BILL ANALYSIS 1
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SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE
DEBRA BOWEN, CHAIRWOMAN
AB 1574 - Lowenthal Hearing
Date: July 10, 2001 A
As Amended: June 27, 2001 FISCAL B
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DESCRIPTION
Current law requires the State Energy Resources Conservation &
Development Commission (CEC) to prescribe lighting, insulation,
climate control system, and other building design and
construction standards which increase the efficiency in the use
of energy for new residential and new non-residential buildings.
Current law defines a "home inspection" as a non-invasive,
physical examination of one or more items including the
mechanical, electrical or plumbing systems, or the structural
and essential components of a home. As defined in current law,
the purpose of a home inspection is "to identify material
defects in those systems, structures or components."
Current law establishes a standard of care for home inspectors
and prohibits certain inspections in which the inspector or the
inspector's employer has a financial interest.
This bill requires all home inspections conducted when a
single-family home is being sold to include an inspection of the
home's energy efficiency. The author will propose amendments in
committee to make such an inspection optional, which is current
law. The amendments will also require home inspectors to offer
clients energy efficiency inspections or to recommend someone
who does them.
This bill authorizes the CEC to adopt regulations that require
"higher envelope and duct R-values" for new nonresidential
buildings. The author will propose amendments in committee to
delete this provision from the bill.
This bill requires a home inspector to provide the results of an
inspection to both the buyer and the seller of the home. The
author will propose amendments in committee to delete this
provision from the bill.
This bill authorizes the CEC to adopt guidelines for minimum
energy-efficiency standards for existing single-family
residential homes.
BACKGROUND
According to some estimates, approximately 80% of California's
12 million existing homes and apartments were built prior to
1983 when the first set of statewide energy efficiency standards
took effect. That means four out of five homes and apartments
in California weren't required to be in compliance with any
statewide energy efficiency standard before they were sold.
Most of the work of the CEC with regard to buildings has been
focused on new construction. This bill focuses on existing
residential buildings and aims to reduce energy consumption by
authorizing the CEC to adopt energy efficiency guidelines for
existing residential buildings and by encouraging people to have
their homes inspected for energy efficiency.
In 1994, the Legislature considered, but defeated, AB 2780
(O'Connell), which proposed to establish a statewide
certification program for home inspectors, including training
and education standards and a certification exam. In 1996, SB
258 (O'Connell), Chapter 338, Statutes of 1996, was enacted to
establish some consumer protections for homebuyers purchasing
home inspections and create basic competency standards for home
inspectors.
COMMENTS
1)Putting The Cart Before The Horse. On June 26, this committee
passed AB 549 (Longville), which is currently pending in the
Senate Appropriations Committee. AB 549 requires the CEC to
develop strategies for improving energy efficiency in existing
residential homes and identify changes in law necessary to
implement those strategies by January 1, 2003.
This bill authorizes the CEC to go a step beyond that and
actually create energy efficiency guidelines for existing
residential buildings. The author and the committee may wish
to consider whether the CEC should be required to develop a
list of options and strategies (as AB 549 requires it to do)
or whether the CEC should be authorized to actually implement
energy efficiency guidelines for existing residential
structures (as this bill proposes).
2)A Second Bite At The Apple. The bill specifically authorizes
the CEC to adopt regulations to require "higher envelope and
duct R-values for new nonresidential buildings." However, the
CEC already has the authority to set energy efficiency
standards for new nonresidential buildings, including
standards for insulation. In fact, the CEC recently updated
its energy efficiency standards for new residential and new
nonresidential buildings, as required by AB 970 (Ducheny),
Chapter 329, Statutes of 2000. Those standards went into
effect in June. As noted above, the author will propose
amendments in committee to delete this provision from the
bill.
3)Paying A Plumber To Do Your Landscaping. The purpose of
commissioning a home inspection is to help a homebuyer
identify potential structural defects in a home. While
California law doesn't mandate that people buying or selling a
home hire a home inspector or obtain a home inspection,
current law does specify that a home inspection is:
"of the mechanical, electrical, or plumbing systems or the
structural and essential components of a residential
dwelling of one to four units designed to identify material
defects in those systems, structures and components. may
include inspecting mechanical, electrical or plumbing
systems, or the structural and essential components of a
home."
Current law defines a "material defect" as a condition that:
"significantly affects the value, desirability,
habitability, or safety of the dwelling. Style or
aesthetics shall not be considered in determining whether a
system, structure, or component is defective."
While the energy efficiency of a home probably doesn't fall
into the category of "style or aesthetics," it arguably
doesn't rise to the level of a "material defect" either. As
such, the author and committee may wish to consider whether
it's appropriate to require home inspectors to offer to
inspect the items noted in this bill or to recommend someone
who can inspect for such items.
4)A Mandated Referral System . This bill currently requires all
home inspection reports to include certain information about
the energy efficiency of a home. However, as noted earlier,
the author will propose amendments to require home inspectors,
if they can't perform an energy efficiency inspection, to
recommend someone who can.
While increasing the energy efficiency of existing homes and
buildings is a laudable goal, the author and committee may
wish to consider whether it's appropriate to require home
inspectors to either offer to provide this particular service
or to recommend someone who can. There are many other
similarly laudable goals that have larger societal benefits,
such as landscaping in a way that requires less water usage,
that homeowners could undertake, yet home inspectors are
neither required to offer that particular service nor
recommend someone who can.
5)The Cost Of Home Inspections . Currently, a homebuyer
interested in having a home inspection can choose whether the
entire house or only certain structures or systems (e.g.,
electrical, plumbing, etc.) are inspected. A full home
inspection typically costs about $350. Some utility companies
and many private home energy rating experts provide
comprehensive home energy audits for fees ranging from about
$75 to $400. If the home to be inspected was built after 1983
when energy efficiency standards were first required in new
homes, the home may already have newer, energy saving
appliances, better insulation, dual-paned windows, and more,
making an energy efficiency inspection to some degree
unnecessary. The author and the committee may wish to
consider whether including energy efficiency inspections in
home inspections would drive up the cost of home inspections
unnecessarily and whether homebuyers interested in energy
efficiency would be better served by taking advantage of
potentially less expensive and more comprehensive energy
audits that may be available from local utilities or private
energy auditors.
6)Related Legislation. SB 37X (Brulte), which this committee
approved on May 1 by a 10-0 vote, requires the CEC to
investigate options to decrease "wasteful peak load energy
consumption" and develop a plan by January 1, 2003. It also
requires the utility companies to provide the CEC with support
for building standards developed by the CEC, including the
appropriate research, development, and training needed to
implement its building standards. (SB 37X became moot when
the first extraordinary session was adjourned, but the bill
was replaced by SB 37XX [Brulte], which is pending in the
Senate Appropriations Committee.)
AB 549 (Longville), which this committee approved on June 26
by a 9-0 vote, requires the CEC to develop a plan to decrease
wasteful peak load energy consumption in existing residential
and non-residential buildings. The CEC is required to report
the plan to the Legislature by January 1, 2003, and include
any changes in law needed to implement a plan to decrease
wasteful peak load energy consumption. AB 549 is pending
before the Senate Appropriations Committee.
7)Technically Speaking. On Page 4, Line 1, the bill should
state "adopt guidelines that describe minimum efficiency"
rather than use the term "prescribe." This change would
clarify that if the CEC develops guidelines for existing
residential buildings under this bill, the guidelines would
not carry a compliance mandate.
ASSEMBLY VOTES
Assembly Floor (54-21)
Assembly Appropriations Committee (14-7)
Assembly Utilities and Commerce Committee (13-4)
Assembly Housing and Community Development Committee
(9-0)
POSITIONS
Sponsor:
Owens Corning
North American Insulation Manufacturers Association
Support:
California Labor Federation, AFL-CIO
CertainTeed Corporation
Glass, Molders, Pottery, Plastics & Allied Workers International
Union
Knauf Fiber Glass
North American Insulation Manufacturers Association
Owens Corning
Oppose:
Coalition of California Home Inspectors (CCHI)
Jennie Bretschneider
AB 1574 Analysis
Hearing Date: July 10, 2001