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Proposed Louisiana Chinese Drywall Bill Revised, Diverted to Committee

Jun 11, 2009 | Parker Waichman Alonso LLP

A bill in the Louisiana Senate that could provide some financial relief to victims of Chinese drywall in that state has been diverted to a Revenue and Fiscal Affairs Committee.  According to the Associated Press, the move followed revisions to some key components of the Chinese drywall bill.

Homeowners in at least 18 states have complained that fumes from Chinese-made drywall produce a “rotten eggs” odor and cause metals, such as air conditioning coils, to corrode. The fumes have also been associated with respiratory and sinus problems in some residents. According to a recent Wall Street Journal article, the U.S. imported roughly 309 million square feet of drywall from China during the housing boom from 2004 to 2007. In Louisiana, many homeowners who had to be rebuild following Hurricane Katrina have discovered that the tainted drywall was used in their homes.

Last month, the Environmental Protection Agency (EPA) released results of tests it conducted that compared Chinese drywall to American-made material. The tests found sulfur and two organic compounds associated with acrylic paint in the Chinese drywall that were not present in the American wallboard. The agency said more testing is needed to determine if any of the compounds found in the Chinese drywall are responsible for problems reported by homeowners.

As we reported last week, the original version of the Louisiana Chinese drywall bill would have allowed homeowners to sue for 100 percent of their damages, plus attorneys fees from either the manufacturer, distributor, or seller of the contaminated drywall.  Right now, Louisiana law only allows homeowners to be compensated partially by each. Critics had claimed that the litigation allowed under the proposal could bankrupt some businesses.  Others asserted that it isn’t fair to sue those companies who didn’t know the materials they purchased from China were toxic

The bill has now been rewritten to delete the litigation provisions. The new proposal calls for  homeowners with the drywall to be reimbursed by the state, with tax credits for the cost of the drywall, the Associated Press said.

The original Chinese drywall bill had  been approved by the Senate Judiciary committee.   But because of the revisions, it has now been diverted to the Revenue and Fiscal Affairs Committee, which considers all tax bills, the Associated  Press said.