In This Issue:
State Tuned:
TRIA Extension Bill Passes First Hurdles
Legislation to extend the Terrorism Risk Insurance Act (TRIA) for an additional fifteen years passed its first two hurdles when the House Committee on Financial Services Committee, Subcommittee on Capital Markets approved H.R.2761, the Terrorism Risk Insurance Revision and Extension Act (TRIREA) of 2007 last week, followed by full committee approval on August 1. The bill was introduced by Reps. Michael Capuano (D-MA) and Barney Frank (D-MA). The current program is set to expire at the end of 2007.
As introduced, H.R. 2761 proposed to extend TRIA for ten years, but an amendment was approved extending the program for fifteen. In addition to extending the terrorism insurance program, the legislation makes some additional changes to the program that BOMA International and our coalition partners fully support. H.R.2761 would give businesses an important new option to purchase insurance for catastrophic non-conventional terrorism risks – nuclear, biological, chemical, and radiological (NBCR) attacks. The legislation would also eliminate the distinction between foreign and domestic acts of terrorism. In addition, H.R.2761 would lower substantially the program’s trigger level which will encourage smaller insurers, currently unable to participate in the program, to return to the terrorism risk insurance marketplace, thereby providing policyholders with a wider choice of insurance options.
The full House will consider the legislation in September when it returns from its August recess.
Contact: Karen Penafiel, (202) 326-6323, kpenafiel@boma.org.
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Energy Efficiency Bill Goes to House Floor
On Friday, HR 3220, the New Direction for Energy Independence, National Security, and Consumer Protection Act is scheduled for debate and votes in the U.S. House of Representatives. The 888 page bill is of keen interest to BOMA members, as it contains several provisions dealing with energy efficiency and “green” buildings, both in the public and private sectors. The bill was just introduced on July 30 by Speaker of the House Nancy Pelosi (D-CA), but is a compilation of other bills that have already been passed by the Committees on Ways and Means and Energy and Commerce.
One provision in the bill that has been actively supported by BOMA International is the extension of the energy efficient commercial buildings tax deduction of $1.80/sf that was originally passed in the 2005 Energy Policy Act. Though we had fought hard to see the deduction increased to $2.25/sf (which was included in the initial extension legislation introduced earlier this year), we are pleased to see that language to extend it through 2013 did make the Speaker’s bill. Another provision of interest includes the establishment of an Office of Commercial High-Performance Green Buildings, under the direction of the Department of Energy, tasked to coordinate efforts to achieve the national goal to reduce commercial building energy use and achieve zero-net-energy commercial buildings.
Once passed, this bill is expected to conference with the legislation passed by the Senate earlier this summer. We’ll keep you posted as this legislation works its way through Congress.
Contact: Karen Penafiel, (202) 326-6323, kpenafiel@boma.org.
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Ask Your Representatives to Cosponsor Leasehold Depreciation Legislation
BOMA International is advocating before Congress the need for a short-term, if not permanent, extension of the 15-year timeline for depreciating leasehold improvements. At the end of last year, Congress extended the reduced depreciation schedule through 2007. If this expires, building owners will be required to return to depreciating tenant improvements on a 39-year schedule, which amounts to an unfair tax on commercial real estate.
Assist BOMA’s efforts today, visit the Legislative Action Center and write to your Representative and Senators and request they join as cosponsors to legislation that would make permanent the 15-year depreciation schedule. Congressmen Joe Crowley (D-NY) and Jerry Weller (R-IL) are the lead sponsors for H.R. 2014 in the House while Senators Kent Conrad (D-ND) and Jon Kyl (R-AZ) are the lead sponsors for the same bill, S. 1361, in the Senate. Act now and let Congress know how important this issue is to the real estate industry!
Contact: Jason Todd, (202) 326-6356, jtodd@boma.org.
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Congress Continues To Focus On Taxation of Carried Interest
Additional hearings took place this week in Congress and more are likely to be held when Congress returns after their August recess on how carried interest is taxed. Earlier this week, the Senate Finance Committee held a second round of hearings on legislation that would change the tax treatment of the carried interest in a public partnership from a capital gain (taxed at 15%) to ordinary income (taxed at about 35%). Carried interest is the compensation a general partner receives at the end of the real estate deal if, and only if, the venture is successful.
While the Senate bill only impacts a handful of entities, House bill H.R. 2834, sponsored by Rep. Sander Levine (D-MI), would tax the carried interest of all partnerships and will likely be heard sometime in September in the Committee on Ways and Means. BOMA is actively working with its real estate partners to educate Congress on the negative consequences this would have on the commercial real estate industry if the House bill becomes law. The Senate will likely follow with a broader carried interest bill later this year.
Contact: Jason Todd, (202) 326-6356, jtodd@boma.org.
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AIA Wants “Green” Requirements in Building Codes
The American Institute of Architects (AIA) is taking the first steps to encourage the insertion of “green” requirements into model building codes. The action comes following the conclusion of AIA’s first-ever Green Codes Summit on July 12, to which BOMA International was invited to participate as a guest. The AIA believes that the best way to advance sustainability in the built environment is to place requirements for such into the model building codes of the International Code Council (ICC). The ICC co-sponsored the summit.
BOMA encouraged AIA to consider that code officials need to be educated on green code proposals before they are considered in the ICC process and that these same officials must be educated on how to enforce green code requirements. BOMA also noted that the code adoption process is already almost overwhelmed in each code development cycle due to the large and growing number of code proposals that require action.
Contact: Dave Johnston, (202) 326-6357, djohnston@boma.org.
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State Tuned:
State Government Affairs Committee Focuses on Transportation Issues
As commercial real estate professionals, BOMA members have a vested interest in the ability of office building occupants to reach the work place conveniently, safely and in a timely manner. With demands on the nation’s transportation system increasing, lack of adequate federal funding for improvements and maintenance is creating serious economic impacts. As this funding dries up, states and local governments are looking for new funding sources to improve roads and alleviate traffic congestion.
BOMA International’s State Government Affairs Committee hosted a special issues forum on transportation during BOMA’s annual meeting in New York City. Panelists from across the country shared their experiences and discussed the impacts on transportation on the industry.
The committee also appointed a task force to examine the issue and collect information on related issues to benefit BOMA members.
Contact: James Cox, (202) 326-6364, jcox@boma.org
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