BILL ANALYSIS
AB 1574
Page 1
Date of Hearing: April 4, 2001
ASSEMBLY COMMITTEE ON HOUSING AND COMMUNITY DEVELOPMENT
Alan Lowenthal, Chair
AB 1574 (Lowenthal) - As Amended: April 3, 2001
SUBJECT : Building standards: energy conservation
SUMMARY : Requires an energy audit upon the sale of a home, if
upgrades are found to be needed, such upgrades shall be
performed and financed with one percent of the selling price of
the home. Specifically, this bill :
1)Requires the California Energy Commission (CEC) to adopt
regulations that require increased energy efficiency for all
new nonresidential buildings and for existing residential
buildings upon their resale.
2)Provides exceptions to compliance for residential buildings
constructed on or after 1992 and that meet existing energy
efficiency standards, low and very low income homeowners as
well as for owners of historic buildings and homes with
historically significant window designs.
3)Requires provisions of this bill to apply to resale of homes
with values greater than $75,000.
4)Provides that these regulations include ceiling insulation,
wall insulation, raised wood floor insulation, duct
insulation, fenestration (windows), sealing of HVAC duct
system, and water heater wrap.
5)Provides that not more than one percent of the sales price
must be spent for efficiency improvements for residential
buildings.
6)Provides that provisions of this bill be documented and
certified by a Home Energy Rater (HER).
7)Requires the CEC to publish information to educate homeowners
of these provisions.
8)Requires the CEC to monitor the effectiveness of these
provisions.
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9)Requires that the provisions of this bill be enforced by the
city, county or city and county building department.
10)Requires the HER rating be made part of the escrow closing
documents for the homebuyer upon sale of the building.
11)Requires the CEC consult with the California Building
Standards Commission prior to adopting regulations.
12)Provides that the regulations adopted by the CEC be adopted
as emergency regulations.
EXISTING LAW :
1)Provides that the CEC shall prescribe by regulation measures
to reduce wasteful consumption of energy by new residential
and new nonresidential buildings (Public Resources Code
Section 25402).
2)Requires the CEC to establish criteria for adopting a
statewide home energy rating program for residential dwellings
(see Home Energy Rater below) (Public Resources Code Section
25942).
3)Provides that no emergency regulation that is a building
standard shall be filed, nor shall the building standard be
effective, unless the building standard is submitted to the
California Building Standards Commission, and is approved and
filed (Government Code Section 11346.1).
FISCAL EFFECT : Unknown.
COMMENTS :
The California Energy Commission estimates that residential and
commercial buildings account for over 65% of all state
electrical energy use and over 52% of all natural gas use.
Although there are existing standards for new construction,
which are periodically updated, those standards were initially
drafted in 1978. According to the sponsor, approximately 5.3
million single-family homes have little to no insulation or
other efficiency improvements.
Estimates from the Department of Finance for year 2000 show
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approximately 8 million existing single family homes have been
built and approximately 7 million square feet of commercial
space is in the marketplace. New construction of residential
and commercial buildings only accounts for 2% of the total
building stock, leaving 98% with little or no efficiency
measures.
The sponsor notes that both residential and commercial building
sectors represent enormous savings potential and should be
targeted for efficiency improvements.
Estimates of the energy savings potential for increasing
efficiency measures in existing residential and commercial
buildings are 20 times greater than comparable savings achieved
by the CEC's recently approved efficiency revisions for new
buildings.
The sponsor states that efficiency improvements to existing
buildings avoids the need to build nearly four power plants.
What is a Home Energy Rater ?
Public Resources Code Section 25942 requires the CEC to develop
a statewide program for third party assessment of cost effective
efficiency measures for the home. The CEC has established such
a program and incorporated certification requirements into its
regulations.
Arguments in Support
Supporters assert that it is estimated that bringing existing
homes up to Title 24 building standards for energy efficiency
would reduce demand on the state electricity grid by nearly 1373
peak megawatts. This is enough energy saved to power 1.3
million homes. Moreover, for each individual residence, the
amount of investment, up to the 1 percent of sales price cap,
would save 21 times more in energy costs.
Arguments in Opposition
The California Association of Realtors argues that with housing
affordability at a low point in California, the case has not
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been made to justify imposing such costs on home buying
transactions. The Realtors suggest targeting incentives to
existing homeowners, and increasing public awareness of existing
programs as well as the new incentives.
Double referred : The Assembly Committee on Rules referred AB
1574 to Housing and Community Development Committee and
Utilities and Commerce Committee. If AB 1574 passes this
committee, the bill must be referred to the Assembly Committee
on Utilities and Commerce.
REGISTERED SUPPORT / OPPOSITION :
Support
Glass, Molders, Pottery, Plastics and Allied Workers
International Union
John Manville Corporation
Knauf Fiber Glass, Shasta Lake
North American Insulation Manufacturers Association
Owens Corning, Compton
Opposition
California Association of Realtors
Analysis Prepared by : Hubert Bower / H. & C.D. / (916)
319-2085