In April 2009,  Louisiana Senator Mary Landrieu and Florida Senator Bill Nelson introduced the Drywall Safety Act of 2009.  It was briefly discussed on this blog as Sen. Landrieu seemed to suggest that the Act would contemplate aid for homeowners and builders.   Since our discussion some months ago, however, the Act has stopped at its introduction and has not yet gone to vote.

However, other legislative initiatives in Louisiana and nationally have gained some speed.

In the Louisiana legislature, for example, Senator Julie Quinn of Metairie proposed a bill that would allow homeowners to sue the makers, distributors and sellers of defective drywall for damages and attorneys fees.

The liability bill aims to retroactively give homeowners some legal remedy, but many warn that the legislation unfairly targets builders and suppliers, who themselves may be victims:

On YourLawyer.com, Parker Waichman Alonso LLP writes:

The bill is supported by many homeowners in the state, as well as plaintiffs’ attorneys. But many business advocates argue because the bill is retroactive, it could push many businesses into bankruptcy. Others assert that it isn’t fair to sue those companies who didn’t know the materials they purchased from China were toxic.

Fortunately for those in the drywall supply chain, the bill was sent back to committee.  Instead, the Legislature adopted House Concurrent Resolution No. 185, authored by Representative Tim Burns.

The resolution requests that the Department of Health and Hospitals, Department of Insurance and Louisiana State Board of Contractors all work together to study the effects of defective drywall in Louisiana, and report back to the legislature prior to the 2010 regular session [read resolution text].

Nationally, three United States senators have recently petitioned the IRS to interpret  165(h) of the tax code, which allows taxpayers to deduct casualty losses, to apply to losses from Chinese Drywall.

As the Bernaird Law Firm states on their blog, the measure would be:

[a] very practical way to assist those people who have often been forced to move if not simply suffer through the health issues relating to Chinese drywall, one can only hope the IRS takes this initiative and runs with it.

While legislatures are aware of the problems and are thinking of possible solutions, homeowners and property owners with Chinese Drywall are still left in the balance, currently without remedies.

As reported by the Wall Street Journal and other news agencies, Louisiana Senator Mary Landrieu has joined Florida Senator Bill Nelson to propose legislation “aimed at initiating a recall and imposing an immediate ban on defective building products from China.”  The bill is the latest effort by agencies and legislatures to address problems caused by imported drywall.

The bill – aptly titled the Drywall Safety Act of 2009 – is summarized in a press release from Mary Landrieu’s office as follows:

The centerpiece of their legislation is a resolution pressing the Consumer Product Safety Commission (CPSC) for a recall on Chinese-made drywall, based in part on findings by a Florida homebuilder and state officials who have confirmed the presence of sulfide gases in homes built with the drywall. The Nelson-Landrieu legislation also asks the CPSC to work with federal testing labs and the Environmental Protection Agency to determine the level of hazard posed by certain chemicals and as yet unidentified organic compounds in the drywall. In addition, the legislation calls on the commission to issue an interim ban on imports until it can review federal drywall safety standards to ensure that consumers are protected in the future.

Rather than regurgitate the news, however, we wanted to comment on two things exposed in Sen. Landrieu’s press release.

1. That behind Florida, Louisiana is the second largest recipient of Chinese Drywall.  This is a bit of a revealing fact for builders in Louisiana who were a bit unsure of how likely it was that they encountered imported drywall.    The press release confirms that “Louisiana has received 60.2 million pounds of imported Chinese drywall, and it may have been used in an estimated 7,000 homes in Louisiana.”
2. That the federal government is not only interested in aiding homeowners, but has builders on its mind as well.    Sen. Landrieu’s very quote strikes at the heart of contractors’ concerns, stating “”This defective Chinese drywall represents an attack on our homeowners, a defrauding of our homebuilders and another obstacle on our road to recovery.”    While the legislation doesn’t provide any specific relief for homebuilders, the press release seems to consider the homebuilders as victims to the contamination as well, and hope that the bill will “provide clarity to businesses in the construction and homebuilding sectors.”

Good news that homebuilders are not off the federal government’s radar, but cautious news as well – since the primary focus is on the homeowners, and the government is looking for a remedy that doesn’t burden the U.S. taxpayer.

Check out this video from a Florida new-station, who landed an interview with Florida Sen Nelson: