By Jim Sanders -- Bee Capitol Bureau
Published 2:15 am PDT Tuesday, April 25, 2006

Legislation to require virtually every Sacramento home and business owner to purchase flood insurance as a hedge against catastrophic levee failure died Monday in an Assembly committee.

The measure by Assemblyman Dave Jones, D-Sacramento, ended with a whimper when nobody seconded a motion to approve Assembly Bill 1898, thus ending the Banking and Finance Committee session without a vote.

"I think we've missed a very important opportunity to make sure people are protected so that when a flood comes, they'll have something to fall back on," Jones said.

AB 1898 was opposed by the insurance and lending industries.

"We do not think it's the appropriate role of state government to mandate flood insurance - or any insurance," said Michael Paiva of the Personal Insurance Federation of California.

Two Sacramento-area legislators serving on the Assembly banking committee - Republicans Roger Niello of Fair Oaks and Doug La Malfa of Richvale - spoke against AB 1898.

Jones' bill would have expanded on a federal law requiring flood insurance for structures within a 100-year floodplain, defined as an area likely to be inundated by a severe storm with a 1 percent chance of occurring in any given year.

AB 1898 would have created a similar insurance mandate for levee-protected property within an even wider area, the 200-year floodplain, from Tehama to Fresno counties in the Central Valley.

The widest impact might have been felt in Sacramento, because much of the capital lies outside the 100-year floodplain but within the wider area targeted by AB 1898.

Jones argued Monday that his bill would provide some level of financial security for residents and could reduce monetary damages sought from the state after a colossal levee failure.

Under pressure, Jones previously deleted a requirement that AB 1898 be enforced by lending institutions through loans they issue.

Critics complained Monday that the bill now has no enforcement mechanism. They also argued that mapping of the 200-year floodplain has been inadequate; they questioned whether California could mandate use of a federal program; and they said the federal flood insurance program could make AB 1898 meaningless by seeking redress against the state if failed levees caused massive flooding.