On March 12 and 13, building owners and managers from across the country headed to Capitol Hill to meet with their elected officials to urge congressional action on a variety of real estate issues. Over 100 commercial real estate professionals met with over 90 congressional offices to participate in the political process and make their voices heard.
At the BOMA Intl. National Issues Conference, keynote sessions provided attendees with the opportunity to hear directly from lawmakers, including Representatives Pete Sessions (R-TX), Earl Blumenauer (D-OR), Ted Poe (R-TX), and Richard Neal (D-MA), co-chair of the Congressional Real Estate Caucus. These four legislators shared their views on issues ranging from middle-income tax relief to immigration reform, in addition to BOMA's priority issues, including leasehold depreciation and terrorism risk insurance.
In addition to the great line-up of congressional speakers, Amy Walter, political analyst and senior editor of the Cook Political Report, shared her views on the 2008 election cycle and the race for the presidency, already well under way. BOMA's advocacy staff also spent time preparing attendees on commercial real estate's key issues so they could effectively communicate with legislators and their staffs. These issues included:
- The need to extend the 15-year depreciation period for tenant improvements and the reduced capital-gains rate.
- The importance of enacting important incentives to promote energy efficiency and reduce greenhouse-gas emissions.
- The necessary extension of the Terrorism Risk Insurance Act (TRIA) before its expiration at the end of 2007 and the federal government's role in resolving the growing reinsurance capacity crisis that has resulted following the high number of devastating storms over the past few years.
TRIA
Absent congressional action, TRIA will expire at the end of this year. Already, both the House Financial Services and the Senate Banking Committees have begun hearings. Legislation has not yet been introduced, but is expected later this spring. Legislators that BOMA members spoke with expressed optimism that a long-term or permanent extension would pass and that Congress would address this issue in earnest well before the act's expiration to hopefully avoid a last-minute, down-to-the-wire vote on the issue, as happened in late 2005 when it was last extended. Though the outlook for action is positive, it remains to be seen what the details will look like - whether it will contain provisions for nuclear, biological, chemical, or radiological attacks; whether it will extend coverage to domestic acts of terrorism; and what the insurers' retention levels will be, for example.
Tax Issues
BOMA members were widely supported in their request that Congress extend the 15-year depreciation period for leasehold improvements (currently set to expire at the end of 2007). Legislators seem to understand how vital this issue is to small businesses and to future construction activity. Legislators were far less receptive to BOMA's goal of passing an extension of the reduced capital-gains tax rate set to expire at the end of 2010, or to eliminate the taxation of capital gains altogether. However, since its expiration is still a few years off, this issue is not likely to be addressed during this session of Congress.
Energy-Efficient Commercial Buildings
BOMA members articulated the need for tax incentives to help drive energy efficiency in commercial buildings. Building owners and managers expressed their support for the "EXTEND the Energy Efficiency Tax Incentives Act," which was introduced on March 8, 2007, in both the House and the Senate. The EXTEND Act would extend the Energy Efficient Commercial Buildings provision included in the Energy Policy Act of 2005. Specifically, it extends the implementation period for retrofits until the end of 2012 and increases the deduction to $2.25 per square foot, or 75 cents per square foot for partial credit for each of the three subsystems of the building (lighting, HVAC and hot water, and building envelope). Members of Congress visited by BOMA members seemed largely supportive of the EXTEND Act.
BOMA Intl. applauds the commercial property professionals who took the time and made the investment to travel to Washington, D.C., on behalf of the entire industry to exercise their constitutional right to actively participate in their government. BOMA has made it easy for all real estate professionals to keep in touch with their legislators: Visit BOMA's Legislative Action Center at (http://capwiz.com/boma/home).
For more information on these and other issues, call BOMA Intl. at (202) 408-2662 or visit (http://www.%20boma.org/).
