The Ultimate Guide to Sacramento Trends

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Three consumer-backed bills intended to help California homeowners keep their insurance and get claims paid cleared a critical legislative hurdle Thursday, while proposals targeting AI developers’ use of copyrighted work, restricting mental health diversion and banning designer pets died.

With an Aug. 31 deadline to pass legislation approaching, California lawmakers decided the fate of hundreds of proposed laws in hearings before the Legislature’s appropriations committees, which assess their potential costs to the state. In a process criticized for its opacity, bills with potentially significant costs are sent to a “suspense” file, and committee members determine their fate through a rapid series of votes without debate. Those that aren’t voted out are dead for the legislative session.

Here are several noteworthy survivors and casualties, including proposals authored by Bay Area lawmakers involving artificial intelligence, environmental regulation, public safety, insurance and animal welfare.

Survivors

Home insurance

SB 1301 is among a trio of consumer advocate-backed bills that advanced, aiming to help homeowners keep their insurance. The bill would give policyholders more notice before an insurer declines to renew coverage and an opportunity to make changes to their homes to meet underwriting guidelines and retain their policies.

Authored by Sen. Ben Allen, an El Segundo Democrat running for state insurance commissioner, the bill would also prohibit policy nonrenewals based on certain claims or the age of a home’s roof. Starting in 2028, it would double the advance notice insurers must provide before declining to renew a policy, from 45 to 90 days. Renewals offering reduced coverage would require 75 days’ notice.

The notices would have to explain the basis for the insurer’s decision and the policyholder’s right to dispute it. If a homeowner could remedy a condition to retain coverage, the insurer would have to provide notice 120 days before the policy expires.

Losses from costly wildfires have spurred insurers to decline to renew coverage in many California communities, forcing homeowners onto the FAIR Plan, a state-mandated, privately run program that provides fire insurance to people otherwise unable to obtain coverage. The number of homes insured by FAIR Plan has surged 146% since 2022, according to a legislative analysis.

The analysis indicated the bill could increase annual Department of Insurance staffing costs by $465,000 to $802,000 in the near term. The bill is opposed by the American Property Casualty Insurance Association, which argues it “would impose unnecessary operational burdens on insurers, limit the ability to effectively underwrite risk and ultimately undermine efforts to improve insurance availability in California.”

Two other insurance-related bills by Sen. Sasha Renée Pérez, a Pasadena Democrat, also advanced. SB 877 would expand the claim-related documents policyholders can request from insurers to include preliminary and final calculations of property valuations, measurements, covered damage and repair costs.

SB 878 would establish deadlines for insurers to respond to residential property claims and make payments. It would also require insurers, with limited exceptions, to pay the actual cash value of a home determined to be a total loss within 30 days and charge interest when certain payments are late.

All three bills were backed by Every Fire Survivor’s Network and Consumer Watchdog.

Leno’s Law 2.0

SB 1392 would provide smog-check exemptions for vehicles manufactured between 1976 and 1985 that are primarily operated for parades, car shows, exhibitions and charitable events. It’s a second attempt by Sens. Dave Cortese, a San Jose Democrat, and Bakersfield Republican Shannon Grove, inspired by entertainer and classic-car collector Jay Leno, after environmental advocates defeated an earlier version over pollution concerns.

State law already exempts vehicles made in 1975 or earlier. The proposed exemption would apply to qualifying vehicles made during the following decade, which are often sought by collectors. The authors said the current bill would not create a permanent rolling exemption for pre-1986 vehicles or alter the broader smog-check program.

The bill is opposed by environmental groups and air districts. According to a legislative analysis, a 1982 vehicle that passed a smog check produced 123 times as much smog-forming pollution as a 2025 vehicle. The analysis said exempting additional vehicles would lead to an unknown but “potentially significant” loss of revenue from smog checks.

Cortese said “Leno’s Law 2.0 strikes the right balance between preserving California’s automotive history and maintaining our nation’s strongest commitment to clean air,” and that “these historic collector vehicles represent a tiny fraction of the cars on our roads, are driven only occasionally, and contribute minimally to overall emissions.”

Casualties

AI copyright transparency

AB 412, authored by Democratic Assemblymembers Rebecca Bauer-Kahan of the East Bay and Ash Kalra of the South Bay, would have allowed copyright owners to ask developers of generative artificial intelligence models whether their protected work was used to develop those tools. Developers generally would have had 30 days to respond and identify any covered material they used.

The authors noted that creators say they should be compensated when their work is used to train commercial AI systems but often do not know which copyrighted books, music, images or other material may have been included in training datasets.

According to a legislative analysis in the Senate, “lawsuits from authors, artists, and publishers are currently testing these issues in court, seeking to establish clearer legal boundaries around AI training practices.” That analysis, however, noted the potential for “significant to major cost pressure to the courts to the extent there are additional civil filings for new violations created by this bill.”

The Chamber of Progress, a technology industry advocacy group, cheered the bill’s failure to advance, saying that with potential penalties of $1,000 per violation per day, lawmakers prevented “a costly new compliance regime that could have imposed billions of dollars in costs on California taxpayers, AI developers, and research institutions.”

The authors did not immediately comment on the committee’s decision.

Limits on mental health diversion

SB 1373 would have revised the public safety standard a court applies when determining whether a criminal defendant is suitable for mental health diversion.

According to its author, Sen. Grove, “for far too long, California’s Mental Health Diversion program has been used as a ‘get-out-of-jail-free’ card by violent offenders.” She said her bill would have closed “dangerous gaps” in state law by allowing an evidentiary hearing and giving judges the information necessary to deny diversion in cases where it appears a violent offender is attempting to abuse the program.

The bill would have required a defendant to have been diagnosed with a mental disorder within five years of the alleged offense before a court could find the disorder was a significant factor. It also would have expanded the charges that make defendants ineligible for diversion to include attempted murder, kidnapping, carjacking and human trafficking.

The bill was backed by prosecutors and law enforcement groups and opposed by public defenders and civil rights advocates. Critics argued it would lead to additional incarceration of people better served by community treatment. A legislative analysis indicated it could require 18,700 additional hearings annually, costing $2.9 million to $6.7 million.

Grove said she was “profoundly disappointed” the Assembly Appropriations Committee killed her bill and that “victims deserve better.”

Designer pet ban

AB 1382 would have prohibited the importation for profit or sale of transgenic pets engineered with cosmetic traits.

Assemblymember Leticia Castillo, a Republican from Corona, said her bill “was about protecting animals from being turned into novelty products.” The lawmaker said advances in gene-editing technology make it possible to alter an animal’s genetic blueprint to produce transgenic “designer pets” with unnatural qualities, such as glow-in-the-dark rabbits, miniature livestock and “unicorn” animals.

The bill included exceptions for genetic traits intended to benefit an animal’s health or enhance its interaction with humans, including hypoallergenic traits, as well as certain aquatic animals.

A legislative analysis cited “unknown, potentially significant workload cost pressures to the state” to adjudicate lawsuits arising from the legislation. Castillo vowed to continue her fight, saying “the technology that makes ‘designer pets’ possible isn’t going away, and neither am I.”

What’s next

Bills that advanced out of the suspense file and appropriations committees now head to floor votes in the Assembly or Senate. Lawmakers must pass them by Aug. 31. Bills that receive final legislative approval will go to the governor, who has until Sept. 30 to sign or veto them.

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The post Home insurance, AI and designer pets: What lived and died in Sacramento appeared first on Insurance News | InsuranceNewsNet.

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