BILL ANALYSIS Ó
AB 468
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Date of Hearing: April 15, 2013
ASSEMBLY COMMITTEE ON NATURAL RESOURCES
Wesley Chesbro, Chair
AB 468 (Chesbro) - As Amended: April 8, 2013
SUBJECT : Insurance: Disaster Management, Preparedness, and
Assistance Surcharge
SUMMARY : (1) Repeals the state fire prevention fee, (2)
creates the District Management, Preparedness, and Assistance
Fund (FUND) for funding emergency activities of the Office of
Emergency Services, the Department, and the Military Department,
as well as to local governments for disaster planning and
response, and (3) supports the Fund by requiring an insured 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 2, 2014, equivalent to 4.8% of the
premium written on residential fire and multiperil insurance or
the property exposure for commercial policies in California.
EXISTING LAW :
1)Establishes the California Emergency Management Agency
(CalEMA) with responsibility for state emergency management
and disaster response services for designated disasters and
emergencies, including responsibility for activities necessary
to prevent, respond to, recover from, and mitigate the effects
of emergencies and disasters to people and property.
2)Authorizes the Governor to appoint the Secretary of California
Emergency Management, subject to Senate confirmation and
grants the Secretary the authority to coordinate all state
disaster response, emergency planning, emergency preparedness,
disaster recovery, and disaster mitigation activities, as well
as homeland security activities.
3)Establishes the Standardized Emergency Management System
(SEMS) Act to overcome problems of incompatible equipment and
inadequacies of resource mobilization, communication and
command structure.
4)Establishes within the State Budget's reserve for economic
uncertainties a Disaster Response Emergency Operations Account
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from which the State Director of Finance is authorized to
allocate monies to state agencies for disaster response or
recovery costs arising from a Governor-declared state of
emergency.
5)Requires the Insurance Commissioner, in cooperation with
insurers, the Emergency Management Agency, and other emergency
service agencies, to establish procedures for the coordination
of efforts between insurers and their representatives and
those of emergency response agencies.
6)Requires the State Board of Forestry and Fire Protectionto
adopt regulations to establish a fire prevention fee in an
amount not to exceed $150 to be charged on each "structure" on
a parcel that is within an SRA. "Structure" is defined as a
building used or intended to be used for human habitation,
including a mobile home or manufactured home. The Board is
required to exclude building types that require no structural
fire protection services beyond those provided to otherwise
unimproved lands.
THIS BILL :
1)Repeals the state fire prevention fee, which is collected to
fund fire prevention activities in areas where the financial
responsibility of preventing and suppressing fires is
primarily the responsibility of the state.
2)Creates the Fund for funding emergency activities of the
Office of Emergency Services, the Department, and the Military
Department, as well as to local governments for disaster
planning and response.
3)Requires an insured 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 2,
2014, equivalent to 4.8% of the premium written on residential
fire and multiperil insurance or the property exposure for
commercial policies in California.
4)Requires the Disaster Management, Preparedness, and Assistance
Surcharge to be remitted by the insurers to the Office of
Emergency Services, or other state agency designated to
collect the surcharge on behalf of the Office of Emergency
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Services, within 45 days following the end of each calendar
quarter.
FISCAL EFFECT : Unkown
COMMENTS :
1)Background. California has suffered catastrophic disasters
and fires that have impacted the entire state's economy,
quality of life and insurance costs-and will likely continue
to do so into the future. Our state also has the best mutual
aid response system in the world. However, fiscal issues at
the state and local levels have created challenges in funding
first response capabilities and the premier mutual aid system
in the world. The state currently lacks all of the financial
resources it needs to fully fund its role in the mutual aid
system and local governments are having increasing difficulty
in funding its shared responsibilities in the system. This
situation is becoming critical and impacts the public safety
of all Californians when a disaster strikes.
Government's first responsibility is the safety of its
citizens. California's state and local firefighters are the
first to respond in a disaster situation, and as such, the
state has a responsibility to ensure they have the necessary
resources to carry out their job effectively and efficiently.
AB 468 is intended to improve California's overall emergency
preparedness and response capabilities.
2)According to the Author. The revenues from the Fund would pay
for disaster planning, response, training and equipment for
three state agencies: CalFire, CalEMA and the Military
Department. The Fund would also provide resources to local
first response-agencies. The funds from this surcharge will
ensure that California is prepared for all disasters
(earthquake, fire, flood, and tsunamis as well as manmade
disasters) by providing first responders with need resources
and proactively helping to save lives and property. It will
benefit all Californians - north, south, coastal, inland,
rural or urban. The state and local governments currently
lack the necessary financial resources needed to fully fund
its role in our outstanding mutual aid system especially in
light of years of state and local budget cuts and the recent
federal sequestration cuts to CalEMA and the National Guard.
This bill will benefit all Californians, no matter where they
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live, by ensuring the integrity and responsiveness of our
mutual aid system during times of horrific disasters.
As for the repeal of the SRA fire fee, this fee is inherently
unfair, regressive and charged only to residents living in
state responsibility areas, which include primarily rural
residents as well as residents of some suburban areas.
CalFire does far more than just respond to wildfires, they are
the first responders for all types of disasters throughout the
state. The surcharge is more fair and representative of the
role CalFire plays in disaster response throughout California.
3)Previous Legislation. In 2010, SB 1258 (Kehoe) introduced a
similar bill. The Senate Appropriations Committee's analysis
for SB 1258 stated the following:
This bill implements the Emergency Response Initiative
proposal included in [Governor Schwarzenegger's]
proposed budget. Under the Governor's proposal, in
the 2010-11 budget year, $200 million in revenues from
the Emergency Response Initiative would be used to
reduce state General Fund expenditures for emergency
response?In subsequent years, new revenues would be
used to offset $219 million in state emergency
response costs, $73 million would be used by state
agencies for enhanced emergency response capability,
and $150 million would be provided to local
governments.
4)Double Referred. This bill is double referred to the
Assembly Insurance Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file
Opposition
California Chamber of Commerce
CalTax
Howard Jarvis Taxpayers Association
AB 468
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Analysis Prepared by : Mario DeBernardo / NAT. RES. / (916)
319-2092