RPPT Bulletin


November 2004

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Please send your comments about this issue to: rppt-comments@mail.abanet.org

The RPPT Bulletin is emailed out on a bi-monthly basis to all Section members to keep members up-to-date on the activities of the Section.

Gatekeeper Initiative

On November 17, 2004, members of the Section’s Gate keeper Task Force, along with Section Vice Chair Kevin Shepherd, will be traveling to Washington DC to participate with representatives of ACTEC and ACREL in a meeting with lawyers from the Department of Treasury. The meeting has been scheduled to afford these three organizations an opportunity to engage in a dialogue with Treasury concerning the role of lawyers in the international fight against money laundering that is being waged under the Gatekeeper Initiative. Promptly after this meeting, the Section’s attendees will provide an update to the Section’s leadership on the results of the meeting.

Uniform Assignment of Rents Act

The drafting committee appointed by the National Conference of Commissioners on Uniform State Laws ("NCCUSL") is in the final drafting stages of the Uniform Assignment of Rents Act. The Section (and the ABA) is represented on the drafting committee by Ira J. Waldman of Los Angeles, California. The drafting committee was formed based on a recommendation of the Joint Editorial Board for Uniform Real Property Acts, on which Board Shannon Skinner of Seattle, Washington and Raymond J. Werner of Chicago, Illinois represent the Section. The purpose of the act is to provide some uniformity to the law surrounding the granting of a security interest in rents generated by income producing property, the perfection of such security interests and the enforcement of such security interests. The issues that generate the most discussion involve the definition of rents, priorities involving security interests in rents and the cash proceeds of rents, and the extent to which the holder of a security interest in rents who enforces the security interest and collects the rents must utilize the rents for property preservation purposes or otherwise in accordance with the terms of the leases. The drafting committee is meeting on October 29 through 31 and comments may be provided to Mr. Waldman at iwaldman@coxcastle.com. The latest draft of the Uniform Act may be found at http://www.law.upenn.edu/bll/ulc/maripp/Oct2004MtgDraft.htm.

NCCUSL Adopts Uniform Residential Mortgage Satisfaction Act

At its August 2004 Annual Meeting in Portland, Oregon, the National Conference of Commissioners on Uniform State Laws (“NCCUSL”) approved the Uniform Residential Mortgage Satisfaction Act (the "Act"). The Act provides a comprehensive framework to govern the payoff and release of mortgage loans secured by residential real property. The fundamental purpose of the Act is to create a realistic and uniform framework within which responsible mortgage lenders can satisfy their responsibility to record timely releases, while also protecting the reasonable expectations of mortgage borrowers. For a copy of the Act, please visit NCCUSL’s web site at www.nccusl.org/Update.

EPA Proposes Federal Rule Outlining “All Appropriate Inquiries” Requirements under CERCLA

The Environmental Protection Agency (“EPA”) has proposed a federal rule outlining the practices necessary to meet the “all appropriate inquiries” requirement of Section 101(35)(B) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”). The proposed rule would most directly affect persons purchasing commercial property and subsequently seeking to qualify for (1) the innocent landowner defense of CERCLA Sections 101(35) and 107(b)(3); (2) the bona fide prospective purchaser liability protection pursuant to CERCLA Sections 101(40) and 107(r); or (3) the contiguous property owner liability protection pursuant to CERCLA Section 107(q). The proposed rule would also affect persons conducting site characterization and assessments with the use of a brownfield grant awarded under CERCLA Section 104(k)(2)(B). The proposed practices necessary to meet the “all appropriate inquiries” requirement include conducting the specific investigations contained in the rule, including an inquiry by an environmental professional, to identify conditions indicative of releases or threatened releases of hazardous substances. The proposed rule does not, however, limit or expand disclosure obligations under federal, state or local law. The comment period for the rule ended October 25, 2004.

Important Notice Regarding Reprinting of Real Estate Opinion Guidelines

The Summer 2003 issue of the Real Property, Probate and Trust Journal included an outstanding article on Real Estate Opinion Letter Guidelines co-authored by The American College of Real Estate Lawyers Attorneys’ Opinion Committee and our Section’s Committee on Legal Opinions in Real Estate Transactions. The Section recognizes the value of these Guidelines to our members and practitioners generally and realizes that they will be reprinted and used as models for opinion writing as well as for training and other purposes. However, because the ABA has agreed not to require the payment of royalties when the Guidelines are reprinted, it is essential that proper attribution be given to the ABA by including the following legend on the first page of all reprints: “Reprinted by permission from Real Property, Probate and Trust Journal, Vol. 38, No. 2, Summer 2003, Copyright 2003, American Bar Association”.

Response to Senate Committee on Finance on Proposed Changes Addressing Abuses in the Nonprofit Section

In June Senator Grassley, as Chairman of the Senate Committee on Finance, held hearings highlighting recent abuses by individuals and organizations operating in the nonprofit sector. At the same time, the Committee issued a “discussion draft” proposing a wide array of changes aimed at curbing these abuses. The proposed changes fall into three categories: amending the tax code to target and eliminate abusive actions by nonprofits and individuals, increasing disclosure to and enforcement by the IRS, and encouraging strong governance and best practices by nonprofit organizations. Proposals in the discussion draft include requiring nonprofits to file with the IRS every 5 years in order for the IRS to determine whether tax-exempt status should be retained, putting restrictions on donor advised funds, applying some private foundation self-dealing rules to public charities, improving the accuracy and timeliness of Form 990’s (including requiring independent audits) and improving communication between the IRS and state government officials that regulate nonprofits. In July the Committee held a roundtable discussion at which key individuals and organizations commented and presented white papers responding to the discussion draft. In general, these responses recognized the need for reform, but expressed concern that some of the proposed reforms were too broad or were unworkable because of lack of funding, personnel, or expertise for implementation and oversight. In follow-up to the roundtable discussion, the Committee recently asked the nonprofit sector to work together to propose its own suggestions for legislative action to help curb abuses in the sector.

The Section’s Committee on Organizational and Operational Issues of Exempt Organizations has prepared a draft response to the issues raised at the hearings and in the discussion draft. This draft response will be discussed and refined by the members of the Section’s Probate and Trust Division at the upcoming Leadership Meeting in Tampa.

Proposed Uniform Power of Attorney Act has First Reading

The proposed draft of the Revised Uniform Durable Power of Attorney Act was considered for a first reading before the National Conference of Commissioners on Uniform State Laws in August. Comments from Commissioners and other interested persons were considered by the drafting committee in October to produce a revised draft. The latest draft of the proposed Act, tentatively renamed the Uniform Power of Attorney Act, will be available for review and discussion at the RPPT fall leadership meeting in Tampa as well as on the Section web site. Significant enhancements in the proposed Act include a statutory presumption of durability for all powers of attorney and greater specificity in provisions concerning the conduct of agents and the acceptance of an agent’s authority by other persons. To facilitate ease and certainty in drafting, the proposed Act contains statutorily defined powers that can be incorporated by reference in an individually drafted power of attorney or selected for inclusion on a statutory short form. The Act also offers protection against unintended dissipation of a principal’s property or alteration of the principal’s estate plan by requiring a specific grant of authority for such powers as making gifts, making or changing beneficiary and survivorship designations, and revoking or creating a trust with the principal’s property. Anyone who wishes to offer comments or suggestions on the proposed Act is encouraged to contact Linda Whitton (Linda.whitton@valpo.edu), Reporter for the Act, Bill Lapiana (wlapiana@nyls.edu), ABA Advisor to the Act, or Abigail Kampmann (agkampmann@estplanning.com), Section Advisor to the Act.

National Health Care Decisions Week Initiative Celebrates Five Years of Public Education

The week of October 17th marked the fifth annual National Health Care Decisions Week sponsored by the Section. This initiative to increase public education about planning for end-of-life health care decisions and organ and tissue donation is a collaboration of the Section, the Health Resources and Services Administration of the US Department of Health and Human Services, the American Medical Association, the National Bar Association, the National Medical Association, and numerous other ABA Sections. Since the inception of the program by the Section in 2000, over 90 bar associations, representing 27 states, the District of Columbia, and the Virgin Islands, have sponsored more than 200 programs for over 10,000 participants. Surveys distributed to program participants confirm that the majority of individuals who have not planned for end-of-life health care decisions desire to do so once they receive education about the topic and access to assistance with preparation of the documentation. In the first four years of the program, lawyers donated an estimated 3,370 hours to provide this public education.

Resolution of Interest Passed at House of Delegates Meeting in Atlanta

Several resolutions of general and particular interest to Section members were adopted by the ABA House of Delegates at the 126th Annual Meeting of the ABA held in Atlanta in August, 2004. Among those were:

Adoption of a resolution condemning any use of torture or other cruel, inhuman or degrading treatment or punishment upon persons within the custody or under the physical control of the United States government and any endorsement or authorization of such measures by government lawyers, officials and agents.

Endorsement of a report urging Congress to reduce the federal tax burdens and compliance costs attributable to the Alternative Minimum Tax (AMT) on individuals by repealing the individual AMT, or, if repeal is not feasible, modifying the AMT in a manner consistent with its original purpose. The proponents emphasized the need for simplification and argued that the AMT is bad tax policy.

Draft Uniform Management of Institutional Funds Act

The Drafting Committee for revision of the Uniform Management of Institutional Funds Act (UMIFA) last met in August 2004. The Committee decided at that meeting to defer presenting the Act for final approval at the annual August 2004 meeting of the National Conference of Commissioners on Uniform State Laws. The decision to defer was based in part on requests from the Real Property Probate and Trust Section of the ABA and the Trust Council Committee of the American Banking Association, to permit those groups to provide more input on the draft. The Committee will meet on December 3-5, 2004 in Chicago, and this is a critical opportunity to raise concerns about the draft. NCCUSL welcomes the attendance of observers at the meeting and also distributes written comments to all members of the Committee. If you have comments or would like to attend the meeting, please contact Carol Kroch (ckroch@rwjf.org), the ABA Advisor, or Susan Gary (sgary@law.uoregon.edu), the Reporter for the Act. NCCUSL also maintains a web site, www.nccusl.org, which has extensive detail about the drafting process. The most recent draft, dated August 25, 2004, and the Reporter's cover memo are available on the site, http://www.abanet.org/rppt/2004.

(Note: The report will be available at this link until 12/31/04)

UPCOMING EVENTS

November 18, 2004
Automatic Rollovers Update
Teleconference

December 2, 2004
Federal Securities Law Basics & Update
Teleconference

April 28 - May 1, 2005
Spring CLE & Council Meeting

Park Hyatt/ Fairmont
Washington, DC

 

 

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