BILL ANALYSIS
AB 280
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Date of Hearing: April 1, 2009
ASSEMBLY COMMITTEE ON INSURANCE
Joe Coto, Chair
AB 280 (Blakeslee) - As Introduced: February 12, 2009
SUBJECT : California Earthquake Authority retrofit program
SUMMARY : Authorizes the California Earthquake Authority (CEA)
to create a program to access and dispense federal mitigation
funds on soft-story residential buildings. Specifically, this
bill :
1)Contains legislative findings and declarations that detail the
risk that different regions of California face with respect to
serious earthquakes, and about housing stock that present
unique and severe risk of loss.
2)Contains additional legislative findings and declarations
detailing the benefits to the communities that a retrofit
grant program would provide, including direct upgrades to the
structures, economic stimulus to the local communities, and
loss prevention in the event of a future serious earthquake.
3)Authorizes the CEA to establish a program to access and
dispense federal stimulus funds via loans and grants, subject
to the following conditions:
a) The retrofit projects must be in cities or counties that
have adopted local laws that:
i) Mandate the retrofit of at-risk structures by 2040;
ii) Provide a streamlined and fast-tracked permit
process for projects funded by a grant or loan from the
CEA;
iii) Establish a procedure for tracking program-funded
projects and reporting information to the CEA.
b) The program may only fund retrofit projects on large,
wood-framed, soft-story buildings with 3 or more stories
and 5 or more residential units.
c) The retrofit funds may only pay for retrofit or other
mandated upgrades, and cannot be used for either functional
or aesthetic improvements.
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d) The program is limited to disbursing federal funds only.
EXISTING LAW :
1)Establishes the CEA to provide earthquake insurance to
homeowners who obtain their homeowners' insurance from CEA
participating insurers, and who opt to purchase separate
earthquake insurance on their home.
2)Creates an Earthquake Loss Mitigation Fund, and authorizes the
CEA to set aside specified funds to be used for grants, loans
or loan guarantees to dwelling owners to retrofit their homes
to protect against earthquake damage.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose of the bill. The Joint Authors, Assemblymembers
Blakeslee and Ma, point to the obvious risk of earthquakes in
California, and the body of evidence from past temblors that
show that soft-story structures pose a unique and substantial
risk of failing. They argue that it is well-documented that
these structures pose a serious threat to both life and
property when they collapse, and that we should be doing
everything possible to mitigate these risks. In support of
these points, they cite the recommendations of several
agencies, including the California Seismic Safety Commission
and the Federal Emergency Management Agency. The authors also
present evidence on the scope of the problem, and viable
mitigation techniques that are designed to provide
cost-effective improvements.
2)Definition of "soft-story"? Soft-story structures are multi
story buildings where the ground floor provides minimal
support. Typical structures are small apartment buildings
where the ground floor is a parking garage, or residential
units over a commercial space that has open floors without
interior walls that support the upper levels. However, since
the proposal strictly limits use of retrofit funds to
structures that are "soft-story," the author should consider
adopting a more specific definition so that both property
owners and program managers will know exactly which structures
qualify.
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3)Is CEA the proper agency to administer the program? The
authors selected the CEA as the proper agency to administer
this proposed mitigation program because of its obvious
interest in mitigating residential property losses due to
earthquakes, as well as the existing mitigation program CEA
operates to provide similar grants, loans and guarantees for
similar purposes. However, two groups, the California Rural
Legal Assistance Foundation and the Western Center on Law and
Poverty, organizations that support the concepts in the bill,
and who represent many people who reside in the type of
structures targeted by the bill, have suggested that the state
Department of Housing and Community Development (HCD) may be a
better program administrator. They argue that HCD operates a
number of similar programs, has better access to the
communities that need these retrofit dollars, and would be
able to get funds into neighborhoods and working to stimulate
the economy faster than the CEA could. The author may wish to
consider, as the bill moves forward, which agency would be
able to provide the best, fastest, and most productive
management of the program. These organizations also suggest
that the eligibility criteria be expanded to include 2-story
soft-story structures.
4)Are federal funds available? The American Recovery and
Reinvestment Act (ARRA), commonly referred to as the federal
economic stimulus package, does not contain specific funding
for a program such as the retrofit program proposed by the
bill. However, the authors point out that there are funds
generally made available that might be tapped for this
purpose. The authors are working with federal authorities to
attempt to secure these funds, and to obtain more specific
provisions in a potential future stimulus measure.
REGISTERED SUPPORT / OPPOSITION :
Support
California Apartment Association
California Rural Legal Assistance Foundation (in concept)
Western Center on Law and Poverty (in concept)
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Opposition
None received.
Analysis Prepared by : Mark Rakich / INS. / (916) 319-2086