Congress this month will consider a $47 billion emergency funding request from the White House as part of a “continuing resolution” (CR) spending bill that would avoid a partial government shutdown starting Oct. 1. (Roll Call, Sept. 6, White House request, Sept. 2) 

Legislative Timing 

• Senate Majority Leader Chuck Schumer (D-NY) said this week, "We're hoping the CR would go to about mid-December and then we might do an omnibus"—a bill that would fund the government through the remainder of the federal fiscal year (Sept. 30, 2023). However, the November mid-term elections could push consideration of an omnibus budget to the congressional lame-duck session. (Reuters, Sept. 7)
  
  
• The CR may also include legislation to fast-track federal permits for energy projects, which Schumer and Sen. Joe Manchin (D-WV) agreed to last month in principle as part of the Democrats’ effort to pass the Inflation Reduction Act of 2022 (IRA).
  
  
• Schumer said on Wednesday, “Permitting reform is part of the IRA, and we will get it done.” (PoliticoPro, Sept. 7 and E&E Daily, Sept. 8) 

The IRA & CRE 

• The IRA, passed on strict party-line votes in both chambers last month, is a $790 billion tax-and-spending package that includes the largest federal clean energy investment in U.S. history. (Roundtable Weekly, Aug. 12)
  
  
• Roundtable fact sheets detail the IRA’s impact on Clean Energy Tax Incentives and Revenue Provisions affecting commercial real estate.
  
  
• The Real Estate Roundtable has encouraged Congress for several years to develop clean energy tax incentives that are more usable for building owners, managers, and financiers—and more impactful to help meet national carbon reduction goals.
  
  
• The Roundtable will stay engaged with lawmakers as the Treasury Department proposes rules and guidance on a range of issues to implement the IRA’s provisions. 

Clean Energy Spending 

• The Biden administration confirmed last week that its top climate advisor Gina McCarthy is leaving her post. The White House also announced that John Podesta, above, will become a senior advisor for clean energy innovation, oversee the implementation of the IRA’s climate and energy spending, and serve as chair of President Biden’s National Climate Task Force. Podesta led former President Barack Obama’s climate strategy. (Wall Street Journal and CNBC, Sept. 2)
  
  
• Private sector investments in battery factories, solar panel manufacturing and other projects in the weeks since President Biden signed the IRA are part of the New York Time’s Sept. 7 article, “Clean Energy Projects Surge After Climate Bill Passage.” 

Roundtable members will meet in Washington, DC on Sept. 20-21 to discuss the IRA’s impact on CRE, the outlook for the midterm elections, and other topics, such as the Federal Reserve’s concurrent meeting on monetary policy. 

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The Real Estate Roundtable submitted comments today to the North American Securities Administrators Association (NASAA) in opposition to proposed rules that would place new restrictions on the market for public non-listed REITs. (Roundtable comment letter and Roundtable Weekly, July 29)

CRE Impact Concerns

• NASAA’s proposal could have a profound impact on the $20.7 trillion U.S. commercial and multifamily real estate market.
  
  
• These proposed revisions to the NASAA Statement of Policy Regarding Real Estate Investment Trusts could have the unintended and unnecessary consequence of impeding real estate capital formation, undercutting economic growth, and weakening the strength and stability of U.S. real estate capital markets. (NASAA Request for Public Comment, July 12)
  
  
• The proposed revisions also have the potential to influence other sets of NASAA Guidelines under development, including those for Asset-Backed Securities, Commodity Pools, Equipment Leasing, Mortgage Programs, and Real Estate Programs other than REITs. (NASAA Request for Public Comment, July 12)

NASAA’s Proposed Changes

• Since nontraded real-estate investment trusts are not listed on stock exchanges, investors purchase shares through financial brokers. Federally regulated, public non-listed REITs (PNLRs) raised a record $35.4 billion last year. (Wall Street Journal, Aug. 30)
  
  
• The NASAA proposal would negatively affect publicly registered, non-traded REITs by linking conduct standards for brokers selling non-traded REITs to the SEC’s Best Interest conduct standard.
  
  
• The proposal has four revisions that would affect individual net income and net worth requirements; add a uniform concentration limitation; and include a new prohibition against using gross offering proceeds to fund distributions. (Roundtable Weekly, July 29 and the Institute for Portfolio Alternatives)

Roundtable Response

• Roundtable President and CEO Jeffrey DeBoer, above, emphasized in his letter to NASAA that PNLRs are a growing source of capital for the acquisition and development of affordable housing, commercial properties for small businesses, and other types of real estate that supports economic growth and employment.
  
  
• “The Roundtable encourages NASAA to conduct or at a minimum to address the economic impact of the proposal in its justification before considering adoption,” DeBoer stated. (Roundtable comment letter, Sept. 9)
  
  
• The Roundtable’s letter also notes the proposal would impose arbitrary restrictions that would limit investor choice during a time of stock market volatility and high inflation.
  
  
• The NASAA rules would also negatively impact highly regulated investment vehicles—including mutual funds, exchange-traded funds, interval funds, tender offer funds and business development companies.

The Roundtable’s letter concludes by urging NASAA to withdraw their proposal and engage industry participants to craft regulations that will help ensure NASAA’s goals without stifling investment in commercial real estate—nor limit investors’ ability to diversify their portfolios.

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Senate Finance Committee Chairman Ron Wyden (D-OR) and Ranking Member Mike Crapo (R-ID) released legislative text yesterday with new restrictions on conservation easements as a revenue offset for their new retirement savings bill.

Easement Restrictions

• Section 1104 of the Senate Finance committee’s summary of the Enhancing American Retirement Now (EARN) Act states that since 2016, the IRS “has identified certain syndicated conservation easement transactions involving pass-through entities as ‘listed transactions’ carrying a high potential for abusive tax avoidance.” (Legislative text)
  
  
• The EARN provision would disallow a charitable deduction for a qualified conservation contribution if the charitable deduction claimed exceeds two and one half times the sum of each partner’s relevant basis in such partnership— unless the contribution meets a three-year holding period test. (Section-by-section summary of the EARN Act)

What’s Next

• The Senate Finance Committee adopted the conservation easement proposal in June during consideration of the EARN Act, which passed on a 28-0 vote. The House passed its retirement legislation by a wide margin in March. The two packages will have to be reconciled. (PoliticoPro and TaxNotes, Sept. 9)

Conservation easement changes, retirement-related legislation, expiring tax provisions, and potentially other tax proposals could gain momentum during the “lame duck” legislative session  following the November mid-term elections.

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The National Counterterrorism Center (NCTC) on Sept 28 will preview its new aCTknowledge platform, designed to deliver timely situational awareness notifications covering terrorist events that may impact local communities.

How to Participate

• CRE participants can join the preview here:

• Wednesday, September 28 from 1:00–2:00 pm (ET)
• Zoom link
  • Meeting ID: 833 6363 8044 
  • Passcode: 591990

• The aCTknowledge platform will provide significant tactics, techniques, and procedures to support homeland security, law enforcement, and community first responder efforts aimed at protecting against terrorist threats. Additionally, NCTC’s aCTknowledge will offer reference guides to aid in rapid response and deployment, helping with private sector efforts. (See fact sheet about the new platform)

Roundtable Efforts

• The Roundtable—through our Homeland Security Task Force (HSTF) and partnership with the Real Estate Information Sharing and Analysis Center (RE-ISAC)—remains focused on increased cross-agency information sharing and cooperation with key law enforcement and intelligence agencies that benefit the industry.

• The RE-ISAC sends a daily report to members to share actionable information on a variety of potential cyber and physical threats. Additionally, The Roundtable’s HSTF works closely with federal, state, and local law enforcement, intelligence agency partners, and the RE-ISAC on risk mitigation measures that CRE businesses may consider to help protect critical infrastructure.

See The Roundtable’s 2022 Annual Report’s Homeland Security section.

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