BILL ANALYSIS AB 1809 Page 1 Date of Hearing: March 23, 2010 ASSEMBLY COMMITTEE ON BUSINESS AND PROFESSIONS Mary Hayashi, Chair AB 1809 (Smyth) - As Amended: March 15, 2010 SUBJECT : Home inspections: energy audits. SUMMARY : Revises the definition of "home inspection" to include a Home Energy Rating System (HERS) energy audit. Specifically, this bill : 1)Requires that if a client requests an inspection of energy efficiency or a HERS California home energy audit in addition to a "home inspection," the home inspection report must include, at a minimum, all of the following information: a) An overview of how the home works as a system and how to prioritize actions; b) Quality installation of heating, ventilating, and air-conditioning equipment including proper sizing of equipment, duct sealing, and refrigerant charge and air flow; c) Quality building envelope air sealing and proper levels of insulation; d) Overview of ENERGY STAR or better products and appliances; e) Information regarding access to a comprehensive home energy audit; f) Non-energy benefits of improving the energy efficiency of the home including reduction of carbon emissions; g) General statement regarding opportunities to improve the thermal envelope, mechanical equipment, lighting, and appliances in the home; and, h) General discussion of concerns regarding combustion safety. 2)Declares legislative intent. AB 1809 Page 2 EXISTING LAW : 1)Allows an individual to request an energy efficiency inspection as part of a home inspection. 2)Establishes the Warren-Alquist State Energy Resources Conservation and Development (SERCD) Act, which requires the California Energy Commission (CEC) to establish specified standards related to a statewide home energy rating program for residential dwellings, known as the HERS program. FISCAL EFFECT : Unknown. This bill is keyed non-fiscal. COMMENTS : Purpose of the bill . According to the author's office, "Current law allows consumers to request a generic energy efficiency inspection as part of their home inspection. AB 1809 simply seeks to clarify existing law in order to give consumers the option to choose to have a HERS inspection conducted by a HERS-certified inspector." Background . CEC establishes regulations for the HERS Program to certify home energy rating services in California. The program provides standards to measure energy efficiency levels among California homes and to guide investment in cost-effective home energy efficiency measures. The HERS scoring system, known as the HERS Index, was established by the Residential Energy Services Network (RESNET), a non-profit membership organization. The HERS Index scores a home out of 100 points; the lower a home's score, the more energy efficient it is. Currently, there are 42 HERS-certified inspectors and three accredited providers that certify HERS inspectors in California. To become a HERS-certified inspector, an individual must complete RESNET-accredited training, receive certification from a RESNET rating provider, and pass an examination. Staff notes that nothing in current law precludes home buyers and sellers from requesting an energy efficiency inspection from HERS-certified inspectors and notes that a list of efficiency efficiency items that may be inspected during an energy effiency AB 1809 Page 3 inspection is included in statute. Support . According to the sponsor, the Amerispec Home Inspection Service, "Study after study has demonstrated that improvements in energy efficiency are among the most cost-effective ways to not only reduce residential energy costs, but also reduce greenhouse gas emissions. Many localities across the United States have begun to explore the idea of requiring home inspections for energy efficiency at the time of sale. Likewise, legislation that would reward homeowners for improving their home energy efficiency, known as Home State or Cash for Caulkers, is currently making its way through Congress. These initiatives are expected to increase demand for qualified energy auditors, as well as promote adoption of a common set of energy efficiency standards. According to HouseMaster, "One of the obstacles to getting Americans to invest in making their homes more energy efficient is being able to assure them that the money they spend will actually yield significant energy savings. To help address this challenge, what has been needed is a standard against which the impact of the retrofits made by homeowners can be measured. AB 1809 strengthens current law in California by authorizing inspectors to perform a HERS audit, which is one of the most - if not, the most - widely accepted energy efficiency ratings in the market today." Prior Legislation . AB 1976 (Maze) of 2004 would have required the Contractors' State License Board to develop a process for licensing home inspectors and would have made it unlawful to perform a home inspection without a license. This bill was held in the Assembly Business & Professions Committee. SB 1332 (Figueroa) of 2002 would have provided title act protection for home inspectors by making it an unfair business practice for an individual to refer to himself or herself as a "certified home inspector" unless he or she has met certain requirements. This bill would have required home inspectors to provide disclosures prior to conducting a home inspection. This bill was held in the Assembly Business & Professions Committee. AB 1574 (Lowenthal), Chapter 773, Statutes of 2001, allowed a buyer or seller, at the time a home is sold, to request a home inspection. This bill required home inspectors to provide contact information for one or more of the following that AB 1809 Page 4 provide home energy information: a non-profit organization, an energy provider, or a government agency. This bill provided that a buyer or seller may request an energy efficiency inspection as part of a home inspection. SB 258 (O'Connell), Chapter 338, Statutes of 1996, established a standard of care for home inspectors, defined terms related to paid home inspections, and prohibited home inspections in which the home inspector has a financial interest. Committee Amendments . As written, this bill mandates all energy inspections to include a report using HERS standards, which was not the author's intent. The following amendments delineate what the HERS standards are, but does not mandate its use. The amendments clarify that a client has the option of requesting an energy efficiency report or a HERS energy audit. On page 3, line 9, after "If" strike ", in addition to a "home inspection,". On page 3, line 9, after "requests" strike "an inspection of energy efficiency or". On page 3, line 12, after "the" insert "HERS California". REGISTERED SUPPORT / OPPOSITION : Support Amerispec Home Inspection Service (sponsor) American Home Inspection Association HouseMaster National Association of Home Inspectors, Inc. (NAHI) WIN Home Inspection Opposition None on file. Analysis Prepared by : Joanna Gin / B. & P. / (916) 319-3301