BILL NUMBER: SB 602	INTRODUCED
	BILL TEXT


INTRODUCED BY   Senator Monning

                        FEBRUARY 27, 2015

   An act to amend Section 10089.38 of the Insurance Code, and to
amend Sections 5899, 8503, 10003, 10100.2, and 10104 of the Streets
and Highways Code, relating to seismic safety, and making an
appropriation therefor.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 602, as introduced, Monning. Seismic safety: California
Earthquake Authority.
   Existing law establishes the California Earthquake Authority,
which is authorized to transact insurance in the state as necessary
to sell policies of basic residential earthquake insurance, as
provided. Existing law provides that a public purpose will be served
by a voluntary contractual assessment program that provides the
legislative body of a public agency with the authority to finance the
installation of seismic strengthening improvements that are
permanently fixed to residential, commercial, industrial,
agricultural, or other real property. For purposes of financing the
installation of seismic strengthening improvements, "public agency"
means a city, county, or city and county.
   This bill would include the California Earthquake Authority as
part of the definition of "public agency" for this purpose.
   The Improvement Bond Act of 1915, provides authority for the
legislative body of any city to determine that bonds may be issued to
pay for specified works of improvement. The Municipal Improvement
Act of 1913 authorizes the legislative body of a municipality to pay
or make funds available to enable the owners of lots or parcels of
real property to pay for work deemed necessary to bring real property
or buildings into compliance with seismic safety standards or
regulations, as provided.
   This bill would include the California Earthquake Authority as
part of the definition of "city" or "municipality" for purposes of
these acts.
   Existing law authorizes the Earthquake Loss Mitigation Fund, a
continuously appropriated fund, to be applied to supply grants and
loans or loan guarantees to dwelling owners who wish to retrofit
their homes to protect against earthquake damage.
   This bill would also authorize the money in the fund to be used to
fund seismic strengthening improvements permanently fixed to
residential, commercial, industrial, agricultural, or other real
property, and to acquire debt obligations issued to fund these
improvements, thereby making an appropriation.
   Vote: majority. Appropriation: yes. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 10089.38 of the Insurance Code is amended to
read:
   10089.38.   (a)    Upon the development and
implementation of an economical system satisfactory to the board and
the commissioner to prevent misapplication of mitigation funds, the
Earthquake Loss Mitigation Fund may be applied to supply grants and
loans or loan guarantees to dwelling owners who wish to retrofit
their homes to protect against earthquake damage. 
   (b) Money in the Earthquake Loss Mitigation Fund may also be used
for either of the following purposes:  
   (1) To fund seismic strengthening improvements authorized pursuant
to Section 5899 of the Streets and Highways Code.  
   (2) To acquire debt obligations issued to fund improvements
described in paragraph (1). 
  SEC. 2.  Section 5899 of the Streets and Highways Code is amended
to read:
   5899.  (a) The Legislature finds and declares all of the
following:
   (1) It is the intent of the Legislature to address seismic safety
needs throughout this state by permitting voluntary individual
efforts to improve the seismic safety of homes and buildings. The
Legislature further intends that this chapter should be used to
finance the installation of seismic strengthening improvements that
are permanently fixed to residential, commercial, industrial,
agricultural, or other real property, including, but not limited to,
the seismic strengthening of cripple walls and sill plate anchorage
of light, wood-framed buildings.
   (2) The upfront cost of making residential, commercial,
industrial, agricultural, or other real property more seismically
safe prevents many property owners from making those improvements. To
make those improvements more affordable and to promote the
installation of those strengthening improvements, it is necessary to
authorize an alternative procedure for authorizing assessments to
finance the cost of seismic strengthening improvements.
   (3) A public purpose will be served by a voluntary contractual
assessment program that provides the legislative body of any public
agency with the authority to finance the installation of seismic
strengthening improvements that are permanently fixed to residential,
commercial, industrial, agricultural, or other real property.
   (b) For purposes of this section, the following terms shall have
the following meanings:
   (1) For the purpose of financing the installation of seismic
strengthening improvements, "public agency" means a city, county, or
city and county  , or the California Earthquake Authority  .
The definition of "city" in Section 5005 shall not apply to this
paragraph.
   (2) "Seismic strengthening improvements" means permanent seismic
safety improvements fixed to residential, commercial, industrial,
agricultural, or other real property.
   (c) The legislative body of  any   a 
public agency may designate an area, in the manner provided pursuant
to Section 5898.20, within which authorized public agency officials
and property owners may enter into voluntary contractual assessments
to finance the installation of seismic strengthening improvements
that are permanently fixed to real property pursuant to this chapter.

   (d) For purposes of establishing a voluntary contractual
assessment program relating to seismic strengthening improvements,
the legislative body shall make the determinations required pursuant
to Section 5898.20 by adopting a resolution indicating its intention
to do so. The resolution of intention shall identify the kinds of
seismic strengthening improvements that may be financed and shall
include all of the information that is required pursuant to
subdivision (b) of Section 5898.20, including, but not limited to,
directing an appropriate public agency official to prepare a report
pursuant to Section 5898.22.
   (e) For purposes of the report required pursuant to Section
5898.22, relating to a voluntary contractual assessment program for
seismic strengthening improvements, the designated public agency
official shall satisfy the requirements of paragraph (1) of
subdivision (c) of Section 5898.22 by identifying the types of
seismic strengthening improvements that may be financed through the
use of contractual assessments.
   (f) Notwithstanding any other provision of this chapter, upon the
written consent of an authorized public agency official, the proposed
arrangements for financing the program pertaining to the
installation of seismic strengthening improvements that are
permanently fixed to real property may authorize the property owner
to purchase directly the related equipment and materials for the
installation of seismic strengthening improvements and to contract
directly for the installation of seismic strengthening improvements
that are permanently fixed to the property owner's residential,
commercial, industrial, agricultural, or other real property. 
   (g) Subdivisions (c) and (d) do not apply to the California
Earthquake Authority. 
  SEC. 3.  Section 8503 of the Streets and Highways Code is amended
to read:
   8503.  "City" includes counties, cities and counties and public
corporations, districts and agencies  , and the California
Earthquake Authority  .
  SEC. 4.  Section 10003 of the Streets and Highways Code is amended
to read:
   10003.  "Municipality" and "city" include every city, city and
county, or county, or other entity, public corporation, or agency
authorized to operate under this division, including any joint powers
entity created pursuant to Chapter 5 (commencing with Section 6500)
of Division 7 of Title 1 of the Government Code and any special
district organized for the purpose of aiding in the development or
improvement of navigation or commerce to, or within, the district
 , and the California Earthquake Authority  .
  SEC. 5.  Section 10100.2 of the Streets and Highways Code is
amended to read:
   10100.2.  (a) (1)  Whenever   When  the
public interest or convenience requires, the legislative body may use
the powers of this division to pay, or make funds available to
enable the owners of lots or parcels of real property within the
district to pay, for either of the following:
   (A)  (i)   Work deemed necessary to bring real
property or buildings, including privately owned real property or
buildings, into compliance with seismic safety standards or
regulations. The legislative body shall declare that public loans or
funds provided to owners of private buildings for seismic
strengthening of unreinforced buildings or other buildings, or real
property, pursuant to this section constitute a public purpose
resulting in a public benefit. Only work certified as necessary to
comply with seismic safety standards or regulations by local building
officials may be financed. No project involving the dismantling of
an existing building and its replacement by a new building or the
construction of a new or substantially new building may be financed
pursuant to this section, except as otherwise provided in
subparagraph (B). Work on qualified historical buildings or
structures shall be done in accordance with the State Historical
Building Code (Part 2.7 (commencing with Section 18950) of Division
13 of the Health and Safety Code). Any financing for seismic
strengthening of a residential structure containing units rented by
households specified in Section 50079.5 of the Health and Safety Code
before strengthening shall be subject to a regulatory agreement that
will ensure that the number of those units in the structure will not
be reduced and will remain available at affordable rents pursuant to
Section 50053 of the Health and Safety Code as long as any
assessments levied pursuant to this section on the parcel on which
the structure is located remain unpaid. 
   No 
    (ii)     A  lot, parcel, or building
shall  not  be included in the district without the owner's
consent.
   (B) Within  any   an  area that has been
designated by the Governor as a disaster area or for which the
Governor has proclaimed the existence of a state of emergency because
of earthquake damage, work deemed necessary to repair any damage to
real property directly or indirectly caused by the occurrence of an
earthquake cited in the Governor's designation or proclamation, or by
aftershocks associated with that earthquake, including work to
reconstruct, repair, shore up, or replace any real property or
building damaged or destroyed by the earthquake or by its
aftershocks. Work may be financed pursuant to this subparagraph only
on real property or buildings identified in a resolution of intention
to establish a district adopted within seven years of the date that
the Governor designates the area as a disaster area or proclaims a
state of emergency in the area.
   (2)  Any   A  district created to
finance seismic safety work on privately owned buildings, including
repair, reconstruction, or replacement of privately owned buildings
pursuant to this section, shall consist only of lots or parcels on
which the legislative body finds that the buildings to be worked on,
repaired, reconstructed, or replaced pursuant to this section, are
located or were located before being damaged or destroyed by the
earthquake that is the subject of the Governor's designation or
proclamation pursuant to subparagraph (B) of paragraph (1), or by the
aftershocks of that earthquake.  Notwithstanding Division 7
(commencing with Section 5000) or this division, this paragraph shall
not apply to any district created by the California Earthquake
Authority. 
   (3) The Legislature hereby declares that the use of public funds
pursuant to this section for seismic strengthening, repair, or
reconstruction of privately owned real property or buildings
constitutes a public purpose resulting in a public benefit. The use
of funds pursuant to this section shall not be construed to be gifts
of public funds in violation of Section 6 of Article XVI of the
California Constitution.
   (4) A loan or expenditure of funds made by a district pursuant to
this section and secured by a tax assessment or a lien, or both that
assessment and lien, on private property shall not, when combined
with existing liens on the property, exceed 80 percent of the current
appraised value of the property, as determined by an independent,
certified appraiser, unless existing lienholders consent in writing
to a higher loan-to-value ratio. Notice of the creation of a district
or the authorization for the loan or expenditure of funds for the
purposes set forth in this section shall be given to lienholders of
record on the property included in the district at least 30 days
prior to any vote of the governing body authorizing the creation of
the district or the loan or expenditure of funds that could create a
lien on the property.
   (b) A district created to finance seismic safety or repair work
pursuant to this section may include areas of territory that are not
contiguous.
   (c) At any time after the passage of the resolution provided for
in subdivision (a) of Section 10312, the legislative body may make
changes in or modify the improvements or reduce the assessment with
respect to a particular lot or parcel within an assessment district
created for the purposes of this section with the written consent of
the owner of that lot or parcel.
   (d)  Any changes made within an assessment district created for
the purposes of this section shall be made after notice and hearing,
as provided in this division, except that changes may be made under
any of the following circumstances:
   (1) At the hearing on the report, changes that do any of the
following:
   (A) Eliminate a portion of the assessment district without
increasing the amount of any assessment or substantially affecting
the distribution of benefits from the improvements.
   (B) Exclude territory that will not be benefited by the remaining
improvements without increasing the amount of any assessment.
   (C) Modify the improvements or the assessment with respect to a
particular lot or parcel within the assessment district with the
written consent of the owner and without increasing the assessments
on any other real property.
   (2) At any time after the improvements are ordered and during the
pendency of the proceedings to establish the assessment district.
   (3) At any time after the adoption of the resolution provided for
in subdivision (a) of Section 10312, to modify the improvements or
reduce the assessment with respect to a particular lot or parcel
within the assessment district with the written consent of the owner.

   (e) An action to determine the validity of any assessments, bonds,
bond anticipation notes, contracts, or improvements for the purposes
of this section may be brought by the legislative body, or by any
person designated by the legislative body, pursuant to Chapter 9
(commencing with Section 860) of Title 10 of the Code of Civil
Procedure. For this purpose, an improvement shall be deemed to be in
existence upon its authorization and an assessment upon its
confirmation.
   (f) It is the intent of the Legislature that the powers conferred
by this section shall be in addition and supplemental to, and not
exclusive of, the powers conferred by any other law.
  SEC. 6.  Section 10104 of the Streets and Highways Code is amended
to read:
   10104.   (a)    When  any  
a  proceeding is initiated under this division by a legislative
body other than that of a city or county, and before the resolution
of intention is adopted, the proposed resolution, together with a
plat or map which shall indicate by a boundary line the extent of
territory included in the proposed district, shall be submitted for
approval of the legislative body of the city, where the land to be
assessed lies within the corporate limits of any city, or of the
county, where the land to be assessed lies within an unincorporated
territory. When  such   the  approval has
been secured, the resolution of intention may be adopted and the
legislative body initiating the proceeding may thereafter take each
and every step required for or suitable for the consummation of the
work and the levying, collecting and enforcement of the assessments
to cover the expenses thereof and the issuance and enforcement of
bonds to represent unpaid assessments. 
   (b) Notwithstanding Division 7 (commencing with Section 5000) or
this division, this section shall not apply to any district created
by the California Earthquake Authority.