BILL NUMBER: AB 1440 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 26, 2015
INTRODUCED BY Assembly Member Nazarian
(Coauthor: Assembly Member Chiu)
FEBRUARY 27, 2015
An act to amend Section 10082.5 of , and to add Section
10089.395 to, the Insurance Code, relating to earthquake
insurance.
LEGISLATIVE COUNSEL'S DIGEST
AB 1440, as amended, Nazarian. Earthquake insurance.
Earthquake loss mitigation: grant programs.
Existing law, the California Earthquake Authority Act, establishes
the California Earthquake Authority (the authority) and authorizes
the authority to transact insurance in this state as necessary to,
among other things, create and maintain, in collaboration or jointly
with subdivisions and programs of local, state, and federal
governments and with other national programs, programs and activities
that mitigate against seismic risks, for the benefit of homeowners
and other property owners. Existing law establishes the Earthquake
Loss Mitigation Fund, a subaccount of the California Earthquake
Authority Fund, a continuously appropriated fund. Existing law
authorizes the authority to apply money in the Earthquake Loss
Mitigation Fund to supply grants and loans or loan guarantees to
dwelling owners who wish to retrofit their homes to protect against
earthquake damage, as specified.
This bill would require the authority to establish a grant
program, to be administered by a joint powers authority of the
authority and the Office of Emergency Services, that would give a
grant to an applicant who owns and lives in a single-family
residential structure for the purpose of paying a portion of the cost
of seismic retrofit work to the structure, as specified. This bill
would require the authority and the office to jointly adopt
regulations necessary to implement the grant program and to establish
eligibility criteria for participation in the grant program. This
bill would establish the maximum amount of a grant to an applicant,
and would provide that a low-income applicant with an adjusted gross
income that does not exceed specified limits does not have to provide
matching funds as a condition of obtaining a grant under the
program. This bill would provide that money in the Earthquake Loss
Mitigation Fund may be expended to implement the grant program and
make grants under the program upon appropriation by the Legislature.
Existing law prohibits an insurer who charges an additional
earthquake insurance premium or deductible because a dwelling fails
to meet certain building requirements relating to earthquake bracing
from charging the additional premium or deductible if the dwelling is
brought into compliance with those requirements, as specified.
This bill would make nonsubstantive, technical changes by deleting
obsolete portions of those provisions.
Vote: majority. Appropriation: no. Fiscal committee: no
yes . State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares
all of the following:
(1) The earthquakes of 2014 that affected the Cities of La Habra
and Napa have generated increased interest in mitigating
single-family homes against earthquake damage.
(2) The California Earthquake Authority and the Office of
Emergency Services plan to expand the Earthquake Brace + Bolt program
to 650 homes in 2015.
(3) The California Earthquake Authority is working with the
Federal Emergency Management Agency and the Applied Technology
Council, a nonprofit research organization, to develop the "ATC-110.
Development of a Prestandard for the Evaluation and Retrofit of One
and Two Family Light Frame Residential Buildings" for retrofitting
additional types of single-family homes.
(4) A well-funded program to encourage homeowners to mitigate
their homes would mean more homes would survive an earthquake and
homeowners who retrofit their homes would receive actuarially
justified lower rates for earthquake insurance.
(5) Only 12 percent of California homeowners currently purchase
earthquake insurance, leaving the vast majority of homeowners
unprotected in the event of a major earthquake.
(6) There are many paths to funding a retrofit program, including
income tax credits, sales tax rebates, attaching the financing to
property taxes, and grants.
(b) Therefore, it is the intent of the Legislature to enact
legislation that would create and fund a program to assist California
homeowners with earthquake mitigation repairs to their homes.
SECTION 1. SEC. 2. Section 10082.5
of the Insurance Code is amended to read:
10082.5. (a) If an insurer subject to this chapter charges an
additional earthquake insurance premium or deductible because a
dwelling fails to comply with paragraph (1), (2), or (3) and the
dwelling is subsequently brought into compliance with any one of
these paragraphs, then the additional premium or deductible
attributed to noncompliance shall not be charged.
(1) Compliance with Section 19215 of the Health and Safety Code
for the bracing, anchoring, or strapping all water heaters to resist
falling or horizontal displacement due to earthquake motion.
(2) Compliance with the foundation anchor bolt requirements of the
2007 edition of the California Building Standards Code as specified
in Title 24 of the California Code of Regulations, or a successor
edition of that code, or with any local government modifications to
those requirements.
(3) Compliance with the bracing requirements for cripple walls of
the 2007 edition of the California Building Standards Code as
specified in Title 24 of the California Code of Regulations, or a
successor edition of that code, or with any local government
modifications to those requirements.
(b) A copy of the approved inspection record for the building
permit for work performed pursuant to this section shall be submitted
by the insured to the insurer in order to verify that retrofits
performed pursuant to this section have been performed.
SEC. 3. Section 10089.395 is added to the
Insurance Code , immediately following Section
10089.39 , to read:
10089.395. (a) On or before July 1, 2016, the authority shall
establish a grant program that is administered by a joint powers
authority of the California Earthquake Authority and the Office of
Emergency Services for the purpose of providing monetary grants that
assist a qualified homeowner by defraying the homeowner's cost of
seismic retrofitting of residential structures.
(b) An applicant who satisfies all of the following may seek a
grant from the program established by this section:
(1) The applicant is an owner of record of, and lives in, the
structure to be retrofitted.
(2) The structure is a single-family, detached, residential
building of not more than four dwelling units.
(3) The structure meets structural requirements established
pursuant to subdivision (c).
(4) The structure is located in a high-risk earthquake area, based
on criteria established pursuant to subdivision (c).
(5) The retrofit work qualifies as work for which the applicant
may receive a grant, based on criteria established pursuant to
subdivision (c).
(c) The authority shall, jointly with the Office of Emergency
Services, adopt regulations necessary to implement this section,
including, but not limited to, establishing structural eligibility
requirements for structures that will receive seismic retrofit work,
defining criteria for determining whether a structure is located in a
high-risk earthquake area, and defining criteria for seismic
retrofit work that qualifies as work eligible for receipt of a grant.
(d) A grant shall not exceed the lesser of 75 percent of the cost
of the qualifying retrofit work, or three thousand dollars ($3,000).
(e) A single person with an adjusted gross income of fifty
thousand dollars ($50,000) or less, or a married couple with an
adjusted gross income of one hundred thousand dollars ($100,000) or
less, as defined by Section 62 of the Internal Revenue Code, shall
not be required to provide matching funds as a condition of receiving
a grant.
(f) The authority may expend money in the Earthquake Loss
Mitigation Fund, upon appropriation by the Legislature, to implement
and make grants pursuant to the program established by this section.