Why it Matters: Due to expire at the end of 2014, TRIA is critical to securing financing in commercial real estate; without it, property values may drop and construction and development may stall. Get up to speed on this important issue by reading these Talking Points from NAR’s Government Affairs Team.
Congressional Action Needed:
Lawmakers need to act quickly to reauthorize the Terrorism Risk Insurance Act (TRIA) of 2002, before it expires at the end of 2014. Terrorism risk insurance is critical to securing financial in commercial real estate; without it property values may drop and construction and development may stall. The federal backstop set up by TRIA has, for the past twelve years, ensured that terrorism risk insurance is widely available and affordable at virtually no cost to taxpayers, and the reauthorization measure should not make big changes to a program which works.
Congressional Actions to Date:
- Several hearings focused on the TRIA program and its future have been held by the House Financial Services Committee and the Senate Banking Committee during the 113th Congress.
- In April 2014, Senator Schumer (D-NY) introduced S. 2244, the Terrorism Risk Insurance Program Reauthorization Act of 2014, which would renew the program for seven years and raise the mandatory recoupment amount from $27.5 to $37.5 billion. The Senate Banking Committee held a markup hearing on the bill in June, and it was unanimously approved by Committee members.
- Several renewal measures have been introduced in the House, including Rep. Neugebauer’s (R-TX) bill, H.R. 4871, the TRIA Reform Act of 2014, which would renew the program for five years. It makes several changes to TRIA, including raising the level of aggregate losses required before the federal government expends any money (the “trigger” amount at which point the TRIA program engages) from $100 million to $500 million, create a small-insurer opt-out provision and bifurcate the treatment of “conventional” terrorism attacks and nuclear biological chemical and radiological (NBCR) attacks. H.R. 4871 was marked up by the House Financial Services Committee in June and was approved by a party-line vote of 32-27.
- In July, the Senate voted to approve S. 2244 by a vote of 93-4.
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By: Talking Point (National Association of REALTORS®)
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