Roundtable Weekly - Sept 27

Policy Landscape

Congress Passes Government Funding Through November 21; President Trump Expected to Sign

U.S. Capitol

A “Continuing Resolution” (CR) to fund the government at current levels through November 21 was approved by the Senate yesterday after House passage last week, sending the stopgap measure to President Trump for his signature. 

  • A senior White House official said President Trump will sign the CR, which avoids the threat of a government shutdown on October 1, the start of the government’s fiscal year.  The measure includes funding for programs of importance to commercial real estate, including the EB-5 Immigrant Investor Regional Center Program and National Flood Insurance Program.  (BGov, Sept. 26 and Roll Call, Sept. 23)

  • The CR gives lawmakers more time to negotiate spending levels and policy differences, since none of the 12 annual discretionary spending bills have been signed into law yet.  One of the most contentious issues in the appropriations process is funding for a wall on the southern border, which is overseen by the Department of Homeland Security.  Disagreements over wall funding led to the historic 35-day partial government shutdown in 2018–2019. (Politico, Jan. 25)

  • President Trump’s request for $5 billion for a southern border wall resulted in Democrats proposing an amendment in the Senate Appropriations Committee on Thursday to block the funds.  (Washington Post, Sept. 26)

  • Senate Appropriations Chairman Richard C. Shelby (R-AL) said, “As we close out this month, I think, we must acknowledge the progress we have made while also recognizing that we still have a long way to go in fulfilling our duty to fund the government.  Most importantly for those negotiations to end in success ... my Democratic colleagues and the president will have to reach an agreement, once again, on border security."

  • The appropriations dispute exists despite an agreement over the summer between Congress and the administration on a broad deal that allocated more than $2.7 trillion in discretionary federal spending over two years and suspended the debt ceiling until July 2021.  (Roundtable Weekly, Aug. 2)

Congress will return from a two-week recess on Oct. 15 to face the Nov. 21 funding deadline, or the prospect of another partial government shutdown.   The tight timeframe poses the possibility of more stopgap measures if differences over funding levels cannot be resolved.  Another scenario is the prospect of a full-year CR.  (CQ and Politico, Sept. 26)

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Energy Policy

Senate Committee Advances Portman-Shaheen Energy Efficiency Bill

Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH)

The Senate Energy and Natural Resources (ENR) Committee passed a bill on Wednesday that emphasizes voluntary measures and incentives to drive energy efficiency improvements in U.S. buildings, manufacturing, and other economic sectors. 

  • The Energy Savings and Industrial Competitiveness (ESIC) Act (S. 2137)sponsored by Senators Rob Portman (R-OH), above left, and Jeanne Shaheen (D-NH), right, and long endorsed by The Real Estate Roundtable – was advanced by the panel, along with several other energy bills.

  • Senator Lisa Murkwoski (R-AK), chairman of the ENR Committee, noted during the hearing, “For several Congresses now, [S. 2137] has been the Senate’s flagship effort on energy efficiency.  I’m hopeful that we are going to be able to see this into law.”

  • The ESIC Act passed the committee by a substantial margin (14-6), although provisions regarding voluntary building energy codes failed to garner a majority of Republican votes.  Murkowski added that the codes sections still needed more work to gain fuller bipartisan support.  She was optimistic that the “prevailing concerns” of industry stakeholders could be resolved.  (Committee video, Sept. 25)

  • The ESIC Act would improve current laws by adding “open government” and transparency provisions that do not currently apply to the development of building energy codes.  Real estate and other stakeholders would be provided a platform to comment on DOE code proposals affecting the industry. The measure also includes a new requirement that would compel the U.S. Department of Energy (DOE) to consider costs and small business impacts as part of the codes development process.  (Roundtable support letter for S. 2137)

  • S. 2137 would also direct the two federal agencies that separately collect critical nationwide data on building energy use – namely, the Energy Information Administration and the Environmental Protection Agency – to coordinate on their respective programs and take steps to ensure higher quality, more consistent data.

  • The ESIC Act “is exactly the kind of smart, forward-looking policy that will help building owners respond to our modern, evolving economy” Roundtable President and CEO Jeffrey DeBoer stated in a Senate news release upon the bill’s introduction this summer.  (Roundtable Weekly, July 19) (Video of DeBoer’s statement)

Further negotiations to refine the ESIC Act are anticipated in the coming weeks before it might advance to the full Senate for a vote.  Companion legislation is pending in the House (H.R. 3962), sponsored by Peter Welch (D-VT) and David McKinley (R-WV).

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Cannabis

House Passes Legislation to Permit Banking Services for Legal Cannabis-Related Businesses

Jeffrey DeBoer, Real Estate Roundtable President and CEO

Real Estate Roundtable President and CEO Jeffrey DeBoer

The House of Representatives on Sept. 11 passed the Secure and Fair Enforcement (SAFE) Banking Act [H.R. 1595 (116)] – a Roundtable-supported bill that would allow federally regulated banks to provide mortgage and financial services to state-licensed, cannabis-related businesses (“CRBs”) without the threat of federal penalties. (Wall Street Journal, Sept. 25)

  • The SAFE Banking Act would also provide protection from the threat of federal enforcement action for real estate owners, law firms and other businesses that provide services to state-approved CRBs.

  • The bill – authored by Reps. Ed Perlmutter (D-CO) and Denny Heck (D-WA) and cosponsored by Reps. Steve Stivers (R-OH) and Warren Davidson (R-OH) – passed by a vote of 321 to 103.

  • Today, 47 states, four U.S. territories, and the District of Columbia – representing 97.7 % of the U.S. population – have legalized some form of recreational or medical marijuana, including CBD oil.  (Rep. Perlmutter news release, Sept. 25)

  • Rep. Perlmutter stated, “Thousands of employees, businesses and communities across this country have been forced to deal in piles of cash because of the conflict between state and federal law. After six years of working on this bill, the SAFE Banking Act will go a long way in getting cash off our streets and providing certainty so financial institutions can work with cannabis businesses and employees.” 

  • The Real Estate Roundtable sent a letter urging swift enactment of SAFE Act in March to the leadership of the House Financial Services and Judiciary Committees.  Roundtable President and CEO Jeffrey DeBoer noted in the letter, “H.R. 1595 clarifies that banks could not take adverse action on a loan to a real estate owner solely because that owner leases property to a legitimate CRB.  The measure also protects sellers and lessors of real estate and other CRB ‘service providers’ by clarifying that proceeds from legitimate marijuana-related transactions do not derive from unlawful activity, and thus do not provide a predicate for federal criminal money laundering.” (Roundtable letter, March 25, 2019)

  • In the Senate, the Banking, Housing and Urban Affairs Committee in July held a hearing on the banking-related challenges faced by CRBs.  The hearing featured testimony by Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR), co-sponsors of the SAFE Banking Act (S. 1200). 

  • Sen. Gardner stated on Wednesday, “The conflicting federal and state marijuana laws make it difficult for legitimate businesses to use basic financial services, and this bipartisan legislation gets Washington out of the way and gives them the access they need to do business and pay taxes. Today’s historic action in the people’s House adds to the momentum the SAFE Banking Act gained following the Banking Committee’s hearing in July. The Senate should move forward with the SAFE Banking Act and deliver it to the President for his signature.” (Gardner news release, Sept. 25)

  • In an interview with Politico, Senate Banking Chairman Mike Crapo (R-ID) said, “"This is an issue in which I have seen strong support not only across the country from various banking institutions, even the small community banks in states that don't have the issue, but also among colleagues on both sides of the aisle," he said. "I think there will be good support for it."  (Politico, Sept. 27)

  • Sen. Crapo also said he may consider new additions to a Senate cannabis banking bill that could include anti-money laundering measures. 

Amendments were added to the House SAFE Banking Act to make it more appealing to Senate leadership, yet prospects for the bill’s passage in the Senate remain uncertain.  (MarketWatch and Politico, Sept 26)

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