Amended in Assembly May 1, 2013

Amended in Assembly April 8, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 468

Introduced by Assembly Member Chesbro

(Principal coauthors: Assembly Members Alejo, Levine, and Stone)

(Coauthor: Assembly Member Atkins)

February 19, 2013

An act to add Section 16031 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 begin delete insurance. end delete begin insert insurance, and declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 468, as amended, Chesbro. Insurance: Disaster Management, Preparedness, and Assistance 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 create the Disaster Management, Preparedness, and Assistance Fund in the State Treasury. The bill would require insureds to pay a special purpose surcharge, the Disaster Management, Preparedness, and Assistance Surcharge, on each commercial and residential fire and multiperil insurance policy issued or renewed on or after January 1, 2014, equivalent to 4.8% of the premium written on residential fire and multiperil insurance or the property exposure for commercial policies in California. 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, as well as local governments for disaster planning 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.

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This bill would declare that it is to take effect immediately as an urgency statute.

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Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 16031 is added to the Insurance Code,
to read:

16031.  

(a) The Disaster Management, Preparedness, and
Assistance 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
funding emergency activities of the Office of Emergency Services,
the Department of Forestry and Fire Protection, and the Military
Department, as well as to local governments for disaster planning
and response.

(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, 2014, equivalent to 4.8
percent of the premium written on residential fire and multiperil
insurance or the property exposure for commercial policies in
California. The Disaster Management, Preparedness, and
Assistance 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 January 1, 2015, shall not result in a penalty, fine, or other
liability.

(c) Every admitted insurer in this state shall collect the surcharge
fee specified in subdivision (b), which shall be separately identified
on each policy, with respect to residential fire and multiperil
insurance and the property portion of commercial policies.

(d) Funds received as a result of the surcharge imposed on
insureds as a percentage of premiums written on residential fire
and multiperil insurance and property exposure for commercial
insurance policies shall be remitted by the admitted insurers to the
Office of Emergency Services, or other state agency designated
to collect the surcharge on behalf of the Office of Emergency
Services, within 45 days following the end of each calendar quarter.

SEC. 2.  

Chapter 1.5 (commencing with Section 4210) of Part
2 of Division 4 of the Public Resources Code is repealed.

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This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

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In order to make necessary statutory changes to improve the
state’s ability to respond to potentially devastating and deadly
emergencies at the earliest time possible, it is necessary that this
act take effect immediately.

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