Bill Text: CA AB1203 | 2015-2016 | Regular Session | Amended
Bill Title: Office of Emergency Services: property insurance surcharge.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2015-04-27 - In committee: Set, first hearing. Hearing canceled at the request of author. Joint Rule 62(a), file notice suspended. [AB1203 Detail]
Download: California-2015-AB1203-Amended.html
BILL NUMBER: AB 1203 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 6, 2015
INTRODUCED BY Assembly Member Jones-Sawyer
FEBRUARY 27, 2015
An act to amend Section 8588.11 of 8685
of, and to add Sections 8587.3 and 8587.4 to, the Government
Code, to add Section 16034 to the Insurance Code, and to repeal
Chapter 1.5 (commencing with Section 4210) of Part 2 of
Division 4 of the Public Resources Code, relating to emergency
services.
LEGISLATIVE COUNSEL'S DIGEST
AB 1203, as amended, Jones-Sawyer. Office of Emergency
Services: Fire Fighter Apprenticeship Program: training: crude oil
spills. Services: property insurance surcharge.
Existing law required, by September 1, 2011, the State Board of
Forestry and Fire Protection to adopt emergency regulations to
establish a fire prevention fee of not more than $150 for the
necessary fire prevention activities of the state that benefit the
owners of structures within a state responsibility area.
This bill would repeal the fire prevention fee. The bill would
instead create the Disaster Response Fund in the State Treasury. The
bill would require all insureds in the state to pay a special purpose
surcharge on each commercial and residential fire and multiperil
insurance policy issued or renewed on or after January 1, 2016, as
specified. Moneys from this surcharge would be deposited in the fund
and be appropriated by the Legislature for the purposes of funding
emergency activities of the Office of Emergency Services, the
Department of Forestry and Fire Protection, and the Military
Department, and local public entities for disaster preparedness and
response. The bill would also require every admitted insurance
company in the state to collect the surcharge and separately identify
the surcharge on each affected insurance policy. The bill would
provide that the failure of an insured to pay the surcharge would
result in the cancellation of his or her policy.
Existing law creates the Office of Emergency Services in the
office of the Governor, with specified powers and duties relative to
coordinating emergency services. Existing law requires the office to
contract with the California Fire Fighter Joint Apprenticeship
Program to develop a fire service specific course of instruction on
the responsibilities of first responders to terrorism incidents. That
law also requires the course of instruction to be developed in
consultation with individuals knowledgeable about the impact of a
terrorist incident, as provided.
This bill would additionally authorize the office to contract with
the program to develop a course of instruction on the
responsibilities of first responders to incidents involving crude oil
spills by rail, and would additionally require the course of
instruction to be developed in consultation with individuals
knowledgeable about crude oil spills by rail.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares all
of the following:
(a) California is faced with ongoing, increasing disaster threats,
which are shared by all Californians and demand a statewide
response.
(b) California's communities must consistently prepare for a
wide-range of devastating emergencies, from natural disasters, such
as floods, droughts, wildfires, mudslides, and earthquakes, to
man-caused disasters, such as a hazardous materials release, a
massive explosion, or the dispersal of a biological or chemical
agent.
(c) Catastrophic disasters impact the entire state's economy, the
entire state's insurance costs, and the entire state's quality of
life.
(d) Our first goal should be to ensure that man-caused disasters
do not happen in the first place. With respect to natural disasters,
we must ensure that our communities and our first responders are
trained at the highest level, are adequately prepared, and have
employed the most effective mitigation strategies.
(e) When the alarm bell rings, the safety of the public demands
that California's state and local government agencies have the
ability to aggressively support our first responders in effectively
mitigating what will inevitably be the next disaster.
(f) Disaster response in California relies upon the coordinated
role that state and local agencies play in the overall mutual aid
emergency response network. There is a critical need to support
California's mutual aid system, the essential state and local
disaster response connection, by ensuring that local agency first
responder services are not threatened by state and local cutbacks.
(g) The Governor's Office of Emergency Services (OES) is the most
experienced emergency management agency in the nation and is charged
with, among other things, coordinating state level emergency
preparedness, response, and recovery using a centralized
communications infrastructure, interagency cooperation, dedicated
resources, and expert staff.
(h) CAL FIRE is the agency responsible for protecting natural
resources from fire on land designated by the State Board of Forestry
as a State Responsibility Area (SRA). CAL FIRE also serves as the
incident command during many of California's most serious disasters
in partnership with OES and California's local government
participants in the State Mutual Aid System.
(i) By design, the SRA fee that has been annually imposed on
properties and structures since 2012 cannot be used for fire
suppression activities, such as fighting fires and acquiring fire
suppression equipment.
(j) In some cases, the SRA fee creates a double or triple layered
fee-structure at the local level, which causes a disconnect among
taxpayers who may be paying a fee that confers little, if any, local
benefit to their local fire department. The SRA fee should be
repealed in favor of a more comprehensive structure that supports
both fire prevention and suppression activities statewide.
(k) It is in the public's best interest and welfare that the state
build on California's base of high-level disaster response readiness
by ensuring a dedicated source of revenue that supports local and
state fire and emergency disaster response. It is an essential
commitment to the safety and well-being of every Californian, no
matter where they live.
SEC. 2. Section 8587.3 is added to the
Government Code , to read:
8587.3. (a) There is hereby established in the Office of
Emergency Services the California Fire and Rescue Mutual Aid Support
Program.
(b) (1) On July 1, 2016, and each year thereafter, upon
appropriation by the Legislature, the program shall be allocated 50
percent of the funds deposited in the Disaster Response Fund created
pursuant to Section 16034 of the Insurance Code, for the purposes
specified in this section.
(2) The Director of Emergency Services shall allocate the funds
specified in paragraph (1) to local public entities providing fire
protection within an operational area as specified in Section 8605,
that are participants in the Master Mutual Aid Agreement as defined
in Section 8561, have, if subject to the requirements of Section
65302.6, adopted a hazard mitigation plan pursuant to that section
and are in compliance with the reporting requirements of Section
13110.5 of the Health and Safety Code. The funds shall be allocated
to local public entities based upon all of the following:
(A) A pro rata share of fees collected for the Disaster Response
Fund created pursuant to Section 16034 of the Insurance Code within
that operational area.
(B) The population served by each local public entity that
provides fire protection within that operational area.
(C) The specific risk assessment within that operational area
based upon hazard maps, community vulnerability and capacity
analysis, risk modeling, and direct, indirect, and secondary effects
of disasters, as determined by the director.
(3) On an annual basis, any funds that are not allocated as
specified in paragraph (1) and are not allocated or scheduled to be
allocated as set forth in subdivision (l) of Section 16034 of the
Insurance Code from the Disaster Response Fund, shall, upon
appropriation by the Legislature, be allocated to the program for the
purposes specified in this section, and shall be allocated by the
director pursuant to paragraph (2).
(c) Local public entities that receive an allocation pursuant to
subdivision (b) shall use the funds to enhance or sustain fire and
rescue disaster mutual aid capacity to combat the effect of all
hazard disasters in any of the following areas:
(1) Disaster response capacity.
(2) Communications interoperability consistent with standards and
specifications established under Article 6.2 (commencing with Section
8592).
(3) Household and individual preparedness outreach and education.
(4) Programs to immediately reduce community vulnerability to
hazards identified in their approved hazard mitigation plan pursuant
to Section 65302.6.
(d) Local public entities that receive an allocation pursuant to
subdivision (b) may use the funds to support personnel, training,
exercises, equipment, construction, and other activities that enhance
or sustain disaster mutual aid capacity or reduce community
vulnerability to disasters.
(e) For purposes of promoting the implementation and functioning
of the program, upon appropriation by the Legislature, the director
may allocate funds to reimburse agencies and special districts that
provide staff support for operational area or regional fire and
rescue coordination.
(f) Funds allocated to local public entities pursuant to this
section shall not be used to supplant any existing funds allocated to
that entity by the Office of Emergency Services for fire and rescue
services.
SEC. 3. Section 8587.4 is added to the
Government Code , to read:
8587.4. (a) Beginning on July 1, 2016, and on July 1 every three
years thereafter, the Director of Emergency Services, in consultation
with the Department of Forestry and Fire Protection, FIRESCOPE, and
statewide stakeholder organizations representing firefighters, fire
chiefs, and special fire districts, shall develop a strategy for
enhancement of mutual aid. The strategy shall do all of the
following:
(1) Identify eligible purchases, activities, and programs that
promote the delivery of mutual aid.
(2) Set goals for mutual aid enhancement.
(3) Identify criteria for allocations of resources for mutual aid.
(4) Prescribe the fiscal and administrative oversight of the
California Fire and Rescue Mutual Aid Support Program established
pursuant to Section 8587.3.
(b) On a date identified by the Director of Emergency Services,
each fire and rescue operational area shall submit a three-year
strategy plan, to the director, for the enhancement of fire and
rescue disaster mutual aid. The plan shall satisfy the requirements
specified in subdivision (a) and shall specify how local public
entities within the operational area will use the funds over the next
three years.
SEC. 4. Section 8685 of the Government
Code is amended to read:
8685. From any moneys appropriated for that purpose, and subject
to the conditions specified in this article, the director shall
allocate funds to meet the cost of any one or more projects as
defined in Section 8680.4. Applications by school districts shall be
submitted to the Superintendent of Public Instruction for review and
approval, in accordance with instructions or regulations developed by
the Office of Emergency Services, prior to the allocation of funds
by the director.
Moneys appropriated for the purposes of this chapter may be used
to provide financial assistance for the following local agency and
state costs:
(a) Local agency personnel costs, equipment costs, and the cost of
supplies and materials used during disaster response activities,
incurred as a result of a state of emergency proclaimed by the
Governor, excluding the normal hourly wage costs of employees engaged
in emergency work activities. Notwithstanding subdivision (a)
of Section 8686, the state share of eligible costs identified in this
subdivision shall be up to 100 percent for those projects involving
local agencies qualified pursuant to paragraph (2) of subdivision (b)
of Section 8587.3 from funds available to the Office of Emergency
Services pursuant to subdivision (l) of Section 16034 of the
Insurance Code.
(b) To repair, restore, reconstruct, or replace facilities
belonging to local agencies damaged as a result of disasters as
defined in Section 8680.3. Mitigation measures performed pursuant to
subdivision (b) of Section 8686.4 shall qualify for funding pursuant
to this chapter.
(c) Matching fund assistance for cost sharing required under
federal disaster assistance programs, as otherwise eligible under
this act.
(d) Indirect administrative costs and any other assistance deemed
necessary by the director.
(e) Necessary and required site preparation costs for mobilehomes,
travel trailers, and other manufactured housing units provided and
operated by the Federal Emergency Management Agency.
SEC. 5. Section 16034 is added to the
Insurance Code , immediately following Section 16032
, to read:
16034. (a) The Disaster Response Fund is hereby created in the
State Treasury. Funds received by the Office of Emergency Services
pursuant to this section shall be deposited into this fund. Funds
deposited into this fund shall be appropriated by the Legislature for
the purposes of this section to fund the disaster and emergency
response activities of the Office of Emergency Services, the
Department of Forestry and Fire Protection, and the Military
Department.
(b) Insureds shall pay a special purpose surcharge on each
commercial and residential fire and multiperil insurance policy
issued or renewed on or after January 1, 2016, equivalent to one of
the following:
(1) Five percent of the premium written on property exposure for
commercial or residential fire and multiperil insurance properties
located within an operational area as specified in Section 8605 of
the Government Code, and within a political subdivision that is not a
participant in the Master Mutual Aid Agreement as defined by Section
8561 of the Government Code.
(2) Three percent of the premium written on property exposure for
commercial or residential fire and multiperil insurance properties
located within an operational area as specified in Section 8605 of
the Government Code, and within a political subdivision that is a
participant in the Master Mutual Aid Agreement as defined by Section
8561 of the Government Code.
(c) The surcharge shall only be applied to new business and
renewal transactions. No adjustment shall be made for midterm
increases or decreases in exposure or coverage. The amount of the
surcharge shall be calculated to the nearest dollar. Notwithstanding
any other law, failure to collect the surcharge from insureds prior
to April 1, 2016, shall not result in a penalty, fine, or other
liability.
(d) Every admitted insurer in this state shall collect the
disaster response surcharge specified in subdivision (b), which shall
be separately identified on each policy, with respect to the
property portion of the commercial or residential fire and multiperil
insurance policy.
(e) For those policies on which the surplus line tax is paid by a
surplus line broker pursuant to Sections 1775.1 and 1775.5,
inclusive, the surplus line broker shall collect the disaster
response surcharge with respect to the property portion of any
homeowners policy, all risk insurance policy, or named peril
insurance policy that specifically includes fire coverage placed with
a nonadmitted insurer. If those policies cover multistate risks, the
surcharge shall be applied pro rata to that portion of the premium
allocated to risks in this state based on the percentage of the
property risk located in California.
(f) (1) Funds received as a result of the surcharge imposed on
insureds as a percentage of premiums written on property exposures
for both commercial and residential insurance policies shall be
remitted by the admitted insurers to the Office of Emergency
Services, or other state agency or their agent designated to collect
the surcharge on behalf of the Office of Emergency Services, within
45 days following the end of each calendar quarter. The premiums
written by admitted insurers for property exposures shall be as
stated on lines 1, 4, and 5.1 of the annual statement filed by each
insurer pursuant to Section 900.
(2) Funds received as a result of the surcharge imposed on
insureds as a percentage of premiums written on property exposures
for both commercial and residential insurance policies placed with a
nonadmitted insurer shall be remitted by the surplus line brokers to
the Surplus Line Association in the same manner and form as the
stamping fee paid on the policies placed with a nonadmitted insurer
by a surplus line broker. The Surplus Line Association shall remit
the funds received from the surplus line brokers to the Office of
Emergency Services, or its designee, within 45 days following the end
of each calendar quarter.
(g) None of the special purpose surcharges shall be considered
premiums for any purpose, including the computation of gross premium
tax or agent's commission. The full amount of the surcharge is due at
inception or renewal of the insurance policy, even if the premium is
paid in installments. The amount of each special purpose surcharge
shall be separately stated on either a billing or policy declaration
send to an insured. Notwithstanding this subdivision, an admitted
insurer or surplus line broker may omit collecting of the surcharge
from its insured if the expense of collecting the surcharge would
exceed the amount of the surcharge and instead remit the amount of
the omitted surcharges to the Office of Emergency Services or its
designee, provided that nothing in this subdivision shall relieve the
admitted insurer or surplus line broker of its obligation to recoup
the amount of the surcharge otherwise collectible.
(h) (1) For commercial policies with combined property and
liability coverage, for which the actual property coverage cannot be
determined, the admitted insurer shall calculate, and the insured
shall remit, the surcharge based upon the ratio of 50 percent
attributable to the property coverage. Within 45 days following
submission of its annual statement to the National Association of
Insurance Commissioners, an admitted insurer shall reconcile its
lines 1, 4, and 5.1 surcharge remittances based upon its annual
statement.
(2) For policies for which a surplus line tax is paid by a surplus
line broker pursuant to Sections 1775.1 to 1775.5, inclusive, for
risks with combined property and liability coverage, the surplus line
broker shall calculate and the insured shall remit the surcharge
based on a ratio of 50 percent attributable to the property coverage.
(i) Each admitted insurer and surplus line broker collecting the
surcharge shall be required to disclose the surcharge as the
"California Disaster Response Surcharge" on the declarations page,
the billing statement, or a separate document accompanying the
declarations page or billing statement. If an insurer chooses to
provide supplemental materials to the policyholders describing the
surcharge, the language shall comply substantially with either of the
following, as applicable and consistent with subdivision (b):
(1) "The State of California has imposed a Disaster Response
Surcharge on all residential and commercial insurance policies issued
or renewed on or after January 1, 2016. The purpose of this
surcharge is to ensure adequate funding of disaster response and fire
and rescue mutual aid services throughout California, including your
area. We are required by law to collect the surcharge from our
policyholders. The surcharge, which is separately stated on your
declarations page or billing statement, is calculated at 5 percent of
the total policy premium related to property insurance."
(2) "The State of California has imposed a Disaster Response
Surcharge on all residential and commercial insurance policies issued
or renewed on or after January 1, 2016. The purpose of this
surcharge is to ensure adequate funding of disaster response and fire
and rescue mutual aid services throughout California, including your
area. We are required by law to collect the surcharge from our
policyholders. The surcharge, which is separately stated on your
declarations page or billing statement, is calculated at 3 percent of
the total policy premium related to property insurance."
(j) Failure of an insured to pay the surcharge shall be treated as
a failure to pay the premium. Failure to pay the surcharge shall
result in cancellation of the policy.
(k) If a policy is canceled before the end of the term for which
it was issued or the end of the period for which a premium has been
paid, the refund of the surcharge amount submitted to the Office of
Emergency Services or its designee shall be remitted to the insured.
However, any assessable policy of insurance that is canceled as of
the effective date of the policy, if the entire premium is returned
to the insured, and no coverage was ever provided to the insured,
shall not be subject to a surcharge. All refunds of previously
collected surcharges on those canceled policies shall be applied to
reduce the surcharges reported in the same calendar quarter in which
the refunded surcharges were made.
(l) Funds in the Disaster Response Fund shall be distributed, upon
appropriation, in accordance with Section 8587.3 of the Government
Code and the balance of the fund to the Office of Emergency Services,
the Department of Forestry and Fire Protection, and the Military
Department for the support of disaster response and fire and rescue
mutual aid activities of those departments, and to the Office of
Emergency Services or its designee for the actual administrative
costs incurred in collecting the surcharge pursuant to this section,
and for the maintenance of an adequate reserve.
(m) Any balance remaining in the fund that is scheduled to be
allocated but not yet allocated as described in paragraph (3) of
subdivision (b) of Section 8587.3 of the Government Code shall be
retained in the fund and carried forward to the next fiscal year.
(n) The Department of Insurance, the Department of Forestry and
Fire Protection, and other state agencies and departments shall
cooperate and provide information to the Office of Emergency Services
as necessary to implement this program.
(o) For the purposes of this section, the following definitions
apply:
(1) "Admitted insurer" means an insurer that has secured a
certificate of authority from the commissioner as required by Section
700 and is subject to the tax set forth in Section 28 of Article
XIII of the California Constitution.
(2) "Hazard" means the potential impact to people or property as a
result of seismic activity, flood, or wildland fire.
(3) "Surplus line broker" means a person licensed pursuant to
Section 1765.2.
(p) For purposes of this section, "FAIR Plan" established pursuant
to Chapter 9 (commencing with Section 10090) of part 1 of Division
2, is an admitted insurer.
SEC. 6. Chapter 1.5 (commencing with Section 4210)
of Part 2 of Division 4 of the Public Resources Code
is repealed.
SECTION 1. Section 8588.11 of the Government
Code is amended to read:
8588.11. (a) The office shall contract with the California Fire
Fighter Joint Apprenticeship Program to develop a fire service
specific course of instruction on the responsibilities of first
responders to incidents involving crude oil spills by rail and
terrorism incidents. The course shall include the criteria for the
curriculum content recommended by the Curriculum Development Advisory
Committee established pursuant to Section 8588.10 to address the
training needs of both of the following:
(1) Firefighters in conformance with the standards established by
the State Fire Marshal.
(2) Paramedics and other emergency medical services fire personnel
in conformance with the standards established by the Emergency
Medical Services Authority.
(b) The course of instruction shall be developed in consultation
with individuals knowledgeable about consequence management that
addresses the topics of containing and mitigating the impact of
incidents involving crude oil spills by rail or a terrorist incident,
including, but not limited to, a terrorist act using hazardous
materials, as well as weapons of mass destruction, including any
chemical warfare agent, weaponized biological agent, or nuclear or
radiological agent, as those terms are defined in Section 11417 of
the Penal Code, by techniques including, but not limited to, rescue,
firefighting, casualty treatment, and hazardous materials response
and recovery.
(c) The contract shall provide for the delivery of training by the
California Fire Fighter Joint Apprenticeship Program through
reimbursement contracts with the state, local, and regional fire
agencies who may, in turn, contract with educational institutions.
(d) To maximize the availability and delivery of training, the
California Fire Fighter Joint Apprenticeship Program shall develop a
course of instruction to train the trainers in the presentation of
the first responder training of consequence management for fire
service personnel.
