Insurers Get Behind Grants for Code Enforcement

01.04.2008
Copyright 2007 (c) A.M. Best Company, Inc. All Rights Reserved.
WASHINGTON (BestWire) -

State and local building departments would be eligible for up to $100 million in dedicated federal funds over the next five years, under insurance industry-supported legislation introduced in both chambers of Congress.

Sponsored in the U.S. House by Rep. Dennis Moore, D-Kansas, and in the Senate by Sen. Mary Landrieu, D-La., the Community Building Code Administration Grant Program would offer awards of up to $1 million for development and implementation of building codes, hiring and training of code officials, and other code enforcement activities.

The legislation requires grant recipients match at least a portion of the funds received, and calls on the Department of Housing and Urban Development to administer eligibility tests and ensure that governments in financial distress are given preferential treatment.
In introducing the bill, Landrieu said her interest was that Gulf Coast communities still recovering from hurricanes Katrina and Rita have the funds necessary to ensure compliance with upgraded home and building safety standards. According to a 2005 study from the National Institute of Building Sciences, U.S. taxpayers save $4 in disaster assistance costs for every $1 of federal funds spent on mitigation.
"Currently, no federal funds are designated for building code administration, and as a result, there is widespread lack of enforcement, presenting a major threat to public safety," Landrieu said.

The measure is the second significant bill introduced in Congress in recent months proposing an expanded federal role in state building code activities. In October, Reps. Doris Matsui, D-Calif., and Mario Diaz-Balart, R-Fla., introduced the Safe Building Codes Act, which would offer incentives to states that enact building codes, including 4% more in disaster relief funds for states that make the codes mandatory and implement enforcement mechanisms.
Like the earlier measure, Moore and Landrieu's bill has earned support from property/casualty insurers and their trade associations, including the American Insurance Association and the National Association of Mutual Insurance Companies.

"This legislation is vital to enhance and promote safer homes and businesses, especially in areas vulnerable to natural catastrophes," Justin Roth, NAMIC's senior federal affairs director, said in a statement. "Stronger building codes are key to protecting lives and property."

Moore's version of the bill, H.R.4461, has been referred to the House Financial Services Committee. Landrieu's version, S.2458, is before the Senate Banking Committee.
(By R.J. Lehmann, Washington bureau manager: raymond.lehmann@ambest.com)
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