Panel Rejects Mandatory Quake Insurance Plan : Government: Proposal to revive state-run coverage fails by one vote in an Assembly committee as the vote splits along party lines. It will be reconsidered next week.

An Assembly committee narrowly rejected legislation Wednesday to revive a state-run earthquake insurance program to help homeowners repair damage caused by major temblors.

The party-line vote by the Housing and Community Development Committee was 5 to 3, one short of the six required for approval.

But the measure’s author, Assemblyman Rusty Areias (D-San Jose), a candidate for state controller, expressed confidence that he will obtain the needed vote when the measure is reconsidered next week.

“The Big One is in our future,” Areias said. “It is intelligent public policy to plan ahead for the disasters that we know will occur.”

The mandatory insurance program would provide homeowners with up to $15,000 to repair homes damaged by earthquakes. It would cost the average homeowner $25 to $75 a year, depending on seismic zones and types of home construction.

Homeowners who refused to pay would face liens that could not be foreclosed by the state until the home is sold. Mobile homes and condominiums would not be covered. County tax collectors would collect the fees and the state Department of Housing and Community Affairs would administer the program.

Wendy Zaucha, a spokeswoman for the Howard Jarvis Taxpayers Assn., objected that “the fee is really a tax increase that doesn’t require a vote of the people.” The former state earthquake insurance program, created after the 1989 Loma Prieta earthquake, was repealed in 1993 after critics claimed it was bordering on insolvency and was giving the public a false sense of security.

If the program had been in place when the Northridge quake struck, Areias said it would have contained about $350 million, enough to give each of the estimated 60,000 to 70,000 Los Angeles-area homeowners who had damage a check for $5,000.

The insurance industry prefers a national natural disaster insurance recovery plan pending in Congress that would cover damage caused by earthquakes, hurricanes, tornadoes and volcanoes. It is sponsored by Rep. Norman Y. Mineta (D-San Jose).

“I can’t quarrel with the insurance industry wanting federal legislation,” Areias said. “But they know and we know it’s not going to happen. This is only a foot-dragging technique.”

Marjorie Berte, director of the state Consumer Services Agency, disagreed with Areias, saying the Wilson Administration is optimistic that the federal bill will become law. Deputy State Insurance Commissioner Masako Dolan said her boss, John Garamendi, a Democratic candidate for governor, also prefers the federal approach.

Areias’ bill was defeated when five Democrats voted for it and three Republicans voted against it. Two Democrats and one Republican were absent when the vote was taken. Assemblywoman Paula L. Boland (R-Granada Hills), whose district was hard-hit by the Northridge quake, cast one of the “no” votes.

“As good as this bill sounds, I also support a federal program,” Boland told her colleagues. “I don’t think California can afford to do this alone. This bill would be fooling the public.”