BILL ANALYSIS Ó
AB 1203
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Date of Hearing: April 30, 2015
ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION
Adam Gray, Chair
AB 1203
(Jones-Sawyer) - As Amended April 6, 2015
SUBJECT: Office of Emergency Services: property insurance
surcharge
SUMMARY: Replaces the State Responsibility Area Fire Prevention
Fee (SRA) with a special purpose surcharge on each commercial
and residential fire and multi-peril insurance policy. The bill
would create the Disaster Response Fund (DRF or Fund) in the
State Treasury with the moneys collected from the surcharge.
The Fund shall be used for the purposes of funding emergency
activities of the Governor's Office of Emergency Services (Cal
OES), the Department of Forestry and Fire Protection (Cal Fire),
and the Military Department, and local public entities for
disaster preparedness and response. Specifically, this bill :
1) Repeals the State Responsibility Area Fire Prevention Fee.
2) Creates Disaster Response Fund in the State Treasury
3) Creates special purpose surcharge of 3% or 5%, as
specified, on each commercial and residential fire and
multi-peril insurance policy issued or renewed on or after
January 1, 2016.
4) Requires moneys from the surcharge to be deposited in the
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Fund and be appropriated by the Legislature for the purposes
of funding emergency activities of Cal OES, Cal Fire, and
the Military Department, and local public entities for
disaster preparedness and response.
5) Requires every insurance company in the state to collect
the surcharge and separately identify the surcharge on each
affected insurance policy.
6) Provides that the failure to pay the surcharge would
result in the cancellation of the policy.
EXISTING LAW:
1)Establishes the Cal FIRE, which, among other things, is
responsible for the fire protection, fire prevention,
maintenance, and enhancement of the state's forest, range, and
brush land resources, contract fire protection, associated
emergency services, and assistance in civil disasters and
other non-fire emergencies.
2)Creates within Cal FIRE the State Board of Forestry and Fire
Protection Board (Board) consisting of nine members appointed
by the Governor. Requires the Board to protect the state's
interest in forest resources on private lands, which includes
establishing adequate forest policy and determining general
policies for Cal FIRE.
3)Requires the Board to classify all lands within the state for
the purpose of determining areas in which the financial
responsibility of preventing and suppressing fires is
primarily the responsibility of the state (these areas are
known as "state responsibility areas" or "SRA.")
4)Declares that it is necessary to impose a fire prevention fee
to pay for fire prevention activities in the SRA that
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specifically benefit owners of structures in the SRA.
5)Requires the Board to adopt regulations to establish a fire
prevention fee in an amount not to exceed $150 (which must be
adjusted every year for inflation) to be charged on each
structure on a parcel that is within the SRA.
6)Requires the fire prevention fees to be deposited in the State
Responsibility Area Fire Prevention Fund, which is available
to the Board and Cal FIRE to expend for fire prevention
activities that benefit the owners of structures within the
SRA who are required to pay the fire prevention fee.
7)Requires the SRA fund shall be used only fire prevention
activities, as specified, which does not include fire
suppression activities, such as fighting fires and acquiring
fire suppression equipment.
8)Establishes OES by the Governor's Reorganization Plan No.2,
operative July 1, 2013.
9)Requires OES to perform a variety of duties with respect to
specified emergency preparedness, mitigation, and response
activities in the state, including emergency medical services.
10)Specifies that the State Emergency Plan (SEP) shall be in
effect in each political subdivision of the state, and the
governing body of each political subdivision shall take such
action as may be necessary to carry out the provisions
thereof.
11)Requires the Governor to coordinate SEP and those programs
necessary to mitigate the effects of an emergency.
12)Requires the Governor to coordinate the preparation of plans
and programs for the mitigation of the effects of an emergency
by the political subdivisions of the State of California, such
plans and programs to be integrated into and coordinated with
the SEP and the plans and programs of the federal government
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and of other states to the fullest possible extent.
13)Specifies that the Governor may, in accordance with SEP and
programs for the mitigation of the effects of an emergency in
this state:
a) Ascertain the requirements of the state or its political
subdivisions for food, clothing, and other necessities of
life in an event of an emergency.
b) Plan for, procure, and pre-position supplies, medicines,
materials, and equipment.
c) Use and employ any of the property, services, and
resources of the state.
d) Provide for the approval of local emergency plans.
e) Provide for mobile support units.
f) Provide for use of public airports.
g) Institute training programs and public information
programs.
h) Make surveys of the industries, resources, and
facilities, both public and private, within the state.
i) Plan for the use of any private facilities, services,
and property and, when necessary, and when in fact used,
provide for payment for that use under the terms and
conditions as may be agreed upon.
j) Take all other preparatory steps, including the partial
or full mobilization of emergency organizations in advance
of an actual emergency; and order those test exercises
needed to insure the furnishing of adequately trained and
equipped personnel in time of need.
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FISCAL EFFECT: Unknown
COMMENTS: AB 1203 will be heard on Thursday, April 30, 2015,
upon adjournment of Session for the purpose of adopting an
amendment to add an urgency. The committee will take no further
action on this bill.
Prior legislation : AB 468 (Chesbro) of 2013/2014 Session.
Would have: (1) Repealed the state fire prevention fee, (2)
created the District Management, Preparedness, and Assistance
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) supported 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. (Never heard in
Assembly Natural Resources Committee)
SB 1258 (Kehoe) of 2009/2010 Session. Would have created the
Emergency Response Fund in the State Treasury. Requires
insureds to pay a special purpose surcharge (of 4.8%) on
commercial and residential fire and multi-peril insurance
policies, including policies with combined property and
liability coverage, issued or renewed on or after July 1, 2010,
as specified. Funds from this surcharge would be available for
appropriation by the Legislature to fund emergency activities,
as defined, of the CalEMA, the Department of Forestry and Cal
FIRE, and the Military Department. Any balance remaining in the
fund at the end of a fiscal year would be retained and carried
forward to the next fiscal year. (Senate Appropriations
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Committee)
REGISTERED SUPPORT / OPPOSITION:
Support
California Professional Firefighters (sponsor)
California Labor Federation
Rural County Representatives of California
Opposition
American Insurance Association
Association of California Insurance Companies
California Association of Realtors
California Chamber of Commerce
California Taxpayers Association
Howard Jarvis Taxpayers Association
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Pacific Association of Domestic Insurance Companies
Personal Insurance Federation of California
Analysis Prepared by:Kenton Stanhope / G.O. / (916) 319-2531