Senator Feinstein Seeks to Prevent Human
and Economic Losses from Future Earthquakes

Bill was drafted over last two years in conjunction with FEMA and Seismology Experts
March 1, 2001

Washington, DC – In an effort to provide protection against the damage caused by future earthquakes, U.S. Senator Dianne Feinstein (D-Calif.) today introduced legislation to make it a federal priority to implement earthquake loss reduction and prevention measures.

The Earthquake Loss Reduction Act of 2001(S. 424) would provide a number of incentives, including grants and tax credits, in order to encourage responsible state and local governments, individuals, and businesses to invest in damage prevention measures before an earthquake strikes.

“In the wake of yesterday’s earthquake in Washington, all of us recognize the importance of taking preventative measures in the event of a large temblor,” Senator Feinstein said. “This bill would help limit the human and economic impact caused by an earthquake -- no matter where one strikes in the United States -- while at the same time reducing the amount of government disaster assistance needed to recover.”

The bill is the result of nearly two years of collaboration on the part of Senator Feinstein, the Federal Emergency Management Agency (FEMA), and seismologists from the California Seismic Safety Commission and the California Institute of Technology.

According to FEMA, roughly $80 billion in damages could be caused if a magnitude 7.0 earthquake occurred along the Newport-Inglewood fault in Los Angeles. Additionally, over 400,000 people would be left homeless, hundreds would be killed and thousands of businesses would face interruption. But if every building in the area was retrofitted, over 90 percent of the deaths would be avoided, the number displaced would shrink to 93,000, and the total damage would drop to $52 billion.

“Much of the scientific knowledge needed to reduce losses from future earthquakes exists -- we just need to put it to work,” Senator Feinstein said. “This bill will help make that happen and prevent and reduce future losses.”

Specifically, the legislation would:

• Provide a credit against federal income taxes equal to 50 percent of a homeowner’s investment in seismic retrofit, not to exceed $6,000.

• Allows businesses to depreciate the cost of seismic retrofit over five years.

• Authorize a $1 billion Loss Reduction Trust Fund to provide matching grants for mitigation measures and recovery planning grants to reduce damage to buildings and utility and transportation systems critical to disaster response. The grants would be provided to local governments, public and private hospitals, institutions of higher education, and special districts. These would require that the state and the local government recipients benefitting from the investment fund a portion of the cost. To be eligible, the local entities must also have in place a long-term strategic earthquake loss reduction plan and enforce land use, building code, and other measures to reduce the vulnerability facilities in the jurisdiction.

• Define a seismic retrofitting bond as a bond for which 95 percent of the proceeds are used for seismic retrofitting expenditures or used to finance loans to borrowers for seismic retrofitting expenditures as “qualified bonds.”

• Encourage private investments in seismic retrofitting of residential properties by improving tax benefits.

• Encourage lower interest rates on mortgages for seismically-retrofitted residences.

• Permanently establishes the Advanced Seismic Research and Monitoring System in the U.S. Geological Survey. This will enable researchers to discover ways to predict an earthquake before it strikes.
  

Representative Mike Thompson (D-Calif) plans to introduce the bill in the House in the coming days.