Posted on December 27, 2017
On November 30, 2017, the U.S. House of Representative passed H.R. 3017, the Brownfields Enhancement, Economic Redevelopment and Reauthorization Act of 2017, which would allow up to $250 million annually to clean up brownfield sites during 2018-2022. The legislation, sponsored by Congressman David McKinley (R-WV), seeks to assist communities in restoring the contaminated land to productive use.
Posted on December 19, 2017
Last Friday, House and Senate negotiators came to an agreement on what is sure to be far-reaching reform of our existing tax code. The Tax Cuts and Jobs Act will be voted on this week and is expected to pass and be signed by President Trump.
This legislation, when passed, represents an important victory for NAIOP members and the commercial real estate industry. For many years, the debate surrounding tax reform gave rise to ideas that would have caused long-term damage to our industry, including the elimination of 1031 like-kind exchanges, ending capital gains tax treatment for real estate carried interests, and not allowing deductibility for interest payments on the financing for real estate projects.
The active involvement of NAIOP members and NAIOP's legislative team in this important public policy debate helped shape the final product to ensure that commercial real estate remains a vibrant contributor to our nation's economy. This tax reform legislation will:
Posted on December 8, 2017
NAIOP's legislative team is committed to keeping you informed throughout this historic tax reform legislative process with progress updates and what the legislation means for the commercial real estate development industry.
The Senate has taken a significant step toward achieving comprehensive tax reform by passing its version of the Tax Cuts and Jobs Act. This week, the House and Senate will meet in conference to iron out the differences between the two versions.
Both the Senate and House versions of the bill include matters important to our industry, including:
While the Senate amended its original version to bring it more in line with provisions included in the House bill, several important differences remain, including:
Posted on November 16, 2017
Last Thursday, the Senate Finance Committee released draft tax reform legislation that they will move through committee later this week. The Senate bill was released after the House Ways and Means Committee passed its version of tax reform earlier that day.
The Senate draft differs in some aspects from the initial House version, which NAIOP President and CEO Thomas Bisacquino detailed last week in terms of its impact on the commercial real estate industry. Overall, both bills continue taxing commercial real estate development and investment on an economic basis, recognizing the long-term, capital-intensive nature of the industry.
Importantly, both bills would preserve the use of 1031 exchanges and continue the deductibility of business interest expense for the commercial real estate industry. Both would also lower corporate tax rates to 20 percent. Under the Senate bill, however, the rate reduction would be delayed until 2019. Some other differences of note for commercial real estate include:
Posted on November 3, 2017
House leaders took a significant step forward with tax reform efforts on Thursday with the release of the Tax Cuts and Jobs Act, H.R.1, which includes an expansive set of proposed changes to the corporate and individual tax system.
As promised in my previous messages to you on this topic, our legislative team and I are committed to keeping you informed on tax reform developments affecting the commercial real estate industry. In this proposal:
Starting next Monday, the House Ways & Means Committee will begin marking up the legislation. The president has expressed his desire to accelerate tax reform and sign a bill before the end of the year.
Posted on October 23, 2017
REBIC has put together an Election Guide to help you cast your vote for candidates who support the real estate industry.
Posted on October 9, 2017
Below are some details on the recently released Unified Framework for Fixing Our Broken Tax Code, in which the Trump administration and congressional Republican leadership have outlined chief areas of agreement for tax reform legislation.
While House and Senate GOP leaders and members of President Trump's economic team left many details of the legislation for the tax-writing committees in both chambers to resolve, there are several agreed-upon major provisions of interest to CRE:
We believe that these provisions will spur stronger economic growth and job creation, benefitting our industry in the long term, but many questions remain unanswered.
Posted on October 6, 2017
Lawmakers in the House and Senate say they’re determined to pass a sweeping tax reform bill this year. But first, for procedural reasons, both houses need to pass a Fiscal Year 2018 budget. FY 2018 began on October 1.
Republicans on the Senate Budget Committee released a draft budget that it says would balance within nine years. But committee members haven’t explained where they would find $5 trillion in spending cuts. That draft budget will be voted on by the full Budget Committee this week, then go to the floor of the Senate later this month. The House drafted a budget plan over the summer and plans to hold a vote on Thursday.
After the two chambers come to an agreement on budgetary spending levels, lawmakers would be able to turn to tax reform, which is a key priority for NAIOP. Throughout the year, NAIOP has met with lawmakers and Hill staffers to deliver the message that all federal spending and tax reform bills should protect the interests of the CRE industry.
Posted on September 25, 2017
Lawmakers are focusing their attention on tax reform this month. The Senate Finance Committee will hold a hearing this week to collect testimony about business tax reform proposals. That follows a similar session last week to discuss individual reform.
For his part, House Speaker Paul Ryan promises to release details of a tax reform plan by September 25. “The outline will represent a consensus between the two tax-writing committees in Congress, the House Ways and Means Committee and the Senate Finance Committee, and the Trump administration,” Bloomberg reported.
President Donald Trump says the final tax measure should draw bipartisan support, and he’s met with leading Democrats including Sen. Charles Schumer and House Minority Leader Nancy Pelosi to discuss taxes and other issues. “More and more, we’re trying to work things out together,” Trump said during a meeting with moderates from both parties.
Posted on September 21, 2017
With 24/7 coverage of ongoing global events dominating the news cycle, it's easy to lose sight of what's happening with U.S. legislation critical to our industry.
Tax reform negotiations are imminent: House Speaker Paul Ryan has promised to release an outline of a tax reform plan the week of September 25, followed by negotiations between the House, Senate, and administration.
This is the first major tax reform in more than three decades, and the stakes for commercial real estate are high. We have been closely working with Congress to ensure legislative programs and incentives critical to our industry are carefully considered throughout the negotiation process, including:
Posted on September 12, 2017
On Thursday, September 7, the United States Senate voted to pass a three-month extension of the National Flood Insurance Program (NFIP). The House of Representatives is expected to pass the legislation on Friday, September 8, 2017, and the President is expected to quickly sign the bill into law later in the day.
This legislation ensures that the NFIP will not lapse on September 30, 2017, and will be extended until December 8, 2017.
Source: National Association of Realtors® (NAR)
Posted on September 6, 2017
The future of tax reform remains unclear as Labor Day approaches. However, the White House is indicating it plans to step back and allow lawmakers to take the lead this fall. “The White House does not plan to release its own version of a tax reform plan and will instead leave that to the congressional leadership and the major tax-writing committees,” Politico reports, citing an administration source.
One issue that may be on the table is the current tax treatment of carried interest as capital gains.
During an event in Louisville with Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin hinted the administration might be open to preserving the current status of carried interest for certain activities that result in long-term capital investment and assets. “We will close the loophole for hedge funds in carried interest. What we are focused on is there are many other types of funds that do create jobs and we want to make sure we don’t discourage investment,” he said.
Posted on September 6, 2017
Early Voting Now Underway for Charlotte’s Primary Election! Early Voting is now underway in the City of Charlotte’s September 12th Primary Election, with nine convenient polling sites around town. Click here to find out where and when you can vote. To see which candidates support the priorities of the real estate industry, click here. Completed candidate questionnaires are posted on the REBIC website.
Posted on August 23, 2017
In a press conference last Tuesday, President Donald Trump announced his latest executive order, which addressed infrastructure permitting. Though the event ultimately devolved into a controversial discussion about the tragic events in Charlottesville, the order offers some insight into the administration’s strategy on infrastructure policy.
The executive order, entitled “Establishing Discipline and Accountability in the Environmental Review and Permitting Process for Infrastructure,” is aimed at expediting permitting for infrastructure projects. It broadly tasks federal agencies with proposing ways to reduce average permitting time from the current average of seven years down to two years, and assigns an agency to each future project, placing them in charge of navigating the bureaucratic process. To demonstrate its inherent complexity, Trump unveiled a six-foot long graphic depicting the permitting process at the press conference.
Trump has often spoken of a $1 trillion infrastructure plan, though none has materialized as of yet. His budget request proposed a mix of $200 billion in tax credits and direct funds, but it remains unclear whether this could spur enough private investment to reach $1 trillion. To complicate things further, the president recently announced that he would scrap plans to create an infrastructure advisory panel, which would have allowed the private sector to share input.
Posted August 9, 2017
The House Transportation and Infrastructure Committee last week voted unanimously to advance H.R. 1758, the Brownfields Reauthorization Act of 2017. As its name suggests, the legislation would formally reauthorize the brownfields program for the first time since 2006, when authorization for the program expired. Congress had continued to appropriate funds despite a lack of authorization, but at varying and often decreased levels. Reauthorization provides supporters of brownfields redevelopment efforts with added leverage in future funding fights. H.R. 1758 makes important adjustments to the program, giving states added flexibility in spending brownfields grant funds, and expanding the universe of eligible grant recipients to include non-profit groups.
Administered by the Environmental Protection Agency, the brownfields program assists states in the cleanup and remediation of properties where contamination is suspected. The fear of unknown and potentially exorbitant costs – particularly those stemming from liability – at these sites often forces developers to look elsewhere for new opportunities. As a result, brownfields go untouched, which can depress surrounding property values and deprive local communities of much-needed tax revenue. Remediation of brownfields sites can yield substantial returns on taxpayers’ investment. Since its inception, the brownfields program has created 10 jobs for every redeveloped acre, and has leveraged $18 in private and state development funds for every $1 of taxpayer-funded brownfields grants.
NAIOP joined several other members of the real estate community in support of the bipartisan legislation, and will continue to advocate for reauthorization of and funding for the brownfields program as the bill is considered by the full House of Representatives.
Posted on August 8, 2017
Written by Thomas J. Bisacquino
The world today moves faster than it ever has before. Smartphones provide immediate access to people and information. Retailers deliver with blinding speed, often the same day. But not everything should, or can, be immediate. That’s true in tax policy, and in commercial real estate (CRE).
In the CRE industry, owners and operators often must wait years, even decades, to recoup their investments. Meanwhile, they keep pouring further spending into their properties to keep them up to code and to deliver the perks tenants demand. CRE doesn’t deliver immediate rewards, but forces owners to make the necessary long-term investments that will pay off for them and the economy.
Posted on August 8, 2017
Fulfilling a portion of an executive order by President Donald Trump, the EPA and U.S. Army Corps of Engineers have released a proposal to rescind the Waters of the United States rule that expanded federal jurisdiction under the Clean Water Act.
The proposal (link is external) published in the Federal Register on Thursday, July 28 would nix the 2015 WOTUS rule and reinstate the definition of the streams and wetlands subject to federal oversight under the act that existed prior to its finalization.
The publication of the proposal constitutes the first part of a two-step process to meet the Feb. 28 executive order directing the rule’s review. The second step will be “a separate notice and comment rulemaking that will consider developing a new definition” for the extent of federal jurisdiction under the act, say the EPA and Corps in a pre-publication copy of the proposed rescission.
Posted on July 28, 2017
Republican leaders are trying to pass a budget before the House of Representatives goes on recess at the end of the week. The proposal would “set the stage for a potential $203 billion rollback of financial industry regulations, federal employee benefits, welfare spending and more,” The Washington Post reported.
The bill passed the Budget Committee last week. The GOP calls it “a plan for fiscal responsibility,” and says it would balance the budget without raising taxes or cutting Social Security. However, the plan is facing a tough battle; some parts of it are opposed by House conservatives, other parts by Republican moderates.
The bill aims to do more than set spending priorities. It would also be a stepping stone lawmakers could use in the Senate to avoid a filibuster and advance one of President Donald Trump’s top issues. “This is the tax reform budget,” Ways and Means Chairman Kevin Brady (R-TX) said. “It’s critical that our party in the House comes together to pass this budget.”
Posted on July 14, 2017
Congress returns from their July 4 recess this week, with the Senate consumed by the debate over their version of healthcare legislation meant to repeal and replace the Affordable Care Act. While Senate Majority Leader Mitch McConnell had hoped to pass a healthcare bill prior to the July 4 recess, he will now will try to accomplish that prior to the six-week summer recess beginning in August. Senator McConnell has begun to hint that goal may not be attainable, however, because of divisions within the Republican caucus.
The delay by the Senate on healthcare has prompted Republican leadership to try to fast-track bipartisan legislation, including NAIOP-supported energy legislation governing the development of energy-efficiency codes for commercial buildings. The bill, S. 1460, the Energy and Natural Resources Act of 2017, originally sponsored by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH), could bypass the committee process and go directly to a floor vote. NAIOP worked with Senate staff to include language requiring a rule-making process for industry input, and that codes be economically and technically feasible. The prior Portman-Shaheen bill failed to advance when negotiations stalled in the last Congress.
Having passed their version of a healthcare bill, the House of Representatives plans to continue moving toward comprehensive tax reform legislation. This week, the House Ways and Means Subcommittee on Tax Policy, chaired by Representative Peter Roskam (R-IL), will hold a hearing on July 13 on the impact of tax reform on small business. The hearing will be the third held by the committee as it moves to develop a bill that most anticipate will be ready this September.
Posted on July 10, 2017
With health care legislation moving along, House Speaker Paul Ryan is eager to pivot to tax reform. During a June 20 speech at the National Association of Manufacturers, the speaker discussed the GOP Blueprint for Tax Reform. He said the plan will eliminate certain taxes, including the Alternative Minimum Tax, and vows it will “clear out special-interest carve outs and excessive deductions, and focus on keeping those that make the most sense: home ownership, charitable giving, and retirement savings.” Finally, he promised to use the savings from closing loopholes to decrease tax rates.
For his part, Ways and Means Committee Chairman Kevin Brady says, “What we are hearing from our local businesses is: go bold, go permanent, and go now.”
NAIOP’s government affairs staff meets regularly with lawmakers to discuss tax reform legislation and to voice concerns regarding proposals that could harm the CRE industry. That includes measures that would eliminate or limit real estate like-kind exchanges under Section 1031 of the tax code, and end the capital gains treatment for real estate partnership “carried interests.”
