HB 6646 — AN ACT CONCERNING CRUMBLING CONCRETE FOUNDATIONS.

21-120 9 of 10 Substitute House Bill No.

6646 limited to a mortar bar expansion test pursuant to American Society for Testing and Materials standard C1293, Standard Test Method for Determination of Length Change of Concrete Due to Alkali-Silica Reaction, or C227, Standard Test Method for Potential Alkali Reactivity of Cement-Aggregate Combinations;

Such regulations shall include, but not belimitedto,definitionsfortheterms"rapidtotalsulfurbelimitedto,definitionsfortheterms "rapidtotalsulfur test","x-rayfluorescenceanalysis","purgeandtrapgaschromatography analysis", "analysis by combustion furnace", "x-ray diffraction", sHB6646"magnetic /susceptibility Fileanalysis", No."petrographic analysis" and "mortar bar expansion test".

776Approved sHB6646July File6, 2021 Public Act No.

77621-120 "magnetic10 susceptibilityof analysis",10 "petrographic analysis" and "mortar bar expansion test".

This act shall take effect as follows and shall amend the following sections:

Section 1 from passage 29-265d Sec.

2 July 1, 2021 38a-91vv(b)(2) Sec.

3 July 1, 2021 38a-91vv(i) Sec.

4 July 1, 2021 New section Sec.

5 July 1, 2021 8-446 Sec.

6 July 1, 2021 1-210(b)(28) Sec.

7 July 1, 2021 29-265e Sec.

8 July 1, 2021 New section Sec.

9 July 1, 2021 New section sHB6646 / File No.

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776 The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose.

In general, fiscal impacts are based upon a variety of informational sources, including the analyst’s professional knowledge.

Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note State Impact:

Agency Affected Fund-Effect FY 22 $ FY 23 $ Department of Housing HHF - Cost 175,000 None Note:

HHP=Healthy Homes Fund Municipal Impact:

Municipalities Effect FY 22 $ FY 23 $ Various Potential None None See Below Municipalities Revenue Gain Various Precludes None None See Below Municipalities Revenue Gain Explanation The bill makes various changes related to the issue of crumbling concrete foundations that result in the fiscal impacts described below.

Section 1 prevents municipalities, once they have adjusted the assessment of a home with a defective concrete foundation, from reassessing that home until the foundation has been repaired or replaced.

This precludes any revenue gain a municipality might experience if it chose to increase the assessment of a home with a defective concrete foundation prior to such foundation being repaired.

The bill also results in a revenue gain to municipalities associated withhomeownersimpactedby crumbling foundationsto theextent that it allows more homeowners to have their foundations remediated.

Under current law, as of September 2020, at least 845 properties in at least 10 communities have had their assessments reduced due to sHB6646 / File No.

776 sHB6646 File No.

776 foundation problems.

This has resulted in an estimated revenue loss to those municipalities of about $2.7 million cumulatively.

The bill results in a revenue gain that would vary based on the assessments of such properties after foundation remediation.

It is unknown how much of this revenue gain would occur in FY 23 and how much would occur in the out years.

Section 3 eliminates the June 30, 2022 sunset date for the captive insurer, Connecticut Foundations Solutions Indemnity Company Inc.

(CFSIC), which allows the captive to continue operating using state funding already authorized for that purpose.

1 As the captive spends approximately $800,000 of its revenue annually on operating expenses, under the bill that operating cost is anticipated to continue in FY 23 and future years.

2 Sections 4 and 5 result in a one-time cost to the Healthy Homes Fund of up to $175,000 in FY 22 to provide funding for CFSIC to research and report on the extent of crumbling foundations in nonresidential buildings.

This will result in less funding being available for the lead removal, remediation and abatement program under the Department of Housing (DOH) that is funded from the same account.

Sections 8 and 9 require specified geological reports and quarry operational plans, to be submitted to the State Geologist and the Department of Energy and Environmental Protection (DEEP).

The bill also allows DEEP to establish regulations under certain conditions.

These provisions are not anticipated to result in a fiscal impact.

The bill also makes other minor changes that have no fiscal impact.

CFSIC distributes financial assistance to homeowners with foundations crumbling due to the presence of pyrrhotite using state funds deposited in the Crumbling Foundations Assistance Fund.

The state has authorized $100 million in bond funds and about 85 percent of the revenue from a $12 annual surcharge on homeowners' insurance policies (in place through 2029) to provide such assistance.

Under current law, the captive or its successor is expected to continue minimal operations for up to 36 months after sunset to run off accumulated liabilities, so not all FY 23 operating expenses under the bill are additional.

sHB6646 / File No.

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776 House "A" strikes the underlying bill and its associated fiscal impact and results in the fiscal impact described above.

The Out Years The municipal impacts identified above would continue into the future subject to the timing and value of homes being remediated and reassessed and to the number of additional home foundations remediated as a result of the bill.

Sources:

Connecticut Foundation Solutions Indemnity Company, Inc.

2019 and 2020 Audited Financial Statements sHB6646 / File No.

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776 OLR Bill Analysis sHB 6646 (as amended by House "A")* AN ACT CONCERNING CRUMBLING CONCRETE FOUNDATIONS.

SUMMARY This bill makes various changes in state law concerning “crumbling foundations.” (Generally, this means concrete foundations that are failing or deteriorating due to the presence of pyrrhotite.) It makes the Connecticut Foundation Solutions Indemnity Company (CFSIC) permanent by eliminating the current June 30, 2022, termination date and adds two gubernatorial appointees to its board of directors (§§ 2 & 3).

The bill also requires CFSIC to study the extent of pyrrhotite-related foundation damage in nonresidential buildings and remits up to $175,000 from the Healthy Homes Fund for the study’s expenses (§§ 4 & 5).

CFSIC is the captive insurance company created by law to distribute money to homeowners with concrete foundations that are deteriorating due to the presence of pyrrhotite.

The bill requires concrete aggregate quarry operators to test and report on their aggregate’s total sulfur content (“total S”).

It imposes restrictions on the use of aggregate that has a relatively high total S and, in certain circumstances, requires additional testing to identify the presence of pyrrhotite.

The bill authorizes the Department of Energy and Environmental Protection (DEEP) commissioner to adopt regulations on aggregate testing and impose restrictions on aggregate that contains pyrrhotite (§ 9).

The bill also:

1.

eliminates the five-year cap on reduced assessments for properties made with defective concrete (§ 1) and sHB6646 / File No.

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requiresConnecticut concrete aggregate quarriesto (1)submit an operations plan to the state geologist and DEEP commissioner annually and (2) prepare a geological source report (GSR) every four years and submit it to the same entities (§ 8).

Additionally, the bill permanently exempts certain executive branch agency records related to faulty or failing concrete foundations in residential buildings from disclosure under the Freedom of Information Act (FOIA) and applies the exemption to the same types of records held by public higher education institutions (§ 6).

The bill requires executive branch agencies to keep information about claims of faulty or failing foundations confidential in perpetuity (§ 7).

*House Amendment “A”:

(1) eliminates provisions allowing the Connecticut Housing Finance Authority to make loans to CFSIC and issue up to $100 million in revenue bonds;

(2) adds gubernatorial appointees to CFSIC’s board of directors (§ 2);

(3) clarifies the reassessment provision requires properties with adjusted assessments to be revalued during normal cycles(§ 1);

(4) adds the FOIA and confidentiality provisions (§§ 6 & 7);

(5) modifies the GSR provision and makes the submission of an operations plan an annual requirement (§ 8);

(6) eliminates the provision in the underlying bill requiring the Department of Consumer Protection commissioner to adopt regulations establishing standards for aggregate testing and replaces them with requirements for annual aggregate testing and authorization for DEEP to adopt regulations (§ 9);

and (7) makes minor changes.

EFFECTIVE DATE:

July 1, 2021, except the provision on assessments (§ 1) is effective upon passage.

§ 1 — REDUCED ASSESSMENT FOR PROPERTIES WITH DEFECTIVE FOUNDATIONS By law, municipal assessors or their staff must inspect and reassess residential properties with foundations made from defective concrete at the property owner’s request.

Under current law, the adjusted assessment must reflect the property’s current value and is valid for five sHB6646 / File No.

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776 assessment years unless the foundation is repaired or replaced sooner.

The bill eliminates the five-year maximum, thus allowing property owners to benefit from a reduced assessment until their foundation is repaired or replaced.

The property’s assessment must be updated with each revaluation and reflect any diminished value.

§ 2 — CFSIC BOARD OF DIRECTORS The bill requires the governor to appoint two members to CFSIC’s volunteer board of directors, one of whom must be a nonvoting, ex- officio member.

By law, CFSIC’s board of directors includes four legislatively appointed non-voting ex-officio members, as well as several members with experience related to various aspects of crumbling concrete foundations, including a real estate broker or agent;

a municipal chief executive;

insurance and banking industry representatives;

and the executive directors of the Capitol Region and Northeastern Councils of Governments.

§§ 4 & 5 — STUDY OF NONRESIDENTIAL CRUMBLING CONCRETE DAMAGE By January 1, 2023, the bill requires CFSIC to submit a report to the Insurance and Real Estate and Planning and Development committees analyzing the extent of pyrrhotite-related concrete foundation damage in nonresidential buildings.

The bill also requires the Department of Housing to remit up to $175,000 from surcharge remittances transferred to the Healthy Homes Fundduring the2021 calendar yearto CFSICforresearch,development, and administrative expenses related to the report described above.

(The Healthy Homes Fund includes revenue from an annual $12 surcharge that existing law imposes on the named insured under certain homeowners insurance policies.) However, the bill specifies that this amount must not be used in calculating the total funds allocated or made available to CFSIC for administrative or operational expenses.

(By law, CFSIC may not spend more than 10% of its annual allocations on administrative or operational sHB6646 / File No.

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776 costs (CGS § 38a-91vv(c)).) § 6 — DISCLOSURE UNDER FOIA Currentlawexemptsfromdisclosure(1)documentsexecutive branch agencies have on claims of faulty or failing concrete foundations in residential buildings by the buildings’ owners and (2) associated agency-prepared documents.

Currently, the disclosure protection lasts until the later of May 25, 2023, or seven years after the agency receives the documents.

The bill makes the disclosure exemption permanent.

The bill also makes minor changes that specify which records are covered.

Under the bill, the executive branch agency protection applies to (1) any records the agencies maintain or keep on file related to claims of or testing for faulty or failing residential concrete foundations, rather than only those related to owners’ claims, and (2) both documents and materials the agencies prepare related to the records.

Lastly, the bill extends disclosure protection to records public higher education institutions maintain or keep on file, or documents or materials the institutions prepare, concerning claims of and testing for faulty or failing concrete foundations.

§ 7 — CONFIDENTIALLY OF INFORMATION Current law generally requires executive branch agencies to keep documentation they receive or obtain related to owners’ claims of faulty or failing residential concrete foundations and related agency-prepared materials confidential for at least seven years from the date of receipt.

The bill eliminates the seven-year cap, thus requiring this information to be kept confidential permanently.

§ 8 — GSR AND OPERATIONS PLAN REQUIREMENT GSR By January 1, 2022, the bill requires the operator of each Connecticut quarry established on or before July 1, 2021, that produces concrete aggregate to prepare a geological source report (GSR) and submit it to the state geologist and DEEP commissioner.

Similarly, before using or sHB6646 / File No.

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776 selling concrete aggregate, the operator of a new quarry must prepare and submit a GSR.

Under the bill, each concrete aggregate quarry must update and submit its GSR quadrennially.

GSR Requirements The GSR must be prepared as the commissioner requires and must include:

1.

a description of the operator’s mining, processing, storage, and quality control methods;

2.

a description of the products the quarry will produce;

3.

a description of the characteristics of the aggregate to be excavated, prepared by a qualified geologist;

4.

the results of an inspection of face material and geologic log analysis, completed by a qualified geologist;

and 5.

core sample analyses completed by a qualified geologist unless the quarry is active and the commissioner determines the quarry’s performance history is satisfactory.

A “qualified geologist” is a geologist certified by the American InstituteofProfessionalGeologists,licensedbytheNationalAssociation of State Boards of Geology, or certified or licensed by another organization deemed suitable by the state geologist.

Operations Plan By January 1, 2022, and annually thereafter, the bill requires concrete aggregate quarry operators to provide the quarry’s operations plan to the state geologist and DEEP commissioner.

§ 9 — ANNUAL AGGREGATE TESTING Beginning July 1, 2022, and at least annually thereafter, the operator of each quarry that sells or provides aggregate intended for use in sHB6646 / File No.

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776 concrete, must provide a written report to the DEEP commissioner and the state geologist, containing the results of a third-party test of the aggregate’s sulfur content (total S) and further testing for pyrrhotite, if applicable.

The bill exempts quarry operators from the annual requirement if tests show their aggregate has a low total S.

(If aggregate has a high total S concentration, it is not suitable for structural concrete.

Measuring aggregate’s total S enables one to develop a conservative estimate of the maximum pyrrhotite concentration.

(Many minerals other than pyrrhotite contain sulfur.)) Under the bill, the test must be conducted by a third-party certified or accredited to conduct testing in accordance with American Society for Testing Materials standard C33/C33M, Standard Specification for Concrete Aggregates.

The certification or accreditation must be provided by the International Organization for Standardization, United States Army Corps of Engineers, American Association of State Highway and Transportation Officials, International Accreditation Service, or a similar organization.

The bill authorizes the DEEP commissioner to adopt regulations to implement the bill’s aggregate testing provisions.

If adopted, the regulations must include definitions for the following terms:

“rapid total sulfur test,” “x-ray fluorescence analysis,” “purge and trap gas chromatography analysis,” “analysis by combustion furnace,” “x-ray diffraction,” “magnetic susceptibility analysis,” “petrographic analysis,” and “mortar bar expansion test.” Total S Test Each test must include the performance of a rapid total S test on a 10- pound aggregate sample using one of the following methods:

1.

x-ray fluorescence analysis, 2.

purge and trap gas chromatography analysis, 3.

analysis by combustion furnace, or sHB6646 / File No.

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other technology deemed at least as accurate by the state geologist.

The bill specifies that representative samples must be (1) collected and managed in accordance with American Society for Testing and Materials standard D75/D75M, Standard Practice for Sampling Aggregates, and (2) reduced to a size appropriate for laboratory testing and pulverized for analysis.

Results.

If testing shows the sample’s total S by mass is more than 1%, the operator cannot sell or otherwise provide the aggregate for use in concrete.

If testing shows the sample’s total S by mass is less than 0.1%, a quarry operator (1) may sell or provide such aggregate for use in concrete four years, beginning on the date of receipt of such test results;

and (2) does not need to submit test results to the DEEP commissioner and state geologist during that period.

If testing shows the sample’s total S falls in between these thresholds, then further testing is required.

Further Testing for Pyrrhotite Required Testing.

If the total S of the sample is 0.1% or more, but less than 1% (by mass), then the sample must be further tested for the presence andrelative abundance (concentration)ofpyrrhotite usingone of the following methods:

(1) x-ray diffraction, (2) magnetic susceptibility, or (3) another type of petrographic analysis.

If the sample contains pyrrhotite, a petrographic analysis must be conductedtodeterminewhether theaggregatecanbeused.Theanalysis must be based on (1) American Society for Testing and Materials standards C295, Standard Guide for Petrographic Examination of Aggregates for Concrete, and (2) C294, Standard Descriptive Nomenclature for Constituents of Concrete Aggregates.

Additional Testing and Restrictions.

If testing shows that sHB6646 / File No.

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776 pyrrhotite is present and the total S by mass is 0.1% or more but less than 1%, then DEEP’s commissioner, in consultation with the state geologist, may do the following:

1.

require the quarry operator to conduct additional testing, including a mortar bar expansion test pursuant to American Society for Testing and Materials standard C1293, Standard Test Method for Determination of Length Change of Concrete Due to Alkali-Silica Reaction, or C227, Standard Test Method for Potential Alkali Reactivity of Cement-Aggregate Combinations;

and 2.

impose restrictions on selling or using the aggregate for concrete.

BACKGROUND Related Bill HB 6236 (File 337), favorably reported by the Higher Education and Employment Advancement Committee, contains substantially similar FOIA provisions, but it does not eliminate the seven-year retention provision.

COMMITTEE ACTION Planning and Development Committee Joint Favorable Substitute Yea 26 Nay 0 (03/31/2021) sHB6646 / File No.

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