HB 589 — An Act establishing the Landslide and Sinkhole Insurance Program and the Landslide and Sinkhole Insurance Fund; establishing and providing for the powers and duties of the Landslide and Sinkhole Insurance Board; providing for duties of the Auditor General; imposing a penalty; and making transfers.

PRIOR PRINTER'S NO.NOS.

10691069, 2096 PRINTER'S NO.

20962104 THE GENERAL ASSEMBLY OF PENNSYLVANIA HOUSE BILL Session of No.

MILLER, MARKOSEK, McANDREW, TAKAC AND WEBSTER, MARCH 20, 2025 AS AMENDEDRE-REPORTED ONFROM SECONDCOMMITTEE CONSIDERATION,ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, AS AMENDED, JULY 8,9, 2025 AN ACT Establishing the Landslide and Sinkhole Insurance Program and the Landslide and Sinkhole Insurance Fund;

20250HB0589PN209620250HB0589PN2104 - 2 - CHAPTER 1 PRELIMINARY PROVISIONS Section 101.

The following words and phrases when used in this act shall 20250HB0589PN209620250HB0589PN2104 - 3 - have the meanings given to them in this section unless the context clearly indicates otherwise:

(3) Make use of the most effective scientific and 20250HB0589PN209620250HB0589PN2104 - 4 - technological advances available, including, but not limited to, technology such as GIS.

(3) Develop best management practices, including 20250HB0589PN209620250HB0589PN2104 - 5 - recommendations for local governments to mitigate slope instability and landslide and sinkhole risk.

(2) The board may enter into any contracts, agreements 20250HB0589PN209620250HB0589PN2104 - 6 - or other appropriate arrangements to carry out its authority under this subsection.

A local government may adopt land-use controls for the 20250HB0589PN209620250HB0589PN2104 - 7 - benefit of the local government's residents.

(b) Insurance Program.-- 20250HB0589PN209620250HB0589PN2104 - 8 - (1) The board shall develop and administer the program, including assessing a premium for participating in the program.

(c) Claim or liability.--A claim against or a liability of the insurance fund shall not be deemed to constitute a debt or liability of the Commonwealth or a charge against the General 20250HB0589PN209620250HB0589PN2104 - 9 - Fund.

(b) Amount of premium.--The premium for the program is fixed and shall be adequate to enable payment of all sums that may become due and payable under the provisions of this act, and 20250HB0589PN209620250HB0589PN2104 - 10 - adequate reserve sufficient to carry all policies and claims to maturity.

(a) Set aside percentage.--The board shall set aside 5% of all premiums collected under this act until the board determines 20250HB0589PN209620250HB0589PN2104 - 11 - that the surplus is large enough to cover the catastrophe hazard of all the subscribers to the insurance fund and to guarantee the solvency of the insurance fund.

(2) The State Treasurer shall be responsible for 20250HB0589PN209620250HB0589PN2104 - 12 - executing and overseeing all insurance fund investments and may hire investment advisers, asset managers, actuaries and other financial professional consultants or investment experts that, in the opinion of the State Treasurer, as necessary, to assist in the management of the insurance fund.

20250HB0589PN209620250HB0589PN2104 - 13 - (2) 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 as required under this section, and after setting aside an adequate reserve, the balance, as the board may determine to be safely distributable, may be allocated to the cost of administering the insurance fund or distributed among the subscribers in proportion to the premiums paid by them.

20250HB0589PN209620250HB0589PN2104 - 14 - (ii) Within 90 days after receiving the application, issue a certificate showing whether the board approved the application and the amount of premium payable by the applicant for the year for which the premium is sought.

The 20250HB0589PN209620250HB0589PN2104 - 15 - following shall apply to insurance coverage:

(a) Application process.--An application for an increase in the amount of insurance, up to the allowable limits, may be made at any time by the subscriber by submitting a written statement, as determined by the board, to the board, except during a period when a claim filed by the subscriber is open and pending 20250HB0589PN209620250HB0589PN2104 - 16 - investigation.

(2) the subscriber's unreasonable action or inaction is 20250HB0589PN209620250HB0589PN2104 - 17 - responsible for the board's failure to reinspect the insured structure within 60 days of receipt of the application for additional insurance under subsection (a);

(1) The Auditor General or a designee shall at least once each year make a complete examination and audit of the 20250HB0589PN209620250HB0589PN2104 - 18 - insurance fund, including all receipts and expenditures, cash on hand and securities and investments or property held representing cash or cash disbursements.

Nothing in this act shall relieve any person, partnership or 20250HB0589PN209620250HB0589PN2104 - 19 - corporation from any liability for damages sustained, and the insurance fund shall be subrogated to the rights of any property owners' insurance as provided under this chapter.

The board shall make an annual report on the program and on experience with landslide and sinkhole insurance sales through producers to the chairperson and minority chairperson of the 20250HB0589PN209620250HB0589PN2104 - 20 - Environmental Resources and Energy Committee of the Senate and the chairperson and minority chairperson of the Environmental and Natural Resource Protection Committee of the House of Representatives.

(a) Annually.--Funding shall be appropriated on an annual <-- basis to the board for the purposes of this act and expenses of organization and administration of the insurance fund as provided under this act.

(c) (A) Fund transfer.--Thetransfer.-- <-- (1) The sum of $10,000,000 is transferred <-- from the General Fund to the insurance fund for the fiscal year July 1, 2025, through June 30, 2026.

(C)(2) FUNDIf, TRANSFER.--upon <--completion (1)of THEan SUMannual OFexamination and audit under section 513, the board determines that the total asset value of the insurance fund is at least $20,000,000, the sum of $10,000,000 ISis TRANSFERREDtransferred FROMfrom THEthe GENERALinsurance FUNDfund TOto THEthe INSURANCEGeneral FUNDFund, FORif THEthe FISCALtransfer YEARwould JULYnot 1,impair 2025,the THROUGHsolvency JUNEof 30,the 2026.insurance fund.

(2)(d) IF,(B) UPONBoard.--Money COMPLETIONin OFthe ANinsurance ANNUALfund EXAMINATIONis ANDappropriated AUDIT<-- UNDERto SECTIONthe 513,board THEin BOARDamounts DETERMINESas THATmay THEbe TOTALdetermined ASSETannually VALUEby OFthe THEGovernor INSURANCEto FUNDbe ISused ATfor LEASTthe $20,000,000,specified THEpurposes SUMof OFthis $10,000,000act. IS TRANSFERRED FROM THE INSURANCE FUND TO THE GENERAL FUND, IF THE TRANSFER WOULD NOT IMPAIR THE SOLVENCY OF THE INSURANCE FUND.

20250HB0589PN209620250HB0589PN2104 - 21 - (d)Section Board.--Money706. in the insurance fund is appropriated to the board in amounts as may be determined annually by the Governor to be used for the specified purposes of this act.

Section 706.

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