Washington Update - 03/21/2006 (Plain Text Version)

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Association Health Plans Advance in Senate

Last week, after more than a decade of debate on the topic and little or no Senate interest, the Senate Health, Education, Labor and Pensions (HELP) Committee took up the issue of whether bona fide trade associations should be allowed to offer health plans to their members across state lines. HELP Committee Chairman Mike Enzi (R-WY) introduced S. 1955, the “Health Insurance Marketplace Modernization Act,” and the bill was approved by the panel on March 15 by a vote of 11-9. NAHB, which has championed association health plan legislation during the past several years, sent a letter to the full HELP Committee prior to the markup supporting the committee’s efforts to address the issue.

The measure, which contains several provisions to address the crisis of the uninsured, including association-sponsored health plans (called “small business health plans” in this version of the legislation), bears some resemblance to legislation (H.R. 525) passed by the House of Representatives in 2005. However, many differences remain between the House and Senate versions on how the plans would operate. NAHB will continue to work with key Senators to refine S. 1955 as it moves to the Senate floor in order to make it economically practical for trade associations to offer association health plans to their members.

The Senate bill is expected to be considered on the Senate floor sometime during the end of April or in early May. Upon passage, it would have to be reconciled with the more widely-supported House bill. Major differences between the two versions could potentially slow down the bill’s progress. To read the Senate legislation, click here and enter S. 1955 in the box at the center of the page, or view the story in Nation’s Building News Online. For additional information, contact Jenna Morgan Hamilton at 800-368-5242, x8407.

NAHB Fights for Property Owners in Flood Insurance Bill

Acting to keep the National Flood Insurance Program (NFIP) solvent, the House Financial Services Committee on March 16 approved H.R. 4973, the “Flood Insurance Reform and Modernization Act of 2006.” The measure would allow the NFIP to borrow up to $25 billion from the U.S. Treasury to pay insurance claims and would make other changes to the program to reduce the need for future borrowing. The Federal Emergency Management Agency (FEMA), which runs the NFIP, estimates it will need $24 billion to pay off claims resulting from the devastating destruction caused last year by Hurricanes Katrina and Rita.

Separate legislation approved by the House and Senate would raise FEMA’s borrowing authority from the Treasury to $20.8 billion, up from the current ceiling of $18.5 billion. The agency has warned that it will exhaust its current borrowing authority in coming weeks and would then be forced to stop payments to flood claimants.

NAHB’s successful lobbying against several amendments during the House panel’s consideration of H.R. 4973 will result in significant savings for millions of property owners. Of particular note, an amendment that would have eliminated subsidized premiums on all NFIP properties was soundly defeated by a vote of 45-10. The Congressional Budget Office estimates that entirely eliminating all subsidies would boost average premiums by about 150%. However, the committee-passed bill does contain a provision to phase-out NFIP subsidies for vacation homes, second homes and commercial properties. To read the House legislation, click here and enter H.R. 4973 in the box at the center of the page; or click here for the story in Nation’s Building News Online. For more information, contact Scott Meyer at x8144. [return to top]

NAFTA Panel Finds No Grounds for Lumber Tariffs

The nation’s home builders on March 20 called on the Bush Administration to rescind punishing tariffs on Canadian lumber imports following a unanimous ruling by a North American Free Trade Agreement panel that Canada does not subsidize its lumber industry. “This marks the sixth time in the past three years that a NAFTA panel has found no justification for the U.S. to be imposing countervailing duties on Canadian lumber shipments into the American marketplace,” said NAHB President David Pressly. “It’s time for the U.S. to honor its legal obligations by eliminating these border taxes that are unnecessarily raising the cost of housing and refunding to Canada the duties that have been collected.”

Currently, there is an 8.7% countervailing duty on Canadian lumber imports and anti-dumping duties average about 2.1%. U.S. law permits countervailing duties to be imposed only if a foreign supplier is benefiting from subsidies and U.S. producers are being injured, or threatened with injury, as a result. On March 17, the NAFTA panel determined that the subsidy is below 1%, which under U.S. law means that the lumber imports are not subject to duties. The U.S. has until April 27 to file an appeal to the decision. Last week’s ruling has no effect on anti-dumping duties of 2.1%. View NAHB’s press release or contact Jason Lynn at x8307 for more information. [return to top]

House Panel Examines Tax-Exempt Bond Financing

The House Ways and Means Subcommittee on Select Revenue Measures held a hearing last week to examine the growth in the use of tax-exempt financing during the last two decades. Specifically, the hearing looked at the relative costs to the federal government from this type of financing, considered whether activities supported by tax-exempt bonds serve a significant public purpose, and scrutinized the ability of regulators to oversee the use of tax-exempt financing. NAHB members use tax-exempt bond financing extensively in both the single-family and multifamily housing sectors. For more information, contact Greg Brown at x8421. [return to top]

Kempthorne Nominated as Interior Secretary

President Bush last week nominated Idaho Gov. Dirk Kempthorne to take over as Secretary of the Interior Department, a choice likely to be approved by the Senate. Senators in both parties predicted a smooth confirmation process for Kempthorne, who served one term as a Republican Senator from Idaho in the mid-1990s. If he is confirmed, Kempthorne could quickly become a major factor in the push to revise the Endangered Species Act (ESA), both in terms of legislation and regulation. Kempthorne was part of a bipartisan coalition that attempted to get an ESA bill out of the Senate in the 105th Congress, and has publicly advocated changes as governor. For more information, contact Jason Lynn at x8307. [return to top]

Rudman Testifies on Fannie Mae

Former U.S. Senator Warren Rudman (R-NH) testified last week before the House Financial Services Committee on the major findings in his recently released report on Fannie Mae's accounting problems. While several committee members attempted to use the hearing as a means to publicly debate various aspects of government-sponsored enterprise (GSE) reform legislation (specifically portfolio limits), Rudman clearly stated at the beginning of his testimony that the issue was beyond the scope of his study. "Those who wish to draw conclusions as to that issue from the contents of our report are obviously free to do so, but that policy issue is well beyond the scope of our inquiry," he said. “We have drawn no conclusions on that issue.”

After the release of the Rudman report last month, NAHB reaffirmed its support for the corrective actions that the current management of Fannie Mae has taken to rebuild the confidence of policymakers and investors while refocusing the company on its housing mission. NAHB also reiterated its support for H.R. 1461, "The Federal Housing Finance Reform Act of 2005," as the best regulatory reform legislative vehicle to ensure the safety and soundness of the GSEs while still enabling them to provide critical financial support for housing. To read the House legislation, click here and enter H.R. 1461 in the box in the center page. For further information, contact Scott Meyer at x8144. [return to top]