Commercial Investment Real Estate Winter 2020 | Page 31

Shah Page, a Partner at K & L Gates LLP and manager of the Coalition for Energy Efficient Jobs and Investment. “We look forward to participating in discussions next year to comprehensively review potential re- forms to strengthen and enhance the Section 179D deduction.” Earlier this year, the Senate Finance Committee’s task force examining a vari- ety of temporary tax provisions, often re- ferred to as the “tax extenders,” found the 179D deduction to be an effective method for both addressing the climate and the economy. The task force’s “Report of the Cost Recovery Temporary Tax Policy Task Force,” released in July 2019, noted that, “The Section 179D deduction is a proven tool to drive economic development by le- veraging billions of dollars in private cap- ital to incentivize energy-efficient building Photo by Liufuyu enhancements. Section 179D positively im- pacts a broad set of industries — including real estate, manufacturing, architecture, contracting, engineering, building service, financing, labor, and government — and has the support of environmental and ener- gy efficiency advocates.” A longer-term re- authorization would allow commercial real estate owners to better plan for and utilize this significant incentive. Both the House and Senate also in- troduced the Energy Savings and Industrial Competitiveness Act in 2019 — dubbed the Portman-Shaheen Act after the leg- islation’s originating sponsors, Senators Rob Portmann, R-Ohio, and Jeanne Sha- heen, D-N.H. This bipartisan legislation establishes a wide range of voluntary en- ergy efficiency incentives for real estate, CIREMAGAZINE.COM manufacturing, and other related economic sectors, including a commercial building energy efficiency financing initiative. The bill also provides an avenue for real estate practitioners to give the Department of En- ergy feedback on building code proposals and would consider the onus on small busi- nesses in such proposals. While this legisla- tion has been introduced in some variation in the past five Congresses, the climate change conversation has reached a new ur- gency in 2019, which may spur movement on bipartisan sustainability-related legisla- tion in 2020. Portman noted that “This bill is a win-win, creating new jobs and protect- ing our environment — all without a single new tax or mandate.” CANNABIS BANKING LEGISLATION In September, the House passed the bipar- tisan Secure and Fair Enforcement Banking Act, which provides a safe harbor to banks that serve cannabis businesses in states where marijuana is legal. In these states, access to capital is a significant constraint for cannabis-related businesses and real es- tate owners who could accommodate them. During a break-out session at the CCIM Global Conference in October, panelist Wen- dy Berger, founder of WBS Equities, empha- sized the challenge of accessing traditional capital for cannabis-related businesses and real estate investors and noted that passage of the SAFE Banking Act would be a positive step in increasing financing opportunities. The SAFE Banking Act removes the bar- riers to traditional banking services for the cannabis business industry and provides a safe harbor for insurance providers who serve cannabis businesses. While the SAFE Banking Act may face an uphill battle in the Senate, where Senate Banking Committee Chairman Mike Crapo has expressed some concern with the bill in its current form, he has indicated he is open to amendments. Supporters of the legislation remain cau- tiously optimistic that the legislation has a path to move forward. There are many variables that will impact legislative movement in 2020. Modernizing the country’s transportation and energy infrastructure, reforming and reauthorizing flood insurance, and imple- menting critical sustainability measures are essential to a thriving real estate sector and a healthy planet. It is imperative that Congress can rise above the polarizing rhet- oric to compromise and reach consensus on these many critical issues. Elizabeth Vincent Membership and public policy manager for CCIM Institute Contact her at [email protected]. LEGISLATION CHALLENGES IN 2020 Now that the calendar has flipped to 2020, the upcoming presidential elec- tion kicks into full gear. Our divided federal government – with a Repub- lican occupying the White House and each chamber of Congress led by an opposing party – has made it exceeding- ly challenging to pass any meaningful legislation. Neither political side wants to give the other side a “win” that can potentially be capitalized on in Novem- ber. Furthermore, the impeachment process against President Trump is ex- pected to last into 2020, with the Senate impeachment trial still unscheduled. These proceedings have heightened an already partisan environment in Wash- ington, making compromise between the House and Senate nearly impossible to achieve. While some non-controversial, bi- partisan policies may still pass, any oth- er legislative action will likely only come in the form of so-called messaging bills. These bills are put forth by either party and used strictly for campaign purposes, without any expectation of actually be- coming law. Since the entire House and one third of the Senate will be up for re- election in 2020, these bills will be used as rallying calls designed to influence vot- ers in the presidential and all down-ballot races. In theory, these individual pieces of legislation highlight what each party’s respective priorities would be if given full control of the federal government. So what does this mean for law- makers and American citizens? We will likely see little in the way of legislation over this year, but we expect the admin- istration to continue to act through new regulations, executive actions, and reg- ulatory guidance. We saw some signif- icant activity in this area this year, par- ticularly the repeal of the Waters of the U.S. rule relating to federal governance over waterways. Following a February 2017 executive order, the Environmental Protection Agency and the Army Corps of Engineers rewrote the definition of a waterway to exclude some of the more concerning aspects of the 2015 rule. We also saw reforms to the Endangered Spe- cies Act, incorporating economic cost benefit analysis into habitat and listing decisions. We can expect more of the same in 2020. Megan Booth Director of federal housing, valuation, and commercial real estate policy and programs for the National Association of REALTORS® COMMERCIAL INVESTMENT REAL ESTATE MAGAZINE 29