News Type: Roundtable Weekly

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Posted on by Trey Jackson

2018 -Department-of-Treasury border

A bipartisan bill reintroduced July 17 by Sens. Rob Portman (R-OH) and Jeanne Shaheen (D-NH) includes provisions to advance energy efficiency standards for U.S. real estate by fostering market incentives, data-driven research, and open government procedures.  

  • Roundtable President and CEO Jeffrey D. DeBoer joined other industry and environmental group leaders at a press conference Wednesday in the Senate to support the Energy Savings and Industrial Competitiveness (ESIC) Act.  (Video of DeBoer’s statement and entire press event)
  • The ESIC Act is a revived version of comprehensive energy efficiency legislation introduced in prior sessions of Congress. (Bill summaryand  text.)  
  • The Real Estate Roundtable has long endorsed the ESIC Act.  The bill contains no mandatory federal building or climate-related regulations.  It aims to improve energy efficiency across U.S. buildings by:  
    • Importing new economic, cost, and small business impact considerations into the process by which the U.S. Department of Energy (“DOE”) proposes revisions to “model” building energy codes, that state and local bodies may ultimately adopt;  
    • Providing stakeholders with opportunities to comment on code revisions suggested by DOE – to correct the currently closed process by which federal code proposals are developed without industry input;  
    • Clarifying standards for real estate appraisers and banks to consider energy efficiency capital investments when determining an asset’s market value; and
    • Creating a voluntary program that can lead to lower interest rates and greater qualifications for buyers seeking mortgages on new energy efficient homes.

            

  • The Portman-Shaheen bill also includes new Section 103 , strongly supported by The Roundtable.  This provision would require coordination by federal agencies to gather and report higher quality data on energy consumed by U.S. buildings, through the nationwide Commercial Building Energy Consumption Survey (CBECS).   Data from CBECS provides the underpinning for EPA’s ENERGY STAR scores.  (See Roundtable Weekly  energy policy story above)
  • In a July 18 Senate news release , 15 business and energy efficiency sector leaders expressed support for the latest Portman-Shaheen bill – including DeBoer and Henry H. Chamberlain, President and CEO, Building Owners and Managers Association (BOMA) International.
  • DeBoer stated in the Senate news release, “The [ESIC Act] is exactly the kind of smart, forward-looking policy that will help building owners respond to our modern, evolving economy.  The needs of business tenants have changed dramatically since the turn of the century to power the data centers, IT, and communications systems upon which our workforce depends.  Building owners are meeting their tenants’ 24/7 energy demands while constructing and managing their assets more efficiently – and reducing their carbon footprints.”
  • During the July 17 news conference, Sen. Portman added that the bill would save consumers $13 billion a year – the equivalent in emissions savings of taking 11 million cars off the road within 15 years. (Video of press event, July 17)

In a positive sign, a swath of energy efficiency bills are moving through both the Senate and House, indicating that energy policy could pass in a divided Congress.  ( The Washington Examiner , July 18) 

 

Senate Finance Committee Task Force Proposes Making Tax Deduction for Energy Efficient Buildings (sec. 179D) Permanent

Posted on by Trey Jackson

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.  Section 179D expired at the end of 2017.  ( BloombergTax , Aug. 13) 

Senate Finance Chairman Chuck Grassley (R-IA), right, and Ranking Member Ron Wyden (D-OR), left, set up five bipartisan task forces in May to consider long-term solutions for more than 40 temporary provisions in the federal tax code that repeatedly expire and come up for renewal.
  • Senate Finance Chairman Chuck Grassley (R-IA) and Ranking Member Ron Wyden (D-OR) set up five bipartisan task forces in May to consider long-term solutions for more than 40 temporary provisions in the federal tax code that repeatedly expire and come up for renewal.   
  • Three of the task forces released reports on Wednesday, addressing the areas of cost recovery (e.g., sec. 179D) and energy (e.g., sec. 45L credit for energy-efficient new homes).   In addition to recommending permanency for section 179D, the Cost Recovery Temporary Tax Policy Task Force led by Senators Mike Crapo (R-ID) and Ben Cardin (D-MD) noted that further improvements to the provision would accelerate its positive impact.
  • The reports refer to extensive comments from stakeholders, including The Real Estate Roundtable and industry coalitions.  The committee also posted further information about the temporary tax policies that the task forces examined.  
  • The task forces’ “thorough and bipartisan approach will form the foundation of the committee’s work to provide more certainty to temporary tax policy,” Grassley said. “The next step will be to put together a legislative package based on the proposals that the taskforces received, the areas of consensus among the taskforce members and continued bipartisan discussions.” (SFC news release, Aug. 13) 
  • In the House, the Ways and Means Committee on June 20 passed legislation to extend a host of expired and expiring tax credits through 2020, including section 179D.  (Markup of House Tax Legislation and Roundtable Weekly, June 21)  The Taxpayer Certainty and Disaster Tax Relief Act of 2019 (H.R. 3301) includes other provisions affecting real estate:  

    •  Credit for construction of new energy efficient homes (sec. 45L)

    •  Credit for energy efficient improvements to existing homes (sec. 25C)

    •  Exclusion of mortgage debt forgiveness (sec. 108(a)(1)(E))

    •  Deductibility of mortgage insurance premiums (sec. 163(h)(3)(E))

    •  New markets tax credit (sec. 45D)  

    •  Empowerment zone tax incentives (sec. 1391-97)

      Building Owners and Managers Association (BOMA) International President and Chief Operating Officer, Henry Chamberlain, testified before Ways and Means last year to support Section 179D’s permanence.  ( BOMA testimony -March 14, 2018)
    • Building Owners and Managers Association (BOMA) International President and Chief Operating Officer, Henry Chamberlain, testified before Ways and Means last year to support Section 179D’s permanence.  (BOMA testimony, March 14, 2018) 
    • On a separate track from extenders and 179D is an energy efficiency tax proposal urged by The Roundtable and a broad coalition of real estate and environmental organizations.  The groups urge House and Senate tax writers to establish an accelerated depreciation schedule for a new category of Energy Efficient Qualified Improvement Property installed in buildings – or “E-QUIP” – with a 10-year cost recovery period (Coalition E-QUIP Letter, May 8) 
    • Roundtable President and CEO Jeffrey DeBoer stated, “The purpose of establishing a new E-QUIP category in the tax code is to stimulate productive, capital investment on a national level that modernizes our nation’s building infrastructure while helping to lower greenhouse gas emissions.”  (Roundtable Weekly, May 10) 

    When Congress returns on September 9 from summer recess, additional changes to the Ways and Means extenders bill may be made as it moves to the House floor, and then to the Senate.  However, passage of spending bills to fund the government beyond September 30 are considered must-pass legislation.  Whether an extenders bill can be attached to an FY’20 appropriations bill is uncertain at this time.    

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    Senate Committee Advances Legislation to Reauthorize “Brand USA” Tourism Marketing Program

    Posted on by Trey Jackson

    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. 

    Brand USA - RW

    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.
    • 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. 
    • The federal portion of Brand USA funding runs out next year.  S. 2203 would extend the federal cost-share until 2027, and increase the foreign traveler fees that pay for the federal portion. 
    • The bill’s bipartisan co-sponsors are Sens. Roy Blunt (R-MO), Amy Klobuchar (D-MN), Cory Gardner (R-CO), Catherine Cortez Masto (D-NV), Dan Sullivan (R-AK), Lindsey Grahan (R-SC), and Jacky Rosen (D-NV).  Nearly 50 senators signed-onto a bipartisan May 2019 “Dear Colleague” letter to support reauthorizing and extending Brand USA. 
    • The Real Estate Roundtable is part of the Visit U.S. Coalition which advocates for Brand USA reauthorization.  The coalition, led by the U.S. Travel Association (USTA) and the American Hotel and Lodging Association, also includes the American Resort Development Association and the U.S. Chamber of Commerce.  The importance of international travel to the domestic economy, job growth, and CRE was the focus of a panel discussion during The Roundtable’s 2018 Annual Meeting. (Roundtable Weekly, June 15, 2018). 
    • A study released last year shows that Brand USA’s marketing efforts brought in 6.6 million incremental international visitors to the U.S. between 2013 and 2018, at a return-on-investment of $28 in visitor spending for every $1 the agency spent on marketing. 
    • S. 2203 is introduced at a crucial time, as recent travel trend figures forecast steady declines in the U.S.’s share of the international travel market through at least 2022.   The decline in market share represents estimated losses to the domestic economy of 14 million international visitors, $59 billion in international traveler spending and 120,000 U.S. jobs. (USTA news release, Aug. 1) 
    • Other travel policy legislation is pending in the House.  Reps. Mike Quigley (D-IL) and Tom Rice (R-SC) on April 9 reintroduced the bipartisan Jobs Originating through Launching Travel (JOLT) Act of 2019 (H.R. 2187) to improve national security, increase international tourism, and reform visa laws.  (Roundtable Weekly, April 26, 2019) 

    When Congress returns from its summer recess on Sept. 9, policymakers will face the task of setting FY’20 federal appropriations for individual agencies and departments – before current funding runs out on September 30.  It is uncertain which individual programs such as Brand USA could be addressed within these funding bills, or whether Congress will need to pass an extension of current funding levels via a “Continuing Resolution.”  (Roundtable Weekly, Aug. 2)

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    Commercial Real Estate Executives Report Stable Market Conditions for Q3

    Posted on by Trey Jackson

    Despite Positive Sentiment About Q3 and Future Market Conditions, Industry Remains Cautious

    (WASHINGTON, D.C.) — 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. 

    “As our Q3 Index shows, industry executives are entering the second half of the year with confidence in stable market fundamentals, supported by a solid economy with low employment,” said Real Estate Roundtable President and CEO Jeffrey DeBoer. “Although there is political uncertainty and the economic recovery is historical in length, commercial real estate market dynamics remain sound, with balanced supply and demand in most markets, and debt and equity readily available, particularly for high grade investments,” DeBoer added.

    The Roundtable’s Q3 2019 Sentiment Index’s registered a score of 50 — a one point decrease from the previous quarter. [The Overall Index is scored on a scale of 1 to 100 by averaging Current and Future Indices; any score over 50 is viewed as positive.]  Both the Current-Conditions Index of 53 and Future-Conditions Index of 48 for this quarter remained the same from the previous quarter, reflecting the stabilized real estate market conditions and the overall economy.

    The report’s Topline Findings include:

    • The Real Estate Roundtable Q3 2019 Sentiment Index registered a score of 50 – a one point decrease from the previous quarter. Survey participants are confident in today’s market dynamics. However, many respondents feel the US real estate market has become fragmented during this cycle and is more accurately examined as a group of separate but correlated markets distinguished by geographic location and property type.
    • Many respondents feel a change in the market is imminent, but are unable to identify a definitive potential cause for a decline as they recognize economic fundamentals appear strong. Nearly half of respondents suggested market conditions one year from now would be similar to the prevailing conditions today.
    • Asset prices remain high for the best assets in the best locations. Many question whether the real estate cycle may be nearing an end and prices could decline in the near future. Sixty percent of respondents believe real estate asset values will be the same one year from now.
    • Availability of debt and equity capital remains strong for high grade investments. Respondents identified a trend of renewed construction financing availability from financial institutions which had previously pulled back from the market.

    While 50% of survey participants reported Q3 asset values today are “about the same” compared to this time last year, 60% of respondents believe that one year from now, values will be “about the same” suggesting real estate asset pricing will remain steady through the remainder of the year. Some respondents believe there is still opportunity for growth for high quality assets in certain markets. 

    Data for the Q3 survey was gathered in July by Chicago-based FPL Associates on The Roundtable’s behalf. 

    View Full Report

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    Environmental, Social and Governance (ESG) Risk Disclosure Gaining Interest Among Policymakers

    Posted on by Trey Jackson

    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) 

    Rep. Carolyn Maloney (D-N.Y.) – chairwoman of the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets – stated during the July 10 hearing, “Investors overwhelmingly want companies to disclose ESG information, especially because there’s now considerable evidence that companies that perform better on ESG metrics, also perform better financially.”  
    • 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.  
    • Rep. Carolyn Maloney (D-N.Y.) – chairwoman of the Subcommittee on Investor Protection, Entrepreneurship, and Capital Markets – stated during the hearing, “Investors overwhelmingly want companies to disclose ESG information, especially because there’s now considerable evidence that companies that perform better on ESG metrics, also perform better financially.” 
    • She added, “I believe the best way to improve the quality and consistencies of these disclosures is for the Securities and Exchange Commission (SEC) to establish standards for ESG Disclosure that would apply to all public companies in the United States.” (Video of entire hearing, July 10) 
    • During the hearing, policymakers considered the merits of five draft bills that would require public companies to disclose information on several ESG topics – including climate change risk, political expenditures and human rights risk.  ( DavisPolk , July 11)   
    • Issues raised included whether the draft bills would mandate this type of disclosure for all public companies. Other issues included:

    • Whether mandated disclosure is necessary given current voluntary disclosure practices; 

    •  The potential increased regulatory burden of these disclosures, which could negatively impact U.S. IPO markets; and 

    •  Whether ESG issues qualify as material information for investors.  

    • In the Senate, the Committee on Banking, Housing and Urban Affairs held a hearing in April 2019 on the application of ESG principles in investing. 
    • Regulators also are considering ESG topics. The Commodity Futures Trading Commission last month voted to establish a Climate-Related Market Risk Subcommittee to address climate-related financial risks. (CFTC, July 10)
    • SEC Chairman Jay Clayton in a recent interview said that not all ESG matters are created equally. “Matters considered to be in the G category tend to be a lot closer to the core governance issues that investors have come to expect in terms of disclosure from our public companies. In contrast, matters considered to be in the E category, such as regulatory risk, and risk to property and equipment vary widely from industry to industry and country to country,” Clayton said.  (Directors & Boards, July 22) 

    According to a recent report by  US|SIF , ESG factors in the United States continue to play an increased role in investment decisions. Total US-domiciled assets under management using ESG strategies grew from $8.7 trillion at the start of 2016 to $12 trillion at the start of 2018, a 38 percent increase.  This represents 26 percent-or 1 in 4 dollars-of the total US assets under professional management.  (US|SIF,  2018 Report on US Sustainable, Responsible, and Impact Investing Trends ).

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

    Posted on by Trey Jackson

    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) 

    After passing the budget deal yesterday, the Senate left for summer recess, following the House’s exit last week.  Congress will reconvene on September 9.
    • 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. 
    • Senate Majority Leader Mitch McConnell (R-KY) yesterday commented on the bill: “In recent weeks, key officials on President Trump’s team engaged in extensive negotiations with Speaker Pelosi and the Democratic House.  Given the exigencies of
      divided government, we knew that any bipartisan agreement on funding levels would not appear perfect to either side. But the administration negotiated a strong deal.” (CNN,
      August 1) 
    • Notably, the budget deal puts an end to the threat of sequestration, which would have imposed a mandatory 10 percent cut on all programs if budget targets were not met.  Senate Minority Leader Chuck Schumer (D-NY), said yesterday, “For too long,
      the arbitrary, draconian limits of sequester have hampered our ability to invest in working Americans and in our military readiness. This deal ends the threat of sequester permanently. That is huge.” (Schumer Floor Remarks, August
      1) 
    • President Trump has indicated he wanted to eliminate budget brinkmanship in Washington that last year resulted in the longest partial government shutdown in U.S. history – while obtaining a two-year budget allocation until after the 2020
      presidential election.  (Wall Street Journal, August 1) 
    • After passing the budget deal yesterday, the Senate left for summer recess, following the House’s exit last week.  Congress will reconvene on September 9. 
    • Policymakers will face a tight deadline upon their return as they will need to set federal appropriations for individual agencies and departments for FY’20.  Current FY’19 funding runs out on September 30, as does legislative authority for the
      National Flood Insurance and EB-5 investment programs.  

    If Congress and President Trump cannot agree on how to allocate the $1.37 trillion in discretionary money allotted for the new fiscal year beginning October 1, a stopgap funding measure (or “Continuing Resolution”) may be required.

    ENERGY POLICY – LEGISLATION

    Posted on by Trey Jackson

    A bipartisan bill reintroduced July 17 by Sens. Rob Portman (R-OH) and Jeanne Shaheen (D-NH) includes provisions to advance energy efficiency standards for U.S. real estate by fostering market incentives, data-driven research, and open government procedures.  

    Roundtable President and CEO Jeffrey D. DeBoer, left, with Sens. Rob Portman (R-OH) and Susan Collins (R-ME) at a press conference to support the Energy Savings and Industrial Competitiveness (ESIC) Act.
      (  Video of DeBoer’s statement and  the entire press event)

    – enlarge photo above  –  
    • Roundtable President and CEO Jeffrey D. DeBoer joined other industry and environmental group leaders at a press conference Wednesday in the Senate to support the Energy Savings and Industrial Competitiveness (ESIC) Act.  (Video of DeBoer’s statement and entire press event)
    • The ESIC Act is a revived version of comprehensive energy efficiency legislation introduced in prior sessions of Congress. (Bill summaryand  text.)  
    • The Real Estate Roundtable has long endorsed the ESIC Act.  The bill contains no mandatory federal building or climate-related regulations.  It aims to improve energy efficiency across U.S. buildings by:  
      • Importing new economic, cost, and small business impact considerations into the process by which the U.S. Department of Energy (“DOE”) proposes revisions to “model” building energy codes, that state and local bodies may ultimately adopt;  
      • Providing stakeholders with opportunities to comment on code revisions suggested by DOE – to correct the currently closed process by which federal code proposals are developed without industry input;  
      • Clarifying standards for real estate appraisers and banks to consider energy efficiency capital investments when determining an asset’s market value; and
      • Creating a voluntary program that can lead to lower interest rates and greater qualifications for buyers seeking mortgages on new energy efficient homes.

        The Portman-Shaheen bill also includes new Section 103,  strongly supported by The Roundtable.  

              

    • The Portman-Shaheen bill also includes new Section 103 , strongly supported by The Roundtable.  This provision would require coordination by federal agencies to gather and report higher quality data on energy consumed by U.S. buildings, through the nationwide Commercial Building Energy Consumption Survey (CBECS).   Data from CBECS provides the underpinning for EPA’s ENERGY STAR scores.  (See Roundtable Weekly  energy policy story above)
    • In a July 18 Senate news release , 15 business and energy efficiency sector leaders expressed support for the latest Portman-Shaheen bill – including DeBoer and Henry H. Chamberlain, President and CEO, Building Owners and Managers Association (BOMA) International.
    • DeBoer stated in the Senate news release, “The [ESIC Act] is exactly the kind of smart, forward-looking policy that will help building owners respond to our modern, evolving economy.  The needs of business tenants have changed dramatically since the turn of the century to power the data centers, IT, and communications systems upon which our workforce depends.  Building owners are meeting their tenants’ 24/7 energy demands while constructing and managing their assets more efficiently – and reducing their carbon footprints.”
    • During the July 17 news conference, Sen. Portman added that the bill would save consumers $13 billion a year – the equivalent in emissions savings of taking 11 million cars off the road within 15 years. (Video of press event, July 17)

    In a positive sign, a swath of energy efficiency bills are moving through both the Senate and House, indicating that energy policy could pass in a divided Congress.  ( The Washington Examiner , July 18) 

     

    Republican Senators Urge Treasury to Index Capital Gains to Inflation

    Posted on by Trey Jackson

    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)

    The Treasury Department may have the legal authority to adopt inflation indexing through regulatory guidance.  The term “cost” in the tax code’s capital gains provisions arguably is ambiguous and not plainly limited to historical cost,   i.e ., the price originally paid for a capital asset.  
    • 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 Republican Senators’ letter suggests that indexing capital gains for inflation “would unlock capital for investment, increase wages, create new jobs, and grow the economy.”  
    • The Treasury Department may have the legal authority to adopt inflation indexing through regulatory guidance.  The term “cost” in the tax code’s capital gains provisions arguably is ambiguous and not plainly limited to historical cost, i.e., the price originally paid for a capital asset.  
    • Supporters of the proposed plan include President Trump’s National Economic Council Director Larry Kudlow, who is leading a White House task force examining the proposal. (Wall Street Journal, March 20, 2018) 
    • Stephen Moore, former advisor to President Trump’s 2016 campaign, also recently wrote that President Trump wants to move forward with capital gains indexing.  (Washington Times, July 14, 2019) 
    • However, a 1992 memorandum written by President George H.W. Bush’s administration determined that Treasury did not have the power to index capital gains by regulation. (Justice Dept. Opinion – Sept. 1, 1992).  In contrast, more recent legal analysis has found support in subsequent case law. (Harv. J. Law & Pub. Policy, 2012).  
    • Conservatives such as Americans for Tax Reform President Grover Norquist cite a 2002 Supreme Court decision in a case between Verizon Communications and the Federal Communications Commission to show Treasury can act unilaterally on the issue.  (Americans for Tax Reform – June 26, 2019) 
    • Congressional Democrats have come out strongly against the proposal.  A recent letter to Secretary Mnuchin from 15 Democratic Senators stated, “We urge you to reject reported plans to use questionable authority to – yet again – lavish tax cuts upon our country’s wealthiest, while middle class families and working people continue to see costs rise and wages stagnate.”  (Senate Democratic letter, July 12).  House Ways and Means Committee Chairman Richard Neal (D-MA) on Wednesday stated, “If the Trump Administration unilaterally changes the capital gains tax structure, it wouldn’t just be bad policy, it would be executive overreach.”  (Ways and Means news release, July 31)   

    Senate Finance Committee Ranking Member Ron Wyden (D-OR) this week also responded to the proposal, stating, “The Office of Legal Counsel has plainly stated that the Treasury secretary does not have the authority to index capital gains tax rates.”  (Senate Finance news release, July 30).  Wyden added such an action would “absolutely” end up in court.  “We will oppose this strongly, because this is another backdoor effort to flout responsible tax policy,” he told reporters. (TaxNotes, July 31 and New York Times, July 30) 

    Senate Committee Advances Five-Year Transportation Bill

    Posted on by Trey Jackson

    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)  

      The Roundtable on April 29 submitted  infrastructure policy recommendations  to
    House Committee on Transportation and Infrastructure Chairman Peter DeFazio (D-OR) and Ranking Member Sam Graves (R-MO 
    ).    
    • 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)  

    • The ATIA would also codify Trump Administration measures to cut lengthy
      project permitting times.  EPW Chairman John Barrasso (R-WY) and Ranking Member Tom Carper (D-DE) stated their bill “will speed up project delivery by codifying key elements of the President’s ‘One Federal Decision’ policy,
      without forgoing important environmental protections. Cutting red tape will allow important highway infrastructure projects to be built quicker and smarter.”  (July 29 CNN joint op-ed)

    • President Trump tweeted his support of S. 2302 on
      July 30, praising the EPW Committee’s 21-0 vote as a bipartisan achievement. 

    • The bill now moves to the Finance Committee, chaired by Sen. Chuck Grassley (R-IA), to figure out how to pay for it through tax revenues and other means.  Additionally, the Senate Banking Committee, chaired by Mike Crapo (R-ID), must also mark-up
      sections dealing with mass transit programs.  The Senate’s No. 2 Republican, John Thune (R-SD), said funding the bill will be a “heavy lift” and that any broader infrastructure package is “really unlikely.”  (POLITICO Morning Transportation, Aug. 2)

    • One financing source reportedly off-the-table is an increase to the “pay-at-the-pump” gas user fee that capitalizes the HTF.  Congress has not raised the so-called “gas tax” since 1993, and its buying power has been significantly diminished since
      then by inflation and gains in fuel efficiency.  Grassley said the Finance Committee will not consider how to pay for the ATIA until Senate Majority Leader Mitch McConnell (R-KY) “says he’s willing to let a gas tax increase on the floor.” 
      (BGov Tax, July 31)

    • The Real Estate Roundtable’s infrastructure policy agenda recommends a responsible increase to the gas user fee to sustain the Highway Trust Fund for the long term;
      streamlined permitting goals; and support for infrastructure innovations (such as driverless and electric vehicles) that respond to the nation’s changing demographics and accommodate increased demands for transit-oriented development.

    Roundtable President and CEO Jeffrey D. DeBoer discussed the role of public-private partnerships to develop infrastructure projects on  CNBC’s Squawk Box  in June 2017 .  ( Roundtable Weekly , June 9, 2017)  Congressional committees have also received statements from The Roundtable outlining our infrastructure priorities. ( Roundtable Weekly,   
    May 3, 2019  and March 22, 2019 ).  

     

    Senate Committee Considers Protections for Banks Dealing With Legal Cannabis-Related Businesses; Bill Would Allow CRBs to Buy Property Insurance

    Posted on by Trey Jackson

    A Senate Banking Committee hearing on July 23 focused on a bipartisan bill that would protect lenders from federal liability when they provide accounts and other financial services to cannabis-related businesses (CRBs) deemed legal under state laws.  The bill would also protect certain real estate transactions involving legitimate CRBs. (Senate Banking Committee, ” Challenges for Cannabis and Banking: Outside Perspectives “)

    Senate Banking Chairman Mike Crapo (R-ID)  said at the hearing that “the case was made pretty strongly” that lawmakers needed to address confusion about whether banks and credit unions can provide accounts to marijuana businesses, as well as those ancillary businesses that service the growing industry.
    • The hearing featured testimony by Sens. Cory Gardner (R-CO) and Jeff Merkley (D-OR), co-sponsors of the Secure And Fair Enforcement (SAFE) Banking Act.  Their bill (S. 1200) would provide a safe harbor to financial institutions serving CRBs, protecting them from federal money laundering laws. 
    • Senate Banking Chairman Mike Crapo (R-ID) said at the hearing that “the case was made pretty strongly” that lawmakers needed to address confusion about whether banks and credit unions can provide accounts to marijuana businesses, as well as those ancillary businesses that service the growing industry. (BGov, July 23)  Chairman Crapo reportedly “stopped short of endorsing a legal fix for banks that want to serve cannabis businesses, warning that major concerns he has about financial crimes and access to the drug still need to be addressed.” (Politico Morning Money, July 24) 
    • For real estate: the SAFE Banking Act would protect sellers and lessors of real estate, and other “service providers,” by clarifying that proceeds from transactions with legitimate CRBs do not derive from unlawful activity – and thus do not provide a predicate for federal criminal money laundering. 
    • The Real Estate Roundtable on April 30 urged the Senate Banking Committee leadership to hold hearings on the SAFE Act.  Roundtable President and CEO Jeffrey DeBoer stated in the letter, “Without a bank account, dispensaries and other legal CRBs must operate on a cash basis.  Risks of crime thus increase and tax revenues to pay for infrastructure and other government services are potentially lost.  S. 1200 can significantly address these problems by providing protections for banks, real estate firms and their employees from punishment simply because they aim to serve businesses within … states that have legalized marijuana to varying degrees.”  (Roundtable Policy Letter, April 30) 
    • Companion legislation in the House (H.R. 1595) was approved by the Financial Services Committee on March 27 by a 45-15 vote. A full House vote on the bill may occur after the upcoming summer recess. (Roundtable Weekly, April 26 and Forbes, July 23) 
    • At the July 23 Senate hearing, Banking Committee member Bob Menendez (D-NJ) discussed bipartisan legislation he introduced the day before – to ensure legal CRBs have access to comprehensive and affordable insurance coverage.    The Clarifying Law Around Insurance of Marijuana (CLAIM) Act would prohibit the federal government from taking any adverse action on an insurance policy held by an owner or operator of a CRB, or against real estate or equipment leased to a CRB, solely because the policy covers cannabis operations that a state deems legal. (Menendez news release, July 23) 

    Following the hearing, Chairman Crapo said the Committee is acting on the SAFE Banking Act.  “We’re looking at it to see if there’s a solution to the various issues we’re talking about.”  (BGov, July 23)