LEGISLATION:

PA 18-179

Summary of PA 18-179:

This bill codifies the residential disclosure report home sellers must provide to purchasers and expands what must be included in it. The new information the bill requires includes:

• disclosures on the building's structure and any improvements made to it, including questions on, among other things, the roof, exterior, driveway, and the types of testing, inspection, or repairs done to the foundation; and
  
• a new statement on concrete foundations that suggests prospective buyers have the concrete foundation inspected by a licensed profession who is a structural engineer for deterioration due to the presence of pyrrhotite.

Summary of PA 18-160:

This bill imposes a $12 surcharge on certain homeowners insurance policies issued, renewed, amended, or endorsed between January 1, 2019 and December 31, 2029 to be deposited into the Healthy Homes Fund which the bill establishes.

The bill establishes the Healthy Homes Fund, a separate non lapsing General Fund account to collect insurance surcharge funds to in part help homeowners with concrete foundations damaged from pyrrhotite. Under the bill, within 30 days of receiving the deposit of surcharge funds, 85% of the deposits must be transferred to the Crumbling Foundations Assistance Fund, which is used by the Connecticut Foundation Solutions Indemnity Company, LLC to assist homeowners with crumbling concrete foundations.

EFFECTIVE DATE: January 1, 2019, for the insurance surcharge provisions, and June 2018 for the provisions on the Healthy Homes Fund.

PA 17-2

Summary of PA 17-2 Sec 334 – 348:

• Provides a framework to assist owners of residential buildings (i.e., a one- to four-family dwelling, including condominium and planned development units) with concrete foundations damaged by the presence of pyrrhotite (“crumbling concrete foundations”)
  
• Creates a not-for-profit captive insurance company (“captive”) to help homeowners repair or replace crumbling concrete foundations with the lowest possible amount of borrowed funds

* Subjects the captive to existing laws regulating captive insurance companies but exempts it from having to pay a license fee in its first year or a renewal fee thereafter

* Deems that captive employees and agents are not state employees, but (1) subjects its employees, directors, agents, consultants, and contractors to certain state ethics provisions and (2) allows the Office of State Ethics to enforce these provisions

*Requires the captive to file, in addition to any report required of nonprofit entities, quarterly reports to specified legislative committees on its operations, including town by town information on claims, claim amounts, applications, and application approvals.

* Creates an application and review process and an appeal process for homeowners whose applications are denied

* Sunsets the captive on June 30, 2022, or earlier if its existence is terminated by law, and vests all rights and properties to the state at that time

* Allows DOH to apply for federal funds, and requires it to deposit the money into the Crumbling Foundations Assistance Fund

* Requires the Insurance; Finance, Revenue and Bonding; Planning and Development; Public Safety; and Housing committees to, at least annually, hold a joint public hearing on the captive's operation and financial condition

* Creates the Collapsing Foundations Credit Enhancements Program, administered by CHFA, to help homeowners obtain additional funding necessary to replace or repair crumbling concrete foundations and requires CHFA to publish a plain language summary of the program on its website

* Prohibits the use of recycled material containing pyrrhotite to make structural concrete unless (1) the State Building Inspector adopts a standard and (2) the person selling or offering the concrete provides the purchaser with written notice that the concrete meets the standard

* Makes a violation punishable under the Connecticut Unfair Trade Practices Act (CUTPA)

* Requires municipalities to waive application fees (regardless of any conflicting municipal charters, home rule ordinances, or special acts) and the State Building Inspector to waive education fees for building permit applications to repair or replace crumbling concrete foundations

* Requires the DCP commissioner to include in the residential property condition disclosure report a (1) recommendation that the prospective purchaser have any concrete foundation inspected by a state licensed structural engineer for deterioration caused by the presence of pyrrhotite, (2) question as to whether the seller has knowledge of any testing or inspection by a licensed professional related to the property's foundation, and (3) question as to whether the seller has any knowledge of any repairs related to the property's foundation.

* Requires personal risk insurance policies (e.g., homeowners) and certain condominium master and property insurance policies to allow suit against insurers for up to one year after the date the insured receives a written denial for all or any part of a claim under a property coverage provision for a crumbling concrete foundation

* Allows taxpayers to reduce their Connecticut adjusted gross income by the amount of any financial assistance received from the Crumbling Foundations Assistance Fund or paid to, or on behalf of, an owner of a residential building pursuant to the bill

* Allows municipalities to jointly borrow, or individually bond, to fund projects to abate certain deleterious conditions caused by crumbling concrete

* Establishes an eight-member working group to develop a model quality control plan for quarries and to study the workforce of contractors repairing and replacing crumbling concrete foundations; it must report its findings to the General Law Committee by December 31, 2018, at which point it terminates

* Establishes a special homeowner advocate within DOH responsible for, among other things, coordinating state efforts to assist homeowners with crumbling concrete foundations, helping resolve complaints concerning the captive, working with the federal government, and reporting to General Assembly

* Establishes a training program for contractors repairing or replacing these foundations

EFFECTIVE DATE: Upon passage, with the provision allowing suit against certain insurers for up to one year after a claim denial is applicable to policies issued, renewed, or in effect on or after the bill's effective date; and the tax deduction provisions applicable to taxable years beginning on or after January 1, 2017