BILL ANALYSIS Ó
AB 1406
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Date of Hearing: May 6, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1406 (Gordon) - As Amended April 28, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill imposes a $15 fee on all bail transactions to fund
enforcement efforts by the California Department of Insurance
(CDI) and local district and city attorneys. Specifically, this
bill:
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1)Requires a surety insurer to pay a $15 fee on all bail
transactions.
2)Creates the Bail Investigation and Prosecution Fund (fund)
within the Insurance Fund to receive bail transaction fee
revenue.
3)Requires CDI to distribute the revenues in the fund as
follows:
a. 70% for investigating and prosecuting unlawful
conduct by bail agents and responding to consumer
complaints.
b. 30% to provide grants to local prosecutors for
investigating and prosecuting bail cases.
4)Provides CDI authority to issue regulations and requires CDI
to issue an annual report related to bail investigation and
prosecution activities.
FISCAL EFFECT:
The new fee is projected to raise about $2.6 million annually
(Bail Investigation and Prosecution Fund, created by this bill),
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$1.8 million of which would fund CDI activities and $800,000 of
which would fund local activities.
COMMENTS:
1)Purpose. According to the author, the bill is motivated by the
growth and seriousness of bail complaints received by the
department. The department's resource limitations have
prevented the creation of a comprehensive bail enforcement
program. Funds are not only needed to create an aggressive
prevention, investigation, and prosecution program dedicated
to eliminating illegal bail schemes, but also to educate and
increase outreach on bail laws in California. This bill is
sponsored by CDI.
2)Background. Existing law requires surety insurers and bail
agents to be licensed by the CDI. In California, a bail agent
is a person licensed and regulated by the department, and will
post a bond for a person accused of a crime. A bail agent
works with one or more bail surety companies, which
essentially operate as an insurer backing the bail bond. The
bail agent takes responsibility for the accused making all
court appearances and if the accused fails to appear, the bail
agent will be the party responsible to pay the court the full
amount of the bail bond.
This bill would impose a fee of $15 per bond transaction to
all surety companies transacting bail in California. Similar
programs are in place for automobile insurance and
investigations related to life insurance and annuity products.
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3)Support. A broad coalition of law enforcement supports this
bill, including associations of sheriffs, district attorneys,
city attorneys, and the Peace Officers Research Association of
California. Some individual bail agents also support this
bill.
4)Opposition. This bill is opposed by coalitions of bail agents,
bail surety companies, and individual agents. The Golden State
Bail Agents Association questions whether this fee is
necessary and is appropriately scaled, and indicates their
belief that CDI's data on bail-related complaints is suspect.
The American Bail Coalition (of surety companies) states
license fees support regulation and that the fee level is far
too high, working out to over $500 per bail agent.
5)Staff Comment. A workload justification for the regulatory fee
level has not been provided. Additionally, if the bail
agents' conduct requires an enhanced level of investigation,
as is alleged, it is unclear that a fee on bail transactions
has the appropriate nexus. Generally, across many licensing
categories, investigation into conduct of professional
licensees is paid for by license fees.
Analysis Prepared by:Lisa Murawski / APPR. / (916)
319-2081
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