BILL NUMBER: AB 1440 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 20, 2015
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, to the Insurance
Code, relating to earthquake insurance. loss
mitigation.
LEGISLATIVE COUNSEL'S DIGEST
AB 1440, as amended, Nazarian. Earthquake loss mitigation: grant
programs.
Existing law, the California Earthquake Authority Act, establishes
the California Earthquake Authority (the authority) ,
administered by the Insurance Commissioner, 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
recognize the existence of the California Residential Mitigation
Program (CRMP), a joint powers authority created in 2012 by agreement
between the authority and the Office of Emergency Services. The bill
would require the CRMP to implement a grant program and give a grant
to a qualifying owner of a single-family residential structure
for the purpose of paying a portion of to
defray the owner's cost of seismic retrofit work to
the structure, as specified , if the Legislature appropriates
funds for that purpose . This bill would require the
authority and the office to jointly adopt regulations
the governing board of the CRMP, after providing notice and
opportunity for review and public comment, to adopt policies and
procedures 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. applicant.
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: 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 the
damage to single-family homes against earthquake
damage. from earthquakes.
(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
the risk to 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.
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. SEC. 2. 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.
10089.395. (a) The Legislature finds and declares
that there exists the California Residential Mitigation Program,
also known as the "CRMP," a joint powers authority created in 2012 by
agreement between the California Earthquake Authority and the Office
of Emergency Services.
(b) If Legislature appropriates funds for the purpose of funding
the CRMP's implementation of the grant program described in this
section, the CRMP shall, pursuant to the requirements of this
section, implement the grant program and make grants that assist a
qualifying owner of a single-family residential structure by
defraying the owner's cost of seismic retrofitting of the structure.
(b) An
(c) The CRMP may make a grant to an
applicant who satisfies all of the following may seek
a grant from the program established by this section:
following:
(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). (e).
(4) The structure is located in a high-risk earthquake area, based
on criteria established pursuant to subdivision (c).
(e).
(5) The retrofit work qualifies as work for which the applicant
may receive a grant, based on criteria established pursuant to
subdivision (c). (e).
(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).
(c) The authority shall, jointly with the Office of Emergency
Services, adopt regulations
(e) The governing board of the CRMP
shall adopt policies and procedures 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. In adopting those policies and procedures, the
governing board shall provide notice and opportunity for public
review and comment, publish the policies and procedures on the CRMP's
Internet Web site, and otherwise make the policies and procedures
available to the public.
(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.