Author: Trey Jackson

Jobs Originating through Launching Travel (JOLT) Act Aims to Encourage Tourism to the U.S. and Bolster Job Creation

Posted on by Trey Jackson

Reps. Mike Quigley (D-IL) and Tom Rice (R-SC) reintroduced the bipartisan Jobs Originating through Launching Travel (JOLT) Act of 2019 (H.R. 2187) on April 9 to improve national security, increase international tourism, create jobs and reform visa laws. 

The Visit U.S. Coalition endorsed the introduction of the JOLT Act last year and again this month on its reintroduction. (Roundtable Weekly, July 27, 2018 and Visit U.S., April 9)  The coalition, led by the U.S. Travel Association and the American Hotel and Lodging Association, includes The Real Estate Roundtable, U.S. Chamber of Commerce and the American Resort Development Association.  

The Visit U.S. Coalition endorsed the introduction of the JOLT Act last year and again this month on its reintroduction. (Roundtable Weekly, July 27, 2018 and Visit U.S., April 9)  The coalition, led by the U.S. Travel Association and the American Hotel and Lodging Association, includes The Real Estate Roundtable, U.S. Chamber of Commerce and the American Resort Development Association.   

The JOLT Act proposes to: 

  • Strengthen visa processing by setting timely goals for applicants; 
  • Create a pilot program at the State Department to utilize videoconferencing technology for applicants who lack easy access to U.S. embassies;
  • Rename the Visa Waiver Program (VWP) the Secure Travel Partnership to more accurately reflect the realities of security and travel facilitation within the program;””
  • Modify the VWP to prevent overstays, and increase the ability of secure countries to participate;
  • Increase the ability of Canadians to stay up to 240 days per year;
  • Improve coordination between the Department of Homeland Security and the State Department. 

“Welcoming international travelers to American shores has undeniable benefits – from boosting the economy with spending at hotels, restaurants, and retail stores, to showing the world what makes America great,” said Visit U.S. Coalition spokesperson Andrea Riccio.   According to the coalition, each overseas traveler spends approximately $4,200 when they visit the U.S., directly supporting 1.2 million jobs and $33.7 billion in wages.  (Visit U.S. news release, April 9) 

A panel discussion at last year’s Annual Roundtable Meeting focused on travel and tourism, economic growth and commercial real estate.  Participants included Roger Dow, President and CEO, U.S. Travel Association; Katherine Lugar, (former) President and CEO, American Hotel & Lodging Association; Senator Amy Klobuchar (D-MN) and Anthony E. Malkin  (Chairman and CEO, Empire State Realty Trust).  (Roundtable Weekly, June 15, 2018)

House Expected to Vote on Cannabis SAFE Banking Bill; STATES Act Reintroduced to Resolve Federal-State Legal Conflicts Over Cannabis

Posted on by Trey Jackson

A pair of bills working their way through Congress could allow financial institutions to provide legal cannabis companies with banking services and resolve federal-state laws governing cannabis.

State-by-State Cannabis Policies — interactive map from National Cannabis Industry Association. 
  • Congressman Earl Blumenauer (D-OR), founder and co-chair of the Congressional Cannabis Caucus, said that the House will soon vote on the SAFE Act – a bill allowing banks to work with marijuana businesses in certain states. (The Hill, April 19)
  • The House Financial Services Committee on March 27 approved the Secure and Fair Enforcement (SAFE) Banking Act of 20119 (H.R. 1595). The bipartisan bill, approved by a 45-15 vote, was co-sponsored Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH).
  • The Real Estate Roundtable in March sent a letter urging swift enactment of the bill to the leadership of the Financial Services and Judiciary Committees.  Roundtable President and CEO Jeffrey DeBoer noted in the letter, “The SAFE Banking Act provides much-needed clarity for the banking, real estate, and business sectors to function within the contours of state laws that have legalized marijuana.”  (Roundtable Weekly, March 29)

As the SAFE and STATES Acts move the cannabis issue forward in Congress, prospects for passing marijuana-related bills in the Senate remains uncertain.  (Fortune, April 19)

  • Blumenauer and Rep. David Joyce (D-OH) on April 4 also reintroduced the Strengthening the Tenth Amendment Through Entrusting States Act (STATES Act) in the House, which would ensure that each state has the right to determine for itself the best approach to cannabis within its borders.  (H.R. 2093) 
  • According to a summary of the bill, 47 states have laws permitting marijuana or marijuana-based products. Washington D.C., Puerto Rico, Guam, and a number of tribal nations have similar laws.  Last year,  Michigan, Missouri, Oklahoma, Utah, and Vermont all expanded legal marijuana.
  • In the Senate, the STATES Act (S. 1028) was reintroduced by Sens. Cory Gardner (R-CO) and Elizabeth Warren (D-MA) to resolve the federal-state conflict over cannabis laws.  (U.S. News & World Report, April 4 and Roundtable Weekly, April 12)  

As the SAFE and STATES Acts move the cannabis issue forward in Congress, prospects for passing marijuana-related bills in the Senate remains uncertain.  (Fortune, April 19) 

 

Treasury Issues Highly Anticipated and Favorable Opportunity Zones Guidance

Posted on by Trey Jackson

The Treasury Department on Wednesday released a highly-anticipated, second set of Opportunity Zone (OZ) regulations that seek to provide certainty to potential OZ investors and drive economic development in economically distressed communities nationwide. (reference: 169-page Treasury regulations and IRS news release, April 17) 

President Donald Trump with Scott Turner, executive director of the White House Opportunity and Revitalization Council,  at the April 17 Opportunity Zone Conference with state, local, tribal and community leaders. (Official White House Photo by Shealah Craighead)  

  • A White House Opportunity Zones event on Wednesday featured President Trump, Treasury Secretary Steven Mnuchin and officials from local governments around the country.  (White House Remarks and  Video, April 17)
  • The Treasury Department designated more than 8,700 low-income census tracts as Qualified Opportunity Zones last June. (IRS Notice 2018-48).  Treasury estimates that Opportunity Zones will boost investment in these targeted areas by $100 billion.  According to White House Chief Economist Kevin Hassett (citing Zillow data), property values in Opportunity Zones have appreciated by about 20 percent since zone designations were made in early 2018. 
  • Roundtable President and CEO Jeffrey DeBoer said, “We are pleased that these proposed regulations provide answers to many key structural and operational questions that have concerned potential opportunity zone investors, developers, and business owners.   The opportunity zone program, designed to stimulate investment in economically struggling communities nationwide, has tremendous potential.   We look forward to continuing to work with policymakers to reduce unnecessary, counterproductive aspects of the new law.”

The Roundtable previously submitted two comment letters to policymakers on Opportunity Zones, one in June 2018 and one in December 2018. (Roundtable Weekly: Oct. 19, and  Dec. 21). The rules issued this week expanded on the previously proposed regulations and address a variety of OZ investment issues.  Positive developments in the newly proposed regulations include the following:

The  169-page Treasury regulations and IRS news release, April 17

  • Opportunity Funds that own more than one property can sell assets individually after a 10-year holding period and fund investors can exclude the gain, without a requirement that the fund investor sell his or her interest in the fund.  In addition, the regulations clarify that multi-asset Opportunity Funds that choose to set up separate funds for individual assets can reduce the administrative burden on their investors through the use of a “feeder” fund that aggregates the fund interests;
  • Opportunity Funds can make nontaxable, debt-financed distributions to fund investors during the 10-year holding period, provided they comply with “disguised sale” rules that limit distributions made during the first 2 years;
  • Land (improved and unimproved) is qualified opportunity zone business property provided it is used in an active trade or business, and it does not have to meet the “original use” or “substantial improvement” requirements that apply to structures;
  • The working capital safe harbor, which provides up to 31-months for Opportunity Funds to deploy capital, is further liberalized.  Specifically, the regulations clarify that: (1) subsequent contributions of capital to the same Opportunity Fund are subject to a new 31-month period, and (2) the 31-month period is extended if the delay is due to waiting for government action or approval;
  • Leased property, including property leased by an Opportunity Fund from a related property, can qualify as opportunity zone business property if certain requirements are met.  This clarification in particular should help existing owners of property in Opportunity Zones participate in the tax incentives without having to sell or dispose of their ownership interest; 

Roundtable President and CEO Jeffrey DeBoer said, “We are pleased that these proposed regulations provide answers to many key structural and operational questions that have concerned potential opportunity zone investors, developers, and business owners.”

  • Real estate that straddles an Opportunity Zone border can qualify as opportunity zone business property as long as the portion of the property that is inside the zone is substantial relative to the total property;
  • While the sale of an asset during the 10-year holding period is generally a taxable event for the Opportunity Fund investors, the regulations infer that a fund could do a like-kind exchange and as long as the replacement property is qualified opportunity zone business property, the gain would be deferred for the investors;
  • Lastly, the regulations include a number of changes that aim to facilitate investment in operating businesses, which should increase tenant demand for commercial real estate located in Opportunity Zones.

The IRS has scheduled a public hearing on the second set of proposed rules for July 9, 2019. Comments are due 60 days after the proposed rules are published in the Federal Register. A third set of proposed guidelines is expected on Opportunity Fund’s reporting requirements to measure the effectiveness of the program.

The OZ program’s goals and incentives were the focus of a Jan. 29 discussion during The Real Estate Roundtable’s State of the Industry Meeting, which featured Sen. Scott and Roundtable member Geordy Johnson (CEO, Johnson Development Associates, Inc.). (Roundtable Weekly, Feb. 15) 

The Roundtable’s Tax Policy Advisory Committee (TPAC) plans to continue its work with policymakers on the OZ program and regulations affecting Qualified Opportunity Funds.

 

 

ULI Reports on Climate Risks; NYC Sets Aggressive GHG Targets on Buildings

Posted on by Trey Jackson

A recent report from the Urban Land Institute (ULI) and Heitman LLC explores current methods for assessing and mitigating climate risk in real estate. 

Climate Risk and Real Estate Investment Decision-Making explores current methods for assessing and mitigating climate risk in real estate.

  • Climate Risk and Real Estate Investment Decision-Making  concludes, “An eventual downward repricing of higher-risk assets will be the market’s way of redirecting capital to locations and individual assets where it is expected to be better insulated from these particular risks. This process will be painful for investors who are caught off guard, but those who are prepared have the potential to outperform.”  (CNBC, April 9 and ULI news release, Feb. 5 )
  • The New York City Council this week approved a set of bills that set greenhouse gas (GHG) emission caps for many different types of buildings, along with fines for those who do not meet the caps. (New York Times, April 17 and Politico Pro, April 18)
  • Real Estate Board of New York (REBNY) President John Banks responded that the organization is fully supportive of the City’s carbon emission goals, but the Council is leading New York in the wrong direction.  “The legislation is not an energy efficiency measure. With so many exemptions and carve-outs, we will be confronted with the fact that our city is off-track from meeting its ambitious 40 percent carbon reduction goal by 2030,” Banks said.  (REBNY, April 16 and April 18)
  • Commercial building owners and operators, including several members of The Real Estate Roundtable, were recognized last week at the annual ENERGY STAR Awards for demonstrating national leadership in cost-saving energy efficient solutions.  The U.S. Environmental Protection Agency and the U.S. Department of Energy awarded 183 ENERGY STAR partners for their outstanding contributions to public health and the environment.  The award winners also include Fortune 500 companies, schools, retailers, manufacturers and home builders.  (EPA news release, April 9)
  • The Roundtable and its Sustainability Policy Advisory Committee (SPAC) continue to work with lawmakers on sound policy issues that promote energy efficiency – not only to achieve better building performance, but to spur innovation, create construction jobs that cannot be exported, and enhance the country’s energy security through a more resilient building stock.  (The Roundtable’s 2019 Policy Agenda Energy Section) 

In this session of the U.S. Congress, climate-related policy is expected to play a role in any major tax, infrastructure, energy, or disaster-relief legislation, as the political parties seek to stake out their respective positions before the 2020 election. (Stanford News, April 17)

Bipartisan FIRPTA Repeal Legislation Introduced

Posted on by Trey Jackson

Bipartisan legislation introduced on April 10 by Reps. John Larson (D-CT) and Kenny Marchant (R-TX) would repeal the Foreign Investment in Real Property Tax Act (FIRPTA) – a discriminatory capital gains tax on foreign investors in U.S. real estate.  (Legislative text of the Invest in America Act and one-page summary)

This week, Rep. John Larson (D-CT), above, and Rep. Kenny Marchant (R-TX)  introduced bipartisan legislation, Invest in America Act, that would repeal FIRPTA.

  • FIRPTA’s tax penalty does not apply to any other asset class except U.S. real estate.  The arcane tax, enacted in 1980, discourages capital formation and investment that could create jobs and improve U.S. real estate and infrastructure.  By repealing FIRPTA, the Invest in America Act (H.R. 2210) would unlock foreign capital for productive investment. 
  • Rep. Larson stated, “The American Society of Civil Engineers has given America’s infrastructure a D+ rating. That’s unacceptable. This isn’t a Republican or Democrat issue, this is an American issue. I am proud to introduce the Invest in America Act today with Congressman Marchant to unlock more opportunities to invest in communities in Connecticut and across the nation and to rebuild our infrastructure.”  (Larson-Marchant news release, April 10)
  • Rep. Marchant added, “I am proud to partner with Congressman Larson to introduce the Invest in America Act, which will remove the barriers in our tax code that discourage investments in real estate.  By providing parity to real estate assets under the law, foreign investors will be able to create more opportunities and more prosperity for American families.”
  • The Larson-Marchant bill (H.R. 2210) was introduced with a total of 11 original cosponsors from the tax-writing Ways and Means Committee who represent every major region of the country.  
  • In 2015, Congress passed meaningful reforms to FIRPTA, exempting foreign pension funds and doubling the amount a foreign interest may invest in a publicly traded U.S. REIT.  (Roundtable Weekly, March 18, 2016)

    A  report by the Rosen Consulting Group  (RCG) estimated that FIRPTA repeal would generate an initial increase of between $65 billion and $125 billion in international investment in U.S. commercial real estate.  

     

  • The Real Estate Roundtable and American Institute of Architects released a statement of support for the Invest in America Act yesterday.  RER President and CEO Jeffrey DeBoer said, “The FIRPTA regime is an anti-competitive outlier that deflects global capital to other countries.  Our infrastructure challenges demand a holistic approach and innovative solutions. Now is the time to build on the recent success of the 2015 reforms by eliminating FIRPTA outright and unlocking private capital for even more job growth and infrastructure improvements.”
  • The Roundtable and 19 national trade organizations wrote to Ways and Means Committee Members and other key House lawmakers on March 28, urging them to support the Invest in America Act.  (Coalition FIRPTA letter, March 28)

A report by the Rosen Consulting Group (RCG) estimated that FIRPTA repeal would generate an initial increase of between $65 billion and $125 billion in international investment in U.S. commercial real estate. This new level of activity would lead to the creation of 147,000 to 284,000 jobs throughout the economy and increase taxpayers’ income by $8 billion to $16 billion.  (Unlocking Foreign Investment in U.S. Commercial Real Estate, July 2017) 

 

Bipartisan lawmakers unveil “Invest in America Act”

Posted on by Trey Jackson

Legislation would spur American job creation and investment in U.S. communities, infrastructure and Opportunity Zones

 
(WASHINGTON, DC) — The American Institute of Architects (AIA) and The Real Estate Roundtable (RER) are pledging support for the “Invest in America Act” (H.R. 2210), which was unveiled yesterday afternoon by U.S. Reps. John Larson (D-CT) and Kenny Marchant (R-TX).
 
The legislation has the potential to create as many as 284,000 American jobs and attract as much as $125 billion in global investment in U.S. communities, which would support addressing America’s aging buildings and crumbling infrastructure. 
 
The legislation does so by repealing the “Foreign Investment in Real Property Tax Act” (FIRPTA). Originally enacted in 1980, FIRPTA is an arcane tax that deflects global capital from U.S. cities and towns by imposing a capital gains tax on global investors that finance any U.S. real property. Consequently, the law greatly inhibits state and local leaders from partnering with global investors—in addition to leveraging domestic partners—to improve their communities, including renovating aging buildings; constructing roads, bridges, tunnels, hospitals and airports; developing affordable housing; and utilizing new Opportunity Zones.
 
“Under current law, global investment is discouraged in the United States and investors are driven to other countries,” said AIA EVP/Chief Executive Officer Robert Ivy, FAIA. “This legislation will put the U.S. on equal footing in the competition for investment dollars, which can be put directly into American communities through partnerships with local and state governments. This will result in meaningful jobs not only for architects but other professionals in design and construction as well as manufacturing and service industries.”
 
A partial repeal of FIRPTA occurred in 2015 with passage of the “Protecting Americans from Tax Hikes Act.” Changes to the law increased global investment in U.S. cities of all sizes and locations by 33 percent, proving that a full repeal would have a significant benefit to many more state and local economies. 
 
“The FIRPTA regime is an anti-competitive outlier that deflects global capital to other countries,” said RER President and CEO Jeffrey DeBoer. “Our infrastructure challenges demand a holistic approach and innovative solutions. Now is the time to build on the recent success of the 2015 reforms by eliminating FIRPTA outright and unlocking private capital for even more job growth and infrastructure improvements.”
 
Learn more about the legislation by visiting the Invest in America Coalition’s website.
 

Bipartisan lawmakers unveil “Invest in America Act

Posted on by Trey Jackson

Legislation would spur American job creation and investment in U.S. communities, infrastructure and Opportunity Zones

 
(WASHINGTON, DC) — The American Institute of Architects (AIA) and The Real Estate Roundtable (RER) are pledging support for the “Invest in America Act” (H.R. 2210), which was unveiled yesterday afternoon by U.S. Reps. John Larson (D-CT) and Kenny Marchant (R-TX).
 
The legislation has the potential to create as many as 284,000 American jobs and attract as much as $125 billion in global investment in U.S. communities, which would support addressing America’s aging buildings and crumbling infrastructure. 
 
The legislation does so by repealing the “Foreign Investment in Real Property Tax Act” (FIRPTA). Originally enacted in 1980, FIRPTA is an arcane tax that deflects global capital from U.S. cities and towns by imposing a capital gains tax on global investors that finance any U.S. real property. Consequently, the law greatly inhibits state and local leaders from partnering with global investors—in addition to leveraging domestic partners—to improve their communities, including renovating aging buildings; constructing roads, bridges, tunnels, hospitals and airports; developing affordable housing; and utilizing new Opportunity Zones.
 
“Under current law, global investment is discouraged in the United States and investors are driven to other countries,” said AIA EVP/Chief Executive Officer Robert Ivy, FAIA. “This legislation will put the U.S. on equal footing in the competition for investment dollars, which can be put directly into American communities through partnerships with local and state governments. This will result in meaningful jobs not only for architects but other professionals in design and construction as well as manufacturing and service industries.”
 
A partial repeal of FIRPTA occurred in 2015 with passage of the “Protecting Americans from Tax Hikes Act.” Changes to the law increased global investment in U.S. cities of all sizes and locations by 33 percent, proving that a full repeal would have a significant benefit to many more state and local economies. 
 
“The FIRPTA regime is an anti-competitive outlier that deflects global capital to other countries,” said RER President and CEO Jeffrey DeBoer. “Our infrastructure challenges demand a holistic approach and innovative solutions. Now is the time to build on the recent success of the 2015 reforms by eliminating FIRPTA outright and unlocking private capital for even more job growth and infrastructure improvements.”
 
Learn more about the legislation by visiting the Invest in America Coalition’s website.
 

Opportunity Zones: Treasury Regs Expected Soon; Reporting Legislation Discussed; White House Hosts Opportunity and Revitalization Council Meeting

Posted on by Trey Jackson

President Trump yesterday hosted the first meeting of the White House Opportunity and Revitalization Council and introduced its new Executive Director – Texas state legislator and former NFL player Scott Turner – to lead a coordinated Administration effort to revitalize economically distressed communities.   (White House tweet, April 4 and Scott Turner intro video)

 

President Trump yesterday hosted the first meeting of the White House Opportunity and Revitalization Council and introduced its new Executive Director – Texas state legislator and former NFL player Scott Turner – to lead a coordinated Administration effort to revitalize economically distressed communities.   (White House tweet, April 4 and Scott Turner intro video)

– enlarge White House photo above –
  • Trump stated during the cabinet-level meeting, “We’re providing massive tax incentives for private investment in these areas to create jobs and opportunities where they are needed the most.  This Council will further leverage federal resources and authorities to support these communities however possible.  We will work to streamline regulations, improve education, promote affordable housing, reduce crime, and expand jobs and skilled training for Americans all throughout our country.  Our actions will directly improve the lives of countless low-income Americans.”  (Remarks by President Trump at the White House Opportunity and Revitalization Council Meeting, April 4)
  • Treasury Assistant Secretary for Tax Policy David Kautter stated at an April 1 conference that the highly-anticipated, second set of Treasury Opportunity Zone (OZ) regulations could be issued in “a couple of weeks.”  Those regulations have been under review since mid-March and according to Kautter, their release will likely include a request for comments concerning the type of information the IRS should consider.  (Tax Notes, April 5)
  • Sen. Tim Scott (R-SC), who led the effort in Congress for enactment of the OZ program, said he is discussing legislation with Sen. Cory Booker (D-NJ) that would reinstate reporting requirements—including investor asset class, zones receiving investment, poverty reduction, and job creation—showing the effects of OZ tax breaks on local communities.  (BloombergTax, March 28 and March 27)
  • The OZ program’s goals and incentives were the focus of a Jan. 29 discussion during The Real Estate Roundtable’s State of the Industry Meeting, which featured Sen. Scott and Roundtable member Geordy Johnson (CEO, Johnson Development Associates, Inc.). (Roundtable Weekly, Feb. 15)
  • Last June, the Treasury Department designated more than 8,700 low-income census tracts in the United States, Puerto Rico, and territories as qualified Opportunity Zones. (IRS Notice 2018-48)  

Congress created the Opportunity Zone tax incentive program in the 2017 Tax Cuts and Jobs Act. Incentives reward Opportunity Fund investors with a capital gains deferral or exclusion on their invested capital in low-income communities.  (Roundtable  Opportunity Zones webpage)

Roundtable Recommends Policies to Spur Infrastructure Investment and Economic Growth

Posted on by Trey Jackson

Repealing FIRPTA, streamlining permit procedures and passing infrastructure financing measures will help spur infrastructure improvements and contribute to economic growth, according to recommendations submitted this week by The Real Estate Roundtable to the House Ways and Means Committee.  (Roundtable Statement for the Record)

Repealing FIRPTA, streamlining permit procedures and passing infrastructure financing measures will help spur infrastructure improvements and contribute to economic growth, according to recommendations submitted this week by The Real Estate Roundtable to the House Ways and Means Committee.  (Roundtable Statement for the Record)

The Roundtable recommendations include the following:  

  • Unlocking private capital by repealing the Foreign Investment in Real Property Tax Act (FIRPTA).  FIRPTA imposes a discriminatory layer of capital gains tax on foreign investment—a tax burden that does not apply to any other asset class.  Repealing FIRPTA would serve as a market-driven catalyst to finance improvements in our nation’s infrastructure.
  • Streamlining the permitting process.  A report by the nonprofit organization Common Good estimates that a six-year delay in starting construction on public projects costs the nation more than $3.7 trillion.  Permit delays dampen private sector investment and add to the overall costs of infrastructure projects. 
  • Increasing the federal gas “user fee” in a responsible and sustainable manner.  The gas user fee (18.4-cents a gallon) that capitalizes the Highway Trust Fund has not been raised since 1993.  The Roundtable supports proposals to sustain the HTF by increasing the user fee by five cents a year for the next five years, and indexing it to inflation thereafter.
  • Revising IRS “volume caps” and other limitations on private-activity bonds (PABs).  Congress should broaden availability of these tax-exempt municipal bonding tools. Bipartisan measures that advance PAB financing, including the Move America Act (H.R. 1508), the Public Buildings Renewal Act ( H.R. 1251), and the BUILD Act  (S. 352), warrant close analysis.   
  • Improving the Transportation Infrastructure Finance Innovation Act (TIFIA) loan program through measures such as the RAPID Act (S. 353).  Congress should consider establishing a similar credit enhancement program to encourage public-private partnerships to help repair an aging pipeline grid and remediate gas leaks that impact climate change. 

DeBoer discussed the role of public-private partnerships to develop infrastructure projects on CNBC’s Squawk Box in June 2017.  “There’s a lot of capital that wants to invest in infrastructure,” DeBoer said.  (Roundtable Weekly, June 9, 2017).  

Ways and Means Chairman Richard Neal (D-MA) has indicated he intends for his committee to consider an infrastructure bill this spring.

House Committee Approves Bill Allowing Banks to Serve Legal Cannabis Businesses; Roundtable Urges Enactment

Posted on by Trey Jackson

The House Financial Services Committee on March 27 approved the Secure and Fair Enforcement (SAFE) Banking Act of 20119 (H.R. 1595), which would allow financial institutions to legally work with state-authorized cannabis-related businesses.

The Roundtable earlier in the week sent a  letter urging swift enactment  of the legislation to the leadership of the House Financial Services and Judiciary Committees.

  • The bipartisan bill, approved by a 45-15 vote, was co-sponsored Reps. Ed Perlmutter (D-CO), Denny Heck (D-WA), Steve Stivers (R-OH) and Warren Davidson (R-OH).
  • The Real Estate Roundtable earlier in the week sent a letter urging swift enactment of the legislation to the leadership of the House Financial Services and Judiciary Committees. 
  • Roundtable President and CEO Jeffrey DeBoer notes in the letter, “The SAFE Banking Act provides much-needed clarity for the banking, real estate, and business sectors to function within the contours of state laws that have legalized marijuana.”
  • The Roundtable letter emphasizes that federal and state law differences on cannabis policy leaves banks and real estate providers trapped between their mission to serve lawful businesses in local communities – and the threat of federal enforcement action.  If H.R. 1595 is enacted, federally regulated banks would no longer face the threat of sanction simply by providing financial services to a legitimate cannabis-related businesses (CRB).
  • “Without a bank account, dispensaries and other legal CRBs must operate on a cash basis,” DeBoer notes. “Risks of crime thus increase and tax revenues to pay for infrastructure and other government services are potentially lost.  H.R. 1595 can significantly address these problems by providing protections for banks, real estate firms and their employees from punishment simply because they aim to serve businesses within the 46 states that have legalized marijuana to varying degrees,” DeBoer stated.  (Roundtable SAFE Act letter, March 25)

Rep. Perlmutter noted the broad support for the legislation from the business community, including The Roundtable, in a March 28 news release. Perlmutter added, “With 152 cosponsors at the time of the committee vote – over a third of the entire House – the bill will next move to the floor of the House.  A Senate companion bill is also expected to be introduced in the coming weeks.”