BILL NUMBER: AB 280	INTRODUCED
	BILL TEXT


INTRODUCED BY   Assembly Members Blakeslee and Ma

                        FEBRUARY 12, 2009

   An act to add Section 10089.55 to the Insurance Code, relating to
the California Earthquake Authority.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 280, as introduced, Blakeslee. California Earthquake Authority:
retrofit programs: grants.
   Existing law establishes the California Earthquake Authority,
administered under the authority of the Insurance Commissioner.
Existing law provides that the authority shall be governed by a
3-member governing board consisting of the Governor, the Treasurer,
and the commissioner. The authority is authorized to transact
insurance as necessary to sell policies of basic residential
earthquake insurance, as specified.
   This bill would authorize the board to create a program,
administered by the authority, to access and dispense federal
stimulus dollars for purposes of retrofitting multiunit, soft-story
buildings, as specified.
   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.  The Legislature finds and declares all of the
following:
   (a) There is a 99 percent chance that a magnitude 6.7 or greater
earthquake will occur in California sometime in the next 30 years.
   (b) The Great Southern California Shakeout, a program run by the
Earthquake Country Alliance and the University of Southern California'
s Southern California Earthquake Center, found that a large
earthquake in southern California would cost about $213 billion
dollars, including business interruption.
   (c) The Great Southern California Shakeout estimates that about
1,800 people would die in a large southern California earthquake.
   (d) The next major earthquake on the Hayward Fault, near the bay
area, may cause more than $165 billion in property damage alone.
   (e) The last major earthquake on the Hayward Fault was 140 years
ago. The last five earthquakes on the fault have come, on average,
140 years apart.
   (f) There are approximately 4,600 wood-framed buildings with three
or more stories and five or more residential units in San Francisco.

   (g) In San Francisco, approximately 80 percent of the weakest
wood-framed buildings are expected to completely collapse or be
damaged beyond repair in a large earthquake; residents of these
approximately 2,000 uninhabitable buildings would need new homes for
the years it would take to rebuild. Approximately 60,000 people live,
2,000 businesses use, and 7,000 employees work in these buildings.
   (h) Multifamily housing is slow to recover after an earthquake. A
1994 study after the Loma Prieta earthquake found that one year after
the earthquake, 90 percent of the units destroyed were still out of
service. Four years later, 50 percent were still not repaired or
replaced.
   (i) Retrofit projects provide hundreds of spade-ready jobs that
could commence within 12 months.
   (j) Retrofit projects stimulate the economies of San Francisco and
the East Bay at a time when unemployment is soaring.
   (k) Retrofits would cost approximately $9,000 to $28,000 per
residential unit for direct construction costs.
   (l) Retrofit construction would last two to four months and would
be limited to the ground floor.
   (m) For the most dangerous wood-framed units in San Francisco,
total unit collapse could be reduced to one in 30 rather than the
current level of one in five.
   (n) Depending on the type of retrofit performed on a building,
average per unit dollar loss avoided to structure and contents ranges
from $24,000 to $52,000.
  SEC. 2.  Section 10089.55 is added to the Insurance Code, to read:
   10089.55.  The board may, for purposes of retrofitting multiunit
soft-story buildings, establish a program, administered by the
California Earthquake Authority, to access and dispense federal
stimulus dollars made available by the federal government to
stimulate the economy. The authority may offer grants or loans for
some or all of the costs of a project, as otherwise allowed under
this section. The following limitations shall apply to funds
dispensed by the authority under this program:
   (a) The authority shall only fund retrofit projects that are
located in city or county jurisdictions which have adopted, by
ordinance, a retrofit program that includes:
   (1) Mandated retrofits of at-risk structures within the
jurisdiction by the year 2040 or earlier.
   (2) A streamlined and fast-tracked permit procedure for seismic
retrofit projects funded by the authority through the program created
under this section.
   (3) A procedure for tracking and documenting program-funded
retrofit projects and for reporting about these projects to the
authority.
   (b) The authority shall only fund retrofit projects of large,
wood-framed, soft-story buildings with three or more stories and five
or more residential units, and each of these projects shall be rated
on its ability to mitigate the greatest risk at the lowest cost.
   (c) The program shall only fund retrofit or other mandated
upgrades and shall not fund functional or aesthetic improvements.
   (d) The authority shall only dispense federal funds.