Amendment #186 to H5500

Crumbling Concrete Assistance Fund

Mr. Ashe of Longmeadow moves to amend the bill by adding the following section XXXX

SECTION 1. The following terms as used in this act shall have the following meanings, except where the context clearly indicates otherwise:—

“CEDAC” shall mean the Community Economic Development Assistance Corporation as established chapter 40H of the general laws;

“residential building” shall mean a one-family, two-family, three-family, or four-family dwelling, including, but not limited to, a condominium unit, apartment complex, or dwelling in a planned unit development.

SECTION 2. Chapter 29 of the General Laws, as appearing in the 2024 edition, is hereby amended by inserting after section 2FFFFFFF the following section:

Section 2KKKKKKK. (a) There shall be established a Crumbling Concrete Assistance Fund which shall be administered by the Community Economic Development Assistance Corporation, as established in chapter 40H of the general laws. The fund shall be credited with: (i) appropriations or other money authorized by the general court and specifically designated to be credited to the fund; (ii) 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; (iii) federal funds received under subsection (b); and (iv) interest earned on the assets of the fund.

Amounts credited to the fund shall be expended, without further appropriation, to: (A) provide financial assistance to owners of residential real property for the replacement of concrete foundations of such residential real property that have deteriorated due to the presence of pyrite or pyrrhotite; (B) minimize negative fiscal impacts on municipalities in which such property is located; and (C) reimburse the owner of a residential real property that presents satisfactory evidence, as determined by the program as established by section 3 of this act, that said owner has paid for and replaced their concrete foundation that deteriorated due to the presence of pyrite or pyrrhotite prior to the establishment of the fund; provided, however, that the reimbursement shall not exceed the funding the owner would have received had they applied for financial assistance through the fund. The unexpended balance in the fund at the end of a fiscal year shall remain available for expenditure in subsequent fiscal years. No expenditure made from the fund shall cause the fund to be in deficit at any point.

(b) The administrator 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. The administrator shall seek to maximize available federal reimbursements for money spent from the fund.

(c) Amounts issued from the fund to impacted homeowners and contractors or other vendors for the replacement of concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite shall be exempt from taxation under chapter 62.

(d) Annually, not later than June 1, CEDAC shall report on the activities of the fund from the previous calendar year to the clerks of the senate and house of representatives, the senate and house committees on ways and means, the joint committee on environment and natural resources and the joint committee on housing.

SECTION 3: Chapter 40H of the General Laws, as appearing in the 2024 Official Edition, is hereby amended by adding the following section:-

Section 10. There shall be established a Massachusetts Crumbling Concrete Assistance Program to provide assistance to owners of residential real property with concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite. This program shall be administered and supervised by the Community Economic Development Assistance Corporation, as established by chapter 40H of the general laws, as consistent with its powers under section 4 of chapter 40H.

The program shall be overseen by a director who shall be appointed by the board of directors. The director shall report to the Executive Director of CEDAC.  The director shall have the authority to hire staff sufficiently to meet the requirements and obligations of the program with the approval of the executive director of the CEDAC. Not more than ten percent of all monies allocated or made available in a given fiscal year to the Crumbling Concrete Assistance Fund as established by section 2KKKKKKK of chapter 29 of the general laws or a sum of one and a half million dollars, whichever is greater, shall be used for administrative and operational costs.

The program shall develop requirements and guidelines that shall be published on the CEDAC public internet website. Should the requirements and guidelines be amended the program shall post the amended requirements and guidelines on the public internet website within 30 days of the approved amendment.

The program shall, without limitation:

(a) develop and promulgate eligibility requirements for participation by homeowners who are affected by pyrite or pyrrhotite. Such requirements shall include, but not be limited to: (i) verification of the presence of pyrite or pyrrhotite in a concrete foundation through core testing conducted in accordance with standards established by the program; (ii) confirmation of pyrite or pyrrhotite-related deterioration by a licensed and trained home inspector or other qualified professional approved by the program; and (iii) documentation demonstrating that applicable insurance coverage for the necessary repair or remediation has been denied, in whole or in part, by the homeowner’s insurer;

(b) develop and implement a standardized severity classification system to assess and rank the extent of damage to concrete foundations caused by the presence of pyrite or pyrrhotite. Such system shall establish multiple tiers or categories of deterioration, based on objective criteria, including but not limited to: (i) the concentration and distribution of pyrite or pyrrhotite within the concrete as determined by core testing; (ii) the presence, width, and pattern of cracking; (iii) evidence of structural compromise or loss of load-bearing capacity; and (iv) the progression and expected rate of further deterioration;

(c) develop and promulgate requirements establishing a process for the reimbursement of eligible homeowners who, prior to the effective date of the program, incurred costs to replace concrete foundations damaged by the presence of pyrite or pyrrhotite. Eligibility for such reimbursement shall be subject to the same requirements and criteria established by the program for current applicants;

(d) develop a training program for all home inspectors, contractors, and other vendors who apply to do work on behalf of the program. The training program shall train inspectors, contractors, and other vendors on how to identity pyrite or pyrrhotite in concrete foundations, and determine the safety, in regards to pyrite or pyrrhotite, of concrete poured for all residential and commercial projects. The program may contract with an outside vendor to provide such training as they determine to be necessary;

(e) provide information biannually to the public regarding structurally sound concrete and the dangers of pyrite and pyrrhotite published on the CEDAC public internet website and other public communication sources as the program sees fit;

(f) administer and oversee the crumbling concrete assistance fund established in section 2KKKKKKK of chapter 29;

(g) provide financial assistance to such owners of residential buildings for the replacement of concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite, including, but not limited to, financial reimbursement to homeowners who have had such repair or replacement performed prior to the effective date of this section;

(h) assist such owners of residential buildings to obtain additional financing necessary to fully fund the repair or replacement of concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite;

(i) approve contractors or other vendors for eligibility to perform foundation repairs or replacements on behalf of claimants. These contractors or other vendors shall have familiarity with crumbling concrete and the risks of pyrite or pyrrhotite;

(j) disburse such financial assistance to approved contractors or other vendors on behalf of claimants;

(k) ensure that the financial assistance is used solely for costs of replacing concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite. If the homeowner receives more financial assistance than what is needed to replace the foundation they may use the excess funding toward ancillary costs associated with the replacement of the foundation;

(l) require the disclosure of the amount of all financial compensation received by an owner of such a residential building, if any, arising out of a claim for coverage under the property coverage provisions of the homeowners policy for foundation deterioration due to the presence of pyrite or pyrrhotite and ensure that such amount is considered when determining the amount of financial assistance offered to such owner;

(m) when appropriate, apply for, qualify for and receive any federal funds made available under any federal act, for assistance to owners of residential buildings and residential condominium units having concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite. To the extent permissible under federal law, all such federal funds shall be deposited into the crumbling concrete assistance fund established pursuant to section 2KKKKKK of chapter 29;

(n) enter into agreements, as necessary, with the Massachusetts Housing Finance Authority and any participating lender to develop and implement additional loan programs or financial products to assist such owners to repair or replace concrete foundations that have deteriorated due to the presence of pyrite or pyrrhotite, while employing terms and conditions that are preferable to the open market; and

(o) develop and implement an application process to allow homeowners affected by crumbling concrete foundations to apply for foundation replacement assistance. Such application process shall be electronic in nature and shall permit the submission of all required forms, supporting documentation, and materials through an online platform.

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 criteria, severity ranking, if eligible, the estimated replacement time, detailed reason for denial, if not eligible.

An impacted homeowner may request a review of any decision by the program 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 receiving the homeowner’s request, unless an extension is agreed to by the homeowner.

The agency shall promulgate any additional guidelines or requirements necessary to properly administer the program, including but not limited the establishment of a maximum cap on the amount payable by the program for any eligible project, claim, or reimbursement. All guidelines or requirements that are necessary for the proper administration of this program must be completed within nine months of the effective date of this act.

The director shall file an annual report with the clerks of the senate and the house of representatives, the joint committee on housing and the senate and house committees on ways and means: (a) monies allocated or made available pursuant to this section; (b) total financial assistance and financial assistance, by town, provided to owners of such residential buildings pursuant to this section; (c) administrative and operational expenditures; (d) the total number and number, by town, of applications for assistance received during the year and to date, (e) the total number and number, by town, of applications for assistance granted during the year and to date; (f) the average time to process applications; and (g) the total number and number, by town, of applications pending and amount of such claims. Such reports shall be filed annually on or before June 1 and shall refer to activities planned for the subsequent calendar year. The director shall also file with said committees an annual report detailing all expenditures under each program administered by the program. Such reports shall be filed on or before June 1 of each year and shall refer to activities in the preceding calendar year.

SECTION 4. The General Laws, as so appearing, are hereby amended by inserting after Chapter 64N the following new Chapter:

Chapter 64O:

Section 1: As used in this chapter, the following words shall, unless the context otherwise requires, have the following meanings:—

“Ready-mix concrete”, concrete that is manufactured for delivery and in an unhardened state, produced by combining cement, aggregates, water, and any admixtures, and mixed at a central batching plant or in a truck mixer, and transported by truck for placement at a construction site, including concrete delivered for use in residential, commercial, or other construction projects within the commonwealth.

“Program”, the Massachusetts Crumbling Concrete Assistance Program

Section 2: There shall be imposed a surcharge at a rate of six dollars per cubic yard on all ready mix concrete sold for use in residential and commercial projects within the commonwealth.

The surcharge shall be assessed at the point of sale and shall be remitted to the commonwealth by the ready-mix concrete producer, supplier, distributor, or other person or entity selling or distributing such concrete product within the commonwealth. Each such producer, supplier, distributor, or entity shall remit all surcharges collected pursuant to this section to the Department of Revenue not later than April 1 and October 1 of each year for surcharges collected during the preceding six-month period, in such form and manner as may be prescribed by the commissioner.

All such remittances shall be deposited into the Crumbling Concrete Assistance Fund, as established in section 2KKKKKK of chapter 29 of the General Laws, no later than 30 days after the receipt of remittance.

SECTION 5: Section 87XX ½ of chapter 112 of the General Laws, as so appearing, is hereby amended by inserting after the word “valuation”, in line 17, the following words:-  risks of pyrite or pyrrhotite

SECTION 6: Section 222 of chapter 112 of the General Laws, as so appearing, is hereby amended by inserting after the word “board.”, in line 46, the following words:-

One of the required educational components shall include instruction on the risks associated with pyrite or pyrrhotite and guidance on how to identify the presence of pyrite or pyrrhotite in concrete foundations.; and is further hereby amended by inserting after the word “regulations.”, in line 69, the following words:-  One of the required educational components shall include instruction on the risks associated with pyrite or pyrrhotite and guidance on how to identify the presence of pyrite or pyrrhotite in concrete foundations.

SECTION 7: Chapter 175 of General Laws, as so appearing, is hereby amended by inserting the following new section:

Section 113Z: There shall be imposed a policy fee at the rate of six dollars on the named insured under each homeowners , and condominium unit owner’s property insurance. This surcharge shall be added to every new purchase of a policy or renewal of an existing policy. Such surcharge shall not be considered premium for any purpose.

Each admitted or nonadmitted insurer shall remit to the division of insurance, on a biannual basis and not later than April 1 and October 1 of each year for policy fees collected during the preceding six-month period, in such form and manner as may be prescribed by the division.

All such remittances shall be deposited into the Crumbling Concrete Assistance Fund, as established in section 2KKKKKK of chapter 29 of the General Laws, no later than 30 days after the receipt of remittance.

Additional co-sponsor(s) added to Amendment #186 to H5500

Crumbling Concrete Assistance Fund