By: Carona	S.B. No. 19
	(In the Senate - Filed February 26, 2013; March 5, 2013,
	read first time and referred to Committee on Business and Commerce;
	March 25, 2013, reported adversely, with favorable Committee
	Substitute by the following vote:  Yeas 9, Nays 0; March 25, 2013,
	sent to printer.)
	COMMITTEE SUBSTITUTE FOR S.B. No. 19	By:  Carona

	A BILL TO BE ENTITLED
	AN ACT
	relating to certain residential and other structures and mitigation
	of loss to those structures resulting from natural catastrophes;
	providing a criminal penalty.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Subtitle C, Title 2, Insurance Code, is amended
	by adding Chapter 152 to read as follows:
	CHAPTER 152.  LOSS MITIGATION PROGRAMS
	Sec. 152.001.  DEFINITIONS. In this chapter:
	(1)  "Construction" includes alteration,
	rehabilitation, remodeling, enlargement, or repair of, or an
	addition to, a structure.
	(2)  "Loss mitigation measure" means an improvement to
	or feature of a structure that reduces the risk or amount of loss
	from a covered loss under a residential property insurance policy.
	(3)  "Qualified inspector" includes:
	(A)  an inspector certified by:
	(i)  the International Code Council;
	(ii)  the Building Officials and Code
	Administrators International, Inc.;
	(iii)  the International Conference of
	Building Officials; or
	(iv)  the Southern Building Code Congress
	International, Inc.;
	(B)  a licensed professional engineer whose name
	appears on the roster described by Section 1001.652, Occupations
	Code; or
	(C)  a person who meets the requirements for
	appointment to conduct windstorm inspections as specified by the
	commissioner by rule.
	(4)  "Seacoast territory" has the meaning assigned by
	Section 2210.003.
	(5)  "Trade association" means a nonprofit,
	cooperative, and voluntarily joined association of business or
	professional competitors designed to assist its members and its
	industry or profession in dealing with mutual business or
	professional problems and in promoting their common interest.
	Sec. 152.002.  ESTABLISHMENT OF PROGRAMS; PURPOSE.  (a)  The
	commissioner in consultation with the office of public insurance
	counsel shall develop and implement statewide loss mitigation
	programs designed to reduce potential insured residential property
	losses in this state.
	(b)  The programs may:
	(1)  reduce property loss with respect to windstorm,
	hail, wildfire, and other natural catastrophes;
	(2)  reduce the risk and amount of potential insured
	residential property losses arising from windstorm, hail,
	wildfire, and other natural catastrophes;
	(3)  provide grants for loss mitigation measures; and
	(4)  promote public education about loss mitigation
	related to windstorm, hail, wildfire, and other natural
	catastrophes.
	(c)  The department and the office of public insurance
	counsel may enter into an interagency contract or other agreements
	with each other as appropriate to implement this chapter. The
	department or the office of public insurance counsel, jointly or
	severally, may enter into agreements with any individual or entity,
	including a political subdivision, a state or federal agency, a
	trade association, a university, or a nonprofit entity or other
	private entity as appropriate to implement this chapter.
	Sec. 152.003.  FUNDING FOR LOSS MITIGATION GRANT PROGRAM.
	(a)  The department in cooperation with the office of public
	insurance counsel shall use its best efforts to obtain funding for
	loss mitigation grants available under Section 152.004, including
	obtaining:
	(1)  grants from any individual or entity, including a
	political subdivision, a state or federal agency, a trade
	association, a university, or a nonprofit entity or other private
	entity; or
	(2)  gifts or grants of money or in kind.
	(b)  The department may enter into interagency agreements
	and other agreements as necessary to seek funding.
	Sec. 152.004.  LOSS MITIGATION GRANT OR LOAN PROGRAM.
	(a)  The commissioner in consultation with the office of public
	insurance counsel may establish and administer a statewide grant or
	loan program to fund the implementation, addition, or installation
	of loss mitigation measures for residential property.
	(b)  Subject to eligibility requirements established by the
	commissioner by rule, grants or loans under this section may be made
	available to residential property owners in areas susceptible to
	windstorm, hail, wildfire, and other natural catastrophes as
	determined by the commissioner by rule.
	(c)  Grants or loans may be made available for
	implementation, addition, or installation of loss mitigation
	measures, including:
	(1)  roof deck attachments;
	(2)  secondary water barriers;
	(3)  roof coverings;
	(4)  brace gable ends;
	(5)  roof-to-wall connection reinforcements;
	(6)  exterior opening protections;
	(7)  exterior doors, including garage doors;
	(8)  tie-down systems;
	(9)  reinforcements of trusses, studs, or other
	structural components; or
	(10)  other loss mitigation measures approved by the
	commissioner by rule.
	(d)  In establishing eligibility requirements for the
	program, the commissioner shall consider factors the commissioner
	considers reasonable, including whether the residential property
	is:
	(1)  owner occupied;
	(2)  built before June 2009; and
	(3)  located in:
	(A)  an area designated as underserved under
	Chapter 2004 or 2211; or
	(B)  a region of the state in which insurers
	report high average loss ratios for residential property insurance.
	(e)  The commissioner shall prioritize the distribution of
	grants or loans under the program based on the following criteria in
	the following order of importance:
	(1)  close proximity to the coast;
	(2)  relative susceptibility to wind damage;
	(3)  replacement cost value;
	(4)  owner occupancy; and
	(5)  the anticipated effect of a loss mitigation
	measure on the insurance premium rate charged for residential
	property insurance covering the property.
	(f)  The proceeds of a grant or loan under this section must
	be paid to the contractor or other person who has entered into a
	contract to implement, add, or install a loss mitigation measure
	for the residential property owner.
	(g)  Before payment of the proceeds of a grant or loan under
	this section, the commissioner may require inspection of the
	applicable property or, after implementation, addition, or
	installation, the loss mitigation measure the implementation,
	addition, or installation of which is funded by the grant or loan.
	(h)  The commissioner by rule may adopt quality standards for
	the loss mitigation measures described by Subsection (c).
	Sec. 152.005.  FRAUD; PENALTIES. (a)  A person commits an
	offense if the person knowingly or intentionally:
	(1)  submits to the department in connection with the
	program established under Section 152.004 false or misleading
	information or documents; or
	(2)  diverts proceeds of a grant or a loan to a purpose
	other than implementing, adding, or installing loss mitigation
	measures in accordance with the application for the grant or loan.
	(b)  An offense under Subsection (a) is a fraudulent
	insurance act under Chapter 701 and a Class C misdemeanor.
	Sec. 152.006.  LOSS MITIGATION CREDIT AND SURCHARGE
	INFORMATION COLLECTION. (a)  The commissioner by rule may require
	a residential property insurer to provide with a rate filing under
	Chapter 2251 supplementary rating information, including
	information relating to:
	(1)  credits and surcharges or absence of credits and
	surcharges related to implementation, addition, or installation of
	loss mitigation measures specified by the commissioner by rule; and
	(2)  variances in premium resulting from the
	implementation, addition, or installation of loss mitigation
	measures identified by the commissioner by rule.
	(b)  The Texas Windstorm Insurance Association and FAIR Plan
	Association shall provide the information described by Subsection
	(a) to the department with rate filings made by each association.
	Sec. 152.007.  PUBLIC AVAILABILITY OF INFORMATION. (a)  The
	department may collect information relating to premium credits,
	surcharges, and discounts:
	(1)  related to loss mitigation generally; or
	(2)  authorized under Section 152.006.
	(b)  The information collected under Subsection (a) may
	include:
	(1)  the name of a credit or surcharge;
	(2)  the amount of a credit or surcharge;
	(3)  loss mitigation measures eligible for a credit;
	(4)  building code standards that must be met to avoid a
	surcharge; and
	(5)  other information the commissioner in
	consultation with the office of public insurance counsel reasonably
	believes promotes the purpose of this chapter.
	(c)  The information collected under this section may be used
	in connection with the public education program established under
	Section 152.009.
	(d)  The information collected under this section must be:
	(1)  made available to the public;
	(2)  posted on the department's Internet website; and
	(3)  posted on the Internet website of the office of
	public insurance counsel.
	(e)  The department and the office of public insurance
	counsel shall take all reasonable precautions to prevent disclosure
	or use of personal information obtained in the collection of
	information under this section.
	Sec. 152.008.  FUNDING FOR PUBLIC EDUCATION PROGRAM. The
	department in cooperation with the office of public insurance
	counsel shall use its best efforts to obtain funding for the public
	education program established under Section 152.009, including
	obtaining:
	(1)  grants from any individual or entity, including a
	political subdivision, a state or federal agency, a trade
	association, a university, or a nonprofit entity or other private
	entity; or
	(2)  gifts or grants of money or in kind.
	Sec. 152.009.  PUBLIC EDUCATION PROGRAM. (a)  The
	commissioner in cooperation with the office of public insurance
	counsel may create a public education program to educate and inform
	the public about:
	(1)  the programs established under this chapter;
	(2)  the appropriateness and benefits of particular
	loss mitigation measures in certain circumstances;
	(3)  the availability of credits described by this
	chapter; and
	(4)  the imposition of surcharges described by this
	chapter.
	(b)  To develop and implement the public education program,
	the department may coordinate or collaborate with any individual or
	entity, including a political subdivision, a state or federal
	agency, a trade association, a university, or a nonprofit entity or
	other private entity.
	SECTION 2.  Subsection (a), Section 233.151, Local
	Government Code, is amended to read as follows:
	(a)  In this subchapter, "new residential construction"
	includes:
	(1)  residential construction of a single-family house
	or duplex on a vacant lot; and
	(2)  construction of an addition to an existing
	single-family house or duplex[, if the addition will increase the
	square footage or value of the existing residential building by
	more than 50 percent].
	SECTION 3.  Section 233.152, Local Government Code, is
	amended to read as follows:
	Sec. 233.152.  APPLICABILITY. (a)  Subject to Subsection
	(b), this [This] subchapter applies only to a county that has
	adopted a resolution or order requiring the application of the
	provisions of this subchapter [and that:
	[(1)     is located within 50 miles of an international
	border; or
	[(2)  has a population of more than 100].
	(b)  This subchapter does not apply to nonresidential
	structures or appurtenances located on land used for agriculture as
	defined by Section 397A.051.
	SECTION 4.  Subsection (f), Section 233.153, Local
	Government Code, is amended to read as follows:
	(f)  Except as provided by Section 233.1546, a [A] county may
	not charge a fee to a person subject to standards under this
	subchapter to defray the costs of enforcing the standards.
	SECTION 5.  Subchapter F, Chapter 233, Local Government
	Code, is amended by adding Sections 233.1545 and 233.1546 to read as
	follows:
	Sec. 233.1545.  CERTIFICATION OF COMPLIANCE; CONNECTION OF
	UTILITIES. (a)  A county to which this subchapter applies shall
	require the issuance of a certificate of compliance as a
	precondition to obtaining utility services as provided by this
	section.
	(b)  Not later than the fifth business day after the date a
	notice of inspection described by Section 233.154(c) stating that
	the inspection showed compliance with building code standards
	described by Section 233.153 adopted under this subchapter is
	received, the county shall issue the party submitting the notice a
	written certificate of compliance.
	(c)  An electric, gas, water, or sewer service utility may
	not permanently serve or connect new residential construction of a
	single-family house or duplex as described by Section 233.151(a)(1)
	with electricity, gas, water, sewer, or other utility service
	unless the utility receives a certificate issued by the county
	under Subsection (b).
	(d)  Subsection (c) does not prevent the temporary use or
	connection of utilities necessary to complete new residential
	construction, including temporary use or connection of utilities to
	pass an inspection under this subchapter.
	Sec. 233.1546.  FEES. A county may charge a reasonable fee
	not to exceed $25 to issue a certificate of compliance under Section
	233.1545.  The fees, aggregated annually, may not exceed the annual
	cost of issuing the certificates under Section 233.1545.
	SECTION 6.  The changes in law made by this Act apply only to
	new residential construction that commences on or after the
	effective date of this Act, except that if the county requires
	notice under Subsection (b), Section 233.154, Local Government
	Code, this Act applies only to new residential construction for
	which notice was given on or after the effective date of this Act.
	SECTION 7.  This Act takes effect September 1, 2013.
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