BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 98| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 98 Author: Assembly Budget Committee Amended: 6/11/13 in Senate Vote: 27 - Urgency ASSEMBLY FLOOR : Not relevant SUBJECT : Property insurance: Seismic Safety Account SOURCE : Author DIGEST : This bill makes statutory changes necessary for the continued funding of the Seismic Safety Commission. ANALYSIS : This bill: 1.Creates the Seismic Safety Account within the Insurance Fund. 2.Requires the Department of Insurance to calculate an annual assessment, not to exceed $0.15 per property exposure, to be charged to each commercial and residential property exposure based on specified factors. 3.Requires the insurer to collect the assessment and remit it to the Department of Insurance unless the insurer elects to pay the assessment on the insured's behalf. Background CONTINUED AB 98 Page 2 The passage of the Seismic Safety Act in 1975 established the Seismic Safety Commission. The Commission was established to advise the Governor, the Legislature, and local governments on risk mitigation in the event of an earthquake. Subsequent legislation (Chapter 532, Statutes of 2006) renamed the commission the Alfred E. Alquist Seismic Safety Commission, moved the commission under the California State and Consumer Services Agency, and added an additional three members to the commission. Currently, the commission is comprised of twenty commissioners. FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No According to the Senate Budget and Fiscal Review Committee, the 2013 Budget Act includes a General Fund loan of $1.12 million to the Insurance Fund. The General Loan will be made to the Insurance Fund in order to finance operations of the Commission for Fiscal Year 2013-14. The loan to the Insurance Fund is expected to be repaid once sufficient funds for repayment have been allocated to the Seismic Safety Account. AL:nl 6/13/13 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END ****