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The House Ways and Means Committee on June 4 held a Members' Day Hearing to address tax legislative priorities for the remainder of the year – including technical corrections to the Tax Cuts and Jobs Act (TCJA) that would correct a drafting error affecting qualified improvement property (QIP). Numerous other tax priorities are also expected to crowd the congressional agenda, including expired or expiring tax provisions; repeal of the state and local tax deduction cap; the national debt limit; and budget spending caps. A coalition of businesses and trade groups, including The Real Estate Roundtable, urged all members of Congress in April to cosponsor the Restoring Investment in Improvements Act (H.R. 1869 / S. 803) – a bill that would correct the QIP drafting error. The legislation would give qualified improvement property a 15-year depreciation period and restore its eligibility for accelerated bonus depreciation. (QIP Policy Comment Letter and Roundtable Weekly, April 26)

Installation of certain communications equipment on leased property to enable expansion of wireless networks should not be allowed without owner consent. That is the message submitted on June 3 to the Federal Communications Commission (FCC) by an industry coalition that includes The Real Estate Roundtable. (Joint Industry Comments to FCC). The coalition's comments come as the FCC considers whether to expand its interpretation of federal law regarding consumer home antennas, spurred by the development of 5G technology for the next generation of advanced communications equipment.

The Treasury Department yesterday issued proposed tax regulations clarifying the scope and operation of the foreign pension fund exemption from the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). (Federal Register, June 7) The proposed rules appear to be overwhelming positive and likely to resolve most, if not all, of foreign investors' remaining concerns. FIRPTA imposes U.S. capital gains tax on the sale of a U.S. repeal property interest by a foreign investor. FIRPTA results in a discriminatory tax on foreign investment in US real estate and infrastructure that does not apply to any other asset class. The FIRPTA regime is an anti-competitive outlier that deflects global capital to other markets.

The Real Estate Roundtable yesterday asked the U.S. Treasury Department and IRS to reduce the risk of market disruption by clarifying the tax treatment of financial contracts that replace the expiring London Inter-bank Offered Rate (LIBOR) with a substitute reference rate. Over $200 trillion of LIBOR contracts are outstanding, including roughly $1.3 trillion of commercial real estate debt. (Roundtable LIBOR letter, June 6) The United Kingdom's Financial Conduct Authority (FCA), which regulates LIBOR, announced in 2017 that it is phasing out the global borrowing index by the end of 2021. LIBOR will need to be replaced in both new agreements and innumerable existing legacy contracts.

On the eve of a May 22 White House meeting to discuss a national infrastructure improvement package, President Trump sent a letter to Democratic congressional leaders requesting they first approve his trade deal with Canada and Mexico before taking up infrastructure legislation. (Bloomberg, May 21) "Before we get to infrastructure, it is my strong view that Congress should first pass the important and popular [United States-Mexico-Canada Agreement (USMCA)] trade deal," Trump wrote. "Once Congress has passed USMCA, we should turn our attention to a bipartisan infrastructure package," he added.

With sweeping tax code changes enacted last month now in effect, both chambers of Congress are returning to a packed legislative to-do list and looming policy deadlines – including the expiration of the latest round of government funding on Jan. 19.

The Real Estate Roundtable is saddened by the recent passing of real estate industry veteran Joe Stettinius.

Commercial real estate industry leaders continue to acknowledge positive conditions in the economy and current real estate markets, while expressing some caution about 2019, according to The Real Estate Roundtable’s Q1 2018 Economic Sentiment Index released yesterday.

During a week of thousand-point gyrations in the stock market and last-minute congressional votes to keep the government open, President Trump this morning signed a budget deal into law that ended a nine-hour government shutdown.

The House of Representatives on Wednesday passed legislation (H.R. 620) to reform the American With Disabilities Act (ADA) to curb unscrupulous lawsuits alleging minor and easily correctable impediments to building access.

Lawmakers struggling over policy and program disagreements related to a $1.2 trillion “omnibus” spending bill have pushed a congressional vote to next week – closer to March 23, when current funding expires.

The Senate on Wednesday passed (67-31) bipartisan Dodd-Frank reform legislation (S. 2155) that includes a Roundtable-supported measure to reform the Basel III High Volatility Commercial Real Estate (HVCRE) Rule, which would clarify specific requirements for acquisition, development, or construction (ADC) loans.

In the Federal Reserve's first major decision under new Chairman Jerome Powell, the central bank on Wednesday raised the federal funds rate 25 basis points (to a range of 1.5 percent to 1.75 percent) and boosted its U.S. economic growth forecast for 2018 and 2019.

In a week of intense budget negotiations, a $1.3 trillion dollar “omnibus” spending bill (H.R. 1625) to fund the government through September 30 was introduced Wednesday night to avoid a government shutdown today. The 2,232-page measure passed both the House and Senate by comfortable margins, and President Trump signed it this afternoon.

Legislation introduced May 21 by Sen. Thom Tillis (R-N.C.) would delay implementation of the Current Expected Credit Losses (CECL) accounting standard, which will force banks to book losses on bad loans much faster. (ABA Journal, May 22) The independent Financial Accounting Standards Board (FASB) is proceeding with its plan to implement CECL for publicly traded U.S. banks at the beginning of 2020 – and later for other financial institutions. (Roundtable Weekly, April 5)

A Senate Banking Committee hearing this week on "Combating Illicit Financing by Anonymous Shell Companies Through the Collection of Beneficial Ownership Information" followed recent approval of legislation by the House Financial Services Committee that would affect beneficial ownership requirements for commercial real estate transactions. Senate Banking Chairman Mike Crapo (R-ID) said in his opening statement that the committee seeks solutions "… to deter money laundering and the financing of terrorism through the use of front companies, shell companies, shelf companies, opaque nominees, and other means to conceal and disguise the true beneficial owners of property and other assets."

Senate Finance Committee Ranking Member Ron Wyden (D-OR) yesterday introduced legislation to fundamentally alter the longstanding tax treatment of a profits interest in a real estate partnership. The Wyden proposal (detailed summary of the legislation and one-pager) would depart dramatically from prior carried interest legislation by taxing partners before any capital gain or even rental income is generated by the partnership. For example, it would give rise to large amounts of taxable (but phantom) income for a general partner with a profits interest during the pre-construction and development phase of a real estate project.

New York’s highest court issued a significant decision on March 27 regarding the governance, operation and dissolution of businesses structured as general partnerships; the value of “goodwill” that can inure to real estate assets; and the discounts that apply when valuing the stake of an investor with only a minority position in an enterprise.

House and Senate GOP leaders signaled this week they intend to pursue legislation that would make permanent the individual tax provisions enacted as part of the Tax Cuts and Jobs Act (P.L. 115-97) enacted last December.

Legislative language that could affect the allowable heights of buildings near airports passed the House today (393-13) as part of a bill ( H.R. 4 ) extending authorization of the Federal Aviation Administration (FAA) for five years.