinances implemented by the local government and quantitative data,
where available.
(6) Other information relevant to compliance with Section 41780 .
(c) A jurisdiction may also include, in the report required by
this section, all of the following:
(1) Information onndisposal reported pursuant to Section 41821.5
that the jurisdiction believes may be relevant to the board' s
determination of the jurisdiction's per capita disposal rate.
(2) Disposal characterization studies or other completed studies
that show the effectiveness of the programs being implemented.
(3) Factors that the jurisdiction believes would affect the
accuracy of, or mitigate the amount of, solid waste disposed by the
jurisdiction, including, but not limited to, either of the following:
(A) Whether the jurisdiction hosts a solid waste facility or
regional diversion facility.
(B) The effects of self-hauled waste and construction and
demolition waste.
(4) The extent to which the jurisdiction previously relied on
biomass diversion credit and the extent to which it may be impacted
by the lack of the credit.
(5) Information regarding the programs the jurisdiction is
undertaking to address specific disposal challenges, and why it is
not feasible to implement programs to respond to other factors that
affect the amount of waste that is disposed.
(6) Other information that describes the good faith efforts of
the jurisdiction to comply with Section 41780.
(d) The board shall use, but is not limited to the use of, the
annual report in the determination of whether the jurisdiction's
source reduction and recycling element needs to be revised or
updated.
(e) (1) The board shall adopt procedures for requiring additional
information in a jurisdiction's annual report. The procedures shall
require the board to notify a jurisdiction of any additional required
information no later than 120 days after the board receives the
report from the jurisdiction.
(2) Paragraph (1) does not prohibit the board from making
additional requests for information in a timely manner. A
jurisdiction receiving a request for information shall respond in a
timely manner.
(3) If the schedule for the submission of an annual report by a
jurisdiction does not correspond with the scheduled review by the
board specified in subdivision (a) of Section 41825, the board shall
utilize the information contained in the annual report only to assist
the board in providing technical assistance and informally reviewing
the jurisdiction' s diversion program implementation. The board is
not required to otherwise review the annual report for those years
that are in addition to the review required by subdivision (a) of
Section 41825 .
(f) The board shall adopt procedures for conferring with a
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SB 1016 Senate Bill - AMENDED Page 8 of 14
jurisdiction regarding the implementation of its diversion programs.
(g) Notwithstanding the Uniform Electronic Transactions Act (
Title 2 .5 (commencing with Section 1633 .1) of Part 2 of Division 3
of the Civil Code) , a jurisdiction shall submit the progress report
required by this section to the board electronically, using the board'
s electronic reporting format system.
(h) Notwithstanding the reporting schedule required by this
section, and in addition to the review required by Section 41825, the
board shall visit each jurisdiction not less than once each year to
monitor the jurisdiction's
implementation and maintenance of its diversion programs.
29Q—444 SEC. 11. The heading of
Article 4 (commencing with Section 41825). of Chapter 7 of Part 2 of
Division 30 of the Public Resources Code is amended to read:
Article 4. Review and Compliance Orders
2 ;- �2 - SEC. 12. Section 41825 of
the Public Resources Code is repealed.
RRQ- 14 SEC. 13. Section 41825 is
added to the Public Resources Code, to read:
41825 . (a) The board shall make a finding whether each
jurisdiction was in compliance with Section 41780 for calendar year
2006 and shall review a jurisdiction' s compliance with Section 41780
in accordance with the following schedule:
(1) If the board makes a finding that the jurisdiction was in
compliance with Section 41780 for calendar year 2006, the board shall
review, commencing January 1, 2012, and at least once every four
years thereafter, whether the jurisdiction.has made a good faith
effort to implement its source reduction and recycling element and
household hazardous waste element.
(2) If the board makes a finding that the jurisdiction did not
meet the requirements of Section 41780 for calendar year 2006 or for
any other subsequent calendar year, but made a good faith effort to
implement its source reduction and recycling element and household
hazardous waste element, the board shall review, commencing January
1, 2010, and at least once every two years thereafter, whether the
jurisdiction has made a good faith effort to implement its source
reduction and recycling element and household hazardous waste
element.
(3) If the board makes a finding that the jurisdiction was not in
compliance with Section 41780 for calendar year 2006 or for any
subsequent calender year, the board shall review, commencing January
1, 2010, and at least once every two years thereafter, whether the
jurisdiction has made a good faith effort to implement its source
reduction and recycling element and household hazardous waste
element.
(4) If, after determining that a jurisdiction is not in compliance
with Section 41780 and is subject to paragraph (2) or (3) , the board
subsequently determines that the jurisdiction has come into .
compliance with Section 41780, the board shall review, at least once
every four years, whether the jurisdiction has made a good faith
effort to implement its source reduction and recycling element and
household hazardous waste in the same manner as a jurisdiction that
is subject to paragraph (1) .
(b) In addition to the requirements of subdivision (a) , the board
may review whether a jurisdiction is in compliance with Section 41780
in accordance with the requirements of this section at any time that
the board receives information that indicates the jurisdiction may
not be making a good faith effort to implement its source reduction
and recycling element and household hazardous waste element.
(c) (1) Before issuing a compliance order pursuant to subdivision
(d) , the board shall confer with the jurisdiction regarding
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SB 1016 Senate Bill - AMENDED Page 9 of 14
conditions relating to the proposed order of compliance, with a first
meeting occurring not less than 60 days before issuing a notice of
intent to issue an order of compliance.
(2) The board shall issue a notice of intent to issue an order of
compliance not less than 30 days before the board holds a hearing to
issue the notice of compliance. The notice of intent shall specify
all of the following:
(A) The proposed basis for issuing an order of compliance.
(B) The proposed actions the board recommends are necessary for
the jurisdiction to complete ,to implement its source reduction and
recycling element or household hazardous waste element.
(C) The proposed recommendations to the board.
(3) The board shall consider any information provided pursuant to
subdivision (c) of Section 41821 if the proposed issuance of an order
of compliance involves changes to a jurisdiction' s calculation of
annual disposal.
(d) (1) If, after holding a public hearing, which, to the extent
possible, shall be held in the local or regional agency' s
jurisdiction, the board finds that a jurisdiction has failed to make
a good faith effort to implement its source reduction and recycling
element or its household hazardous waste element, the board shall
issue an order of compliance with a specific schedule for achieving
compliance.
(2) The compliance order shall include those conditions that the
board determines to be necessary for the jurisdiction to implement
its diversion programs .
(3) In addition to considering the good faith efforts of a
jurisdiction, as specified in subdivision (e) , to implement a
diversion program, the board shall consider all of the following
factors in determining whether or not to issue a compliance order:
(A) The rural nature of the jurisdiction.
(B) whether an exceptional growth rate may have affected
compliance.
(C) Other information that the jurisdiction may provide that
indicates the effectiveness of the jurisdiction' s programs, such as
disposal characterization studies or other jurisdiction specific
information.
(e) For purposes of making a determination pursuant to this
section whether a jurisdiction has failed to make a good faith effort
to implement its source reduction and recycling element or its
household hazardous waste element, the board shall consider all of
the following, criteria:
(1) For the purposes of this section, "good faith effort" means
all reasonable and feasible efforts by a jurisdiction to implement
those programs or activities identified in its source reduction and
recycling element or household hazardous waste element, or
alternative programs or activities that achieve the same or similar
results.
(2) For purposes of this section "good faith effort"
may also include the evaluation by a jurisdiction of improved
technology for the handling and management of solid waste that would
reduce costs, improve efficiency in the collection, processing, or
marketing of recyclable materials or yard waste, and enhance the
ability of the jurisdiction to adequately address all sources of
significant disposal, the submission by the jurisdiction of a
compliance schedule, and the undertakers of all other reasonable and
feasible efforts to implement the programs identified in the
jurisdiction's source reduction and recycling element or household
hazardous waste element.
(3) In determining whether a jurisdiction has made a good faith
effort, the board shall consider the enforcement criteria included in
its enforcement policy, as adopted on April 25, 1995, or as
subsequently amended.
(4) The board shall consider all of the following when considering
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SB 1016 Senate Bill - AMENDED Page 10 of 14
whether a jurisdiction has made a good faith effort to implement its
source reduction and recycling element or its household hazardous
waste element:
(A) Natural disasters .
(B) Budgetary conditions within a jurisdiction that could not be
remedied by the imposition or adjustment of solid waste fees.
(C) Work stoppages that directly prevent a jurisdiction from
implementing its source reduction and recycling element or household
hazardous waste element.
(D) The impact of the failure of federal, state, and other local
agencies located within the jurisdiction to implement source
reduction and recycling programs in the jurisdiction.
(E) The extent to which the jurisdiction has implemented
additional source reduction, recycling, and composting activities.
(F) The extent to which the jurisdiction has made program
implementation choices driven by considerations related to other
environmental issues, including climate change.
(G) Whether the jurisdiction has provided information to the board
concerning whether construction and demolition waste material is at
least a moderately significant portion of the waste stream, and, if
so, whether the local jurisdiction has adopted an ordinance for
diversion of construction and demolition waste materials from solid
waste disposal facilities, has adopted a model ordinance pursuant to
subdivision (a) of Section 42912 for diversion of construction and
demolition waste materials from solid waste disposal facilities, or
has implemented another program to encourage or require diversion of
construction and demolition waste materials from solid waste disposal
facilities.
(H) The extent to which the jurisdiction has implemented programs
to comply with Section 41780 and to maintain its per capita disposal
rate.
(5) In making a determination whether. a jurisdiction has made a
good faith effort, pursuant to this section, the board may consider a
jurisdiction's per capita disposal rate as a factor in determining
whether the jurisdiction adequately implemented its diversion
programs. The board shall not consider a jurisdiction' s per capita
disposal rate to be determinative as to whether the jurisdiction has
made a good faith effort to implement its source reduction and
recycling element or its household hazardous waste element.
SRO r-15 , SEC. 14. The heading of
Article 5 (commencing with Section 41850) of Chapter 7 of Part 2 of
Division 30 of the Public Resources Code is amended to read:
Article S. Enforcement and Penalties
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SB 1016 Senate Bill - AMENDED Page 11 of 14
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SEC. 15. Section 41850 of the Public
Resources Code is amended to read:
41850. (a) Except as specifically provided in Section 41813, if,
after holding the public hearing and issuing an order of compliance
pursuant to Section 41825, the board finds that the - T
G"144�" e- aq@'4Fy jurisdiction has
failed to make a good faith effort to implement its source reduction
and recycling element or its household hazardous waste element, the
board may impose administrative civil penalties upon the city or
county or, pursuant to Section 40974, upon the city or county as a
member of a regional agency, of up to ten thousand dollars ($10, 000)
per day until the e;t7, eejAi4l7=, a
jurisdiction implements the element.
(b) In determining whether or not to impose any penalties, or in
determining the amount of any penalties imposed under this section,
including any penalties imposed due to the exclusion of solid waste
pursuant to Section 41781.2 that results in a reduction in the
quantity of solid waste diverted by a G;Lt n4
^,' &9@14gyl jurisdiction , the board shall
consider whether the jurisdiction has made a good faith effort to
implement its source reduction and recycling element or its household
hazardous waste element. In addition, the board shall consider only
those relevant circumstances that have prevented a -ems,
jurisdiction from
meeting the requirements of this division,
e9 -seet -4-1- 2Q7— including, but not limited to,
all Gf the €e"ear;eg the factors described in
subdivisions (d) and (e) of Section 41825.
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SB 1016 Senate Bill - AMENDED Page 12 of 14
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99.-�; _- SEC. 16. Section 42921 of
the Public Resources Code is amended to read:
42921. (a) Each state agency and each large state facility shall
divert at least 25 percent of all solid waste generated by the state
agency by January 1, 2002, through source reduction, recycling, and
composting activities.
(b) On and after January 1, 2004, each state agency and each large
state facility shall divert at least 50 percent of all solid waste
through source reduction, recycling, and composting activities.
� . .19 SEC. 17. Section 42921.5 is
added to the Public Resources Code, to read:
42921.5 . (a) On and after January 1, 2009, the board shall
determine each state agency's or a large state facility's compliance
with Section 42921, for each year commencing with January 1, 2007, by
comparing the per capita disposal rate in subsequent years with the
equivalent per capita disposal rate that would have been necessary
for the state agency or large state facility to comply with Section
42921 on January 1, 2007, as calculated pursuant to subdivision (d) .
(b) In making a determination whether a state agency or large
state facility is in compliance with the requirements of Section
42921, the board may consider an agency' s or facility' s per capita
disposal rate as a factor in determining whether the state agency or
large state facility is adequately implementing its integrated waste
management plan. The board shall not consider a state, agency, or
large state facility's per capita disposal rate to be determinative
when considering whether the agency' s or facility is implementing its
integrated waste management plan.
(c) When determining whether an agency or facility is in
compliance with Section 42921, the board shall consider that an
increase in the per capita disposal rate is a result of disposal
amounts increasing faster than the growth of the state agency or
large state facility. The board shall use an increase in the per
capita disposal rate that is in excess of the equivalent per capita
disposal rate as a factor in determining whether the board is
required to more closely examine the agency's or facility' s plan
implementation efforts. If indicated by this examination, the board
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SB 1016 Senate Bill - AMENDED Page 13 of 14
may require a state agency or large state facility to expand existing
programs or implement new programs.
(d) (1) Except as provided in paragraph (2) , "per capita disposal"
or "per capita disposal rate" means the total annual disposal by a
state agency or large state facility, in pounds, divided by total
number of employees in that state agency or large state facility, and
divided by 365 days .
(2) The board may alternatively define per capita disposal or per
capita disposal rate for a state agency or large state facility that
has a significant amount of disposal from nonemployees or for other
reasons that would make calculation of per capita disposal by the
number of employees inaccurate.
21;:C:--12 SEC. 18. Section 42926 of
the Public Resources Code is amended to read:
42926. (a) In addition to the information provided to the board
pursuant to Section 12167.1 of the Public Contract Code, each state
agency shall submit an annual report to the board summarizing its
progress in reducing solid waste as required by Section 42921. The
annual report shall be due on or before September 1, 2009, and on or
before September 1 in each subsequent year. The information in this
report shall encompass the previous calendar year.
(b) Each state agency's annual report to the board shall, at a
minimum, include all of the following:
(1) Calculations of annual disposal reduction.
(2) Information on the changes in waste generated or disposed of
due to increases or decreases in employees, economics, or other
factors.
'(3) A summary of progress made in implementing the integrated
waste management plan.
(4) The extent to which the state agency intends to utilize
programs or facilities established by the local agency for the
handling, diversion, and disposal of solid waste. If the state agency
does not intend to utilize those established programs or facilities,
the state agency shall identify sufficient disposal capacity for
solid waste that is not source reduced, recycled, or composted.
(5) Other information relevant to compliance with Section 42921.
(c) The board shall use, but is not limited to the use of, the
annual report in the determination of whether the agency' s integrated
waste management plan needs to be revised.
22C 20 SEC. 19. Section 42927 is
added to the Public Resources Code, to read:
42927 . (a) Notwithstanding Section 12167 of the Public Contract
Code, a community college district shall expend the revenues derived
from the sale of recyclable materials for the purposes of offsetting
the recycling program costs imposed pursuant to this chapter.
(b) A community college district shall expend all cost savings
that result from implementation of the district ' s integrated waste
management plan pursuant to this chapter to fund the continued
implementation of the plan.
(c) A community college district shall expend the revenues and
cost savings specified in subdivisions (a) and (b) to offset
recycling program costs incurred pursuant to this chapter from the
initial date when the community college district became subject to
this chapter.
(d) A community college district shall provide information on the
quantities of recyclable materials collected for recycling at least
annually to the board, according to a schedule determined by the
board and the district.
—ems'- ;Z� SEC. 20. No reimbursement
is required by this act pursuant to Section 6 of Article XIII B of
the California Constitution because a local agency or school district
has the authority to levy service charges, fees, or assessments
sufficient to pay for the program or level of service mandated by.
this act or because the act provides for offsetting savings to local
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SB 1016 Senate Bill - AMENDED Page 14 of 14
agencies or school districts that result in no net costs to the local
agencies or school districts, within the meaning of section 17556 of
the Government Code.
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m� 3 � `rr � � �k � ., � � fir. � � j �', `��i� � ��r at � '� ���
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� � � � �i s a9',� �» � � �� � �.`� ,f'�.i.� t � ire{
MEASURE: S.B. 1016 (Wiggins)
TOPIC: Diversion: compliance: per capita disposal rate.
HOUSE LOCATION: Assembly
LAST AMENDED DATE: 07/02/2008
TYPE OF BILL:
Active
Non-Urgency
Non-Appropriations
Majority Vote Required
State-Mandated Local Program
Fiscal
Non-Tax Levy
LAST HIST. ACT. DATE: 07/15/2008
LAST HIST. ACTION Read second time. To third reading.
FILE: ASM THIRD READING
FILE DATE: 07/17/2008
ITEM: 127
COMM. LOCATION: ASM APPROPRIATIONS
COMM. ACTION DATE: 07/09/2008
COMM. ACTION: Do pass.
COMM. VOTE SUMMARY: Ayes: 15 Noes: 00 PASS
SUBJECT: Solid waste reporting
SOURCE: California Integrated Waste Management Board
SUMMARY: This bill authorizes the California Integrated Waste Management Board to:
1. reduce the reporting frequency from annual to biennial, and to change the
compliance measurement from diversion based on estimated per capita generation
to diversion based on actual per capita disposal;
2. consider per capita disposal rate and whether a jurisdiction has adequately
implemented its diversion programs in determining good faith effort to implement
source reduction and recycling elements.
INTENT: The intent of this legislation is to streamline the existing jurisdiction annual
reporting system and streamline the process for determining whether or not a local
jurisdiction is complying with the 50% solid waste diversion requirement by shifting the
focus from diversion to solid waste disposal reduction expressed as a per capita rate.
SB 1016
page--2
ANALYSIS: Existing law, under the California Integrated Waste Management Act of
1989:
1. Requires each city or county source reduction and recycling element to include an
implementation schedule that shows a city or county must divert 25 percent of solid
waste from landfill disposal or transformation by January 1, 1995, through source
reduction, recycling, composting activities, and must divert 50 percent of solid waste
on and after January 1, 2000.
2. Requires each city, county, or regional agency to annually submit a report to the
CIWMB summarizing its progress in reducing solid waste, and requires the report to
contain certain information(e.g., calculations of annual disposal reduction,
information on changes in waste generated or disposed, progress in diverting
construction and demolition waste material).
This bill:
1. Requires that on and after January 1, 2009, CIWMB will determine compliance with
the diversion goals established by the Act by comparing each jurisdiction's "per capita
disposal rate" with the jurisdiction's "50% equivalent" per capita disposal rate on
January 1, 2007.
2. Specifies that CIWMB consider the per capita disposal rate when determining.
compliance with the Act, and specifies that the Board shall consider,but is not limited
to consideration of per capita disposal when determining whether a jurisdiction has
made "good faith effort" to comply with the Act.
3. Specifies how CIWMB determines the per capita disposal rate (total annual disposal
in pounds divided by total population as reported by Dept. of Finance, divided by 365
days).
4. Authorizes CIWMB, at its discretion,to establish an alternative method for
developing the per capita disposal rate for a jurisdiction if a representative rate cannot
be determined using the specified method.
5. Specifies how CIWMB determines the 50% equivalent per capita disposal rate using
a formula incorporating years 2003-2006 waste generation information.
6. Revises the 10% diversion "credit" for transformation to reflect the per capita
disposal rate.
7. Specifies that CIWMB is not required to complete a full review of the annual reports
annually, but may use the information included to assist CIWMB in providing
SB 1016
page--3
technical assistance and informally reviewing a jurisdiction's diversion program
implementation.
8. Requires CIWMB staff to visit each jurisdiction at least annually to monitor the
jurisdiction's implementation and maintenance of diversion programs.
9. Revises the requirements relating to CIWMB review of each jurisdiction as follows:
a) For jurisdictions meeting the 50% equivalent per capita disposal rate or making
a "good faith effort" to reach that requirement, permits CIWMB to complete a
review of the jurisdiction not less than every four years, beginning January 1,
2012, rather than every two years, as required by existing law.
b) For jurisdictions failing to meet the 50% equivalent per capita disposal rate or
failing to make a "good faith effort" to do so, permits CIWMB to complete a
review of the jurisdiction not less than every two years, beginning January 1,
2010.
10. Makes related conforming and clarifying changes to existing law.
Arguments PRO:
1. According to the Integrated Waste Management Board, allowing biennial reporting
will streamline the jurisdiction reporting requirements and allow the Board to focus
on assisting jurisdictions with program implementation.
2. Although calculated diversion shows a nine-fold increase since adoption of integrated
waste management act, actual landfill disposal in our state has increased. The 31%
increase in solid waste disposal statewide since 1996 has actually outpaced the 16%
increase in the state's population. A focus on per capita disposal versus waste
diversion is intended to reverse this trend.
Arguments CON:
1. The per capita disposal amounts are based on the Disposal Reporting System (DRS)
used by Counties and the Board to track disposal tonnage and source the load to the
jurisdiction of origination. This is essentially an honor system, which relies on
haulers and self-haulers to declare the city or jurisdiction from which the waste
originated. Reporting errors, "ghost" tonnage, and tonnage sourced to other
cities by uneducated and/or unscrupulous haulers are common issues with the DRS.
This bill increases the incentive for haulers from non-compliant cities to dump
tonnage on compliant cities. Huntington Beach already absorbs thousands of tons
SB 1016
page
annually that most likely originated in other cities or in unincorporated areas. The
Board has not implemented an effective process to guarantee accurate tonnage
reporting.
2. This bill requires the Board to consider per capita disposal when determining good
faith effort. Previous versions said that the Board"may" consider per capita disposal
when determining good faith effort. The current version states that the Board"shall"
consider per capita disposal when determining good faith effort.
3. The annual recordkeeping required of local jurisdictions is unchanged.
Related Legislation:
SB 1020 (Padilla)requires the board to adopt policies, programs, and incentives to ensure
that 60% of all solid waste generated in the state is source reduced, recycled, or
composted by December 21, 2012; and 75% of all solid waste generated is source
reduced, recycled, or composted by January 1, 2020. This bill is currently pending a
Third Reading in the Assembly Appropriations Committee. Should SB 1016 move
forward,'conforming changes will need to be made to SB 1020.
Staff Recommendation:
Staff recommends opposing this bill in its current form.
Organizations Supporting/Opposing:
Solid Waste Association of North America(SWANA),the Regional Council of Rural
Counties (RCRC), the California State Association of Counties (CSAC), the Sanitation
Districts of Los Angeles County(LACSD), and the League of California Cities (the
League) issued a Joint Letter of Strong Concern on July 15, 2008.(attached).
Analysis prepared by: Debra Jubinsky, Sr. Administrative Analyst
END
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---' ..aa„'�... _ sdr� ',rc??3m-.�. e _s�_..ac-' .n .,=�,.T�ra,��t'rk? ..»` ...,__,..,�,aansi,.��:- � �„' _..�:,<,,.s�.�.
ILL
°°° AL LEAGUE
• aril coutles*
OF CALIFORNIA
CITIES SWANA� A1101�DIS1HiCf80PtA9ANG6IfSC0UN1
SOLID WASTE ASSOCIATION
July 15, 2008
The Honorable Alex Padilla
Member, of the California State Senate
State Capitol, Room 4032
Sacramento, CA 95814
The Honorable Patricia Wiggins
Member, of the California State Senate
State Capitol, Room 4081
Sacramento, CA 95814
RE: Senate Bill 1016 and Senate Bill 1020—STRONG CONCERNS
Dear Senator Padilla and Senator Wiggins:
On behalf of the Solid Waste Association of North America (SWANA), the Regional Council of
Rural Counties (RCRC), the California State Association,of Counties (CSAC), the Sanitation Districts
of Los Angeles County (LACSD), and the League of California Cities (the League), we are writing to
express our strong concerns over recent. amendments to Senate Bill 1016 (Wiggins) and proposed
amendments to Senate Bill 1020 (Padilla).
SB 1016, which is sponsored by the Integrated Waste Management Board (the Waste Board),
would re-calculate the way solid waste diversion efforts are imposed upon local governments. The bill
also revises the timelines that local jurisdictions must adhere to when reporting to the Waste Board.
SB 1020, as proposed to be amended, sets a new 60% mandated level for jurisdictions to meet in
diverting their solid waste from landfills. SB 1020 also requires specified cities and counties to adopt
local ordinances which impose recycling mandates on local businesses.
Several of our organizations adopted a qualified support for SB 1016 in the belief that a new
calculation method and a new timeline scheme would be beneficial to the Waste Board and local
jurisdictions. That qualified support position was reached with some apprehension and was
predicated upon the Waste Board having flexibility and discretion in approving local diversion plans.
A recent amendment (page 6, lines 1 — 12) removes the discretion of the Waste Board to use per-
capita disposal numbers as one indicator of a jurisdictions' effort in compliance. In other words, we
believe the latest version of SB 1016 requires the Waste Board to include per-capita disposal
calculations when determining compliance. We respectfully request that this provision be returned to
its original form or unfortunately,the support that was offered earlier will be reversed.
I
Complicating the latest amendment to SB 1016 are proposed amendments to SB 1020. In
essence, without some flexibility given to the Waste Board with respect to compliance determination,
virtually every jurisdiction in California will have a difficult — and some say impossible —time attaining
a 60%diversion requirement as called for in SB 1020.
We would also request that once SB 1016 is amended, SB 1020 be amended to adopt a
statewide goal of 60% by 2015. Specifically, we request that, when SB 1020 is amended, Section
41780(a)(3) of the Public Resources Code not be included. If these amendments can be made, local
Page 2of2
SB 1016 and SB 1020—Strong Concerns
government can remove their opposition to each measure and we can continue to work towards these
efforts being implemented in an appropriate manner.
If you have any questions or concerns about our position, please do not hesitate to contact
any one of us at your convenience.
Sincerely,
PAUL A. SMITH, RCRC KAREN KEENE, CSAC KYRA EMANUELS ROSS,the League
Director of Legislative Affairs Legislative Representative Legislative Representative
n-
PAUL YODER, SWANA SHARON GREEN, Sanitation Districts of Los Angeles County
Legislative Advocate Legislative & Regulatory Liaison
cc: Members, Assembly Natural Resources Committee
Members, Senate Environmental Quality Committee
Ms. Caroll Mortensen, Senate Environmental Quality Committee
Ms. Elizabeth MacMillan, Assembly Natural Resources Committee
Members of the California Integrated Waste Management Board
Ms. Elizabeth Huber, California Integrated Waste Management Board
}
�i
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SB 1146 Senate Bill - AMENDED Page 1 of 5
BILL NUMBER: SB 1146 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 2, 2008
AMENDED IN ASSEMBLY JUNE 5, 2008
AMENDED IN SENATE APRIL 29, 2008
AMENDED IN SENATE APRIL 3, 2008
INTRODUCED BY Senator Cedillo
FEBRUARY 4, 2008
An act to amend and repeal Section 19551.1 of, to amend, repeal,
and add Section 19551 to, and to add and repeal Section 19551.5 of,
the Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
SB 1146, as amended, Cedillo. Tax administration: disclosure of
information: Franchise Tax Board and cities.
Existing income tax laws authorize tax officials of a political
subdivision of the state to request information from the Franchise
Tax Board by using an affidavit, as provided. Existing law also
authorizes the Franchise Tax Board, until December 31, 2011, to
disclose to tax officials of any city that executed an agreement with
the Franchise Tax Board, subject to certain specified requirements,
a taxpayer' s name, address, social security or taxpayer
identification number, and business activity code, as provided, but
limits the use of that information to employees of the taxing
authority of a city.
This bill would revise those provisions by extending that repeal
date to January 1, 2014, by authorizing a city that has entered into
a reciprocal agreement, as defined, with the Franchise Tax Board to
exchange tax information, as provided, and by allowing a city to
-request any other information from the Franchise Tax Board by using
an affidavit, as provided.
This bill would also require cities to annually furnish to the
Franchise Tax Board specified information that is collected in the
course of administration of the city's business tax program, as
described, and would repeal these provisions on January 1, 2014 . By
imposing additional duties on local agencies, this bill would impose
a state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that reimbursement for these costs shall
be provided for at a specified rate in the annual Budget Act
beginning in the 2009-10 fiscal year and each fiscal year thereafter.
This bill would also provide that, if the Commission on State
Mandates Qza a Q Q rt Q€ appellat@a ��d€s4€ems
determines that the costs to local agencies exceeds the
specified rate, the provisions of the bill shall be repealed or
if a California superior court or a California court of appellate
jurisdiction determines that the costs to local agencies exceeds the
specified rate, the provisions of the bill shall be repealed
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
http://info.sen.ca.gov/pub/07-08/bill/sen/sb_l101-1150/sb_1146 bill_20080702_amended_asm v95.htm1 7/21/2008
SB 1146 Senate Bill - AMENDED Page 2 of 5
SECTION 1. Section 19551 of the Revenue and Taxation Code is
amended to read:
19551. (a) The Franchise Tax Board may permit the Commissioner of
Internal Revenue of the United States, other tax officials of this
state, the Multistate Tax Commission, the proper officer of any state
imposing an income tax or a tax measured by income or the authorized
representative of that officer, or the tax officials of Mexico, if a
reciprocal agreement exists, to inspect the income tax returns of
any taxpayer, or may furnish to the commission, or the officer or the
authorized representative thereof an abstract of the return or
supply thereto information concerning any item of income contained in
any return or disclosed by the report of any investigation of the
income or return. The information shall be furnished to the
Multistate Tax Commission, the federal or state officer or his or her
representative, or the officials of Mexico for tax purposes only.
Except when furnished pursuant to a written agreement, information
furnished pursuant to this section shall be furnished only if the
request is in the form of an affidavit under penalty of perjury
stating that the purpose for the request relates to an investigation
of the tax specified in the request and that the information will be
used in the ordinary performance of the applicant's official duties.
(b) Notwithstanding subdivision (a) and except as otherwise
provided in Section 19551.1, tax officials of political subdivisions
of this state shall request information from the Franchise Tax Board
by affidavit only. At the time a tax official makes the request, he
or she shall provide the affected person with a copy of the affidavit
and, upon request, make the information obtained available to that
person.
(c) For purposes of this section, "reciprocal agreement" means a
formal agreement to exchange information between national taxing
officials of Mexico and taxing authorities of the State Board of
Equalization, the Franchise Tax Board, and the Employment Development
Department. Furthermore, the reciprocal agreement shall be limited
to the exchange of information ' ^' that
is essential for tax administration purposes only. Taxing
authorities of the State of California shall be granted tax
information only on California residents. Taxing authorities of
Mexico shall be granted tax information only on Mexican nationals.
(d) This section shall remain in effect through and including
December 31, 2013, and shall be repealed on January 1, 2014.
SEC. 2 . Section 19551 is added to the Revenue and Taxation Code,
to read:
19551. (a) The Franchise Tax Board may permit the Commissioner of
Internal Revenue of the United States, other tax officials of this
state, the Multistate Tax Commission, the proper officer of any state
imposing an income tax or a tax measured by income or the authorized
representative of that officer, or the tax officials of Mexico, if a
reciprocal agreement exists, to inspect the income tax returns of
any taxpayer, or may furnish to the commission, or the officer or the
authorized representative thereof an abstract of the return or
supply thereto information concerning any item of income contained in
any return or disclosed by the report of any investigation of the
income or return. The information shall be furnished to the
Multistate Tax Commission, the federal or state officer or his or her
representative, or the officials of Mexico for tax purposes only.
Except when furnished pursuant to a written agreement, information
furnished pursuant to this section shall be furnished only if the
request is in the form of an affidavit under penalty of perjury
stating that the purpose for the request relates to an investigation
of the tax specified in the request and that the information will be
used in the ordinary performance of the applicant's official duties.
(b) Notwithstanding subdivision (a) , tax officials of political
subdivisions of this state shall request information from the
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SB 1146 Senate Bill - AMENDED Page 3 of 5
Franchise Tax Board by affidavit only. At the time a tax official
makes the request, he or she shall provide the affected person with a
copy of the affidavit and, upon request, make the information
obtained available to that person.
(c) For purposes of this section, "reciprocal agreement" means a
formal agreement to exchange information between national taxing
officials of Mexico and taxing authorities of the State Board of
Equalization, the Franchise Tax Board, and the Employment Development
Department. Furthermore, the reciprocal agreement shall be limited
to the exchange of information whi a'^ that
is essential for tax administration purposes only. Taxing
authorities of the State of California shall be granted tax
information only on California residents. Taxing authorities of
Mexico shall be granted tax information only on Mexican nationals.
(d) This section shall become operative on January 1, 2014.
SEC. 3 . Section 19551.1 of the Revenue and Taxation Code is
amended to read:
19551.1. (a) (1) The Franchise Tax Board may permit the tax
officials of any city to enter into a reciprocal agreement with the
Franchise Tax Board to obtain tax information from the Franchise Tax
Board, as specified in subdivision (b) .
(2) For purposes of this section, "reciprocal agreement" means a
formal agreement to exchange information for tax administration
purposes between tax officials of a city and the Franchise Tax Board.
(b) The information furnished to tax officials of a city under
this section shall be limited as follows:
(1) The tax officials of a city are authorized to receive
information only with respect to taxpayers with an address as
reflected on the Franchise Tax Board's records within the
jurisdictional boundaries of the city who report income from a trade
or business to the Franchise Tax Board.
(2) The tax information that may be provided by the Franchise Tax
Board to a city is limited to a taxpayer's name, address, social
security or taxpayer identification number, and business activity
code.
(3) Tax information provided to the taxing authority of a city may
not be furnished to, or used by, any person other than an employee
of that taxing authority.
(4) The information provided to the tax officials of the city by
the Franchise Tax Board under this section is subject to Section
19542, and may not be used for any purpose other than the city's tax
enforcement, or as otherwise authorized by state or federal law.
(5) Section 19542. 1 applies to this section.
(c) The Franchise Tax Board may not provide any information
pursuant to this section until all of the following have occurred:
(1) An agreement has been executed between a city and the
Franchise Tax Board, that provides that an amount equal to all first
year costs necessary to furnish the city information pursuant to this
section shall be received by the Franchise Tax Board before the
Franchise Tax Board incurs any costs associated with the activity
permitted by this section. For purposes of this section, first year
costs include costs associated with, but not limited to, the
purchasing of equipment, the development of processes, and labor.
(2) An agreement has been executed between a city and the
Franchise Tax Board, that provides that the annual costs incurred by
the Franchise Tax Board, as a result of the activity permitted by
this section, shall be reimbursed by the city to the Franchise Tax
Board.
(3) Pursuant to the agreement described in paragraph (1) , the
Franchise Tax Board has received an amount equal to the first year
costs.
(d) Any information, other than the type of tax information
specified in subdivision (b) , may be requested by the tax officials
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SB 1146 Senate Bill - AMENDED Page 4 of 5
of a city from the Franchise Tax Board by affidavit. At the time a
tax official makes the request, he or she shall provide the person
whose information is the subject of the request, with a copy of the
affidavit and, upon request, make the information obtained available
to that person.
(e) This section does not invalidate any other law. This section
does not preclude any city or county from obtaining information about
individual taxpayers, including those taxpayers not subject to this
section, by any other means permitted by state or federal law.
(f) Nothing in this section shall be construed to affect any
obligations, rights, or remedies regarding personal information
provided under state or federal law.
(g) Notwithstanding subdivision (c) , the Franchise Tax Board shall
waive a city' s reimbursement of the Franchise Tax Board's cost if a
city enters into a reciprocal agreement as defined in paragraph (2)
of subdivision (a) . The reciprocal agreement shall specify that each
party shall bear its own costs to furnish the data involved in the
exchange authorized by this section and Section 19551.5, and a city
shall be precluded from obtaining reimbursement as specified under
Section 5 of the act adding this subdivision.
(h) This section shall remain in effect through and including
December 31, 2013, and shall be repealed on January 1, 2014 .
SEC. 4 . Section 19551.5 is added to the Revenue and Taxation Code,
to read:
19551.5. (a) Notwithstanding any other law, each city that
assesses a city business tax or requires a city business license
shall annually submit to the Franchise Tax Board the information that
is collected in the course of administration of the city's business
tax program, as described in subdivision (b) .
(b) Information, collected in the course of administration of the
city's business tax program, shall be limited to the following:
(1) Name of the business, if the business is a corporation,
partnership, or limited liability company, or the owner's name if the
business is a sole proprietorship.
(2) Business mailing address.
(3) Federal employer identification number, if applicable, or the
business owner's social security number.
(4) Standard Industrial Classification Code (SIC) or North
American Industry Classification System (NAICS) Code.
(5) Business start date.
(6) Business cease date.
(7) City number.
(8) Ownership type.
(c) The reports required under this section shall be filed on
magnetic media such as tapes or compact discs, through a secure
electronic process, or in other machine-readable form, according to
standards prescribed by regulations promulgated by the Franchise Tax
Board.
(d) Cities shall begin providing to the Franchise Tax Board the
information required by this section as soon as economically
feasible, but no later than December 31, 2009. The information shall
be furnished annually at a time and in the form that the Franchise
Tax Board may prescribe by regulation.
(e) The city data provided to the Franchise Tax Board under this
section is subject to Section 19542, and may not be used for any
purpose other than state tax enforcement or as otherwise authorized
by law.
(f) If a city enters into a reciprocal agreement with the
Franchise Tax Board pursuant to subdivision (a) of Section 19551.1,
the city shall also waive reimbursement for costs incurred to provide
information required under this section and shall be precluded from
obtaining reimbursement as specified under Section 5 of the act
adding this subdivision. The reciprocal agreement shall specify that
each party shall bear its own costs to furnish the data involved in
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SB 1146 Senate Bill - AMENDED Page 5 of 5
the exchange authorized by Section 19551.1 and this section, and the
Franchise Tax Board shall be precluded from obtaining reimbursement
as specified under subdivision (c) of Section 19551.1.
(g) This section shall remain in effect through and including
December 31, 2013, and shall be repealed on January 1, 2014.
SEC. 5 . (a) Reimbursement to local agencies for those costs
mandated by the state pursuant to this act shall be provided by the
Franchise Tax Board beginning in the 2009-10 fiscal year and each
fiscal year thereafter, by an appropriation in the annual Budget Act.
Reimbursement for costs mandated by the state pursuant to Section
-IPF9Q1.1 19551.5 of the Revenue and
Taxation Code, as added by this act, shall be for actual costs
incurred by the local agency to provide records in the manner
prescribed by the Franchise Tax Board, not to exceed a rate of one
dollar ($1) per usable record submitted by the local agency to the
Franchise Tax Board beginning in the 2009-10 fiscal year. The rate
shall be annually adjusted in the Budget Act for the implicit price
deflator.
(b) In the event of a determination by the Commission on State
Mandates e�: a 9;tea, ,,,a; a by a Q, , ; 4,.,
se;&3;t of app@11ate ' sd; Gt4^^ that the costs mandated by
the state pursuant to this act exceed the rate provided for by
subdivision (a) , this act shall be repealed 90 days after the date on
which the Commission on State Mandates adopts the statement of
decision ea; PQ GlaTs a€teY th@ dat;o QP which pro {;rs} c.L
(c) (1) This act shall not be repealed
pursuant to subdivision (b) if the Director of Finance files a
written Notice of Intent to Appeal with the Commission on State
Mandates within 90 days of the adoption of a statement of decision
finding that the costs mandated by the state pursuant to this act
exceed the rate provided for by subdivision (a) . The Notice of Intent
to Appeal shall consist of a written notice setting forth the
intention of the Director of Finance to seek judicial review of the
decision of the Commission on State Mandates.
(2) In the event of a determination by a California superior court
or a California court of appellate jurisdiction that the costs
mandated by the state pursuant to this act exceed the rate provided
for by subdivision (a) , this act shall be repealed 90 days after the
date on which the judicial determination becomes final.
http://info.sen.ca.gov/pub/07-08/bill/sen/sb_l 101-1150/sb_1146_bill_20080702_amended_asm_v95.htm1 7/21/2008
Mow
fin➢ 1nH33rr� �� � ' Ig3A r 71
3 �
k�
ociation
Cafifomia Municipal Revenue. & Tax Ass
March '61 2008
Senator.Gilbert A Cediito
Senator, Twenty Second District
State Capitol, Room 510
Sacramento,;'CA 95814
Re: Support-& Sponsorship of SB 1146
Dear Senator Cedillo:
The California Municipal Revenge & Tax Association (CM'RTA)thanks you:for
authoring, SB IMB. This important bill would authorize,city tax:officials and.Jhe.
Franchise TaX Board (FTB) to.exchange tax information: California and itscrties
have a significant underground"economy and..tax compliance probl.emAh'at:SB
11�46 will help reduce; California-law authorizes the.FT646, xchange data'with
other states;and Mexico, and Callifornias' city tax bf iciais should Kaye qt:.I ast
fhe:same authority afforded non=California:tax officials..
SB 1146 does.not increase Iocal_or State taxes; but its-provisions ensure-fhat
both the.State and;cities,will continue to realize millions,in tax dollars<by,
identifying t8k0eats_ Moreover, SB 1 l46 levels�the,playing field for businesses
by reducing the competitive advantage#hat tax cheatrng;businesses have over
tax compliant, usinesses
SB 1.146 limits the State's mandate reimbursement=°liability by cieating;a
legislatively imposed"mandate with a unit cost reimburseem'ent methodology:for
cities that electnot to;participate in a recrprocaI exchange program Those cities
that do eXchange data wit the FTB would consider the`., X benefits denvetl from
the:data;as satisfying any mandated costs:and..not submit rein' ursement claims.
The.CMRTA,appreciatesyour leadership in authoring SB 114Rand.respectNljy
requests to'b`e con"sidered a sponsor of.the bill.
sincerely,
Robyn Zamora
'President.
RCA ROUTING SHEET
INITIATING DEPARTMENT: Administration
SUBJECT: Intergovernmental Relations Recommendations
COUNCIL MEETING DATE: August 4, 2008
ff R 4k STATUS` S
�R Ai' TTAC H M EN 5
. -au, n... ... ..,. .,,. .x.. . . d�
Ordinance (w/exhibits & legislative draft if applicable) Attached ❑
Not Ap licable
Resolution (w/exhibits & legislative draft if applicable) Attached ❑
Not Applicable
Tract Map, Location Map and/or other Exhibits Attached ❑
Not Ap licable
Contract/Agreement (w/exhibits if applicable) Attached ❑
Signed in full by the City Attorney) Not Applicable
Subleases, Third Party Agreements, etc. Attached ❑
Approved as to form by City Attorney) Not Applicable
Certificates of Insurance (Approved by the City Attorney) Attached ❑
Not Applicable
Fiscal Impact Statement (Unbudgeted, over$5,000) Attached ❑
Not Applicable
Bonds (If applicable) Attached ❑
Not Applicable
Staff Report (If applicable) Attached ❑
Not Applicable 0
Commission, Board or Committee Report (If applicable) Attached ❑
Not Applicable
Findings/Conditions for Approval and/or Denial Attached ❑
Not Applicable
k fi EXEPLAN' TION'FOR MISSI46 TACH' NTSr ..
x REVIEWEDr� REETURNED FOR AR ED
Administrative Staff
Assistant City Administrator Initial
City Administrator Initial
City Clerk
EXPLANATION FOR RETURN OF!ITEM
+1 n ,..3..7.4
(Below Space For City Clerk's Use Only)
RCA Author: Dapkus