BILL NUMBER: AB 2449	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Member Eggman

                        FEBRUARY 19, 2016

   An act to amend Section 1811 of, and to add Section 1824 to, the
Insurance Code, relating to insurance.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2449, as introduced, Eggman. Insurance: bail licenses.
   Existing law provides for the issuance of bail licenses under the
jurisdiction of the Insurance Commissioner for bail agents, bail
permittees, and bail solicitors. Existing law requires persons
soliciting or negotiating the execution or delivery of an undertaking
of bail on behalf of a surety insurer to be licensed as a bail
agent. Existing law requires the commissioner to charge and collect
specified fees for an application for a new or renewed bail license
by a bail agent, bail permittee, or bail solicitor.
   This bill would increase the fees for an application for a new or
renewed bail license, as specified. The bill would require each
surety insurer or bail permittee to pay a fee, not to exceed $10 per
bail bond transaction. These fees would go to the Bail Investigation
and Prosecution Fund, created as a special account in the Insurance
Fund. The bill would provide that moneys in the Bail Investigation
and Prosecution Fund be distributed by the commissioner, upon
appropriation, to fund the reasonable costs incurred in regulating
entities involved in the undertaking of bail, as specified. The bill
would provide that if the total amount in the Bail Investigation and
Prosecution Fund ever exceeds $8,000,000, then the commissioner shall
reduce the amount of the assessment, as specified. The bill would
authorize the commissioner to develop guidelines to implement or
clarify these provisions. The bill would require the commissioner to
provide an annual report on the department's Internet Web site
including various information, as specified. The bill would make
related legislative findings and declarations.
   Existing constitutional provisions require that a statute that
limits the right of access to the meetings of public bodies or the
writings of public officials and agencies be adopted with findings
demonstrating the interest protected by the limitation and the need
for protecting that interest.
   This bill would make legislative findings to that effect.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


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

  SECTION 1.  The Legislature finds and declare as follows:
   (a) Currently, bail agents, as defined in Section 1802 of the
California Insurance Code, pay five hundred sixty-six dollars ($566)
for a two-year license and one hundred seventy dollars ($170) for a
license renewal. Bail permittees, as defined in Section 1802.5 of the
Insurance Code, pay one thousand one hundred thirty-four dollars
($1,134) for a two-year license and seven hundred sixteen dollars
($716) for a license renewal. Bail solicitors, as defined in Section
1803 of the Insurance Code, pay five hundred sixty-six dollars ($566)
for a two-year license and one hundred seventy dollars ($170) for a
license renewal.
   (b) Section 12978 of the Insurance Code states that the cumulative
amount that fees may be increased or decreased shall be the amount
necessary to provide sufficient moneys to carry out the projected
workload of the Department of Insurance.
   (c) In the past five years, the seriousness and the number of bail
complaints received by the department have steadily increased.
   (d) Despite the fact that bail products are less than 2 percent of
the insurance market, bail complaints account for roughly 10 percent
of the Reports of Suspected Violation workload of the department's
Enforcement Branch.
   (e) The limited resources of the department do not currently allow
for a sufficiently comprehensive bail enforcement program.
Additional resources are needed to create an aggressive prevention,
investigation, and prosecution program dedicated to eliminating
illegal bail schemes, and additionally to increase outreach and
education, particularly to bail professionals, on bail laws in
California.
   (f) Legislation is necessary that would provide the department
with the resources to eliminate the bail complaint backlog, and more
fully investigate illegal bail practices, by more appropriately
aligning the licensing fees paid by bail agents, bail permittees, and
bail solicitors, and by creating a Bail Investigation and
Prosecution Fund within the department. The fund would contain
resources from increased licensing fees for bail professionals and
from the imposition of a fee of ten dollars ($10) per bond
transaction in California. A portion of the moneys in the fund would
be distributed to district attorneys and city attorneys to prosecute
these cases.
   (g) Effective bail enforcement by the department produces numerous
benefits to both the bail bond industry and consumers who purchase
bail products. Consumers are protected from predatory tactics by
unscrupulous bail agents, and the bail industry benefits from
improved customer confidence.
   (h) A well-regulated bail industry reduces business and
transaction costs for industry members, who benefit when business
partners perceive less risk from engagement with the bail industry,
and it fosters competitive bail markets by ensuring a level playing
field for all members of the bail industry.
  SEC. 2.  Section 1811 of the Insurance Code is amended to read:
   1811.  For his services in connection with the filing of any
application or request for any license under this chapter, the
commissioner shall charge and collect the following fees:
   (a) For filing an application or request for bail agent's license,
 one hundred eighteen dollars ($118)   one
thousand one hundred thirty-two dollars ($1,132)  per year.
   (b) For filing an application or request for bail solicitor's
license,  one hundred eighteen dollars ($118)  
one thousand one hundred thirty-two dollars ($1,132)  per year.
   (c) For filing an application or request for bail permittee's
license,  two hundred thirty-six dollars ($236). 
 two thousand two hundred sixty-eight dollars ($2,268). 
   (d) For filing an application for examination, or reexamination,
twenty-four dollars ($24).
   (e) For a renewal application, a fee of  thirty-five
dollars ($35)   three hundred forty dollars ($340) 
per year. In the case of a bail agent with more than one valid
notice of appointment on file, the fee to be charged pursuant to this
subdivision shall be the fee provided herein multiplied by the
number of insurers whose valid appointments are on file at the date
the document is filed unless the bail agent in that document advises
the commissioner of his or her intent to terminate the appointment of
one or more of those insurers, in which event the fee shall be based
upon the number for insurers remaining.
   (f) For a bail solicitor's renewal application, a fee of 
thirty-five dollars ($35)   three hundred forty dollars
($340)  per year.
   (g) For a bail permittee's renewal application, a fee of 
one hundred forty-eight dollars ($148) per year.   one
thousand one hundred thirty-two dollars ($1,132). 
   (h) At the time of filing an application for a license, if a
qualifying examination is required for issue or in connection with
the license, the fee for filing the first application to take the
qualifying examination shall be paid at the time of filing
application for the license.
   (i) For filing application or request for approval of a true or
fictitious name pursuant to Section 1724.5, twelve dollars ($12),
except that there shall be no fee when the name is contained in an
original application.
   (j) For filing a bond required by this chapter, except when the
bond constitutes part of an original application, ten dollars ($10).
   (k) For filing a first amendment to an application, six dollars
($6).
   (  l  ) For filing a second and each subsequent amendment
to an application, twelve dollars ($12).
  SEC. 3.  Section 1824 is added to the Insurance Code, to read:
   1824.  (a) The Bail Investigation and Prosecution Fund is hereby
created as a special account within the Insurance Fund. Each surety
insurer or bail permittee admitted and authorized to execute an
undertaking of bail in this state through a licensed bail licensee
shall pay a fee per bail bond transaction, not to exceed ten dollars
($10) for each bail bond posted in this state. The revenue from this
fee shall be deposited into the Bail Investigation and Prosecution
Fund.
   (b) Moneys in the Bail Investigation and Prosecution Fund shall be
distributed, upon appropriation by the Legislature, to fund the
reasonable costs incurred in regulating entities involved in the
undertaking of bail as described in this section. Moneys in the Bail
Investigation and Prosecution Fund shall not be used for any other
purpose. Moneys in the Bail Investigation and Prosecution Fund shall
be distributed by the commissioner as follows:
   (1) Seventy percent of these funds shall be distributed within the
department for consumer enforcement and protection purposes related
to bail transactions, including, but not limited to:
   (A) Investigating and prosecuting unlawful conduct by bail
licensees, or a person or entity purporting to solicit or negotiate
in respect to execution or delivery of an undertaking of bail or bail
bond, or execute or deliver an undertaking of bail or bail bond, or
matters subsequent to the execution of an undertaking of bail or bail
bond contract and arising out of it.
   (B) Responding to consumer inquiries and complaints related to
bail transactions.
   (C) Regulating and overseeing bail bond products, solicitation,
and advertising directed toward consumers.
   (D) The cost of any fiscal audit performed pursuant to this
section.
   (2) Thirty percent of the funds shall be distributed to county
district attorneys and city attorneys, for investigating and
prosecuting surety insurer and bail abuse cases involving licensees,
or any person or entity engaged in the solicitation or negotiation in
respect to execution or delivery of an undertaking of bail or bail
bond, or execution or delivery of an undertaking of bail or bail
bond.
   (A) The commissioner shall distribute funds to county district
attorneys and city attorneys who show a likely positive outcome that
will benefit consumers in the local jurisdiction based on specific
criteria promulgated by the commissioner. Each local district
attorney and city attorney desiring a portion of those funds shall
submit to the commissioner an application, including, at a minimum,
all of the following:
   (i) The proposed use of the moneys and the anticipated outcome.
   (ii)  A list of all prior relevant cases or projects and a copy of
the final accounting for each. If cases or projects are ongoing, the
most recent accounting shall be provided.
   (iii) A detailed budget, including salaries and general expenses,
specifically identifying the cost of purchase or rental of equipment
or supplies.
   (B) Each district attorney and city attorney who receives funds
pursuant to this section shall submit a final detailed accounting at
the conclusion or closure of each case or project. For cases or
projects that continue longer than six months, interim accountings
shall be submitted every six months, or as otherwise directed by the
commissioner.
   (C) Each district attorney and city attorney who receives funds
pursuant to this section shall submit a final report to the
commissioner, which may be made public, as to the success of the
cases or projects conducted. The report shall provide information and
statistics on the number of active investigations, arrests,
indictments, and convictions. The applications for moneys, the
distribution of moneys, and the annual reports shall be public
documents.
   (c) Notwithstanding any other provision of this section,
information submitted to the commissioner pursuant to this section
concerning criminal investigations, whether active or inactive, shall
be confidential.
   (d) The commissioner may conduct a fiscal audit of the programs
administered under this subdivision. If conducted, this fiscal audit
shall be conducted by an internal audit unit of the department.
   (e) If the commissioner determines that a district attorney or
city attorney is unable or unwilling to investigate or prosecute a
relevant bail abuse case, the commissioner may discontinue
distribution of funds allocated for that matter and may redistribute
those funds to other eligible district attorneys or city attorneys.
   (f) If, as of June 30 of any calendar year, the total amount in
the Bail Investigation and Prosecution Fund exceeds eight million
dollars ($8,000,000), the commissioner shall reduce the amount of the
assessment accordingly for the following year to eliminate that
excess. A surety insurer, upon receipt of an invoice, shall transmit
payment to the department for deposit in the Bail Investigation and
Prosecution Fund. Any balance remaining in the Bail Investigation and
Prosecution Fund at the end of the fiscal year shall be retained in
the account, to be available in the next fiscal year.
   (g) The commissioner may develop guidelines for implementing or
clarifying these provisions, including guidelines for the allocation,
distribution, and potential return of unused funds. The commissioner
may, from time to time, issue regulations for implementing or
clarifying these provisions.
   (h) The commissioner shall provide a consolidated report annually
on the department's Internet Web site, which shall include, but is
not limited to, the following information:
   (1) The number of consumer complaints regarding to bail bond
transactions.
   (2) The number of investigations initiated relating to bail bond
transactions.
   (3) The number of investigations related to bail and bail bond
transactions referred to and reported by prosecuting agencies.
   (4) The number of administrative or regulatory cases related to
bail and bail bond transactions referred to the department's legal
division.
   (5) The number of administrative or regulatory enforcement actions
taken in cases related to bail and bail bond transactions.
   (i) A violation of this section is not a crime pursuant to Section
1814.
  SEC. 4.  The Legislature finds and declares that Section 3 of this
act, which adds Section 1824 to the Insurance Code, imposes a
limitation on the public's right of access to the meetings of public
bodies or the writings of public officials and agencies within the
meaning of Section 3 of Article I of the California Constitution.
Pursuant to that constitutional provision, the Legislature makes the
following findings to demonstrate the interest protected by this
limitation and the need for protecting that interest:
   In order to ensure that criminal investigations are not frustrated
or hindered, it is necessary to limit the public's right of access
to information submitted to the Insurance Commissioner pursuant to
this act concerning criminal investigations.