U.S. Rep. Shelley Berkeley (D-Nev.) and ICSC president and CEO Michael Kercheval met in late July as Berkeley introduced the Community Recovery and Enhancement Act to Congress

The International Council of Shopping Centers (ICSC) is leading a charge to get Congress to enact legislation that would encourage more rapid workouts of distressed loans. In late July, Congresswoman Shelley Berkeley (D-Nev.) introduced H.R. 5943, the “Community Recovery and Enhancement Act of 2010”.

The bill has been referred to the House Ways and Means Committee. It has drawn two co-sponsors — Devin Nunes (R-Calif.) and Joseph Crowley (D-N.Y.). A companion bill has not yet been introduced to the Senate.

The bill is designed to encourage third parties to inject equity into situations where a borrower is under water on the mortgage. If passed, the bill would provide a tax benefit in the form of 50% bonus depreciation on the amount invested into a distressed debt situation. The new investor would obtain a minority stake in the center and a preferred cashflow position on future income.

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