BY NICOLE NORMAN, CAMILLE VON KAENEL, POLITICO
SACRAMENTO, California — A key California Senate committee on Wednesday sided with business interests over environmental and consumer groups by voting down two proposals aimed at addressing the state’s insurance crisis. One would have targeted oil and gas companies, and the other sought to expand coverage in fire-prone areas.
What happened: The Senate Insurance Committee declined to pass SB 982, a bill by Sen. Scott Wiener that aimed to recoup rising property insurance costs from the oil and gas industry, and SB 1076, a bill by Sen. Sasha Renée Pérez that would have required property insurers to cover properties in fire-prone areas if they meet fire mitigation standards.
In a rare move, a majority of the committee declined to support the bills, even though Sen. Steve Padilla, the committee’s new chair this year, voted to advance them.
Padilla said that he was “perturbed” and “concerned” before the final vote came in for Pérez’s bill, which got 3 yes votes and 2 no votes. He said the bill deserved “a chance to continue to be worked, and not to die in this committee.”
He added that he was disappointed that the committee members were not able to have a conversation about how “risk reduction is a primary driver” of getting insurers to stay in California.
Padilla was more muted on Wiener’s proposal, withholding a recommendation for his other committee members and saying he would vote yes to advance the bill to the floor, but would not commit to voting for it later. The bill failed, with only 3 yes votes to 2 no votes.
The two Democrats who declined to vote were Sen. Susan Rubio, the former chair of the committee, and Sen. Laura Richardson.
Why this matters: The failure of both bills show the limits of a movement driven largely by progressive environmental groups and consumer groups to levy the Los Angeles firestorm into support for longstanding policy proposals. It also highlighted the power of the opposition, which included oil and gas companies.
Their failure is also a loss for Padilla, who was appointed Insurance Committee chair over Sen. Rubio by Senate President Pro Tem Monique Limón late last year.
More details: Wiener had agreed to significantly water down his climate liability proposal Tuesday night to clear the Senate Judiciary Committee, which opposed the bill twice before narrowly passing it.
The deal, announced by Senate Judiciary Committee chair Tom Umberg, pushed back the date when oil and gas companies would start accruing liability from 2016 to 2032. It also established a crediting system by which oil and gas companies could reduce their liability by showing they were reducing their own greenhouse gas emissions through technologies like wind, solar or carbon sequestration.
But it wasn’t enough to clear significant opposition from trade unions, business groups and oil and gas companies. And some of the legislators on the Senate Insurance Committee cited concerns about how little time they had to review the deal, and that it had not been put in writing.
The environmental and disaster survivor groups sponsoring the bill, including California Environmental Voters, meanwhile, shared their disappointment in statements after the Wednesday vote.
“We were able to move the ball forward against Big Oil by passing this bill out of its first committee, but today’s vote fell short of that,” Wiener said in a statement. “When climate disasters destroy people’s lives and spike insurance costs to make home ownership unattainable, we cannot ask the victims to pay for everything. Big Oil needs to pay their fair share, and that’s the opportunity we missed today.”
Perez, meanwhile, was also trying to revive past failed proposals with her bill, hoping that the outcry over the limited availability of property insurance options in recent years, as private insurers flee fire-prone areas of the state, would buoy her bill, a version of a longstanding proposal by advocacy group Consumer Watchdog.
But the Personal Insurance Federation of California came out in strong opposition to the bill, calling it unworkable. “Insurers would be forced to guarantee coverage in high risk areas, even if they are losing billions of dollars and cannot sustain the business,” said Seren Taylor, the group’s vice president.
What’s next: Without committee approvals, the bills can not advance this year.
