Author: Trey Jackson

FIRPTA Repeal Bill Introduced; “Tax Reform 2.0” Mark-Up Next Week

Posted on by Trey Jackson

As House Republican leaders this week promoted a second round of tax cuts before the mid-term elections, Reps. Kenny Marchant (R-TX) and Joe Crowley (D-NY) introduced legislation yesterday to repeal the Foreign Investment in Real Property Tax Act of 1980 (FIRPTA). 

A recent 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. 

  • FIRPTA subjects foreign investment in U.S. real property to a much higher tax burden than foreign investment in any other class of assets. As a result, overseas investors are often discouraged from investing in U.S. real estate.  FIRPTA effectively deters billions of dollars of capital that would strengthen U.S. infrastructure, expand the tax base and create much-needed domestic jobs.
  • The Marchant-Crowley Invest in America Act would build on FIRPTA reforms Congress passed in the Protecting Americans from Tax Hikes Act of 2015 (the PATH Act) by repealing FIRPTA altogether.  
  • The PATH Act exempted foreign pension funds from FIRPTA and increased the share of a publicly traded US REIT that a foreign investor can hold without triggering FIRPTA.  The PATH Act changes injected billions of dollars in foreign investment into the U.S. real estate market, and contributed to a spike in capital investment in many parts of the country.  (Roundtable Weekly – Oct 13, 2017)
  • A recent 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 report determined that repealing FIRPTA would generate between $26 and $49 billion in total economic activity — a boost of 10 to 30 basis points to U.S. GDP.  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.  RCG’s report concluded that repealing FIRPTA would not have a meaningful impact on the federal budget, as FIRPTA accounted for less than 0.002% of federal tax receipts from 2009 to 2013. (Unlocking Foreign Investment in U.S. Commercial Real Estate, July 2017)
  • FIRPTA reform is a long-standing goal of The Roundtable.  The economic benefits of a comprehensive FIRPTA repeal was a focus of testimony by Real Estate Roundtable President and CEO Jeffrey DeBoer before the U.S. Senate Finance Committee on Sept. 19, 2017.  (Roundtable Weekly) 

“In 2015, Congress passed the most significant reforms of FIRPTA since its passage in 1980.  Congress should build on the recent success by repealing FIRPTA outright as part of tax reform. Unleashed by FIRPTA’s repeal, capital from abroad would create jobs by financing new real estate developments, as well as the upgrading and rehabilitation of existing buildings. Architects, engineers, construction firms, subcontractors, and others would be put to work building and improving commercial buildings and infrastructure,” DeBoer testified.  (Roundtable Statement for the Record, Senate Finance Committee Sept 2017) 

Tax Reform 2.0

GOP leaders aiming to pass another round of tax reforms through the House before the November mid-term elections are planning next week to introduce “Tax Reform 2.0” legislation. The bill would make the individual tax cuts contained in President Donald Trump’s December tax overhaul permanent, while expanding taxpayer savings opportunities. 

House Ways and Means Committee Chairman Kevin Brady (R-TX) commented, “… next week we will introduce legislation to make permanent the small business and individual tax cuts that are driving these positive economic numbers. This investment into our workers will produce over a million and a half new jobs, continue to boost wages, and increase America’s competitiveness for years to come.”  (Accounting Today, Sept. 7). 
  • Today, House Ways and Means Committee Chairman Kevin Brady (R-TX) commented on the 2.0 legislation expected to be marked up by his committee next week while reacting to the U.S. Bureau of Labor Statistics’ August jobs report showing a gain of 201,000 jobs.
  • “August was another solid month of job growth, marking over 1.6 million jobs created this year and the highest level of wage gains since 2009. And we know we can do even better to continue creating greater financial security for our workers and Main Street businesses. That’s why next week we will introduce legislation to make permanent the small business and individual tax cuts that are driving these positive economic numbers. This investment into our workers will produce over a million and a half new jobs, continue to boost wages, and increase America’s competitiveness for years to come,” Brady said.  (Accounting Today, Sept. 7)
  • In July, Brady released a two-page framework for “Tax Reform 2.0” that would make individual and small business tax cuts.  Although last December’s Tax Cuts and Jobs Act made corporate tax cuts permanent, most provisions for individuals and pass-through businesses are set to expire at the end of 2025.  Yesterday, Ways and Means Committee Republicans released an updated outline of the Tax Cuts 2.0 package.
  • Bloomberg reported this week that House Majority Whip Steve Scalise stated, “We’re not resting on our laurels. We’re seeing this great economic growth, and so we’re starting to put together tax cuts 2.0.”  (Los Angeles Times, Sept. 5)

The central feature of the reform proposal — a permanent extension of tax cuts for individuals — is unlikely to pass the Senate, where it would need Democratic support (The Hill, July 24).  Additionally,  the introduction of a Tax Reform 2.0 bill may delay legislation addressing tax technical corrections until after the November elections. (Roundtable Weekly, July 20)

 

Top Republican Unveils Bipartisan Housing Finance Reform Bill

Posted on by Trey Jackson

House Financial Services Committee Chairman Jeb Hensarling (R-TX) on Sept. 6 unveiled a sweeping proposal to overhaul the housing finance system in the United States during a hearing entitled, “A Failure to Act: How a Decade without GSE Reform Has Once Again Put Taxpayers at Risk.”

House Financial Services Committee Chairman Jeb Hensarling (R-TX) on Sept. 6 unveiled a sweeping proposal to overhaul the housing finance system in the United States during a hearing entitled, “A Failure to Act: How a Decade without GSE Reform Has Once Again Put Taxpayers at Risk.” 

(Hensarling statement on YouTube). 
  • This fall marks ten years since the height of the financial crisis, when the Government-Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac were placed into government conservatorship on September 6, 2008.  According to a committee summary of yesterday’s  hearing, “The subsequent financial bailout of Fannie Mae and Freddie Mac has required over $190 billion in taxpayers contributions to date, and taxpayers remain explicitly obliged to provide over $254 billion should future losses materialize.  Never intended as a permanent solution, the conservatorship continues ten years later.” 
  • The discussion draft of the “Bipartisan Housing Finance Reform Act of 2018” proposes to “repeal the GSEs’ charters, permanently ending their monopoly, and transition to a system that allows qualified mortgages backed by an approved private credit enhancer with regulated, diversified capital resources to access the explicit, full government securitization guarantee provided by Ginnie Mae,” according to Chairman Hensarling’s opening committee statement.  The bill is co-sponsored by Jim Hines (D-CT) and John Delaney (D-MD). 
  • In a Wall Street Journal Op-Ed, Hensarling further explained the proposal – “Loan originators would have to acquire coverage from an approved ‘credit enhancer,’ or private mortgage credit guarantor, to use the Ginnie Mae system. That would function as a private capital buffer on the loan, which could then be securitized by any of Ginnie Mae’s more than 400 approved issuers with an explicit, full government guarantee of mortgage-backed securities.” (Wall Street Journal Op-Ed, Sept. 6) 
  • The day before the hearing, a coalition of the housing industry’s largest trade groups and affordable housing advocates wrote to the Trump Administration and Congress to enact permanent reforms to the government-sponsored enterprises.  ( Coalition letter and HousingWire, Sept 5) 
  • A private sector solution to GSE reform was offered in a Sept. 4 Op-Ed in The Hill by Roundtable member Willy Walker, Chairman and CEO of Walker & Dunlop, one of the largest commercial real estate finance companies in the United States.
  • In his Op-Ed, Mr. Walker writes, “The GSEs’ multifamily lending businesses, where they back loans to owners of apartment buildings across the country, is the model that should be applied to all lending done by the GSEs. It’s the same role they play in financing single-family homes, but with a fundamental difference: In the multifamily business, private capital is required to take risk on every loan the GSEs guarantee, protecting the GSEs and taxpayers in the process.” (A fix for Fannie Mae and Freddie Mac already exists, Sept. 4) 
  • The proposed legislation has slim chances of advancing during an election year, yet Reps. Hensarling and Delaney said it could serve as a road map that lawmakers in the next Congress could use to push for GSE reform.  Hensarling is not running for re-election. (Bloomberg, Sept 6) 

Hensarling concluded his committee statement, “If the political will to enact such reform stalls in this Congress or the next, the Administration can and should effectuate change. The President will appoint a new Federal Housing Finance Agency Director in January. With apologies to The Rolling Stones, ‘you can’t always get what you want, but if you try some time, you just might find, you get what you need’ to avert the next housing crisis.”  (Hensarling statement on YouTube)

 

Business Coalition Urges Treasury Secretary Mnuchin to Issue Guidance on Cost Recovery Period for Real Estate Improvements

Posted on by Trey Jackson

A broad-based business coalition that includes The Real Estate Roundtable urged Treasury Secretary Steven Mnuchin on Wednesday to issue guidance clarifying certain provisions included in tax overhaul legislation enacted last year — including the cost recovery period for qualified improvement property (QIP).  ( Coalition letter , Aug. 22)

A broad-based business coalition that includes The Real Estate Roundtable urged Treasury Secretary Steven Mnuchin on Wednesday to issue guidance clarifying certain provisions included in tax overhaul legislation enacted last year — including the cost recovery period for qualified improvement property (QIP).  (Coalition letter , Aug. 22) 

  • An unintentional drafting mistake in the tax law has resulted in a significantly longer 39-year cost recovery period for new, qualified nonresidential interior improvements.  Congress intended to allow the immediate expensing of qualified improvements, or provide a 20-year recovery period in the case of taxpayers electing out of new limitations on the deductibility of business interest.  
  • The drafting error affects leasehold improvements, expenditures made to improve common spaces in shopping centers and office buildings, and other interior improvements to nonresidential structures.  The longer cost recovery period effectively increases the after-tax cost of upgrading and improving commercial real estate.   (“Correcting the Drafting Error Involving the Expensing of Qualified Improvement Property ” –  The Tax Foundation , May 30)     
  • The August 22 letter includes 283 signatories, who state the delay in correcting the  QIP provision is delaying some store and restaurant remodeling projects, and causing some retailers to decline opportunities to purchase or lease new store locations that would require substantial improvements.  
  • The coalition letter further explains, “These decisions not only deny communities the jobs associated with substantial construction projects, but also deny our communities the opportunity to bring new, permanent jobs to an otherwise abandoned store or to revitalize a declining mall. The delayed investment in remodeling projects is also causing a decline in sales by manufacturers that supply products used in remodels, like energy-efficient lighting and plumbing supplies.”  
  • The coalition urges Secretary Mnuchin “to issue guidance that will facilitate the intent of the law and eliminate the imposition of large additional tax compliance and accounting burdens on taxpayers, as well as associated tax enforcement burdens on the Internal Revenue Service.”  
  • Last week, all Republican members of the Finance Committee and Chairman Orrin Hatch (R-UT) wrote to Treasury and the IRS, requesting “guidance that is consistent with the congressional intent” of the new tax law regarding QIP expensing and two other tax policy areas.  (Roundtable Weekly, Aug. 17)    

Roundtable President and CEO Jeffrey DeBoer stated, “In 2015, Congress voted overwhelmingly to permanently extend the 15-year recovery period for certain property improvements.  By passing tax reform, Congress intended to consolidate those changes.  Treasury should now use its authority to provide taxpayers with relief until a technical corrections bill is enacted.  Treasury guidance will remove taxpayer uncertainty, unlock investment, and spur job-creating property upgrades and renovations.” 

Senate GOP Taxwriters Request Treasury Secretary Mnuchin to Clarify Cost Recovery Period for Real Estate Improvements

Posted on by Trey Jackson

Senate Finance Committee Republicans yesterday sent a letter to Treasury Secretary Steven Mnuchin and Acting IRS Commissioner David Kautter requesting clarifications to the tax overhaul legislation enacted last year – including guidance related to a drafting error that unintentionally pushed the cost recovery period for qualified property improvements (QIP) from 15 to 39 years. (The Hill, Aug. 16)

The August 16 letter, signed by all Republican members of the Finance Committee and Chairman Orrin Hatch (R-UT), urges Treasury and the IRS to “issue guidance that is consistent with the congressional intent” of the new tax law regarding QIP expensing and two other tax policy areas. 
  • The unintentional drafting mistake has resulted in a longer cost recovery period for qualified nonresidential interior improvements – a category that previously covered leasehold improvements, retail improvements, and new restaurant construction.  (” Correcting the Drafting Error Involving the Expensing of Qualified Improvement Property” – The Tax Foundation, May 30) 
  • As a result of the mistake, businesses across the country are delaying, or significantly reducing, capital expenditures for building improvements, undermining job creation and economic activity.  
  • The August 16 letter, signed by all Republican members of the Finance Committee and Chairman Orrin Hatch (R-UT), urges Treasury and the IRS to “issue guidance that is consistent with the congressional intent” of the new tax law regarding QIP expensing and two other tax policy areas. 
  • On the depreciation of real property, the letter notes: “[I]n eliminating the separate definitions of qualified leasehold improvement, qualified restaurant, and qualified retail improvement property and providing a new single definition of qualified improvement property, the language…failed to designate qualified improvement property as 15-year property under the modified accelerated cost recovery system (“MACRS”).  In addition, there is a typographical error in a cross-reference identifying qualified improvement property as property which is recovered over 20 years under the alternative depreciation system (“ADS”).  Congressional intent was to provide a 15-year MACRS recovery period and a 20-year ADS recovery period for qualified improvement property. Such intent is set forth in the Conference Report to accompany (the Tax Cuts and Jobs Act ).” ( H.R. Rep. 115-466, at p. 366).”  
  • During a February hearing in the House, Treasury Secretary Mnuchin testified about the QIP issue: “I am aware of the error and it obviously was unintended. We are looking at whether there is anything we can do with regulations. I think it is likely that this is something that may need to be fixed in the bill. We look forward to working with you.” (Ways and Means Committee – Mnuchin’s testimony and hearing video and Roundtable Weekly, June 1) 
  • The letter, signed by Senate Finance Committee Chairman Orrin Hatch (R-UT) and other GOP tax writers, states they will also introduce legislation to correct unintentional mistakes in the new tax, although support from Democrats would be needed to pass such a bill.  An amendment (# 3597) introduced July 26 by Sen. Pat Toomey (R-PA) to an appropriations bill (H.R. 6147) would have corrected the QIP drafting error, but did not receive a vote.  

The letter also notes that the Finance Committee continues to review the law for potential areas that may require regulatory guidance or technical corrections: “After this review, we intend to introduce technical corrections legislation to address any items identified.”  (Senate Finance Committee News Release, Aug. 16)

President Trump Signs Bill Expanding Federal Review of Foreign Investments

Posted on by Trey Jackson

President Trump on Monday signed a defense funding bill into law that includes an expansion of federal authority to review and potentially block foreign investments based on national security considerations. (Law.com, Aug. 13 and Wall Street Journal, Aug. 15)

CFIUS recently ordered Chinese conglomerate HNA Group Co., Ltd  to sell its majority stake in a 21-story Manhattan building whose tenants include a police precinct assigned to protect Trump Tower.

  • The defense bill included the Foreign Investment Risk Review Modernization Act of 2018 (FIRMMA), which expands the authority of the Committee on Foreign Investment in the United States (CFIUS) — a U.S. interagency committee that conducts national security reviews of foreign investment. (Pensions & Investments, Aug. 13)
  • CFIUS’s scope now expands to cover the national security implications of transactions that could result in control of a U.S. business by a foreign person — and to block transactions or impose measures to mitigate any threats to U.S. security. (Law.com, Aug. 13)
  • FIRRMA expands the list of covered transactions to include some foreign purchases and leases of real estate near military and other strategic facilities.  Responding to concerns raised by The Roundtable and other industry groups, language is also included that exempts real estate located in ‘urbanized areas’ from the criteria of a covered transaction.  The Census defines an urbanized area as one comprising more than 50,000 people.  See pages 820-826 of the final congressional conference report. 

CFIUS recently ordered Chinese conglomerate HNA Group Co., Ltd to sell its majority stake in a 21-story Manhattan building whose tenants include a police precinct assigned to protect Trump Tower. (Bloomberg, Aug. 8 and The Wall Street Journal, Aug. 10)

 

Trump 2016 Campaign Advisor: Boost Foreign Tourism to Lower the Trade Deficit

Posted on by Trey Jackson

Club for Growth founder and economic advisor to the Trump 2016 campaign, Stephen Moore, writes in an August 15 op-ed that boosting foreign tourism to the United States will increase economic growth and lower the trade deficit — a view shared by the VisitU.S. Coalition.  (Boston Herald, Aug. 15)

The economic importance of foreign travel and tourism to the United States’ economy and commercial real estate industry was the focus of a panel discussion during The Roundtable’s 2018 Annual Meeting in June. 
– enlarge photo –

  • Moore notes in his commentary, “Washington is ignoring one easy way to trim the trade deficit without new tariff threats or complicated trade deals that could take years to consummate.  Get more foreigners to travel to the United States and buy things here. Recently, I met with officials from the Visit U.S. Coalition – which is made up of owners of businesses such as hotels, restaurants, airlines, amusement parks and shopping centers – and they alerted me to this lost opportunity.”
  • Led by the U.S. Travel Association (USTA) and the American Hotel and Lodging Association (AH&LA), the VisitU.S. Coalition includes The Real Estate Roundtable, U.S. Chamber of Commerce and the American Resort Development Association.  The multi-industry coalition aims to safely and securely welcome more overseas visitors, who stay an average of 18 nights and spend an estimated $4,360 at U.S. hotels, stores, restaurants and attraction properties.
  • Moore also comments in his op-ed: “Prior to 9/11, the U.S. was the destination for about 1 in 6 international trips, but now we are the destination for about 1 in 8.  The travel industry economists calculate that this decline has reduced foreign purchases of American goods and services by some $32 billion. They estimate about 100,000 fewer jobs have been created as a result of fewer tourists arriving from abroad.”  
  • To address the drop of 7.4 million international visitors to America from 2015-2017, the VisitU.S. coalition encourages policies to help the nation regain its lost share of the global travel market by 2020 and help achieve the Administration’s economic goals. (Roundtable Weekly, Jan. 19 and  Feb. 9)  

    VisitU.S. Coalition video on the State of International Travel. 
  • Specifically, the coalition is urging Congress to reauthorize the Brand USA program — the nation’s first public-private partnership that markets the U.S. as a premier travel destination and communicates U.S. visa and entry policies.  “The travel industry itself needs to do a better and more comprehensive job marketing America and our natural and man-made wonders,” Moore noted in his editorial.   
  • Entry fees on foreign visitors – not federal taxpayer dollars – support Brand USA.  An FY2017 return on investment analysis showed each dollar of Brand USA marketing generated almost 28 dollars in visitor spending.  Brand USA is also estimated to have produced 486 million dollars in federal tax revenue, and another $526 million  in state and local tax revenue.  

Travel and tourism policies to boost economic growth were addressed in a panel discussion during The Real Estate Roundtable’s June 14 Annual Meeting.  Participants included USTA’s Roger Dow, AH&LA’s Katherine Lugar, Senator Amy Klobuchar (D-MN) and Anthony E. Malkin (Chairman and CEO, Empire State Realty Trust).  (Roundtable Weekly, June 15, 2018.)

 

New ENERGY STAR Building Scores Available August 27

Posted on by Trey Jackson

The Environmental Protection Agency (EPA) announced this week that long-anticipated, updated ENERGY STAR scores that rate and compare U.S. buildings’ energy performance will be available on Monday, August 27.  [EPA website]

The EPA currently lists 34,226 commercial buildings and plants located in all 50 states as ENERGY STAR-labeled – representing 4.95 trillion square feet of space.

  • EPA currently lists 34,226 commercial buildings and plants located in all 50 states as ENERGY STAR-labeled – representing 4.95 billion square feet of space.  This number of “top of class” assets is expected to decrease, as average building “scores” will drop in light of updates to metrics in ENERGY STAR’s Portfolio Manager energy usage benchmarking tool.   
  • For most types of buildings, an ENERGY STAR score (registered on a scale of 1 to 100) is based on the Commercial Buildings Energy Consumption Survey (CBECS), conducted periodically by the U.S. Department of Energy. The latest CBECS data, which forms the base for the new EPA scores, became available in 2016.  Prior to the update, for years ENERGY STAR scores have reflected data collected in 2003. 
  • EPA’s move to update its building scores has been in the works for several years and has been a continual focus of The Roundtable’s Sustainability Policy Advisory Committee (SPAC).  Many Roundtable member companies own and/or operate ENERGY STAR properties, and market their ratings to attract an increasingly Millennial-dominated workforce.  Pension funds and other institutional investors also rely on the label as a signal for well-managed assets with smaller carbon footprints.   

    EPA’s annual Top Cities list shows which metro areas were home to the  most ENERGY STAR certified buildings  in the previous year.

  • “We have to face the facts: ENERGY STAR building certification will likely be much harder to achieve,” said Tony Malkin, Chairman and CEO of Empire State Realty Trust, and chairman of The Roundtable’s SPAC.  “The U.S. commercial real estate industry has made huge strides, and those strides are reflected in the new data set about to be deployed by the EPA.  ENERGY STAR has always been a mark of highest achievement.  With more efficient buildings in the data set, there will be a reduction in the number of buildings which qualify on a relative basis.”  
  • “There are new technologies and practices, as well as inducements, such as ENERGY STAR for Tenants on which RER worked hard to put in place, which justify capital investments in buildings to reach even higher levels of performance, encourage greater collaboration between commercial landlords and tenants, and create thousands of well-paying retrofit construction jobs that cannot be exported,” Malkin continued.  (See Roundtable Weekly, June 15, 2018.)      
  • EPA reports that Portfolio Manager will be down on Sunday, August 26. New ENERGY STAR building scores, with updated Portfolio Manager metrics, will be available on Monday, August 27.  EPA encourages ENERGY STAR users to documents their current scores now – and their new scores starting August 27.  

EPA’s recommendations for how to prepare for the upcoming changes and webinars about the new metrics are available online.

 

Congress Passes Defense Legislation Addressing Foreign Investment Risk; Includes Language Addressing Real Estate

Posted on by Trey Jackson

The Senate on August 1 approved the National Defense Authorization Act for Fiscal Year 2019 (NDAA) – a compromise $717 billion defense policy bill aimed at building up the military and blunting Chinese foreign investment – which includes language that may affect some foreign purchases and leases of real estate near military and other strategic facilities.

The final version of the NDAA – including FIRRMA  –  would expand the list of covered transactions to include some foreign purchases and leases of real estate near military and other strategic facilities. It is anticipated that President Trump will sign the legislation in August.

  • The NDAA bill also includes the Foreign Investment Risk Review Modernization Act of 2018 (FIRMMA), which reforms the Committee on Foreign Investment in the United States (CFIUS) – a U.S. interagency committee that conducts national security reviews of foreign investment. 
  • FIRMMA expands the review authority of CFIUS to review national security implications of transactions that could result in control of a U.S. business by a foreign person and to block transactions or impose measures to mitigate any threats to U.S. security.
  • FIRRMA also expands the list of covered transactions to include some foreign purchases and leases of real estate near military and other strategic facilities.  Responding to concerns raised by The Roundtable and other industry groups, language is also included that exempts real estate located in ‘urbanized areas’ from the criteria of a covered transaction.  The Census defines an urbanized area as one comprising more than 50,000 people.  See  pages 820-826 of the final congressional conference report.

A congressional conference committee reconciled House and Senate versions of the NDAA last month. The final version of the NDAA – including FIRRMA – passed the House on July 26 and the Senate on Wednesday. It is anticipated that President Trump will sign the legislation in August.

National Flood Insurance Program Extended through Nov. 30

Posted on by Trey Jackson

A five-month extension of the National Flood Insurance Program (NFIP) was passed by Congress hours before its scheduled July 31 expiration and signed by President Trump later that day.  The NFIP extension gives the House and Senate additional time to work towards long-term reauthorization.

If the National Flood Insurance Program had lapsed, the Federal Emergency Management Agency would not have been able to issue new policies, and its borrowing authority would have been reduced to $1 billion from $30.4 billion. This would have had major effects on the real estate markets in coastal areas, where a flood insurance policy is mandatory for obtaining a new mortgage. 
  • If the program had lapsed, the Federal Emergency Management Agency (FEMA) would not have been able to issue new policies, and its borrowing authority would have been reduced to $1 billion from $30.4 billion. This would have had major effects on the real estate markets in coastal areas, where a flood insurance policy is mandatory for obtaining a new mortgage. (BGov, July 31) 
  • On July 25 the House voted 366-52 to pass the National Flood Insurance Program Extension Act of 2018 (S.1182), as amended, and on July 31 the Senate followed suit with a vote of 86-12. The measure reauthorizes FEMA to enter into new contracts for flood insurance and borrow from the Treasury up to specified amounts through Nov. 30, 2018 – the ­official end of the Atlantic hurricane season.   
  • The bill received pushback from Senate and House Republicans who wanted reforms to make the NFIP financially sustainable – after more than a decade of historic storms put the program deeply into debt. (CQ, July 25) 
  • A White House statement last week supported efforts to keep the flood insurance program from expiring, but noted Congress needs to enact long-term changes to ensure the program’s long-term viability. (The White House, July 25) 
  • In November 2017, the House passed long term legislation – the 21st Century Flood Reform Act (H.R. 2874) – that would reform and reauthorize NFIP for five years. The bill included: funding for flood mitigation assistance; lower flood insurance rates, support for  the private flood insurance market, modernization of flood zone mapping; and flood mitigation practices for homebuilders and land developers.  However, the measure was not been taken up in committee in the Senate. (Roundtable Weekly, Nov. 17, 2017) 

The Roundtable will continue to work with lawmakers and our coalition partners to assist with NFIP reforms and a long-term reauthorization, that would help protect the nation’s commercial and multifamily business-owners, their properties, and residents.

 

Jobs Originating through Launching Travel (JOLT) Act Introduced to Spur International Tourism and Job Creation Issues

Posted on by Trey Jackson

In a bipartisan effort to spur tourism to the U.S., create jobs, reform outdated visa laws and increase national security, Reps. Mike Quigley (D-IL) and Tom Rice (R-SC) yesterday introduced the Jobs Originating through Launching Travel (JOLT) Act of 2018.

“By improving the visa process, strengthening national security, and welcoming vetted travelers, the U.S. will be able to realize economic benefits at hotels, restaurants, retail store, and attractions around the country,” said VisitU.S. Coalition spokesman Amos Snead.  (VisitU.S. News Release, July 26)

  • Rep. Quigley said, “By updating outdated visa laws, we can drive tourism and job growth in our cities and assist the U.S. intelligence community with their mission to spot and stop terrorist threats. The JOLT Act accomplishes both of those objectives by stimulating economic activity and improving national security.”
  • Rep. Rice added, “The JOLT Act will enhance our economic competitiveness and strengthen national security by modernizing the Visa Waiver Program (VWP), which facilitates streamlined travel into the United States for pre-approved travelers from member countries.”
  • In 2016, 22 million people traveled to the U.S. from VWP countries, accounting for 59% of overseas arrivals to the U.S.  Travelers from these countries generated more than $90 billion for the U.S. economy.  (Rep. Quigley News Release, July 26)
  • The VisitU.S. Coalition applauded introduction of the Act. Coalition spokesman Amos Snead commented, “By improving the visa process, strengthening national security, and welcoming vetted travelers, the U.S. will be able to realize economic benefits at hotels, restaurants, retail store, and attractions around the country,” said VisitU.S. Coalition spokesman Amos Snead.  (VisitU.S. News Release, July 26)
  • Led by the U.S. Travel Association and the American Hotel and Lodging Association, the VisitU.S. coalition  also includes The Real Estate Roundtable, U.S. Chamber of Commerce and the American Resort Development Association. 
  • The coalition is also urging Congress to reauthorize the Brand USA program, which is funded through fees on foreign visitors who do not require a visa when entering the U.S.  Legislation is needed to authorize the program beyond 2020 – and ensure that visitor fees authorized for collection from 2021 to 2027 will not be diverted to the Treasury Department, as currently scheduled. (Roundtable Weekly, June 29)

A panel discussion at The Roundtable’s June 14 Annual Meeting focused on travel and tourism, economic growth and CRE.  Participants included Roger Dow, President and CEO, U.S. Travel Association; Katherine Lugar, 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.)