The people of the State of California do enact as follows:

SECTION 1.
Section 1374.21 of the Health and Safety Code is amended to read:
1374.21.
(a) (1) A change in premium rates or changes in coverage stated in a group health care service plan contract shall not become effective unless the plan has delivered in writing a notice indicating the change or changes at least 60 days prior to the contract renewal effective date.
(2) The notice delivered pursuant to paragraph (1) for large group health plans shall also include the following information:
(A) Whether the rate proposed to be in effect is greater than the average rate increase for individual market products negotiated by the California Health Benefit Exchange for the most recent calendar year for which the rates are final.
(B) Whether the rate proposed to be in effect is greater than the average rate increase negotiated by the Board of Administration of the Public Employees’ Retirement System for the most recent calendar year for which the rates are final.
(C) Whether the rate change includes any portion of the excise tax paid by the health plan.
(b) A health care service plan that declines to offer coverage to or denies enrollment for a large group applying for coverage shall, at the time of the denial of coverage, provide the applicant with the specific reason or reasons for the decision in writing, in clear, easily understandable language.
SEC. 2.
Section 1385.045 is added to the Health and Safety Code, to read:
1385.045.
(a) For large group health care service plan contracts, each health plan shall file with the department the weighted average rate increase for all large group benefit designs during the 12-month period ending January 1 of the following calendar year. The average shall be weighted by the number of enrollees in each large group benefit design in the plan’s large group market and adjusted to the most commonly sold large group benefit design by enrollment during the 12-month period. For the purposes of this section, the large group benefit design includes, but is not limited to, benefits such as basic health care services and prescription drugs. The large group benefit design shall not include cost sharing, including, but not limited to, deductibles, copays, and coinsurance.
(b) (1) A plan shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(2) The department shall conduct an annual public meeting regarding large group rates within three months of posting the aggregate information described in this section in order to permit a public discussion of the reasons for the changes in the rates, benefits, and cost sharing in the large group market. The meeting shall be held in either the Los Angeles area or the San Francisco Bay area.
(c) A health care service plan subject to subdivision (a) shall also disclose the following for the aggregate rate information for the large group market submitted under this section:
(1) For rates effective during the 12-month period ending January 1 of the following year, number and percentage of rate changes reviewed by the following:
(A) Plan year.
(B) Segment type, including whether the rate is community rated, in whole or in part.
(C) Product type.
(D) Number of enrollees.
(E) The number of products sold that have materially different benefits, cost sharing, or other elements of benefit design.
(2) For rates effective during the 12-month period ending January 1 of the following year, any factors affecting the base rate, and the actuarial basis for those factors, including all of the following:
(A) Geographic region.
(B) Age, including age rating factors.
(C) Occupation.
(D) Industry.
(E) Health status factors, including, but not limited to, experience and utilization.
(F) Employee, and employee and dependents, including a description of the family composition used.
(G) Enrollees’ share of premiums.
(H) Enrollees’ cost sharing.
(I) Covered benefits in addition to basic health care services, as defined in Section 1345, and other benefits mandated under this article.
(J) Which market segment, if any, is fully experience rated and which market segment, if any, is in part experience rated and in part community rated.
(K) Any other factor that affects the rate that is not otherwise specified.
(3) (A) The plan’s overall annual medical trend factor assumptions for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology for the applicable 12-month period ending January 1 of the following year. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories, to the maximum extent possible, that are the same as, or similar to, those used by other plans.
(B) The amount of the projected trend separately attributable to the use of services, price inflation, and fees and risk for annual plan contract trends by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A health plan that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the enrollees of the plan shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other plans.
(C) A comparison of the aggregate per enrollee per month costs and rate of changes over the last five years for each of the following:
(i) Premiums.
(ii) Claims costs, if any.
(iii) Administrative expenses.
(iv) Taxes and fees.
(D) Any changes in enrollee cost sharing over the prior year associated with the submitted rate information, including both of the following:
(i) Actual copays, coinsurance, deductibles, annual out of pocket maximums, and any other cost sharing by the benefit categories determined by the department.
(ii) Any aggregate changes in enrollee cost sharing over the prior years as measured by the weighted average actuarial value, weighted by the number of enrollees.
(E) Any changes in enrollee benefits over the prior year, including a description of benefits added or eliminated, as well as any aggregate changes, as measured as a percentage of the aggregate claims costs, listed by the categories determined by the department.
(F) Any cost containment and quality improvement efforts since the plan’s prior year’s information pursuant to this section for the same category of health benefit plan. To the extent possible, the plan shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(G) The number of products covered by the information that incurred the excise tax paid by the health plan.
(d) The information required pursuant to this section shall be submitted to the department on or before October 1, 2016, and on or before October 1 annually thereafter. Information submitted pursuant to this section is subject to Section 1385.07.
SEC. 3.
Section 10181.45 is added to the Insurance Code, to read:
10181.45.
(a) For large group health insurance policies, each health insurer shall file with the department the weighted average rate increase for all large group benefit designs during the 12-month period ending January 1 of the following calendar year. The average shall be weighted by the number of insureds in each large group benefit design in the insurer’s large group market and adjusted to the most commonly sold large group benefit design by enrollment during the 12-month period. For the purposes of this section, the large group benefit design includes, but is not limited to, benefits such as basic health care services and prescription drugs. The large group benefit design shall not include cost sharing, including, but not limited to, deductibles, copays, and coinsurance.
(b) (1) A health insurer shall also submit any other information required pursuant to any regulation adopted by the department to comply with this article.
(2) The department shall conduct an annual public meeting regarding large group rates within three months of posting the aggregate information described in this section in order to permit a public discussion of the reasons for the changes in the rates, benefits, and cost sharing in the large group market. The meeting shall be held in either the Los Angeles area or the San Francisco Bay area.
(c) A health insurer subject to subdivision (a) shall also disclose the following for the aggregate rate information for the large group market submitted under this section:
(1) For rates effective during the 12-month period ending January 1 of the following year, number and percentage of rate changes reviewed by the following:
(A) Plan year.
(B) Segment type, including whether the rate is community rated, in whole or in part.
(C) Product type.
(D) Number of insureds.
(E) The number of products sold that have materially different benefits, cost sharing, or other elements of benefit design.
(2) For rates effective during the 12-month period ending January 1 of the following year, any factors affecting the base rate, and the actuarial basis for those factors, including all of the following:
(A) Geographic region.
(B) Age, including age rating factors.
(C) Occupation.
(D) Industry.
(E) Health status factors, including, but not limited to, experience and utilization.
(F) Employee, and employee and dependents, including a description of the family composition used.
(G) Insureds’ share of premiums.
(H) Insureds’ cost sharing.
(I) Covered benefits in addition to basic health care services, as defined in Section 1345 of the Health and Safety Code, and other benefits mandated under this article.
(J) Which market segment, if any, is fully experience rated and which market segment, if any, is in part experience rated and in part community rated.
(K) Any other factor that affects the rate that is not otherwise specified.
(3) (A) The insurer’s overall annual medical trend factor assumptions for all benefits and by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology for the applicable 12-month period ending January 1 of the following year. A health insurer that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the health insurer’s insureds shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories, to the maximum extent possible, that are the same or similar to those used by other insurers.
(B) The amount of the projected trend separately attributable to the use of services, price inflation, and fees and risk for annual policy trends by aggregate benefit category, including hospital inpatient, hospital outpatient, physician services, prescription drugs and other ancillary services, laboratory, and radiology. A health insurer that exclusively contracts with no more than two medical groups in the state to provide or arrange for professional medical services for the insureds shall instead disclose the amount of its actual trend experience for the prior contract year by aggregate benefit category, using benefit categories that are, to the maximum extent possible, the same or similar to those used by other insurers.
(C) A comparison of the aggregate per insured per month costs and rate of changes over the last five years for each of the following:
(i) Premiums.
(ii) Claims costs, if any.
(iii) Administrative expenses.
(iv) Taxes and fees.
(D) Any changes in insured cost sharing over the prior year associated with the submitted rate information, including both of the following:
(i) Actual copays, coinsurance, deductibles, annual out of pocket maximums, and any other cost sharing by the benefit categories determined by the department.
(ii) Any aggregate changes in insured cost sharing over the prior years as measured by the weighted average actuarial value, weighted by the number of insureds.
(E) Any changes in insured benefits over the prior year, including a description of benefits added or eliminated as well as any aggregate changes as measured as a percentage of the aggregate claims costs, listed by the categories determined by the department.
(F) Any cost containment and quality improvement efforts made since the insurer’s prior year’s information pursuant to this section for the same category of health insurer. To the extent possible, the insurer shall describe any significant new health care cost containment and quality improvement efforts and provide an estimate of potential savings together with an estimated cost or savings for the projection period.
(G) The number of products covered by the information that incurred the excise tax paid by the health insurer.
(d) The information required pursuant to this section shall be submitted to the department on or before October 1, 2016, and on or before October 1 annually thereafter. Information submitted pursuant to this section is subject to Section 10181.7.
SEC. 4.
Section 10199.1 of the Insurance Code is amended to read:
10199.1.
(a) (1) An insurer or nonprofit hospital service plan or administrator acting on its behalf shall not terminate a group master policy or contract providing hospital, medical, or surgical benefits, increase premiums or charges therefor, reduce or eliminate benefits thereunder, or restrict eligibility for coverage thereunder without providing prior notice of that action. The action shall not become effective unless written notice of the action was delivered by mail to the last known address of the appropriate insurance producer and the appropriate administrator, if any, at least 45 days prior to the effective date of the action and to the last known address of the group policyholder or group contractholder at least 60 days prior to the effective date of the action. If nonemployee certificate holders or employees of more than one employer are covered under the policy or contract, written notice shall also be delivered by mail to the last known address of each nonemployee certificate holder or affected employer or, if the action does not affect all employees and dependents of one or more employers, to the last known address of each affected employee certificate holder, at least 60 days prior to the effective date of the action.
(2) The notice delivered pursuant to paragraph (1) for large group health insurance policies shall also include the following information:
(A) Whether the rate proposed to be in effect is greater than the average rate increase for individual market products negotiated by the California Health Benefit Exchange for the most recent calendar year for which the rates are final.
(B) Whether the rate proposed to be in effect is greater than the average rate increase negotiated by the Board of Administration of the Public Employees’ Retirement System for the most recent calendar year for which the rates are final.
(C) Whether the rate change includes any portion of the excise tax paid by the health insurer.
(b) A holder of a master group policy or a master group nonprofit hospital service plan contract or administrator acting on its behalf shall not terminate the coverage of, increase premiums or charges for, or reduce or eliminate benefits available to, or restrict eligibility for coverage of a covered person, employer unit, or class of certificate holders covered under the policy or contract for hospital, medical, or surgical benefits without first providing prior notice of the action. The action shall not become effective unless written notice was delivered by mail to the last known address of each affected nonemployee certificate holder or employer, or if the action does not affect all employees and dependents of one or more employers, to the last known address of each affected employee certificate holder, at least 60 days prior to the effective date of the action.
(c) A health insurer that declines to offer coverage to or denies enrollment for a large group applying for coverage shall, at the time of the denial of coverage, provide the applicant with the specific reason or reasons for the decision in writing, in clear, easily understandable language.
SEC. 5.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

Summary: Existing law, the federal Patient Protection and Affordable Care Act (PPACA), requires the United States Secretary of Health and Human Services to establish a process for the annual review of unreasonable increases in premiums for health insurance coverage in which health insurance issuers submit to the secretary and the relevant state a justification for an unreasonable premium increase prior to implementation of the increase. The PPACA imposes an excise tax on a provider of applicable employer-sponsored health care coverage, if the aggregate cost of that coverage provided to an employee exceeds a specified dollar limit. Existing state law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care and makes a willful violation of the act a crime. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires a health care service plan or health insurer in the individual, small group, or large group markets to file rate information with the Department of Managed Health Care or the Department of Insurance. For large group plan contracts and policies, existing law requires a plan or insurer to file rate information with the respective department at least 60 days prior to implementing an unreasonable rate increase, as defined in PPACA. Existing law requires the plan or insurer to also disclose specified aggregate data with that rate filing. Existing law authorizes the respective department to review those filings, to report to the Legislature at least quarterly on all unreasonable rate filings, and to post on its Internet Web site a decision that an unreasonable rate increase is not justified or that a rate filing contains inaccurate information. Existing law requires prior notice, as specified, of changes to premium rates or coverage in order for those changes to be effective. This bill would add to the existing rate information requirement to further require large group health care service plans and health insurers to file with the respective department the weighted average rate increase for all large group benefit designs during the 12-month period ending January 1 of the following calendar year. The bill would require the notice of changes to premium rates or coverage for large group health plans and insurance policies to provide additional information regarding whether the rate change is greater than average rate increases approved by the California Health Benefit Exchange or by the Board of Administration of the Public Employees’ Retirement System, or would be subject to the excise tax described above. The bill would require the plan or insurer to file additional aggregate rate information with the respective department on or before October 1, 2016, and annually thereafter. The bill would require the respective department to conduct a public meeting regarding large group rate changes. The bill would require these meetings to occur annually after the respective department has reviewed the large group rate information required to be submitted annually by the plan or insurer, as specified. The bill would authorize a health care service plan or health insurer that exclusively contracts with no more than 2 medical groups to provide or arrange for professional medical services for enrollees or insureds to meet this requirement by disclosing its actual trend experience for the prior year using benefit categories that are the same or similar to those used by other plans or health insurers. Because a willful violation of the bill’s requirements by a health care service plan would be a crime, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that no reimbursement is required by this act for a specified reason.

An act to amend Section 1374.21 of, and to add Section 1385.045 to, the Health and Safety Code, and to amend Section 10199.1 of, and to add Section 10181.45 to, the Insurance Code, relating to health care coverage.


The people of the State of California do enact as follows:

SECTION 1.
The Legislature finds and declares all of the following:
(a) The California Health and Human Services Agency consists of the following departments: the California Department of Aging, the Department of Community Services and Development, the State Department of Developmental Services, the State Department of Health Care Services, the Department of Managed Health Care, the State Department of Public Health, the Department of Rehabilitation, the State Department of Social Services, and the State Department of State Hospitals.
(b) The agency also includes the Emergency Medical Services Authority, the Office of Health Information Integrity, the Office of Patient Advocate, the Office of Statewide Health Planning and Development, the Office of Systems Integration, the Office of Law Enforcement Support, and the State Council on Developmental Disabilities.
(c) California baby boomers are turning 65 years of age at the highest rate in the nation, and over 20 percent of California’s population will be 65 years of age or older by 2030.
(d) Among persons 65 years of age and older, an estimated 70 percent will use long-term services and supports (LTSS).
(e) Persons who are 85 years of age or older are the fastest growing segment of the United States population, and they are four times more likely to need LTSS than persons who are 65 years of age or older, but younger than 85 years of age.
(f) People are living longer, and the aging population is increasingly diverse.
(g) A report by the Senate Select Committee on Aging and Long Term Care on January 5, 2015, called, “A Shattered System: Reforming Long-Term Care in California. Envisioning and Implementing an IDEAL Long-Term Care System in California,” found that the state’s system of 112 aging and long-term care programs administered by 20 agencies and departments is almost impossible for consumers to navigate.
(h) Other deficiencies of the system include the lack of person-centered care, poor transitions from hospital to home or to other institutions, limited access to a range of services that enable aging in place, deficiency of services and supports in rural areas, limited cultural competency, skilled workforce shortages across a range of disciplines, the lack of uniform data, the lack of a universal assessment tool, and limited caregiver supports.
SEC. 2.
Division 121 (commencing with Section 152000) is added to the Health and Safety Code, to read:
DIVISION 121. Aging and Long-Term Care Services, Supports, and Program Coordination
152000.
The Secretary of California Health and Human Services shall be responsible for all of the following:
(a) Inter- and intra-agency coordination of state aging and long-term care services, supports, and programs.
(b) Ensuring efficient and effective use of state funds.
(c) Maximizing the drawdown, and the efficient and effective use of federal funds.
152001.
There is hereby created a Statewide Aging and Long-Term Care Services Coordinating Council, chaired by the Secretary of California Health and Human Services, and consisting of the heads, or their designated representative, of all of the following:
(a) The California Department of Aging.
(b) The Department of Community Services and Development.
(c) The Department of Consumer Affairs.
(d) The Department of Food and Agriculture.
(e) The Department of Human Resources.
(f) The Department of Insurance.
(g) The Department of Justice.
(h) The Department of Motor Vehicles.
(i) The Department of Rehabilitation.
(j) The Department of Transportation.
(k) The Department of Veterans Affairs.
(l) The Emergency Medical Services Authority.
(m) The Employment Development Department.
(n) The Office of Health Information Integrity.
(o) The Office of Law Enforcement Support.
(p) The Office of Patient Advocate.
(q) The Office of Statewide Health Planning and Development.
(r) The Office of Systems Integration.
(s) The State Department of Developmental Services.
(t) The State Department of Health Care Services.
(u) The State Department of Public Health.
(v) The State Department of Social Services.
152002.
(a) The secretary shall lead the council in the development of a state aging and long-term care services strategic plan to address how the state will meet the needs of the aging population in the years 2020, 2025, and 2030. The strategic plan shall incorporate clear benchmarks and timelines for achieving the goals set forth in the strategic plan and a cost and benefit analysis for each goal or recommendation included in the plan. In developing the strategic plan, the council shall consult with all of the following:
(1) Experts, researchers, practitioners, service providers, and facility operators in the field of aging and long-term care.
(2) Consumer advocates and stakeholders, including the Olmstead Advisory Committee, the California Commission on Aging, area agencies on aging, the State Council on Developmental Disabilities, the California Foundation for Independent Living Centers, and the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy.
(3) Rural and urban communities, in order to identify infrastructure capacity issues, the need for uniform access standards for home and community-based services, and mechanisms for supporting coordination of regional and local service access and delivery.
(4) The California Task Force on Family Caregiving, the findings and recommendations of which shall be incorporated into the strategic plan.
(b) Technical support for the development of the strategic plan shall be provided by the Office of Health Equity in the State Department of Public Health and by the California Department of Aging.
(c) The strategic plan shall address all of the following:
(1) Integration and coordination of services that support independent living, aging in place, social and civic engagement, and preventive care.
(2) Long-term care financing.
(3) Managed care expansion and continuum of care.
(4) Advanced planning for end-of-life care.
(5) Elder justice.
(6) Care guidelines for Alzheimer’s disease, dementia, Amyotrophic Lateral Sclerosis (ALS), and other debilitating diseases.
(7) Caregiver support.
(8) Data collection, consolidation, uniformity, analysis, and access.
(9) Affordable housing.
(10) Mobility.
(11) Workforce.
(12) The alignment of state programs with the federal Administration for Community Living.
(13) The potential for integration and coordination of aging and long-term care services with services and supports for people with disabilities.
(d) In developing the strategic plan, the council shall examine model programs in various cities, counties, and states. The strategic plan shall consider how to scale up local, regional, and state-level best practices and innovations designed to overcome the challenges related to long-term care services delivery.
(e) Notwithstanding Section 10231.5 of the Government Code, the strategic plan shall be submitted to the Secretary of the Senate and the Chief Clerk of the Assembly, to the appropriate chairs of the policy committees of the Legislature with jurisdiction over any aging and long-term care related issues, and to the chairs of the fiscal committees of the Legislature by July 1, 2018.
152003.
The secretary may accept grants or donations, real or in-kind, to support the operation of the council and the development of the state aging and long-term care services strategic plan.

Summary: Existing law establishes the California Health and Human Services Agency consisting of the Departments of Aging, Child Support Services, Community Services and Development, Developmental Services, Health Care Services, Managed Health Care, Public Health, Rehabilitation, Social Services, and State Hospitals, among other entities. Existing law sets forth legislative findings and declarations regarding long-term care services, including that consumers of those services experience great differences in service levels, eligibility criteria, and service availability that often result in inappropriate and expensive care that is not responsive to individual needs. Those findings and declarations also state that the laws governing long-term care facilities have established an uncoordinated array of long-term care services that are funded and administered by a state structure that lacks necessary integration and focus. This bill, among other things, would create the Statewide Aging and Long-Term Care Services Coordinating Council, chaired by the Secretary of California Health and Human Services, and would consist of the heads, or their designated representative, of specified departments and offices. The secretary would have specified responsibilities, including, but not limited to, leading the council in the development of a state aging and long-term care services strategic plan to address how the state will meet the needs of the aging population in the years 2020, 2025, and 2030. The bill would require the strategic plan to be submitted to the Secretary of the Senate, the Chief Clerk of the Assembly, and the chairs of specified policy and fiscal committees of the Legislature by July 1, 2018. The bill would authorize the Secretary of California Health and Human Services to accept grants or donations, real or in-kind, to support the operation of the Statewide Aging and Long-Term Care Services Coordinating Council and the development of the state aging and long-term care services strategic plan.

An act to add Division 121 (commencing with Section 152000) to the Health and Safety Code, relating to aging.


The people of the State of California do enact as follows:

SECTION 1.
The Legislature finds and declares all of the following:
(a) Quality, affordable child care is essential to prepare California’s children to succeed in school and in life and to allow families to work and contribute to the state’s economy with the assurance that their children are safe, well cared for, and learning.
(b) Family child care is the child care setting of choice for many families because of its warm homelike environment, convenience, and affordability. The flexibility offered by many family child care providers is particularly vital to low-wage workers who are subject to highly unpredictable work schedules, and to the many California workers who work nontraditional hours and need child care on evenings, overnights, and weekends. Close to 40 percent of licensed family child care homes offer evening, weekend, and overnight care, compared with only 2 percent of centers.
(c) Family child care providers are small business owners who contribute significantly to the economies of their communities and the state. As businesses, family child care providers are engines for economic growth, generating 100,000 direct and indirect jobs, three billion five hundred million dollars ($3,500,000,000) in economic output, and five hundred fifty million dollars ($550,000,000) in tax revenues. Family child care providers also contribute to the economy by serving as a vital job support for working families.
(d) Family child care providers face significant health and safety risks on the job, and will thus benefit from training on occupational safety and health.
(e) Giving family child care providers training on how to better navigate the state-funded child care system, including how to become licensed, will result in a more efficient and cost-effective system for family child care providers, families, and the state.
(f) California currently does not have a single list of all family child care providers who participate in the state-funded child care program. Creating such a list will enable the state to track and ensure compliance with training and background check requirements. Making that list available to provider organizations that will enable family child care providers to meet one another, be informed about training opportunities, and form and build organizations will allow them to share their common concerns and advocate to improve the quality, access, and stability of child care available to California’s children and families. This will allow the state to maximize its return on its investment in child care.
SEC. 2.
Article 19.5 (commencing with Section 8430) is added to Chapter 2 of Part 6 of Division 1 of Title 1 of the Education Code, to read:
Article  19.5. Raising Child Care Quality Act
8430.
This article shall be known, and may be cited, as the Raising Child Care Quality Act.
8431.
The purpose of this article is to ensure that family child care providers receive orientation training on subjects including occupational health and safety practices and standards and the state’s early learning foundations, and to make it more possible for family child care providers to be informed about training opportunities and to form and join provider organizations to share their common concerns and advocate for improvements to the state-funded child care system.
8432.
As used in this article:
(a) “Family child care provider” or “provider” means a child care provider that participates in a state-funded child care program and is either of the following:
(1) A family day care home provider, as described in Section 1596.78 of the Health and Safety Code, who is licensed pursuant to the requirement in Section 1596.80 of the Health and Safety Code.
(2) An individual who meets both of the following criteria:
(A) Provides child care in his or her own home or in the home of the child receiving care.
(B) Is exempt from licensing requirements pursuant to Section 1596.792 of the Health and Safety Code.
(b) “Provider organization” means an organization that has all of the following characteristics:
(1) Includes family child care providers as members.
(2) Has as one of its main purposes the representation of family child care providers in their relations with public or private entities in California or in advancing the concerns of providers regarding the terms of their participation in state-funded child care programs.
(3) Is not an entity that contracts with the state or a county to administer or process payments for a state-funded child care program.
(c) “State-funded child care program” means a program administered by the State Department of Education, the State Department of Social Services, or another department, agency, or political subdivision of the state, including programs established subsequent to the passage of this article, to subsidize early learning and care for children, but not including the public education system.
8433.
(a) To ensure that family child care providers have the opportunity to receive substantive training on topics including health and safety standards for child care workers, child care subsidy program functioning, and the state’s early learning foundations, the State Department of Education shall ensure that all family child care providers attend an in-person orientation training. Providers who are new to the state-funded child care program shall complete the orientation training within three months after they begin participating in the state-funded child care program. Providers who are already participating in the state-funded child care program shall complete the orientation training within two years after it is first offered. Other child care providers who are not family child care providers or who do not participate in the state-funded child care program may also be invited to attend the orientation training at no cost to the providers personally.
(b) Family child care providers shall be compensated for their time attending the orientation training. The orientation training shall be offered at times and in community-based settings that are convenient and accessible to family child care providers.
(c) If a substantial number of the family child care providers participating in the state-funded child care program in a given county are non-English speaking, some orientation training, including written material distributed at the training, in that county shall be provided in the languages spoken by a substantial number of family child care providers, in order to facilitate full participation from all providers.
(d) Alternatives to in-person orientation training shall be offered on a case-by-case basis for providers who have been unable to attend an orientation training within two years after the training is first offered, or within three months after the family child care provider begins participating in the state-funded child care program.
(e) An orientation training shall include at least four hours of instruction, which shall be in addition to training currently offered by resource and referral programs, and which is intended to count towards satisfying pre-service or orientation training requirements of federal law. The orientation training shall include information about all of the following:
(1) Minimum health and safety standards, including emergency preparedness and response planning.
(2) Occupational health and safety for family child care providers, including information about injuries, infectious diseases, environmental risks, and job-related stress.
(3) Information about the state-funded child care program, including the referral and listing process of resource and referral agencies, alternative payment programs, including family approval and payment processes, timelines, appeals processes, licensing guidelines, and the process for becoming a licensed family child care provider.
(4) Information about the state’s early learning foundations and how they align with K–5 standards.
(5) Information on resources available to providers and the children and families they serve, including all of the following:
(A) The federal Child and Adult Care Food Program.
(B) The state early intervention system, First 5 county commissions, and other sources of available training and resources, particularly related to child development, literacy, and alignment with K–5 standards.
(C) Information from provider organizations that notify the State Department of Education they would like to make presentations at or include information about their organizations at an orientation training. These programs or organizations may deliver this information through brief presentations as part of the orientation training.
(f) The State Department of Education shall offer the orientation training either directly or through contracts. The occupational safety and health portion of the training shall be offered through contracts with a statewide organization that has expertise about the state-funded child care program, that includes family child care providers as members, and that is not an entity that contracts with the state or a county to administer or process payments for a state-funded child care program. The remainder of the training shall be offered primarily with local resource and referral programs, as defined in subdivision (x) of Section 8208.
(g) Only curriculum approved by the State Department of Education may be used to fulfill the training requirements specified in this section. In order to ensure that the occupational safety and health portion of the training reflects providers’ needs and the realities of their work with regard to the occupational safety and health portion of the training, the State Department of Education shall only approve training curriculum that has been developed with input from family child care providers or their representatives.
(h) The Superintendent may adopt rules and regulations regarding the orientation training required under this section. The Superintendent may consult with other appropriate entities, including provider organizations and other early education and care advocates, representatives of community colleges, higher education institutions, resource and referral networks, First 5 county commissions, organizations that operate training programs or apprenticeship programs, and early education and care employers in developing these rules and regulations.
8434.
(a) Within 10 days of receipt of a request from a provider organization, the State Department of Social Services shall make available to that provider organization information regarding family child care providers described in paragraph (1) of subdivision (a) of Section 8432, including each provider’s name, home address, mailing address, telephone number, email address, if known, and license number.
(b) Within 30 days of receipt of a request from a provider organization, the State Department of Education, with the assistance of the State Department of Social Services and any state department or agency, or its contractor or subcontractor, in possession of the relevant information, shall collect information regarding family child care providers, including each provider’s name, home address, mailing address, telephone number, email address, if known, unique provider identification number, if applicable, and shall make that information available to the provider organization. The provider organization shall bear the reasonable costs of collecting the information described in this subdivision to the extent that the state is not already collecting it and is not already required by federal or state law or regulation to collect it, with any such payment going to reimburse the state departments, agencies, contractors, or subcontractors that incurred the costs of compiling the list. It is the intent of the Legislature that this list will assist the State Department of Social Services and the State Department of Education and their contractors in tracking provider compliance.
(c) A provider organization under this article shall be considered a family day care organization for purposes of subdivisions (b) and (c) of Section 1596.86 of the Health and Safety Code. All confidentiality requirements applicable to recipients of information pursuant to Section 1596.86 of the Health and Safety Code apply to provider organizations and shall apply also to protect the personal information of family child care providers as defined in paragraph (2) of subdivision (a) of Section 8432.
(d) Information provided pursuant to this section shall be used only for purposes of advocating on behalf of family child care providers and educating them on their rights and services available to them.
(e) Upon written request of a family child care provider, the State Department of Education and the State Department of Social Services shall remove the family child care provider’s home address and home telephone number from the mailing lists referenced in subdivisions (a) and (b) before the release of the lists.
8435.
The requirements of this article are contingent upon appropriation of funds for purposes of this article in the annual Budget Act or another statute.

Summary: Existing law, the California Child Day Care Facilities Act, provides for the licensure and regulation of family day care homes by the State Department of Social Services. Existing law, the Child Care and Development Services Act, administered by the State Department of Education, requires the Superintendent of Public Instruction to administer child care and development programs that offer a full range of services for eligible children from infancy to 13 years of age, including, among others, resource and referral programs, alternative payment programs, and family child care home education networks. This bill would require the State Department of Education to ensure that all family child care providers, as defined, attend an in-person orientation training, as provided. The bill would require the orientation training to include at least 4 hours of instruction and include specified information, including minimum health and safety standards, as provided. The bill would authorize the Superintendent to adopt rules and regulations regarding the orientation training. The bill would require the State Department of Social Services and the State Department of Education, with the assistance of specified state departments and agencies, and their contractors and subcontractors, to make specified information regarding family child care providers available to provider organizations, and would require the provider organization requesting the information to bear the costs of collecting the information, as provided. The bill would provide that the above provisions are contingent upon an appropriation of funds for these purposes in the annual Budget Act or another statute.

An act to add Article 19.5 (commencing with Section 8430) to Chapter 2 of Part 6 of Division 1 of Title 1 of the Education Code, relating to child care.


The people of the State of California do enact as follows:

SECTION 1.
Section 320.6 is added to the Penal Code, to read:
320.6.
(a) Notwithstanding Section 320.5, this section shall apply to an eligible organization, as defined in subdivision (c).
(b) A raffle conducted by an eligible organization, as defined in subdivision (c), for the purpose of directly supporting beneficial or charitable purposes or financially supporting another private, nonprofit eligible organization, as defined in subdivision (c) of Section 320.5, that performs beneficial or charitable purposes may be conducted in accordance with this section.
(c) For purposes of this section, “eligible organization” means a private, nonprofit organization established by, or affiliated with, a team from the Major League Baseball, National Hockey League, National Basketball Association, National Football League, Women’s National Basketball Association, or Major League Soccer, or a private, nonprofit organization established by the Professional Golfers’ Association of America, Ladies Professional Golf Association, or National Association for Stock Car Auto Racing that has been qualified to conduct business in California for at least one year before conducting a raffle, is qualified for an exemption under Section 501(c)(3) of the Internal Revenue Code, and is exempt from taxation pursuant to Section 23701a, 23701b, 23701d, 23701e, 23701f, 23701g, 23701k, 23701l, 23701t, or 23701w of the Revenue and Taxation Code.
(d) For purposes of this section, “raffle” means a scheme for the distribution of prizes by chance among persons who have paid money for paper tickets that provide the opportunity to win these prizes, in which all of the following are true:
(1) Each ticket sold contains a unique and matching identifier.
(2) (A) Winners of the prizes are determined by a manual draw from tickets described in paragraph (1) that have been sold for entry in the manual draw.
(B) An electronic device may be used to sell tickets. The ticket receipt issued by the electronic device to the purchaser may include more than one unique and matching identifier, representative of and matched to the number of tickets purchased in a single transaction.
(C) A random number generator is not used for the manual draw or to sell tickets.
(D) The prize paid to the winner is comprised of one-half or 50 percent of the gross receipts generated from the sale of raffle tickets for a raffle.
(3) The manual draw is conducted in California under the supervision of a natural person who meets all of the following requirements:
(A) The person is 18 years of age or older.
(B) The person is affiliated with the eligible organization conducting the raffle.
(C) The person is registered with the Department of Justice pursuant to paragraph (4) of subdivision (o).
(4) (A) Fifty percent of the gross receipts generated from the sale of raffle tickets for any given manual draw are used by the eligible organization conducting the raffle to benefit or provide support for beneficial or charitable purposes, or used to benefit another private, nonprofit organization, provided that an organization receiving these funds is itself an eligible organization as defined in subdivision (c) of Section 320.5. As used in this section, “beneficial purposes” excludes purposes that are intended to benefit officers, directors, or members, as defined by Section 5056 of the Corporations Code, of the eligible organization. Funds raised by raffles conducted pursuant to this section shall not be used to fund any beneficial, charitable, or other purpose outside of California. This section does not preclude an eligible organization from using funds from sources other than the sale of raffle tickets to pay for the administration or other costs of conducting a raffle.
(B) An employee of an eligible organization who is a direct seller of raffle tickets shall not be treated as an employee for purposes of workers’ compensation under Section 3351 of the Labor Code if the following conditions are satisfied:
(i) Substantially all of the remuneration, whether or not paid in cash, for the performance of the service of selling raffle tickets is directly related to sales rather than to the number of hours worked.
(ii) The services performed by the person are performed pursuant to a written contract between the seller and the eligible organization and the contract provides that the person will not be treated as an employee with respect to the selling of raffle tickets for workers’ compensation purposes.
(C) For purposes of this section, an employee selling raffle tickets shall be deemed to be a direct seller as described in Section 650 of the Unemployment Insurance Code as long as he or she meets the requirements of that section.
(e) A person who receives compensation in connection with the operation of the raffle shall be an employee of the eligible organization that is conducting the raffle, and in no event may compensation be paid from revenues required to be dedicated to beneficial or charitable purposes.
(f) A raffle ticket shall not be sold in exchange for Bitcoin or any other cryptocurrency.
(g) A raffle otherwise permitted under this section shall not be conducted by means of, or otherwise utilize, any gaming machine that meets the definition of slot machine contained in Section 330a, 330b, or 330.1.
(h) (1) A raffle otherwise permitted under this section shall not be conducted, nor may tickets for a raffle be sold, within an operating satellite wagering facility or racetrack inclosure licensed pursuant to the Horse Racing Law (Chapter 4 (commencing with Section 19400) of Division 8 of the Business and Professions Code) or within a gambling establishment licensed pursuant to the Gambling Control Act (Chapter 5 (commencing with Section 19800) of Division 8 of the Business and Professions Code).
(2) A raffle shall not be operated or conducted in any manner over the Internet, nor may raffle tickets be sold, traded, or redeemed over the Internet. For purposes of this paragraph, an eligible organization shall not be deemed to operate or conduct a raffle over the Internet, or sell raffle tickets over the Internet, if the eligible organization advertises its raffle on the Internet or permits others to do so. Information that may be conveyed on an Internet Web site pursuant to this paragraph includes, but is not limited to, all of the following:
(A) Lists, descriptions, photographs, or videos of the raffle prizes.
(B) Lists of the prize winners.
(C) The rules of the raffle.
(D) Frequently asked questions and their answers.
(E) Raffle entry forms, which may be downloaded from the Internet Web site for manual completion by raffle ticket purchasers, but shall not be submitted to the eligible organization through the Internet.
(F) Raffle contact information, including the eligible organization’s name, address, telephone number, facsimile number, or email address.
(i) An individual, corporation, partnership, or other legal entity shall not hold a financial interest in the conduct of a raffle, except the eligible organization that is itself authorized to conduct that raffle, and any private, nonprofit, eligible organizations receiving financial support from that charitable organization pursuant to subdivisions (b) and (d).
(j) (1) An eligible organization may conduct a major league sports raffle only at a home game.
(2) An eligible organization shall not conduct more than one major league sports raffle per home game.
(k) An employee shall not sell raffle tickets in any seating area designated as a family section.
(l) An eligible organization shall disclose to all ticket purchasers the designated private, nonprofit, eligible organization for which the raffle is being conducted.
(m) An eligible organization that conducts a raffle to financially support another private, nonprofit eligible organization, as defined in subdivision (c) of Section 320.5, shall distribute all proceeds not paid out to the winners of the prizes to the private, nonprofit organization within 15 days of conducting the raffle, in accordance with this section.
(n) Any raffle prize remaining unclaimed by a winner at the end of the season for a team with an affiliated eligible organization that conducted a raffle to financially support another private, nonprofit eligible organization, as defined in subdivision (c) of Section 320.5, shall be donated within 30 days from the end of the season by the eligible organization to the designated private, nonprofit organization for which the raffle was conducted.
(o) (1) (A) An eligible organization shall not conduct a raffle authorized under this section, unless it has a valid registration issued by the Department of Justice. The department shall furnish a registration form via the Internet or upon request to eligible nonprofit organizations. The department shall, by regulation, collect only the information necessary to carry out the provisions of this section on this form. This information shall include, but is not limited to, the following:
(i) The name and address of the eligible organization.
(ii) The federal tax identification number, the corporate number issued by the Secretary of State, the organization number issued by the Franchise Tax Board, or the California charitable trust identification number of the eligible organization.
(iii) The name and title of a responsible fiduciary of the organization.
(B) (i) The department may require an eligible organization to pay a minimum annual registration fee of five thousand dollars ($5,000) to cover the reasonable costs of the department to administer and enforce this section.
(ii) An eligible organization shall pay, in addition to the annual registration application fee, one hundred dollars ($100) for every individual raffle conducted at an eligible location to cover the reasonable costs of the department to administer and enforce this section. This fee shall be submitted in conjunction with the annual registration form.
(2) (A) A manufacturer or distributor of raffle-related products or services shall not conduct business with an eligible organization for purposes of conducting a raffle pursuant to this section unless the manufacturer or distributor has a valid annual registration issued by the department.
(B) The department may require a manufacturer or distributor of raffle-related products or services to pay a minimum annual registration fee of five thousand dollars ($5,000) to cover the reasonable costs of the department to administer and enforce this section.
(3) An eligible organization shall register the equipment used in the sale and distribution of raffle tickets, and shall have the equipment tested by an independent gaming testing lab.
(4) (A) A person affiliated with an eligible organization who conducts the manual draw shall annually register with the department.
(B) The department may require a person affiliated with an eligible organization who conducts the manual draw to pay a minimum annual registration fee of ten dollars ($10) to cover the reasonable costs of the department to administer and enforce this section.
(5) The department may, by regulation, adjust the annual registration fees described in this section as needed to ensure that revenues will fully offset, but not exceed, the reasonable costs incurred by the department pursuant to this section. The fees shall be deposited by the department into the General Fund.
(6) The department shall receive moneys for the costs incurred pursuant to this section subject to an appropriation by the Legislature.
(7) The department shall adopt, on or before June 1, 2016, regulations necessary to effectuate this section, including emergency regulations, pursuant to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).
(8) The department shall maintain an automated database of all registrants.
(9) A local law enforcement agency shall notify the department of any arrests or investigation that may result in an administrative or criminal action against a registrant.
(10) The department may investigate all suspected violations of this section or any regulation adopted pursuant to this section, or any activity that the registrant has engaged in that is not in the best interests of the public’s health, safety, or general welfare as it pertains to charitable raffles.
(11) The department may audit the records and other documents of a registrant to ensure compliance with this section, and may charge a registrant the direct costs associated with an audit conducted pursuant to this paragraph.
(12) (A) Once registered, an eligible organization shall file annually thereafter with the department a report that includes all of the following information for each of the eligible organization’s last three fiscal years:
(i) The aggregate gross receipts from the operation of raffles.
(ii) The aggregate direct costs incurred by the eligible organization from the operation of raffles.
(iii) The charitable or beneficial purposes for which proceeds of the raffles were used.
(iv) The aggregate distributions of proceeds from the operation of raffles made to directly support beneficial or charitable purposes, other than beneficial or charitable purposes undertaken by the eligible organization, or eligible recipient organizations, under subdivision (c) of Section 320.5.
(v) The aggregate distributions of proceeds from the operation of raffles made to raffle winners.
(vi) The aggregate distributions of proceeds from the operation of raffles made to any other organizations, or for any other purposes, other than those included in clauses (ii), (iv), and (v).
(vii) A schedule of distributions of proceeds from the operation of raffles, by individual raffle, made to eligible recipient organizations under subdivision (c) of Section 320.5 that are not affiliated with the eligible organization.
(viii) A schedule of distributions of proceeds from the operation of raffles, by individual raffle, made to eligible recipient organizations under subdivision (c) of Section 320.5 that are affiliated with the eligible organization.
(ix) A schedule of distributions of proceeds from the operation of raffles, by individual raffle, made to any other organization not included under clause (vii) or (viii), or for beneficial or charitable purposes undertaken by the eligible organization.
(x) The aggregate gross receipts from activities other than the operation of raffles.
(xi) The aggregate costs incurred by the eligible organization from activities other than the operation of raffles.
(xii) The aggregate distributions of funds other than proceeds from the operation of raffles made to directly support beneficial or charitable purposes or eligible recipient organizations under subdivision (c) of Section 320.5.
(xiii) The aggregate distributions of funds other than proceeds from the operation of raffles for purposes other than those listed in clauses (xi) and (xii).
(xiv) A schedule of distributions of funds other than proceeds from the operation of raffles made to eligible recipient organizations under subdivision (c) of Section 320.5 that are not affiliated with the eligible organization.
(xv) A schedule of distributions of funds other than proceeds from the operation of raffles made to any other organization not included under clause (xiv), or for beneficial or charitable purposes undertaken by the eligible organization.
(B) Failure to submit the annual report to the department as required in this paragraph shall be grounds for denial of an annual registration.
(C) The department shall make the reports required by this paragraph available to the public via the online search portal of the Attorney General’s Registry of Charitable Trusts maintained pursuant to Section 12584 of the Government Code.
(13) The department shall annually furnish to registrants a form to collect this information.
(p) The department may take legal action against a registrant if it determines that the registrant has violated this section or a regulation adopted pursuant to this section, or that the registrant has engaged in any conduct that is not in the best interests of the public’s health, safety, or general welfare. An action taken pursuant to this subdivision does not prohibit the commencement of an administrative or criminal action by the Attorney General, a district attorney, city attorney, or county counsel.
(q) An action and hearing conducted to deny, revoke, or suspend a registry, or other administrative action taken against a registrant, shall be conducted pursuant to the Administrative Procedure Act (Chapters 4.5 (commencing with Section 11400) and 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code). The department may seek civil remedies, including imposing fines, for violations of this section, and may seek recovery of the costs incurred in investigating or prosecuting an action against a registrant or applicant in accordance with those procedures specified in Section 125.3 of the Business and Professions Code. A proceeding conducted under this subdivision is subject to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure. A violation of this section shall not constitute a crime.
(r) This section shall remain in effect only until December 31, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before December 31, 2018, deletes or extends that date.

Summary: The California Constitution authorizes the Legislature to permit private, nonprofit, eligible organizations to conduct raffles as a funding mechanism to support beneficial and charitable works, if, among other conditions, at least 90 of the gross receipts from the raffle go directly to beneficial or charitable purposes in California. The California Constitution further authorizes the Legislature to amend the percentage of gross receipts required to be dedicated to beneficial or charitable purposes by a statute passed by a 23 vote of each house of the Legislature. Existing statutory law implements those provisions and requires the Department of Justice to administer and enforce those provisions. This bill would authorize a major league sports raffle at a home game conducted by an eligible organization, as defined, for the purpose of directly supporting specified beneficial or charitable purposes in California, or financially supporting another private, nonprofit, eligible organization, as defined, that performs those purposes if, among other requirements, each ticket sold contains a unique and matching identifier, 50 of the gross receipts generated from the sale of raffle tickets are used to benefit or provide support for beneficial or charitable purposes, as defined, the other 50 is paid to the winner, and the winners of the prizes are determined by a manual draw, as specified. The bill would authorize an electronic device to be used to sell tickets. The bill would prohibit the use of a random number generator for the manual draw or sale of tickets. This bill would define an eligible organization as a private, nonprofit organization established by, or affiliated with, a team from specified sports organizations that has been qualified to conduct business in California for at least one year before conducting a raffle and is exempt from taxation pursuant to specified provisions of federal and California law. The bill would require, if an eligible organization conducts a raffle for purposes of financially supporting another private, nonprofit, eligible organization, the eligible organization conducting the raffle to distribute to the other eligible organization all proceeds not paid out to the winners within 15 days of conducting the raffle. The bill would require an eligible organization to disclose to all ticket purchasers the designated private, nonprofit organization for which the raffle is being conducted. This bill would also prohibit an eligible organization from conducting a raffle, and a manufacturer or distributor of raffle-related products or services from conducting business with an eligible organization for purposes of conducting a raffle pursuant to these provisions, without first having obtained and thereafter maintained a registration from the Department of Justice, as specified. Once registered, the bill would require an eligible organization to file annually thereafter with the department a report that includes specified information for each of the eligible organization’s last 3 fiscal years, and would require the department to make those reports available online, as provided. This bill would require the department to adopt, on or before June 1, 2016, regulations to enforce these provisions, would authorize the department to assess annual registration fees, as specified, to be deposited in the General Fund to cover the reasonable costs of establishing and operating this registration system, and would require the department to maintain a database of registrants and conduct specified proceedings in compliance with the Administrative Procedure Act. The bill would repeal its provisions on December 31, 2018.

An act to add and repeal Section 320.6 of the Penal Code, relating to gaming.


The people of the State of California do enact as follows:

SECTION 1.
Section 116681 of the Health and Safety Code is amended to read:
116681.
Except as provided in paragraph (2) of subdivision (j) of Section 116686, the following definitions shall apply to this section and Sections 116682, 116684, and 116686:
(a) “Adequate supply” means sufficient water to meet residents’ health and safety needs.
(b) “Affected residence” means a residence within a disadvantaged community that is reliant on a water supply that is either inadequate or unsafe.
(c) “Consistently fails” means a failure to provide an adequate supply of safe drinking water.
(d) “Consolidated water system” means the public water system resulting from the consolidation of a public water system with another public water system, state small water system, or affected residences not served by a public water system.
(e) “Consolidation” means joining two or more public water systems, state small water systems, or affected residences not served by a public water system, into a single public water system.
(f) “Disadvantaged community” means a disadvantaged community, as defined in Section 79505.5 of the Water Code, that is in an unincorporated area, is in a mobilehome park, or is served by a mutual water company.
(g) “Extension of service” means the provision of service through any physical or operational infrastructure arrangement other than consolidation.
(h) “Receiving water system” means the public water system that provides service to a subsumed water system through consolidation or extension of service.
(i) “Safe drinking water” means water that meets all primary and secondary drinking water standards.
(j) “Subsumed water system” means the public water system, state small water system, or affected residences not served by a public water system consolidated into or receiving service from the receiving water system.
SEC. 1.5.
Section 116681 of the Health and Safety Code is amended to read:
116681.
Except as provided in paragraph (2) of subdivision (j) of Section 116686, the following definitions shall apply to this section and Sections 116682, 116684, and 116686:
(a) “Adequate supply” means sufficient water to meet residents’ health and safety needs.
(b) “Affected residence” means a residence within a disadvantaged community that is reliant on a water supply that is either inadequate or unsafe.
(c) “Consistently fails” means a failure to provide an adequate supply of safe drinking water.
(d) “Consolidated water system” means the public water system resulting from the consolidation of a public water system with another public water system, state small water system, or affected residences not served by a public water system.
(e) “Consolidation” means joining two or more public water systems, state small water systems, or affected residences not served by a public water system, into a single public water system.
(f) “Disadvantaged community” means a disadvantaged community, as defined in Section 79505.5 of the Water Code, that is in an unincorporated area, is in a mobilehome park, or is served by a mutual water company or a small public water system.
(g) “Extension of service” means the provision of service through any physical or operational infrastructure arrangement other than consolidation.
(h) “Receiving water system” means the public water system that provides service to a subsumed water system through consolidation or extension of service.
(i) “Safe drinking water” means water that meets all primary and secondary drinking water standards.
(j) “Small public water system” has the same meaning as provided in subdivision (b) of Section 116395.
(k) “Subsumed water system” means the public water system, state small water system, or affected residences not served by a public water system consolidated into or receiving service from the receiving water system.
SEC. 2.
Section 116682 of the Health and Safety Code is amended to read:
116682.
(a) Where a public water system or a state small water system, serving a disadvantaged community, consistently fails to provide an adequate supply of safe drinking water, the state board may order consolidation with a receiving water system as provided in this section and Section 116684. The consolidation may be physical or operational. The state board may also order the extension of service to an area within a disadvantaged community that does not have access to an adequate supply of safe drinking water so long as the extension of service is an interim extension of service in preparation for consolidation. The state board may set timelines and performance measures to facilitate completion of consolidation.
(b) Before ordering consolidation or extension of service as provided in this section, the state board shall do all of the following:
(1) Encourage voluntary consolidation or extension of service.
(2) Consider other enforcement remedies specified in this article.
(3) Consult with, and fully consider input from, the relevant local agency formation commission regarding the provision of water service in the affected area, the recommendations for improving service in a municipal service review, and any other relevant information.
(4) Consult with, and fully consider input from, the Public Utilities Commission when the consolidation would involve a water corporation subject to the commission’s jurisdiction.
(5) Consult with, and fully consider input from, the local government with land use planning authority over the affected area, particularly regarding any information in the general plan required by Section 65302.10 of the Government Code.
(6) Consult with, and fully consider input from, all public water systems in the chain of distribution of the potentially receiving water systems.
(7) (A) Notify the potentially receiving water system and the potentially subsumed water system, if any, and establish a reasonable deadline of no less than six months, unless a shorter period is justified, for the potentially receiving water system and the potentially subsumed water system, if any, to negotiate consolidation or another means of providing an adequate supply of safe drinking water.
(B) During this period, the state board shall provide technical assistance and work with the potentially receiving water system and the potentially subsumed water system to develop a financing package that benefits both the receiving water system and the subsumed water system.
(C) Upon a showing of good cause, the deadline may be extended by the state board at the request of the potentially receiving water system, potentially subsumed water system, or the local agency formation commission with jurisdiction over the potentially subsumed water system.
(8) Obtain written consent from any domestic well owner for consolidation or extension of service. Any domestic well owner within the consolidation or extended service area who does not provide written consent shall be ineligible, until the consent is provided, for any future water-related grant funding from the state other than funding to mitigate a well failure, disaster, or other emergency.
(9) (A) Hold at least one public meeting at the initiation of this process in a place as close as feasible to the affected areas. The state board shall make reasonable efforts to provide a 30-day notice of the meeting to the ratepayers, renters, and property owners to receive water service through service extension or in the area of the subsumed water system and all affected local government agencies and drinking water service providers. The meeting shall provide representatives of the potentially subsumed water system, affected ratepayers, renters, property owners, and the potentially receiving water system an opportunity to present testimony. The meeting shall provide an opportunity for public comment.
(B) An initial public meeting shall not be required for a potentially subsumed area that is served only by domestic wells.
(c) Upon expiration of the deadline set by the state board pursuant to paragraph (7) of subdivision (b), the state board shall do the following:
(1) Consult with the potentially receiving water system and the potentially subsumed water system, if any.
(2) (A) Conduct a public hearing, in a location as close as feasible to the affected communities.
(B) The state board shall make reasonable efforts to provide a 30-day notice of the hearing to the ratepayers, renters, and property owners to receive water service through service extension or in the area of the subsumed water system and to all affected local government agencies and drinking water service providers.
(C) The hearing shall provide representatives of the potentially subsumed water system, affected ratepayers, renters, property owners, and the potentially receiving water system an opportunity to present testimony.
(D) The hearing shall provide an opportunity for public comment.
(d) Before ordering consolidation or extension of service, the state board shall find all of the following:
(1) The potentially subsumed water system has consistently failed to provide an adequate supply of safe drinking water.
(2) All reasonable efforts to negotiate consolidation or extension of service were made.
(3) Consolidation of the receiving water system and subsumed water system or extension of service is appropriate and technically and economically feasible.
(4) There is no pending local agency formation commission process that is likely to resolve the problem in a reasonable amount of time.
(5) Concerns regarding water rights and water contracts of the subsumed and receiving water systems have been adequately addressed.
(6) Consolidation or extension of service is the most effective and cost-effective means to provide an adequate supply of safe drinking water.
(7) The capacity of the proposed interconnection needed to accomplish the consolidation is limited to serving the current customers of the subsumed water system.
(e) Upon ordering consolidation or extension of service, the state board shall do all of the following:
(1) As necessary and appropriate, make funds available, upon appropriation by the Legislature, to the receiving water system for the costs of completing the consolidation or extension of service, including, but not limited to, replacing any capacity lost as a result of the consolidation or extension of service, providing additional capacity needed as a result of the consolidation or extension of service, and legal fees. Funding pursuant to this paragraph is available for the general purpose of providing financial assistance for the infrastructure needed for the consolidation or extension of service and does not need to be specific to each individual consolidation project. The state board shall provide appropriate financial assistance for the infrastructure needed for the consolidation or extension of service. The state board’s existing financial assistance guidelines and policies shall be the basis for the financial assistance.
(2) Ensure payment of standard local agency formation commission fees caused by state board-ordered consolidation or extension of service.
(3) Adequately compensate the owners of a privately owned subsumed water system for the fair market value of the system, as determined by the Public Utilities Commission or the state board.
(4) Coordinate with the appropriate local agency formation commission and other relevant local agencies to facilitate the change of organization or reorganization.
(f) (1) For the purposes of this section, the consolidated water system shall not increase charges on existing customers of the receiving water system solely as a consequence of the consolidation or extension of service unless the customers receive a corresponding benefit.
(2) For purposes of this section, fees or charges imposed on a customer of a subsumed water system shall not exceed the cost of consolidating the water system with a receiving system or the extension of service to the area.
(g) Division 3 (commencing with Section 56000) of Title 5 of the Government Code shall not apply to an action taken by the state board pursuant to this section.
SEC. 3.
Section 116686 is added to the Health and Safety Code, to read:
116686.
(a) (1) To provide affordable, safe drinking water to disadvantaged communities and to prevent fraud, waste, and abuse, the state board may do both of the following, if sufficient funding is available and if the state board finds that consolidation with another system or extension of service from another system is either not appropriate or not technically and economically feasible:
(A) (i) Contract with an administrator to provide administrative and managerial services to a designated public water system to assist the designated public water system with the provision of an adequate and affordable supply of safe drinking water.
(ii) To fulfill the requirements of this section, the state board may contract with more than one administrator, but only one administrator may be assigned to provide services to a given designated public water system.
(iii) An administrator may provide administrative and managerial services to more than one designated public water system.
(B) Order the designated public water system to accept administrative and managerial services, including full management and control, from an administrator selected by the state board.
(2) In performing its duties pursuant to paragraph (1), the state board may use criteria from the policy handbook adopted pursuant to Section 116760.43.
(b) Before the state board determines that a public water system is a designated public water system, the state board shall do both of the following:
(1) Provide the public water system with notice and an opportunity to show either of the following:
(A) That the public water system has not consistently failed to provide an adequate and affordable supply of safe drinking water.
(B) That the public water system has taken steps to timely address its failure to provide an adequate and affordable supply of safe drinking water.
(2) (A) Conduct a public meeting in a location as close as feasible to the affected community.
(B) The state board shall make reasonable efforts to provide a 30-day notice of the meeting to affected ratepayers, renters, and property owners.
(C) Representatives of the public water system, affected ratepayers, renters, and property owners shall be provided an opportunity to present testimony at the meeting.
(D) The meeting shall provide an opportunity for public comment.
(c) The state board shall make financial assistance available to an administrator for a designated public water system, as appropriate and to the extent that funding is available.
(d) An administrator may do any of the following:
(1) Expend available moneys for capital infrastructure improvements that the designated public water system needs to provide an adequate and affordable supply of safe drinking water.
(2) Set and collect user water rates and fees, subject to approval by the state board. The provisions of this section are subject to all applicable constitutional requirements, including Article XIII D of the California Constitution.
(3) Expend available moneys for operation and maintenance costs of the designated public water system.
(e) The state board shall work with the administrator of a designated public water system and the communities served by that designated public water system to develop, within the shortest feasible timeframe, adequate technical, managerial, and financial capacity to deliver safe drinking water so that the services of the administrator are no longer necessary.
(f) A designated public water system shall not be responsible for any costs associated with an administrator.
(g) Administrative and managerial contracts pursuant to this section shall be exempt from Chapter 2 (commencing with Section 10290) of Part 2 of Division 2 of the Public Contract Code and may be awarded on a noncompetitive bid basis as necessary to implement the purposes of this section.
(h) For purposes of this section, a local government, as defined in Article XIII C of the California Constitution, that sets water rates in accordance with Article XIII D of the California Constitution shall be deemed to be providing affordable water.
(i) This section does not apply to a charter city, charter county, or charter city and county.
(j) For purposes of this section, the following terms have the following meanings:
(1) “Administrator” means a person whom the state board has determined is competent to perform the administrative and managerial services of a public water system, as described in subdivision (d). In determining competency, the state board may consider demonstrated experience in managing and operating a public water system.
(2) “Designated public water system” means a public water system that serves a disadvantaged community, as defined in Section 79505.5 of the Water Code, and that the state board finds consistently fails to provide an adequate and affordable supply of safe drinking water.
SEC. 4.
Section 1.5 of this bill incorporates amendments to Section 116681 of the Health and Safety Code proposed by this bill, Assembly Bill 1611, and Senate Bill 839. It shall only become operative if (1) this bill and Assembly Bill 1611 or Senate Bill 839, or both of those bills, are enacted and become effective on or before January 1, 2017, (2) Assembly Bill 1611, Senate Bill 839, or both, as enacted, amend Section 116681 of the Health and Safety Code, and (3) this bill is enacted last of these bills that amend Section 116681 of the Health and Safety Code, in which case Section 116681 of the Health and Safety Code, as amended by Assembly Bill 1611 or Senate Bill 839, shall remain operative only until the operative date of this bill, at which time Section 1.5 of this bill shall become operative, and Section 1 of this bill shall not become operative.

Summary: Existing law, the California Safe Drinking Water Act, provides for the operation of public water systems and imposes on the State Water Resources Control Board various responsibilities and duties. The act authorizes the state board to order consolidation with a receiving water system where a public water system, or a state small water system within a disadvantaged community, consistently fails to provide an adequate supply of safe drinking water. The act authorizes the state board to order the extension of service to an area that does not have access to an adequate supply of safe drinking water so long as the extension of service is an interim extension of service in preparation for consolidation. Existing law, for these purposes, defines “disadvantaged community” to mean a disadvantaged community that is in an unincorporated area or is served by a mutual water company. This bill would authorize the state board to order consolidation where a public water system or a state small water system is serving, rather than within, a disadvantaged community, and would limit the authority of the state board to order consolidation or extension of service to provide that authority only with regard to a disadvantaged community. This bill would make a community disadvantaged for these purposes if the community is in a mobilehome park, even if it is not in an unincorporated area or served by a mutual water company. The act requires the state board, before ordering consolidation or extension of service, to take certain actions, including consulting with specified entities, to hold at least one initial public meeting, as specified, and to obtain written consent from any domestic well owner for consolidation or extension of service. The act provides that any affected resident within the consolidation or extended service area who does not provide written consent is ineligible, until consent is provided, for any future water-related grant funding from the state, except as specified. This bill would also require the state board, before ordering consolidation or extension of service, to consult with public water systems in the chain of distribution of the potentially receiving water system. The bill would provide that an initial public meeting is not required for a potentially subsumed area that is served only by domestic wells. The bill would apply to the domestic well owner, instead of to an affected resident, within the consolidation or extended service area the written consent requirement for eligibility for water-related grant funding. The act requires the state board, upon ordering the consolidation or extension of service, to adequately compensate the owners of a privately owned subsumed water system for the fair market value of the system as determined by the Public Utilities Commission for water corporations subject to the commission’s jurisdiction or the state board for all other systems. The act prohibits a consolidated water system from increasing charges on existing customers of the receiving water system solely as a consequence of the consolidation or extension of service unless the customer receives a corresponding benefit. This bill would instead authorize the Public Utilities Commission or the state board to determine the fair market value of a subsumed water system, without regard to whether the system is a water corporation subject to the commission’s jurisdiction. The bill would prohibit fees or charges imposed on a customer of a subsumed water system from exceeding the cost of consolidating the water system or the cost of extension of service to the area. The act exempts the consolidation or extension of service pursuant to these provisions from the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, which governs the procedures for the formation and change of organization of cities and special districts. This bill would instead exempt an action taken by the state board pursuant to these provisions from the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000. This bill would authorize the state board, for the purpose of providing affordable, safe drinking water to disadvantaged communities and preventing fraud, waste, and abuse, to contract with an administrator to provide administrative and managerial services to a designated water system and to order the designated public water system to accept those services if sufficient funding is available and if the state board makes a certain finding. The bill would define designated water system as a public water system that serves a disadvantaged community and that the state board finds consistently fails to provide an adequate and affordable supply of safe drinking water. The bill would require the state board to provide a public water system with notice, as specified, and to conduct a public meeting, as specified, before determining that the public water system is a designated public water system. The bill would authorize the administrator of a designated public water system to expend available moneys for capital infrastructure improvements that the designated public water system needs to provide an adequate and affordable supply of safe drinking water, to set and collect user water rates and fees, and to expend available moneys for the operation and maintenance costs of the designated public water system. The bill would require the state board to work with the administrator of the public water system and the communities served by that designated public water system to develop, within the shortest feasible timeframe, adequate technical, managerial, and financial capacity to deliver safe drinking water so that the services of the administrator are no longer necessary. The bill would not apply these administrator provisions to a charter city, charter county, or charter city and county. This bill would incorporate additional changes to Section 116681 of the Health and Safety Code proposed by AB 1611 and SB 839 that would become operative if this bill and one or both of those bills are enacted and this bill is chaptered last.

An act to amend Sections 116681 and 116682 of, and to add Section 116686 to, the Health and Safety Code, relating to water.


The people of the State of California do enact as follows:

SECTION 1.
Section 10608.34 is added to the Water Code, to read:
10608.34.
(a) (1) On or before January 1, 2017, the department shall adopt rules for all of the following:
(A) The conduct of standardized water loss audits by urban retail water suppliers in accordance with the method adopted by the American Water Works Association in the third edition of Water Audits and Loss Control Programs, Manual M36 and in the Free Water Audit Software, version 5.0.
(B) The process for validating a water loss audit report prior to submitting the report to the department. For the purposes of this section, “validating” is a process whereby an urban retail water supplier uses a technical expert to confirm the basis of all data entries in the urban retail water supplier’s water loss audit report and to appropriately characterize the quality of the reported data. The validation process shall follow the principles and terminology laid out by the American Water Works Association in the third edition of Water Audits and Loss Control Programs, Manual M36 and in the Free Water Audit Software, version 5.0. A validated water loss audit report shall include the name and technical qualifications of the person engaged for validation.
(C) The technical qualifications required of a person to engage in validation, as described in subparagraph (B).
(D) The certification requirements for a person selected by an urban retail water supplier to provide validation of its own water loss audit report.
(E) The method of submitting a water loss audit report to the department.
(2) The department shall update rules adopted pursuant to paragraph (1) no later than six months after the release of subsequent editions of the American Water Works Association’s Water Audits and Loss Control Programs, Manual M36. Except as provided by the department, until the department adopts updated rules pursuant to this paragraph, an urban retail water supplier may rely upon a subsequent edition of the American Water Works Association’s Water Audits and Loss Control Programs, Manual M36 or the Free Water Audit Software.
(b) On or before October 1, 2017, and on or before October 1 of each year thereafter, each urban retail water supplier shall submit a completed and validated water loss audit report for the previous calendar year or the previous fiscal year as prescribed by the department pursuant to subdivision (a). Water loss audit reports submitted on or before October 1, 2017, may be completed and validated with assistance as described in subdivision (c).
(c) Using funds available for the 2016–17 fiscal year, the board shall contribute up to four hundred thousand dollars ($400,000) towards procuring water loss audit report validation assistance for urban retail water suppliers.
(d) Each water loss audit report submitted to the department shall be accompanied by information, in a form specified by the department, identifying steps taken in the preceding year to increase the validity of data entered into the final audit, reduce the volume of apparent losses, and reduce the volume of real losses.
(e) At least one of the following employees of an urban retail water supplier shall attest to each water loss audit report submitted to the department:
(1) The chief financial officer.
(2) The chief engineer.
(3) The general manager.
(f) The department shall deem incomplete and return to the urban retail water supplier any final water loss audit report found by the department to be incomplete, not validated, unattested, or incongruent with known characteristics of water system operations. A water supplier shall resubmit a completed water loss audit report within 90 days of an audit being returned by the department.
(g) The department shall post all validated water loss audit reports on its Internet Web site in a manner that allows for comparisons across water suppliers. The department shall make the validated water loss audit reports available for public viewing in a timely manner after their receipt.
(h) Using available funds, the department shall provide technical assistance to guide urban retail water suppliers’ water loss detection programs, including, but not limited to, metering techniques, pressure management techniques, condition-based assessment techniques for transmission and distribution pipelines, and utilization of portable and permanent water loss detection devices.
(i) No earlier than January 1, 2019, and no later than July 1, 2020, the board shall adopt rules requiring urban retail water suppliers to meet performance standards for the volume of water losses. In adopting these rules, the board shall employ full life cycle cost accounting to evaluate the costs of meeting the performance standards. The board may consider establishing a minimum allowable water loss threshold that, if reached and maintained by an urban water supplier, would exempt the urban water supplier from further water loss reduction requirements.

Summary: Existing law requires the state to achieve a 20 reduction in urban per capita water use in California by December 31, 2020, and requires the state to make incremental progress towards this goal by reducing per capita water use by at least 10 on or before December 31, 2015. Existing law requires each urban retail water supplier to develop urban water use targets and an interim urban water use target, in accordance with specified requirements. This bill would require each urban retail water supplier, on or before October 1, 2017, and on or before October 1 of each year thereafter, to submit a completed and validated water loss audit report for the previous calendar year or previous fiscal year as prescribed by rules adopted by the Department of Water Resources on or before January 1, 2017, and updated as provided. The bill would require the department to post all validated water loss audit reports on its Internet Web site in a manner that allows for comparisons across water suppliers and to make these reports available for public viewing. This bill would require the department to provide technical assistance to guide urban retail water suppliers’ water loss detection programs. The bill would require the State Water Resources Control Board, no earlier than January 1, 2019, and no later than July 1, 2020, to adopt rules requiring urban retail water suppliers to meet performance standards for the volume of water losses. This bill would require the board to contribute up to $400,000 using funds available for the 2016–17 fiscal year towards procuring water loss audit report validation assistance for urban retail water suppliers.

An act to add Section 10608.34 to the Water Code, relating to water.