‘ AB 428, SEISMIC RETROFIT TAX CREDIT ASSEMBLYMEMBER ADRIN NAZARIAN This Bill: AB 428 will create a Seismic Retrofit Tax Credit to encourage property owners of seismically vulnerable structures, to make necessary seismic safety improvements to their “at-risk properties.” Specifically AB 428: o Will establish a 5 year 30% tax credit for qualified costs associated with Seismic Retrofit for qualified owners of an “at-risk property.” The tax credit is awarded upon completion of Seismic Retrofit. o Defines an “at-risk property” as a building that is deemed hazardous and in danger of collapse in the event of a major earthquake and is certified as so by the appropriate local jurisdiction with authority for building code enforcement, including but not limited to, soft story buildings, non-ductile concrete residential buildings, and pre-1980 concrete residential buildings. o Provides that a municipality’s local agency with jurisdiction for building code and safety enforcement certify an “at-risk building” located within their area. o Defines what Seismic Retrofit Construction means. o Sets a sunset date of December 1, 2021. Background: There are many types of buildings that have been identified as seismically unsafe through studies and past declarations by the state Legislature. These buildings include soft story buildings and non-ductile concrete buildings, including lift-slab buildings with lateral force resisting systems. Concrete buildings, particularly older ones with high numbers of occupants, can collapse and kill individuals. These buildings are the fastest growing cause of earthquake losses around the world. California changed building codes in the mid1970s, after engineers learned what caused their vulnerability and how to strength them. As a result, new concrete construction is at least 20 times safer in an earthquake. Yet even now, 40 years after those advances, the great majority of California's older concrete buildings have still not been evaluated or retrofitted. These buildings include apartment buildings and condominiums that house thousands of Californians. The sturdy appearance of these buildings is dangerously deceptive. Even those that do not collapse in a strong earthquake may have to be replaced, as was seen after the 2011 Christchurch, New Zealand magnitude 6.3 earthquake. Although only 2 buildings in that city collapsed completely, 70% of the city's downtown had to be leveled to the ground and rebuilt. The impact of a strong earthquake on downtown Los Angeles is predicted to be far greater. The 1989 Loma Prieta magnitude 6.9 earthquake and the 1994 Northridge magnitude 6.7 earthquake were both much stronger than the one in Christchurch that caused such destruction. Recent findings by UC researches, highlighted in a recent article in the Los Angeles Times, identify 1,500 concrete buildings that are seismically vulnerable in the Los Angeles area. The researchers state that in the event of a huge earthquake 75 are likely to collapse.1 1 http://graphics.latimes.com/la-concrete-buildings/ Last Updated: 3.24.15 ‘ AB 428, SEISMIC RETROFIT TAX CREDIT ASSEMBLYMEMBER ADRIN NAZARIAN The US Geologic Survey gives better than 99% odds that one or more magnitude 6.7 earthquakes will take place in California by 2038. The survey states 46% odds that at least one even more powerful quake, of magnitude 7.5 or greater, will take place during the same period.2 Support: City of Los Angeles California Apartment Association Opposition: Purpose: N/A AB 428 promotes earthquake preparedness and safety by providing Californians with a tax incentive, to encourage the retrofit of unsafe properties. Staff Contact: Hrag Kitsinian 916.319.2411 [email protected] The benefits of a Seismic Retrofit Tax Credit are enormous. A recent FEMA study shows that money spent on reducing the risk of natural hazards is a sound investment. On average, a dollar spent on hazard mitigation (actions to reduce disaster losses) provides the Nation about $4 in future benefits. 3 AB 428 will decrease future public costs for disaster relief, as well as, reduce the damage to private property and improve resilience from future earthquakes. Over the long term, the public will save money that would otherwise have been required for disaster relief. Lives and private property will be saved. There will be improved community resilience following a catastrophic earthquake. 2 http://www.scec.org/ucerf2/ http://c.ymcdn.com/sites/www.nibs.org/resource/resm gr/MMC/hms_vol1.pdf 3 Last Updated: 3.24.15