Legislative Update

Report by Manfred Chemek CO WY CCIM Chapter legislative affairs committee chair 2010 and legislative for 2010. Report dated 4-27-09

 

Legislative affairs has approval to subsidize CCIM members traveling to the Capitol Hill visits similar to IREM. But with this years budget problems that will be delayed for one year. CCIM and IREM will work together to see there are no future schedule conflicts for Hill visits as there where this year.

In 2010 CCIM spring meetings will be in New Orleans April 18-21, Capitol Hill visits will be May 4-5.

In 2011 CCIM will have their spring meetings in Bethesda, MD and will coordinate Capitol Hill visits while in Bethesda.

The joint CCIM, IREM Lobbying efforts are producing results for the commercial real estate industry and the public. During the committee meetings I spoke briefly with Ronald L. Myles, CCIM (1986 CCIM President) from Denver. He felt we should use the information to attract the large houses in Denver back as active CCIM members by showing them what CCIM is doing on a legislative level to benefit them. Chapters, like the CO WY CCIM Chapter where encouraged to form a legislative affairs committee and have a chair or contact person who will coordinate and disseminate information on TARP Money and other legislative items. This will also give us additional points for the president’s cup. I am willing to volunteer. 

 

Some highlights regarding the Economic Stimulus Package and Treasury Financial Stability Plan.

See the synopsis compiled by Adrian Arriaga, CCIM, CIPS April 23, 2009 on our Chapter web site. 

The current bill package includes $6.3 billion for water and brown fields improvements. $4.5 Billion for government Buildings. $48 Billion for Highways. $18 Billion for light rail. 

 

TALF Term Asset – Backed Securities Loan Facility Plan was expanded to include commercial mortgage backed securities (CMBS) and increased the funds from $ 20 Billion to $ 200 Billion to come out of TARP. This should now support about $ 1 trillion in lending as opposed to $200 Billion in lending.

This is expected to help restore lending activity in commercial real estate. The problem, as we all know, has very negatively impacted the $ 6 trillion commercial real estate market which is financed by more than $ 3 trillion in debt. This should help to refinance the loan maturities coming up in 2009. 

 

PPIP Public Private Investment Program will utilize funds from TARP to generate $500 Billion to 1 Trillion to be used to provide equity capital for new investment funds, matched with investments from private investors and hedge funds to purchase loans.

Market to Market, to change the current accounting rules so assets could be given a fair value. CCIM Staff drafted two proposals which along with a letter from NAR President Charles McMillan, CIPS    where submitted to the FASB (federal Accounting Standards board).

 

The American Recovery and Reinvestment Act was passed and signed by the President into law Feb 17, 2009. The $780 Billion package has roughly 35% devoted to tax cuts, mostly in 2009 and the rest spending in 2009 and 2010. Commercial real estate is impacted primarily in 3 major areas, green building and energy efficiency, business tax incentives and investment in transportation and infrastructure.

 

Green Buildings and Energy Efficiencies. 

Commercial property owners seeking funds or tax breaks to offset upgrades will need to apply through city and state government programs which will receive the funds from the US Government. 

 

 

Business tax incentives.

Extension of bonus depreciation. Can write off 50% of cost of depreciable property acquired in 2008 and 2009. Extension of small business expensing. Small business may write off expenses in the year of acquisition rather than over time.   We heard stories of small businesses who found this to be a quick source of new capital, since they could not get bank loans. They applied for these tax credits immediately and received from $250,000 to $800,000 in funds from the government in the first quarter of 2009.

the same was true of 5 year carry back of net operating losses for small business. Under current law you can only carry back 2 years. Now you can for 5 years.

Leasehold improvements extended 15 years. Passive loss re indexed from $100,000 to $186,000 and from $150,000 to 287,000. 

 

Infrastructure Investments

The bill includes major increases in spending on transportation and infrastructure. This includes $ 144 billion for state and local projects. We have seen some of these take effect in Colorado already.

 

This ends my report.

Submitted by Manfred Chemek, CCIM, CIPS   4/27/2009