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Volume VIII, Number 1 - October 2002In this bulletin: House Passed Amended Bankruptcy Bill/Senate Did Not ActIn 2002, the House failed to pass H.R. 333, the Bankruptcy Reform Act conference report, and instead passed an amended version of the bill. The bankruptcy bill contained pro-commercial real estate provisions such as providing for protections for shopping center owners and eliminating a loophole which allowed for residential rental tenant abuse of the code. The amended version of the bill passed by the House removed a controversial provision on abortion clinic violence that was agreed to in the conference report of the bill. The Senate was unwilling to consider the bill without the provision related to abortion therefore the legislation died with the 107th Congressional Session. As in years past, the CCIM Institute, along with the National Association of REALTORS® (NAR) and other commercial real estate organizations, will work to get these provisions introduced again in the next Congress.Insurance Task Force Meets with Consumer and Insurance Industry RepresentativesIn the last two months of 2002, the National Association of REALTOR'S® Insurance Task Force met with representatives from the following organizations:
Meetings with these organizations were necessary in order to examine the current difficult insurance market and possible solutions. While recommendations from the Task Force are pending, the group will be carefully considering the feasibility of NAR-provided alternative insurance products, the creation of resources to assist state associations with state insurance regulatory efforts and to participate in proposed federal initiatives impacting the insurance industry and consumers. The Task Force is scheduled to meet in January 2003 in order to finalize any recommendations. In addition, NAR has launched a website designed to provide the detailed information necessary for dealing with the practice and policy-related aspects of the insurance availability situation. The Government Affairs Property Casualty Insurance website delves into the specifics and details which are necessary to understand current market conditions, educate and advise clients about insurance scores and insurance claims databases, and deal with state insurance regulators and legislators. Among the topics covered: The Problem Causes, Impacts and NAR Concerns, The Insurance Industry Perspective on Insurance Scoring, Consumers' Federal Rights When Insurers Make Use of Credit and Claims Databases, How Consumers Can Obtain Their Insurance Scores, How to Access CLUE Reports, How State Regulators and Legislators Are Addressing the Use of Insurance Scores, a Glossary of Common Insurance Terms and What NAR is Doing to Address the Availability Problem. To access the site, please go to: http://www.realtor.org/GAPublic.nsf/pages/propcasinsurance?OpenDocument Senate Overwhelmingly Approves Terrorism Bill HR 3210On Tuesday November 26, President Bush signed HR 3210 The Terrorism Risk Insurance Act of 2002. HR 3210 was approved by the House and Senate on November 19 with 86 yeas and 11 nays during a late evening session.HR 3210 becoming law is a major victory for both Commercial and Residential Realtors. They both will benefit by the additional reinsurance capacity that the bill will bring to the marketplace. Commercial lending liquidity should be substantially improved as well. It culminates a year of coordinated effort by CCIM Institute, NAR, the Institute of Real Estate Management (IREM) and the Coalition to Insure Against Terrorism (CIAT). The CCIM Institute adopted a statement of policy supporting this issue in November 2001. The new bill will be in force for three years through December 31, 2005. It mandates that property and casualty insurance policies in all 50 states must offer traditional terrorism insurance coverage. It voids all existing property and casualty insurance policy exclusions for traditional terrorism coverage. The new bill will establish a Federal backstop for commercial property and casualty insurers arising from terrorism. Treasury will pay directly to insurers 90 percent of claims after insured losses exceed $10 billion in year 1, $12.5 billion in year 2, and $15 billion in year 3. Treasury will pay until insured losses exceed $100 billion. The new bill will not have a Federal standard for the awarding of punitive damages in terror-related suits brought against property owners. As a result state laws on punitive damages will prevail. It does consolidate terror-related lawsuits in Federal court at both the pre-trial and trial phases. Flood Insurance ReauthorizedThe U.S. House adjourned for the year without reauthorizing the National Flood Insurance Program, which expired December 31, 2002. Due to persistent lobbying by the National Association of REALTORS® and its affiliates, President Bush signed legislation on Monday, Jan. 13 to reauthorize the National Flood Insurance Program, which passed the House and Senate last week. The action makes the program retroactive to Dec. 31, 2003.Federal Tax Policy Reforms – CCIM Task ForceWhile President Bush speaks to the press about reducing the tax on stock dividends and acceleration of income tax cuts, the CCIM Institute, working with NAR and other affiliates, is preparing a ‘wish list’ of tax reforms long needed in the commercial real estate industry. Depreciation and bankruptcy reform as well as capital gains tax reductions are high on the list. Due to the conservative climate predicted in Washington for the 108th Congressional Session, CCIM expects to encounter an unusually and highly receptive audience for its tax policy recommendations.The CCIM Legislative Affairs Committee appointed a Tax Policy Task Force in order to assess and potentially reorganize our tax policy priorities in order to ensure a strong platform when lobbying Congress. Once the Task Force has completed its work this month, a report will be submitted to the Committee for its consideration. If you have any questions or comments for the Task Force, please contact Charles Achilles at cachille@irem.org or at (312) 329-6020. National Energy ReformNational energy reform stalled in conference committee in the Fall 2002 where it expired along with the 107th Congressional session. Republicans, emboldened by hitting the trifecta of control over the House, Senate and White House, will undoubtedly pursue reintroducing energy reform legislation; however, it remains to be seen what components of the 2002 legislation will be incorporated into a rejuvenated package. The CCIM Institute remains committed to ensuring that any package introduced include tax credits for energy efficient properties.Toxic Mold Legislation/Medical Opinion on MoldDuring the 107th Congressional Session, Rep. John Conyers, (D-Michigan), introduced H.R. 5040 the “United States Toxic Mold Safety and Protection Act of 2002”, a far-reaching bill prescribing research, inspection and remediation standards to address the myriad of issues stemming from toxic mold. H.R. 5040 represented Congress’ first crack at federal mold legislation and it will likely be introduced in the 108th Congressional Session.The bill, in effect, would have created a national toxic mold hazard insurance program much like the federal flood insurance program in order to address the burgeoning number of claims against policies for costs related to mold clean-up and health hazards. Careful analysis of the bill’s language revealed several areas of concern. In particular, Sections 201 through 206 addressing inspection requirements for residential properties, building code requirements and construction requirements. H.R. 5040 did prescribe tax credits for toxic mold inspection and remediation; a component that the CCIM Institute will monitor to ensure its inclusion in any legislation introduced in 2003. Also, in toxic mold news, medical opinion continues to weigh in on the lack of credible scientific data regarding adverse health effects from mold. The American College of Occupational and Environmental Medicine (ACOEM) stated these conclusions in an evidence-based statement on "Adverse Human Health Effects Associated With Molds in the Indoor Environment". A team led by Bryan D. Hardin, a former deputy director of NIOSH and Assistant Surgeon General, developed the peer-reviewed statement. While recognizing both the allergic and infectious effects of mold under certain conditions, the statement concludes: "Current scientific evidence does not support the proposition that human health has been adversely impacted by inhaled mycotoxins in home, school, or office environments." Community Choice In Real Estate Act ReintroducedThe Federal Reserve and Treasury have yet to act on their proposed rule (published January 2001) to allow national banks and financial holding companies to engage in real estate brokerage and property management. NAR and IREM have strongly opposed this proposal, and had legislation introduced in 2002 to prevent such a mixing of banking and commerce. The legislation had more than 240 co-sponsors in the House and 15 in the Senate. With the same strong bipartisan support, the legislation was reintroduced on January 7, 2003 for the new 108th Congressional Session. Lead co-sponsors in the House are Representative Ken Calvert (R-Calif) and Paul E. Kanjorski (D-Penn) and the lead co-sponsors in the Senate are Senators Richard Shelby (R-Ala), Wayne Allard (R-Colo) and Hillary Rodham Clinton (D-N.Y.).Homeland Security and Commercial Real EstateThe Institute of Real Estate Management (IREM) will continue to meet with the National Infrastructure Protection Center (NIPC). This department of the Federal Bureau of Investigation (FBI) is the national focal point for gathering information on threats to critical infrastructures. It is the principal means of facilitating and coordinating the federal government's response to an incident, mitigating attacks, investigating threats, and monitoring reconstitution efforts. This organization has developed a number of private sector Information Sharing and Analysis Centers (ISAC). To date, ISACs have been set up with a number of important industries including the electric power industry, telecommunications industry, financial services industry, water supply industry, and the chemical industry. IREM is working to determine if this kind of structure would be appropriate for the commercial real estate industry.Telecommunications State ActivityThe Massachusetts Supreme Judicial Court ruled and announced on December 2. 2002, that Telecommunications providers will not be given access to office and apartment buildings without landlord approval. The decision voids a 2000 State Department of Telecommunications and Energy regulation that was never imposed due to legal pitfalls. The regulation would have classified landlords who own commercial buildings or apartment complexes of five or more units as "utilities" and allowed telecom service providers access to those spaces to serve customers. The court ruled that the department's plans "are not statutorily authorized."The Utah Public Service Commission has received a petition in December, 2002, to expand what network elements are covered by the state's essential facility rules. Specifically, the Commission has been asked to expand the definition of an essential facility to include internal building ducts, wires and closest. The significance of having something designated an essential facility is that all carriers would have access to such a facility. IREM, through the Real Access Alliance, is addressing the petition. CCIM Institute Legislative Staff Chuck Achilles, IREM VP Legislative & Research, 312.329.6020, cachille@irem.org back to the top ^ |