Real Estate’s 2004 Agenda

Washington, D.C. – In 2004, expect to see several issues of importance to building owners and managers in play, both in Congress and in statehouses across the country.The Building Owners and Managers Association (BOMA) International, with the help of local BOMA associations throughout the United States, are aggressively representing your interests so that policymakers at all levels of government hear the united voice of BOMA when considering policy decisions that would affect our industry. Following is a look at the major issues BOMA expects to see this year at the federal and the state levels.

Federal IssuesDepreciation of leasehold improvements: With the current depreciation schedule at an illogical 39 years, BOMA International will continue to advocate for a 10-year schedule. Ways and Means Committee Chair Bill Thomas (R-CA) included short-term leasehold depreciation in his international tax bill introduced at the end of 2003. His bill includes a 15-year schedule for improvements placed into service in 2004 and 2005. BOMA International will continue to support Thomas’ bill as well as a more favorable bill introduced by Congressman Clay Shaw Jr. (R-FL) that would permanently reduce the depreciation schedule to 10 years.

Class action reform: While easily passing the House multiple times, legislation to move class action lawsuits to Federal courts finally received momentum in the Senate in 2003. Although Republicans were one vote short of the required 60 votes to prevent a filibuster, a few of the Democrats who voted against the measure in 2003 have expressed interest in working out a compromise early this year. With only one additional Democrat needed to support the legislation, Senate Republicans should be able to come up with a compromise that will pick up the additional vote.

Transportation: Another important piece of legislation up for reauthorization is the roads and surface transportation bill. The previous bill, named TEA-21, was set to expire in September 2003 but was extended by six months. This means Congress will have to deal with transportation issues early this year. Expect to see some heated debate on the funding levels for the bill, as there are some discrepancies between Administration, House, and Senate proposals. Congressman Don Young (R-AK), chairman of the House Transportation and Infrastructure Committee, is also asking for a controversial increase in the gas tax to support the House version’s higher funding levels.

In the StatesTaxes: One issue that will continue to receive much attention at the state and local level is that of taxes. Municipalities across the country are struggling to find sufficient revenue to pay for current government activities. As a response, city councils and state legislatures are considering proposals to revamp their tax codes in order to collect additional funds. While some are choosing to focus their efforts on raising sales taxes or increasing “sin” taxes, like those on tobacco or alcohol, others are considering whether to change how property taxes are levied, to include their rates for commercial properties. If the economy continues to improve and tax revenues begin to rise, which several states have already started to see, this issue might be sidelined. If not, be prepared for some fierce fights about the fair rate of taxation for commercial buildings in your city.

Mold: Thanks to the aggressive litigation over the issue and a growing lack of insurance coverage for properties, the debate over mold will have another robust year in 2004. State and local decision-makers will again focus on the issue with unreasonable alarm, even though the science over mold toxicity remains unclear. A number of state legislatures are already gearing up to consider the matter in 2004, though the interest is focused at the moment on small niches of property like educational facilities.

Codes: The codes arena should be, as always, an active one at the state and local levels. The most important battle of 2004 will be the ongoing fight over building code adoption. The debate remains focused on the International Code Council’s (ICC) International Building Code and its competitor, the National Fire Protection Association’s (NFPA) Building Construction and Safety Code (NFPA 5000). As BOMA International remains convinced that code harmony is extremely important for our industry, it will continue to support the ICC family of codes. In Phoenix, a discussion is currently under way on which code should be adopted for its built environment, with Oregon, Washington, and New York City seen as likely sites of future debate.Additionally, with terrorist threats and the Chicago municipal building fire, code changes that address egress from tall buildings will also be on the table in 2004.

Information on these and other issues can be found on BOMA International’s website (www.boma.org).