News Type: Roundtable Weekly

Mnuchin: President Supports Sales Tax for Online Purchases; GAO Study Shows States Losing Billions from Tax-Free Sales

Posted on by Trey Jackson

As expectations grow that the Supreme Court will rule on the issue of state and local taxation of internet purchases by this summer, Treasury Secretary Steven Mnuchin recently testified before two congressional committees about President Trump’s support for an online sales tax.

Treasury Secretary Steven Mnuchin recently testified before two congressional committees about President Trump’s support for an online sales tax.

During a hearing before the Senate Banking Committee, Mnuchin addressed taxing online purchases through the Marketplace Fairness Act, stating: “[T]he president fundamentally supports the idea of some type of sales tax across the board … There are aspects of that he likes a lot and he looks forward to working with you and others on it.” (Video of Exchange with Sen. Jon Tester (D-MT), C-Span, Jan. 30) 

At a Feb. 15 House Ways and Means Committee hearing, Mnuchin said the president “does feel strongly” that the U.S. should impose a sales tax on purchases made over the Internet. (Bloomberg, Feb. 15)

The U.S. Government Accountability Office (GAO) released a study in December estimating that state and local governments could have collected an estimated 8 to 13 billion dollars in 2017 if states were given authority to require sales tax collection from all remote sellers. (GAO report, Dec. 18, 2017).  The Roundtable has recommended that sales taxes collected from on-line consumer purchases may provide a reliable source of state and local revenue to help pay for President Trump’s recently proposed infrastructure re-building plan.  (Roundtable Weekly, Jan. 26, 2011.)

The Supreme Court is scheduled to hear oral argument in South Dakota v. Wayfair, Inc., on April 17 to resolve the constitutionality of collecting sales and use taxes that are due on Internet purchases.  The high court is expected to render a decision by the end of June. (Roundtable Weekly, Jan. 12)

The International Council of Shopping Centers, Investment Program Association, Nareit®, and the National Association of REALTORS® will join The Roundtable on an amicus brief to be filed early next month in Wayfair, urging the Supreme Court to overturn a pair of decades-old opinions prohibiting states from imposing sales and use tax collection obligations on web-based, catalog, and other retailers lacking an in-state physical presence.  The upcoming brief will re-iterate many of the points that the real estate coalition set forth in an initial amicus brief filed last November  (Roundtable Weekly, Nov. 3, 2017.)

Trump Administration Proposes Framework for Nationwide Infrastructure Improvements

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The Trump Administration on Monday released its long-awaited Legislative Outline for Rebuilding Infrastructure in America, which proposes at least $1.5 trillion in new investment across infrastructure asset classes; incentivizing greater state and local funding; shortening the project permitting process to two years; investing in rural projects; and improving worker training. (White House Fact Sheet, Feb. 12)

The Trump Administration on Monday released its long-awaited Legislative Outline for Rebuilding Infrastructure in America  , which proposes at least $1.5 trillion in new investment across infrastructure asset classes. ( White House Fact Sheet  , Feb. 12)    

President Trump proposes that the government would spend $200 billion in infrastructure investment to spur states, localities and the private sector to raise the $1.3 trillion balance. 

According to the Administration’s proposal, states, localities and the private sector are asked to “step-up” their presence to catalyze a larger, modernized, and broader investment market.  New federal funds would be allotted to boost existing federal infrastructure financing (like the TIFIA loan program for surface transportation) and expand federal financing platforms to reach airports, ports, short-line and passenger rail, rural broadband, stormwater, flood remediation and prevention, Brownfields remediation, and others. 

Transportation Secretary Elaine Chao will appear before Senate and House infrastructure panels in early March to discuss the Administration’s proposal. (Bloomberg Law, Feb. 13)   

Since odds for passing a bill with additional spending this year are slim, serious consideration of a specific infrastructure bill is not expected until after the mid-term elections and a new Congress is sworn-in. 

Roundtable President and CEO Jeffrey DeBoer commented on the positive economic benefits that such an infrastructure program would bring to the nation. “Modernizing our roads, tunnels, mass transit, drinking water, power grid, and telecommunications systems – in rural and urban areas alike – are vitally important to economic growth, productivity and America’s global competitiveness,” DeBoer said. 

He added, “Real Estate Roundtable members are experienced in addressing the financing, permitting and government partnership issues that frequently slow or stop infrastructure projects.  We intend to provide positive feedback and ideas to all policymakers working to facilitate improvements in our nation’s infrastructure.”  (Roundtable Letter on Infrastructure Funding, Jan. 11) 

Policymakers Pledge to Issue Technical Corrections and Guidance to Implement New Tax Law

Posted on by Trey Jackson

Treasury Secretary Steven Mnuchin testified before Senate and House tax-writers this week about implementation of the new tax law – including needed corrections affecting carried interest limitations and a drafting mistake that subjects qualified property improvements to a 39-year recovery period, rather than 15 years.

Secretary Mnuchin testified on tax issues before the Senate Finance Committee on Feb. 14, followed by his appearance before the House Ways and Means Committee on Feb. 15.

Ways and Means Chairman Kevin Brady (R-TX) pledged during a Feb 15 hearing to address errors included in the Tax Cuts and Jobs Act (P.L. 115-97).  Brady stated, “We know that certain parts of this provision are having unintended consequences” and that he was “committed to working with our Ways and Means Members, with Senator Hatch and the Senate Finance Committee, and the Administration and stakeholders to develop the right solution now – one that is thoughtful, carefully crafted, and successful  restoring balanced competition in the marketplace.”  (Brady’s Opening Statement, Feb. 15) 

[Earlier that day, Brady invited input from stakeholders on potential problems and unintended consequences arising from the new tax law. “We expect to develop a punch list of provisions that need to be addressed either administratively or through changes in the code itself,” he said.  (BNA, Feb. 15)] 

During the House hearing, Rep. Jim Renacci (R-OH) explained to Secretary Mnuchin that Ways and Means members are working on a tax reform drafting mistake that should have provided for a 15-year recovery cost-recovery period to qualified property improvements, instead of the 39 year period that was enacted.   

Mnuchin responded to Renacci: “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) 

If a focused corrections bill cannot be quickly passed by Congress, policymakers are considering adding a corrections provision to a must-pass spending bill to keep the government funded beyond by March 23.  (Bloomberg Law, Feb. 13) 

Mnunchin also testified during a Feb 14 Senate Finance Committee hearing that Treasury will issue guidance this month regarding new tax laws affecting carried interest. Under the new tax law, investment fund managers and others qualify for carried interest tax treatment after holding assets for three years, instead of one year.  Yet the new law doesn’t apply to S corporations’ carried interest profits. (The Hill, Feb. 14) 

“We will be putting out guidance and regulations to make sure that people can’t abuse the pass-throughs,” Mnuchin testified. “The IRS and [Treasury office of] tax policy intends to send out within the next two weeks guidance that we do believe that taxpayers will not be able to get that loophole by going through [S corporations],” he added.  (Bloomberg, and CQ, Feb. 14) 

In January, The Roundtable wrote to Treasury Secretary Mnuchin  offering several suggestions aimed at ensuring the long-term success of the Tax Cuts and Jobs Act (TCJA).  [Roundtable Letter, Jan. 18]

International Visitor Spending in the U.S. Drops; “Visit U.S.” Coalition Aims to Spur Tourism and Economic Growth

Posted on by Trey Jackson

Spending by international travelers to the U.S. decreased 3.1 percent over the past year, the second consecutive annual drop in 15 years, according to Department of Commerce data released Tuesday.  (U.S. Travel Association, Feb. 7)

Travel Exports vs. All Other Exports  
(U.S. Travel Association)

— enlarge —   

As the U.S. hospitality sector is a vital component of the commercial real estate industry – providing significant capital investment, opportunities and infrastructure improvements in local communities throughout the country – The Real Estate Roundtable recently joined 12 other national trade organizations as a member of the “Visit U.S.” Coalition to work with policymakers in reversing the decline. (Roundtable Weekly, Jan. 19).  

The two-year fall-off in international visitor spending confirmed by Commerce data also tracks America’s loss in long-haul market share – a decrease from 13.6 percent in 2015 to 11.9 percent in 2017.  Overall travel volume increased 7.9 percent in the same period – meaning that foreign travelers are opting to visit other countries than the US and spending their money elsewhere. (U.S. Travel Association, Travel Exports vs. All Other Exports, Feb. 2)

“The slide (in international travel to the U.S.) has deprived our economy of an estimated $32 billion in additional spending and 100,000 additional jobs.”

 U.S. Travel Association President and CEO Roger Dow     

“We are certainly concerned about the statistics,” said Craig Kalkut, vice president of government affairs at the American Hotel and Lodging Association (AHLA) – a founding member of the Visit U.S. coalition.  Kalkut added, “It’s important for the hotel industry but also the businesses that surround [and occupy] hotels and the economy overall, so it’s time to take some action.” (Commercial Observer, Feb. 8)

USTA President and CEO Roger Dow stated, “International inbound travel is America’s No. 2 export overall; directly supports more than a million American jobs; and brings in $245 billion a year to our economy. But the U.S. share of the growing global long-haul travel market has been eroding since before the start of the Trump administration … That slide has deprived our economy of an estimated $32 billion in additional spending and 100,000 additional jobs. The good news? The problem is fixable, through balanced messaging and sound policymaking.”  (USTA, International Visitors Are Crucial to President Trump’s Priorities, Feb. 7)

In the coming weeks, Visit U.S. will advance policy recommendations that support its shared objectives with the Trump administration. (Visit U.S., Jan. 16)

Janet Yellen Concludes Tenure as Federal Reserve Chair; Jerome Powell Begins Four-Year Term on Feb. 5

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Janet Yellen concluded her final meeting as chair of the Federal Reserve on Wednesday after four-years of overseeing a cautious approach to monetary policy at the central bank.  The Fed released a statement the same day about positive trends in the national economy, citing information “that the labor market has continued to strengthen and that economic activity has been rising at a solid rate.” (Federal Reserve Statement, Jan 31)

The  Federal Reserve in Washington, DC

The Senate on Jan. 23 voted 84-13 to confirm Fed Governor Jerome “Jay” Powell as the next Fed chairman.  After the Fed’s Federal Open Market Committee (FOMC) this week unanimously affirmed Powell as its chair, he will be sworn into office for a four-year term on Feb. 5. 

President Trump now has the opportunity to fill four of seven seats empty on the Fed’s board.  

Powell is expected to continue monetary policies pursued in the Yellen-era.  In December, Ms. Yellen said, “There is strong consensus in the committee for the gradual approach that we’ve been pursuing, and governor Powell has been part of that consensus.”  (Wall Street Journal, Jan. 31) 

During her tenure, Yellen raised borrowing costs five times since late 2015 and recently initiated a reduction process in the central bank’s 4.5 trillion dollar balance sheet.  Most economists foresee another interest rate increase when the Fed meets for its next scheduled policy meeting in March under Chairman Powell.  (Los Angeles Times, Jan. 31) 

Before President Barack Obama appointed him to serve as Fed Governor in 2012, Powell served at the Treasury Department under President George H.W. Bush and served as a managing director at Carlyle Group.

House Judiciary Committee Passes Infrastructure Expansion Act to Counter Inequities in “Scaffold Law”

Posted on by Trey Jackson

Legislation aimed at lessening the harsh impact of an antiquated 133 year-old labor “Scaffold Law” – an economic burden on infrastructure projects crossing state lines – passed the House Judiciary Committee on Tuesday.  (Committee Mark-up Video, Jan. 30)

The Jan. 29, 2018 industry coalition letter in support of the Infrastructure Expansion Act (H.R. 3808). 

The Infrastructure Expansion Act of 2017 (H.R. 3808), sponsored by Rep. John Faso (R-NY), passed along party lines by a 16-14 vote.  The Real Estate Roundtable, Associated General Contractors, and 17 U.S. organizations representing the contracting, insurance and real estate sectors urged the committee to pass the bill. (Coalition Letter, Jan. 29) 

The coalition letter provides several examples of transportation projects (such as the Northeast Corridor Gateway Program) that would benefit multiple states and the national economy, yet are hindered by application of the Scaffold Law. 

Courts have interpreted the New York law to subject property owners and contractors to “absolute liability” for slips, falls, and height-related accidents that occur during commonplace painting, cleaning, remodeling, and construction activities.  

Under this standard, any negligence by a worker that may cause an accident or intensify his own injuries is disregarded.  As an example, an inebriated worker who stumbles and falls at a project site would not be held accountable to the extent his intoxicated state caused his own injuries. (Roundtable Weekly, Jan. 19).  As a result, absolute liability under the Scaffold Law has caused premiums for general liability insurance at New York development sites to skyrocket. 

H.R. 3808 would deny federal funding to construction projects that use New York’s “absolute liability” standard for workplace injuries caused by falls. The bill does not diminish or alter Federal or state OSHA obligations, nor does it foreclose “no-fault” workers’ compensation.  

Committee Chairman Goodlatte (R-VA) broadened the bill’s scope to require states use either a “comparative negligence” or “contributory negligence” standard for falls on federally subsidized projects.  In a statement, Goodlatte also offered  detailed reasons explaining why the legislation should be enacted. 

Although the Infrastructure Expansion Act may continue to gain predominantly GOP support in the House, its prospects in the Senate are far more challenging.

Trump Administration Prepares to Unveil Nationwide Infrastructure Proposal; Roundtable Submits Specific Suggestions for Innovative Infrastructure Financing Sources

Posted on by Trey Jackson

A six-page document leaked to the media this week purports to show details of the White House’s anticipated infrastructure plan just before President Trump is scheduled to offer his first State Of The Union address on Jan. 30.  White House spokeswoman Lindsay Walters declined to comment on the contents of the leaked document, but said the Administration looks forward to announcing a plan “in the near future.” (Axios, Jan. 22)

A  six-page document  leaked to the media this week purports to show details of the White House’s anticipated infrastructure plan just before President Trump is scheduled to offer his first State Of The Union address on Jan. 30.

According to the document, leaked Monday to Axios and Politico, approximately 10 percent of the plan’s funds would go to  “transformative projects” – a category that includes a “commercial space” sector that could compete for funds.  (CQ, Jan. 25)
 
The  Roundtable on Jan. 11 sent a comment letter to President Trump offering specific suggestions on how innovative financing sources may be used to help pay-for infrastructure – and how restructuring a lengthy permitting process and cutting unnecessary red tape will help control project costs and delays. 
 
Sen. John Barrasso (R-WY), chairman of the Senate Environment and Public Works Committee, said that permit streamlining would be an important part of an infrastructure plan. (CQ, Jan. 23).  Barrasso’s committee oversees all public works projects and the Environmental Protection Agency, which would be a path to streamlining EPA and other agencies’ permitting approvals.
 
The  Roundtable letter suggests several innovative financing sources, including:

  • Responsibly and sustainably increase the federal gas “user fee;”
  • Allow states to capture lost tax revenues from Internet sales – and devote it to infrastructure;
  • Attract more foreign investment to U.S. infrastructure by repealing or scaling back the Foreign Investment in Real Property Tax Act (FIRPTA);
  • Assess whether IRS “volume caps” and other limitations on private-activity bonds (PABs) should be revised to boost infrastructure development;

The Roundtable on Jan. 11 sent a comment letter to President Trump offering specific suggestions on how innovative financing sources may be used to help pay-for infrastructure – and how restructuring a lengthy permitting process and cutting unnecessary red tape will help control project costs and delays.

  • Couple successful federal loan programs (like TIFIA) with state and local “value capture” techniques to re-pay that debt – and attract private investors;
  • Develop best practices that channel public-private partnerships (P3s) for appropriate projects in appropriate geographies;
  • Prioritize the limited proceeds from the Highway Trust Fund with a “Fix it First” strategy;
  • Limit “formula grants” and move toward performance-based criteria;
  • Enact common sense reform measures that limit taxpayers’ carrying costs for exorbitant liability insurance premiums on public infrastructure projects. 
  • Ease regulatory burdens for projects of same size and scope in same location as existing infrastructure.

More details on each of the suggestions above are included in The Roundtable letter.  
 
Also this week, Special Assistant to the President for Infrastructure Policy DJ Gribbin met on Tuesday with Roundtable members in an open exchange of ideas about a national infrastructure plan.  On Thursday, Gribbin spoke to the U.S. Conference of Mayors about the Trump Administration’s upcoming plan, stating that it will not require any new funding.  Gribbin said that 200 billion dollars in existing federal funds would be shifted to infrastructure projects, which would be leveraged to attract an additional 800 billion in state and private investment. (CQ, Jan. 25)
 
Infrastructure was a major topic of discussion during The Roundtable’s Jan. 24-25 State of the Industry meeting (see story above).  The Roundtable will remain engaged with policymakers as the Administration’s infrastructure plan moves forward in 2018.

Roundtable Debuts 2018 Policy Agenda, Engages Policymakers on Key Issues

Posted on by Trey Jackson

Top U.S. policymakers and industry leaders met this week for The Roundtable’s State of the Industry (SOI) Meeting in Washington, DC to discuss policy issues of compelling interest to CRE.

Launching the SOI meeting on Wednesday, Roundtable Chair William C. Rudin (  Rudin Management Company, Inc.  ), right, and Roundtable President and CEO Jeffrey DeBoer, left,  noted how Roundtable efforts are the result of research and analysis to find correct answers that benefit economic growth and job creation.

The Roundtable also issued its 2018 National Policy Agenda: Building For The Future. Specific issues included in the Policy Agenda were identified after a comprehensive, annual membership survey; frequent meetings held by The Roundtable’s policy advisory committees (see below); and participation by The Roundtable’s Board of Directors. 

Launching the SOI meeting on Wednesday, Roundtable Chair William C. Rudin (Rudin Management Company, Inc.) noted how Roundtable efforts are the result of research and analysis to find correct answers that benefit economic growth and job creation.  Rudin also said that the organization consistently communicates positions to policymakers that illustrate how healthy real estate markets are intertwined with the entire economy.  This approach – “analysis first, followed by advocacy” – will continue to be the model for The Roundtable through 2018 and beyond, Rudin commented. 

Illustrating how The Roundtable relies on member participation, he commented on the organization’s successful 2017 policy year regarding tax policy, sustainability and other efforts: “This past year we had great participation from Roundtable members who traveled to Washington when needed to personally meet with policymakers and discuss the obvious, and sometimes not so obvious, consequences of a policy decision.”   

He added, “We testified, wrote comment letters, led industry coalitions, submitted economic analysis, organized targeted meetings, and continued to brand The Roundtable as a trusted voice on national policy issues.” 

Illustrating how The Roundtable relies on member participation, Rudin spoke about the organization’s successful 2017 policy year regarding tax policy, sustainability and other efforts to the SOI audience.

Rudin also outlined various policy initiatives The Roundtable will focus on in the upcoming fiscal year with the Trump Administration and Congress, including implementation of the new tax law; financial regulatory issues; internet sales tax; infrastructure; attracting overseas tourists through the “Visit U.S.” coalition; and high performance buildings — all vital to spurring job creation and sustaining economic growth. 

Roundtable President and CEO Jeffrey DeBoer then offered an overview of the recent changes in tax law, along with upcoming issues in play.  He also noted the vital role of The Roundtable’s 17 national real estate trade association partners in presenting a unified voice on issues to policymakers in Washington. 

Policy Issues and Meeting Speakers  

Five U.S. Senators were among the featured SOI guests, which included: 

Senate Minority Leader Chuck Schumer (D-NY) engaged Roundtable members on the need for a massive plan to revamp the nation’s airports, bridges, roads, seaports, broadband and other critical infrastructure.

  • Senate Minority Leader Chuck Schumer (D-NY) engaged Roundtable members on the need for a massive plan to revamp the nation’s airports, bridges, roads, seaports, broadband and other critical infrastructure. Sen. Schumer emphasized how critical infrastructure improvements are to commercial real estate, job creation and the national economy.  He also spoke about the need to pass the Marketplace Fairness Act to bolster states’ collection of internet sales taxes, which could be used to assist state funding of infrastructure improvements. 
  • Sen. Mark Warner (D-VA) emphasized the need for bipartisanship in Congress in light of the recent tax legislation passed by Republicans. He noted that bipartisan efforts on issues such as GSE and housing finance reform could provide relief to the housing affordability crisis, while encouraging capital flows and competition.  Sen. Warner said that regulatory relief on Dodd-Frank was also possible in upcoming months in Congress.  
  • Sen. Ron Wyden (D-OR), ranking member of the Senate Finance Committee, spoke about the need for a bipartisan effort to address low income housing needs. Sen. Wyden described the “Build America Bonds” program, which he helped create, as an example of successful legislation that could spur infrastructure investment through innovative tax financing. Temporarily authorized in 2009 and now expired, 181 billion dollars in Build America Bonds were issued in the years immediately following the financial crisis. 

    Sen. Ron Wyden (D-OR), left, ranking member of the Senate Finance Committee, spoke about the need for a bipartisan effort to address low income housing needs.

  • Sen. Ron Johnson (R-WI)  spoke with Roundtable members on the need for more deregulation and pro-growth policies.  He also described his central role in ensuring that tax reform provided relief for all job-creating businesses, including pass-throughs.  As the chairman of the Senate Homeland Security and Governmental Affairs Committee, Rep. Johnson also discussed the increasing need for cybersecurity in an age where future geopolitical conflicts will increasingly be conducted in cyberspace. 
  • Sen. Doug Jones (D-AL)  commented about his recent election, appointment to the Senate Banking Committee and the need for broadband internet access in rural areas as part of an infrastructure program.  Serving his first month in Congress, Sen. Jones noted he is receptive to all approaches to policy that encourage economic growth and looks forward to working with The Roundtable. 
  • Jim VandeHei — the co-founder of and CEO of Axios, gave a candid view of upcoming mid-term elections; prospects of the House flipping to Democrat majority; and the news dissemination role of large tech companies like FaceBook in past and future elections. 
  • Bob Schieffer —  the former Face the Nation moderator participated in a discussion with incoming Roundtable Chair Deb Cafaro (Chairman & CEO, Ventas, Inc.) about the emerging era of “fake news” within a media landscape of fractured outlets and a deluge of partisan information.

Roundtable Policy Committees

In conjunction with the SOI Meeting, The Roundtable’s Policy Advisory Committees met on Jan. 24-25, discussing policy issues in detail with high-level congressional and agency staff.

In the wake of the most significant tax measures passed in 31 years, TPAC attracted a large audience to address the details of what lay ahead in implementing the new tax law.

  • Research and Real Estate Capital Policy Advisory Committee (RECPAC) 
    During this joint committee meeting, two panels of industry experts addressed the current real estate market cycle and provided an update on the state of real estate capital and debt markets.  Participants also discussed High Volatility Commercial Real Estate (HVCRE) and the Roundtable’s response to the recently proposed High Volatility Acquisition, Development or Construction Loans (HVADC) rule, as well as potential GSE reform.
  • Tax Policy Advisory Committee (TPAC) 
    In the wake of the most significant tax measures passed in 31 years, TPAC attracted a large audience to address the details of what lay ahead in implementing the new tax law.  A panel of experts from the congressional tax-writing committees described the evolution of the key partnership and real estate-related provisions. Following presentations by TPAC members, Dana Trier, Deputy Assistant Secretary of Treasury for Tax Policy, outlined the rulemaking process going forward and provided insight on how Treasury may resolve certain open questions important to real estate investment. 

    SPAC hosted Dr. Joseph Allen, Assistant Professor, Harvard T.H. Chan School of Public Health, right and John Mandyck, Chief Sustainability Officer, United Technologies Corporation, left, who presented new research on the health co-benefits of Green Buildings.

  • Sustainability Policy Advisory Committee (SPAC) 
    In addition to other guests, SPAC heard updates from Environmental Protection Agency (EPA) staff on the ENERGY STAR building- and tenant-level recognition programs, which recognizes leased spaces for high-performance design, construction and energy efficiency in CRE assets. 
  • Homeland Security Task Force meeting (HSTF) and Risk Management Working Group (RMWG) 
    Representatives of the FBI briefed the Joint Meeting on the current threat picture and discussed psychological profiles of the recent homegrown violent extremists (HVEs).  The Task Force was also briefed on current cyber threat picture and how businesses should be addressing this risk.

Next on The Roundtable’s FY2018 meeting calendar is the Spring Roundtable Meeting on April 25 at The Newseum in Washington, DC.  This meeting will be restricted to Roundtable-level members only.

The Roundtable Joins “Visit U.S.” Coalition to Spur International Tourism, Domestic Job Creation and Economic Growth

Posted on by Trey Jackson

The Real Estate Roundtable joined 10 national trade organizations as a member of the “Visit U.S.” Coalition, which launched on Wednesday with the goals of spurring job creation and economic growth while reversing a decline in international visitors to the United States.  (Visit U.S., Jan. 16).

According to the U.S. Travel Association, global travel volume to the United States from 2015 to 2017 fell from 13.6 percent to 11.9 percent — the first decline after more than a decade of consistent growth.  The statistics also show that if the U.S. had maintained its 2015 international travel market share, its economy would have gained an additional 4 million international visitors, $32.2 billion in spending and 100,000 jobs. 

 – enlarge chart – 

The coalition represents a broad cross-section of industries that have come together to address the recent drop in travel to the U.S. and resulting opportunity cost to the economy and jobs.  According to the U.S. Travel Association, global travel volume to the United States from 2015 to 2017 fell from 13.6 percent to 11.9 percent — the first decline after more than a decade of consistent growth.  The statistics also show that if the U.S. had maintained its 2015 international travel market share, its economy would have gained an additional 4 million international visitors, $32.2 billion in spending and 100,000 jobs. 

“As a vital component of the commercial real estate industry, the U.S. hospitality sector provides significant capital investment, creates enormous job opportunities and encourages infrastructure improvements in local communities throughout the country,” said Roundtable President and CEO Jeffrey DeBoer.  “CRE is the provider of secure spaces where people live and play in the United States, and we welcome the opportunity to work with the Trump Administration and our coalition partners to encourage a positive uptick in international tourism to our cities, towns, destinations and attractions,” added DeBoer. 

Roundtable members were recently briefed on the drop in foreign travel to the United States and the economic ramifications by Katherine Lugar, president and chief executive officer of the American Hotel & Lodging Association (AHLA) — the largest trade association representing the U.S. lodging industry.  (Roundtable Weekly, Oct. 6, 2017) 

AHLA, a founding member of Visit U.S., supports policy initiatives such as reforms that enable safe and secure processing of visitor visas to strengthen business and leisure travel — as well as the H-2B program to provide valuable support for businesses looking to supplement their workforce with temporary seasonal employees when American workers are unavailable. 

During the travel coalition’s launch this week, Lugar said, “Fewer visitors means fewer hotel stays, fewer meals eaten in our restaurants, fewer goods purchased in our retail stores, and fewer visits to our national attractions. It also means fewer American jobs and a loss to our economy. We are committed to working together with the Administration to balance a welcome message with strong security to ensure we don’t fall behind to other countries.” 

U.S. Travel Association President and CEO Roger Dow, another founding member of Visit U.S., added, “America is the best country in the world to visit, but we’re losing the competition for international travelers and the dollars they spend when they come here.  The Visit U.S. Coalition is founded on the principle that we can have strong security but at the same time welcome robust numbers of international business and leisure travelers. We can do both.” 

Left to Right: Roundtable President and CEO Jeffrey DeBoer,   American Hotel & Lodging Association President and CEO  Katherine Lugar , and Roundtable Chairman William C. Rudin (  Rudin Management Company, Inc  .)

 – enlarge photo – 

“The U.S. economy is on the upswing, but we can grow even more by encouraging more travel to America,” said U.S. Chamber of Commerce President and CEO Thomas J. Donohue, also part of the coalition. “Travel creates jobs and economic activity across a swath of industries and sectors as people visit the U.S. and spend their time and money with American businesses. The Chamber is proud to join with our partners in the business community to make the case for a renewed focus on travel as a driver of economic growth and American prosperity.”

Media coverage regarding the coalition’s launch includes:

The Roundtable and 16 Real Estate, Insurance and Contracting Organizations Urge Passage of Infrastructure Expansion Act to Counter Inequities in “Scaffold Law”

Posted on by Trey Jackson

The Real Estate Roundtable, Associated General Contractors, and 16 U.S. organizations representing the contracting, insurance and real estate sectors today urged the House Judiciary Committee and key congressional offices to swiftly pass the Infrastructure Expansion Act of 2017 (H.R. 3808), sponsored by Rep. John Faso (R-NY).  (Coalition Letter, Jan. 19)

According to the  coalition letter  , the Infrastructure Expansion Act seeks to provide is a 21st century solution to ameliorate the harsh impact of an outdated 19th century law, which is restraining modern interstate commerce and economically burdening transportation projects that cross state lines.

H.R. 3808 is a common sense tort reform effort aimed at correcting inequities from New York State’s outdated “Scaffold Law.”  Passed during the Industrial Revolution – long before the advent of Federal and state Occupational Safety and Health Administration and workers’ compensation laws – the Law holds property owners, employers, and contractors fully liable for all fall-related injuries at building and infrastructure construction sites. 

As a result, courts have interpreted the New York law to subject property owners and contractors to “absolute liability.”  Under this standard, the costs of injuries from commonplace painting, cleaning, remodeling, and construction activities are completely borne by property owners and contractors, even if they do not directly employ the injured worker.  The Scaffold Law also deems property owners and contractors as absolutely liable for height-related incidents, without regard to whether the worker caused the accident and intensified his or her own injuries.  Under this standard, even an inebriated worker who stumbles and falls at a project site is not held accountable to the extent his intoxicated state caused his own injuries.  (Roundtable Weekly, Oct. 27, 2017) 

The House bill counters the absolute liability standard by specifying that lawsuits against property owners and contractors for injuries associated with slips, falls, and “gravity-related risks” at Federally-assisted projects should instead be held to a “comparative negligence” standard.  When workers proximately cause their own injuries, comparative negligence factors such self-inflicted harm to proportionately limit damages awarded by judges and juries.  H.R. 3808 fosters the comparative negligence legal standard adopted by the overwhelming majority of courts, legislatures, and legal scholars across the United States. 

According to the coalition letter, the Infrastructure Expansion Act seeks to provide is a 21st century solution to ameliorate the harsh impact of an outdated 19th century law, which is restraining modern interstate commerce and economically burdening transportation projects that cross state lines.  

Rep. John Faso (R-NY) introduced the  Infrastructure Expansion Act of 2017 (H.R. 3808)  , intended to counter New York State’s “Scaffold Law.”

Among specific examples offered in the letter showing the economic impacts of the Scaffolding Law is  the Gateway Program, a Department of Transportation-assisted rail tunnel project of overwhelming national significance.  The New York law is estimated to drive-up costs by as much as 300 million dollars for this project, which will modernize the power grid, update a century-old tunnel inundated by Superstorm Sandy, and help eliminate a train “bottleneck” in the Northeast Corridor that contributes $50 billion to US GDP annually.  H.R. 3808 can help reduce the substantial added costs from insurance coverage, excessive litigation pay-outs, and project delays for interstate infrastructure construction like Gateway. 

“On the heels of a major federal infrastructure initiative, Rep. Faso’s bill is welcome news – enacting it would drive down costs of proposed infrastructure projects like the vital Gateway tunnel project between New York and New Jersey, said John Banks, President of the Real Estate Board of New York.  (See REBNY Newsroom, Oct. 25, 2017).  

Additionally, the Infrastructure Expansion Act of 2017 does not diminish or alter Federal or state OSHA obligations, nor does it foreclose “no-fault” workers’ compensation. 

The coalition letter addressed to House Judiciary Committee Chairman Bob Goodlatte (R-VA) and Ranking Member Jerrold Nadler (D-NY) concludes that H.R. 3808 “… simply makes property owners, contractors, and workers accountable for their own choices and conduct at construction sites benefitting from Federal taxpayer dollars. We encourage swift passage of the ‘Infrastructure Expansion Act.'”