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®
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