Texas 2013 - 83rd Regular

Texas Senate Bill SB19 Compare Versions

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1	1	By: Carona S.B. No. 19
2	2	(In the Senate - Filed February 26, 2013; March 5, 2013,
3	3	read first time and referred to Committee on Business and Commerce;
4	4	March 25, 2013, reported adversely, with favorable Committee
5	5	Substitute by the following vote: Yeas 9, Nays 0; March 25, 2013,
6	6	sent to printer.)
7	7	COMMITTEE SUBSTITUTE FOR S.B. No. 19 By: Carona
8	8
9	9
10	10	A BILL TO BE ENTITLED
11	11	AN ACT
12	12	relating to certain residential and other structures and mitigation
13	13	of loss to those structures resulting from natural catastrophes;
14	14	providing a criminal penalty.
15	15	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
16	16	SECTION 1. Subtitle C, Title 2, Insurance Code, is amended
17	17	by adding Chapter 152 to read as follows:
18	18	CHAPTER 152. LOSS MITIGATION PROGRAMS
19	19	Sec. 152.001. DEFINITIONS. In this chapter:
20	20	(1) "Construction" includes alteration,
21	21	rehabilitation, remodeling, enlargement, or repair of, or an
22	22	addition to, a structure.
23	23	(2) "Loss mitigation measure" means an improvement to
24	24	or feature of a structure that reduces the risk or amount of loss
25	25	from a covered loss under a residential property insurance policy.
26	26	(3) "Qualified inspector" includes:
27	27	(A) an inspector certified by:
28	28	(i) the International Code Council;
29	29	(ii) the Building Officials and Code
30	30	Administrators International, Inc.;
31	31	(iii) the International Conference of
32	32	Building Officials; or
33	33	(iv) the Southern Building Code Congress
34	34	International, Inc.;
35	35	(B) a licensed professional engineer whose name
36	36	appears on the roster described by Section 1001.652, Occupations
37	37	Code; or
38	38	(C) a person who meets the requirements for
39	39	appointment to conduct windstorm inspections as specified by the
40	40	commissioner by rule.
41	41	(4) "Seacoast territory" has the meaning assigned by
42	42	Section 2210.003.
43	43	(5) "Trade association" means a nonprofit,
44	44	cooperative, and voluntarily joined association of business or
45	45	professional competitors designed to assist its members and its
46	46	industry or profession in dealing with mutual business or
47	47	professional problems and in promoting their common interest.
48	48	Sec. 152.002. ESTABLISHMENT OF PROGRAMS; PURPOSE. (a) The
49	49	commissioner in consultation with the office of public insurance
50	50	counsel shall develop and implement statewide loss mitigation
51	51	programs designed to reduce potential insured residential property
52	52	losses in this state.
53	53	(b) The programs may:
54	54	(1) reduce property loss with respect to windstorm,
55	55	hail, wildfire, and other natural catastrophes;
56	56	(2) reduce the risk and amount of potential insured
57	57	residential property losses arising from windstorm, hail,
58	58	wildfire, and other natural catastrophes;
59	59	(3) provide grants for loss mitigation measures; and
60	60	(4) promote public education about loss mitigation
61	61	related to windstorm, hail, wildfire, and other natural
62	62	catastrophes.
63	63	(c) The department and the office of public insurance
64	64	counsel may enter into an interagency contract or other agreements
65	65	with each other as appropriate to implement this chapter. The
66	66	department or the office of public insurance counsel, jointly or
67	67	severally, may enter into agreements with any individual or entity,
68	68	including a political subdivision, a state or federal agency, a
69	69	trade association, a university, or a nonprofit entity or other
70	70	private entity as appropriate to implement this chapter.
71	71	Sec. 152.003. FUNDING FOR LOSS MITIGATION GRANT PROGRAM.
72	72	(a) The department in cooperation with the office of public
73	73	insurance counsel shall use its best efforts to obtain funding for
74	74	loss mitigation grants available under Section 152.004, including
75	75	obtaining:
76	76	(1) grants from any individual or entity, including a
77	77	political subdivision, a state or federal agency, a trade
78	78	association, a university, or a nonprofit entity or other private
79	79	entity; or
80	80	(2) gifts or grants of money or in kind.
81	81	(b) The department may enter into interagency agreements
82	82	and other agreements as necessary to seek funding.
83	83	Sec. 152.004. LOSS MITIGATION GRANT OR LOAN PROGRAM.
84	84	(a) The commissioner in consultation with the office of public
85	85	insurance counsel may establish and administer a statewide grant or
86	86	loan program to fund the implementation, addition, or installation
87	87	of loss mitigation measures for residential property.
88	88	(b) Subject to eligibility requirements established by the
89	89	commissioner by rule, grants or loans under this section may be made
90	90	available to residential property owners in areas susceptible to
91	91	windstorm, hail, wildfire, and other natural catastrophes as
92	92	determined by the commissioner by rule.
93	93	(c) Grants or loans may be made available for
94	94	implementation, addition, or installation of loss mitigation
95	95	measures, including:
96	96	(1) roof deck attachments;
97	97	(2) secondary water barriers;
98	98	(3) roof coverings;
99	99	(4) brace gable ends;
100	100	(5) roof-to-wall connection reinforcements;
101	101	(6) exterior opening protections;
102	102	(7) exterior doors, including garage doors;
103	103	(8) tie-down systems;
104	104	(9) reinforcements of trusses, studs, or other
105	105	structural components; or
106	106	(10) other loss mitigation measures approved by the
107	107	commissioner by rule.
108	108	(d) In establishing eligibility requirements for the
109	109	program, the commissioner shall consider factors the commissioner
110	110	considers reasonable, including whether the residential property
111	111	is:
112	112	(1) owner occupied;
113	113	(2) built before June 2009; and
114	114	(3) located in:
115	115	(A) an area designated as underserved under
116	116	Chapter 2004 or 2211; or
117	117	(B) a region of the state in which insurers
118	118	report high average loss ratios for residential property insurance.
119	119	(e) The commissioner shall prioritize the distribution of
120	120	grants or loans under the program based on the following criteria in
121	121	the following order of importance:
122	122	(1) close proximity to the coast;
123	123	(2) relative susceptibility to wind damage;
124	124	(3) replacement cost value;
125	125	(4) owner occupancy; and
126	126	(5) the anticipated effect of a loss mitigation
127	127	measure on the insurance premium rate charged for residential
128	128	property insurance covering the property.
129	129	(f) The proceeds of a grant or loan under this section must
130	130	be paid to the contractor or other person who has entered into a
131	131	contract to implement, add, or install a loss mitigation measure
132	132	for the residential property owner.
133	133	(g) Before payment of the proceeds of a grant or loan under
134	134	this section, the commissioner may require inspection of the
135	135	applicable property or, after implementation, addition, or
136	136	installation, the loss mitigation measure the implementation,
137	137	addition, or installation of which is funded by the grant or loan.
138	138	(h) The commissioner by rule may adopt quality standards for
139	139	the loss mitigation measures described by Subsection (c).
140	140	Sec. 152.005. FRAUD; PENALTIES. (a) A person commits an
141	141	offense if the person knowingly or intentionally:
142	142	(1) submits to the department in connection with the
143	143	program established under Section 152.004 false or misleading
144	144	information or documents; or
145	145	(2) diverts proceeds of a grant or a loan to a purpose
146	146	other than implementing, adding, or installing loss mitigation
147	147	measures in accordance with the application for the grant or loan.
148	148	(b) An offense under Subsection (a) is a fraudulent
149	149	insurance act under Chapter 701 and a Class C misdemeanor.
150	150	Sec. 152.006. LOSS MITIGATION CREDIT AND SURCHARGE
151	151	INFORMATION COLLECTION. (a) The commissioner by rule may require
152	152	a residential property insurer to provide with a rate filing under
153	153	Chapter 2251 supplementary rating information, including
154	154	information relating to:
155	155	(1) credits and surcharges or absence of credits and
156	156	surcharges related to implementation, addition, or installation of
157	157	loss mitigation measures specified by the commissioner by rule; and
158	158	(2) variances in premium resulting from the
159	159	implementation, addition, or installation of loss mitigation
160	160	measures identified by the commissioner by rule.
161	161	(b) The Texas Windstorm Insurance Association and FAIR Plan
162	162	Association shall provide the information described by Subsection
163	163	(a) to the department with rate filings made by each association.
164	164	Sec. 152.007. PUBLIC AVAILABILITY OF INFORMATION. (a) The
165	165	department may collect information relating to premium credits,
166	166	surcharges, and discounts:
167	167	(1) related to loss mitigation generally; or
168	168	(2) authorized under Section 152.006.
169	169	(b) The information collected under Subsection (a) may
170	170	include:
171	171	(1) the name of a credit or surcharge;
172	172	(2) the amount of a credit or surcharge;
173	173	(3) loss mitigation measures eligible for a credit;
174	174	(4) building code standards that must be met to avoid a
175	175	surcharge; and
176	176	(5) other information the commissioner in
177	177	consultation with the office of public insurance counsel reasonably
178	178	believes promotes the purpose of this chapter.
179	179	(c) The information collected under this section may be used
180	180	in connection with the public education program established under
181	181	Section 152.009.
182	182	(d) The information collected under this section must be:
183	183	(1) made available to the public;
184	184	(2) posted on the department's Internet website; and
185	185	(3) posted on the Internet website of the office of
186	186	public insurance counsel.
187	187	(e) The department and the office of public insurance
188	188	counsel shall take all reasonable precautions to prevent disclosure
189	189	or use of personal information obtained in the collection of
190	190	information under this section.
191	191	Sec. 152.008. FUNDING FOR PUBLIC EDUCATION PROGRAM. The
192	192	department in cooperation with the office of public insurance
193	193	counsel shall use its best efforts to obtain funding for the public
194	194	education program established under Section 152.009, including
195	195	obtaining:
196	196	(1) grants from any individual or entity, including a
197	197	political subdivision, a state or federal agency, a trade
198	198	association, a university, or a nonprofit entity or other private
199	199	entity; or
200	200	(2) gifts or grants of money or in kind.
201	201	Sec. 152.009. PUBLIC EDUCATION PROGRAM. (a) The
202	202	commissioner in cooperation with the office of public insurance
203	203	counsel may create a public education program to educate and inform
204	204	the public about:
205	205	(1) the programs established under this chapter;
206	206	(2) the appropriateness and benefits of particular
207	207	loss mitigation measures in certain circumstances;
208	208	(3) the availability of credits described by this
209	209	chapter; and
210	210	(4) the imposition of surcharges described by this
211	211	chapter.
212	212	(b) To develop and implement the public education program,
213	213	the department may coordinate or collaborate with any individual or
214	214	entity, including a political subdivision, a state or federal
215	215	agency, a trade association, a university, or a nonprofit entity or
216	216	other private entity.
217	217	SECTION 2. Subsection (a), Section 233.151, Local
218	218	Government Code, is amended to read as follows:
219	219	(a) In this subchapter, "new residential construction"
220	220	includes:
221	221	(1) residential construction of a single-family house
222	222	or duplex on a vacant lot; and
223	223	(2) construction of an addition to an existing
224	224	single-family house or duplex[, if the addition will increase the
225	225	square footage or value of the existing residential building by
226	226	more than 50 percent].
227	227	SECTION 3. Section 233.152, Local Government Code, is
228	228	amended to read as follows:
229	229	Sec. 233.152. APPLICABILITY. (a) Subject to Subsection
230	230	(b), this [This] subchapter applies only to a county that has
231	231	adopted a resolution or order requiring the application of the
232	232	provisions of this subchapter [and that:
233	233	[(1) is located within 50 miles of an international
234	234	border; or
235	235	[(2) has a population of more than 100].
236	236	(b) This subchapter does not apply to nonresidential
237	237	structures or appurtenances located on land used for agriculture as
238	238	defined by Section 397A.051.
239	239	SECTION 4. Subsection (f), Section 233.153, Local
240	240	Government Code, is amended to read as follows:
241	241	(f) Except as provided by Section 233.1546, a [A] county may
242	242	not charge a fee to a person subject to standards under this
243	243	subchapter to defray the costs of enforcing the standards.
244	244	SECTION 5. Subchapter F, Chapter 233, Local Government
245	245	Code, is amended by adding Sections 233.1545 and 233.1546 to read as
246	246	follows:
247	247	Sec. 233.1545. CERTIFICATION OF COMPLIANCE; CONNECTION OF
248	248	UTILITIES. (a) A county to which this subchapter applies shall
249	249	require the issuance of a certificate of compliance as a
250	250	precondition to obtaining utility services as provided by this
251	251	section.
252	252	(b) Not later than the fifth business day after the date a
253	253	notice of inspection described by Section 233.154(c) stating that
254	254	the inspection showed compliance with building code standards
255	255	described by Section 233.153 adopted under this subchapter is
256	256	received, the county shall issue the party submitting the notice a
257	257	written certificate of compliance.
258	258	(c) An electric, gas, water, or sewer service utility may
259	259	not permanently serve or connect new residential construction of a
260	260	single-family house or duplex as described by Section 233.151(a)(1)
261	261	with electricity, gas, water, sewer, or other utility service
262	262	unless the utility receives a certificate issued by the county
263	263	under Subsection (b).
264	264	(d) Subsection (c) does not prevent the temporary use or
265	265	connection of utilities necessary to complete new residential
266	266	construction, including temporary use or connection of utilities to
267	267	pass an inspection under this subchapter.
268	268	Sec. 233.1546. FEES. A county may charge a reasonable fee
269	269	not to exceed $25 to issue a certificate of compliance under Section
270	270	233.1545. The fees, aggregated annually, may not exceed the annual
271	271	cost of issuing the certificates under Section 233.1545.
272	272	SECTION 6. The changes in law made by this Act apply only to
273	273	new residential construction that commences on or after the
274	274	effective date of this Act, except that if the county requires
275	275	notice under Subsection (b), Section 233.154, Local Government
276	276	Code, this Act applies only to new residential construction for
277	277	which notice was given on or after the effective date of this Act.
278	278	SECTION 7. This Act takes effect September 1, 2013.
279	279	* * * * *