RUMBLE ERUPTS OVER QUAKE FUND : LAWMAKERS ANGRY ABOUT PRIVATE DEAL.

Byline: Mark Katches Daily News Sacramento Bureau

More partisan divisions emerged Monday in a plan to create a $10.5 billion state agency selling earthquake insurance when Democrats on a joint-house conference committee refused to endorse a proposal worked out last week.

Even state Sen. Charles Calderon, D-Montebello, who negotiated the deal with Assembly Speaker Curt Pringle, R-Garden Grove, and Assemblyman David Knowles, R-Cameron Park, did not sign the conference report.

Calderon's signature would have moved the legislation setting up the California Earthquake Authority to the state Assembly and Senate for a final vote.

Calderon said last week that he hoped the legislation would advance Monday, but he has come under attack for negotiating the deal in private without public input.

``The legislative process is a long game,'' Calderon said. ``It's not a short game. I don't think this exercise should be interpreted as anything more than us doing our job.''

Insurance Department officials were more skeptical of the reasons Senate President Bill Lockyer, D-Hayward, called for a delay and Democrats went along.

``It's to derail this,'' said Insurance Department spokesman Richard Wiebe. ``It's the only motive.''

Calderon said he would rather proceed cautiously, believing that more hearings needed to be held before the committee acts to set up the California Earthquake Authority.

``It doesn't matter how long it takes as long as the public has its say,'' Calderon said. ``I can't make a decision as to when there's been too much democracy. I'm an elected representative. My job is to listen.''

His decision came after he was pressured by Lockyer, who urged the senators on the committee to delay a decision for one week.

The conference committee has been meeting since April to strike a compromise between rival plans for the new state agency spelled out in bills written by Calderon and Knowles.

Three Republican lawmakers went ahead and signed the conference report after listening to nearly four hours of testimony - most of it a replay of hearings held over the past three months.

``This is as good as it's going to get,'' said a weary Knowles. ``I believe it's time to put a name on the line and move forward.''

Calderon was joined by Sen. Herschel Rosenthal, D-Los Angeles, and Assemblywoman Denise Moreno-Ducheny, D-National City, who declined to sign the report.

It takes four signatures - two members from each house - to send a conference committee report back to the full Senate and Assembly.

Lockyer has said he is opposed to elements of the deal worked out between Calderon and Knowles in Pringle's office. But he denied that he is trying to kill the legislation.

``I have concerns about the process,'' Lockyer said. ``The issues were discussed in a very general way, but this particular set in changes in policy were never discussed in a public setting. It's important to have more public input.''

Opposition to the earthquake authority continued to mount earlier in the day when Rosenthal, a longtime critic, was joined by two other Valley lawmakers - state Sen. Tom Hayden, D-Los Angeles, and Assemblyman Wally Knox, D-Los Angeles - at a news conference.

``It does nothing in particular for the consumers and the homeowners who vote for us and expect their interests to be represented here,'' said Hayden, whose district takes in parts of Woodland Hills, Sherman Oaks and Agoura Hills.

The new state agency would offer no-frills policies with a 15 percent deductible, $5,000 for contents coverage and up to $3,000 for living expenses, depending on the financial health of the pool.

The plan would create a governing board to set the rates. Insurance Commissioner Chuck Quackenbush's staff has estimated that premiums would cost an average of $3.29 per $1,000 of coverage. But the cost could reach $7.90 for every $1,000 of coverage depending on the age, type of house and whether the home is in an area of high seismic activity.

Rosenthal said the plan will provide little protection for homeowners in the event of a major earthquake.

He objected to the ``backroom, secret negotiations'' in Pringle's office.

``The Pringle deal is essentially a sweetheart deal for insurers,'' Rosenthal said.

Knox, whose district includes parts of Sherman Oaks, Studio City and Universal City, added that the plan ``gives no assurance that my home really will be covered.''

If there is a catastrophic quake, homeowners - already faced with a 15 percent deductible and minimal living expenses and contents coverage - likely will get a pro-rated insurance payout while their premiums could skyrocket 20 percent, according to the plan.

The way the $10.5 billion fund is structured, insurers, and private investors will have more protection than homeowners in the event of an earthquake. Bondholders, who will provide a layer of the funding, could receive 15 percent returns on their investment at the same time homeowners are getting limited payouts.