THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY DeLUCA, BOBACK, GEIST, GEORGE, KORTZ, KOTIK, LEVDANSKY, MUSTIO, READSHAW, SIPTROTH, SOLOBAY, THOMAS, VULAKOVICH, WALKO AND YOUNGBLOOD, FEBRUARY 19, 2009

REFERRED TO COMMITTEE ON INSURANCE, FEBRUARY 19, 2009  

AN ACT

Establishing the Landslide Insurance and Assistance Program

within the Pennsylvania Emergency Management Agency;

providing for related powers and duties of the Pennsylvania

Emergency Management Agency; establishing and providing for

the powers and duties of the Landslide Insurance and

Assistance Board; establishing the Landslide Insurance Fund

and the Landslide Assistance Fund; and making appropriations.

TABLE OF CONTENTS

Chapter 1.  Preliminary Provisions

Section 101.  Short title.

Section 102.  Declaration of policy.

Section 103.  Definitions.

Chapter 3.  Program Generally

Section 301.  Program goals.

Section 302.  Board.

Section 303.  Appeals.

Section 304.  Program generally.

Section 305.  Program authority.

Section 306.  Land use controls and rate structure.

Chapter 5.  Landslide Insurance Fund

Section 501.  Landslide Insurance Fund.

Section 502.  Schedule of premiums.

Section 503.  Surplus.

Section 504.  Insurance program.

Section 505.  Application for increase in insurance.

Section 506.  Automatic inflation protection increase.

Section 507.  Audit by Auditor General.

Section 508.  Claims against insurance fund.

Section 509.  Defenses against claims and procedure.

Section 510.  Subrogation to rights of claimants.

section 511.  Insurance companies may cover risk.

Section 512.  Escrow of premium payments.

Section 513.  Properties in violation of State or local law.

Chapter 7.  Mitigation Assistance

Section 701.  Mitigation assistance.

Section 702.  Landslide Assistance Fund.

Section 703.  Construction permits.

Chapter 9.  Program Administration and Funding

Section 901.  Regulations.

Section 902.  Agency report.

Section 903.  Program funding.

Section 904.  Reimbursement.

Section 905.  Appropriations.

Section 906.  Cost of administration.

Section 907.  Commissions.

Chapter 21.  Miscellaneous Provisions

Section  2101.  Effective date.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

CHAPTER 1

PRELIMINARY PROVISIONS

Section 101.  Short title.

This act shall be known and may be cited as the Landslide

Insurance and Assistance Program Act.

Section 102.  Declaration of policy.

The General Assembly finds and declares as follows:

(1)  Geologists have studied with increasing concern the

underground movement of the geological formations in this

Commonwealth and its impeding effects on the vertical and

horizontal natural and manmade surfaces.

(2)  Landslides and slope movement have historically been

the norm throughout most parts of this Commonwealth.

(3)  Landslides and slope movements occur without regard

for municipal boundaries, ordinances, planning codes,

politics and economies, making it difficult for local

officials to deal effectively with the development and

implementation of methods and standards to control the

devastation these natural forces can cause.

(4)  Landslides and slope movement have caused an

enormous amount of damage to homes and roadways in this

Commonwealth, particularly the southwestern region of the

State.

(5)  Landslides and slope movement will continue to

plague southwestern Pennsylvania.

(6)  Landslides affect every state in the nation causing

an estimated $1,000,000,000 to $3,000,000,000 in damages a

year.

(7)  Landslide damage caused by flooding is not covered

by the National Flood Insurance Program.

(8)  While landslide damage caused by mining practices is

covered by the Coal and Clay Mine Subsidence Insurance Fund

and mudslide damage is covered by the National Flood

Insurance Program, other types of landslide damage are

usually not covered by insurance.

(9)  Problems associated with landslide damage are

becoming more widespread.

(10)  It would be to the advantage of residents of the

landslide-prone areas of this Commonwealth to form a common

bond to combat distress resulting from landslides.

Section 103.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Agency."  The Pennsylvania Emergency Management Agency.

"Assistance fund."  The Landslide Assistance Fund established

in section 702.

"Board."  The Landslide Insurance and Assistance Board

established in section 302.

"Community."  Either of the following:

(1)  A political subdivision that has zoning and building

code jurisdiction over an area having landslide hazards.

(2)  A political subdivision that is designated to

develop and administer a mitigation plan.

"Extremely hazardous area."  An area where all of the

following factors that contribute to landslides occur in the

same location:

(1)  Steep slopes.

(2)  Soils prone to landslides.

(3)  Landslide features.

"Further review area."  An area for which additional site-

specific review is needed based on a geological map or model

identifying the area as including a site prone to experience a

landslide.

"GIS."  Geographic Information Systems.

"Hazardous area."  An area where one of the following factors

that contribute to landslides occurs:

(1)  Steep slopes.

(2)  Soils prone to landslides.

(3)  Landslide features.

"Insurance fund."  The Landslide Insurance Fund established

in section 501.

"Landslide."  Any detached mass of soil, rock, earth or

debris that moves down a slope and is of sufficient size to

cause damage. The term includes sinkholes.

"Landslide features."  Includes, but is not limited to,

rockfall areas, creep, red beds and historic landslides.

"Mitigation."  An activity relative to landslides that

prevents an emergency from occurring, reduces the likelihood of

an emergency occurring or lessens the damaging effects of

unavoidable emergencies.

"Mitigation plan."  A plan designed by a community that when

implemented provides mitigation.

"Program."  The Landslide Insurance and Assistance Program

established in section 304.

CHAPTER 3

PROGRAM GENERALLY

Section 301.  Program goals.

The goals of the program are as follows:

(1)  To provide actuarially sound insurance coverage.

(2)  To make program policies universally available and

competitively priced.

(3)  To make use of the most effective scientific and

technological advances available, including technology such

as GIS.

(4)  To process claims promptly, fairly and consistently.

(5)  To provide tools and incentives for landslide loss

reduction, including the assistance fund.

(6)  To collaborate with other organizations that operate

in the public interest to assist in achieving program goals.

Section 302.  Board.

(a)  Board established.--The Landslide Insurance and

Assistance Board is hereby established within the Pennsylvania

Emergency Management Agency.

(b)  Members.--The board shall consist of the following

members:

(1)  The Secretary of Banking or a designee.

(2)  The Secretary of Community and Economic Development

or a designee.

(3)  The Secretary of Conservation and Natural Resources

or a designee.

(4)  The Secretary of Environmental Protection or a

designee.

(5)  The Insurance Commissioner or a designee.

(6)  The Secretary of Public Welfare or a designee.

(7)  The Secretary of the Commonwealth or a designee.

(8)  The Secretary of Transportation or a designee.

(9)  The State Treasurer or a designee.

(10)  The Director of the Pennsylvania Emergency

Management Agency or a designee.

(11)  The Executive Director of the Pennsylvania Housing

Finance Agency or a designee.

(c)  Chairperson.--The Director of the Pennsylvania Emergency

Management Agency or the designee shall serve as the chairperson

of the board.

(d)  General counsel.--The Attorney General shall, ex

officio, be the general counsel of the board and shall appoint

an attorney or attorneys as may be deemed necessary to aid the

board in its functioning.

(e)  Employees.--All employees of the board shall be employed

by and located in the agency and shall be subject to the

administrative jurisdiction and authority of the agency.

Section 303.  Appeals.

Any party aggrieved by an action of the board shall have the

right to appeal in accordance with 2 Pa.C.S. (relating to

administrative law and procedure).

Section 304.  Program generally.

(a)  Establishment.--The Landslide Insurance and Assistance

Program is hereby established within the agency.

(b)  Program components.--The program shall consist of the

following components:

(1)  A grant program.

(2)  A revolving loan program.

(3)  An insurance program.

(c)  Purposes.--The grant program and the revolving loan

program are established for the primary purposes of mitigation

and repairing minor structural damage. The board shall employ

the grant program and the revolving loan program as tools to aid

in the success of the insurance fund.

Section 305.  Program authority.

(a)  Intergovernmental cooperation.--The program shall:

(1)  Work closely with Federal, State and local agencies

and any other government agencies, including those of other

states, to accomplish program goals.

(2)  Create and implement a Statewide landslide

mitigation plan that would encourage and support local

mitigation efforts.

(3)  Investigate sites to define hazards.

(4)  Recommend legislation, regulations, ordinances and

zoning to mitigate slope instability contributed by

excavation and drainage.

(5)  Work with local governments to evaluate risk

associated with certain homesite development.

(6)  Share the most up-to-date geological surveys, in the

form of maps, GIS data or other useful form, and related

information, free of charge to government agencies and

appropriate representatives of communities, and at a

reasonable cost to all other persons. Receipts under this

paragraph shall be deposited in the assistance fund.

(7)  Inform the Department of Transportation which

highways are at greatest risk from landslides.

(8)  Notify local governments in areas with the greatest

risk from landslides.

(9)  Have the authority to consult, receive information

and enter into any agreements or other arrangements in order

to identify and publish information with respect to all

landslide-prone areas, establish or update landslide-risk

zone data and make estimates with respect to the rates of

probable landslide-caused loss for the various landslide risk

zones for each of these areas.

(10)  Publish any change to landslide insurance map

panels.

(11)  Ensure that it is consistent in landslide control,

landslide forecasting and landslide damage prevention.

(b)  Studies and investigations.--

(1)  The program is authorized to carry out necessary

studies and investigations, utilizing to the maximum extent

practicable the existing facilities and services of other

Federal and Commonwealth departments or agencies, local

governmental agencies and any other organizations, with

respect to the adequacy of State and local measures in

landslide-prone areas as to:

(i)  Land management and use.

(ii)  Landslide control.

(iii)  Zoning.

(iv)  Landslide damage prevention.

(2)  The program may enter into any contracts, agreements

or other appropriate arrangements to carry out its authority

under this section. The studies and investigations shall

include, but not be limited to, the following:

(i)  Laws.

(ii)  Regulations.

(iii)  Ordinances.

(iv)  Zoning.

(v)  Building codes.

(vi)  Building permits.

(vii)  Subdivision or other building restrictions.

(c)  State and local measures.--On the basis of studies and

investigations under subsection (b) and other information as the

agency deems necessary, the program shall develop comprehensive

criteria designed to encourage, where necessary, the adoption of

adequate State and local measures which, to the maximum extent

feasible, will:

(1)  Constrict the development of land which is exposed

to landslide damage where appropriate.

(2)  Guide the development of proposed construction away

from locations which are threatened by landslide hazards.

(3)  Assist in reducing damage caused by landslides.

(4)  Otherwise improve the long-range land management and

use of landslide-prone areas.

(d)  Technical assistance.--The program shall work closely

with and provide any necessary technical assistance to State and

local governmental agencies to encourage the application of the

criteria and the adoption and enforcement of the measures under

this section.

Section 306.  Land-use controls and rate structure.

Local governments may initiate land-use controls for the

benefit of their residents. The following shall apply:

(1)  No new landslide insurance coverage shall be

provided to new construction without preapproval by an

appropriate local public body, which shall have the option of

adopting adequate land use and control measures with

effective enforcement provisions.

(2)  A community rating system shall be employed by the

board as an incentive for community landslide management.

(3)  Rate structures shall provide incentives for

measures that reduce the risk of landslide damage and

evaluate the measures. The program shall provide incentives

in the form of credits on premium rates for landslide

insurance coverage in communities that the agency determines

have adopted and enforced measures that reduce the risk of

landslide damage.

(4)  The credits on premium rates for flood insurance

coverage shall be based on the estimated reduction in flood

and erosion damage risks resulting from the measures adopted

by the community under the program. If a community has

received mitigation or other assistance under the program,

the credits may be used in a manner determined by the agency

to recover the amount of assistance provided for the

community.

CHAPTER 5

LANDSLIDE INSURANCE FUND

Section 501.  Landslide Insurance Fund.

(a)  Establishment.--The Landslide Insurance Fund is

established as a separate fund in the Treasury Department. The

insurance fund shall be administered by the board for the

purpose of insuring subscribers against the damages to their

structures resulting from landslides if the damage is not

covered by other insurance programs or coverage.

(b)  Administration.--The insurance fund shall be

administered by the board without liability on the part of the

Commonwealth beyond the amount of the fund except as provided

under this act and shall be applied to the payment of damage as

described under subsection (a).

(c)  State Treasurer as custodian of insurance fund.--The

State Treasurer shall be the custodian of the insurance fund,

and all disbursements from the insurance fund shall be paid at

the request of the board. For making payments without audit, the

State Treasurer shall not be under any liability whatsoever. The

State Treasurer may deposit any portion of the insurance fund

not needed for immediate use as other State funds are lawfully

deposited. The interest shall be placed to the credit of the

insurance fund.

Section 502.  Schedule of premiums.

At any time during each year the board shall prepare and

publish a schedule of premiums or rates of insurance for

subscribers. This schedule shall be printed and distributed free

of charge to any person upon application. Any subscriber may at

the subscriber's option pay to the insurance fund the amount of

premium appropriate, and upon payment of the premium shall be

insured for the year for which the premium is paid. The

insurance shall cover all payments becoming due for which the

premium is paid. The premium shall be adequate to enable payment

of all sums which may become due and payable under this act, and

adequate reserve sufficient to carry all policies and claims to

maturity. In establishing the premiums payable by any

subscriber, the board may take into account the condition of the

premises of the subscriber in respect to the possibility of

landslide damage as shown by the report of any inspector

appointed by the board or by the agency. The board may change

the amount of premiums payable by any of the subscribers as

circumstances may require and the condition of the premises of

the subscribers in respect to the possibility of a landslide may

justify. The board may increase the premiums of any subscriber

whose loss experience warrants a change. The insurance of any

subscriber shall not be effective until the premium so fixed and

determined has been paid in full.

Section 503.  Surplus.

The board shall set aside 5% of all premiums collected for

the creation of a surplus until the surplus is sufficiently

large to cover catastrophic hazard of all the subscribers to the

insurance fund and to guarantee the solvency of the fund. At

such point, the board shall reevaluate the set-aside and

investment of the surplus and make a recommendation to the

General Assembly.

Section 504.  Insurance program.

(a)  General rule.--Any owner of a structure located within a

landslide-prone region who desires to become a subscriber to the

insurance fund for the purpose of insuring a structure in the

region against damage from landslides shall make a complete

application as prescribed by the board to the board, its agents

or insurance producers. Upon receipt of an application, the

board shall make an investigation as may be necessary if the

application complies with the rules and regulations of the

board. Within 60 days after the request for an application is

received the board shall issue a certificate showing the

acceptance of the application and the amount of premium payable

by the applicant for one, two or three years as the board may

establish. No insurance shall become effective until the premium

has been paid. All premiums shall be made payable to the State

Treasurer whereupon a receipt shall be issued therefor. The

receipt for premium together with a certificate of the board

shall be evidence that the applicant has become a subscriber to

the insurance fund and is insured from the date of application.

The following apply:

(1)  The insurance may be subject to later reductions,

and premiums adjusted accordingly, if the board determines

that the amount of insurance coverage requested is in excess

of the current replacement cost of the structure or the

maximum amount of coverage established by the fund, whichever

is less.

(2)  The insurance shall be void if, upon investigation

of the structure, the board determines that either landslide

damage occurred before the application was submitted or the

applicant is responsible for not allowing the board to

inspect the structure within 60 days of receipt of the

application.

(3)  The use of the most current science available to

identify landslide-prone areas shall be employed. If the

property is located in a further review area within a

hazardous area, the property owner may be required to

complete a site assessment with a licensed professional,

which may include an onsite evaluation. The property owner

shall fund this assessment. This assessment may also be

required before a local government accepts an application for

a development permit.

(4)  Notwithstanding any other provision of law, any

structure repaired or restored to its original condition with

moneys from the insurance fund shall not be eligible for

duplicative disaster relief assistance from programs

administered by the agency.

(5)  In order to assist insurance producers and potential

policyholders in identifying structures that could be at risk

from landslides, the board shall publish and update in the

Pennsylvania Bulletin a list of areas in this Commonwealth

that are believed to be at risk for landslide damage.

(b)  Penalty.--A person who knowingly furnishes or makes any

false certificate, application or statement required under this

section commits a misdemeanor and shall, upon conviction, be

sentenced to pay a fine of not more than $1,500 or to

imprisonment for not more than one year, or both.

Section 505.  Application for increase in insurance.

Additions in the amount of insurance are subject to the same

standards as initial applications.

Section 506.  Automatic inflation protection increase.

The board shall make available to all subscribers an annual

inflation protection option on the anniversary date of each

policy issued only if the total insurance remains at or under

the value of the structure itself. An inflation protection

increase shall not be subject to a reinspection of the

structure.

Section 507.  Audit by Auditor General.

The Auditor General shall at least once each year make a

complete examination and audit of the insurance fund, including

all receipts and expenditures, cash on hand, investments and

property held representing cash or cash disbursements. For these

purposes the Auditor General is hereby authorized to employ

agents and staff as the Auditor General may deem necessary. The

expense incurred in making the examination and audit shall be

certified to the insurance fund by the Auditor General and shall

be paid from the program.

Section 508.  Claims against insurance fund.

Any subscriber to the insurance fund must file with the board

a true statement of the subscriber's claim for any landslide

damage and shall give to the board an opportunity to investigate

and to determine whether the board will pay the claim.

Section 509.  Defenses against claims and procedure.

In every case where a claim is made against the insurance

fund, the fund shall be entitled to every defense against the

claim under the policy and shall be subrogated to every right of

the subscriber arising out of such accidents against any third

persons. The insurance fund may, in the name of the fund, sue or

be sued to enforce any right given against or to any subscriber

or other persons under this act.

Section 510.  Subrogation to rights of claimants.

Nothing in this act shall relieve any person, partnership or

corporation otherwise liable therefor from any liability for

damages sustained by a subscriber. The insurance fund shall be

subrogated to the rights of any property owner's insurance under

this act.

Section 511.  Insurance companies may cover risk.

Any insurance company may issue policies covering the type of

risk provided for under this chapter subject to the prior

approval of the Insurance Commissioner as to policy form and

rates.

Section 512.  Escrow of premium payments.

Mortgage lenders shall escrow the landslide insurance premium

payments if they offer the purchase of the insurance.

Section 513.  Properties in violation of State or local law.

No new landslide insurance coverage shall be provided for any

property which the agency finds has been declared by a State or

local zoning authority, or other authorized public body, to be

in violation of State or local laws, regulations or ordinances

which are intended to discourage or otherwise restrict land

development or occupancy in landslide-prone areas.

CHAPTER 7

MITIGATION ASSISTANCE

Section 701.  Mitigation assistance.

(a)  Financial assistance generally.--The agency shall carry

out a program to provide financial assistance to communities and

individuals for planning and carrying out activities designed to

reduce the risk of landslide damage to structures covered under

contracts for landslide insurance. Financial assistance may be

made available to communities and individuals in the form of

grants or revolving loans for the carrying out of mitigation

activities. Loans shall carry an interest rate of no more than

3%.

(b)  Grants.--The agency may make grants under this section

to communities to assist in developing mitigation plans.

(c)  Eligibility.--To be eligible to receive financial

assistance, a community shall develop a mitigation plan that

describes the mitigation activities to be carried out with

assistance provided under this section. The mitigation plan must

be consistent with the criteria established by the agency and

provide protection against landslide losses to structures for

which contracts for flood insurance are available under this

act. The mitigation plan shall be consistent with a

comprehensive strategy for mitigation activities for the area

affected by the mitigation plan that has been adopted by the

community following a public hearing.

(d)  Procedure.--The agency shall notify a community

submitting a mitigation plan of the approval or disapproval of

the plan not later than 120 days after submission of the plan.

If the agency does not approve a mitigation plan submitted under

this section, the agency shall notify in writing the community

submitting the plan of the reasons for the disapproval.

(e)  Limitation.--Amounts provided under this section may be

used only for mitigation activities specified in a mitigation

plan approved by the agency. The agency may approve only

mitigation plans that specify mitigation activities that are

technically feasible and cost effective and that are cost

beneficial under Chapter 5.

(f)  Approval.--The agency shall approve funding for

mitigation plans based on criteria that include:

(1)  Criteria under subsection (e).

(2)  Proposed activities to address repetitive loss

structures and structures that have incurred substantial

damage.

(g)  Matching funds.--The agency may require a community to

match grant funds.

(h)  Oversight.--The agency shall conduct oversight of

recipients of mitigation assistance to ensure that the

assistance is used in compliance with the approved mitigation

plans of the recipients and that any matching fund requirements

are fulfilled.

(i)  Failure to comply.--If the agency determines that a

community that has received mitigation assistance has not

carried out the mitigation activities as set forth in the

mitigation plan or has not secured required matching funds, the

agency shall recapture any unexpended amounts and redeposit the

amounts in the assistance fund.

Section 702.  Landslide Assistance Fund.

The Landslide Assistance Fund is hereby established as a

restricted account in the Treasury Department. The assistance

fund shall be administered by the agency and shall be comprised

of moneys appropriated for purposes of this chapter. All moneys

in the assistance fund and the interest accruing thereon are

appropriated to the agency on a continuing basis to carry out

the provisions of this chapter.

Section 703.  Construction permits.

No Commonwealth agency shall approve any financial assistance

for the acquisition of land for construction purposes in any

area that has been identified by the agency as an extremely

hazardous zone without approval to proceed by the agency based

on the results of a risk assessment.

CHAPTER 9

PROGRAM ADMINISTRATION AND FUNDING

Section 901.  Regulations.

The agency, in conjunction with the board, may promulgate

rules and regulations and establish other conditions of the

policies as it deems just and expedient in keeping with the

fulfillment of the purposes of this act, including reasonable

classification of risks eligible for coverage under this act,

limits of coverage and rules covering the adjustment and

settlement of claims.

Section 902.  Agency report.

The agency shall make an annual report on the program and on

experience with landslide insurance sales through producers to

the General Assembly. Each report shall include mitigation

efforts, an analysis of the cost-effectiveness of the program,

accomplishments or shortcomings of the program and

recommendations for legislation regarding the program.

Section 903.  Program funding.

The program shall be funded by the General Assembly through

an appropriation of moneys to the Pennsylvania Emergency

Management Agency until which time the insurance fund and

assistance fund are deemed self-sufficient by the General

Assembly.

Section 904.  Reimbursement.

The program shall reimburse any Commonwealth departments for

agreed-upon costs of services that aid in administering the

program.

Section 905.  Appropriations.

(a)  Insurance fund.--The sum of $2,500,000, or as much

thereof as may be necessary, is hereby appropriated to the

Landslide Insurance Fund for the fiscal year July 1, 2009,

through June 30, 2010.

(b)  Assistance fund.--The sum of $2,500,000, or as much

thereof as may be necessary, is hereby appropriated to the

Landslide Assistance Fund for the fiscal year July 1, 2009,

through June 30, 2010.

(c)  Agency.--Moneys in the Landslide Insurance Fund and the

Landslide Assistance Fund are hereby appropriated to the

Pennsylvania Emergency Management Agency in such amounts as may

be determined annually by the Governor to be used for the

specified purposes of this act.

(d)  Additional appropriations.--If, upon completion of the

annual examination and audit, it is determined that the total

asset value of either the insurance fund or assistance fund is

less than $2,500,000, such additional sum as may be necessary to

increase the total asset value of the fund or funds to

$2,500,000 shall be appropriated.

Section 906.  Cost of administration.

The board shall keep an accurate account of the money paid in

premiums by the subscribers and the disbursements on account of

damages to premises. If, at the expiration of any year there

shall be a balance remaining after deducting the disbursements,

the unearned premiums on undetermined risks and the percentage

of premiums paid or payable to create or maintain the surplus

provided under this act, and after setting aside an adequate

reserve, the board may determine to allocate to the cost of

administering the insurance fund.

Section 907.  Commissions.

Moneys from the insurance fund shall be available to pay a

one-time commission as determined by the board to insurance

producers who forward applications for landslide insurance to

the board if a policy is issued pursuant to an application

submitted by an insurance producer. The amount of the commission

shall be determined by the board on an annual basis.

CHAPTER 21

MISCELLANEOUS PROVISIONS

Section 2101.  Effective date.

This act shall take effect July 1, 2009, or immediately,

whichever is later.