Assembly Standing Committee on Insurance

Okay. The Assembly Insurance Committee is now in session. We can start. Vice Chair, Members of the Committee, welcome to our Committee. Today. Today we're going to consider eight bills. Three bills are proposed consent. These bills are. File item one, SB 291. File item three, SB 447. File item eight, SB 847. And we're going to establish a quorum Committee. Secretary, please call the roll.

[Roll Call]

Great. Now we're going to take up the consent calendar. Do I have a motion and a second? Thank you.

[Roll Call]

Okay, we're going to leave that on call. Okay, Our first item is SB371. Senator Cabaldon, please come forward. Welcome, Senator Cabaldon. Before you begin, will you be accepting the amendments reflected in the analysis and Communications and Conveyance Committee should the measure receive sufficient votes to move forward?

Madam Chair, of course. I wouldn't even be here today if it weren't for me accepting those. Yes. Thank you. I am here to present SB371, and I do want to begin by accepting the author's amends. I believe, technically, we'll be taking them in Communications and Conveyance, which is hearing the same bill later today.

Yes, but thank you.

Thank you to the Chair and the staff for all the work on the bill. I'm here to present this bill. The Legislature set the insurance limits for Uber and Lyft and other rideshare companies a little over a decade ago, when the sector was brand new.

The Senate Committee hearing documents on the insurance issue described this strange, exotic new idea that was out there. And at one of the informational hearings, the staff reported that they had actually secured a live human driver that was driving rideshare in order to make money, that this was such a. It's such a strange concept.

And at the time, if none of you are old enough to remember this, but many Californians were like, I'm not getting in that unless I'm not getting in some stranger's car unless it has $5 billion worth of insurance coverage. You know, I need a guide dog animal with me.

I'm not sure about this at all. It's a completely different market today. Rideshare is a fundamental part of the transportation ecosystem in California, and not just in the ways that we sometimes think, especially those of us that are in rural and suburban areas. Rideshare, publicly contracted but privately operated Rideshare, not Uber and Lyft, but it's covered.

But other TNCs are the backbone transit systems in my County of Yolo, increasingly in other parts of California. So they're no longer simply an optional, an option. They are not an alternative to taxis or other forms.

But as you know, as part of that original scoping a decade ago, and I would point out, the Committee analysis at that time pointed out, hey, it's anybody's guess what the right insurance limits are. We've got to do something, but we got to put something in place. And that was necessary. And those limits were intended to protect.

Protect drivers and riders and others. So these limits apply only to in the event where there's uninsured or under or underinsured motors coverage that's kicking in. Remember that drivers are protected through several layers of insurance protection, including the direct driver coverage from the companies.

But riders are also protected by the coverage that is provided more generally in the vehicle and their own coverage when there is insufficient or no coverage by another driver who is at fault. That's the issue. That's the zone in which we're speaking about in this bill.

So this bill takes the limits that were put in place as a, basically as a interim, it's quote, unquote, anybody's guess approach a little over a decade ago, and replaces them with these amendments with limits of $100,000. Per person, $300,000 per passengers in the vehicle to modernize, including language to.

To provide for additional data analysis, studies and accountability and transparency in order to assure that this is the right thing.

Rideshare is now one of the most significant costs that California's face in their transportation options if they don't own a car, or if, like yesterday, as I was heading to surgery, I couldn't drive and there was no other alternative. And so the affordability of rideshare as an option for California is absolutely critical. And.

And the cost of uninsured and underinsured motorist coverage for the rideshare companies and therefore for riders, has grown so substantially that it is a significant part of the fare.

And so our efforts here in this bill are to try to reduce the cost of insurance for the rides and therefore significantly reduce the cost of the fares for the riders. That's the bill in a nutshell. Look forward to the robust conversation here, and thank you again for the Committee's work and for the amendments.

I'm going to ask for the appropriate time for an Aye vote. Thanks, Madam Chair.

Thank you. And I know you postponed your surgery, so I appreciate your hair. Shows your dedication to your job. Your lead witnesses can please come forward and go ahead and begin whenever you're ready.

Alrighty. Good morning, Madam Chair, Mr. Vice Chair, and Members of the Committee. My name is Ramona Prieto and I am the Director of Public Policy for Uber. And I'm here today to express our strong support for SB371, the targeted fix to a problem that's quietly making rideshare more expensive for millions of riders. Today.

Each trip is covered by multiple forms of insurance, as Senator Cabaldon just alluded to. $1.0 million in liability insurance, $1.0 million in occupational accident insurance to protect drivers physical damage coverage. Three coverages that we are not talking about today as SB371 does not touch them. Lastly, $1.0 million in uninsured and underinsured motorist coverage.

Coverage for when rideshare drivers are not at fault. No other vehicles on California roads are required to carry this. Not taxis, not limousines, not public school buses. Nobody rideshare alone. And this policy has become the single biggest cost driver in Los Angeles County. Up to 45% of every fare goes to government mandated insurance.

Around 33% for the State of California. To be clear, this insurance is a pass through to riders today. And you can see it on any of your own individual receipts on the booking fee. These inflated costs are passed directly to the people who rely on rideshare to get to work, to school, to Doctor's appointments.

And they're cutting into the earnings of drivers who keep our platform moving. I'm proud to have a support letter here with me today, signed by over 7,000 rideshare drivers. SB371, informed by data, modernizes the coverage requirements, but still above what the law requires for anybody else.

It defines that drivers will never have to carry this policy, and it ensures that Rideshare UMUIM policy will be primary to others like it. On behalf of Uber, I encourage your support of SB371 so we can continue the conversation on this important reform. And we remain committed to working with this Committee. Thank you.

Thank you. Thank you. Good morning, Madam Chair, and esteemed Members of this Committee. My name is Nick Johnson, Public Policy Director for Lyft, and I'm speaking today in support of Senate Bill 371. Senate Bill 371 aims to address the affordability of rideshare services by adjusting uninsured and underinsured motorist coverage limits which were established over a decade ago.

As the Senator said, I want to acknowledge the inherent challenges in establishing those requirements 10 years ago because there was limited data and this was a novel industry that was on the rise. So we recognize that this proposed change is a paradigm shift. Nevertheless, our observations indicate that the elevated limits mandated by UMUIM have become economically inefficient.

This inefficiency is largely attributable to inflated attorney representative claims, often involving substantial contingency fees, which consequently drive up fares. It is important to define the scope within which this bill would operate. UMUIM coverage is applicable when our driver is not at fault as an accident.

As Ramona said, the bill does not alter our $1 million liability coverage, which addresses accidents in which our driver is at fault. UMUIM claims constitute a small fraction of the claims that we process annually. At the proposed limits, California would still maintain a higher requirement than 40 other states.

Furthermore, it is notable that 26 states do not require this. This coverage at all for TNCs. And as Ramona said, no other commercial mode of transportation in California requires this specific type of. Of insurance.

Our request today is simply to maintain this policy requirement at a level that would adequately cover the majority of UMUIM claims occurring on our platform and make our policy primary to that of passenger UMUIM. The objective of this limit reduction is not to achieve a windfall.

Rather, it is to enhance the affordability of rideshare, increase profitability for drivers, and disincentivize bad behavior in the legal system. I thank you for your time and respectfully request your support. Thank you.

Thank you. Do we have any other witnesses and support in the room? Please come forward.

Good morning. Good morning, Madam Chair. Chris McKayley on behalf of the Los Angeles Area Chamber of Commerce and support, thank you.

Good morning. I'm Leon Guidry with the California Black Chamber of Commerce in support of 371.

Good morning. Tish Rylander, here on behalf of a handful of supporters. TechNet, Cal Asian Chamber, the NAACP, California and Hawaii State Conference and the Chamber of Progress.

Good morning, Madam Chair, Members. Nico Molina, on behalf of the Silicon Valley Leadership Group and support. Thank you.

Good morning. Anthony Butler Torres, on behalf of the California Hispanic Chambers of Commerce and support. Thank you.

Morning Chair and Members Alex Torres, here on behalf of the Bay Area Council as well as the California Nightlife Association in support.

Good morning, Madam Chair, Members. Timothy Burr, on behalf of a few organizations, San Francisco Chamber of Commerce, Central City Association of Los Angeles, VICA and the Greater Los Angeles African American Chamber of Commerce. Thank you so much.

Good morning. My name is Dr. Takori Porter. I'm the President of the National Action Network Sacramento Chapter in support.

Thank you. Okay, do we have any lead witnesses in opposition? If so, please come forward. You can have a seat at the table.

Madam Chair, Members of the Committee, Casey Johnson, Vice President of the Consumer Attorneys of California, here to respectfully express our opposing less amended position on SB 371. This bill proposes a drastic reduction in the uninsured and underinsured motorist coverage UMUIMU required of Uber and Lyft from $1 million down to just $100,000 per person, $300,000 per incident.

It's a 90% cut in protection for passengers and drivers who were injured by uninsured or underinsured motorists. We thank the Committee for their work on improving the bill from the language in print which proposed a 95% reduction to $50,100,000. However, more work must be done.

Make no mistake, this is a corporate windfall at the expense of real people. Californians who rely on rideshare services deserve to know that if they're seriously injured by a reckless or uninsured driver, they'll be covered. But under SB371, they could be left with hundreds of thousands in medical bills, lost wages and long term disability without meaningful compensation.

This bill also leaves drivers dangerously under protected in serious crashes. Unlike UIM, the occupational accident insurance provided under Proposition 22 excludes compensation for pain suffering, emotional distress and permanent disability, leaving drivers with only partial coverage and substantial out of pocket costs.

Moreover, Uber's insurer delays access to UIM benefits by creating a procedural roadblock at a time when injured drivers are struggling to recover both physically and financially. The reduction in SB371 would place drivers in a position with fewer rights and no guarantee that any corporate savings will be passed along for their benefit.

One way to ameliorate the harsh impact of the reduced limits would be to make sure that TNC drivers and passengers can access the full amount of the TNNC UIM reduced $100,000 coverage if warranted by their injuries by eliminating a credit against the UIM policy for the amount of the at fault driver's policy.

Uber recently agreed to this provision in the State of Virginia. We understand several other states also make sure the full value of the policy is accessible and to TNC drivers and passengers when needed. This coverage is not a luxury, it's a critical safety net. We urge you to protect injured Californians and not multibillion dollar corporations.

Please reject SB371.

Thank you Madam Chair, Members. Sarah Flocks, California Federation of Labor Unions we are also opposed unless amended. We do thank the Committee for their work on the bill, but I wanted to give some context for the current insurance requirements for for Uber and Lyft and TNCS.

So in 2013 a six year old child was struck and killed by a TNC driver in San Francisco which put a spotlight on the industry and really exposed the gaps in coverage.

And that is when Assemblymember Bonilla came in with the bill that currently set the the insurance cover which which was supported by Uber and Lyft at the time.

Part of that was recognizing that this was a unique industry in that at the time the companies were misclassifying drivers, they were using their personal vehicles and the companies depended on a very large disposable pool of drivers who would come in and drive for short amounts of time and there was a lot of cycling through.

So these were drivers who were not always on the road and they were not covered by workers comp health insurance. They were using their personal vehicles. They did not have the same kind of requirements in terms of security trainings or inspections that any other driver did in the state, creating a large amount of risk.

That's why these insurance levels were put into place because there was this is a different industry with very different requirements for drivers. The misclassification of drivers at the time has now become law because of Proposition 22. That means that these drivers do not have workers compensation. Occupational accident industry is not the same coverage.

It does not have the same guarantees for workers. They do not have guaranteed health coverage at the same levels. They do not have paid time off. They don't have any of the benefits that any other worker in the State of California does does as an employee, putting them at much greater risk.

They also have to do all of the reimbursements in terms of gas and repairs to their cars. So these levels are very important to protect both passengers, many who rely on this every day to get to work, as well as workers.

And at the same time, take TNCs don't have any of the responsibilities to the state as other companies, such as paying payroll taxes into the UI Fund, workers compensation, anything else that is kind of the collective pooled responsibility that insurance is based on. And so for those reasons, we are opposed unless amended.

We were opposed because we think these insurance limits should be in place, the insurance level should be in place.

But our amendment would be that there needs to be a guarantee, not intent, not just it leaving it up to the companies, but actual guarantee that all of the cost savings from this reduction in insurance are passed on to drivers and to riders. Because this does. There's nothing in this bill that guarantees this.

There's nothing that prevents algorithmic wage setting or surge pricing or anything that riders and drivers deal with. For that reason, we remain opposed unless amended.

Thank you. Additional opposition in the room.

Good morning, Madam Chair Members. Robert Harrell, Executive Director of the Consumer Federation of California. We have an opposed position. I must say, respectfully, I don't recognize the world that the author described in his open. And I say that as someone who. Was a decade ago at the Department.

Of Insurance and the name of the young girl who was killed was Sophia Lu. That was a really tragic event that should not have ever happened. Thank you.

Good morning, Madam Chair, Members of the Committee. Navneet Puryear, on behalf of the California School Employees Association. We also have an opposed unless amended position. We're concerned that the lowered cost will. Encourage districts to contract out with TNC companies such as Zoom and Hop, Skip. And Drive, which would endanger the lives of students.

It would also impose significant financial burdens. On staff and students involved in accidents. With underinsured TNC drivers. Thank you.

Good morning. Kim Stone, Stone Advocacy on behalf of Consumer Watchdog in respectful opposition.

Good morning, Madam Chair Members. Louie Costa with Smart Transportation Division in respectful opposition unless amended. And there are other transportation companies that are required to carry the 1 million uninsured underinsured, those carriers that transport railroad workers. This body passed that legislation last session. Thank you very much.

Scott Brent, Smart Transportation Division opposed unless amended. Thank you.

Good morning. Connor Gusman, on behalf of Teamsters California and the Amalgamated Transit Union also oppose unless amend.

Thank you. Okay, I'm going to bring it back to the Committee. Do we have any questions or comments from the Committee Members? Assemblywoman Corral.

Thank you, Madam Chair. I am sorry you guys have to turn awkwardly. Thank you, Senator Caboldan, for bringing this bill. I appreciate it. I am prepared to support this bill today, but I do think we really need to strike a balance here.

You know, what I'm seeing as positives in this bill are impact on affordability and the amount that consumers are paying to ride, list to ride Ubers, and then also potential, you know, potential support for drivers, increased pay, better benefits. And so that's really what I'm looking. Positive positives.

But I am concerned about the liability piece, and I think it's striking a balance on what exactly the right number is. So I will be voting for this bill today. I appreciate you bringing it and appreciate the conversation that everyone's having about this bill. Thanks.

Okay. Assembly woman Ortega.

Thank you, Senator. I appreciate you postponing your surgery.

The doc just the surgeon did that. I do like the bill, but, you know, my eye is more important than any bill.

But, you know, I had a lot of questions about this bill, so I want to be very clear. As you know, labor and Employment Committee chair, my Committee passed the bill for Uber and Lyft drivers to unionize. And I don't see any labor support today for this bill.

I don't know why I haven't had an opportunity to have a lot of those conversations, but what I can tell you is that I'm very uncomfortable, that there are no guarantees that. That any of the savings on insurance costs are going to trickle down to the people who are driving those cars.

I bargained a lot of contracts in my time, and I know what a guarantee looks like, and this version of your bill does not have it. So unfortunately, I cannot support your bill today.

Hey, Assembly woman Addis.

Thank you. Thank you, Senator. And I want to appreciate the focus you have here on affordability and just the intent of the bill. I understand where you're trying to go, but just was wondering if you could clarify a little bit more.

I know it's not in the bill, particularly in terms of savings to drivers, savings to riders, but things that you might be thinking about moving forward or that we might see before this gets. Goes to the floor. I know there's still potentially conversations that could be had before this comes to the floor.

And so what you might be looking at. I know you to be a very thoughtful person, and so if you could clarify a little bit of that.

Madam Chair, may I respond? Yes. All right, thanks. Thank you. Thank you so much. And thank you. The question is at the core of all of this, because that is the entire purpose of the bill is to reduce fares for riders and also to improve compensation for drivers.

Both for those two purposes, but also because this is a market that is in some challenge. Right. And so part one of the reason fares are so high is there are not enough drivers out there. And so we have to do both things. And so the bill is intended to do both of them at the same time.

I spend most of my time working on housing issues where we have the same exact thing like, okay, you're providing this streamlined ministerial approval. Can you guarantee that that means the apartment will be $1200 and not 2000 or what have you? And I think generally that's really hard to do in the private marketplace.

And so we've been struggling with exactly how would we accomplish that. No one wants to do that more than me, though. So, you know, folks have been, you know, ideas have been swirling around.

I've talked to the, to the chair about it as well, and then also the chair of the next Committee about, you know, mechanisms that we would be able to, you know, get the, get information about what, you know, a look back, the language that's in the bill that the Committee put together will help us do that.

But, you know, being, being explicit that a look back, you know, what happened and if it didn't happen the way that we're expecting, right. As we do this, then then we'd have to, we'd come back and look at it again.

So I don't know what the exact answer is, but I absolute you're interested in the transparency and accountability to assure that we're doing this for that we are doing that we're going to accomplish what we're trying to do here and absolutely committed to continue to work with every party, crazy supporter, opponent that has ideas about how we might be able to accomplish that as we go forward.

And are you concretely looking at potential changes to the Bill to make sure those things happen before it gets to the floor?

Yes, we, I know we've had conversations about them as well as the chair of CNC about, about some, some frameworks to, to accomplish that. I think, you know, I gave the housing example. The advantage that we have here is that it's not, it's not a million people in the market.

It's, you know, it's a, it's a handful of companies, so it's a little bit simpler, but it still is that challenge. So I think there are that both committees and others have come up with a couple of frameworks that are in that kind of a look Back point of view.

Tell us, did we, did they, did they do what they said that would happen? I'm pretty confident because the economics, the economic incentives are aligned exactly right, that they're the ones that are experiencing the challenges of their market. So their absolute interest is for fares to be lower and for riders to want to drive.

So I think in this case we are in a place where our interests are aligned. But yes, we've been looking at some of the frameworks that have been kind of floated here in the Assembly and absolutely committed to if we can land on one to make sure it's in the bill as well.

I appreciate that. Again, I love your focus on affordability and wanting to improve rates for drivers as well as increase fares for customers. I struggle with the lack of concreteness in the bill that in terms of those particular pieces I'm going to support it today would really be looking for those as this moves towards the floor.

I'm assuming that it's going to move to the floor, but really be looking for more concrete things in this that will provide those kinds of guarantees. But want to help you get it out of Committee.

I think you've got a supportive Committee here and that's going to get out anyway but would like to support you today and then be looking for those things.

Vice Chair Wallis.

Thank you , Madam Chair. Senator, I appreciate you bringing this bill forward. When I was growing up, you know, we were taught as kids not to get in strangers cars and not to meet people strangers from the Internet. And now we're literally summoning strangers from the Internet to get into their cars. So I appreciate that while times change, so should policy.

And that's the approach I think you're taking here. You know, I'm very supportive of this bill. I was supportive of it before taking the Committee amends. But I do appreciate you taking the Committee amendments and working with our group here in insurance. I do think that you've hit sort of the crux of the issue here.

How do we get lower fares for riders and how do we get more money in drivers pockets. And so I appreciate your work on this and just looking forward to supporting the bill. I'd like to move the bill when appropriate.

Okay. Assemblywoman Avila Farias.

Thank you, Madam Chair. Senator, I always look forward to your presentations because the one thing we have in in deep common is affordability of housing policy. And so we're just wired a little differently around public policy.

And so when I saw this bill I knew that there was a lot of thoughtful thinking behind it to assure a balance for consumers and also the Uber drivers.

And so I feel this bill, does that create that balance through reducing excessive costs for the drivers and then at the same time protecting consumers, which I know all of us have a vested interest in.

But most importantly, you know, we at the beginning of the year and the Legislature on the floor committed to making California more affordable. And this is really in the spirit of, you know, keeping affordability and accessibility, which are equally important.

And it's, it's smart, fair, updated policy that I think that you are looking through that lens and I do see jobs here.

You know, as someone who's been in the labor space all of my public service, career and a Member, the economic opportunity that I see here for our Members is every time I jump in an Uber, I always ask in our long chat, whether it's an airport drive, is this your full time job or what do you do?

And the majority, it's their second job, utilize to supplement their income to, you know, deal with the high cost of housing in California. And so I have yet to jump into a car where they are not appreciative of the opportunity, the economic job opportunity that they're being provided by the Uber organization.

And so as a Legislator, you know, our job is to create that economic opportunity space. And I think Uber does that. And I think again, your policy is striking a balance here. So thank you for bringing it forward and I'll be supporting the bill today as well.

Assemblyman Harabedian.

Thank you, Madam Chair, and thank you to the author and the sponsors and obviously the opposition as well for being here. And I want to just go back quickly to the opposition.

Sir, the issue that you had talked about is, and I want to make sure I'm getting this right, is somehow the drivers don't automatically get to take part in this insurance policy. The, um, uim, because of, I think you just described a basic subrogation issue and I just want to make sure I'm not missing something. Do.

Are you, are you asking for an amendment that would, that would basically go around subrogation rules under the existing insurance policies and laws in California, or is it something completely different that you're asking. For something completely different? Okay, so what exactly, what exactly are you, are you saying is not in this bill that should be.

The amendment that we would be seeking would be that if the writer had their own policy that had coverage. I'm sorry, let me start over.

If there was an at fault party who had coverage and there were payments made by that at fault party that Any payments made by that party would not serve as any sort of a set off for the coverage provided in the UMUIM under the new limits.

So, for example, if there was an at fault party who had a minimum insured a $30,000 policy, the person suffered a broken arm, had to have surgery, missed work for a couple of months, and that at fault parties insurer paid the $30,000, the full amount of the underinsured coverage available under the Uber policy would then still be available.

It wouldn't just be $70,000 because $30,000 had already been paid by the at fault parties insurer.

I understand. Is that current set off in. Under the current limits, there is a set off. There is a set off for any payments made at fault in any insurance. Yeah. Okay. I appreciate it.

Just wanted to clarify.

Thank you.

Okay. Assemblyman Alvarez.

Thank you. Appreciate that question. It presents an interesting approach which I'm certainly interested in hearing more about. But I want to ask about the. In our analysis, you identify a study which talks about the percentage of claims that would be settled under 50,000 or 100,000 limits. Who conducted the study and is that data available?

I believe you're referring to the BRG study, Berkeley Research Group. That was the industry study that we commissioned this year. It may be what you're referring.

It's a study that's in our analysis, doesn't name it in section of the analysis.

So we can provide that.

Okay, so. So in your, in this study you analyze existing like historical trends and that's how this percentage was arrived to. And that was originally in the bill. The amendments which I understand are being taken, raise those limits.

What do the new limits do in terms of the percentage of coverage, if you will, of incidents compared to the 60% of claims under the previous 50,000- 100,000 limits?

So you're asking how much. I'm sorry, how many claims? How many more is how I interpret that. That's right. We can get back to your office on that and, and have that information for you. Okay.

And worth flagging if. Am I, if I'm allowed to share. We had conducted a study with our underwriter, our state underwriter, just our company, on what would be sufficient. Like what 5100 was not pulled out of the sky. And I think it's wonderful that we're having the opportunity to debate it today and I'm very thankful for that.

But that study we will also be happy to share with you. The 5100 being compared to accidents for personal drivers, you or I individually, not TNCs would cover 96% of Umuim claims today for individual people different than companies. The claims for companies, according to our underwriter, are often 10 to 12 times more expensive on UMUIM claims.

But we would be happy to send the BRG study and our outside study as well.

Okay, I definitely would be interested in that now more from a user perspective as this affordability for on multiple levels as a user pulled up a very recent trip that I took and I'm curious where there are several fees that Uber charges to the user.

Where would a discounted fare or discounted in as a result of this bill, where would that be reflected in the multiple fees that I have listed? Would that be in the booking fee? I assume it would not be in the driver benefits fee. When you go to an airport.

Airports have their own fee that has nothing to do with you. There's a regulatory fee and there's a something called an access fee and then there's the actual fare.

Yeah.

So where would I see a reduction in my fare?

Great question. So the regulatory fees and the access for all fees, those are a result of state legislation, but our insurance fees today are captured in the booking fee. So we are transparent per trip on government mandated insurance and what those costs are, where you will see a difference.

And if you were to compare a receipt, I don't know if you went to spring training in Arizona and your booking fee in Arizona versus California or for example in Boston, where it's a tenth of the cost of our insurance.

Here the booking fee will be the place where those savings are reflected and will be captured too by elements of the study being proposed in the amendments today.

Would you be willing to provide what the breakdown of the booking fee is per state regulation to us?

Gladly.

And identify specifically where the insurance fee, what percentage of that fee is due to insurance.

Yeah, no problem.

And I would just add that, you know, I'm upset that you weren't looking at a lift receipt, but at the same time we have an earnings guarantee for our drivers.

So after external fees and government mandated insurance, 70% of ride fares go to our drivers and we guarantee that and we've been doing that for the last couple of years.

So if there were to be any savings, they would be on the external fees and insurance and that pot of that pot of money would reduce and it would go to the drivers. So we're talking about the fees before there's the take rate from to the drivers and to us. Right.

And so if we were to reduce insurance costs, then those external Fees would go down and the pool of money available to drivers would go up.

You might have lost me a little bit. So I understand what you most of what you said but now talking about drivers because this was also something that was mentioned and appreciate the author concerned both about consumers and those who provide the service.

So then we would anticipate that the outside of all these other fees there would be some benefit to drivers. They should anticipate some benefit to them. If it's a 70/30 split. Are you talking about the 70/30 split changing or what would they expect?

No, so sorry if I didn't, if I wasn't clear enough. So after external fees. So that's what you were talking about as far as airport fees, gross receipts, taxes, Prop 22 fees, now the CPUC clean miles fee.

So what do you call your trip fare? I'm sorry, would you, would you call your trip fare is what you're talking about?

Yes, yes, yes. So after fees that's when the 70/30 split split happens with our earnings guarantee. And so the fees before that split occurs will go down because insurance costs will go down.

And so I understand the fees to me as a consumer will go down. I got that part. We're talking also about now the drivers themselves. We've talked about the benefits to them. So where would we be able to identify the benefits to drivers as a result of this? I got it.

So if the, if the in the lift situation. So if the fee, if the fees go down by adopt by $10 by automatic operation of their of the formula then the drivers the driver captures 70% of that automatically without any separate policy. But in the case of Uber that's not.

It sounds the way that they.

So receipts are how we name insurance is a bit different but let's use trip to LAX and let's use a round number. It's $100 and you or I individually are deciding if we can afford to do that. $45 of that $100 today goes to government mandated insurance.

The occupational accident insurance I referenced or excuse me, the liability insurance that I referenced and UMUIM represent a large portion of that. Bringing down Umuim and making trips more affordable. Let's say there's. It's $20 more affordable. You or I are quicker to now go on that trip.

There's more demand also from riders to take trips so drivers have access to more work. They will never have to carry this policy. A healthy marketplace too is incumbent on people willing to take trips. So there are both direct benefits and Marketplace benefits for drivers. And I hear their critique on wanting that to be formalized.

And like the Senator mentioned, we are committed to continuing to work with this Committee and all of you and figuring out the right ways to do that.

Okay. I think that's an appropriate place to close. I think certainly Senators heard across the board trying to identify how this is going to positively impact consumers in the way that we can. Those of us that are consuming this product can feel it, and those, those who are employed also have the benefit.

Certainly appreciative that the goal is mutual there for both of those. And so I'll support the bill today, but looking forward to what that actually becomes before this goes to the floor. Thank you.

Assembly Member Berman.

Thank you, Madam Chair. And thank you to the author for bringing the bill and out. I kind of want to align myself with different points that all of my colleagues have made during the conversation.

I think I very much appreciate your primary objective of lowering the cost for consumers and lowering the cost of daily living in California, which we all, I think in a bipartisan fashion, agree is a top priority for the Legislature this year and in future years.

I also appreciate that your, your, you know, secondary focus is increasing benefits for, for drivers, increasing benefits for gig workers who are the ones who are getting out on the road and, and, you know, literally driving this, this new economy that has sprung up in California and expanded to other parts of, of the country and the world.

And Assemblymember Ortega referenced the organizing bill for gig workers, which I'm proud to be a joint author of with selling Member Wicks. And you know, that's, that's, I'd say that's my primary concern. And then also reducing the cost for consumers is a great benefit as well and a secondary kind of benefit in my eyes.

But it's rare this day and age where you get the opportunity to do both at the same time. And I think that's a really unique opportunity and something that we should embrace. And so I'm happy to support the Bill today. Also look for other opportunities to do that in other sectors of our economy.

I appreciate the questions that some Member Alvarez was asking and would encourage the companies get that data to all of us. You know, data. I know that the original proposal was 5100. I assume there was some science behind that and, and data behind that.

I would love to get to understand that data better if, and as the bill moves forward. I understand that the current limit is $1.0 million and it's a very kind of easy to understand talking point that this would reduce that by 90% or the original proposal would reduce that by 95%.

I think that's an easy talking point to understand. I don't find it to be a convincing one because I think that $1.0 million limit was set at a totally different time.

It was set at a different time when the industry was brand new, when there was a lot of unknowns as to what the impact of the industry would be on our, on our communities, on drivers, on riders, on other passengers, you know, on other drivers on the road, on the insurance market. We don't.

And I think largely that original $1.0 million limit was, was sort of plucked out of thin air as something to be super conservative to give Californians the comfort to start using this new technology. But we don't need to pull things out of thin air anymore because we've got over a dozen years of experience.

We've got a lot of data in California, we've got a lot of data from other states. And I'm struck by the fact that California is very out of whack with most other states across the country.

I understand those states might have unique circumstances, but I'd love to understand for the states that have much lower limits, what has the impact been. What has the impact been on the insurance market in those states?

What has the impact been on drivers and riders and, you know, other, other drivers that aren't in the lifts and Ubers in those states? We do, we don't, we don't have to guess anymore. We've got data and we can look at that data to figure out what really is the right limit.

And I don't know if it's 51 hundred or if it's 100, 300 or if it's something in between 51 hundred and 100, 300. You know, I hope that that's a continuing conversation that the Legislature has.

I, you know, again, really want to encourage the companies to provide a lot of that information, provide a lot of that data, be as transparent as possible so that we all as legislators can get a better understanding of what that right balance is.

You know, clearly what we currently have is way too conservative, and there's a lot of potential benefit to lowering that for consumers.

You know, funny little anecdote, but the Berman family loves to pick each other up from the airport, and my parents love it and my brothers love it, and I hate it because I find it to be a massive waste of time.

And so, you know, a decade ago I'd be like, get in and I will pay for your lyft I will pay for your Uber. Like that's way, you know, time better spent than me spending an hour driving you. But the cost has gone up a lot.

And that's a harder argument for me to make or that's a harder bill for me to pay when my brother flies in from Portland. And so, you know, it has been noticeable, I think for everybody how much, you know, the cost of these rides has increased.

And you know, so I think this is an important conversation to lower that cost lower for consumers, get that money to workers.

I appreciate the commitment to continuing to work to make sure that, you know, we make it very clear that the, you know, as much of the savings as possible are going to go to workers, are going to go to consumers and look forward to getting more of that information from y' all over the next, you know, six weeks or so and, you know, making sure that we set that proper limit for Californians for the next dozen years and don't come back, you know, a dozen years from now and say, zero, that was still too high.

So appreciate you bringing the bill. Happy to support it. I know there's a lot more conversation that still needs to happen and looking forward to having that conversation. Thank you, Madam Chair.

Q. Assemblywoman Ortega, you had one more comment.

Yeah, it's a question to overleft. You mentioned $45 out of $100 goes towards insurance. So if this bill were to pass, because we're talking a lot about savings and the savings going to workers and consumers, so how much savings are we actually talking about?

So the government, of the government mandated insurance referenced, it isn't just this policy. So this policy is getting at a portion of that to be sure. And the ways that we are looking to be transparent on who it benefits, I'll use just speaking for Uber is in our booking fee and the ways that it benefits drivers.

As mentioned earlier to Assemblymember Alvarez, the savings will be, let's say around half of that, maybe less. We can give you in terms of government mandated insurance, what goes to liability and what goes to umuim. We can give you the range.

We've, we've, it's on our receipts now in terms of the median of what those costs are in California on receipts. But the booking field will be the place that's very transparent and will be part of the study for, for the money being reinvested, the ways that we're saying.

So the study that you guys are all proposing to add along with the areas that it exists transparently in our receipts.

Yeah, and from a Lyft standpoint, we calculate government mandate insurance to be about $6 per ride. And as Ramona said, UMUIM is a portion of that per ride fee. And so we would be seeing some savings.

I don't want to violate any type of antitrust laws, and I don't want to talk about what that impact would be, but we would gladly reach out to your, your team and give you that information separately and. Sorry, go ahead.

No, I'm asking here because I've asked for this information over the weekend and I have yet to receive a number. Okay, so you're. The argument here today is that the Uber and Lyft, if we pass this bill, get signed, you will be saving money that will then be passed to the consumer and to the workers.

So I want to know what that number is.

Yeah, and I'll just say we have no interest in having higher fares or keeping fares as high as they are right now. It's not good for business, it's not good for the riders, it's not good for drivers. So any savings that we could see from these insurance savings would go back into the marketplace.

That's just how it's going to work. Lower prices means more rides. More rides means more opportunities to earn and more money for drivers. And that's what we're committed to. And so I'm sorry if you haven't got that information, and I thought that we had provided that, but we will definitely provide that information directly.

But because we are competitors, we cannot say that publicly in the same room together. So we would rather not violate antitrust today.

Okay. Seeing no other questions or comments from the Committee, Senator, would you like to close?

Yeah. Thank you so much, Madam Chair, and I really appreciate both the, the dialogue and the attention here, but also the, the, the universal insistence that the focus here is on affordability for, for riders and also on making sure that the drivers are appropriately compensated.

You mentioned that in an Uber ride, you always ask, is this your main job and all of that. I do the same, and the driver always asks me back, how much did you pay for this ride? Because I'm not making that much because it's all going to the fees.

And so this bill's intended to do both, to accomplish both things. I do want to turn to a couple of the opposition elements as we close, because we've been working with the opposition, and there are some important issues that have been raised.

First, just in terms of the look back from a decade ago when this was done, I just want to be Clear because there were some, some questions about the, about what I had said earlier and 10 years ago when this, when this was done, there was very serious work and analysis done on the insurance requirements for rideshare in the Bonilla Bill in all of the hearings.

But, and here's the key difference, which I think I just want to emphasize for the opposition, is that if you. Look, I read every sentence of the PUC hearings on this, the rulemaking, all of the transcripts from every single hearing that that bill went through. UMUIM was virtually never mentioned.

So there was a very extensive, as the opposition has testified, very, very extensive consideration of what are the right insurance limits for rideshare generally. But on umuim, no, it was. Uber already is doing it. Let's. Okay, so let's move on to the next issue.

So this has not been substantially studied, litigated, described, and that's why it's appropriate for this bill to be doing so. Second, the issues that the consumer attorneys have raised are real ones. As Senator, as Assemblymember Harabedian, this question revealed there are like 16,000 different ways in which these different policies interact or subrogate and what have you.

We've been trying to grapple with those. We're committed to continuing those conversations. I want to emphasize, at the consumer attorney's suggestion, we did add language that makes this the rideshare company's policy primary to get it part of it.

I know it doesn't get to this issue, but I'm simply saying we have been very open to trying to, to fix the interaction of these policies to maximize the benefits for claimants and for riders and drivers as well. And we're committed to continue to do that.

We see claims in the UMUIM space here, as I think has been was noted in the testimony, on average 8 or 9 or 10 times higher than claims in the non UMUIM space where there is regular coverage.

And if we're in the accident, I'll go to UC Davis Med Center, I will use my blue shield coverage.

But in many of the UMUIM claims, and you'll see this if you go to the, you know, the ads and the websites and what have you, I would be diverted instead to a different medical provider charging substantially more. And so this isn't a cost shifting issue. It is.

It is a cost exaggeration issue in a very tiny part of the market that we're grappling with here. And so the bill is intended to try to try to harmonize that so that matches the rest of the insurance and liability system for the rest.

And then lastly, I would say that, you know, other issues have been raised around algorithms and surge pricing and all of that, that they're real issues, as both are. As a rider and with lots of my friends who are drivers, I'm completely there. That's not this bill.

I'm happy to maybe carry something next year, but this bill is really about trying to assure that we get the insurance policies to be among the best in the country, but also right size to make sure that we're able to. To.

To make this essential backbone part of our transportation system in California affordable for riders and a viable economic activity for drivers. So, again, thank you for the Committee. Thanks very much, Madam Chair, for all of your work on this. And I would respectfully ask for an Aye vote.

Thank you, Senator. And I believe we have a. We have a motion and a second, so. Secretary, please call the roll.

This is item number two, SB 371 by Senator Cabaldin. The motion is due passed as proposed to be amended in Communications and Conveyance Committee. [Roll Call]

Okay, we will leave that roll open for absent Members. Thank you. Thank you. Okay, next we're going to have. Yeah. SB 487. Senator Grayson, come forward whenever you're ready.

Nice to see you again, Senator. Whenever you're ready.

Good morning, honorable Madam Chair, esteemed Members of the Committee. I am pleased to present SB 487, which ensures that peace officers and firefighters injured in the line of duty will receive compensation awarded to them through a settlement or judgment. When a peace officer or firefighter is injured on duty due to a third party's negligence, they are eligible to file a workers compensation claim.

Now, this claim covers medical expenses and under labor code section 4850 guarantees their full salary for up to one year. After that, they may receive state disability benefits at two thirds of their base salary for an additional year. However... Expeditiously presenting here. After two years, no further income support is provided if the disability persists. SB 487 ensures that injured peace officers and firefighters receive at least 2/3 of the of the at fault parties liability insurance limits.

When both, and this is important, the employee proves their total damages exceed the net amount left after the employer's claim is satisfied and the availability or available liability insurance limits are insufficient to fully cover both the employer's claim and the employer's proven damages. With that, I do have witnesses to introduce through the Chair, and I'll have them self introduce.

Good morning. My name is Megan Bartlett. Thank you for having us. I'm an attorney who represents public safety officers and firefighters throughout California. My practice is dedicated to representing firefighters and public safety officers who have been injured in the line of duty at the hands of a third party.

I pursue civil claims against the at fault parties on behalf of injured officers in order to compensate them for the damages they experience as a result of the injury. The problem this bill addresses is that an officer injured on duty by a third party often receives little to no compensation for their injuries because the current law allows the employer to be reimbursed first before the officer. Workers compensation will cover some of their losses, but there's a lot that is not covered.

Any loss of overtime, loss of promotion opportunities, pension benefits, pain and suffering, to name a few. These damages are not speculative. They're real, calculable, and often unrecoverable with current law. In some cases, the at fault third party does not carry enough insurance to cover the employer's losses as well as the officer's losses. Under the current system, the entire settlement can be claimed by the employer, leaving the injured officer with little to nothing.

These amendments to the labor code remedy those situations by guaranteeing that the injured officer receives a portion of the available recovery while ensuring the employer still has a right to get a portion of the recovery. This situation only applies where limits are insufficient to cover the damages they both experience.

On the whole, when you look at the total number of workers compensation cases involving public safety officers, those with third party fault are a very small percentage of cases. But when these cases do occur, it can have a severe impact on the lives of the injured officers.

The language in the amended statutes is not without similar precedent and is modeled after CCP 3040, which governs health insurance reimbursement rights while ensuring that the injured individual receives a fair portion of the insurance money available.

Another example is Government Code section 20252, which governs CalPERS reimbursement rights in severe injury cases where the officer has to medically retire. That statute guarantees a portion of the recovery to the injured employee. Our injured officers deserve to get their fair portion. Thank you for your time and support.

Good morning. Kiana Lewis, Deputy Sheriff in California. On July 19, 2022, while working uniform patrol, I was struck, run over, and pinned beneath a fully equipped patrol vehicle caused by a drunk driver. I remained trapped under the vehicle for approximately 25 minutes before the fire department arrived and used specialized equipment to extricate me.

As a result of this horrific incident, I sustained multiple fractures and ligament damage in my foot, both of my knees required surgical intervention, and my back needed multiple procedures. Surviving such an impact is nothing short of a miracle. However, survival has come at a steep cost. Following the collision, my life changed drastically.

I went from thriving in extreme physical activities to needing help with a basic daily task, such as using the bathroom, showering, or getting a glass of water. These visible injuries told only a part of the story. Behind the scenes, I endured profound personal losses. I was forced to cancel once in a lifetime trips and personal events.

I needed help getting food and groceries, resorting to delivery services, and I relied on others to drive me to and from medical appointments for months. All these changes were noticed by my colleagues. Professionally, the impact was also significant. Being unable to work in a full duty capacity directly impacted my eligibility for specialty assignments and promotional opportunities.

After a year of surgeries and rehabilitation, I returned to light duty only to be informed that my absence would delay any advancement and consideration. Additionally, because I was restricted from working overtime, I experienced a financial loss estimated at around $50,000 in just one year.

Despite my recovery and returning to duty, I carry an unspoken stigma because of my incident. While I've worked hard to regain my physical and professional footing, there's a lingering perception that I'm less capable due to the severity of my injuries and the time spent away from full duty.

This perception, whether conscious or not, places me at a disadvantage when it comes to fair consideration for promotional opportunities and specialized assignments, impacting my financial earnings. This traumatic incident has affected every area of my life, physically, emotionally, mentally, financially, and professionally. The consequences of one person's reckless and illegal decision has and will continue to shape my future in ways I could never have imagined. Thank you for your support.

Okay, do we have additional support in the room?

Shane LaVigne on behalf of the Fraternal Order of Police, the Sheriffs Association of Orange County, San Bernardino County, Sacramento County, Santa Ana Police Officers Association, and Long Beach Police Officers Association. Thank you.

Thank you, Madam Chair and Members. Doug Subers on behalf of the California Professional Firefighters in strong support.

Madam Chair and Members. Matthew Siverling on behalf of the Association for Los Angeles Deputy Sheriffs in support. Thank you.

Okay, do we have any lead opposition in the room? Whenever you're ready.

Thank you, Madam Chair and Members. My name is Jason Schmelzer. I'm here today on behalf of the California Coalition on Workers Compensation and PRISM. We want to thank the author and the sponsors and the Committee for some robust conversation over the past few months, few weeks.

Unfortunately, those conversations weren't fruitful in producing a workable middle ground from our perspective, and we're opposed for that reason today. First, briefly on our concerns with the underlying issue here. When an employee is injured at work, their employer steps in immediately to provide medical treatment and cash benefits to offset lost wages.

California has a no fault system, so employers step in to provide these benefits even when a third party is responsible for the workplace accident. State law recognizes that in those cases the employer has a financial loss resulting from those accidents, and we're allowed to recover our costs from the responsible third party.

Employer recoveries specifically for public safety officers can be expensive, in large part because the Legislature has granted them special benefits that help soften the financial impact on workplace injuries. The Senator touched on 4850 benefits, which provide a full year of full salary tax free to the injured worker.

So in those scenarios, they're actually receiving more take home pay than they do when they're working. And then if a public safety officer can't return to their normal job, they are eligible for industrial disability retirement benefits in addition to normal permanent disability benefits. They can work while receiving those benefits. They're lifetime benefits, and they're pretty substantial.

So state and local employers face significant costs and effective recovery from those responsible third parties is really critical because the public needs those resources back to provide critical services to constituents. Despite our concerns with the underlying bill, I think we tried our best to work with the author and the sponsors on a middle ground.

We proposed amendments that would have essentially taken the policy that's in SB 487 and applied it only in situations where you had very limited insurance. If the problem is that there's not enough money to go around, I think we can get to the place where we can support that in a situation where there's limited insurance.

You know, commercial vehicles though carry millions of dollars of insurance. And we feel like when there's that much money available, the public should be reimbursed for their costs. The other thing that we proposed was a sunset and a study with the Commission on Health and Safety and Workers Compensation.

Because the bill is largely proceeding on anecdote at this point and we think that a fuller examination of the data, the outcomes in these third party cases would be warranted for the Legislature to make permanent changes to the way this money flows in third party recoveries. And for those reasons, we urge your no vote today, but would be open to further conversations with the Senator.

Good morning, Madam Chair and Members. Faith Borges on behalf of the California Association of Joint Powers Authorities, which advocates for over 100 JPAs representing most counties and cities that self fund workers compensation claims for public employees.

CAJPA is respectfully opposed to SB 487, which would limit the ability of public agency employers to recover the cost of workers compensation benefits when a police officer or firefighter is injured due to the fault of a third party. First responders receive extensive protections under current law.

Presumptions for certain conditions, tax free full salary continuation for up to a year per injury, and generous tax free industrial disability retirement. All of these all of which far exceed what's available to other injured workers in California. And these are important benefits, but they come at a high cost.

It is not a minor fiscal change to limit the recouping of these taxpayer funded benefits from the responsible third party. As noted in the fiscal committee analysis and supported by our own internal review of local government data, this is a multimillion dollar constraint on local government dollars.

When another party causes the injury, the only avenue for public employers that they have to recover those taxpayer funded costs is through subrogation. SB 487 would severely restrict that ability without any data demonstrating the problem. This bill, though well intended, undermines a long standing balanced public policy.

We urge the Committee not to make the decision to increase public agency liability for incidents that it did not cause without a full clear need for the bill and consideration of the fiscal impacts on local government budgets. For these reasons, we respectfully ask for your no vote.

Is there additional opposition in the room? Please come forward.

Clifton Wilson on behalf of the County Board of Supervisors for Humboldt and Del Norte. Thank you. In opposition.

Good morning. Johnnie Pina with the League of California Cities in respectful opposition. Thank you.

Good morning. Julissa Ceja Cardenas with the California State Association of Counties and the California Association of Special Districts in opposition. Thank you.

Okay, I'm going to bring it back to the Committee. Do we have any questions or comments? Assemblywoman Rodriguez.

I just want to thank the author and ask to be added as a co-author, please.

Okay, Assemblyman Gipson.

Sure. For the opposition, what does one do if an officer is injured by a third person and is unable to work? What does a person do?

Well, workers compensation benefits would need to be provided immediately. Statutorily we're required to provide those benefits no matter what the situation. If it occurred in the course and scope of work, we're going to pay and that's why we try to seek recovery on the back end.

So in this case, we would pay 4850 benefits, full salary for a full year, and then we would switch to temporary disability benefits, which is two thirds of the average weekly wage for another year. And then after that, permanent disability, industrial disability retirement, those things would come into play.

So person is not able to work and all that runs out, not able to resume his or her full full duty.

Correct. They would be eligible for industrial disability retirement, which starts at 50% of your last wage and then goes up. I think it's 2% for every year of service.

Depending on if you have a long enough tenure of service.

Thank you so much for that question. Having served as critical response chaplain for a police agency since 2007, I have witnessed and I take offense that this is just an anecdotal bill. I have witnessed and spoke with many officers who have been injured, whether by third party or not.

And the workers comp claim may take years to get reimbursed. As a matter of fact, they go through all their sick time, they go through all their vacation time. Most likely they have to sue the agency that they're working for, the municipality to be able to even break into beginning the benefits.

And some of us that are exposed to emergency services know good and well that I'm telling the truth. So with that, this is about an injured party by a third party that has to literally go get their own attorney, file their own civil lawsuit. And when they get that payout, the county wants to come in or the municipality wants to come in and take that away from them and allow them no recovery for whether it be a future promotion that they would have qualified for or as you heard the witness of the testimony.

So with that, basically the injured officer or the injured firefighter goes without. And if they're blessed enough, their colleagues that are serving with them will donate sick time to help them get through. But many of them suffer and even some lose their homes over it.

The reason why I asked that question, I'm reminded of being on this Committee a long time when there was a previous insurance Chair. And when officers were off duty and there was a mass shooting in Las Vegas, Nevada, and there was a lot of California officers who sprung into action, and there was a lot of deaths that occurred.

And there was this misnomer that was told to a lot of officers, including myself, that you're an officer 24 hours a day, seven days a week. And that misnomer took, was in everyone's mind. And those officers who were from California sprung to action, saved a lot of lives.

They were injured within themselves, came to California, filed claims, a lot of injuries. California said that they were not in California, so they were not on duty, even though they were supposed to be police officers 24 hours a day, seven days a week, no matter you were in California or not. And they were denied claims. A lot of them were not able to return back to duty. And policy was brought before this Committee and we saw the need to, you know, to cover them, and rightfully so.

I think this is a good policy because I believe that, as you describe, we cannot afford those particular officers, those first responders, to not be covered. Because I think it's the right thing to do, even though it's a third party and those individuals are, in fact, at work. And I think they should be covered.

And I do see the need, even as this deputy has indicated, all the things you went through and still going through. Losing compensation, losing 50,000, and then also the inability to promote. You are still working and, you know, all those things you have to deal with financially moving forward. I think that we need to look at the policies and be able to support those individuals who serve us.

And I understand the impact on municipalities. I was a city council member for almost 10 years as well. That we need to protect those who serve our cities and our municipalities. So I will be voting for this and will ask that you consider me as being a joint author. Thank you.

Okay. Assemblyman Chen.

Thank you, Madam Chair. I appreciate your time. I just want to thank the Senator for bringing this bill forward. And I'm also a very proud co-author of this legislation. As elected officials, one of the most important groups that we want to have or at any July 4th parade, what have you.

And the praise is our heroes in law enforcement. Be it police, sheriff or firefighters. And I think not only in their use of force issues or in day to day jobs, but also when they have to be covered when it comes to injuries and liability. And I think this is an important step toward that direction.

And I want to thank our witness testimony for being here today, for your courage and bravery in and out of the Assembly floor, but also on your day to day life, to sharing your story with us. So if this bill hasn't been moved, I'd be honored to move it. And thank you so much for your time, Madam Chair.

Okay. Seeing no other questions or comments, would you like to close, Senator?

Thank you, Madam Chair. These are women and men, as I've already been pointed out, that put their lives on the line every day. Now would be a time for us in their crisis to be able to step up and have their backs and take care of them. With that, I respectfully ask for an aye vote.

Thank you. And I appreciate you bringing this bill forward. This is a good bill. And thank you, officer, for coming and sharing your story. We appreciate it. Secretary, please call the roll.

This is item number four, SB 487 by Senator Grayson. The motion is do pass to the Committee on Appropriations. [Roll Call]

Okay, we are going to leave that on call. Thank you.

Thank you so much. Thank you.

Okay, our next item is SB616. Senator Rubio, whenever you're ready, please come forward.

Good morning. Hello. I need them.

Okay. Welcome, Senator. Hello.

Hello. Good morning, everyone. You let me. When you're ready. Whenever you're ready. Okay. Well, thank you. Good morning everyone and thank you for allowing me to come before you today. I'm excited to present this bill, SB616.

This is an important bill that will take a crucial step towards fixing the state's insurance availability and affordability crisis here in our beautiful State of California. SB616 will create an independent community hardening Commission within the Department of Insurance.

The Commission will bring together state and local governments, experts and stakeholders that deal with this issue to create consistent, data driven recommendations to standards for state wide fire mitigation policies.

We know that effective fire mitigation is critically important to help improve availability and affordability of property insurance here in our state, which are the biggest issues that I hear over and over again, and I'm sure all of you do back home and in your communities.

We definitely need to take this step forward to help consumers better access insurance and make sure that we're safe. More importantly, currently work on community and home hardening is guided through a long array of state codes, regulations, departments, and we know that also nonprofit organizations have their standards.

So this bill is meant to break the silos and get everyone working together towards the same common goal. And that is to make our community safer and have good policies that will make insurance affordable and available again.

We need a collaborative approach and that is why this bill is so important to make sure that everyone comes to the table to to focus on fire science, construction, planning, insurance and emergency response disciplines. All of this is needed if we really want to tackle this issue.

And lastly, and equally important, in the event of future wildfires, as we've seen, they're no longer seasonal, they're year long, we happen to have another wildfire. This Bill also mandates that we do a post catastrophic report to ensure that we learn the important lessons from those incidents.

To ensure that we learn those deficiencies not only from our communities, but also building and be able to be better prepared in the future to have real tangible recommendations that we can work off of.

And I have met and worked with so many of the stakeholders and I know there's still concerns, but I've made every effort to address every single concern that will be before you.

And I remain committed to continue the collaboration with all stakeholders as the Bill moves forward, as this issue is so important to all our families and our communities. And with that I would like to invite my witness here with me, Joseph Finn Figueroa from Deputy Commissioner Lattice Office to present.

Thank you. Good morning, Madam Chair, Members of the Committee, Josephine Figueroa, Deputy Commissioner and Legislative Director for the Department of Insurance under the leadership of Insurance Commissioner Ricardo Lara. Also with me today is Amanda Jimenez from our Climate and Sustainability Branch to assist with any technical questions you may have. As a proud sponsor of SB616.

Insurance Commissioner Lara would like to thank Senators Rubio, Cortes and Stern for authoring this important measure, SB616 represents an important step forward in our fight to protect communities from the kinds of devastating wildfires that have impacted many parts of California.

This Bill creates an independent Commission within the Department with a single goal to align statewide efforts for community wildfire risk reduction and mitigation efforts. The growing threat and impact of more frequent, more destructive and more costly wildfires have left many Californians struggling to find or afford the insurance coverage they need.

When communities take collective mitigation action, they are more effectively protecting themselves. Even a few homes lacking effective mitigation can be the weak link in wildfire defense. That is why Insurance Commissioner Lara created the safer from wildfires regulations, the first in the nation mandatory insurance discount program recognizing community wide mitigation.

Without community mitigation, fire can more easily spread from structure to structure, a pattern we have seen over and over again. Firefighters and wildfire scientists know how to protect homes, but current laws spread mitigation efforts across multiple codes, multiple agencies. Property owners looking for clear guidance face a patchwork of complex, conflicting or incomplete requirements.

The Commission created by this bill would review existing hardening regulations and policies and recommend cost effective measures that improve insurability and reduce risk. It will also oversee the creation of guidelines towards a comprehensive wildfire data sharing platform, ensuring that all agencies across California could have the information they need to make informed decisions.

We cannot leave Californians navigate these complicated and sometimes contradicting guidelines and regulations on their own. SB616 allows rules and regulations to evolve to reflect today's reality. The Commission would work on proactive strategies to address emerging risks before they become a crisis. On behalf of Insurance Commissioner Ricardo Lara, I asked for your aye vote.

Just here for technical support.

Okay, great. Okay. Additional support in the room. Please come forward.

Clifton Wilson, on behalf of the Board of Supervisors for the counties of Mendocino, Nevada, Madera and Fresno, all in very strong support and thank you for authoring this important measure.

Good morning, Michelle [unintelligible] with Nielsen Merxmer on behalf of the County Board of Supervisors of Lake County in support.

Yes, Madam Chair Members, Jolene Dolores on behalf of the League California Cities in strong support.

Kim Stone Stone Advocacy on behalf of Consumer Watchdog in enthusiastic support.

Sean Bellack on behalf of the California Association of Realtors here in support.

Good morning, Madam Chair and Members, [unintelligible] Franco here on behalf of the California Fire Chiefs Association and the Fire Districts Association of, California, we'd like to start by thanking the author, the Committee and staff for getting the bill to this point.

They currently have a supportive amended position, but are considering a change in position considering the amendments that Were just recently accepted. Thank you.

Thank you. Okay. Is there any lead opposition in the room? Please come forward.

Good morning, chair and Members. My name is Kylie Wright with the Association of California Water Agencies. ACWA represents approximately 470 public water agencies statewide. We respectfully have an opposing less amended position on SB616. Aqua appreciates our conversations with the author's office and their thoughtfulness in trying to address our concerns.

We recently had conversations about amendments that we believe would improve the bill. But ACWA would still have remaining concerns and remain requesting that community hardening standards relating to improvements to water infrastructure be struck from the bill. Public water agencies are tasked with providing public the public with safe and reliable drinking water.

These water systems were not designed to combat wildfires, especially the climate driven wildfires California experiences today.

There are concerns that the bill's proposed Commission with a focus on fire insurance and with the current lack of adequate representation from water agencies could create statewide best practices for water infrastructure improvements that are not aligned with water agencies objective of providing safe and reliable drinking water.

Public water agencies are the experts of their unique systems and they are the best entity for determining water infrastructure needs to best serve the communities they are accountable to. We have concerns that statewide recommendations would not reflect the complexities of our water systems and the vast diversity of conditions across our state.

Water agencies have additional considerations including maintaining water quality, financial constraints and operational realities. There are significant concerns that if water agencies fail to adhere to these best practices developed by the state, there would be a potential increased risk to litigation following a wildfire event.

Costs from potential litigation would ultimately fall into rate pairs, resulting in water affordability concerns. Ultimately, ACWA does not believe that this Commission under the Department of Insurance is the right body to be making recommendation regarding California's water infrastructure and that these statewide recommendations would not be applicable to each water system.

For these reasons and without the requested amendment to remove water infrastructure from the bill, we ask the Committee today to vote no. Thank you.

Thank you. Is there any additional opposition in the room? Please come forward.

Madam Chair, Bob Reeb with Reeb Government Relations on behalf of Desert Water Agency, which is a member of the Association of California Water Agencies and the California Special Districts Association opposed unless amended.

Thank you. Okay, I'm going to bring you back to the Committee. Do we have any questions or comments for. Thank you. Okay. Senator, would you like to close?

Yes, thank you. And I just want to acknowledge the comments of the opposition.

And we've been having a lot of conversations and I think that we've done our due diligence of really engaging and, you know, they wanted a seat at the table and which is something that we offered to consider, but they would still remain opposed to that.

And so at this point, we'll continue the conversation, but I think that water is a critical component of solving this issue. We can have a conversation about wildfires without the water conversation, but there are no mandates to the Bill on water infrastructure, which is what has been stated. We just want to make recommendations.

And as we know, we can no longer sit back and watch our communities burn down. We know that these occurrences are happening year round and. And our communities need us. They need us to step up and create really cohesive policies with everyone at the table. So I want to thank Madam Chair for allowing me to present.

But it's time that we stabilize the insurance market and make sure it's affordable and available for our communities. Thank you. And with that, as for an. I vote.

[Roll call]

Okay, we will leave that on call for absent Members. Thank you, Senator.

I believe I'm going to be presenting the next Bill, so I'm just waiting for the materials. Wonderful.

Thank you. SP547.

Yes. So I'm just going to sit aside and wait for them to. Materials. I believe that the author is stuck in Committee, so I will be presenting.

Thank you so much. Appreciate that.

We go ahead and add on. Secretary, please call the roll.

[Roll Call]

Thank you. Senator Rubio, whenever you're ready, you can present SB 547, which I believe you are a co author. Joint author. Sorry.

Okay. All right.

How generous. Thank you. Thank you. Madam, should I. Oh, sorry. Well, thank you so much. I'll make it quick.

I'm happy to be a co author to this Bill, SB547 by Senator Perez, which extends the prohibition to commercial property insurance for an insurer from counseling or refusing to renew a residential property insurance policy for one year from the declaration of a state emergency.

If the residential property is located within the perimeter of a wildfire or in an adjacent zip code. And the reason we needed to bring this forward is that we know that we have a reprieve for homeowners, but businesses are also being left out. And so I'm happy to co author this Bill and for the chair.

We will be accepting the amendments from the Committee and I will pass it on to our lead witness in support, if I may.

Good morning, Madam Chair, Members of the Committee, Josephine Figueroa, Deputy Commissioner and Legislative Director for the Department of Insurance under the leadership of Insurance Commissioner Ricardo Lara. With me today also is Damon Dieterich, the Department's Privacy Office, to assist with any technical questions you may have.

As a proud sponsor of SB 547 Insurance Commission, I would like to thank Senators Perez and Rubio for their partnership in authoring this important wildfire measure.

SB547 would, similar to existing residential insurance moratorium law, provide a moratorium for commercial insurance entities from being non renewed or cancelled from the commercial insurance insurer for a one year following an emergency declaration. The expanded protections will safeguard commercial entities such as HOAs, condos, affordable housing units, small businesses, nonprofits, food banks and other essential commercial entities.

The Department continues to receive requests for guidance on navigating wildfire recovery, including the question, does this moratorium protect me? It is a concern we hear from homeowners, small businesses and nonprofits and essential services providers alike. People working hard to stay connected to their communities. Excuse me, during recovery.

But many are also facing the added strain and uncertainty of possibly losing their insurance coverage. Since 2018, the Department has issued 36 residential moratoriums covering more than 4.4 million policyholders impacted by over 110 fires, giving families and homeowners the time and support they need to recover.

And now, as wildfires increasingly devastate entire communities, the same vital protections must be extended to commercial policyholders. SB547 provides support to commercial policyholders. When stability matters most, it's important protecting the businesses and organizations that keep our communities running.

To truly support recovery, we have to do everything we can to sustain local economies, preserve livelihoods and prevent the added burden of sudden insurance cancellation. SB 547 is a practical step towards ensuring that recovery is possible for all, not just for homeowners, but for every member of our community.

On behalf of Insurance Commissioner Ricardo Lara, I ask for your aye vote.

Thank you. Just technical. Okay. Additional witnesses and support, please come forward.

Thank you. Kim Stone, Stone Advocacy, on behalf of Consumer Watchdog in enthusiastic support.

Good morning. Kyra Ross, on behalf of the City of Glendale in support.

Michelle Rubalcava on behalf of the Lake County Board of Supervisors in support.

Clifton Wilson, on behalf of the Board of Supervisors for the counties of Madera, Fresno and Mendocino. All in support. Thank you.

Sean Bellach, on behalf of the California Association of Realtors here in support.

Good morning. Louis Brown, on behalf of the Community Associations Institute in support.

Mayra Baena with the Mesa Verde Group on behalf of the Consumer Federation of California in support.

Elise Borth on behalf of the California Community Foundation in strong support.

Do we have any opposition in the room? Lead opposition, please come forward.

Members of the Committee. Denny Ritter here on behalf of the American Property Casualty Insurance Association. We are here to remove our opposition and thank the Committee greatly for. And the author and the sponsors as well, for all of their work. We do remain concerned that proposals like this have unintended consequences.

But we greatly appreciate the narrowing of this Bill and do commit to continued conversations with the Committee and sponsors in the years that follow to assess the implications of this. Thank you.

Good morning. Sherry Mchugh, representing the Pacific Association of Domestic Insurance Companies. We too would like to thank the Committee, the author and the sponsor for working with us. And we're pleased to remove our opposition to the Bill. Thank you.

Good morning, Allison Adey on behalf of the Personal Insurance Federation of California as well as the National Association of Mutual Insurance Companies, aligning our comments with our. Our colleagues from APCA and Paddock, also removing our opposition. Thank you.

Thank you. Okay, I'm going to bring it back to the Committee. Any questions or comments? Okay, we have. We've already got a motion in. Second secret. Senator, would you like to close?

Yes. Thank you. As we know cancellations happen more and more often these days, and I think extending this vital protection for commercial buildings is. And businesses is vital. So thank you for that. And with that, I ask for your aye vote.

Thank you. Okay. Secretary, please call the roll.

[Roll Call]

That's out, and we'll leave it on call. Thank you. Okay, now we're just waiting for Senator Allen. If his staff is watching, if you could please have him come to the Insurance Committee, that would be great. Ah, there you are. Welcome. That was right on time, Senator.

Excellent.

All right.

Whoops. Oh, my God. Sorry. Here, come and sit here. Sorry.

All right. Yeah.

All right. There you go. Yeah. Well, you had some long ones today. Yeah. Whenever you're ready. All right. So. So this bill's all about. We're trying to help folks with EVs.

We know that one of the major barriers is folks living in multifamily renters, et cetera, and we're just trying to take away a barrier that has impacted the ability of folks to charge in their HOAs.

I authored a bill back in 2018, SB 1016, to remove many of the burdensome policies that prevented the installation of EV chargers and HOAs. But the bill did not remove this requirement about the homeowner obtaining an insurance policy that names the HOA as an additional insured. And that has basically made our earlier bill much less effective.

So we've had situations you're going to hear about today. Consumers trying to contact a dozen insurance agents without finding any that would provide a policy that names the HOA as an additional insured, and others have been told their premiums could increase dramatically.

And so we're just concerned if we don't pass something like this, that HOA residents will be prevented from installing chargers and discouraged from making the switch to an ev. So we have Charlie Terrier, who's here, he's an HOA resident from the Bay Area, and Brandon Wong from CalStart here to speak in support of the bill.

My turn.

Okay.

Hi, my name is Charlie Carriera, and I'm a public servant and co-op owner living in San Francisco. I encourage you to vote yes on SB 770 because the current rule requiring an Association to be listed as additional insured makes installing EV chargers both difficult and costly for Californians.

I reached out to the supporters of this b ill because of my own frustrating experience trying to comply with existing law. This year I have tried to install an EV charger in my parking space. I attempted to get my Association or my Association listed as additional insured through my current provider, Geico Assurant.

But their website stated prominently that associations are, quote, never listed as additional insured. A call to my insurer confirmed this. After asking around our Association, no one could identify an insurer that was offering the type of policy that I needed. Instead, I was referred to insurance brokers.

The first broker I spoke to said that that to secure a policy with the required language, it would cost three times my current policy. I ultimately secured an inferior policy at greater costs from a different broker.

My new policy costs 60% more than my current policy, almost $500 more per year, and has a deductible that is five times my old deductible, with one fifth the amount of dwelling coverage that I had previously.

At a time when sustainable energy is under attack at the federal level and California politicians are rightly focused on cost of living, now is the time to remove a confusing and expensive obstacle to installing EV chargers. Please vote yes on SB770. Thank you.

Thank you. Go ahead.

Good morning, Madam Chair. Brandon Wong, on behalf of Cal Startup Pasadena Based, a global nonprofit dedicated to the growth of the clean transportation industry. Like as Senator mentioned, this bill at its core is pretty simple in that we really see the insurance dilemma at the heart of SB770 as one of these unforced, unintentional barriers.

For a lot of homeowners who are seeking condos and townhouses, other common interest developments, as a more affordable housing option, they just want to be able to count that they can charge at home.

And so, according to the California Energy Commission, at home charging, whether it's in a single family residence or in a multi family building, is going to account for about 75% of all of our charging needs over the next decade.

And so we do anticipate about a third of every new charger that needs to be built in California needs to be in a multifamily building. And not all of that is going to be at public expense, essentially. Right.

And so individual homeowners, as they buy their new ev, are really encountering these types of struggles as they're trying to charge at home. And we know at home charging is both Cheaper to install. So we're able to get to our climate goals a lot faster and a lot cheaper.

And it's also cheaper for the driver because they're able to charge during off peak hours, which can oftentimes be cheaper than public fast charging. And so we've gotten a lot of public feedback through our own inboxes. And I understand the Senator has as well in terms of individual homeowners encountering this issue.

So for these reasons, we urge you for your support. Thank you.

Thank you. Is there additional support in the room? Please come forward.

Good morning, Madam Chair and Members, [unintelligible] here on behalf of the California Electric Transportation Coalition in support.

Thank you. Do we have lead opposition in the room? Please come forward.

Morning, Madam Chair. Members of the Committee, Louis Brown here today on behalf of the Community Associations Institute in opposition to the bill. We're not in opposition to electric vehicles or electric vehicle chargers.

In fact, the law has been in place since 2009 allowing for a Member of the Association to have access to the community property, community property, meaning owned by everybody, to install a charger. They do not need permission from the Association to do that. All we need is that certificate of additional insured.

This has been in place since 2009. In 2018, we came and we deleted the $1 million policy requirement because that was the issue. Now the issue is the certificate of additional insured. I beg to differ. The issue is insurance.

And what you've heard today about this one individual's experience is what we're afraid is going to happen to associations all around the state. There are 55,000 associations in the state, 60% of them condominiums. When that premium increase is transferred from that individual who purchased an ev, it just doesn't go away. The entire Association bears that cost.

We've seen associations around the state have 100 and 200 and 300% increases in their premiums. They've been canceled. They've been renewed. I just testified in support of a bill put in a moratorium on cancellations because the issue is so dire for community associations.

And so an individual who's making an individual choice to buy an EV and put it on community property, all we're asking for them to do is to cover the insurance.

If they don't do it, then we just know that when we go back and we show our insurance provider the following year that we now have 123 electric vehicle chargers on our property, that's going to come back to our Association premiums. And then the only way we cover those are increasing assessments or Special assessments.

So this is about housing affordability. This is not about electric vehicle chargers. This is, this is about the insurance crisis this state is facing. This is not about electric vehicle chargers. We've tried to find common ground with the Senator on this issue. We've not been able to do that.

I've requested him to make it a two year bill so we can continue to work on that. We've not reached agreement on that. We are concerned that this bill passes, you will see increases in insurance premiums to your condominium associations in every one of your districts.

And because of that risk, we remain in opposition and ask you to vote no today.

Okay, thank you. Is there additional opposition in the room? Please come forward. Okay. Seeing none. I'm going to bring it back to the Committee for questions.

Thank you, Madam Chair. Thank you to the author, thank you to the testifying witnesses and the opposition. We saw this in Judiciary. We've had conversations. I think that there are, there are some valid concerns from the opposition.

From the standpoint of who pays for this risk and to the extent that insurance is going to go up for someone, whether it's the person who's using the charger versus the Association as a whole, the question that we have to grapple with is who, who should bear that cost?

And I guess I would just like for you to respond to that because I think that we've now talked about this through two committees. I think it's a valid concern because this is just about economic rationality. Who should have to pay?

Should it be all of the residents or should it just be the one resident that's actually benefiting from the chargers? So I don't think that's an unfair question.

It's not an unfair question. I mean, I think the challenge here is, I think the hope on our side is that what we're asking for here is such a low risk activity to be insured. So certainly I would be terrible if what, the way that Louis has described the outcome would actually come to fruition.

It's hard for me to believe it because of how low risk this technology is. When the insurance requirements were first discussed years and years ago, we had so little experience with chargers and we just didn't know. But there haven't. These are not internal. They don't spontaneously combust.

The worst scenario that we've heard is maybe someone leaves the line out and someone trips over it. I mean, that's something that can happen with anything in a shared parking space. So it's my fervent hope here that this is just going to be a relatively easy add on once we create more maturity in the market.

And that's what I'm seeking to push here. I totally understand and respect Louis position here, and it's painful that we're, you know, and I guess the flip side argument is, well, should we all, should we then require this to be a product on the insurance side? We've had those conversations. I know that's probably your position.

Obviously, the insurance folks push back. So I don't have a. I recognize this is an imperfect solution. We're trying to make it so that folks living in HOAs can get an EV and charge it at their house. And this has become a barrier. I know it potentially puts a burden on the HOAs. I hope it doesn't.

And if folks have ideas about ways to hone this so as to mitigate risk further, I'm so open to that. He's defending his folks and I respect him for it.

It's hard for me to believe that this is going to be anywhere near as bad as has been described, given how low the risk is associated with the installation of these chargers. But I don't discount the possibilities that have been raised by my friend Mr. Brown. And I know you're the insurance Committee.

You have expertise in this area. If you've got ideas as to how to better hone. I'm so open to those ideas.

May I? Thank you, Madam Chair. I appreciate that. And just how thoughtful you always are with your bills, including this one. I think the concern is obviously your testifying witness what he went through and just how much he had to pay for this limited policy. I would agree with you. This does not seem like a huge risk.

However, I'm going to use that testimony and I'm going to believe him. It was in the market. Quite a big difference in his insurance policy. So it's hard for me to believe that the HOAs policies are, will not be affected. I'm not sure where the insurance. They were sitting here all day.

I'm not sure if anyone's here, but I would have loved to have heard from them as to what they think is going to happen in the market.

I'm going to support it out of Committee today, Senator Allen, and I do think that this is a real, this is a real issue that I hope you guys can land the plane with the insurance companies because to the extent that one individual is going through this, I think the HOA are going to go through it too.

And I think it's something we should be cognizant of so appreciate you considering that and I will move the bill and support it today but it is an issue.

Yeah, I mean my hope here and maybe this is terribly naive, I don't know but this is going to be kind of like maybe I'll regret bringing this up but like solar, right. I mean solar was incredibly expensive.

We put in place systems to decrease the cost and over time it scaled and people were able to purchase it that if we, if we push the envelope here it will just become like a no brainer add on that will you know add minimal costs onto the. Under the policies.

But I totally listen, I understand that it's a, it's a. It puts our friends from the HOA community in a nervous place because there's no guarantee. Again we're trying to create a scenario which will lead to more affordable, more workable adoption of EVs. We know that the installation of these chargers produces minimal really De minimis risk.

I mean this technology has been out there for years now. But if there are folks from the industry that want to speak, we certainly had conversations with them. We all talked to them together who want to speak to this issue. I welcome them to the microphone.

Assembly Woman Nguyen.

Thank you Madam Chair. And thank you Assemblymember Harabedian. Because I was going to ask the same question and I feel like the question wasn't answered because I'm not quite sure still who's going to bear this cost. And then I also want to know was this an issue in Judish and it didn't get resolved and now it's carrying over to here.

It sounds like it was and it's still an issue. And have there been amendments that were sent? I hear you, Senator. Folks have ideas but this should have been happening before it came to us to talk about any.

Of course we've been discussing it. We have. I mean quite frankly there hasn't been a. You know, I think. Of course we've been discussing it. We just have. We. I think that there's a. I think that, you know, Mr. Brown is.

His job is to look out for worst case scenarios for his clients and has been correctly bringing those. Those concerns to the fore. It's our position that what we're asking for here is reasonable that it's not going to lead to the kinds of increases that he's worried about.

From my perspective, that position makes sense because of the low risk associated with this technology and the long track record of use of this technology with no incidents that we can point to that would lead to the need for high cost associated with insurance.

I think what's happened here is that there's, it's just not a, it's a nascent market and the question of HOA residents and the insurance industry is just not come forward with a product yet. Yeah, yeah, please. Yeah.

So just, just to be clear, my costs did not increase because I proposed to install an EV charger. They increased because I had to find a bespoke insurer that would add my HOA as additional insured. So, so just the insurer had no idea that I was planning to install an EV charger.

So to, to, to tie my costs to, to the fact that I was installing an EV charger is not accurate. It had to do with this requirement that an insurer like Geico and Assurant, a major insurer had no like just said they wouldn't do. Just want to make that clear.

Madam Chair. Mayor.

Yes.

A couple issues is first the question of who does pay for this? If you're an Association of 100 Association Members and one person gets an EV charger, now all 100 are paying for those potential increases in insurance, not just the one. That's the way the Association world works.

We have communicated with three of the major carriers in the state, State Farm, Travelers and AAA, who all provide these certificates when asked. On the commercial side, certificates of additional insured are just part of doing business.

If you're a landscaper, if you're doing a construction job on Association before you get the contract, you provide a certificate of additional insured. This is something that happens in the insurance industry all the time. And so again, it happens in various cases. If it's not happening in this space, then we question why.

And until we understand why and we can be assured that those cost increases aren't going to be borne by everybody else in the Association, those who don't have an EV, then we don't want to assume the risk. And I don't think that's unfair. Just a point. Sorry.

Go ahead. When I looked into getting insurance, State Farm and AAA will not write policies in San Francisco.

Okay.

Thank you. I have a lot of concerns. I appreciate your thoughtfulness about how safe the technology is. My concern is I live in a very fire prone area. So it's not necessarily the cost, the risk that that technology has, it's the risk of replacing it. For those natural disasters, floods, fires, we have everything in my district.

Have you talked to insurers about that or the potential cost for, I mean my, my people are getting canceled right and left and their policies have gone up 3-400%. Yeah, they cannot afford another take. And honestly, if one person came with an EV in the HOA, I'm going to hear about it every day.

If they all have to pay for that because of this bill.

The reason why, I mean I'm in a fire prone area too. Right. I represent the Palisades. Let's be real clear. The reason why our constituents are having trouble getting insurance has nothing to do with folks wanting to put EV chargers in HOA parking lots. It's all the risks that we talk about in this Committee every week.

So you know, again, both of both the analyses from judiciary and insurance have spoken to the low risk associated here. I think that, you know, the concerns are, I think Mr. Brown's doing his job in terms of raising the concerns.

But again, the risk associated with this particular ask in this bill is not the cost driver, it's not the availability driver that, that you're speaking to.

But then that insurance company is going to have to replace that. So if we let them put it in, the insurance company itself is going to have to replace that. If we have a wildfire there or a flood. Right. So the damages, no matter what, it's going to be expensive to replace it.

So that HOA is going to have that cost or the owner.

So the owner be the cost of replacing what they're replacing the unit.

The replacing. Yeah.

Like if what under what circumstances?

Like it burns up in a fire. So that's what they're ensuring. Right. Is that they can replace that.

I think they're mainly ensuring against people. Tripping on a cord. Well, tripping on cords and that could not replacing. I mean it's a liability certainly. Look, it's one of a set of assets that are in a building.

You know, I gosh, it hasn't come up that this is a, that the cost drivers associated with the whole building burning down and then it adds an additional cost associated with the destruction of that unit. It's been more trip and fall type concerns.

But is that clear in your bill that it's not going to affect that like replacement value or replacement of whatever technology is in there?

You know, I mean, look, if that's the concern, I think we could put in some language about replacement value because at the end of the day that's such an unlikely scenario. I mean, you know, not in my district. Well, sadly.

Look, from my perspective, I'm just trying to make it easier for folks to feel good about adopting EVs living in HOAs. So. If there's a way we can write the language so that it would only be for the kinds of concerns that have come up in our previous discussions, trip and fall situations, I'm happy to do that.

I would love to work with you on that. I am very concerned. I think this is a personal choice you make to make that purchase. I have a personal choice that we run a pumpkin patch, we buy additional policies for that. That's a personal choice. So I won't be able to support the bill today. But thank you.

Just real quick. I think I moved the bill earlier and I think that I have confidence enough in the Senator and the author of the intent of the bill that he will continue to work with the opposition from moving the bill out of Committee. I believe there's enough dialogue that have taken place.

He has heard the concerns and I have confidence enough to believe that when this bill, I think this bill will probably from here go to appropriation to the floor. Okay, we'll see it again. And I believe that he will again continue to have dialogue to meet the concerns of the opposition.

I think his work here has certainly shown that. And I believe that because of the witness who's brought this, because he has certainly demonstrated there is certainly an issue that I believe that if he's having an issue that other people is having an issue.

I believe that regardless there will be some costs associated, whether it's the HOA or the homeowners Association will occur. It still seems like it's going to be a limited burden on someone and hopefully that through it all it would work out through the process. So I just wanted to make mention of that.

That goes to the author of the bill, Assemblywoman Krell.

Thank you so much, Madam Chair. I will keep this quick. I am prepared to vote for this b ill today, but I share my colleagues concerns about it. I'm especially concerned about the impact that this will have on homeowners.

And it remains unclear to me how the costs will be shared and who will end up having the burden and what that burden looks like.

So I reserve to not vote for it on the floor just based on further research that I do and hopefully further dialogue that we have and potential amendments like those that my colleagues here have discussed. But thanks so much for your work on it, Senator.

Appreciate it. Thank you. Thank you. And would you mind if our witness were just to answer one issue related to Mr. Chadwick's concerns?

Thank you. So with respect to the concern about replacement cost if this bill passes, I'm still required to maintain my own policy, which I would bring a claim against if there were a fire that resulted in the destruction of that charger. So it's still covered, and it's ultimately my property.

So even if I didn't have a policy which will still legally be required under the law, I would have to. I mean, it would be my expectation to replace it because it's my property.

Right. So we could explicitly write into whatever insured requirements for the HOA that there wouldn't be a replacement responsibility to lower the cost, lower the liability. I mean, that'd be helpful. Right?

All right.

You think it wouldn't be like.

Okay. Well, Senator, before you close, thank you.

I appreciate the questions and comments from my colleagues, and I just encourage you to please continue working with Mr. Brown and the opposition through this, because I think everybody on this dice, and I know you in this space, the last thing we want to see is unintended consequences to HOA Members, and we've seen their rates skyrocket over the last few years.

And I know that's not your intent. You're trying to help with the EV issue. And so I just encourage you to please keep working with the opposition as this moves forward.

Okay.

Would you like to close?

Yeah. I mean, just remember these are. These are situations where folks are in shared parking. That's why we have to be here in this conversation right now. As opposed to individualized garages in those places where individual garages. It's all clearly in the hands of the, of the, of the resident.

And so we're just trying to come up with a. I mean, it's a clunky. It's a clunky situation in terms of the rules and the, and the, and the access. So I appreciate the. The opportunity to continue to work on this, and I'm very hopeful that we'll be able to get a little closer.

I think your suggestion's not a bad one in terms of, you know, whatever we can do to reduce the costs, the potential costs associated with this coverage. I'm all about.

I mean, because in the end of the day, all this is about for me is making sure that, you know, folks like Charlie can, you know, who live in an HOA with shared parking can get an ev. That's the sign that's the guiding star here.