NAHB lobbyists report that the two senators are close to an agreement and Dodd said he was “optimistic” a deal could be reached when the panel reconvenes next week. As originally drafted, taxpayers would be liable if new loans insured by the FHA to help struggling home owners went into default. Shelby objected to risking taxpayer money and the two senators reached an understanding where taxpayers would no longer be liable. Under a compromise plan, government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac would be required to use money from a proposed affordable housing trust fund to pay for the FHA rescue plan.

Final details still must be resolved. Differences also remain regarding specific legislative language on the ability of the GSE regulator to limit the size of Fannie’s and Freddie’s retained mortgage portfolios. Also of note, the legislation would permanently raise the conforming loan limit to $625,000, which would make housing finance more affordable in high-cost markets.

Prior to committee consideration, NAHB sent a letter to members of the Banking Committee urging passage of the bill. NAHB continues to monitor the situation closely and will work with committee members to ensure that the association’s priorities on GSE portfolio and capital requirements are addressed.

Dodd’s bill is one part of the housing package and only includes FHA rescue and GSE reform. The full Senate last month passed a housing stimulus tax package and FHA modernization. All of these elements are included in legislation approved by the House on May 8. At this point, it is still uncertain whether House and Senate negotiators will ultimately consider one giant housing package or choose to move it in pieces. For more information, contact Scott Meyer at 800-368-5242, x8144.

• Retains the wind provisions.
• Does not mandate flood insurance for home owners who reside behind flood control structures such as dams or levees, because the benefits of such compulsory coverage outweigh the costs.
• Increases the program’s coverage limits.
• Forgives the flood program’s $17.5 billion debt. The nearly $1 billion in interest payments that the Federal Emergency Management Agency must pay the Treasury each year to service that debt is raising the cost of insurance premiums and threatening the program’s viability.

For more information, contact Scott Meyer at  800-368-5242 x8144. [return to top]

NAHB does not take a position on the overall Farm Bill, but within the legislation are two provisions that impact NAHB members.

The first provision included in the package is a bill called the Illegal Logging Act, which aims to decrease the occurrences of illegal logging around the world by putting greater penalties and restrictions on U.S. importers who knowingly import illegally logged wood and wood products.  The original legislation would have held anyone in the chain of custody of a wood product accountable for its potentially illegal origin.  NAHB opposed this provision, arguing that builders should not be held liable for the origins of a wood product when they would have no way of knowing whether that product—or a component in that product—was once logged illegally in a forest somewhere in the world.  Specifically, the scope of the original language could have held a builder accountable if the wood used as shelves in kitchen cabinets originally came from a tree that was logged illegally in Russia two years before. 

After much wrangling with the environmental community and U.S. Department of Justice,  the language was eventually altered to provide for an “innocent owner” defense for those in the chain of custody who legitimately had no way of knowing the product’s origin.  Efforts to amend this language were spearheaded by Chairman Nick Rahall (D-W.Va.) of the House Resources Committee, and Senator Ron Wyden (D-Ore.), both of whom agreed that the scope should not extend to those who have no knowledge of the product’s origin.

The second provision included in the Farm Bill conference report was a sudden addition at the end of conference negotiations of a new softwood lumber import regime that has the potential to hinder the importation of softwood framing lumber from Canada.  This provision was included in the report by Senate Finance Committee Chairman Max Baucus (D-Mont.) at the behest of a few U.S. timber producers represented by the Coalition for Fair Lumber Imports (CFLI).  This coalition has long sought to block the importation of softwood lumber from Canada, which amounts to about one-third of the framing lumber used in the United States each year. 

The new import regime was not a part of either of the original House or Senate versions of the Farm Bill, and the language was also opposed by the Administration.  The program would require the creation of a new information and declaration system for every shipment of softwood lumber coming into the United States from Canada.  It would also create a new series of audit and report requirements that appear to be designed to ultimately delay shipments into the United States.  All of these requirements would be placed on top of those already contained within the Softwood Lumber Agreement that was agreed to by the U.S. and Canada in late-2006.

While NAHB members are not importers of record, and thus would not be required to do the paperwork, audits and reports associated with this new program, NAHB was concerned that the outcome of the program will be to hinder supply coming across the border, potentially leading to instability and price spikes for SPF framing lumber.  Thus, this program would become more of a concern for our members as the building industry picks up steam over the next couple of years. 

NAHB communicated its strong objections to the language to several key allies on the Hill, who attempted to craft a strategy to strip the language from the bill, only to be thwarted by the parliamentarian’s office who ruled, not surprisingly, that the Finance Committee chairman’s language would be considered germane even though it had never originally appeared in either of the House or Senate-approved versions of the legislation.  NAHB is continuing to work with allies, and to communicate our concerns to the Administration, the Canadian Embassy in Washington and the Canadian forest products industry in the hopes of ensuring that this new program, once in place, does not lead to the market disruptions it appears these few U.S. producers are seeking to create. For more information, contact Jenna Hamilton at 800-368-5242, x8407.
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