Business Watch

Electric vehicle sales in the United States are forecast to approach 40,000 units by the year 2000, reflecting an 83 percent annual growth rate, according to a recent study by The Freedonia Group, Cleveland. Mandates for zero emission vehicles in New York, California and Massachusetts will drive the increase in sales. These mandates are expected to be implemented beginning in 1998.

Already, electric vehicles have emerged at showrooms in the U.S. General Motors has taken the first step into the market with its EV1 electric car. Other auto makers indicate that they will most likely follow GM’s lead, with several Japanese companies planning to introduce electric cars this year in the U.S.

The EV1 uses a lead-acid battery pack, while the Japanese versions from Honda and Nissan are expected to be powered by nickel-metal hydride and lithium-ion batteries, respectively. Other battery technologies being considered include nickel-cadmium and zinc-air.

While these electric vehicles are less polluting than gasoline-powered models, their affordability, adaptability and integration into society may be tougher than expected. The EV1, for example, is expensive at about $480 to $640 a month leasing cost, and it can only go for about 90 miles before requiring battery re-charging. The vehicle may also have a hard time adapting to much colder climates than southern California – the only region where they are currently offered. And the availability of charging stations and length of charge time are also drawbacks at this point.

MONEY DOESN’T GROW ON TREES, BUT PLASTIC SOON WILL

For years, manufacturers have tried to develop a truly biodegradable plastic, with varying degrees of success. Recently, researchers in the United States, England and South Korea say they have come up with a possible solution – grow the plastic. The goal is to produce a biodegradable polymer by having it produced by special, genetically-altered plants or trees. One company is experimenting with canola and soybean crops, while another firm is working with aspen trees.

Already, at the Carnegie Institute of Washington, Stanford, Calif., scientists have been able to grow plants that produce granules of a biodegradable polyester. Korean researchers say they have also succeeded in experiments with plastic-producing aspen trees, and English scientists have made polymers through the fermentation of microorganisms, a process that can be transferred to plants.

Increasingly, many medium-size regional environmental consulting and contracting companies are consolidating. As these companies merge, the integration of their different insurance programs into one program can present a host of difficulties for the risk manager, insurance broker and underwriter, according to John Beauchamp, managing underwriter for ECS Underwriting Inc., Exton, Pa.

The merging firms first must identify their existing insurance coverages. For environmental firms, that usually means coverage beyond the standard commercial property and casualty coverages to include pollution and/or professional liability coverage. Since many of these coverage forms are drafted by the individual insurer, no two forms are exactly alike. Therefore, these polices must be reviewed carefully to determine that no coverage is lost in transition.

Also, it is not uncommon for one company to have a claims-made casualty program while another has an occurrence program. When moving from a claims-made to an occurrence program, it is important to make sure the carrier provides innovative solutions to prevent coverage gaps, says Beauchamp.

Additionally, as firms merge and grow larger, their insurance buying motivations often change as they realize the need for greater asset protection. Some are looking to purchase limits of liability in excess of $100 million.

SHOULD THE NFL BE TAX-EXEMPT?

There are now 1.2 million non-profit organizations registered in the United States, according to a report by the Newhouse News Service, with about 45,000 new ones being added each year. Of those non-profits, only about half are considered true charities, meaning they not only have tax-exempt status, but contributions to them are tax deductible, too.

To be eligible for 501-C-3 non-profit designation, an organization must operate exclusively for religious, charitable, scientific, literary or educational purposes. Some notable non-profits include the American Red Cross and the Boy Scouts of America.

But not all organizations have to be a charity to be non-profit, and some may be considered a stretch for non-profit status. For instance, the National Football League, the National Rifle Association and C-SPAN are some of the lesser known registered non-profit organizations. These groups are only tax exempt, and donations to them are not tax deductible.

The NFL insists that it only funnels money and does not generate it, qualifying it for non-profit status, and most associations can make that claim. Of note, the NFL itself (not including the teams) currently has 130 employees, requires $47.5 million to run, and its commissioner makes about $3.2 million a year.