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The Treasury Department Treasury yesterday issued proposed regulations to comprehensively implement the Foreign Investment Risk Review Modernization Act of 2018 (FIRRMA), which seeks to more closely scrutinize certain investments and real estate transactions potentially affecting national security.

The Roundtable on August 21 wrote to Treasury Secretary Steven Mnuchin requesting regulatory relief from existing tax accounting rules that unfairly accelerate federal income tax liability for new condominium construction. • Current condo tax accounting rules require multifamily developers of condominium buildings with five or more residential units to recognize income and pay tax on their expected profit as construction is ongoing — well before pre-sale transactions are closed and full payment is due from the buyer. The existing rules create a mismatch of cash flow and tax liability. Home builders of single-family homes, townhouses and row houses are not subject to this accounting rule restriction.

California lawmakers passed legislation (AB 1482) September 11 that imposes a statewide cap limiting annual rent increases to 5% after inflation – the latest measure from a growing list of jurisdictions seeking to address housing affordability though rent regulations. California Governor Gavin Newsom (D) has said he will sign the bill. (New York Times, Sept. 11 and NMHC, Sept. 12) • In a state of nearly 40 million people, California’s rent control measure could affect an estimated 8 million residents of rental homes and apartments. (Realtor Magazine, Sept. 12). The 5% rent increase cap would not apply to housing built within the last 15 years or to single-family homes that are not corporate-owned.

The Senate’s Energy Subcommittee on Wednesday held a hearing that considered bipartisan legislation that would help further advance energy efficiency in U.S. buildings without federal regulations but through data-driven, voluntary measures. • The Senate panel assessed the Energy Savings and Industrial Competiveness (ESIC) Act (S. 2137), co-sponsored by Senators Rob Portman (R-OH) and Jeanne Shaheen (D-NH), along with nine other energy policy bills at the subcommittee’s Wednesday hearing. The Roundtable is a strong supporter of the Portman-Shaheen bill

On Thursday, Senate Finance Committee Ranking Member Ron Wyden (D-OR) presented and released a detailed white paper outlining his plan to reform the taxation of capital gains. (News Conference Video, Center for American Progress Action Fund, Sept. 12) • Entitled “Treat Wealth Like Wages,” the proposal is billed by the top Democratic tax-writer in the Senate as “a plan to fix our broken tax code, ensure the wealthy pay their fair share, and protect Social Security.” Sen. Wyden’s proposal would end the preferred tax rate for capital gains and impose annual mark-to-market taxation of capital assets for taxpayers above certain income thresholds.

The Senate Banking Committee's September 10 hearing on "Housing Finance Reform: Next Steps" focused on the Trump Administration's efforts to reform the U.S. housing finance system, including their proposal to overhaul the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac. Treasury Secretary Steven Mnuchin testified before the committee about the Administration's Housing Reform Plan released last week to revamp and recapitalize the GSEs before releasing them from conservatorship. The Administration’s goal is to reduce the federal government’s footprint in housing finance, increase the role of the private sector and private capital in the market and, eventually, return Fannie Mae and Freddie Mac to private shareholder ownership. Mnuchin testified that if Congress fails to act, the Administration will pursue an agreement with the GSEs' regulator, the Federal Housing Finance Agency (FHFA) to change the terms of the government's bailout agreements reached 11 years ago.

Lawmakers returned to Washington this week for their post-election “lame duck” session, facing a Dec. 7 government funding deadline that threatens a partial government shutdown.

Roundtable's DeBoer Comments on Energy Efficiency Bill at Senators Portman, Shaheen News Conference

Commercial real estate industry leaders continue to see balanced and stable economic market conditions, according to The Real Estate Roundtable's 2019 Q3 Sentiment Index released today.

A bipartisan group of Senate Finance Committee policymakers this week recommended the tax deduction for energy efficient commercial buildings (section 179D) should become a permanent provision in the federal tax code.

The Senate Committee on Commerce, Science and Transportation on July 24 overwhelmingly passed S. 2203 , the Brand USA Extension Act to reauthorize the organization that promotes the U.S. globally as a travel destination.

The Senate Environment and Public Works Committee (EPW) unanimously approved a bill on Tuesday to authorize $287 billion over five years to repair and maintain the nation's surface transportation. The bipartisan measure also aims to expedite the infrastructure permitting process, help address climate change, and grow the economy. ( EPW Committee news release , July 30) America's Transportation Infrastructure Act of 2019 (ATIA, S. 2302) is not the comprehensive infrastructure overhaul that Republicans and Democrats have long sought. (Roundtable Weekly,May 3, 2019.) However, it makes progress toward shoring-up the Highway Trust Fund (HTF) – the nation's largest financing source for roads, bridges, tunnels, and mass transit. Congress must reauthorize and capitalize the HTF before it runs out of money by the end of September 2020, at the height of the presidential election season. (ATIA summary and section-by-section analysis)

President Trump signed major bipartisan legislation today that allocates more than $2.7 trillion in discretionary federal spending over two years; suspends the debt ceiling until July 2021; and permanently eliminates the prospect of strict "sequestration" spending caps imposed under the Budget Control Act of 2011. ( The Hill , Aug. 2) The legislation – a result of weeks of negotiations between Democratic congressional leaders and the White House – passed the Senate yesterday by a vote of 67-28 after the House last week approved it 284-149. (Roundtable Weekly, July 26). President Trump tweeted yesterday in support of the bill.

Real Estate Roundtable' Q3 2019 Economic Sentiment Index Report

The Senate Committee on Commerce, Science and Transportation on July 24 overwhelmingly passed S. 2203 , the Brand USA Extension Act to reauthorize the organization that promotes the U.S. globally as a travel destination. Survey. Brand USA is a public-private partnership that attracts international travelers to the U.S. to encourage tourism spending at America's hospitality, retail, attraction and other properties. The Brand USA marketing organization operates at no expense to taxpayers. Private sector contributions fund the program, matched by U.S. government fees collected from foreign visitors who enjoy visa-free entry to the U.S.

A recent hearing by a House Financial Services subcommittee reflects a growing interest among policymakers regarding environmental, social, and governance (ESG) reporting by public companies. (" Building a Sustainable and Competitive Economy: An Examination of Proposals to Improve Environmental, Social and Governance (ESG) Disclosures ," July 10 hearing) ESG disclosures generally address issues in the areas of environmental sustainability (e.g., climate change); social (e.g., human rights and labor practices); and governance (e.g., executive- and board-level diversity) matters. ( Financial Services Committee memorandum , July 5) Nareit's ESG Dashboard identifies and tracks key performance indicators to better measure and quantify best ESG practices for the U.S. REIT industry.

President Trump Signs Debt Limit, Budget Caps Deal After Senate Passage; Congress In Recess Until Sept. 9.

Roundtable's DeBoer Comments on Energy Efficiency Bill at Senators Portman, Shaheen News Conference

Twenty-one Senate Republicans led by Ted Cruz (R-TX) this week urged Treasury Secretary Steven Mnuchin to use his regulatory authority to eliminate inflationary gains from the calculation of capital gains tax liability. ( Letter to Secretary Mnuchin , July 29) Capital gains tax is generally based on the difference between the sale price of a capital asset and its original cost, adjusted for certain factors such as depreciation. Capital gain liability includes an amount that reflects general price inflation, in addition to the true economic gain. Especially for long-held assets such as real estate, capital gain thus overstates a taxpayer's economic income.

The Senate Environment and Public Works Committee (EPW) unanimously approved a bill on Tuesday to authorize $287 billion over five years to repair and maintain the nation's surface transportation.