Amended in Assembly April 6, 2015

California Legislature—2015–16 Regular Session

Assembly BillNo. 1203


Introduced by Assembly Member Jones-Sawyer

February 27, 2015


An act to amend Sectionbegin delete 8588.11 ofend deletebegin insert 8685 of, and to add Sections 8587.3 and 8587.4 to,end insert the Government Code,begin insert 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,end insert relating to emergency services.

LEGISLATIVE COUNSEL’S DIGEST

AB 1203, as amended, Jones-Sawyer. Office of Emergencybegin delete Services: Fire Fighter Apprenticeship Program: training: crude oil spills.end deletebegin insert Services: property insurance surcharge.end insert

begin insert

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.

end insert
begin insert

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.

end insert
begin insert

Because the payment of the special purpose surcharge, under the bill, would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, the bill would require for passage the approval of 23 of the membership of each house of the Legislature.

end insert
begin delete

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.

end delete
begin delete

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.

end delete

Vote: begin deletemajority end deletebegin insert23end insert. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

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

P2    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

The Legislature finds and declares all of the
2following:

end insert
begin insert

3(a) California is faced with ongoing, increasing disaster threats,
4which are shared by all Californians and demand a statewide
5response.

end insert
begin insert

6(b) California’s communities must consistently prepare for a
7wide-range of devastating emergencies, from natural disasters,
8such as floods, droughts, wildfires, mudslides, and earthquakes,
9to man-caused disasters, such as a hazardous materials release,
P3    1a massive explosion, or the dispersal of a biological or chemical
2agent.

end insert
begin insert

3(c) Catastrophic disasters impact the entire state’s economy,
4the entire state’s insurance costs, and the entire state’s quality of
5life.

end insert
begin insert

6(d) Our first goal should be to ensure that man-caused disasters
7do not happen in the first place. With respect to natural disasters,
8we must ensure that our communities and our first responders are
9trained at the highest level, are adequately prepared, and have
10employed the most effective mitigation strategies.

end insert
begin insert

11(e) When the alarm bell rings, the safety of the public demands
12that California’s state and local government agencies have the
13ability to aggressively support our first responders in effectively
14mitigating what will inevitably be the next disaster.

end insert
begin insert

15(f) Disaster response in California relies upon the coordinated
16role that state and local agencies play in the overall mutual aid
17emergency response network. There is a critical need to support
18California’s mutual aid system, the essential state and local
19disaster response connection, by ensuring that local agency first
20responder services are not threatened by state and local cutbacks.

end insert
begin insert

21(g) The Governor’s Office of Emergency Services (OES) is the
22most experienced emergency management agency in the nation
23and is charged with, among other things, coordinating state level
24emergency preparedness, response, and recovery using a
25centralized communications infrastructure, interagency
26cooperation, dedicated resources, and expert staff.

end insert
begin insert

27(h) CAL FIRE is the agency responsible for protecting natural
28resources from fire on land designated by the State Board of
29Forestry as a State Responsibility Area (SRA). CAL FIRE also
30serves as the incident command during many of California’s most
31serious disasters in partnership with OES and California’s local
32government participants in the State Mutual Aid System.

end insert
begin insert

33(i) By design, the SRA fee that has been annually imposed on
34properties and structures since 2012 cannot be used for fire
35suppression activities, such as fighting fires and acquiring fire
36suppression equipment.

end insert
begin insert

37(j) In some cases, the SRA fee creates a double or triple layered
38fee-structure at the local level, which causes a disconnect among
39taxpayers who may be paying a fee that confers little, if any, local
40benefit to their local fire department. The SRA fee should be
P4    1repealed in favor of a more comprehensive structure that supports
2both fire prevention and suppression activities statewide.

end insert
begin insert

3(k) It is in the public’s best interest and welfare that the state
4build on California’s base of high-level disaster response readiness
5by ensuring a dedicated source of revenue that supports local and
6state fire and emergency disaster response. It is an essential
7commitment to the safety and well-being of every Californian, no
8matter where they live.

end insert
9begin insert

begin insertSEC. 2.end insert  

end insert

begin insertSection 8587.3 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
10read:end insert

begin insert
11

begin insert8587.3.end insert  

(a) There is hereby established in the Office of
12Emergency Services the California Fire and Rescue Mutual Aid
13Support Program.

14(b) (1) On July 1, 2016, and each year thereafter, upon
15appropriation by the Legislature, the program shall be allocated
1650 percent of the funds deposited in the Disaster Response Fund
17created pursuant to Section 16034 of the Insurance Code, for the
18purposes specified in this section.

19(2) The Director of Emergency Services shall allocate the funds
20specified in paragraph (1) to local public entities providing fire
21protection within an operational area as specified in Section 8605,
22that are participants in the Master Mutual Aid Agreement as
23defined in Section 8561, have, if subject to the requirements of
24Section 65302.6, adopted a hazard mitigation plan pursuant to
25that section and are in compliance with the reporting requirements
26of Section 13110.5 of the Health and Safety Code. The funds shall
27be allocated to local public entities based upon all of the following:

28(A) A pro rata share of fees collected for the Disaster Response
29Fund created pursuant to Section 16034 of the Insurance Code
30within that operational area.

31(B) The population served by each local public entity that
32provides fire protection within that operational area.

33(C) The specific risk assessment within that operational area
34based upon hazard maps, community vulnerability and capacity
35analysis, risk modeling, and direct, indirect, and secondary effects
36of disasters, as determined by the director.

37(3) On an annual basis, any funds that are not allocated as
38specified in paragraph (1) and are not allocated or scheduled to
39be allocated as set forth in subdivision (l) of Section 16034 of the
40Insurance Code from the Disaster Response Fund, shall, upon
P5    1appropriation by the Legislature, be allocated to the program for
2the purposes specified in this section, and shall be allocated by
3the director pursuant to paragraph (2).

4(c) Local public entities that receive an allocation pursuant to
5subdivision (b) shall use the funds to enhance or sustain fire and
6rescue disaster mutual aid capacity to combat the effect of all
7hazard disasters in any of the following areas:

8(1) Disaster response capacity.

9(2) Communications interoperability consistent with standards
10and specifications established under Article 6.2 (commencing with
11Section 8592).

12(3) Household and individual preparedness outreach and
13education.

14(4) Programs to immediately reduce community vulnerability
15to hazards identified in their approved hazard mitigation plan
16pursuant to Section 65302.6.

17(d) Local public entities that receive an allocation pursuant to
18subdivision (b) may use the funds to support personnel, training,
19exercises, equipment, construction, and other activities that
20enhance or sustain disaster mutual aid capacity or reduce
21community vulnerability to disasters.

22(e) For purposes of promoting the implementation and
23functioning of the program, upon appropriation by the Legislature,
24the director may allocate funds to reimburse agencies and special
25districts that provide staff support for operational area or regional
26fire and rescue coordination.

27(f) Funds allocated to local public entities pursuant to this
28section shall not be used to supplant any existing funds allocated
29to that entity by the Office of Emergency Services for fire and
30rescue services.

end insert
31begin insert

begin insertSEC. 3.end insert  

end insert

begin insertSection 8587.4 is added to the end insertbegin insertGovernment Codeend insertbegin insert, to
32read:end insert

begin insert
33

begin insert8587.4.end insert  

(a) Beginning on July 1, 2016, and on July 1 every
34three years thereafter, the Director of Emergency Services, in
35consultation with the Department of Forestry and Fire Protection,
36FIRESCOPE, and statewide stakeholder organizations representing
37firefighters, fire chiefs, and special fire districts, shall develop a
38strategy for enhancement of mutual aid. The strategy shall do all
39of the following:

P6    1(1) Identify eligible purchases, activities, and programs that
2promote the delivery of mutual aid.

3(2) Set goals for mutual aid enhancement.

4(3) Identify criteria for allocations of resources for mutual aid.

5(4) Prescribe the fiscal and administrative oversight of the
6California Fire and Rescue Mutual Aid Support Program
7established pursuant to Section 8587.3.

8(b) On a date identified by the Director of Emergency Services,
9each fire and rescue operational area shall submit a three-year
10strategy plan, to the director, for the enhancement of fire and
11rescue disaster mutual aid. The plan shall satisfy the requirements
12specified in subdivision (a) and shall specify how local public
13entities within the operational area will use the funds over the next
14three years.

end insert
15begin insert

begin insertSEC. 4.end insert  

end insert

begin insertSection 8685 of the end insertbegin insertGovernment Codeend insertbegin insert is amended to
16read:end insert

17

8685.  

From any moneys appropriated for that purpose, and
18subject to the conditions specified in this article, the director shall
19allocate funds to meet the cost of any one or more projects as
20defined in Section 8680.4. Applications by school districts shall
21be submitted to the Superintendent of Public Instruction for review
22and approval, in accordance with instructions or regulations
23developed by the Office of Emergency Services, prior to the
24allocation of funds by the director.

25Moneys appropriated for the purposes of this chapter may be
26used to provide financial assistance for the following local agency
27and state costs:

28(a) Local agency personnel costs, equipment costs, and the cost
29of supplies and materials used during disaster response activities,
30 incurred as a result of a state of emergency proclaimed by the
31Governor, excluding the normal hourly wage costs of employees
32engaged in emergency work activities.begin insert Notwithstanding subdivision
33(a) of Section 8686, the state share of eligible costs identified in
34this subdivision shall be up to 100 percent for those projects
35involving local agencies qualified pursuant to paragraph (2) of
36subdivision (b) of Section 8587.3 from funds available to the Office
37of Emergency Services pursuant to subdivision (l) of Section 16034
38of the Insurance Code.end insert

39(b) To repair, restore, reconstruct, or replace facilities belonging
40to local agencies damaged as a result of disasters as defined in
P7    1Section 8680.3. Mitigation measures performed pursuant to
2subdivision (b) of Section 8686.4 shall qualify for funding pursuant
3to this chapter.

4(c) Matching fund assistance for cost sharing required under
5federal disaster assistance programs, as otherwise eligible under
6this act.

7(d) Indirect administrative costs and any other assistance deemed
8necessary by the director.

9(e) Necessary and required site preparation costs for
10mobilehomes, travel trailers, and other manufactured housing units
11provided and operated by the Federal Emergency Management
12Agency.

13begin insert

begin insertSEC. 5.end insert  

end insert

begin insertSection 16034 is added to the end insertbegin insertInsurance Codeend insertbegin insert, end insert14immediately following Section 16032begin insert, to read:end insert

begin insert
15

begin insert16034.end insert  

(a) The Disaster Response Fund is hereby created in
16the State Treasury. Funds received by the Office of Emergency
17Services pursuant to this section shall be deposited into this fund.
18Funds deposited into this fund shall be appropriated by the
19Legislature for the purposes of this section to fund the disaster
20and emergency response activities of the Office of Emergency
21Services, the Department of Forestry and Fire Protection, and the
22Military Department.

23(b) Insureds shall pay a special purpose surcharge on each
24commercial and residential fire and multiperil insurance policy
25issued or renewed on or after January 1, 2016, equivalent to one
26of the following:

27(1) Five percent of the premium written on property exposure
28for commercial or residential fire and multiperil insurance
29properties located within an operational area as specified in
30Section 8605 of the Government Code, and within a political
31subdivision that is not a participant in the Master Mutual Aid
32Agreement as defined by Section 8561 of the Government Code.

33(2) Three percent of the premium written on property exposure
34for commercial or residential fire and multiperil insurance
35properties located within an operational area as specified in
36Section 8605 of the Government Code, and within a political
37subdivision that is a participant in the Master Mutual Aid
38Agreement as defined by Section 8561 of the Government Code.

39(c) The surcharge shall only be applied to new business and
40renewal transactions. No adjustment shall be made for midterm
P8    1increases or decreases in exposure or coverage. The amount of
2 the surcharge shall be calculated to the nearest dollar.
3Notwithstanding any other law, failure to collect the surcharge
4from insureds prior to April 1, 2016, shall not result in a penalty,
5fine, or other liability.

6(d) Every admitted insurer in this state shall collect the disaster
7response surcharge specified in subdivision (b), which shall be
8separately identified on each policy, with respect to the property
9portion of the commercial or residential fire and multiperil
10insurance policy.

11(e) For those policies on which the surplus line tax is paid by
12a surplus line broker pursuant to Sections 1775.1 and 1775.5,
13inclusive, the surplus line broker shall collect the disaster response
14surcharge with respect to the property portion of any homeowners
15policy, all risk insurance policy, or named peril insurance policy
16that specifically includes fire coverage placed with a nonadmitted
17 insurer. If those policies cover multistate risks, the surcharge shall
18be applied pro rata to that portion of the premium allocated to
19risks in this state based on the percentage of the property risk
20located in California.

21(f) (1) Funds received as a result of the surcharge imposed on
22insureds as a percentage of premiums written on property
23exposures for both commercial and residential insurance policies
24shall be remitted by the admitted insurers to the Office of
25Emergency Services, or other state agency or their agent
26designated to collect the surcharge on behalf of the Office of
27Emergency Services, within 45 days following the end of each
28calendar quarter. The premiums written by admitted insurers for
29property exposures shall be as stated on lines 1, 4, and 5.1 of the
30annual statement filed by each insurer pursuant to Section 900.

31(2) Funds received as a result of the surcharge imposed on
32insureds as a percentage of premiums written on property
33exposures for both commercial and residential insurance policies
34placed with a nonadmitted insurer shall be remitted by the surplus
35line brokers to the Surplus Line Association in the same manner
36and form as the stamping fee paid on the policies placed with a
37nonadmitted insurer by a surplus line broker. The Surplus Line
38Association shall remit the funds received from the surplus line
39brokers to the Office of Emergency Services, or its designee, within
4045 days following the end of each calendar quarter.

P9    1(g) None of the special purpose surcharges shall be considered
2premiums for any purpose, including the computation of gross
3premium tax or agent’s commission. The full amount of the
4surcharge is due at inception or renewal of the insurance policy,
5even if the premium is paid in installments. The amount of each
6special purpose surcharge shall be separately stated on either a
7billing or policy declaration send to an insured. Notwithstanding
8this subdivision, an admitted insurer or surplus line broker may
9omit collecting of the surcharge from its insured if the expense of
10collecting the surcharge would exceed the amount of the surcharge
11and instead remit the amount of the omitted surcharges to the
12Office of Emergency Services or its designee, provided that nothing
13in this subdivision shall relieve the admitted insurer or surplus
14line broker of its obligation to recoup the amount of the surcharge
15otherwise collectible.

16(h) (1) For commercial policies with combined property and
17liability coverage, for which the actual property coverage cannot
18be determined, the admitted insurer shall calculate, and the insured
19shall remit, the surcharge based upon the ratio of 50 percent
20attributable to the property coverage. Within 45 days following
21submission of its annual statement to the National Association of
22Insurance Commissioners, an admitted insurer shall reconcile its
23lines 1, 4, and 5.1 surcharge remittances based upon its annual
24statement.

25(2) For policies for which a surplus line tax is paid by a surplus
26line broker pursuant to Sections 1775.1 to 1775.5, inclusive, for
27risks with combined property and liability coverage, the surplus
28line broker shall calculate and the insured shall remit the
29surcharge based on a ratio of 50 percent attributable to the
30property coverage.

31(i) Each admitted insurer and surplus line broker collecting the
32surcharge shall be required to disclose the surcharge as the
33“California Disaster Response Surcharge” on the declarations
34page, the billing statement, or a separate document accompanying
35the declarations page or billing statement. If an insurer chooses
36to provide supplemental materials to the policyholders describing
37the surcharge, the language shall comply substantially with either
38of the following, as applicable and consistent with subdivision (b):

39(1) “The State of California has imposed a Disaster Response
40Surcharge on all residential and commercial insurance policies
P10   1issued or renewed on or after January 1, 2016. The purpose of
2this surcharge is to ensure adequate funding of disaster response
3and fire and rescue mutual aid services throughout California,
4including your area. We are required by law to collect the
5surcharge from our policyholders. The surcharge, which is
6separately stated on your declarations page or billing statement,
7is calculated at 5 percent of the total policy premium related to
8property insurance.”

9(2) “The State of California has imposed a Disaster Response
10Surcharge on all residential and commercial insurance policies
11issued or renewed on or after January 1, 2016. The purpose of
12this surcharge is to ensure adequate funding of disaster response
13and fire and rescue mutual aid services throughout California,
14including your area. We are required by law to collect the
15surcharge from our policyholders. The surcharge, which is
16separately stated on your declarations page or billing statement,
17is calculated at 3 percent of the total policy premium related to
18property insurance.”

19(j) Failure of an insured to pay the surcharge shall be treated
20as a failure to pay the premium. Failure to pay the surcharge shall
21result in cancellation of the policy.

22(k) If a policy is canceled before the end of the term for which
23it was issued or the end of the period for which a premium has
24been paid, the refund of the surcharge amount submitted to the
25Office of Emergency Services or its designee shall be remitted to
26the insured. However, any assessable policy of insurance that is
27canceled as of the effective date of the policy, if the entire premium
28is returned to the insured, and no coverage was ever provided to
29the insured, shall not be subject to a surcharge. All refunds of
30previously collected surcharges on those canceled policies shall
31be applied to reduce the surcharges reported in the same calendar
32quarter in which the refunded surcharges were made.

33(l) Funds in the Disaster Response Fund shall be distributed,
34upon appropriation, in accordance with Section 8587.3 of the
35Government Code and the balance of the fund to the Office of
36Emergency Services, the Department of Forestry and Fire
37Protection, and the Military Department for the support of disaster
38response and fire and rescue mutual aid activities of those
39departments, and to the Office of Emergency Services or its
40designee for the actual administrative costs incurred in collecting
P11   1the surcharge pursuant to this section, and for the maintenance
2of an adequate reserve.

3(m) Any balance remaining in the fund that is scheduled to be
4allocated but not yet allocated as described in paragraph (3) of
5subdivision (b) of Section 8587.3 of the Government Code shall
6be retained in the fund and carried forward to the next fiscal year.

7(n) The Department of Insurance, the Department of Forestry
8and Fire Protection, and other state agencies and departments
9shall cooperate and provide information to the Office of Emergency
10Services as necessary to implement this program.

11(o) For the purposes of this section, the following definitions
12apply:

13(1) “Admitted insurer” means an insurer that has secured a
14certificate of authority from the commissioner as required by
15Section 700 and is subject to the tax set forth in Section 28 of
16Article XIII of the California Constitution.

17(2) “Hazard” means the potential impact to people or property
18as a result of seismic activity, flood, or wildland fire.

19(3) “Surplus line broker” means a person licensed pursuant to
20Section 1765.2.

21(p) For purposes of this section, “FAIR Plan” established
22pursuant to Chapter 9 (commencing with Section 10090) of part
231 of Division 2, is an admitted insurer.

end insert
24begin insert

begin insertSEC. 6.end insert  

end insert

begin insertChapter 1.5 (commencing with Section 4210) of Part
252 of Division 4 of the end insert
begin insertPublic Resources Codeend insertbegin insert is repealed.end insert

begin delete
26

SECTION 1.  

Section 8588.11 of the Government Code is
27amended to read:

28

8588.11.  

(a) The office shall contract with the California Fire
29Fighter Joint Apprenticeship Program to develop a fire service
30specific course of instruction on the responsibilities of first
31responders to incidents involving crude oil spills by rail and
32terrorism incidents. The course shall include the criteria for the
33curriculum content recommended by the Curriculum Development
34Advisory Committee established pursuant to Section 8588.10 to
35address the training needs of both of the following:

36(1) Firefighters in conformance with the standards established
37by the State Fire Marshal.

38(2) Paramedics and other emergency medical services fire
39personnel in conformance with the standards established by the
40Emergency Medical Services Authority.

P12   1(b) The course of instruction shall be developed in consultation
2with individuals knowledgeable about consequence management
3that addresses the topics of containing and mitigating the impact
4of incidents involving crude oil spills by rail or a terrorist incident,
5including, but not limited to, a terrorist act using hazardous
6materials, as well as weapons of mass destruction, including any
7chemical warfare agent, weaponized biological agent, or nuclear
8or radiological agent, as those terms are defined in Section 11417
9of the Penal Code, by techniques including, but not limited to,
10rescue, firefighting, casualty treatment, and hazardous materials
11response and recovery.

12(c) The contract shall provide for the delivery of training by the
13California Fire Fighter Joint Apprenticeship Program through
14reimbursement contracts with the state, local, and regional fire
15agencies who may, in turn, contract with educational institutions.

16(d) To maximize the availability and delivery of training, the
17California Fire Fighter Joint Apprenticeship Program shall develop
18a course of instruction to train the trainers in the presentation of
19the first responder training of consequence management for fire
20service personnel.

end delete

CORRECTIONS:

Digest--Page 2.

Digest--Vote Key--Page 2.




O

Corrected 4-8-15—See last page.     98