BILL ANALYSIS
SENATE COMMITTEE ON BANKING, FINANCE,
AND INSURANCE
Senator Ronald Calderon, Chair
SB 1258 (Kehoe) Hearing Date: April 21, 2010
As Introduced: February 19, 2010
Fiscal: Yes
Urgency: Yes
SUMMARY Would impose a 4.8% emergency response surcharge on
all new or renewed commercial and residential fire or multiperil
insurance premiums issued or renewed on or after July 1, 2010 in
California. Would allocate surcharge revenue directly to CALFIRE
(California Department of Forestry and Fire Protection), CalEMA
(California Emergency Management Agency), and local governments
to fund critical emergency mutual aid response, equipment and
other much-needed resources. Would, beginning July 1, 2011,
require distribution of 31.3 percent of the revenue collected to
local governments on a per capita basis to support their
participation in the state's fire and rescue mutual aid system.
Would provide surcharge revenue to help fund the National Guard
for its support role in the state's emergency response network.
DIGEST
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)
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Act to overcome problems of incompatible equipment and
inadequacies of resource mobilization, communication and command
structure:
a. Promoting effective emergency response by
establishing a structure with a clear and consistently
applied organizational structure to facilitate setting of
priorities, interagency cooperation, and the efficient
flow of resources and information in emergency situations;
b. Requiring state agencies, counties, cities,
special districts and agencies such as the American Red
Cross, the Salvation Army and other Community-based
organizations to operate and coordinate within the SEMS
system.
c. Coordinating disaster responses of all types and
sizes statewide via the nationally recognized Incident
Command System (ICS) to provide for unified direction of
all responders through a single unified command structure
designed to maximize efficiency within the identified
incident priorities.
d. Strengthening the capacity and resilience of all
California first responders, as appropriate to the
location, magnitude, and circumstances of a particular
public emergency.
4.Establishes within the State Budget's reserve for economic
uncertainties a Disaster Response Emergency Operations Account
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.Existing law 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.
This bill
1.SB 1258 would impose a 4.8% emergency response surcharge on
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all new or renewed commercial and residential fire or
multiperil insurance premiums issued or renewed on or after
July 1, 2010 in California.
2.Would allocate such revenue from the surcharge directly to CAL
FIRE (California Department of Forestry and Fire Protection),
Cal EMA (California Emergency Management Agency), and local
governments to improve local response and mutual aid capacity
under the SEMS structure and support critical emergency mutual
aid response, and to fund equipment and other key resources.
3.Would fund CAL FIRE in support of its operations, including
the acquisition of updated emergency response and other aerial
firefighting assets and ensure that first year collections aid
in backfilling cuts and setting aside monies to fund
unanticipated emergency disasters within CAL FIRE's purview.
4.Would also fund Cal EMA's support in coordinating emergency
response mutual aid resources under its direction, such as
mutual aid response fire engines and strike teams supporting
California's ongoing development of capacity and readiness
within the state's Standardized Emergency Management System
(SEMS) Act.
5.Would, beginning July 1, 2011, require direct distribution of
31.3 percent of the revenue collected to local governments on
a per capita basis to support their participation in the
state's fire and rescue mutual aid system.
6.Would apply surcharge revenue to help fund the National Guard
for its support role in the state's emergency response
network.
COMMENTS
1.Purpose of the bill According to the author, Senate Bill
1258's Emergency Response Initiative will ensure California is
prepared by providing first responders with new equipment and
technology, improving overall emergency preparedness and
response, and proactively helping to save lives and property.
This proposal will benefit all Californians - north, south,
coastal, inland, rural, or urban.
SB 1258 (Kehoe), Page 4
2.SB 1258 is sponsored by Governor Arnold Schwarzenegger. The
bill is the legislative vehicle for the Governor's Emergency
Response Initiative (ERI)
3.SB 1258's co-sponsors are the California Professional
Firefighters, the California Fire Chiefs Association and the
Fire Districts Association of California.
4.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.
5.It is a commonplace that advocates of all manner of goods and
services like to assert their product is "world-class".
6.The many supporters of SB 1258 frequently point out that
California's mutual aid system is, in fact, "world-class".
Given the national and international reach of California and
its disaster-preparedness reputation, it does appear that
California's 58 county and 482 city network of mutual aid
agreements is in fact a world-class instrumentality. It
appears to be a class of "public good" that may well be the
most highly emulated California public sector innovation.
The California system, as it has developed, does appear to be
the yardstick by which all other mutual assistance programs
are measured.
7.The record of the past indicates that one never knows when or
where the next challenging circumstance will arise and the
readiness and capacity of all public agencies to respond
appropriately within the SEMS Incident Command System is a
class of intangible "public good" which was invented in
California and has now been exported to other jurisdictions,
nationally in the US and elsewhere as the standard pattern for
effective disaster response. However, while the SEMS
innovation and its statewide implementation and
capacity-building has made California's mutual aid response
system the best in the world, the fiscal crisis we face at
both the state and local levels has put this premier mutual
aid system in distress. 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 finding the funding for its shared
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responsibilities in the system. This situation is becoming
critical and impacts the public safety of all Californians
when a disaster strikes.
8.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.
SB 1258 can dramatically improve California's overall
emergency preparedness and response capabilities. Ultimately,
this bill will benefit all Californians, no matter where they
live, by helping to ensure the integrity and responsiveness of
our first class mutual aid system.
9.According to the Legislative Analyst's Office (LAO), SB 1258
would produce fire-fighting revenue of $478.7 million in a
full year of implementation and $238.1 million if only applied
for half of a year. Full-year funding would be split among
state fire agencies and local fire agencies. LAO estimated
that first responders would receive approximately 31.3% of
full-year funding, which amounts to approximately $150
million. The LAO is critical of the ERI on the basis that the
funding is closely tied to the fire services provided by
CalFire and similar agencies, a factor LAO places heavy
reliance on in characterizing this funding mechanism as a
suspect tax.
10. It appears the LAO analysis fails to clearly acknowledge the
role of the state's various classes of fire service/first
responders as in fact being the backbone of the state's
SEMS/ICS all hazard disaster response capability. SB 1258,
according to its proponents, offers a means to build, develop,
and keep current a strong 58 county, 482 city disaster
response capability, which, under mutual aid principles,
includes a back-up system of safety net coverage for
communities whose own front line first responders are called
out of the local jurisdiction to provide critical support
elsewhere.
11.Support :
a. Writing in support of SB 1258, the Secretary
of the California Emergency Management Agency, Mr.
Matthew Bettenhausen, states, "California is at risk
for catastrophic disasters that include devastating
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earthquakes, multi-regional flooding, chemical
releases, large fires and acts of terrorism. Mutual
aid response is the state's most vital and effective
defense against natural and manmade disasters;
however, the system can only work when local and state
jurisdictions participate with timely resources and
trained personnel.
b. SB 1258 would provide critical funding at a
time when state and local budgets are in crisis and
vital rescue and disaster response systems are losing
essential resources. I fully support the
establishment of the local government Mutual Aid
Enhancement Program and the Emergency Response Fund
(ERF), which will be an invaluable resource for
preserving and enhancing the state's mutual aid system
and will provide funding for state and local all
hazards response capabilities." The California
Professional Firefighters, noting that State and Local
first responders are essential to preserving the
safety of California's citizens, state "SB 1258
ensures that a measure of the state's disaster
response system is maintained, and that the doctrine
of "local control" doesn't result in gaping holes in
our critical statewide disaster response?. Ultimately,
SB 1258 will benefit Californians statewide - north,
south, coastal, inland, rural and urban - by
satisfying all levels of the mutual aid system."
c. The California Fire Chief Association and the
Fire Districts Association of California states "SB
1258 will greatly enhance and preserve the state's
world-class mutual aid system with much needed
revenues to support state and local fire response
capabilities, not just for wildland fires, but for all
catastrophic disasters, including but not limited to,
devastating earthquakes, floods, and the potential of
chemical releases and attacks. Senate Bill 1258 will
provide direct financial assistance to local fire
protection agencies to help them pay for and enhance
their mutual aid capabilities and response,
benefitting all Californians during times of
catastrophic disasters."
12.Opposition None received by the committee, but the Howard
SB 1258 (Kehoe), Page 7
Jarvis Taxpayers Association communicated an oppose position
to the Senate Governmental Organization Committee, claiming
that the ERI surcharge will be found by the courts to be an
illegal tax rather than a fee that supplies a service that
directly benefits the persons and businesses who pay the
surcharge..
13.Questions In view of the flexible, 58 County and 482 city
response capabilities that California's system of mutual aid
has created within its Standardized Emergency Management
System (SEMS) and Incident Command System (ICS) frameworks,
should SB 1258 include findings that relate the surcharge
incidence to the unique, and highly adaptable, public safety
capacity and internationally regarded class of "public good"
that will be supported and strengthened via its imposition?
14.Suggested Amendments None
15.Prior and Related Legislation:
a. 2009 Assembly Bill 8x 36 (Ma, 2009). The
Legislative History indicates AB 8x 36 of 2009 "Died
at Desk" without having been heard in a policy
committee or on the floor before the 8th Extraordinary
Session concluded.
b. SB 1258 is also identical to AB 196 of the
2009-10 Legislative Session, which died in Senate
Rules Committee for procedural reasons. The floor
analysis for AB 196 is perfunctory but accurate.
POSITIONS
Support
California Emergency Management Agency (CalEMA)
Alameda County Fire Department
Bakersfield Fire Department
Belmont-San Carlos Fire Department
Big Bear Lake Fire Protection District
Boulder Creek Fire Department
SB 1258 (Kehoe), Page 8
Butte County Fire Chiefs Association
Brea Fire Services Department
Burbank Fire Department
Central County Fire Department
Central Valley Flood Control Association
Contra Costa County Fire Department
Cosumnes Fire Department
Folsom Fire Department
Kings County Fire Department
Kentfield Fire Protection District
Mariposa County Fire Department
Meeks Bay Fire Protection District
Montecito Fire Protection District
Mountain View Fire Department
North County (San Mateo) Fire Authority
Novato Fire District
Palm Springs City Fire Department
Pasadena Fire Department
Rialto Fire Department
San Bernardino County Fire Chiefs Association
San Diego County Fire Chiefs Association
San Diego Fire-Rescue Department
San Diego Rural Fire Protection District
San Jose Fire Department
Scotts Valley Fire Protection District
Shasta Lake Fire protection District
West Covina Fire Department
Windsor Fire Protection District
Oppose
None received by committee but see paragraph 12, above.
Consultant: Kenneth Cooley (916) 651-4102