HomeMy WebLinkAboutConsider Positions on Legislation Pending Before the State a (3) r�r�HHrfo✓cb b -o - /
City of Huntington Beach
File #: 21428 MEETING DATE: 6/1/2021
REQUEST FOR CITY COUNCIL ACTION
SUBMITTED TO: Honorable Mayor and City Council Members
SUBMITTED BY: Oliver Chi, City Manager
PREPARED BY: Travis K. Hopkins, Assistant City Manager
Subject:
Consider positions on legislation pending before the State and Federal Legislature, as
recommended by the Intergovernmental Relations Committee (IRC)
Statement of Issue:
On May 24, 2021, the Intergovernmental Relations Committee (IRC), comprised of Mayor Kim Carr,
Mayor Pro Tern Tito Ortiz, and Council Member Mike Posey discussed State and Federal issues with
relevance to Huntington Beach. Following discussion, the IRC chose to take positions on certain
proposed legislation, which are presented to the City Council for consideration.
Financial Impact:
Not applicable.
Recommended Action:
Approve one or more City positions on the following State legislation:
A) Watch Assembly Bill 1177 (Santiago) - California Public Banking Option Act
B) Support Assembly Bill 1158 (Petrie-Norris) - Alcoholism or drug abuse recovery or treatment
facilities
Alternative Action(s{:
Do not approve one or more recommended legislative positions and direct staff accordingly.
Analysis:
On May 24, 2021, the IRC recommended positions on the following State legislation, which are being
presented to the City Council for approval:
1. WATCH - AB 1177 (Santiago) - California Public Banking Option Act
This bill establishes the Public Banking Option Board to administer the BankCal Program,
offering consumers who lack access to traditional banking services access to no-cost, zero-
fee, zero-penalty federally-insured bank account and debit card services. It would require the
City of Huntington Beach Page 1 of 2 Printed on 526/2021
po e,e'AK LeQVal"'
File #: 21-428 MEETING DATE: 6/1/2021
Board, before July 1, 2023, to conduct a market analysis to determine if BankCal can be
implemented, and if program revenue will be sufficient to cover program costs within six years
of the program's implementation. The Board's determination is subject to approval of the
Legislature through enactment of a subsequent statute. The author believes that establishing
BankCal will help close the racial wealth gap, and allow families to keep money they have
earned and build their savings. Dozens of labor and social organizations, as well as public
banks support this bill; multiple bankers associations and the California Chamber of
Commerce oppose. The lRC is not certain that a public bank is a critical necessity at this time,
and chose a Watch position as this bill makes its way through the Assembly.
2. SUPPORT - AB 1158 (Petrie-Norris) - Alcoholism or drug abuse recovery facilities
This bill imposes additional standards on "recovery residences" (sober living homes), as well
as drug treatment facilities that contract with government entities. These standards include
maintaining minimum insurance coverage levels, and higher standards to protect patients from
abuse or injury. Furthermore, it would require these facilities to fully comply with all standards
issued by the National Alliance for Recovery Residences. Currently, there is no registered
opposition, and the industry is generally supportive of this bill. The lRC believes maintaining
insurance and industry standards are a commonsense approach to operating any facility or
business.
Environmental Status:
Not applicable.
Strategic Plan Goal:
Non Applicable - Administrative Item
Attachmentls):
1 . AB 1177 (Santiago)
2. AB 1158 (Petrie-Norris)
City of Huntington Beach Page 2 of 2 Printed on 526/2021
oowere792 Legistar"'
AMENDED IN ASSEMBLY MAY 24, 2021
AMENDED IN ASSEMBLY MAY 4. 2021
AMENDED IN ASSEMBLY APRIL 21, 2021
AMENDED IN ASSEMBLY MARCH 25. 2021
CALIFORNIA LEGISLATURE-2021-22 REGULAR SESSION
ASSEMBLY BILL No. 1177
Introduced by Assembly (Members Santiago, Carrillo, Chia,
Eduardo Garcia, Gipson, Lorena Gonzalez, Kalra, Lee, Ting,
and Nicks
(Coauthors: Assembly Members Friedman, Jones-Sawyer, and
Luz Rivas)
(Coauthors: Senators Durazo, Gonzalez, I-lueso. and Wiener)
February 18, 2021
An act to amend Section 1947.3 of the Civil Code, to add Title 21.1
(commencing with Section 100100) to the Government Code, to add
Section 90.4 to the Labor Code, and to amend Section 12302.2 of the
\Velfare and Institutions Code, relating to financial institutions.
LEGIsLA"rlvr COUNSEL'S DIGEST
AB 1177. as amended. Santiago. California Public Banking Option
Act.
(1 ) Existing law, the CalSavcrs Retirement Savings Trust Act, creates
in state government the CalSavcrs Retirement Savings Board and
requires the board to, among other things, design and implement the
CASavers Retirement Savings Program.
"['his bill. the California Public Banking Option Act, would, among
other things, establish in state government the Public Banking Option
95
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AB 1177 —2 —
Board consisting of nine members, including the Treasurer or the
"Treasurer's desiLnee and would require the board to administer the
BankCal Program, which the act would create for the purpose of
protecting consumers who lack access to traditional banking services
from predatory, discriminatory, and costly alternatives, by offering
access to voluntary, zero-fce, zero-penalty, federally insured transaction
account and debit card services at no cost to accountholders. The act
would require the board to design and implement the BankCal Program
bv, among other things, selectins a financial services network
administrator and establishing the duties and functions of the financial
services network administrator. including contracting with, managins.
and coordinating the financial services vendors for the program, as
prescribed. The arcs would make the requurcment of the board to design
and inipleniew the BankCal Program operative will, if the Senate
Committee on Banking and Financial Ills(itfai071S and tine Assembly
Committee on Banking and Finance consider. and the Legislature
approves by statute. the implementation gf the Program after the
completion gfihe.ranker analvsis described below. The act would make
its provisions inoperative if the board determines, after making 3
solicitations to applicants, that no applicant meets the minimum
capabilities of a financial services network administrator, as prescribed.
The act would require the board to, on or before.luly I, 2023, conduct
and deliver, as specified, a market analysis to determine both if the
program can be implemented and if program revenue is more likely
than not to be sufficient to pay for program costs within 6 years ofthe
program's implementation.
The act would also establish the BankCal fund in the State Treasury.
The act would make moneys in the fund available upon appropriation
by the Legislature for the purposes of the act and would, exce )t-with
rc peeFtetfK ;t i` __..•,_ d b ., .... wotddauthorize
moneys in the BankCal Fund to be used for startup and administrative
costs to implement the program only ifthe-b rdyes, Pursustit
to the
,._,. m _
t thzvtnotsufficiewpm� f-i
mer y mc t r er' v—rlt i t
tr tr as pre;
for the eo is of' implementing the mld require those
bmticm -o be�icposYted--'rime-tfre-ftrttci-. Legislature
approves by statue, as specked. the implementation glthe program.
95
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-3 — AB 1177
The act would require employers and hiring entities to have and
maintain a payroll direct deposit arrangement that enables voluntary
worker participation in the BankCal Program. The act would define
"employer' to mean a person, including a state or local government or
agency, engaged in a business, industry, profession, trade, or other
enterprise in the state, whether or not for profit, excluding the federal
government, that has at least five employees. By imposing the mandate
to maintain a payroll direct deposit arrangement on a local government
or agency, this bill would impose a state-mandated local program. 'file
act would require the board to enforce the provisions of the act with
respect to employers and hiring entities in coordination with the Labor
Commissioner, as specified, and would make an employer or hiring
entity that, without good cause, fails to allow its workers to participate
in the BankCal Program liable Ibr a civil penalty, as prescribed.
(2) Existing law authorizes a landlord or a landlord's agent to demand
or require cash as the exclusive form of payment of rent or deposit of
security if the tenant has previously attempted to pay the landlord or
landlord's agent with a check drawn on insufficient funds or the tenant
has instructed the drawee to stop payment on a check, drab, or order
for the payment of money, as specified.
The act would, as an exception to that authorization, require a landlord
or landlord's agent to allow a tenant to pay rent and deposit of security
by an electronic funds transfer from a BankCal account.
(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, if the Commission on State Mandates
determines that the bill contains costs mandated by the state,
reimbursement for those costs shall be made pursuant to the statutory
provisions noted above.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
The people of the State of California do emict os follows:
I SECTION I. This act shall be known. and may be cited, as the
2 California Public Banking Option Act.
3 SEC. 2. The Legislature finds and declares all ofthe followin<_,:
d (a) With unemployment rates soaring,homelessness rising_, and
5 an unprecedented wave of evictions looming as a result of the
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AB 1177 —4-
1 COVID-19 pandemic, the financial stability of the state's most
2 vulnerable residents has become a matter of particularly urgent
3 concern, not only to those individuals themselves but to the
4 economic health of the state as a whole.
3 (b) Access to basic financial services, includinu demand deposit
6 (checking) and savings accounts, is a critical component of
7 financial stability. Yet one in four California households, and
S nearly one in two Black and Hispanic California households, is
9 currently unbanked or underbanked. These households either lack
10 a bank account altogether or have a bank account but still largcly
1 I rely on alternative financial services, including nonbank check
12 cashers, payday lenders, prepaid debit cards, and pawn shops.
13 which are services that are often predatory, discriminatory, and
14 costly, leading to compounding fees and debts.
13 (c) Unbanked and underbanked households pay proportionally
16 more fir their financial services, lack secure means ol'saving, have
17 fewer opportunities to build credit, and are rejected for loans at
IS far higher rates. Basic financial transactions, including the payment
19 of rent, utilities, and other recurring bills or charitable
20 contributions, are a particularly formidable challenge for
21 households lacking access to important tools, including automated
22 hill pay, or whose monthly income fluctuates too much to make
23 automated processes viable. Because they have fewer options when
24 their money runs short, unbanked households face a far more
25 destructive cycle of punitive action when they default on their
26 recurring bills. which leads to compounding interest and further
27 debt. For all these reasons, exclusion from traditional financial
28 services significantly increases the risk of poverty and
29 homelessness and places an unnecessary burden on the entire
30 economy.
31 (d) Limited access to affordable financial services is a problem
32 that disproportionately impacts low-income communities and
33 communities ofcolor. I11 201 7, Californians earning less than S 15
34 per hour made up 80.7 percent of the unbanked in the state, and
35 Black and Hispanic Californians made up 78.3 percent. Nearly
36 half.45.9 percent, of all Black-identifying households in California
37 and 41.1 percent of all Hispanic-identifying households were
38 unbanked or underbanked in 2017 compared to 15.5 percent of
39 white-identifying households. Forty-four percent of disabled
40 Californians in 2017 were also unbanked or underbanked.
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-5— All 1177
1 (e) Providing Californians with a zero-fee, zero-penalty public
2 option for basic financial services would empower Californians
by providing a stable, affordable financial platform for all
4 Californians, especially this underserved population, and would
5 eliminate the need for exploitative alternatives to traditional
6 banking and reduce their risk of falling into catastrophic debt traps
7 and downward spirals.
8 SEC. 3. Section 1947.3 of the Civil Code is amended to read:
9 1947.3. (a) (I) Except as provided in paragraph(2),a landlord
10 or a landlord's agent shall allow a tenant to pay rent and deposit
I I ofsecurity by at least one florin oflpayment that is neither cash nor
12 electronic funds transfer.
13 (2) Except as provided in paragraph (5), a landlord or a
14 landlord's agent may demand or require cash as the exclusive form
1.5 ofpayment of rent or deposit ofsecurity ifthe tenant has previously
16 attempted to pay the landlord or landlord's agent with it check
17 drawn on insufficient funds or the tenant has instructed the drawee
18 to stop payment on a check. draft, or order for the payment of
19 monev. The landlord may demand or require cash as the exclusive
20 form of payment only for a period not exceeding three months
21 tbllowirw an attempt to pay with a check on insufficient funds or
22 following a tenant's instruction to stop payment. If the landlord
23 chooses to demand or require cash payment under these
24 circumstances, the landlord shall give the tenant a written notice
25 stating that the payment instrument was dishonored and informing
26 the tenant that the tenant shall pay in cash for a period determined
27 by the landlord. not to exceed three months, and attach a copy of
28 the dishonored instrument to the notice. The notice shall comply
29 with Section 827 if demanding or requiring, payment in cash
30 constitutes a change in the terms of the lease.
31 (3) Subject to the limitations below, a landlord or a landlord's
32 agent shall allow a tenant to pay rent through a third party.
33 (A) A landlord or landlord's agent is not required to accept the
34 rent payment tendered by a third party unless the third party has
35 provided to the landlord or landlord's agent a signed
36 acknowledgment stating that they are not currently a tenant ofthe
37 premises for which the rent payment is being made and that
38 acceptance ofthe rent payment does not create a new tenancy with
39 the third party.
o:
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AB 1177 —6-
1 (13) Failure by a third party to provide the signed
2 acknowledgment to the landlord or landlord's agent shall void the
3 obligation of a landlord or landlord's agent to accept a tenant's
4 rent tendered by a third party.
5 (C) The landlord or landlord's agent may, but is not required
6 to, provide a form acknowledgment to be used by third parties, as
7 provided for in subparagraph(A), provided however that a landlord
S shall accept as sufficient for compliance Nvith subparagraph (A)
9 an acknowledgment in substantially the following form:
10
I I 1, 1insert name of third party], state as lollows:
12 1 am not currently a tenant of the premises located at [insert
13 address ofpremises].
14 1 acknowledge that acceptance of the rent payment I am offering
15 for the premises does not create a new tenancy.
16
17
IS (signature of third pang) (date)
19
20
21 (D) A landlord or landlord's agent may require a signed
22 acknowledgment for each rent payment made by the third party.
23 A landlord or landlord's agent and the third party may agree that
24 one acknowledgment shall be sufficient for when the third party
25 makes more than one rent payment during a period of time.
26 (E) Nothing in this paragraph shall be construed to require a
27 landlord or landlord's agent to enter into a contract in connection
23 with a Federal, state, or local housing assistance program, including,
29 but not limited to, the federal housing assistance voucher programs
30 under Section S of the United States Housing Act of 1937 (42
31 U.S.C. Sec. 1437t).
32 (4) Paragraphs (2) and (3) do not enlarge or diminish a
33 landlord's or landlord's agent's legal right to terminate a tenancy.
34 Nothing in paragraph (3) is intended to extend the due date for any
35 rent payment or require a landlord or landlord's agent to accept
36 tender of rent beyond the expiration of the period stated in
37 paragraph (2) of Section 1 161 of the Code of Civil Procedure.
33 (5) A landlord or landlord's agent shall allow a tenant to pay
39 rent and deposit of security by an electronic funds transfer from a
9�
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-7— AB 1177
1 BankCal account, as defined in Section 100100 ofthe Govemment
2 Code.
3 (b) For the purposes of this section, the issuance of a money
4 order or a cashier's check is direct evidence only that the instrument
5 was issued.
6 (c) For purposes of this section, "electronic funds transfer'
7 means any transfer of funds, other than a transaction originated
S by check,draft.or similar paper instrument, that is initiated through
9 an electronic terminal, telephonic instrument, computer, or
10 magnetic tape so as to order, instruct, or authorize a financial
I I institution to debit or credit an account. "Electronic funds transfer'
12 includes, but is not limited to, point-of-sale transfers, direct deposits
13 or withdrawals of funds, transfers initiated by telephone, transfers
14 via an automated clearinehouse, transfers initiated electronically
15 that deliver a paper instrument,and transfers authorized in advance
16 to recur at substantially regular intervals.
17 (d) Nothing in this section shall be construed to prohibit the
IS tenant and landlord or agent to mutually agree that rent payments
19 may be made in cash or by electronic funds transfer, so long as
20 another form of payment is also authorized, subject to the
21 rcquiremaits of subdivision (a).
22 (e) A waiver of the provisions of this section is contrary to public
23 policy, and is void and unenforceable.
24 SEC.4. Title 21.1 (commencing with Section 100100) is added
25 to the Government Code, to read:
26
27 TITLE 21.1. CALIFORNIA PUBLIC BANKING OPTION
28 ACT
29
30 100100. For purposes of this title:
31 (a) ''Accountholder" means an individual who has a BankCal
32 account.
33 (b) `BankCal account" means a federally insured transaction
34 account held as pan of the program.
35 (c) "BankCal Program" or ''program' means the program
36 established pursuant to this title through which an individual may
37 open a no-fee, no-penalty transaction account with an associated
38 debit card.
39 (d) "Board" means the California Public Banking Option Board
40 established pursuant to Section 100102.
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All 1177 —8-
1 (e) `'Electronic fund transfer" has the same meaning as defined
2 in Section 1693a ofI'itle 15 ol'thc United States Code.
3 (1) (I) "Employee" means an individual who is employed by
4 an employer.
5 (2) "Employee" does not include an employee covered under
6 the federal Railway Labor Act(45 U.S.C. Sec. 151)or an employee
7 engaged in interstate commerce so as not to be subject to the
S legislative powers ofthe state, except insofar as application ol'this
9 tide is authorized under the United States Constitution or laws of
10 the United States.
I I (g) (1) "Employer' means a person engaged in a business,
12 industry, profession, trade, or other enterprise in the state, whether
13 or not for profit, excluding the federal government, that has more
14 than 25 employees.
15 (2) Upon a positive determination pursuant to paragraph (4) of
16 subdivision (b) of Section 100106. `employer' includes an
17 employer of a provider of in-home supportive services regulated
IS by Article 7 (commencing with Section 12300) of'Chapter 3 of
19 Part 3 of Division 9 of the Welfare and Institutions Code.
20 (h) "Federally insured" means insured by the Federal Deposit
21 Insurance Corporation (FDIC) or the National Credit Union
22 Administration (NCUA).
23 (i) "Hiring, entity" means a person engaged in a business.
24 industry. profession, trade, or other enterprise in the state, whether
25 or not for profit, excluding the federal government, that has
26 contracted with more than 25 independent contractors to perform
27 the same or similar labor or service.
28 0) "Independent contractor' means an individual who renders
29 labor or service to a hiring entity for it specified recompense for a
30 specified result who is not an employee of that hiring entity.
31 (k) "In-network partner'means a participating retail or financial
32 institution offering an ATAl. bank, or credit union branch through
33 which accountholders can load or withdraw funds from their
34 13ankCal account using a 13ankCal debit card for no tee.
35 (l) "Local financial institution"has the same meaning as defined
36 in Section 57600.
37 (m) "Participating depository financial institution" means a
38 yualil'ying bank, credit union, or other financial institution, as
39 determined by the board pursuant to paragraph (4) of'subdivision
40 (a) of Section 100106. participating in the 13ankCal Program by
`>
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-9— AB 1177
1 providing BankCal accounts to accountholders in concert with the
2 financial services network administrator, as described in
3 subparagraph (A) of paragraph (3) of subdivision (a) of Section
4 100106.
5 (n) "Payroll direct deposit arrangement's means an arrangement
6 by which a worker may authorize payment of\wages or other money
7 due the .worker by an employer or hiring entity, or any portion
S thereof. to be directly deposited by electronic fund transfer into
9 the worker's BankCal account.
10 (o) "Person" means an individual, sole proprietorship,
I I partnership,joint venture, association, trust, estate, business trust,
12 corporation, joint stock company, limited liability company,
13 unincorporated association, state or local government or agency.
14 instrumentality, or political subdivision thereol', or any similar
15 entity or organization.
16 (p) "Preauthorized electronic lund transfer" means an electronic
17 fund transfer authorized in advance to recur at substantially regular
IS intervals.
19 (q) "Program fund" means the BankCal fund established
20 pursuant to Section 100110.
21 (r) "Public bank" has the same meaning as defined in Section
22 57600.
23 (s) "Registered payee" means a person who has registered with
24 the program to accept receipt of' preauthorized electronic fund
25 transfers from accountholders by agreeing to specific conditions
26 to be established by the board.
27 (t) " transaction account" means a demand deposit account,
2S share draft account, or similar account.
29 (u) "Worker' means an employee or an independent contractor.
30 (v) "1Vorker participant" means a worker who is an
31 accountholder.
32 100102. (a) The Public Banking Option Board is hereby
33 established in state government.
34 (b) The board shall consist of' nine members pursuant to the
35 following:
36 (1) The Treasurer or the Treasurers designee.
37 (2) The Commissioner ofthe Department offinancialProtection
38 and Innovation or that person's designee.
9s
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AB 1177 — W-
1 (3) An individual with banking expertise, particularly expertise
2 in transaction accounts and debit cards, appointed by the Senate
3 Committee on Rules.
4 (4) An individual with expertise in economic and racial justice
5 and cultural competence appointed by the Speaker of tile Assembly.
6 (5) An employee representative appointed by the Governor.
7 (6) _ qtr indit�iducd wilt ecpertLse
S in banking or consumer financial services affiliated with an
9 academic institution appointed by the Governor.
10 (7) An inclividual with bankntg etpertise who is an advocate
I I for. or representative of, a mission-aligned banking institution, a
12 community development financial institution, or, a community
13 development credit union appointed by the Governor.
14 (S) A public banking advocate appointed by the Senate
15 Committee on Rules.
16 (9) A consumer representative or advocate with expertise in
17 banking access and financial empmvi-r»ent empowermew.
IS including within historically unbanked and underbanked
19 communities, appointed by the Speaker of the Assembly.
20 (c) Members of the board appointed by the Governor, the Senate
21 Committee on Rules. and the Speaker of the Assembly shall serve
22 at the pleasure of the appointing authority.
23 (d) the board shall elect a chairperson on an annual basis.
24 (e) In making appointments to the board, the appointing
25 authorities shall take into consideration the cultural, ethnic, and
26 geographical diversity ofthe state so that the board's composition
27 reflects the conununities of California.
2S (f) (1) Except as provided in paragraph (2). members of the
29 board shall serve without compensation.
30 (2) Members of the board shall be reimbursed for necessary
31 travel expenses incurred in connection with their board duties.
32 (g) A board member, stall of the board, or publicly employed
33 program stall', while serving in those positions, shall not be
34 employed by, a consultant to, a member of the board of directors
35 of, affiliated with, or otherwise a representative of private bank
36 or financial services institution unless that position is an unpaid
37 volunteer position.
38 (h) The board and program administrator shall have the
39 responsibility and duty to meet the requirements of this title and
40 all applicable state and federal laws and re..;ulations, to serve the
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— II — AB1177
1 interests of program accountholders and those seeking to access
2 financial services and debt management tools through the program,
3 to serve the public interest and pursue partnerships with credit
4 unions and other local financial institutions and public banks, and
5 to ensure the operational well-being and fiscal solvency of' tile
6 program.
7 100104. There is hereby created the BankCal Program, to be
S administered by the board for the purpose of protecting consumers
9 who lack access to traditional banking services From predatory.
10 discriminatory. and costly alternatives, by offering access to
II voluntary, zero-fec, zero-penalty, federally insured transaction
12 account and debit card services at no cost to accountholders.
13 100106. (a) The board shall design and implement the BankCal
14 Program. In designimu and implementing the program, the board
15 shall do all of the following:
16 (1) (A) Appoint an executive director, who shall not be a
17 member of the board and who shall serve at the pleasure of the
IS board. The board shall determine the duties of the executive
19 director and; as appropriate. the duties of other staff, who shall be
20 employees of' the Treasurer. and set the executive director's
21 compensation.
22 (13) The board may authorize the executive director to enter into
23 contracts on behalf of the board or conduct business necessary for
24 the efficient operation of the board.
25 (2) Select a program administrator. which may consist of one
26 or more contractors or program staffor a combination thereof; and
27 establish the duties and functions of the program administrator.
28 which shall be in furtherance of the program and shall include all
29 ofthe following:
30 (A) Administer the program as a fiduciary for accountholders
31 in accordance %with all applicable laws and regulations, including
32 all regulations issued by the board.
33 (B) Create and manage an internet website that will serve as a
34 primary source of information about the program, the financial
35 services offered through the program, and the program network
36 through which accountholders can load or withdraw funds from
37 their 13ankCal account using a BankCal debit card for no fee.
38 (C) Create and manage a secure Nveb-based portal and mobile
39 application through which individuals can enroll in the program
40 and entities can become registered payees and through which
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AB 1177 — 12 —
1 accountholders can access and manage their 13ankCal accounts.
2 including their direct deposit, preauthorized electronic fund
3 transfers to registered payees, and automatic disbursement rule
4 elections.
5 (D) Create and manage an application programming interface
6 (API) or web-based portal that enables employers and hiring
7 entities to remit each worker participant's elected direct deposit
S payroll contribution to the worker's 13ankCal account in accordance
9 with the worker's election.
10 (E) Facilitate and manage data exchange with the financial
I I services network administrator, pursuant to paragraph (3),ensuring
12 that account management elections, includin_ direct deposit,
13 preauthorized electronic fund transfers to registered payees. and
14 automatic disbursement rule elections, made by accountholders
15 through the program administrator's online web portal or mobile
16 application are communicated to and executed by the financial
17 services network administrator.
Is (F) Ensure that accountholders' existing accounts and account
19 management elections, including direct deposit, preauthorized
20 electronic fund transfers to registered payees, and automatic
21 disbursement rule elections. are not disrupted by a change in
22 financial services network administrator or by a change in
23 participating depository financial institutions or other program
24 vendors.
25 (G) Facilitate enrollment of accountholders in the program
26 through coordination with government and nonprofit partners.
27 (H) Facilitate and manage connectivity Nvith other state and
2S local government programs providing individuals with financial
29 accounts to enable program accountholders to transfer funds
30 between their 13ankCal account and their other state-managed or
31 locallw managed accounts, as authorized by the board and in
32 accordance with all applicable laws and regulations.
33 (1) Facilitate and manage connectivity with other state and local
34 government agencies and entities t0 enable and streamline
35 remittance of local, state,and federal benefit and public assistance
36 payments and other disbursements to accountholders entitled to
37 those payments and who authorize those payments to be directly
38 deposited by electronic fund transfer into their BankCal account,
39 as authorized by the board and in accordance with all applicable
40 laws and regulations.
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1 (3) Select a financial services network administrator and
2 establish the duties and functions of the financial services network
3 administrator, which shall he in furtherance of the program and
4 shall include all of tile following:
6 (A) Contract with. manage,and coordinate the financial services
6 vendors for the program, which shall provide accountholders access
7 to their BankCal account through a major card network and services
S provided in concert with at least one qualifying participating
9 depository financial institution that meets the requirements
10 established by the board pursuant to paragraph (4).
11 (B) Add additional participating depository financial institutions
12 meeting the requirements established by the board, including
13 especially qualifying credit unions and other local financial
14 institutions and public banks, as program scope and scale permits,
15 in accordance with the board's specifications as set forth in the
16 contract between the board and the financial services network
17 administrator.
IS (C) Issue to each accountholder a secure debit card,which shall
19 utilize current security and antifraud technology consistent with
20 industnV standards. associated with the accountholder's BankCal
21 account.
22 (D) Build a robust and geographically expansive financial
23 services network of participating ATMs, bank or credit union
24 branches, and other in-network partners through which
25 accountholders can load or withdraw funds from their BankCal
26 account using a BankCal debit card for no fee. minimize or
27 eliminate out-of-network fees for accountholders, and ensure that
28 accountholders are not charged out-ol-network fees that are not
29 reasonable and actually incurred by the program vendor.
30 (E) Ensure that all no-fee, no-penalty requirements of* the
31 program are met.
32 (E) Coordinate data exchange with the program administrator
33 and implement all account management elections. including receipt
34 ofdirect deposit payments, preauthorized electronic fund transfers
35 to registered payees, and automatic disbursement rule elections,
36 made by accountholders through the program administrator's online
37 wcb portal or mobile application.
3S (G) Ensure that a change in participating depository financial
39 institution or other program vendor does not disrupt existing
9>
805
AB 1177 — 14-
1 accountholders' BankCal accounts or account manaacmcnt
2 elections.
3 (4) Establish the criteria and terms and conditions for becoming
4 a participating depository financial institution in the program,
5 which shall be designed to ensure program stability, reliability,
6 and integrity. "file criteria and terms and conditions shall be
7 designed to ensure that participating depository financial
S institutions satisfy all of the following criteria:
9 (A) Have an established record of ethical and responsible
10 banking practices and adherence to all applicable local, state, and
I I federal laws and regulations.
12 (13) Meet all technical requirements of the financial services
13 network administrator.
14 (C) Agree to comply with all applicable laws and regulations.
15 including all regulations issued by the board -,oycmina the
16 program, and any contractual requirements established by the
17 board.
is (5) Ensure that the program administrator and financial services
19 network administrator satisfactorily perform all duties and
20 functions and do not market commercial products to BankCal
21 accountholders absent the board's prior express. written
22 authorization.
23 (6) Unsure that accountholders' existing accounts and account
24 management elections, including direct deposit, preauthorized
25 electronic fund transfers to registered payees. and automatic
26 disbursement rule elections. are not disrupted by a change in
27 program administrator, financial senVices network administrator,
28 or participating depository financial institutions or other program
29 vendors.
30 (7) Design and establish the process by which an individual
31 may open a BankCal account pursuant to all of the following:
32 (A) The process shall be designed to maximize program
33 participation and shall facilitate the opening ofa BankCal account
34 by individuals who may not have federal or state
35 goyemnlent-issued photo identification.
36 (13) The board shall facilitate the opening of a BankCal account
37 by anyone who seeks to participate in the program by taking all
38 appropriate steps to collaborate and cooperate with other state and
39 local government agencies and programs. including to the extent
yC
806
- 15— A131177
1 nccessary to verily the individual's identity consistent with the
2 law.
3 (C) The board may desiun and establish rules governing the
4 enrollment and participation in the program of individuals who
5 are under IS years of age, including rules governing the opening
6 of a BankCal account by a person who is at least 14 years ot'age
7 without it cosignor or guarantor on the account, consistent with all
S applicable laws.
9 (D) The board shall design and establish rules governing the
10 enrollment and participation in the program of individuals who do
I I not have permanent housing.
12 (S) Design and establish the process through which an individual
13 may access and manage their BankCal account, including, but not
14 limited to, through a convenient and easily accessible online web
15 portal and through a mobile application.
16 (9) Design and establish the mechanisms by which an
17 accountholder may deposit funds into a BankCal account pursuant
IS to all of the following:
19 (A) The mechanisms shall include, but not be limited to,
20 electronic fund transfers arranged through an employer's or hiring
21 entity's payroll direct deposit arrangement and cash loading
22 through in-network partners to be established by the financial
23 services network administrator. The board shall ensure that no fec
24 is imposed on accountholders for these services.
25 m) 'rhe executive director, at the board's direction, may
26 negotiate with the program administrator, the financial services
27 network administrator, and other financial services partners for
28 additional financial capabilities of a BankCal account relating to
29 deposit of funds, including, but not limited to, mobile check
30 deposit, cash loading through out-of-network partners, and
31 electronic fund transters from linked or nonlinked accounts. The
32 board shall seek to minimize or eliminate the fees imposed on
33 accountholders for additional services and shall ensure that a fee
34 is not imposed on accountholders for additional services that is
35 not reasonable and actually incurred by the financial services
36 network administrator or program vendor.
37 (10) Design and establish the process through which an
3S accountholder may elect to have a portion, up to the entirety, of'
39 their paycheck or earnings due for labor or services performed
40 directly deposited by electronic fund transfer into their FkwkCal
95
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Ala 1 177 — 16—
1 account utilising an operational model that limits interaction
2 between an employerand an employee and between a hiring entity
3 and all independent contractor to the extent feasible.
4 (I I) Design and establish the process through which employers
5 and hiring, entities shall be required to remit through a payroll
6 direct deposit arrangement each worker's elected payroll
7 contribution to the worker's BankCal account in accordance with
S the worker's election.
9 (12) Design and establish mechanisms by which accountholders
10 can withdraw funds from their BankCal account using a BankCal
I I debit card pursuant to all of the fiolloxving:
12 (A) The mechanisms shall include. but not be limited to,
13 withdrawals through point-of-sale purchases using a BankCal debit
14 card and through cash withdrawals at a robust and geographically
15 expansive netn•ork. the scope of which the board shall seek to
16 maximize, of participating A'IT1s, bank or credit union branches,
17 and other in-network partners of desi-mated financial institution
IS partners to be established by the financial services network
19 administrator. The board shall ensure that a fee is not imposed on
20 accountholders for these services.
21 (13) The board shall design and implement the program in such
22 a way that swipe fees imposed on merchants associated with
23 point-of sale purchases using a BankCal debit card are not passed
24 on to the accountholder.
25 (C) The executive director, at the board's direction, may
26 negotiate with the program administrator, the financial services
27 network administrator, and other financial services partners for
28 additional financial capabilities of a BankCal account relating to
29 withdrawal of funds, including. but not limited to, cash withdrawal
30 from out-of-network NI_NIs and bank or credit union branches and
31 international remittances. The board shall seek to minimize or
32 eliminate the fees imposed on accountholders for additional
33 services and shall ensure that a fee is not imposed on
34 accountholdcrs for additional services that is not reasonable and
35 actually incurred by the financial services network administrator
36 or program vendor.
37 (13) Design and establish a process, available to all
38 accountholders for no lee, through which an accountholder may
39 arrange for payment to a registered payee using a preauthorized
40 electronic fund transfer from a BankCal account.
gi
808
- 17— AB 1177
1 (14) Design and establish the process and terms and conditions
2 for becoming a registered payee pursuant to both of the following:
3 (A) Before becoming a registered payee, the payee shall he
4 required to agree to specified terms and conditions to he established
5 by the board in exchange for the benefits of transparency and
6 accountability afforded by participation in an automated payment
7 system.
8 (B) The board shall establish the terms and conditions to which
9 registered payees shall agree. which may vary depending on the
10 type of payee, and which shall be designed to incentivize
II accountholders' preauthorized electronic fund transfers to
12 registered payees and application of voluntary automatic
13 disbursement rules by limiting the Tate payment fees and penalties
14 that registered payees can impose on accountholders who pay them
15 using preauthorized electronic fund transfers from their BankCal
16 account.
l7 (15) Design and establish voluntary automatic disbursement
18 rules to assist accountholders in managing automated payments
19 to registered payees based on the availability of' funds in the
20 accountholder's account, which accountholders may voluntarily
21 elect to apply or to stop applying to their NmkCal account at any
22 time.The voluntary automatic disbursement rules shall be designed
23 to maximize consumer protection and may include, but not be
24 limited to, rules governing the prioritization and timing of'
25 payments, rules limiting payments to a percentage of funds
26 available in the BankCal account, and rules limiting disbursement
27 to designated registered payees only upon satisfaction ofspecified
28 conditions of the BankCal account.
29 (16) Develop and negotiate a lair and equitable program fee
30 and program revenue sharing" structure with the program
31 administrator and financial services network administrator in
32 furtherance ofattaining a financially self-sustaining program. The
33 board shall annually reevaluate and, if appropriate, renegotiate a
34 program fee and program revenue sharing agreement based on
35 program scope and scale-
3 6 (17) Take al I appropriate steps to collaborate and cooperate with
37 the CalSavers Retirement Savings Board, the Scholarshare
38 Investment Board. the California ABLE .Act Board. and the board
39 ofany other state program establishing or administering a program
40 providing for financial accounts for individuals in the state, to the
9;
809
A13 1177 — 18-
1 extent necessary or desirable for the effective and efficient design,
2 implementation, and administration of these programs and to
3 maximize the purposes of these programs and the ability of'
4 participants in these programs to benefit therefrom.
5 (1 S) Take all appropriate steps to collaborate and cooperate with
6 the State Department of Social Services. Office of Systems
7 Integration, Employment Development Department, and other
S applicable government agencies, including, but not limited to,
9 agencies responsible for distribution ofemergency relic fpayments,
10 to improve and streamline operations for the distribution of local,
I I state, and federal benefit and public assistance payments and other
t2 disbursements by enabling accountholders to authorize payments
13 to be directly deposited by electronic fund transfer into their
14 BankCal account, as applicable, to the extent permitted by law.
15 (b) The board shall consider and utilize all of the following
16 parameters in designing the program:
17 (I) The board shall cause the BankCal Program or arrangements
IS established under the program to be desu_ned, established, and
19 operated in a manner that maximizes participation and case ofuse
20 for accountholders.
21 (2) The board shall structure and design the BankCal Program
22 in a manner that encourages partnership rather than competition
23 with credit unions and other local financial institutions and public
24 banks to the extent financially and administratively feasible and
25 appropriate.
26 (3) (A) The board shall not contract for the performance of
27 program administrator or network administrator duties with an
28 entity that, during the preceding three years, has been found to be
29 in violation two or more times of any applicable lacy or regulation
30 governing financial institutions or consumer protection.
31 (13) In selecting a financial services network administrator, the
32 board shall give due consideration to a bidder's proposal for
33 expanding program enrollment and sustaining the program at a
34 scope and scale sufficient to achieve a financially self-sustaining
35 program that is cost neutral for the state.
36 (4) The board shall include in the program a provider of in-home
37 supportive services, as regulated by Article 7 (commencing with
38 Section 12300) of Chapter 3 of Part 3 of Division 9 of the Welfare
39 and Institutions Code, ifthe board determines, and the Director of
810
— 19— AB 1 177
1 Social Services and the Director of Finance certity, in writing, all
2 of the following:
3 (A) The inclusion meets all state and federal legal requirements.
4 (13) The appropriate employer of record has been identified for
5 the purpose of satisfying all the program's employer requirements.
6 (C) The payroll deduction described in Section 12302.2 of the
7 Welfare and Institutions Code can be implemented at reasonable
S costs.
9 (D) The inclusion does not create a financial liability for the
10 state or employer of record.
11 (5) The board shall determine necessary costs associated with
12 outreach, customer service, enforcement, staffing and consultant
13 costs, and all other costs necessary to administer the program.
14 (6) The board shall consult with employer representatives and
15 employee representatives to create an administrative structure that
16 Facilitates employee participation while addressing employer needs,
17 including, but not limited to, clearly defining employers' duties
IS pursuant to Section 1001 12.
19 (7) The board shall include comprehensive worker education
20 and outreach in the program; and the board may collaborate with
21 state and local government agencies. community-based and
22 nonprofit organizations. Foundations, vendors, and other entities
23 deemed appropriate to develop and secure ongoing resources for
24 education and outreach that reflect the cultures and languages of
23 the states diverse workforce population.
26 (S) The board shall include comprehensive employer education
27 and outreach in the program developed in consultation with
28 employer representatives and employee representatives.
29 (9) The board shall structure the program so as to ensure the
30 state is prohibited from incurring liabilities associated with
31 administering the program and that the state has no liabilitv for
32 the program or for the actions of any program contractor or
33 subcontractor.
34 (c� This section shall became operative only if the Senate
35 Committee otn Bcnnkirng anal Fitnancicnl htstitittions ctrndthe rlssennbly
36 Committee on Banking cad Finance consider, and the Legislature
3 7 approves by statute, the implementation of the program after the
38 completion of the market u nalysis required by Section 100109.
95
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AR 1177 —20-
1 10010S. In addition to the powers and authority granted
2 pursuant to Section 100106, the board shall have the powers and
3 authority to do all of the following:
4 (a) Sue and be sued.
5 (b) Make and enter into contracts necessary for the
6 administration of' the 13ankCal Pro.-ram and engage personnel,
7 including consultants, actuaries. managers, counsel, and auditors
S as necessary R>r the purpose of rendering professional, managerial,
9 and technical assistance and advice.
10 (c) Adopt a corporate seal and change and amend it from time
I I to time.
12 (d) Accept, for deposit to the program fund, any grant, gift,
13 legislative appropriation, or other moneys from the state, a unit of
Id federal, state, or local government, or any other person, firm.
15 partnership, or corporation.
16 (c) Make provisions for the payment ofcosts ofadministration
17 and operation of the program.
IS (f) Employ stall.
19 (<_) Retain and contract with other public agencies, focal financial
20 institutions, public banks, private financial institutions. other
21 financial and service providers, consultants, actuaries, counsel.
22 auditors, third-parl administrators, and other professionals as
23 necessary.
24 (h) Procure insurance indemnifying each member of the board
25 from personal loss or liability resulting from a member's action
26 or inaction as a member of the board.
27 (i) Collaborate and cooperate with local financial institutions.
28 public banks, private financial institutions, service providers, and
29 business, financial, trade, membership, and other organizations to
30 the extent necessary or desirable for the effective and efficient
31 design, implementation, and administration of the program and to
32 maximize outreach to potential accountholders.
33 (j) Collaborate with, and evaluate the role of. licensed agents
34 and financial advisors in assisting and providing guidance for
35 eligible workers.
36 (k) Cause expenses incurred to initiate, implement; maintain.
37 and administer the program to be paid from the program fund or
38 arrangements established under the program.
9_
812
-21 — AB 1177
1 (l) Facilitate compliance by the program or arrangements
2 established under the program with all applicable requirements
3 for the program under federal and state law.
4 (m) Exercise any and all other powers as appropriate for the
5 effectuation ofthe purposes,objectives, and provisions ofthis title.
6 100109. (a) (1) The board shall, on or before July 1, 2023,
7 conduct and deliver, pursuant to subdivision (c), a market analysis
S to determine, pursuant to subdivision (d), both ofthe following::
9 (A) If the program can be implemented.
10 (13) If program revenue is more likely than not to be sufficient
I I to pay for program costs within six years of the program's
12 implementation.
13 (2) The board shall contract with one or more independent
14 entities with the appropriate expertise to conduct the market
15 analysis described in paragraph (1).
16 (b) The market analysis shall consider all of the following
17 factors:
IS (1 ) The number of potential accountholders.
19 (2) The availability of' qualified participating financial
20 institutions.
21 (3) Potential accountholders' comfort with various banking
22 products.
23 (4) How individuals without federal or state photo identification
24 can participate.
25 (5) Potential program revenue streams.
26 (6) The presence of private sector or nonprofit competitors to
27 the program.
28 (7) State fiscal risk from the program during economic
29 downturns or economic shocks.
30 (S) Any other factor the board deems relevant to making the
31 determination required by subdivision (a).
32 (c) The board shall deliver,and upon request present,the market
33 analysis to the Chair of the Senate Committee on Banking and
34 Financial Institutions and the Chair ofthe Assembh Committee
35 on Banking and Finance.
36 (d) Subject to approval of' the Legislature by statute and
37 consideration b_v the Senate Committee on Banking and Financial
38 Institutions and the Assembly Committee on Banking and Finance.
39 the board shall make a determination whether the program can be
40 implemented and if program revenue is more likely than not to be
us
813
A13 1177 —22 —
I sunicient to pay for program costs Within six years of the
2 program's implementation.
3 1001 10. (a) The BankCal Fund is hereby created in the State
4 Treasury.
5 (b) The moneys in the BankCal Fund shall be available, upon
6 appropriation, for purposes of this title.
7 (c) (I) (, ) Before the delivery of the market analysis required
S by Section 100109, moneys in the BankCal Fund shall not be used
9 fir startup and administrative costs to implement Section 100106.
10 (13) Before the clelivery of the market unalt:cis required lm
I I Section 100109. moncns in the BcmkCal 1-und may be usecl to
12 establish the board far the purposes of clesigning and
13 commissioning that market anah-sis.
14 (2) After delivery of the market analysis required by Section
15 100109, moneys in the BankCal Fund may be used for startup and
16 administrative costs to implement Section 100106 only if the
17 Legislature approves by statute, pursuant to subclivision (ti) of
IS Section 100109. delenminaLiom thit the >rograin ettn
19 be implemented mid that progmm reNtmtte is more liktly than not
20 �,etzrx-te-pay--fer-pro ram administrative
_ .
21 yew ol=thept»1>Ietnem tiott implementation of the
22 program.
23
24 contributions deposited im the Bank-Gtil Fund—pursuant to
25 3tthflti'13itltr(fl):
26
27 . Purpose of
28 paying R r the cone: under this title.
29 11'Gtil Fund.
30 1001 1 I. (a) The board shall solicit proposals than applicants
31 for the purpose of selectina, a financial services network
32 administrator that meets all of the following minimum criteria:
33 (I) The applicant has demonstrated the capability to carry out
34 the activities required of'a financial services network administrator
35 by this title.
36 (2) The applicant provides relevant information for what the
37 board determines are reasonable upper and lower bound estimates
3S on how the program can achieve cost neutrality.
39 (3) The applicant provides specific milestones to assess whether
40 marginal revenues, marginal costs, fixed costs, and program
vi
814
-23— AB 1177
1 participation indicate that program revenues will sustain program
2 activities.
3 (4) The applicant has an established record of' ethical and
4 responsible practices and adherence to applicable local, state, and
5 federal law-
6 (b) I f'the board determines that no applicant meets the minimum
7 capabilities ofa financial services network administrator,the board
S shall issue a ne\y solicitation pursuant to subdivision (a).
9 (c) I f the board determines that no applicant meets the minimum
10 capabilities ofa financial services network administrator after
11 making three separate solicitations pursuant to this section, this
12 title shall become inoperative on December 31 ol'the year in which
13 that dctcrnnination is made.
14 100112. (a) Employers and hiring entities shall have and
15 maintain a payroll direct deposit arrangement that enables voluntary
16 worker participation in the program.
17 (b) All wages and other payments due a worker that the worker
13 has authorized to be directly deposited by electronic fund transfer
19 into the worker's BankCal account shall be deposited accordingly.
20 (c) Employers and hiring entities shall, consistent with all
21 applicable re:2ulations issued by the board, do all of'the following:
22 (1) Coordinate their payroll process with the program
23 administrator's application program interface to facilitate accurate
24 and seamless payment by direct deposit in accordance with the
25 authorization of each worker participant.
26 (2) Cooperate with the program administrator in providing all
27 requested information available to the emplover or hiring entity
28 necessary for the opening and administration of a worker's
29 BankCal account.
30 (3) Upon request of'the administrator, provide additional forms
31 or notifications to a worker.
32 (d) Employers and hiring entities sha11 not discharge, discipline,
33 threaten to discharge or discipline, or in any other manner retaliate
34 or take an adverse action against a worker or applicant because of-
3
5 the individual's participation or manner of participation in the
36 BankCal Program.
37 (e) A person that is not subject to the requirements of this title
38 may voluntarily maintain a payroll direct deposit arrangement to
39 allow worker participation in the program.
95
815
AB 1177 —24-
1 1001 14. (a) Employers and hiring entities shall not be held
2 liable for a worker's decision to participate in, or opt out of, the
3 program or for the financial activities of workers whose assets are
4 deposited in the program.
5 (b) Employers and hiring entities shall not have civil liability,
6 and a cause of action shall not arise against an employer or hiring
7 entity, For acting pursuant to the regulations prescribed by the
S board defining the roles and responsibilities of employers and
9 hiring entities in providing a payroll direct deposit arrangement
10 to allow worker participation in the program.
I 1 100116. (a) The board shall enforce the provisions ofthis title
12 with respect to employers and hiring entities in coordination with
13 the Labor Commissioner pursuant to Section 90.4 of' the Labor
14 Code.
15 (b) The board shall refer to the Labor Commissioner a complaint
16 it makes or receives that an employer or hiring entity has failed to
17 allow its workers to participate in the BankCal Program pursuant
IS to this title or otherwise violated its duties under Section 1001 12.
19 (c) The board shall reimburse the Labor Commissioner for the
20 costs incurred by the Labor Commissioner in enforcing this title.
21 100118. This title does not preclude or reduce a judgment
22 debtor's right to an exemption from enforcement of' a money
23 judgment provided by state or federal law. Moneys exempt from
24 enforcement of a money judgment remain exempt if they have
25 been deposited into the individual's BankCal account.
26 100120. (a) Notwithstanding Section 10231 .5, the board shall
27 submit an annual report by August I to the Governor, the
28 Controller. the California State Auditor, and the Legislature.
29 pursuant to Section 9795.
30 (b) The report required by this section shall include, but not be
31 limited to. all of the following information in a deidentified and
32 aggregated form:
33 (1) The number of accounts opened and closed in the program
34 during the reporting period, by city and county.
35 (2) The number of employers and hiring entities with workers
36 who received payment to their BankCal account through the
37 employer or hiring entity's payroll direct deposit arrangement
38 during the reporting period, by industry. city. and county.
95
816
-25— AB 1177
1 (3) The number of registered payees who received payment
2 from a BankCal account during the reporting period, by payee
3 category, city, and county.
4 (4) Aggregate accountholder demographics, including, but not
5 limited to, gender, age, race, ethnicity, primary language, annual
6 income, andjob industry-
7 (5) Any other information the board determines to be relevant
S to an assessment of the program.
9 100122. (a) The board shall market the program to the residents
10 of the state to the extent funds are available to do so.
11 (b) The board shall include in its marketing efforts information
12 designed to include financial literacy education and resources and
13 to educate citizens about the benefits of financial management and
14 planning.
15 (c) The board shall also develop a mechanism to keep
16 accountholders motivated about their current and future financial
17 health.
is 100124. (a) The board shall adopt regulations as it deems
19 necessary to implement and effectuate the purposes of this title.
20 (b) The board may adopt regulations to implement this title as
21 emergencv regulations in accordance with the rulenrrkina
22 provisions of the Administrative Procedure Act (Chapter 3S
23 (commencing with Section 1 1340) of Part I of Division 3 of Title
24 2). The adoption of the regulations shall be deemed to be an
25 emergency and necessary for the immediate preservation of the
26 public peace, health and safety, or general wel fa re. notwithstanding
27 subdivision (e) of Section 11046.1 of the Government Code. Any
28 regulation adopted pursuant to this section shall not remain in
29 effect more than IN days unless the board complies with
30 rulemaking provisions of' the Administrative Procedure Act
31 (Chapter 3.5 (commencing with Section 11340) of Part I of
32 Division 3 of Title 2 of the Government Code), as required by
33 subdivision (e) of Section 11346.1 of the Government Code.
34 100126. (a) A public bank may participate in the BankCal
3� Program as a participating depository financial institution.
36 (b) Financial services provided by a public bank in its capacity
37 as a participating depository financial institution in the BankCal
3S Program does not constitute retail activities within the meaning of'
39 Section 57604.
817
AB 1177 —26-
1 (c) This section is declaratory of existing law and shall not be
2 construed or interpreted as creating new law or as modifying or
3 changing existing law.
4 100128. This title does not authorize the state to loan public
5 monev.
6 100130. This title shall be construed liberally in order to
7 effectuate its legislative intent. The purposes of this title and all
S of its provisions with respect to the powers granted shall be broadly
9 interpreted to effectuate that intent and purposes and not as to any
10 limitation of powers.
1 I SEC. 5. Section 90.4 is added to the Labor Code, to read:
12 90.4. (a) For purposes of this section:
13 (1) "13ankCal Program" has the same meaning- as defined in
14 Section 100100 of the Government Code.
15 (2) "Employer' has the same meaning as defined in Section
16 100100 of the Government Code.
17 (3) "Hiring entity" has the same meaning as defined in Section
IS 100100 of the Government Code.
19 (4) "Public Banking Option Board" means the California Public
20 Banking Option Board, as defined in Section 100100 of the
21 Government Code.
22 (5) -Worker"° has the same meaning as defined in Section
23 100100 of the Government Code.
24 (b) The Labor Commissioner shall have the power and duties
25 necessary to administer the enforcement of employer and hiring
26 entity compliance with Title 21 .1 (commencing with Section
27 100100) of the Government Code.
23 (c) (1) Upon receipt of a complaint or referral from the Public
29 Banking Option Board, the Labor Commissioner shall investigate
30 and determine whether there is reasonable cause to believe that an
31 employer or hiring entity has failed to allow its workers to
32 participate in the BankCal Program or otherwise violated Section
33 1001 12 of the Government Code.
34 (2) Upon a finding of reasonable cause pursuant to paragraph
35 (I), the Labor Commissioner shall serve a notice on the employer
36 or hiring entity of its noncompliance.
37 (3) (A) An employer or hiring entity that, without good cause.
38 fails to cure an alleged violation of Section 100112 of the
39 Government Code within 90 days of'receiving the notice required
818
-27— AR 1177
1 by paragraph (2) shall be liable for a civil penalty of thvo hundred
2 fifty dollars (S250) per worker.
3 (13) An employer or hiring entity found to be in noncompliance
4 on or after ISO days from receiving the notice required by
5 paragraph (2) shall be liable for an additional civil penalty of five
6 hundred dollars (S500) per worker.
7 SEC. 6. Section 12302.2 of the Welfare and Institutions Code
S is amended to read:
9 12302.2. (a) (1) If the state or a count\, makes or provides for
10 direct payment to a provider chosen by a recipient or to the
11 recipient for the purchase of in-home supportive services, the
12 department shall perform or ensure the performance ofall rights,
13 duties, and obligations of the recipient relating to those services
14 as required for purposes of payroll direct deposit arrangements
15 offered pursuant to the 13ankCal Program (Title 21. 1 (com Merle inu,
16 with Section 100100) of the Government Code), unemployment
17 compensation, unemployment compensation disability benefits.
IS workers' compensation, retirement savin"s accounts, including
19 payroll deduction IRA arrangements offered pursuant to the
20 CalSavers Retirement Savings Program (Title 21 (commencing
21 with Section 100000) of the Government Code), federal and state
22 income tax, and lederal old-age, survivors, and disability insurance
23 benefits. Those rights, duties, and obligations include, but are not
24 limited to. re,,istration and obtaininv employer account numbers.
25 providing irdormation, notices. and reports, making applications
26 and returns, and withholding in trust from the payments made to
27 or on behalf of a recipient amounts to be withheld from the xvaL s
28 of the provider by the recipient as an employer, including the sales
29 tax extended to support services by Article 4 (commencing with
30 Section 6150) of Chapter 2 of Part I of Division 2 of the Revenue
31 and Taxation Code. and transmitting those amounts along with
32 amounts required for all contributions, premiums, and taxes payable
33 by the recipient as the employer to the appropriate person or state
34 or federal agency. The department may ensure the performance
these rights, duties, and obligations bycontract
35 of any or all of
36 with any person, or any public or private agency.
37 (2) Contributions, premiums, and taxes shall be paid or
38 transmitted on the recipient's behal fas the employer for any period
39 commencing on or after January 1, 1978, except that contributions,
40 premiums, and taxes for federal and state income taxes and federal
95
819
AB 1177 —28-
1 old-age, survivors, and disability insurance contributions shall be
2 paid or transmitted pursuant to this section commencing with the
3 first full month that begins 90 days after the effective date of this
4 section.
5 (3) Contributions, premiums, and taxes paid or transmitted on
6 the recipient`s behalf for unemployment compensation, worker,'
7 compensation, and the employer's share of federal old-age,
8 survivors, and disability insurance benefits shall be payable in
9 addition to the maximum monthly amount established pursuant to
10 Section 12303.5 or subdivision (a) of Section 12304 or other
1 I amount payable to or on behalf of a recipient. Contributions,
12 premiums, or taxes resulting from liability incurred by the recipient
13 as employer for unemployment compensation, workers'
14 compensation, and federal old-age, survivors, and disability
15 insurance benefits with respect to any period commencing on or
16 after January I, 1978, and ending on or before the eflective date
17 of this section shall also be payable in addition to the maximum
IS monthly amount established pursuant to Section 12303.5 or
19 subdivision (a) of Section 12304 or other amount payable to or on
20 behalf of the recipient. Nothing in this section shall be construed
21 to permit any interference with the rccipicnrs right to select the
22 provider of services or to authorize a charge for administrative
23 costs against any amount payable to or on behalf of a recipient.
24 (b) If the state makes or provides for direct payment to a
25 provider chosen by a recipient, the Controller shall make any
26 deductions from the wages of in-home supportive services
27 personnel that are authorized by Sections 1152 and 1 1 53 of the
2S Government Code,as limited by Section 3515.6 ofthe Government
29 Code. and for the sales tax extended to support services by Article
30 4 (commencing with Section 6150) of Chapter 2 of Part I of
3 I Division 2 of the Revenue and Taxation Code.
32 (c) Funding for the costs of administering this section and for
33 contributions, premiums, and taxes paid or transmitted on the
34 recipient's behalf as an employer pursuant to this section shall
3> qualify, where possible, for the maximum federal reimbursement.
36 To the extent that federal funds are inadequate, notwithstanding
37 Section 12306. the state shall provide funding for the purposes of
3S this section.
39 SEC. 7. Ifthe Commission on State Niandates determines that
40 this act contains costs mandated by the state, reimbursement to
9�
820
-29— AB 1177
1 local agencies and school districts for those costs shall be made
2 pursuant to Part 7 (commencing with Section 17500) ol'Division
3 4 of Title 2 of the Government Code.
O
95
821
ANIENDED IN ASSEMBLY MAY 24, 2021
ANIENDED IN ASSEN4111-Y AMIL 22, 2021
CALIFORNIA LEGISLA1 URI 2021-22 REGULAR SESSION
ASSEMBLY BILL No. 1158
Introduced by Assembly Member Petrie-Norris
February 18. 2021
An act to amend Section 11834. 10 of'. and to add Section 11853.5
to. the Health and Safety Code, and to amend Section 10087 a
I-r)f of the Insurance Code. relating to alcoholism or drug abuse.
L EG IS LATI VI: COUNSEL'S DIGEST
A13 1158, as amended. Petrie-Norris. Alcoholism or drug abuse
recovery or treatment facilities: recovery residence: insurance coverage.
Existing law requires the State Department ol'Flealth Care Services
to license and regulate alcoholism or drug abuse recovery or treatment
facilities serving adults. Existing law restricts a licensee I}om operating
an alcoholism or drug abuse recovery or treatment lacility beyond the
conditions and limitations specified on the license. Existing law also
defines a "recovery residence" as a residential dwelling that provides
primary housing for individuals who seek a cooperative living
arrangement that supports personal recovery from a substance use
disorder and that does not require IICCIISure pursuant to those provisions
or does not provide licensable services.
This bill would require a licensee operating an alcoholism or drug
abuse recovery or treatment facility to maintain specified insurance
coverages, including. among others, commercial general liability
insurance and employer's liability insurance. The bill would require
97
822
AB 1158 — 2 —
any eontt-tet bet:a-en;i ro%erimcnt entity and,gorernment entity that
contracts with an alcoholism or drug abuse recovery or treatment
facility. or ' _. _d a recovery residence, to
tMIOng Other Fequirernents. a reclutremem tlrnt require the
contractor maintain those specified insurance coveraes and a
ri'titii-renItnt—thar-tile orrti'tteto submit itH--`peeiiied
.. .,_ . ._,, to .._ insurers prim idim
irtsttrarteeY . ._.. . . to. .,._ __..._._ . . ,_:.. , a_.._
recTnrrtr the _. CrN' Fesidence ar
aleohohlt oae deiht-.coverages. The
bill would make these provisions applicable to contracts entered into.
renewed, or amended on and after January I. 2022.
Existing law creates the Department of Insurance, headed by the
Insurance Commissioner, and prescribes the department's powers and
duties, including various duties to reLulate the business of insurance in
this state.
lli bill watrl .-e tut imsurer providing coverage to
an aleeltvlismor drutt` _, treatment fiteility, z
reeeter-t
protisiats imeludtrj_
with-tht"mstrrnmee eoveragt-pri+ ;fans deaNbed above and-whether
the +ae' - - --I,Sitle,ttt has >ee 3urc
and tile eomlml! ,[otter.
Existing law prohibits a policy of residential property insurance from
beine issued or delivered unless the named insured is offered coveraL�e
for loss or damauc caused by an earthquake, and specifies the minimum
coverage that is required to be offered. Existing law defines a "policy
of residential property insurance- for the purposes of these provisions
to include a policy insuring,among other property, residential structures
and their contents.
This bill would specify that a "policy of residential property
insurance" does not include a policy that provides, or is construed to
provide, any coverage or indemnity for the payment of any fine, penalty,
or restitution in any criminal, civil. or administrative action or
proceeding, or any coverage or indemnity for the payment of any loss
or liability, arisine Iron the operation of either a recovery residence or
an alcoholism or drag abuse recovery or treatment facility. The bill
would make this provision applicable to policies issued, renewed, or
amended on and after January I, 2022.
97
823
-3— AR 1158
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
The people of rlre Srcne of California clo enact as foNums:
I SECTION 1. Section 11834.10 of the Health and Satety Code
2 is amended to read:
3 11834.10. (a) A licensee shall not operate an alcoholism or
4 drug abuse recovery or treatment facility beyond the conditions
5 and limitations specified on the license.
6 (b) Licensed services ollered or provided by a licensed
7 ilcotiolism or drug abuse recovery or treatment facility, including,
8 but not limited to, incidental medical services as defined in Section
9 11834.026, shall be specified on the license and provided
10 eXclusiVCIV:
I I (I) Within the licensed lacility.
12 (2) Within any facilities identified on a single license by street
13 address.
14 (c) Only residents of the licensed alcoholism or druu abuse
15 recovery or treatment facility shall receive licensed services.
16 (d) A licensee shall, at all times, maintain all of the followin-,
17 insurance coverages, which shall include as an additional insured
IS any vovernment entity with which the licensee has a contract, and
19 which shall be obtained from an admitted insurer:
20 (1) Commercial general liability insurance that includes
21 coverage for premises liability, products and completed operations,
22 contractual liability, personal injure' and advertising liability, abuse.
23 molestation, sexual actions, and assault and batter, with minimum
24 coverage amounts for bodily injury or property damage of-not less
25 than one million dollars (S 1,000,600) per occurrence.
26 (2) Commercial or business automobile liability insurance
27 covering all owned vehicles, hired or leased vehicles. nonowned
28 vehicles, and borrowed and permissive uses, with minimum
29 coverage amounts for bodily injury or property damage ol'not less
30 than one million dollars (S 1,000.000) per occurrence.
31 (3) Workers' compensation insurance, as required by law.
32 Notwithstanding subdivision (b) of Section 3700 of the Labor
33 Code, self-insurance does not satisfy this requirement.
97
824
AB 1158 —4-
1 (4) Employer's liability insurance, with minimum coverage
2 amounts for bodily injury or disease of not less than one hundred
3 thousand dollars (S 100,000) per occurrence.
4 (5) Professional liability and errors and omissions insurance
5 that includes an endorsement for contractual liability, with
6 minimum coverage amounts of one million dollars (SI,000,000)
7 per occurrence and tuvo million dollars (S2,000,000) aggregate. 11'
8 applicable, the contract shall include an endorsement for defense
9 and indemnification of any government entity with which the
10 licensee has contracted.
I I (c) The department may adopt reclulations to implement this
12 section in accordance with the Administrative Procedure Act
13 (Chapter 3.5 (commencing with Section 11340) of Part I of
14 Division 3 of Title 2 of the Government Code).
15 (1) Notwithstanding the rulemaking provisions of the
16 Administrative Procedure Act, the department may implement,
17 interpret, or make specific this section by means of provider
IS bulletins, written guidelines, or similar instructions.
.e�tirTn��-o-�s9�S added to tile Health and mct_v
20 C 'dc, to reado
21 government entity t Sat eotiiraets ttiih-tt
22 PH%fttel�' O%kn_dc- -rrcO�-c1" ""'-rc3'idttee-Br-:tlt'.C) OF dl-tig abit;se
23 ty shtrire tit:
24 rcrttcyttr
25 (1) That-O y . xrkTHewinu standaitid
26 applieableo
27 em cry residence 91-- 11 11with
2S+ till _f' the standards , t.irt� in the "t'StOn 1' the
29 N-,kR Standardsaet'eloped-bt 1`:mcnrm-rcm£riltti
30 Re, dettees.
31 (11) Not ritksH ;
32 the _021 22 ♦gym ricsSiv is etraeted on or t f , c r.'. flcni'i-1
33 ?(�—�ticrrt Cyttrrthe devekTpttTCTx t4-•+tririe1 n,C,-n'fi,-3c$naurvs
35 YteCTtery Ye7sii enee shall, i Y
36 tdttrdsdeyeleped puNuant
37 to that act.
3S (ii) Th
39 r - - ;id_.___ n;the ,._: _ _ iftltii*!Ft' terla'th in initial
e�
825
-5— AB 1158
1 ettmpliart geteetttetl
2 ftn4lrrt)-%—t n;-e�n er.
3
5 r ttlg 01xratiert ol'the 1 ieiillit�.
6 (2) -F1t8t the em —t all times, mittimttim all _! the
,i)1 lowing i tistirance et)%e rages, %k hiell shal -gerre>rtrrtrrrt
9 (dtniticii-ri4tittPCP
10 (Aa
13 rsettaf-itrjtrr�xmt-;-aci+� _ li. Se:
14 niolestation. seNtjztl actions, and a'"-ault L .trd-btatel:y� with minitlittrtt
1 alm les-s
16 y
17 (3)
Is Eomme tII4 t♦rltttbilit,irrstmmtee-ern�
19 ..I Q. -.L' l hired ..rl ett. , 1 .._L'_I__
20 . _ ttrtirrttrrrr eo%erage
21 armorer tr-meat dattt81--_ _v._... less
than _tie
22 trril}ttt -
2 3) l
tC-)
24 �-Worker'eem y—lto
26 C tsar.. ttt. _ _
requaremew-
27 f
30 thott3:trtti{ dol S 100, 0) per tteettrrenec.
.
» rtretrEks-mt-ettder5e;• eoitrac mifliniuml
34 coverage atrr tr r ,;;;e rii1lion dollas l 00;(YWf)—der
reptte. The
36 t ae�-h H— —e --
38 hft-, ritCrYhge4-
39 40 ctor,NN ithim
97
825
AB 1158 —6-
1 �e hospitalization Otat
-
2 oee _._:.,_.___ or _l ._h lis
3 reertverv(1r treattixxlt fileility.
5 shall :mel de M! - fn_y f_n •..r•.._.....Hoff ,
6 (i) A-f}C'3CPt�IiFN' .rlmnc-c�' ' "c'M Ol itleidemt, mcitiding C-tttntC:
7 naturelocation. find ,f�-trlc�' ' e%em or-rtiCifitYli-
S . .
9 person, contacted.
10 (iit)Adf-tln tt-t}jat-+k p1mined,
12 erlllt�rr.
14 tit litvil1i)- the report-shall ineittile all oFthe
1 9-ttl
16 the Gfl l ..j_ God, .an_ _
18 the Rollatrtti«,-rrle tri;ri+_s
20 _
21 ('-j "GoNetatrletit euttt" - the
state and any political
22 o l' the stair. rt c as i t l l ll t S Jfl� ers
23 atithorities, and nnv Other unit of loettl --ti-vemmetitt-.
24 ; tile Same
n
25 41833.05.
26 (r) Ewe ti. ref
27 PUFStifflit to tlti.s seetion do not cretatf any additional
.L -
25
29 (fl)- This i _ --itiiim reiiewetlr
30 of.attieti' 'vhvc�n and '1`•♦e Hatitt•♦try 1. 922-
SEG
31 .� n�`,�1 - .-
32 tOT�1 '1 n ♦ • 1 _fah_ read!
Ii JQ�
34 GMtTER 13. .. , ., _..... Nqo ,....... .... .
35 n.._.. ,._. 1 . _ .. .... .._ r,....._ . ...._e n.. _ .....__.. OR
36 T .. ......... ... 1 _.. ......_
37
35 679�&—(a)- -- t itit-� - ensurc s4vettef
39 _ ..___.._..
`f
.1 . -1 ,, .l_ itC
0 _1].__ in 0 . ..'`.._ 1183305 _f Health
and Sitf�..._-`...t97 9
1 .
a7
827
-7— AB 1158
I
2 eontrol ptrr-rmtt-
3 � complies with t>l
4 the stanch_ set arth ill tile MOSt __ .._. N'CF4iO!i4 .i__ . , dui,
7 (trt� ' drxv -�trcr. ..�rrti—tn1 in initial
t
9 .
10 (2)-'Whether rrcsidtnee f�tlly-cvtTtplte3-with-tile
I I insat�tnee c'ttyt . _
12 tt C-r>d
IJ
14 lrtNgra tlt(3) oFsttbdi%-isi,)m (n) of'Section 11853.5 ofthe-Hra!tk
15 and Safety 6ede and %%liCtIleF tile Feeo%ery side._ ._
16 the insttrer with a eopy of-�-
17 �-lYiei''Ud' dwe�ten" -m"`�-r-sireiti"adz-"rr3iit'e'3C'�Ti'ef`rt`ti;'aNY'iH3tifZP
IS providing insurance .
.02 of
20 the-Hcalth tm d c�r.m�"1 rGldlc. 11 L.iy emmsider-ihe i .dd'cmcmiiig ele'iment3
21 as-0ari control progratir
2 . if
23 retriat able
!tions. -
24 (?)-Whether-the-liteilitq #trllt� ,rtp4i e insttratiee
25 _ ert-( t� of
27 . : _
28
. .in,
29
30 msurer with .
31 - i,—z m.l Rork elesel' with the—i v iiey
32 Genern and Stateet, m
33 sititmee
34 8ntl't lcollf)lt`ni or "moist ery or-trc".t[i'r eni 1 iciiitieti'
35 SEC. 3- Section 11853.5 is added to the Health and Safety
36 Code, to read:
37 11853-5. (a) Any government emit'` that contracts Leith a
38 privately oiened recove'v residcnce or alcoholism or chug abuse
39 recovery of treatment f icilirt- shall require the cowractoi: at all
40 times, to maintain all ofthe farllowing insurance covergs es, which
97
828
AB 1158 —8-
1 shall mclucle the governnmem emits as an adclitional insured and
2 shall be obtained fi•orn an achninted insurer-
3 (1) Commercial general liahility insurance that inchtdes
4 coveragefor premises !lability,products chid eonhhlciecl operations,
5 controctual liability, personal it jay and advert/ling liability.
6 abuse. molesvation, sexhtal actions. caul assault cmd baner•y with
7 minimum coverage amounts for boclily h jay or•property damage
S of not less than one million dollars (S 1.000,000)per occurrence.
9 (2) Commercial or business automobile liability insurance
10 covering all owned vehicles, hired or leased vehicles, nanowned
l I vehicles, and borrowed and permissive uses, with mioinuun
12 coverage cunounts fir bodih+injury or property damage ofnot less
13 than one million clollars (S1.000.000)per occurrence.
14 (3) Fhbrkers' compensation insurance, os required by law*
15 A'otnvithstandingsubclivi.sion (b) ofScctiorn 3700 oftlre Labor Coale.
16 self-ins'io-ance does not satisfi� this requirement.
17 (4) L:mplover's liability insurance, with minimum coverage
1 S amounts for bodih- injury or disease of not less than one hunc(ed
19 thousand clollas (SIO0.00O)per occurrence.
20 (5) Professional liability and errors and omissions insurance
21 that includes an endorsement ,for contrac(nal habhluv. with
22 minimnon coverage amorous of one million dollars (S1,000.000)
23 per occurrence and two million dollars (S2,000.000) aggregate.
24 The courac•t shall itch0e, an enclorsenheat for (lease and
23 indernnifieution of the government entity with which the licensee
26 has contracted.
27 (b) For the purposes of this section, the following terms have
28 the followirw meanings:
29 (1) ':Alcoholism or drug abuse recovery or treatment fcrcdlit_r"
30 has the some meaning cis in Section 11834.02.
31 (2) "Government entity" means the state and cur- political
32 subclivision of the state, i nchuhag comties, joint powers
33 authorities. and cow oilier unit of local government.
34 (3) "Recovery residence" has the same meanht; as in Section
35 11833.05.
36 (c) This section shall apply to contracts entered into. rcneived.
37 or amemled on and after January 1, 2022.
3S SECS
39 .SEC. 3. Section 10087 of the Insurance Code is amended to
40 rcad:
97
829
-9— AB 1158
1 10087. (a) (1) As used in this chapter, "policy ol'residential
2 property insurance" means a policy insuring individually owned
3 residential structures of not more than four dwelling units,
4 individually owned condominium units, or individually owned
5 mobilehomes, and their contents, located in this state and used
6 exclusively for residential purposes or it tenants policy insuring
7 personal contents ol'a residential unit located in this state.
S (2) "Policy of residential property insurance" does not include
9 any of'the following:
10 (A) Insurance for real property or its contents used for any
I I commercial,dnrsts4til industrial, or business purpose, except a
12 structure of not more than four dwelling units rented for individual
13 residential purposes.
14 (13) A policy that does not include any of the perils insured
15 against in it standard fire policy.
16 (C) A policy that provides, or is construed to provide, any
17 coverage or indemnity for the payment of any fine, penalty, or
IS restitution in any criminal. civil, or administrative action or
19 proceeding, or any coverage or indenmiity for the payment of any
20 loss or liability, arising from the operation of either it recovery
21 residence, as defined in Section 11833.05 ofthe Health and Safety
22 Code. or an alcoholism or drug abuse recovery or treatment facility,
23 as defined in Section 1 I834.02 of the Heath and Safety Cody.
24 This subparagraph shall apply to policies issued, renewed, or
25 amended on and after.January I, 2022.
26 (b) Proof of mailing of' any offer, disclosure, or document
27 required to be delivered by this chapter by first-class mail addressed
28 to a named insured or applicant at the mailing address shown on
29 the policy or application shall create a conclusive presumption that
30 the offer was made or that the disclosure or document was delivered
31 as required. If an offer, disclosure, or document required to be
32 delivered by this chapter is not mailed, but is hand delivered to
33 the insured, the insured's signed receipt creates a conclusive
34 presumption that the offer was provided or that the disclosure or
35 document was delivered as required.
O
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830