Bill Text: CA AB196 | 2009-2010 | Regular Session | Amended
Bill Title: Emergency services.
Spectrum: Partisan Bill (Democrat 14-0)
Status: (Engrossed - Dead) 2009-09-12 - Read third time. Urgency clause refused adoption. (Ayes 25. Noes 7. Page 2449.) [AB196 Detail]
Download: California-2009-AB196-Amended.html
BILL NUMBER: AB 196 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 10, 2009
AMENDED IN SENATE JUNE 26, 2009
INTRODUCED BY Committee on Budget (Evans (Chair), Arambula, Beall,
Blumenfield, Brownley, Caballero, Carter, De La Torre, Feuer, Hill,
Huffman, Monning, Ruskin, and Swanson)
FEBRUARY 2, 2009
An act to add Sections 8587.3 and 8587.4 to the Government Code,
and to add Section 16031 to the Insurance Code, relating to emergency
services, and declaring the urgency thereof, to take effect
immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 196, as amended, Committee on Budget. Emergency services.
(1) Existing law establishes the California Emergency Management
Agency, which is responsible for the state's emergency and disaster
response services for certain manmade 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.
This bill would establish the Local Government Mutual Aid
Enhancement Program in the agency, and would require funds, as
specified, deposited in the Emergency Response Fund, to be allocated
to the program upon appropriation by the Legislature. This bill would
require the Secretary of California Emergency Management to allocate
funds to specified entities, for the purpose of enhancing or
sustaining fire and rescue disaster mutual aid capacity to combat the
effect of all hazard disasters, as provided. This bill would also
require the secretary, in consultation with specified entities, to
develop a strategy, as provided, for the enhancement of mutual aid,
and would require each fire and rescue operational area to submit a
3-year strategy for the enhancement of fire and rescue disaster
mutual aid, as specified, to the secretary.
(2) Existing law provides that the Insurance Commissioner, in
cooperation with insurers, the Office of Emergency Services, and
other emergency service agencies, shall establish procedures for the
coordination of efforts between insurers and their representatives
and those of emergency response agencies.
This bill would create the Emergency Response Fund in the State
Treasury. Insureds would be required to pay a special purpose
surcharge on commercial and residential fire and multiperil insurance
policies, including policies with combined property and liability
coverage, issued or renewed on or after January 1, 2010, as
specified. Funds from this surcharge would be available for
appropriation by the Legislature to fund emergency activities, as
defined, of the California Emergency Management Agency, the
Department of Forestry and Fire Protection, 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.
This bill would require insurers collecting the surcharge to make a
specified disclosure on the policy declarations page, billing
statement, or a separate document accompanying the declarations page
or billing statement. This bill would also require the Department of
Insurance, the Department of Forestry and Fire Protection, and other
state agencies and departments to cooperate and provide information
to the California Emergency Management Agency as necessary to
implement this act.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 8587.3 is added to the Government Code, to
read:
8587.3. (a) There is established in the California Emergency
Management Agency the Local Government Mutual Aid Enhancement
Program.
(b) (1) On July 1, 2010, and each year thereafter, upon
appropriation by the Legislature, the program shall be allocated 31.3
percent of the funds deposited in the Emergency Response Fund
created pursuant to Section 16031 of the Insurance Code, for the
purposes specified in this section.
(2) The Secretary of California Emergency Management shall
allocate the funds specified in paragraph (1) to entities within an
operational area as specified in Section 8605, and that are
participants in the Master Mutual Aid Agreement as defined by Section
8561. The funds shall be allocated to entities based upon both of
the following:
(A) A pro rata share of fees collected for the Emergency Response
Fund created pursuant to Section 16031 of the Insurance Code within
that operational area.
(B) The population served by each local fire agency or special
district that provides fire protection within that operational area.
(3) On an annual basis, any funds that are not allocated and are
not scheduled to be allocated from the Emergency Response Fund
created pursuant to Section 16031 of the Insurance Code for the
support of state expenditures, shall, upon appropriation by the
Legislature, be allocated to the program for the purposes specified
in this section, and shall be allocated by the secretary pursuant to
paragraph (2).
(c) Entities that receive an allocation pursuant to subdivision
(b) shall use the funds to enhance or sustain fire and rescue
disaster mutual aid capacity to combat the effect of all hazard
disasters in any of the following areas:
(1) Disaster response capacity.
(2) Communications interoperability that comply with Section
8592.5.
(3) Household and individual preparedness outreach and education.
(4) Programs to immediately reduce community vulnerability to
hazards identified in their approved hazard mitigation plan pursuant
to Section 65302.6.
(d) Entities that receive an allocation pursuant to subdivision
(b) may use the funds to support personnel, training, exercises,
equipment, construction, and other activities that enhance or sustain
disaster mutual aid capacity, or reduce community vulnerability to
disasters.
(e) For purposes of promoting the implementation and functioning
of the program, upon appropriation by the Legislature, the secretary
may allocate funds to reimburse agencies and special districts that
provide staff support for operational area or regional fire and
rescue coordination.
(f) Funds allocated to entities pursuant to this section shall not
be used to supplant any existing funds allocated to that entity by
the California Emergency Management Agency for fire and rescue
services.
SEC. 2. Section 8587.4 is added to the Government Code, to read:
8587.4. (a) Beginning on July 1, 2010, and on July 1 every three
years thereafter, the Secretary of California Emergency Management,
in consultation with the Department of Forestry and Fire Protection,
FIRESCOPE, and any other necessary groups representing firefighters,
fire chiefs, and special fire districts throughout the state, shall
develop a strategy for enhancement of mutual aid. The strategy shall
do all of the following:
(1) Identify eligible purchases, activities, and programs that
promote the delivery of mutual aid.
(2) Set goals for mutual aid enhancement.
(3) Identify criteria for allocations of resources for mutual aid.
(4) Prescribe the fiscal and administrative oversight of the Local
Government Mutual Aid Enhancement Program established pursuant to
Section 8587.3.
(b) On a date identified by the Secretary of California Emergency
Management, each fire and rescue operational area shall submit a
three-year strategy, to the secretary, for the enhancement of fire
and rescue disaster mutual aid. The plan shall satisfy the
requirements specified in subdivision (a) and shall specify how fire
entities within the operational area will use the funds over the next
three years.
SEC. 3. Section 16031 is added to the Insurance Code, to read:
16031. (a) The Emergency Response Fund is hereby created in the
State Treasury. Funds received by the California Emergency Management
Agency pursuant to this section shall be deposited into this fund.
Funds deposited into this fund may be appropriated by the Legislature
for the purposes of this section to fund the emergency activities of
the California Emergency Management Agency, the Department of
Forestry and Fire Protection, and the Military Department.
(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, 2010, equivalent to 4.8
percent of the premium written on residential fire and
multiperil insurance or the property exposure for commercial
or residential insurance properties policies
in California. The 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 provision of law, failure to collect the
surcharge from insureds prior to April July
1, 2010, shall not result in a penalty, fine, or other
liability.
(c) Every admitted insurer in this state shall collect the
emergency response surcharge specified in subdivision (b), which
shall be separately identified on each policy, with respect to
residential fire and multipe ril insurance and the
property portion of commercial or residential fire and
multiperil insurance policies .
(d) For those policies on which the surplus line tax is paid by a
surplus line broker pursuant to Sections 1775.1 to 1775.5, inclusive,
the surplus line broker shall collect the emergency response
surcharge with respect to the property portion of any homeowners
policy, all risk insurance policy, or named peril insurance policy
that specifically includes fire coverage placed with a nonadmitted
insurer. Where those policies cover multistate risks, the surcharge
shall be applied pro rata to that portion of the premium allocated to
risks in this state based on the percentage of the property risk
located in California.
(e) (1) 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 exposures for
both commercial and residential
insurance policies shall be remitted by the admitted insurers to the
California Emergency Management Agency, or other state agency
designated to collect the surcharge on behalf of the California
Emergency Management Agency, within 45 days following the end of each
calendar quarter. The premiums written by admitted insurers for
property exposures shall be as stated on lines 1, 4, and 5.1 of the
annual statement filed by each insurer pursuant to Section 900.
(2) Funds received as a result of the surcharge imposed on
insureds as a percentage of premiums written on property exposures
for both commercial and residential insurance policies placed with a
nonadmitted insurer shall be remitted by the surplus line brokers to
the Surplus Line Association in the same manner and form as the
stamping fee paid on the policies placed with a nonadmitted insurer
by a surplus line broker. The Surplus Line Association shall remit
the funds received from surplus line brokers to the California
Emergency Management Agency, or its designee, within 45 days
following the end of each calendar quarter.
(f) None of the special purpose surcharges shall be considered
premiums for any purpose, including the computation of gross premium
tax or agent's commission. The full amount of the surcharge is due at
inception or renewal of the insurance policy, even if the premium is
paid in installments. The amount of each special purpose surcharge
shall be separately stated on either a billing or policy declaration
sent to an insured. Notwithstanding this subdivision, an admitted
insurer or surplus line broker may omit collecting of the surcharge
from its insured if the expense of collecting the surcharge would
exceed the amount of the surcharge and instead remit the amount of
omitted surcharges to the California Emergency Management Agency or
its designee, provided that nothing in this subdivision shall relieve
the admitted insurer or surplus line broker of its obligation to
recoup the amount of the surcharge otherwise collectible.
(g) (1) For commercial policies with combined property and
liability coverage, for which the actual property coverage cannot be
determined, the admitted insurer shall calculate, and the insured
shall remit, the surcharge based upon the ratio of 50 percent
attributable to the property coverage. Within 45 days following
submission of its annual statement to the National Association of
Insurance Commissioners, an admitted insurer shall reconcile its
lines 1, 4, and 5.1 surcharge remittances based upon its annual
statement.
(2) For policies for which a surplus line tax is paid by a surplus
line broker pursuant to Sections 1775.1 to 1775.5, inclusive, for
risks with combined property and liability coverage, the surplus line
broker shall calculate and the insured shall remit the surcharge
based on a ratio of 50 percent attributable to the property coverage.
(h) Each admitted insurer and surplus line broker collecting the
surcharge shall be required to disclose the surcharge as the
"California Emergency Response Safety Surcharge" on either the
declarations page, the billing statement, or a separate document
accompanying the declarations page or billing statement. If an
insurer chooses to provide supplemental materials to policyholders
describing the surcharge, the language shall comply substantially
with the following:
"The State of California has imposed an Emergency Response Safety
Surcharge on all residential and commercial insurance policies issued
or renewed on or after January 1, 2010. The purpose of this
surcharge is to ensure adequate funding of emergency response
services throughout California. We are required by law to collect the
surcharge from our policyholders. The surcharge, which is separately
stated on your declarations page or billing statement, is calculated
at 4.8 percent of the total applicable
policy premium relating to property insurance ."
(i) Failure of an insured to pay the surcharge shall be treated as
a failure to pay the premium. Failure to pay the surcharge shall
result in the cancellation of the policy.
(j) If a policy is canceled before the end of the term for which
it was issued or the end of the period for which a premium has
been paid, the refund of the surcharge amount submitted to
the California Emergency Management Agency or its designee shall be
remitted to the insured. However, any assessable policy of
been paid, the surcharge amount shall not be refunded. However,
any assessable policy of insurance that is canceled as of the
effective date of the policy, if all of the premium is returned to
the insured, and no coverage was ever provided to the insured, shall
not be subject to a surcharge. All refunds of previously collected
surcharges on those canceled policies shall be applied to reduce the
surcharges reported in the same calendar quarter in which the
refunded surcharges were made.
(k) Funds in the Emergency Response Fund shall be distributed,
upon appropriation, to the California Emergency Management Agency,
the Department of Forestry and Fire Protection, and the Military
Department for the support of the emergency response activities of
those departments, and to the California Emergency Management Agency
or its designee for the actual administrative costs incurred in
collecting the surcharge pursuant to this section, and for the
maintenance of an adequate reserve.
(l) Any balance remaining in the Emergency Response Fund at the
end of each fiscal year shall be retained in the fund and carried
forward to the next fiscal year.
(m) The Department of Insurance, the Department of Forestry and
Fire Protection, and other state agencies and departments shall
cooperate and provide information to the California Emergency
Management Agency as necessary to implement this program.
(n) For the purposes of this section, the following definitions
apply:
(1) "Admitted insurer" means an insurer that has secured a
certificate of authority from the commissioner as required by Section
700 and is subject to the tax set forth in Section 28 of Article
XIII of the California Constitution.
(2) "Hazard" means the potential impact to people or property as a
result of seismic activity, flood, or wild land fire.
(3) "Surplus line broker" means a person licensed pursuant to
Section 1765.2.
(o) For purposes of this section, "FAIR Plan" established pursuant
to Chapter 9 (commencing with Section 10090) of Part 1 of Division
2, is an admitted insurer.
SEC. 4. 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:
In order to make the necessary statutory changes to improve the
state's ability to respond to potentially devastating and deadly
emergencies at the earliest time possible and to implement the 2009
Budget Act, it is necessary that this act take effect immediately.
