Bill S.2804

FILED ON: 3/31/2022

SENATE . . . . . . . . . . . . . . No. 2804

The Commonwealth of Massachusetts

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In the One Hundred and Ninety-Second General Court
(2021-2022)

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An Act addressing crumbling concrete foundations.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:

SECTION 1. Section 3B of chapter 7 of the General Laws is hereby amended by inserting after the words “twenty-one A” the following words:- , section sixteen of chapter twenty-one B.

SECTION 2. Section 97 of chapter 13 of the General Laws is hereby amended by inserting at the end thereof the following words:-

Said board shall require all licensed home inspectors who perform an inspection on a residential home for the purpose of a sale or lease of the home to provide the potential buyer or lessee information regarding the possible presence of pyrite or pyrrhotite in the concrete foundation, prepared by the crumbling concrete relief agency established by section 2 of chapter 23B.

SECTION 3. Section 2 of chapter 21B of the General Laws is hereby amended by inserting the following words:-

“Aggregate”, granular materials such as gravel, sand and crushed rock that are combined for a particular purpose

“Certified geologist”, a professional geologist certified by the American Institute of Professional Geologists.

SECTION 4. Said chapter 21B is hereby further amended by adding the following new section:-

Section 16. (a) Any person seeking to mine, expand, excavate or otherwise operate a quarry for the purpose of producing aggregate concrete for sale or use in foundations, structural elements, or infrastructure such as roadways and bridges shall submit to the commissioner and the state geologist an application for a license to conduct such quarry activity. Each license application shall consist of: (i) a description of the geographic location of the quarry; (ii) a quarry operations plan, including without limitation mining, processing, storage, and quality control methods; (iii) a geological source report, consistent with the provisions of paragraph (b) of this section; and (iv) the results of aggregate testing for the presence of pyrite or pyrrhotite, consistent with the provisions of paragraph (c) of this section. Each license application shall be accompanied by a fee in an amount to be determined by the commissioner. Fees received by the department under this section shall be used to implement the provisions of this section, provided that any surplus fee receipts shall be deposited into the crumbling concrete assistance fund established in section 2RRRRR of chapter 29.

(b) The geological source report required by this section shall be prepared by a certified geologist in a form and manner prescribed by the commissioner, in consultation with the state geologist and a representative nominated by the Massachusetts Concrete and Aggregate Producers, and shall include, without limitation: (i) a description of the characteristics of the aggregate to be excavated at the subject quarry; (ii) a description of the products to be produced by such quarry; (iii) a copy of the results of an inspection of face material and geologic log analysis conducted within the preceding 60 days; and (iv) analyses of grab or core samples.

(c) Aggregate testing to identify the presence of pyrite or pyrrhotite required by this section shall include, without limitation, a total sulfur test to measure total sulfur content in a representative sample. Aggregate testing shall be performed by a certified geologist in accordance with applicable standards established by ASTM International or alternate standards to be determined by the commissioner in consultation with the state geologist.

(d) The commissioner or their designee shall review each license application submitted pursuant to this section and notify each applicant whether or not the license has been approved, as well as any conditions of operation, if applicable. If the license is denied, the notification shall include the reason or reasons for denial. A license granted under this section shall be valid for one year from the date of approval; provided, however, that a geological source report prepared in accordance with paragraph (b) of this section shall be acceptable for a period of four years from the date of preparation; and provided further, that aggregate test results demonstrating a total sulfur content of less than one-tenth percent-by-mass shall be acceptable for a period of four years from the date of testing. No license shall be approved under this section if the total sulfur content is equal to or greater one percent-by-mass. If the total sulfur content is equal to or greater than one-tenth percent-by-mass but less than one percent-by-mass, the license shall be denied unless the state geologist, in their sole discretion, recommends approval to the commissioner consistent with applicable ASTM International standards. The state geologist may require additional testing or information to justify an approval recommendation.

(e) A person owning or operating a quarry subject to licensure pursuant to this section shall maintain all records relevant to such licensure and quarry operation, including without limitation a record of the aggregate source in concrete batches, for a period of not less than 30 years.

(f) A person owning or operating a quarry without a license as required by this section shall be: (i) liable in perpetuity for property damage resulting from or related to the use or sale of such aggregate product; and (ii) subject to a civil penalty in an amount to be determined by the commissioner, not to exceed $500,000 in each instance. Amounts collected under this paragraph shall be deposited into the crumbling concrete assistance fund established in section 2RRRRR of chapter 29.

(g) A contractor who uses aggregate concrete produced in violation of this section shall be liable in perpetuity for property damage resulting from or related to the use or sale of such aggregate product, unless the violation was intentionally concealed from the contractor.

(h) The commissioner, in consultation with the state geologist, shall catalogue and maintain the quarry data collected under this section.

(i) Nothing in this section shall prohibit a municipality of the Commonwealth from requiring permits for quarry operation or excavation. Municipalities may establish pyrite and pyrrhotite presence restrictions more stringent than those set forth in this section.

(j) Nothing in this section shall affect the operations of quarries producing aggregate for purposes other than those described in paragraph (a).

(k) The department in consultation with the state geologist shall promulgate regulations to implement the provisions of this section.

SECTION 5. Section 2 of chapter 23B of the General Laws is hereby amended by inserting at the end thereof the following new paragraph:-

(c) There shall also be within the department a crumbling concrete relief agency to provide assistance to owners of residential real property with concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite. The agency shall be overseen by an executive director who reports to the undersecretary. The executive director shall have the authority to hire staff sufficient to meet the requirements and obligations of the agency. The agency shall, without limitation: (a) provide information to the public regarding structurally sound concrete and the dangers of pyrite and pyrrhotite; (b) publish a list of quarries licensed pursuant to section 16 of chapter 21B and a searchable electronic database of all quarries applying for such licensure, including aggregate and other testing results; and (c) administer the crumbling concrete assistance fund established in section 2RRRRR of chapter 29, including establishing eligibility requirements and implementing a process for impacted homeowners to secure foundation repair and replacement funding from the fund. A decision on a request from an impacted homeowner for such financial assistance shall be provided in writing to the homeowner and shall include the information relied upon and the basis for such decision, including the relevant eligibility and underwriting criteria. An impacted homeowner may request a review of any decision by the agency relating to such homeowner not later than 30 days after the decision. A final determination on such a request for review shall be provided in writing to the homeowner not later than 30 days after receipt of the homeowner’s request, unless an extension is agreed to by the homeowner.

SECTION 6. Chapter 29 of the General Laws is hereby amended by inserting after section 2QQQQQ the following section:-

Section 2RRRRR. (a) There shall be a Crumbling Concrete Assistance Fund. The fund shall be expended to provide financial assistance to owners of residential real property for the repair or replacement of concrete foundations of such property that have deteriorated due to the presence of pyrite or pyrrhotite and to minimize any negative economic impacts on municipalities in which such property are located. The crumbling concrete relief agency established by section 2 of chapter 23B shall administer the fund and shall make expenditures from the fund, without further appropriation. The agency shall seek to maximize available federal reimbursements for money spent from the fund.

The fund shall consist of: (i) revenue from appropriations or other money authorized by the general court and specifically designated to be credited to the fund; (ii) interest earned on such revenues; (iii) funds from public and private sources, including but not limited to gifts, grants, donations, and settlements received by the commonwealth that are specifically designated to be credited to the fund; (iv) federal funds paid to the commonwealth under paragraph (b) of this section; (v) monies paid to the commonwealth under paragraph (c) of this section; (vi) monies paid to the commonwealth under paragraph (d) of this section; and (vi) monies paid to the commonwealth under paragraph (f) of section 16 of chapter 21B. Any bond proceeds deposited into the fund shall be kept separate from any and all other funds deposited into the fund. Any balance in the fund at the close of a fiscal year shall be available for expenditure in subsequent fiscal years and shall not be transferred to any other fund or revert to the General Fund.

(b) The crumbling concrete relief agency established by section 2 of chapter 23B may apply for, receive and deposit any federal funds, including but not limited to funds made available by the United States Department of Housing and Urban Development Section 108 Loan Guarantee program, into the fund established by this section.

(c) Any entity licensed and engaged in the provision of homeowners insurance that has denied or rejected claims for repair or replacement of foundations due to the presence of pyrite or pyrrhotite at any time during the period beginning January 1, 2000, and continuing through December 31, 2021, inclusive, shall be required to pay to the department of revenue an amount equal to the total estimated or actual cost of repair or replacement, adjusted for inflation as applicable, in each instance of a denial. No later than November 30, 2022, the attorney general shall determine which insurers are subject to the provisions of this paragraph, including through collection and review of claims denial and related documentation from impacted homeowners, and shall provide a list of subject insurers to the department of revenue, the senate and house committees on ways and means, the joint committee on environment, natural resources and agriculture, and the joint committee on state administration and regulatory oversight no later than December 31, 2022. The department of revenue shall notify subject insurers of penalties owed in writing no later than March 30, 2023. Penalties owed under this paragraph shall be paid on or before June 30, 2023. Penalties collected under this paragraph shall be deposited into the fund established by this section. An entity failing to pay a penalty a penalty owed under this paragraph shall have its license revoked and shall not be eligible for a new or renewed license for a period of five years.

(d) Annually not later than May 1, the commissioner of revenue shall assess any entity licensed and engaged in the provision of homeowners insurance in the commonwealth an amount not less than 3 per cent of the entity’s net profits from the provision of homeowners insurance in the commonwealth during the immediately preceding tax year. Penalties collected under this paragraph shall be deposited into the fund established by this section.

(e) Amounts issued from the fund to impacted homeowners for the repair or replacement of concrete foundations that have deteriorated due to the presence of pyrrhotite shall be exempt from taxation under chapter 62.

(f) Annually not later than June 1, the crumbling concrete relief agency shall report on the activities of the fund from the previous calendar year to the senate and house committees on ways and means and the joint committee on environment, natural resources and agriculture.

(g) The crumbling concrete relief agency shall promulgate regulations or issue other guidance for the expenditure of the funds under this section.

SECTION 7. Chapter 59 of the General Laws is hereby amended by inserting after section 59A the following section:-

Section 59B. (a) Notwithstanding any general or special law to the contrary, an owner of real property in the commonwealth may apply for a residential property tax abatement due to the presence of pyrite or pyrrhotite minerals in the foundation. The presence of pyrite or pyrrhotite shall be established by: (i) not less than 2 core samples from the foundation proving the presence of pyrite or pyrrhotite; or (ii) a certified visual inspection conducted by a professional civil engineer. The owner shall also provide a certified estimate of the cost to repair or replace the foundation. Upon receipt of such documentation, a municipal board of assessors or equivalent entity shall determine a value per square foot of the foundation and percentage of functional obsolescence. If an abatement is sought on multiple properties within a municipality the board of assessors may determine a general value per square foot of foundation and percentage of functional obsolescence to be used for all properties within said municipality. The board of assessors shall use the value and percentage to calculate the reduction in assessment for each affected property. Such reductions shall be effective until the foundation is repaired or replaced.

SECTION 8. Chapter 143 of the General Laws is hereby amended by adding the following section:-

Section 110. Notwithstanding any general or special law to the contrary, fees for building permits for work associated with crumbling concrete foundations replacement shall be waived. In order to qualify for the waiver of fees, the applicant shall provide written documentation showing that pyrite or pyrrhotite minerals are present in the foundation to be replaced. Nothing in this section shall waive any of the permit application requirements, including, but not limited to, holding public hearings, associated with a permit application. A determination to waive fees is not a guarantee of the issuance of a permit.

SECTION 9. Within 2 months of passage of this act, active quarries subject to licensure under the provisions of section 4 of this act shall either submit a complete license application or obtain interim approval from the state geologist to continue operations for a period of not more than six months. Interim operations approvals shall not be renewed.