BILL ANALYSIS
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|Hearing Date:June 28, 2010 |Bill No:AB |
| |1809 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Gloria Negrete McLeod, Chair
Bill No: AB 1809Author:Smyth
As Amended:June 23, 2010 Fiscal: No
SUBJECT: Home inspections: energy audits.
SUMMARY: Provides that a home inspector may perform a home inspection
that includes a Home Energy Rating System (HERS) "California home
energy audit," as defined in current regulations of the California
Energy Commission (CEC) which implement the California HERS Program.
Requires the HERS report which accompanies any home inspection report
to comply with the standards and requirements established by the CEC
pursuant to regulations adopted to implement the HERS Program.
Existing law, the Business and Professions Code:
1)Defines a "home inspector" as any individual who performs a home
inspection.
2)Defines a "home inspection" as a noninvasive, physical examination,
performed for a fee in connection with a transfer of real
property, of the mechanical, electrical, or plumbing systems or
the structural and essential components of a residential
dwelling designed to identify material defects in those systems,
structures and components. "Home inspection" includes any
consultation regarding the property that is represented to be a
home inspection or any confusingly similar term.
3)Defines a "home inspection report" as a written report prepared for a
fee and issued after a home inspection. The report clearly
describes and identifies the inspected systems, structures, or
components of the dwelling, any material defects identified, and
any recommendations regarding the conditions observed or
recommendations for evaluation by appropriate persons.
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4)Requires a home inspector who is not licensed as a general
contractor, structural pest control operator, or architect, or
registered as an engineer to conduct a home inspection with the
degree of care that a reasonably prudent home inspector would
exercise.
5)Prohibits home inspectors who are not registered engineers from
performing any analysis of the systems, components, or
structural integrity of a dwelling that would constitute the
practice of civil, electrical, or mechanical engineering.
6)Exempts registered engineers, licensed land surveyors, or licensed
architects acting pursuant to their professional registration or
license from the provisions governing home inspectors.
7)Provides that it is an unfair business practice for a home inspector
or a company that employs the inspector to do any of the
following:
a) Perform or offer to perform, for an additional fee, any
repairs to a structure on which the inspector, or the
inspector's company, has prepared a home inspection report in
the past 12 months.
b) Inspect for a fee any property in which the inspector, or
the inspector's company, has any financial interest or any
interest in the transfer of the property.
c) Offer or deliver any compensation, inducement, or reward
to the owner of the inspected property, the broker, or agent,
for the referral of any business to the inspector or the
inspection company.
d) Accept an engagement to make an inspection or to prepare a
report in which the employment itself or the fee payable for
the inspection is contingent upon the conclusions in the
report, pre-established findings, or the close of escrow.
e) A home protection company that is affiliated with or that
retains the home inspector does not violate current law if it
performs repairs pursuant to claims made under the home
protection contract.
8)Provides that contractual provisions that purport to waive the
home inspector's duty, or limit the liability of the home
inspector to the cost of the home inspection report, are
contrary to public policy and invalid.
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Existing law, the Public Resources Code:
1)Establishes the CEC under the Natural Resources Agency
consisting of five members appointed by the Governor which was
created in 1974 by the Warren-Alquist State Energy Resources
Conservation and Development Act.
2)Provides that the CEC is the state's primary energy planning and
policy agency and has five original Legislative mandates:
a) Develop and implement California's energy policy.
b) Forecast future statewide energy needs and evaluate
electricity resource acquisition plans.
c) Site and license thermal power plants of 50 megawatts or
larger to meet statewide energy needs.
d) Promote energy efficiency and a wide range of energy
conservation programs and regulations; and develop renewable
energy resources and alternative energy technologies.
e) Plan for and direct state response to energy emergencies
under the auspices of the CEC.
3)Additionally provides that the CEC is to direct energy research
programs on electricity, natural gas, and transportation, and to
support and fund renewable energy programs.
4)Required the CEC by regulations to establish criteria for
adopting a statewide home energy rating program for residential
dwellings and specifies what the program criteria shall include.
5)Specifies pursuant to regulations adopted by CEC on December 17,
2008, and published on August 3, 2009, the standards and
requirements of the HERS Program to provide energy efficiency
ratings for existing and newly constructed residential buildings
that include single family homes and multi-family building or
three stories or less.
6)Provides that the CEC shall approve HERS Providers who shall
administer a home energy rating system in compliance with the
regulations.
7)Provides that a "California Whole-House Home Energy Rater" is a
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person who has been trained, tested, and certified by a Provider
to properly gather information on the energy consuming features
of a home, perform diagnostic testing at the home, evaluate the
validity of that information, and perform other functions as
specified.
8)Provides that a "California Home Energy Inspector" is a home
inspector who has been trained, tested, and certified by a
Provider, as specified, and who works under the direct
supervision of a California Whole-House Energy Rater, as
defined.
9)Provides that a "California Home Energy Audit" means a process
to determine the energy savings and cost-effectiveness of
specific measures together with an evaluation of the energy uses
listed in regulations and a report to present the information
used to evaluate the measures and make recommendations for the
inclusion of such measures into the home.
This bill:
1) Provides that all home inspections, as defined, may, if requested
by the client, to be accompanied by a HERS California home energy
audit pursuant to regulations adopted by the CEC in compliance with
current law.
2) Specifies that if the client requests a HERS California home energy
audit, that the HERS California home inspection report accompanying
any home inspection report, as defined, shall comply with the
standards and requirements established by the CEC for HERS energy
audits as specified in regulations of the CEC.
3) Provides that it is the intent of the Legislature that a HERS
California home energy audit may, at the request of the client, be
performed during escrow by a home inspector who meets the
requirements of the regulations of the CEC.
FISCAL EFFECT: This measure has been keyed "nonfiscal" by Legislative
Counsel.
COMMENTS:
1. Purpose. According to the Author, current law allows consumers to
request a generic energy efficiency inspection as part of their
home inspection. The law does not explicitly state that consumers
can request a HERS inspection instead of the more generic energy
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efficiency inspection. This measure simply seeks to clarify
existing law in order to give consumers the option to chose to have
a HERS inspection conducted by HERS certified inspectors.
The American Home Inspection Association is the Sponsor of this
measure and indicates that study after study has demonstrated that
improvements in energy efficiency are among the most cost-effective
ways to not only reduce residential energy costs, but also reduce
greenhouse emissions. "Indeed, many localities across the United
States have begun to explore the idea of requiring homes at the
time of sale to be inspected for energy efficiency. Likewise,
legislation that would reward homeowners for improving the home's
energy efficiency, known as 'Home Star' or 'Cash for Caulkers,' is
currently wending its way through Congress."
Taken together, as explained by the Sponsor, these initiatives are
expected to increase demand for qualified energy auditors, as well
as promote adoption of commonly agreed-upon set of
energy-efficiency standards. The Sponsor further contends that the
aim of this bill is to address the challenges posed by these
developments by conferring on HERS-certified home inspectors the
authority to perform a HERS audit as part of a home inspection.
"This measure also provides that the HERS standard adopted pursuant
to the Warren-Alquist State Energy Resources Conservation and
Development Act shall be applied by HERS-certified home inspectors,
if a homebuyer requests a California home energy audit established
by Section 25942 of the Public Resources Code."
The Sponsor believes that by facilitating the ease with which
homeowners can obtain a HERS audit, and designating a specified set
of standards, this bill removes many of the obstacles that have
until now limited the ability of homeowners to control their energy
costs - and government at all levels, to implement programs
encouraging them to do so.
2. Background. The CEC established regulations on December 17, 2008
to implement the HERS Program to certify home energy rating
services in California. The program provides standards to measure
energy efficiency levels among California homes and to guide
investments in cost-effective home energy efficiency measures. The
regulations also specify the requirements for Providers
(organizations) who shall administer a home energy rating system in
compliance with the regulations and provides that a "California
Whole-House Home Energy Rater" is a person who has been trained,
tested, and certified by a Provider to properly gather information
on the energy consuming features of a home, perform diagnostic
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testing at the home, evaluate the validity of that information, and
perform other functions as specified. The regulations further
provide that a "California Home Energy Inspector" is a home
inspector who has been trained, tested, and certified by a
Provider, as specified, and who works under the direct supervision
of a "California Whole-House Energy Rater.
The HERS rating system, known as the HERS Index, was established by
the Residential Energy Services Network (RESNET), a non-profit
membership organization. The HERS Index scores a home out of 100
points; the lower the home's score, the more energy efficient it
is.
Currently, there are 42 HERS certified inspectors and three
CEC-Approved HERS Provider organizations that certify HERS
inspectors in California. To become a HERS-certified inspector an
individual must complete RESNET-accredited training, receive
certification from RESNET rating provider, and pass an examination.
3. Prior Legislation Dealing with Home Inspectors and Home
Inspections. AB 293 (Maze) of 2005, required home inspectors to
provide certain, specified disclosures prior to conducting a home
inspection and made it an unfair business practice if the specified
disclosures are not made. This measure was amended to deal with a
different subject matter.
AB 1976 (Maze) of 2004, to required the Contractors' State License
Board (CSLB) to develop a process for licensing home inspectors and
would have made it unlawful to perform a home inspection without a
license. This bill failed passage in Assembly Business and
Professions Committee.
AB 2142 (Houston) of 2004, authorized home inspectors who are also
licensed contractors or licensed structural pest control operators
to make the repairs recommended by them in their own inspection
reports, as long as specific disclosures are made and consumers are
provided flexibility in choosing a contractor. This bill failed
passage in Assembly Business and Professions Committee.
SB 31 (Figueroa) of 2003, and was almost identical to SB 1332, below.
This bill was amended to remove the title act provision in January
2004, leaving only the requirement for specified disclosures and
additions to unfair business practices. This bill died on the
Assembly Floor.
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SB 1332 (Figueroa) of 2002, would have provided title act protection
for home inspectors by making it an unfair business practice for an
individual to refer to himself or herself as a "certified home
inspector" unless he or she had met certain, specified
requirements. The measure also required home inspectors to provide
certain, specified disclosures prior to conducting a home
inspection and made it an unfair business practice if the specified
disclosures were not made. This bill was held in the Assembly
Business and Professions Committee by the Author.
SB 1216 (Hughes) of 1999, would have required a person seeking to
represent himself or herself as a "home inspector" to disclose in
writing to the person who ordered the home inspection whether he or
she has passed a home inspection specific examination or had
performed at least 250 home inspections for which home inspection
reports were issued. This bill would have made it unlawful for a
person who failed to make that disclosure to represent himself or
herself as a "home inspector," or to use other similar terms. A
home inspector would have been required to pass a home inspection
specific examination. SB 1216 would have required a person who
unlawfully identifies himself or herself as a "home inspector," or
by a similar term, to pay a civil penalty to the party who paid for
the home inspection. Governor Davis vetoed this bill and indicated
that the bill could expose consumers to increased costs and would
require additional regulatory burden on licensed professionals.
SB 258 (O'Connell, Chapter 338, Statutes of 1996) was similar to AB
2780, below. This bill was different from AB 2780 in a number of
ways. However, primarily it lacked the formal state certification
process and requirements for certification. It reflects the
current law regarding home inspectors and home inspections.
AB 2780 (O'Connell) of 1994, would have set up a comprehensive
statutory scheme for certifying and regulating home inspectors. It
would have provided for the creation of a new statewide, nonprofit
organization to exclusively certify home inspectors. The
certification requirements included: (1) received a minimum of 100
hours of comprehensive, in-class instruction on home inspection
covering specified items; (2) performed a minimum of 140 hours of
home inspection apprenticeships or have had at least five years
experience as a home inspector; (3) passed a home inspection
examination administered by a recognized industry association or
approved by the certifying organization. It would also have
provided title protection for use of the term "certified home
inspector." AB 2780 failed passage on the Senate Floor.
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There were also several other attempts to regulate the home inspection
industry. In 1987,
SB 974 (Petris) was introduced as a result of a study completed by
California State University, Sacramento which recommended that home
inspectors meet certain qualifications and pass an examination.
Under SB 974, home inspectors would have been regulated and
licensed by the State Contractors Board. SB 974 failed passage.
In 1986, SB 2026 (Petris) would have established specific licensing
requirements for home inspectors. However, this bill was amended
to only require a study by the Contractor's State License Board of
problems relating to home inspectors.
4. Arguments in Support. The National Association of Home Inspectors,
Inc. is in support of this measure and states that "as homeowners
attempt to get a handle on burgeoning utility costs, more are
turning to energy audits to help them identify ways to improve
their energy efficiency. By making it easier for homeowners to
obtain a HERS audit, AB 1809 will not only help accelerate this
trend, but also increase demand for qualified energy audits. In
short, it is a classic piece of 'win-win' legislation that helps
homeowners control their energy costs while creating new,
well-paying 'green' energy jobs."
Several home inspection companies also are in support of this measure
and indicated that homeowners not only want their inspectors to
tell them about their defects they may uncover, but also test the
home's energy performance and help them develop a customized
retrofit plan to help them lower their energy costs. This bill
will help home inspectors serve their clients better by smoothing
the way for inspectors to perform a home inspections and a HERS
energy audit simultaneously. It will also provide better
information to homeowners on ways to save money given the costs of
energy today.
SUPPORT AND OPPOSITION:
Support:
American Home Inspection Association (Sponsor)
California Building Industry
California Business Properties
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California State Pipe Trades Association
California State Association of Electrical Workers
National Association of Home Inspectors, Inc.
Western States Council of Sheet Metal Workers
4 Home Inspection Companies
Opposition:
None on file as of June 21, 2010.
Consultant:Bill Gage