Ten-Year TRIA Reauthorization Bill Scheduled for Late-October Markup in House
House Financial Services Committee Chairwoman Maxine Waters (D-CA) formally introduced H.R. 4634 – the Terrorism Risk Insurance Program Reauthorization Act of 2019 – on October 16 and stated it will be part of an October 29-30 full committee markup. (Chairwoman Waters at podium, above). The announcement came before a joint House subcommittee hearing, which focused on the program and a possible fourth reauthorization of the Terrorism Risk Insurance Act (TRIA).
- “We want to reauthorize [the Terrorism Risk Insurance Act] just as it is,” Waters told CQ Roll Call. “We’ve got support from the Senate, that’s what the Senate wants to do. And you know it’s not easy
for both sides to come together.” (CQ, Oct. 16)
- During the Wednesday news conference, Waters stated, “Nearly two decades after TRIA was enacted, TRIA has thankfully never been triggered, and the program is working as intended, effectively protecting our economy from the costs of a
terrorist attack and providing security for many of our nation’s hospitals, stadiums, schools and small businesses.”
- She added, “Without a reauthorization, the program would expire at the end of 2020, but we could experience the harmful effects of a failure to reauthorize as soon as January of 2020. And so, I am pleased to put forth … a bill
that provides a ten-year clean reauthorization of TRIA.” (Committee news release, Oct. 16)
- TRIA has been extended in 2005, 2007 and again in 2015 – following a 12-day lapse when Congress failed to complete their work on reauthorization at the end of 2014.
- A long-term, clean TRIA reauthorization is a top priority for The Real Estate Roundtable. Before the House hearing, the Coalition to Insure Against Terrorism, which includes The Roundtable, wrote to the subcommittees’ leadership in support of H.R. 4634. (CIAT letter, Oct. 16)
- The Roundtable and nearly 350 companies and organizations also urged Congress on September 17 to swiftly pass a long-term TRIA reauthorization. (Roundtable Weekly, Sept. 20)
- House Financial Services Committee Ranking Member Patrick McHenry (R-NC) stated during the Wednesday hearing that Congress should first update TRIA to address cyberterrorism risks. “We've had substantial changes internationally since the last reauthorization. I want to make sure we do the right thing when it comes to cyber threats, and I don’t believe what we have currently in law is sufficient for that,” said McHenry. (CQ, Oct. 16)
- In the Senate, TRIA reauthorization was a focus of a June Banking Committee hearing chaired by Sen. Mike Crapo (R-ID). (Roundtable Weekly, June 21)
- Roundtable President and CEO Jeffrey DeBoer noted during an October 1 podcast episode of “Through The Noise,”, “Businesses and facilities of all types need to see the terrorism risk insurance program extended. This need applies to hospitals, all commercial real estate buildings, educational facilities, sports facilities, NASCAR and theme parks, and really any place where commercial facilities host large numbers of people."
- TRIA will be the focus of an October 30 discussion during The Roundtable’s Fall Meeting with American Property and Casualty Insurance Association President and CEO David Sampson.
Chairwoman Waters stated during the news conference that after the late October committee markup of H.R. 4634, “I am committed to bringing the bill to the floor soon afterward, and I will be exploring vehicles for the bill to be attached to.”
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Roundtable Joins SCOTUS Brief in “Dreamers” Case Emphasizing Need for Immigrant Workers to Fill Essential Real Estate Jobs
The Real Estate Roundtable on October 4 joined an amicus brief filed with the Supreme Court of the United States (SCOTUS), to emphasize the critical need for foreign-born workers to fill labor shortages in construction, hospitality, building maintenance, and other real estate sector jobs.
- The case, Department of Homeland Security v. Regents of the University of California, concerns the Deferred Action for Childhood Arrivals (DACA) program. DACA has allowed nearly 800,000 undocumented young adults brought to the U.S. as children – the “Dreamers” – to apply for work permits and protection from deportation.
- The Obama Administration established DACA in 2012. In 2017, the Trump Administration announced its own directive to end the program – thus priming the matter for SCOTUS’s review.
- The Roundtable’s amicus brief, led by the National Association of Home Builders, also includes the Essential Worker Immigration Coalition, representing members concerned with the shortages of lesser-skilled labor in the U.S. workforce. The brief states, “DACA-eligible immigrants are a crucial component” of real estate jobs, as 41% of them work in industries represented by the amici.
- The brief also explains that foreign-born workers generally are essential to fill labor shortages that constrain the productivity of the real estate workforce. Foreign-born labor accounts for:
- Close to 25% of construction workers, a percentage that has been rising since the Great Recession;
- An estimated 31% of hotel and lodging, and 22% of restaurant workers;
- As much as 25% of workers providing hands-on care to the elderly and people with disabilities; and
- Over 35% of building and grounds cleaning and maintenance occupations.
- The case has attracted numerous other briefs. One brief in support of DACA was filed by a consortium of 140 companies and 18 business associations representing a broad array of industries, including retail, tech, tourism and communications. (The Hill, Oct. 4)
- The consortium brief included participants such as the American Hotel & Lodging Association, Hilton Worldwide, Host Hotels and Resorts, Marriott International, the U.S. Chamber of Commerce, and numerous Silicon Valley firms. “By expanding the opportunities available to DACA recipients, this program has benefitted America’s companies, our Nation’s economy, and all Americans,” their brief says.
Other stakeholders filing briefs to support the DACA program include Apple, Microsoft and the government of Mexico. (CNBC’s Closing Bell, Oct. 2 and The Hill, Oct. 4). Oral argument is scheduled for Nov. 12 and a decision is expected by summer. (ScotusBlog, Sept. 10)
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Volcker Rule Changes Finalized, Easing Banking Restrictions
- The final Rule – expected to enhance liquidity to commercial mortgage-backed securities (CMBS) markets – takes effect on January 1, 2020 with a compliance date of January 1, 2021. (Federal Reserve, Oct. 8)
- Under the revised Rule, firms that do not have significant trading activities will have simplified and streamlined compliance requirements, while firms with significant trading activity will have more stringent compliance requirements. Community banks generally are exempt from the Volcker rule by statute. The revisions continue to prohibit proprietary trading, while providing greater clarity and certainty for activities allowed under the law.
- The final Rule represents the most significant revision to date of the original 2013 Volcker Rule regulations. The Roundtable has long advocated revisions to the Volcker rule, raising concerns about how it could “negatively impact liquidity and capital formation in commercial real estate."
- Real Estate Roundtable President and CEO Jeffrey DeBoer commented on the Volker Rule changes. “This positive action will benefit liquidity and the commercial mortgage backed securities market, potentially increasing investment in job-creating construction activities," DeBoer said. (Roundtable Weekly, June 1, 2018)
- The revisions are expected to make it easier for 'banking entities' to hold and trade CMBS and could enhance market liquidity. Commercial banks and CMBS are two of the top sources of private debt for commercial and multifamily real estate.
The changes were jointly developed by the Federal Reserve Board, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission.
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