HomeMy WebLinkAboutItem EAGENDA REPORT
DATE: July 23, 2001
TO: Honorable Mayor and City Council
THRU: John B. Bahorski, City Manager
FROM: Lee Whittenberg, Director of Development Services
SUBJECT: Support Letter re: S 424 (Feinstein) — Earthquake Loss
Reduction Act of 2001
SUMMARY OF REOUEST:
Authorize Mayor to sign letter supporting Senate Bill 424 (Senator Feinstein). Instruct
Staff to forward to the Planning Commission for infbnnation. Receive and File Status
Report.
BACKGROUND:
The Earthquake Loss Reduction Act of 2001, sponsored by Representatives Jerry Lewis
(CA- Redlands) and Mike Thompson (CA -St. Helena), makes it a priority for the federal
government to work in partnership with state and local governments, hospitals,
universities, businesses and citizens to implement earthquake loss reduction and
prevention measures. This bipartisan legislation provides important incentives, including
tax credits and grants, to encourage investments in seismic safety efforts before an
earthquake strikes since the vast majority of buildings nation -wide do not meet modem
seismic safety standards.
In addition to saving lives, reducing injuries, and reducing damage, the legislation will
help mitigate the amount of federal assistance needed for post - disaster recovery and will
ensure that critical public facilities, such as hospitals, will continue to function after an
earthquake. The most recent FEMA sponsored USGS seismic maps show that damaging
earthquakes and life loss could happen in over 40 states and territories. FEMA estimates
steps to retrofit buildings and homes could reduce these figures dramatically.
The bill was developed in' consultation with the Federal Emergency Management Agency
(FEMA), seismologists, and earthquake engineers. Senator Dianne Feinstein (CA)
introduced the companion measure in the Senate on March 1, 2001. The legislation is
supported by the American Hospital Association, the League of California Cities, the
California Healthcare Association, the Healthcare Association of New York and the
Earthquake Engineering Research Institute.
Agenda Item
C:WyD m®ca4.EGISLAT3424.CC Staff Rgmn.dc\LW107-09 -01
�1
City Support Letter re S 424 - Earthquake Loss Reduction Act of2001
City Council Staff Report
July 23, 2001
Specifically, the legislation will provide the following assistance:
• Homeowners -- Provides a 50 percent tax credit to homeowners for seismic
retrofit expenses that would include the cost of foundation anchors, cripple wall
braces, chimney braces, etc. Up to $6,000 of qualified expenses per year would be
eligible for the tax credit.
• Businesses — Businesses are able to depreciate seismic retrofitting expenses over
a period of five years, which will encourage retrofit work on large, high
occupancy buildings, as well as other facilities judged to be critical to the business
and that support the national economy.
• Hospitals, Universities, and Local Governments -- Authorizes a $1 billion Loss
Reduction Trust Fund to provide matching grants to local governments, public
and private hospitals, and institutions of higher education. The federal share is
75% and funds are to be used for recovery planning grants and to retrofit critical
facilities including buildings, and utility and transportation systems. The grant
program will be administered by FEMA.
• Tax exempt bonds -- Provides for tax- exempt seismic retrofitting bonds and
mortgage revenue bonds under the Internal Revenue Code. These bonds will help
make financing available for borrowers to retrofit their homes and businesses.
FISCAL IMPACT:
No direct fiscal impact. The legislation will provide various funding mechanisms that
local residents, businesses, and other organizations would be eligible for.
RECOMMENDATION:
Authorize Mayor to sign letter supporting Senate BID 424. Instruct Staff to forward to the
Planning Commission for information. Receive and File Status Report.
e Wlattenberg
Director of Development Servi s
Attachments: (2)
S 424.CC Staff Re n
City Support Letter re S 414 — Earthquake Loss Reduction Act q`2001
City Council Staj%Report
July 23, 2001
Attachment 1: City Comment Letter Supporting S 424 (Feinstein)
Attachment 2: S 424, as introduced on March 1, 2001
S 424.CC Suff Report
July 23, 2001
The Honorable Dianne Feinstein
Senator
331 Hart Senate Office Building
2nd and C Streets, NE
Washington, DC 20510
Dear Senator Feinstein
SUBJECT: SUPPORT - S.424, EARTHQUAKE LOSS
REDUCTION ACT OF 2001
On behalf of the City Council of the City of Seal Beach, I commend you for introducing
legislation to encourage Americans to reduce their risk to earthquakes and offer our
City's strong support for S. 424. We endorse the effort to provide incentives to
encourage the use of proper retrofit standards and are pleased to see attention being given
to needed instrumentation, the development of shake maps and new data to improve our
techniques. Because, we may never be able to predict earthquakes reliably, we need a
persistent effort to improve the quality of new constmction.and to rehabilitate existing at-
risk buildings.
The February 28, 2001 Nisqually earthquake in the State of Washington is a vivid
reminder that damaging earthquakes can strike at any time, in any of our 39 states that
have an earthquake risk. The Nisqually earthquake reminded us that much of the damage
and resulting human and economic consequences would be avoided if we use existing
knowledge. Reducing risk before earthquakes strike is far better than paying for repairs
and recovery and abiding irreplaceable losses. Earthquakes are a national problem and
the federal government has an important role to play. Federal incentives and strong
leadership are needed and S. 424 provides them.
Thank you for providing the leadership needed to help Americans deal with earthquakes.
Please do not hesitate to have your staff contact our Director of Development Services,
Mr. Lee Whittenberg, by telephone at (562) 431 -2527, extension 313 or by e-mail at
lwhi ttenberg @ci.seal - beach.ca.us, if you have questions regarding our position on this
important legislation.
C:Wy Docume Mu ISI AM 424.CC Support Lener.docLLWVI'l -23 -01
City of Seat Beach Support Letter re:
S. 424, Earthquake loss Reduction Act of 2001
July 23, 2001
Sincerely,
ilham J. e
Mayor, City of Seal Beach
cc: Senator Barbara Boxer
Congressman Jerry Lewis
Congressman Mike Thompson
Congressman Dana Rohrabacher
League of California Cities
S 426.CC S.,,aI r
City Support Letter re S 424 — Earthquake Loss Reduction Act of 200/
City Council Staff Report
July 13, 2001
ATTACHMENT 2
S 424, AS INTRODUCED ON MARCH 1, 2001
S 424.CC Smff Report
n
107 CONGRESS
IS S 424
1ST SESSION wJ
To provide incentives to encourage private seetur efforts to reduce earthquake
losses, to establish a national disaster mitigation program, and for other
purposes.
IN THE SENATE OF THE UNITED STATES
Mant,H 1, 2001
Mrs.. FEINSTEIN introduced the following bill; which was read twice and
referred to the Committee on Finanee
A BILL
To provide incentives to encourage private sector efforts to
reduce earthquake losses, to establish a national disaster
mitigation program, and for other purposes.
1 Be it enpcted by the Senate and House of Representa-
2 tines of the United States of Ametica in Congress assembled,
3 SECTION 1. SHORT TITLE.
4 This Act may be cited as the "Earthquake Loss Re-
5 duction Act of 2001 ".
6 SEC. 2. FINDINGS AND PURPOSE.
7 (a) FINDINGS.— Congress finds the following:
8 (1) After 23 years of research funded by the
9 National Earthquake Hazards Reduction Program,
2
1 a substantial body of knowledge exists about earth
2 sciences, geotechnical, and structural engineering
3 and human behavior relating earthquakes.
4 (2) The foremost challenge as we enter the 21st
5 century is putting this knowledge to work by redue-
6 ing future losses to improve the safety of Americans
7 and the performance of State and local government
8 facilities and private buildings and facilities.
9 (3) Earthquakes and tsunamis cause great dan-
10 ger to human life and property throughout the
11 United States and continue to threaten Americans
12 significantly in over 40 States and territories.
13 (4) Too few States and local communities have
14 sufficiently identified and assessed their risk and im-
15 plemented adequate measures to reduce losses from
16 such disasters and to ensure that their critical public
17 infrastructure and facilities will continue to function
18 after the disaster.
19 (5) Too much of the Nation's stocks of housing
20 and -commercial buildings remain inherently vulner-
21 able to earthquake shaking. Future losses in these
22 facilities can be lessened using currently feasible
23 technology.
24 (6) Too much of local government infrastruc-
25 tare remain at risk and are likely to be non -fune-
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1 tional in the aftermath of foreseeable earthquake
2 events at the time when the services they provide are
3 critically necessary.
4 (7) Federal, State and local government es-
5 penditures for disaster assistance and recovery have
6 increased without commensurate reduction in the
7 likelihood of future losses from such earthquakes.
8 (8) Feasible techniques for reducing future
9 earthquake losses are readily available.
10 (9) Without economic incentives, it is unlikely
11 that States and local communities and the public
12 will be able to implement available measures to re-
13 duce losses and ensure continued functionality of
14 their infrastructure.
15 (b) PIIRPOSP. It is the purpose of this Act to estab-
16 lish a national disaster mitigation program that -
17 (1) reduces the loss of life and property, human
18 suffering, economic disruption, and disaster assist -
19 ance costs resulting from earthquakes;
20 (2) offers financial incentives to encourage pri-
21 va.te sector efforts to reduce earthquake losses;
22 (3) provides matching finds to encourage and
23 assist States and local governments and the private
24 sector in their efforts to implement measures de-
25 signed to ensure the continued functionality of pub-
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1 lie infrastructure, commerce, and habitation after
2 earthquakes; and
3 (4) creates Federal, State and local government
4 partnerships to reduce the vldnerability of public in-
5 frastructure, commercial enterprises, and residential
6 buildings to earthquakes.
7 SEC. S. NONREFUNDABLE CREDIT FOR EXPENSES RE-
8 LATED TO SEISMIC RETROFIT OF PRINCIPAL
9 RESIDENCE.
10 (a) GENERAL. RULE. — Subpart. A of part IV of sub -
11 chapter A of chapter 1 of the Internal Revenue Code of
12 1986 (relating to nonrefundable personal credits) is
13 amended by inserting after section 25A the following:
14 "SEC. 25B. EXPENSES RELATED TO SEISMIC RETROFIT OF
15 PRINCIPAL RESIDENCE.
16 "(a) GENERAL RULE. —In the case of an individual,
17 there shall be allowed as a credit against the tax imposed
18 by this chapter for the taxable year an amount equal to
19 50 percent of so much of the qualified seismic retrofit ex-
20 penes of the taxpayer for the taxable year as do not ex-
21 ceed $6,000.
22 "(b) QUALIFIED .SmsmiC RETROFIT E_XPENSES.-
23 For purposes of this section -
24 "(1) IN GENERAL. —The terns `qualified seismic
25 retrofit e.Ypenses' means amounts paid or incurred
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1 by the taxpayer during the taxable year in relation
2 to any seismic retrofit construction of the principal
3 residence of the taxpayer.
4 "(2) .SEISMIC RETROFIT CONSTRUCTION. —The
5 term `seismic retrofit construction' means any addi-
6 tion or improvement -
7 "(A) which is certified by the State dis-
8 aster agency or other applicable agency-
9 "(i) as resulting in the mitigation of
10 the risk of damage to existing property
it from an earthquake, and
12 "(ii) as being in addition to any addi-
13 tion or improvement required by any State
14 or local law with respect to such property,
15 and
16 "(B) which is placed in service at least 5
17 ,years after the date the building is first placed
18 in service.
19 Such term does not include the cost of acquiring
20 such property (or any, interest therein).
21 "(3) PRINCIPAL RESIDENCE. —The term `prin-
22 cipal residence' has the same meaning as when used
23 in section 121.
24 "(e) DENIAL OF DOUBLE BENEFIT. —No deduction
25 shall be allowed under any other provision of this chapter
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1 with respect to any amount of qualified seismic retrofit
2 expenses taken into account under subsection (a).
3 "(d) Buis AD uSTMEENT. —For purposes of this sub -
4 title, if a, credit is allowed under this section with respect
5 to any residence, the basis of such residence shall be re-
6 duced by the amount of the credit so allowed. ".
7 (b) CONFORMING AMENDMENTS. -
8 (1) The table of seetions for subpart A of part
9 IV of subchapter A of chapter 1 of the Internal Rev -
10 enue Code of 1986 is amended by inserting after the
11 - item relating to section 25A the following new item:
"Sec. 25B. Eapensee related to seiemie retw6t of piveijml iv.i.
deuce. ".
12 (2) Subsection (a.) of section 1016 of such Code
13 is amended by striking "and" at the end of para-
14 graph (26), by striking the period at the end of
15 paragraph (27) and inserting ", and ", and by add -
16 ing at the end the following new paragraph:
17 "(28) in the case of a residence with respect to
18 which a credit was allowed under section 2513, to the
19 extent provided in section 2513(d). ".
20 (c) EFFECTIVE DATE. —The amendments made by
21 this section shall apply to expenses paid or incurred in
22 to -xable ,years beginning after December 31, 2000.
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1 SEC. 4. RECOVERY PERIOD FOR DEPRECIATION OF CER.
2 TAIN SEISMIC RETROFIT EXPENSES.
3 (a) TREATMENT AS 5-YEAR PROPERTY. Section
4 168(e)(3)(B) of the Internal Revenue Code of 1986 (relat-
5 ing to 5 -year property) is amended by striking "and" at
6 the end of clause (v), by striking the period and inserting
7 ", and" at the end of clause (vi), and by inserting after
8 clause (vi) the following new clause:
9 "(vii) any qualified seismic retrofit
10 property. ".
11 (b) DEFINITION OF QUALIFIED .SEISMIC RETROFIT
12 PROPERTY.— Section 168(i) of the Internal Revenue Code
13 of 1986 (relating to definitions and special rules) is
14 amended by adding at the end the following new para-
15 graph:
16 "(15) QUALIFIED SEISMIC RETROFIT PROP -
17 ERTY.-
18 "(A) IN GENERAL. —The term `qualified
19 seismic retrofit property' means any addition or
20 improvement to real property for which depre-
21 ciation is allowable under this section -
22 "(i) for which the expenditure is prop -
23 erly chargeable to the capital account, and
24 "(ii) which is a, seismic retrofit.
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1 "(13) .S'EISMIC RETROFIT. —For purposes of
2 subparagraph (A)(i), the term 'seismic retrofit'
3 means any addition or improvement -
4 "(i) which is certified by the State
5 disaster agency or other applicable
6 agency-
7 "(I) as resulting in the mitig-a-
8 tion of the risk of damage to existing
9 property from an earthquake, and
10 "(II) as being in addition to any
11 addition or improvement required by
12 any State or local law with respect to
13 such property, and
14 "(ii) which is placed in service at least
15 5 years after the date the building is first
16 placed in service.
17 Such term does not include the cost of acquir-
18 ing such property (or any interest therein). ".
19 (c) EFFECTIaE DATE. —The amendments made by
20 this section shall apply to qualified seismic retrofit prop -
21 erty placed in service after December 31, 2000.
22 SEC. 5. QUALIFIED SEISMIC RETROFITTING BONDS.
23 (a) IN GENERAL.— Section 144 of the Internal Rev -
24 enue Code of 1986 (relating to qualified small issue bond;
25 qualified student loan bond; qualified redevelopment bond)
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1 is amended by adding at the end the following new sub -
2 section:
3 "(d) QUALIFIED SEISMIC RETROFITTING BOND. -
4 For purposes of this part -
5 "(1) IN GENERAL. —The term `qualified seismic
6 retrofitting bond' means any bond issued as part of
7 an issue 95 percent or more of the net proceeds of
8 which are to be used -
9 "(A) for seismic retrofitting expenditures;
11 "(B) in a manner which meets the require-
12 menns of paragraph (3).
13 "(2) .SEISMIC RETROFITTING EXPENDITURE.—
14 For purposes of paragraph (1), the term `seismic
15 retrofitting expenditure' means any amount property
16 chargeable to capital account -
17 "(A) which is certified by the State dis-
18 aster agency or other applicable agency -
19 "(i) as resulting in the mitigation of
20 the risk of damage to existing property
21 from an earthquake, and
22 "(ii) as being in addition to any addi-
23 tion or improvement required by any State
24 or local law with respect to such property,
25 and
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1 "(B) which is placed in service at least 5
2 ,years after the date the building is first placed
3 in service.
4 Such term does not include the cost of acquiring
5 such property (or any interest therein).
6 "(3) USE OF PROCEEDS REQUIREMENTS. —The
7 use of the proceeds of an issue meets the require -
8 ments of this paragraph if within the 26 -month pe-
9 riod beginning with the date of issue
10 "(A) at least 95 percent of the net pro -
11 ceeds of such issue are used for seismic retro-
12 fitting expenditures or are used to finance 1 or
13 more loans to ultimate borrowers for such ex-
14 penditures, or
15 "(B) to the extent not so used under sub -
16 paragraph (A), such proceeds in excess of
17 $10,000 are used to, redeem bonds which are
18 part of such issue. ".
19 (b) BONDS TREATED AS QUALIFIED BONDS. —Para-
20 graph (1) of section 141(e) of the Internal Revenue Code
21 of 1956 (defining qualified bond) is amended by striking
22 °or ".at the end of subparagraph (F), by redesignating
23 subparagraph (G) as subparagraph (I3), and by inserting
24 after subparagraph (F) the following new subparagraph:
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1 "(G) a qualified seismic retrofitting bond,
2 or ".
3 (c) BONDS INCLUDED FOR PURPOSES OF SMALL
4 ISSUER EXEMPTION STATUS.— Subelause (I) of section
5 265(b)(3)(C)(ii) of the Internal Revenue Code of 1986 (re-
6 lating to obligations not taken into account in determining
7 status as qualified small issuer) is amended by inserting
8 ", or a qualified seismic retrofitting bond, as defined in
9 section 144(d)(1)" after "section 145 ".
10 (d) EXCEPTION FROM VOLUME CAP. — Section
11 146(g) of the Internal Revenue Code of 1986 (relating to
12 exception for certain bonds) is amended by striking "and"
13 at the end of paragraph (3), by striking the period at the
14 end of paragraph (4) and inserting a comma, and by add -
15 ing after paragraph (4) the following new paragraphs:
16 "(5) any qualified mortgage bond if 95 percent
17 or more of the net proceeds of the bond are to be
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21
22
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used to provide home improvement loans in connec-
tion with seismic retrofitting expenditures (as de-
fined in section 144(d)(2) without regard to the cap-
ital account requirement), and
"(6) any qualified seismic retrofitting bond. ".
(e) PROCEEDS OF MORTGAGE REVENUE BONDS
TSED IN CONNECTION WITH SEISMIC RETROFITTING.—
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(1) IN GENERAL.- Paragraph (4) of section
143(k) of the Internal Revenue Code of 1986 (relat-
ing to other definitions and special rules for quali-
fied mortgage bonds) is amended to read as follows:
11(4) QUALIFIED HOME IMPROVEMENT LOAN. -
The term `qualified home improvement loan'
means—
"(A) the financing (in an amount which
does not exceed $15,000) -
"(i) of alterations, repairs, and im-
provements on or in connection with an ex-
isting residence by the owner thereof, but
"(ii) only for such items as substan-
tially protect or improve the basic livability
or energy efficiency of the property, and
"(B) the financing (in an amount which
does not exceed $20,000) of seismic retrofitting
expenditures (as defined in section 144(d)(2)
without regard to the capital account require-
ment) in connection with an existing residence
by the owner thereof. ".
(2) EXCEPTION FROM INCOME REQUIRE -
MENTS.—Seetion 143(1) of such Code (relating to
income requirements) is amended by adding at the
end the following new paragraph:
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1 "(7) ESCEPTION FOR CERTAIN QUALIFIED
2 HOME IMPROVEMENT LOANS. — Paragraph (I) shall
3 not apply Alth respect to any qualified home im-
4 provement loan (as defined in subsection
5 (k)(4)(B)."
6 (f) CLERICAL AMENDMENTS. -
7 (1) The heading of section 144 of the Internal
8 Revenue Code of 1956 is amended by striking
9 "BOND." and inserting "BOND; QUALIFIED SEIS-
10 MIC RETROFITTING BOND. ".
11 (3) The item relating to section 144 in the table
12 of sections for subpart A of part IV of subchapter
13 B of chapter 1 of such Code is amended by striking
14 "bond." and inserting "bond; qualified seismic retro-
15 fitting bond."
16 (g) EFFECTIVE DATE. —The amendments made by
17 this section shall apply to bonds issued after the date of
18 the enactment of this Act.
19 SEC. B. TREATMENT OF PASSIVE LOSSES OF CERTAIN
20 PARTNERSHIPS ENGAGED IN SEISMIC RET-
21 ROFITTING.
22 (a.) IN GENER9L.—Section 469 of the Internal Rev -
23 enue Code of 1986 (relating to passive activity losses and
24 credits limited) is amended by adding at the end the fol-
25 lowing new subsection:
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1 "(n) EXEMPTION FOR SEISMIC RETROFITTING
2 TRADE OR BUSINESS. -
3 "(1) IN GENERAL. —In the case of any natural
4 person, subsection (a) shall not apply to that portion
5 of the passive activity loss or the deduction equiva-
6 lent (within the meaning of subsection 0)(5)) of the
7 passive activity credit for any taxable year which is
8 attributable to any seismic retrofitting activity which
9 such person engages in during the taxable year,
10 whether or not the taxpayer materially participates
11 in such activity.
12 "(2) SEISMIC RETROFITTING ACTIVITY. —For
13 purposes of this subsection, the term `seismic retro-
14 fitting activity' means any activity which involves the
15 trade or business of seismic retrofit construction (as
16 defined in section 2513(b)(2)) for residential prop -
17 erty. ".
18 (b) EFFECTIVE DATE. —The amendment made by
19 subsection (a.) shall apply to taxable ,years beginning after
20 December 31, 2000.
21 SEC. 7. MORTGAGE INSURANCE INCENTIVE.
22 Section 203(b)(2) of the National Housing Act (12
23 U.S.C. 1709(b)(2)), is amended, in the second undesig-
24 noted paragraph, 1>.y inserting "or due to seismic retro-
25 fitting of the residence (within the meaning of the term
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1 `seismic retrofit construction' under section 2513(b)(2) of
2 the Internal Revenue Code of 1986)" before the period
3 at the end.
4 SEC. 8. EARTHQUAKE DISASTER MITIGATION AND RECOV.
5 ERY PLANNING GRANT PROGRAM.
6 (a) DEFINITIONS. -
7 (1) IN GENERAL.— Section 4 of the Earthquake
8 Hazards Reduction Act of 1977 (42 U.S.C. 7703) is
9 amended by adding at the end the following:
10 "(8) AGENcy. —The term `Agency' means the
11 Federal Emergency Management Agency.
12 "(9) CRITICAL FACILITY. —The term `critical
13 facility' means
14 "(A) a public structure (including a police
15 station, fire station, city or town hall, school, or
16 other public building) or a public or nonprofit
17 private hospital that is-
18 "(i) owned by an entity; and
19 "(ii) critical to the continuity of the
20 entity or to the conduct of the disaster re-
21 sponse activities of the entity; or
22 "(B) a facility that -
23 110) provides medical services to a. spe-
24 cific occupational or industry segment of
25 the general public; and
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"(ii) is operated by an organization
described in subsection (c) or (d) of section
501 of the Internal Revenue Code of 1986
and exempt from taxation under subsection
(a) of such section.
"(10) CRITICAL PUBLIC INFRASTRUCTURE. —
The term `critical public infrastructure' means a
utility or transportation system (including a bridge,
enemy system, water or sewer system, or conmm-
mention system) that is—
"(A) owned by an entity; and
"(B) critical to the conduct of the disaster
response activities of the entity.
"(11) EARTHQUAKE DISASTER.—
"(A) IN GENERAL. —The terra `earthquake
disaster' means a disaster that results from a
movement of the earth.
°(B) INCLUSIONS. —The term `earthquake
disaster' includes a disaster that results from a.
tsunami or an earthquake- caused landslide or
liquefaction (as determined by the Director of
the Agency).
"(12) GRANT PROGRAM. —The term `grant pro-
gram' means the earthquake disaster mitigation and
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1 recovery planning grant program established under
2 section 6.
3 "(13) INDIAN TRIBE. -The term 'Indian tribe'
4 has the meaning given the term in section 4 of the
5 Indian Self- Determination and Education Assistance
6 Act (25 U.S.C. 450b).
7 "(14) INSTITUTION OF HIGHER EDUCATION. -
8 The term 'institution of higher education' has the
9 meaning given the term in section 101 of the Higher
10 Education Act of 1965 (20 U.S.C. 1001).
11 "(15) LOCAL GOVERNMENT. —The term 'local
12 government' means -
13 "(A) a. city, town, township, county, parish,
14 village, or other general- purpose political sub -
15 division of a State;
16 "(B) an Indian tribe; and
17 "(C) a. geologic hazard abatement or simi-
18 lar special purpose district formed to carry out
19 or fund projects to reduce the vulnerability of
20 infrastructure and buildings to earthquake dis-
21 asters.
22 "(16) LOSS REDUCTION TRUST FUND. —The
23 term 'Loss Reduction Trust Fund' means the Loss
24 Reduction Trust Fund established by section 7. ".
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1 (2) CONFORMING AMENDMENT.— Section
2 5(b)(1) of the Earthquake Hazards Reduction Act of
3 1977 (42 U.S.C. 7704(6)(1)) is amended by striking
4 "(hereafter in this Act referred to as the `Agency') ".
5 (b) GRANT PROGRAM. —The Earthquake Hazards
6 Reduction Act of 1977 is amended 1 y inserting after sec-
7 tion 5 (42 U.S.C. 7704) the following:
8 "SEC. 6. EARTHQUAKE DISASTER NUTIGATION AND RECOV-
9 ERY PLANNING GRANT PROGRAM.
10 "(a) ESTABLISHMENT. —The Director of the Agency
11 may establish a grant program to provide financial assist-
12
ante to
eligible
recipients described in subsection
(b) to
13
pay the
Federal
share of the cost of carning out
earth-
14 quake disaster mitigation and recovery planning measures
15 with respect to the critical facilities and critical public in-
16 frastructure under the jurisdiction of the recipients.
17 "(b) ELIGIBLE RECIPIENTS.-
18 "(1) IN GENERAL. —To be eligible for a grant
19 under the grant program, an entity shall be a. local
20 government, public or nonprofit private hospital, or
21 public institution of higher education that-
22 "(A) has jurisdiction over, or is located in,
23 an area. that is subject to earthquake disasters;
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"(B) submits to the Director of the Agency
2
for approval an application for the grant in
3
such form as the Director shall require;
4
"(C) has completed an earthquake disaster
5
risk analysis;
6
"(D) has adopted a long -term strategic
7
earthquake disaster loss reduction plan that
8
identifies high priority earthquake disaster loss
9
reduction projects; and
10
"(E) meets criteria established by the Di-
ll
rector under paragraph (2).
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"(2) CRITERIA. -
13
"(A) ES1_ABLISHMENT. —The Director of
14
the Agency shall establish, by regulation, cri-
15
teria that local governments, public and non-
16
profit private hospitals, and public institutions
17
of higher education shall meet to qualify for
18
grants under the grant program.
19
_ "(B) REQIIIREMENT APPLICABLE TO
20
LOCAL GOVERNMENTS. —The criteria under
21
subparagraph (A) applicable to local govern -
22
melts shall include the requirement that a. local
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government adopt and enforce comprehensive
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ordinances, building codes, land use measures,
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and other measures for earthquake disaster loss
reduction that -
"(i) take into consideration the identi-
fied earthquake hazards applicable to the
area over which the local government has
jurisdiction; and
"(ii) reflect current, cost- effective
techniques designed to reduce losses from
earthquake disasters and ensure the con-
tinued functionality of critical facilities and
critical public inh-astructure.
"(C) CONSULTATION. —The criteria under
subparagraph (A) shall be adopted after con-
sultation with -
"(i) Federal, State, and local govern-
ment officials and agencies; and
"(ii) other persons knowledgeable in
the fields of natural disasters and hazard
mitigation.
"(c) COST SHARING. —
"(1) FEDERAL SHARE. —
"(A) IN GENERAL.— Subject to subpara-
graph (B), the Federal share of the cost of
measures carried out using a grant under the
grant program shall be 75 percent.
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"(B) INSUFFICIENCY OF FEDERAL
FUNDS. —In paying the Federal share under
subparagraph (A) in a case in which there are
insufficient funds in the Loss Reduction Trust
Fund to fund all applications that are eligible
for approval, the Director of the Agency may
consider -
"(i) the desirability of geographical
dispersal of available funds;
"(ii) the extent to which any applicant
faces a. greater risk of earthquake disas-
ters, in number or severity, than other ap-
plicants;
"(iii) the extent to which each appli-
cant is expending resources on addressing
urgent problems concerning critical facili-
ties or critical public infrastructure; and
"(iv) the extent to which the measures
proposed to be funded using the grant are
expected to result in cost savings to the
Federal Government under the Robert T.
Stafford Disaster Relief and Emergency
Assistance Act (42 U.S.C. 5121 et seq.).
"(S) NON - FEDERAL SHARE.—
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"(A) GRANTS TO LOCAL GOVERNMENTS
(OTHER THAN INDIAN TRIBES). —In the case of
a grant to a local government (other than an
Indian tribe) under the grant program, the non-
Federal share of the cost of measures carried
out using the grant shall be provided as follows:
"(i) 1/ by the State.
"(ii) 1/2 by the local government.
- "(B) GRANTS TO INDIAN TRIBES. —In the
case of a. grant to an Indian tribe under the
grant program, the non - Federal share of the
cost of measures carried out using the giant
shall be provided as follows:
"(i) 1/ by the Bureau of Indian Af-
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fairs.
"(ii) 1/ by the Indian tribe.
"(C) GRANTS TO PUBLIC HOSPITALS. —In
the case of a, grant to a public hospital under
the grant proglanl, the non - Federal share of
the cost of measures carried out using the
grant shall be provided as follows:
"(i) 1/2 by the State, from funds other
than general State appropriations to the
hospital.
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1 "(ii) r/2 by the public hospital, from
2 general State appropriations to the hos-
3 pital or from funds donated to the hos-
4 pital.
5 "(D) GRANTS TO NONPROFIT PRIVATE
6 HOSPITALS. —In the case of a. grant to a non -
7 profit private hospital under the grant program,
8 the non - Federal share of the cost of measures
9 carried out using the grant shall be provided by
10 the nonprofit private hospital.
11 "(Fi) GRANTS TO PUBLIC INSTITUTIONS OF
12 HIGHER EDUCATION. —In the case of a. grant to
13 a. public institution of higher education under
14 the grant program, the non - Federal share of
15 the cost of measures carried out using the
16 grant shall be provided as follows:
17 "(i) 1/2 by the State, from funds other
18 than general State appropriations to the
19 institution of higher education.
20 "(ii) I/2 by the public institution of
21 higher education, from general State ap-
22 propriatimns to the institution of higher
23 education or from funds donated to the in-
24 stitution of higher education.
25 "(d) USE OF GRANT FUNDS.—
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1 "(1) IN GENERAL. —A grant under the grant
2 program may be used -
3 "(A) to retrofit critical facilities and 0rit-
4 ical public infrastructure in accordance with
5 paragraph (2);
6 "(B) to implement earthquake disaster
7 mitigation measures in accordance with para-
8 graph (3); or
9 "(C) to develop earthquake disaster recov-
10 ery plans in accordance with paragraph (4).
11 "(2) RETROFIT OF CRITICAL FACILITIES AND
12 CRITICAL PUBLIC INFRASTRUCTURE. -
13 "(A) IN GENERAL. —A grant under the
14 grant program may be used to retrofit a. critical
15 facility or critical public infrastructure with
16 parts or equipment that meets current stand -
17 ards for withstanding earthquake disasters (as
18 determined by the Director of the Agency).
19 "(B) .SELECTION OF CRITICAL FACILITIES
20 AND CRITICAL PUBLIC INFRASTRUCTURE. —A
21 critical facility or critical public infrastructure
22 shall be selected for a grant under subpara-
23 graph (A) if the critical facility or critical public
24 infrastructure is identified in a long -term stra-
25 tegic earthquake disaster loss reduction plan
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1 adopted under subsection (b)(1)(D) as having
2 high priority for retrofit because of the effect
3 that damage to the critical facility or critical
4 public infrastructure from an earthquake dis-
5 aster would have on the quality of human life
6 in the region and on recovery from the earth -
7 quake disaster.
8 "(3) IMPLEMENTATION OF EARTHQUAKE DIS-
9 ASTER MITIGATION MEASURES. -A grant under the
10 grant program may be used to implement an ear4.h-
11 quake disaster mitigation measure designed to en-
12 sure the continued functionality of a critical facility
13 or critical public infrastructure.
14 "(4) DEVELOPMENT OF EARTHQUAKE DIS-
15 ASTER RECOVERY PLANS. -
16 "(A) IN GENERAL. —A grant under the
17 grant program may be used to develop an
18 earthquake disaster recovery plan that
19 includes
20 "(i) a, plan for reestablishing govern -
21 nrent operations and commninity services
22 after an earthquake disaster; and
23 "(ii) a plan for long -tern recovery
24 after an earthquake disaster.
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1 "(B) SCHEDULE FOR PAYMENT OF GRAINT
2 FUNDS. —Of a grant for measures described in
3 subparagraph (A)-
4 "(i) 50 percent shall be paid upon ap-
5 proval by the Director of the Ageney of the
6 application for the grant; and
7 "(ii) 50 percent shall be paid upon
8 adoption of the earthquake disaster recov-
9 ery plan by the local government., public
10 hospital, or public institution of higher
11 education.
12 'SEC. 7. LOSS REDUCTION TRUST FUND.
13 "(a) ESTABLISHMENT. —There is established in the
14 Treasury of the United States a fund to be known as the
15 `Loss Reduction Trust Fmrd', consisting of-
16 "(1) such amounts as are appropriated to the
17 Loss Reduction Trust Fund under subsection (b);
18 "(2) such amounts as are appropriated to the
19 Loss Reduction Trust Fund under section 13(e);
20 and
21 "(3) any interest earned on investment of
22 amounts in the Loss Reduction Trust Fund under
23 subsection (d).
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1 °(b) TRANSFERS TO LOSS REDUCTION TRUST
2 FUND. —There are appropriated to the Loss Reduction
3 Trust Fund amounts equivalent to-
4 "(1) such amounts as the Director of the Agen-
5 ev determines are remaining after the close -out of
6 any active disaster declaration account under the
7 Robert T. Stafford Disaster Relief and Emergency
8 Assistance Act (42 U.S.C. 5121 et seq.);
9 "(2) such amounts as-
10 "(A) were allocated for hazard mitigation
11 assistance with respect to a major disaster
12 under section 404 of that Act (42 U.S.C.
13 5170c); and
14 "(B) the Director of the Agency deter -
15 mines are remaining after expiration of the
16 time limits established under subsection (c) of
17 that section; and
18 "(3) amounts received as gifts under subsection
19 (f) .
20 "(c) ESPENDITURES FROM LOSS REDUCTION TRUST
21 FUND. —Upon request by the Director of the Agency, the
22 Secretary of the Treasury shall transfer from the Loss Re-
23 duction Trust Fund to the Director of the Agency such
24 amounts as the Director of the Agency determines are nec-
25 essary to carry out section 6.
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"(d) INVESTMENT OF AMOUNTS. —
"(1) IN GENERAL. —The Secretary of the
Treasury shall invest such portion of the Loss Re-
duction Trust Fund as is not, in the judgment of
the Secretary of the Treasury, required to meet cur-
rent withdrawals. Investments may be made ordy in
interest - bearing obligations of the United States.
"(2) ACQUISITION OF OBLIGATIONS. —For the
purpose of investments under paragraph (1), obliga-
tions may be acquired—
"(A) on original issue at the issue price; or
"(B) by purchase of outstanding obliga-
tions at the market price.
"(3) SALE OF OBLIGATIONS. —Any obligation
acquired by the Loss Reduction Trust Fund may be
sold by the Secretary of the Treasury at the market
price.
"(4) CREDITS TO FUND. —The interest on, and
the proceeds from the sale or redemption of, any ob-
ligations held in the Loss Reduction Trust Find
shall be credited to and form a part of the Loss Re-
duction Trust Fund.
"(e) TRANSFERS OF AMOUNTS. —
"(1) IN GENERAL. —The amounts required to
be transferred to the Loss Reduction Trust Fund
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1 under this section shall be transferred at least
2 monthly from the general fund of the Treasury to
3 the Loss Reduction Trust Fund on the basis of esti-
4 mates made by the Secretary of the Treasury.
5 "(2) ADJUSTMENTS.— Proper adjustment shall
6 be made in amounts subsequently transferred to the
7 extent prior estimates were in excess of or less than
8 the amounts required to be transferred.
9 "(f) GIFTS. —The Secretary of the Treasury may ac-
10 cept gifts of cash for transfer to the Loss Reduction Trust
11 Ford. ".
12 (c) AUTHORIZATION OF APPROPRIATIONS. — Seetion
13 12 of the Earthquake Hazards Reduction Act of 1977 (42
14 U.S.C. 7706) is amended -
15 (1) by redesignating subsection (e) as sub -
16 section (f); and
17 (2) by inserting after subsection (d) the fol-
18 101ving:
19 "(e) LOSS REDUCTION TRUST FUND. —There is au-
20 thorized to be appropriated to the Loss Reduction Trust
21 Fund $1,000,000,000. ".
22 (d) POSTDIBASTER ASSISTANCE. -
23 (1) DEFINITIONS.— Section 102 of the Robert
24 T. Stafford Disaster Relief and Emergency Assist-
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ante Act (42 U.S.C. 5122) is amended by adding at
the end the following:
"(10) CRITICAL FACILITY. —The term `critical
facility' means —
"(A) a public structure (including a, police
station, fire station, city or toum hall, school, or
other public building) or a public or nonprofit
private hospital that is-
"(i) owmed by an entity; and
"(ii) critical to the continuity of the
entity or to the conduct of the disaster re-
sponse activities of the entity; or
"(B) a facility that-
"(i) provides medical services to a spe-
cific occupational or industry segment of
the general public; and
"(ii) is operated by an organization
described in subsection (c) or (d) of section
501 of the Internal Revenue Code of 1986
and exempt from taxation under subsection
(a) of such section.
"(11) CRITICAL PUBLIC INFRASTRUCTURE.—
The term `critical public infrastructure' nneans a
utility or transportation system (including a. bridge,
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1 energy system, water or sewer system, or commu-
2 nication system) that is-
3 "(A) owned by an entity; and
4 "(B) critical to the conduct of the disaster
5 response activities of the entity. ".
6 (e) CONFORMING AMENDMENTS.— Section 12(a) of
7 the Earthquake Hazards Reduction Act of 1977 (42
8 U.S.C. 7706(a)) is amended by inserting "(as in effect on
9 September 30, 1997)" after "6 of this Act" each place
10 it appears. -
11 SEC. 9. ADVANCED NATIONAL SEISMIC RESEARCH AND
12 MONITORING SYSTEM.
13 (a) IN GENERAL. —The Earthquake Hazards Redue-
14 tion Act of 1977 (42 U.S.C. 7701 et seq.) is amended=
15 (1) by redesignating section 12 as section 13; --
16 and
17 (2) by inserting after section 11 the following:
18 'SEC. 12. ADVANCED NATIONAL SEISMIC RESEARCH AND
19 MONITORING SYSTEM.
20 "(a.) ESTABLISHMENT. —The Director of the United
21 States Geological Survey shall establish and operate an
22 advanced national seismic research and monitoring system
23 (referred to in this section as the `system').
24 "(b) PURPOSE. —The purpose of the system shall be
25 to organize, modernize, standardize, and stabilize the na-
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1 tional, regional, and urban seismic monitoring systems in
2 the United States, including sensors, recorders, and data
3 analysis centers, and meld the monitoring systems into a
4 coordinated system that will measure and record the full
5 range of frequencies and amplitudes exhibited by seismic
6 waves, in order to enhance earthquake research and warn-
7 ing capabilities.
8 "(C) MANAGEMENT PLAN. -
9 "(1) IN GENERAL. —Not later than 90 days
10 after the date of enactment of the Earthquake Loss
11 Reduction Act of 2001, the Director of the United
12 States Geological Survey shall submit to Congress a
13 5 -,year management plan for establishing and oper-
14 ating the system.
15 "(2) REQUIRED ELEMENTS. —The plan shall
16 include—
17 "(A) annual cost estimates for -
18 "(i) milestones, standards, and per -
19 formance goals for modernization of the
20 seismic monitoring systems referred to in
21 subsection (b); and
22 "(ii) milestones, standards, and per -
23 formance goals for operation of the system;
24 and
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1 "(B) plans for securing the participation of
2 all existing networks in the system and for es-
3 tablishing new, or enhancing existing, partner-
4 ships to leverage resources.
5 "(d) AUTHORIZATION OF APPROPRIATIONS. -
6 "(1) ESTABLISHMENT. —In addition to amounts
7 made available under section 13(b), there are au-
8 thorized to be appropriated to establish the
9 system -
10 "(A) $33,500,000 for fiscal year 2002;
11 "(B) $33,700,000 for fiscal year 2003;
12 "(C) $35,100,000 for fiscal year 2004;
13 "(D) $35,000,000 for fiscal year 2005;
14 and
15 "(E) $33,500,000 for fiscal year 2006.
16 "(2) OPERATION. —In addition to amounts
17 made available under section 13(b), there are au-
18 thorized to be appropriated to operate the system -
19 "(A) $4,500,000 for fiscal year 2002; and
20 "(B) $10,300,000 for fiscal year 2003. ".
21 (b) CONFORMING AMENDMENTS. — Section 2 of Pub -
22 lie Law 105-47 (42 U.S.C. 7704 note) is amended -
23 (1) in subsection (a)(7), by strildng "section
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12(b)
of the Earthquake Hazards
Reduction Act of
25
1977
(42 U.S.C. 7706(b))" and
inserting "section
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1 13(b) of the Earthquake Hazards Reduction Act of
2 1977"; and
3 (2) in subsection (c)(2), by striking "section
4 12(c) of such Act (42 U.S.C. 7706(c))" and insert-
5 ing "section 13(c) of that Act ".
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