BILL ANALYSIS                                                                                                                                                                                                    



                                                                     AB 764


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          Date of Hearing:  April 22, 2015 


                           ASSEMBLY COMMITTEE ON INSURANCE


                                   Tom Daly, Chair


          AB 764  
          (Quirk) - As Amended April 16, 2015


          SUBJECT:  Parking lots:  design:  insurance discount


          SUMMARY:  Encourages insurers to provide discounts to property  
          owners who install protective vehicle barriers in parking lots.   
          Specifically, this bill:  


          1)Authorizes the California Building Standards Commission (CBSC)  
            to adopt building standards to require that the installation  
            of vehicle barriers be added to the list of considerations in  
            the design of any new commercial property parking lot.  


          2)Authorizes an insurer to consider providing discounts to  
            property owners that install vehicle barriers.


          3)Provides that any discount that an insurer wishes to provide  
            must be consistent with the requirements of Proposition 103.


          4)Defines "vehicle barrier" as a short vertical post placed to  
            protect buildings or pedestrians from collisions by motor  
            vehicles.









                                                                     AB 764


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          EXISTING LAW: 


          1)Establishes the CBSC within the Department of General  
            Services, and requires any building standard adopted or  
            proposed by state agencies to be submitted to, and approved  
            by, the CBSC prior to codification into the California  
            Building Standards Code (CBC).  


          2)Establishes, by initiative statute, a comprehensive rate  
            regulation system implemented by the insurance commissioner  
            that governs the property and liability insurance rates that  
            insurers charge commercial property owners 


          FISCAL EFFECT:  Undetermined.


          COMMENTS:  


          1)Purpose.  According to the author, this bill "seeks to provide  
            awareness of storefront crashes and encourage the use of  
            safety bollards in building design.  A bollard is a vertical  
            pillar or safety device most often made of steel and concrete  
            and is installed in a footing in the ground and placed in a  
            line?to block a vehicle from crossing into a pedestrian,  
            shopping or seating area, or into a building.  Specifically,  
            AB 764 would add bollard installation to this list of  
            considerations in the design of any new commercial property  
            parking lot.  Additionally, it would authorize an insurer to  
            consider these bollards as a safety measure eligible for  
            discounted building insurance rates.  By doing this, AB 764  
            will reduce the number of storefront crashes."


          2)Background.  According to the Texas A&M Transportation  








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            Institute (TTI), "With 500 people reportedly killed each year  
            by vehicles crashing into retail stores, sidewalk cafes, hair  
            salons and other businesses, low speed barrier crashes have  
            been called 'one of the largest unaddressed safety issues in  
            the country."  According to TTI, these accidents occur most  
            frequently when a driver is entering or leaving a parking  
            space perpendicular to a building, and even at relatively low  
            speeds, can cause serious injury or death.  However, TTI notes  
            that simple, preventative measures can protect pedestrians,  
            store employees, and patrons from being injured or killed when  
            thee accidents occur.  In recognition of the safety risks  
            posed by errant vehicles and the increasingly important use of  
            protective barriers as a way to prevent or minimize the  
            damages from these types of accidents, the American Society  
            for Testing and Materials International (ASTM), an  
            international standards development organization, in  
            conjunction with the researchers at TTI, recently approved a  
            test standard, known as the Test Method for Low Speed Barriers  
            for Errant Vehicles, to set parameters for bollards, barriers,  
            and other devices most often seen protecting storefronts and  
            high-traffic pedestrian areas to help standardize the use of  
            protective barriers.  Prior to the adoption of this standard,  
            there was no objective way to evaluate the effectiveness of  
            vertical pipes, decorative planters, and other devices that  
            could serve to protect a business from damages caused by a  
            vehicle-into-building collision.  


          3)Insurance incentives. There are a range of financial  
            incentives that might induce a business to invest in  
            safety-related capital expenditures, and insurance discounts  
            can be one of them.  However, Proposition 103, as implemented  
            by the insurance commissioner, generally requires historical  
            loss-based actuarial data to justify a "discount" in insurance  
            premiums paid by an insured.  To the extent that this bill  
            seeks to encourage insurance incentives as an inducement for  
            capital expenditures to construct safety features, it must be  
            recognized that insurers would be required to provide an  
            actuarial justification in a rate filing subject to the  








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            commissioner prior approval authority before a discount could  
            be offered.


          REGISTERED SUPPORT / OPPOSITION:




          Support


          Storefront Safety Council




          Opposition


          None received




          Analysis Prepared by:Mark Rakich / INS. / (916) 319-2086