Dear NAIOP Members,
As the 2019 comes to a close and Congress adjourns, I wanted to share a quick update on the status of NAIOP's public policy goals. Despite challenges in today's political climate, we have achieved success on several fronts:
• USMCA – The House of Representatives overwhelmingly passed the United States, Mexico and Canada Agreement in a bipartisan vote on December 19, with an expected Senate vote in support and presidential signing early next year. There is widespread agreement that adoption of the USMCA will preserve and strengthen U.S. trade with Canada and Mexico, and our industry benefits with increased cross-border investment and trade throughout North America. NAIOP has supported passage of a trade agreement since discussions began in 2018, and has worked to educate policymakers on its impact on commercial real estate.
• TRIA – The House and Senate have reauthorized the federal Terrorism Risk Insurance Act program, which was due to expire in 2020. The program provides a federal backstop for insurers, enabling the private sector to continue to offer insurance against terrorist acts. The bill now goes to the president for his signature.
• Section 179D-Energy Efficient Commercial Buildings – The provision allows building owners to claim a deduction of up to $1.80 per square foot for installing qualifying systems. The provision, which had expired, was extended in year-end tax legislation.
• New Markets Tax Credit – The provision provides an incentive for increased private sector investment in certain underserved communities. Like the energy efficiency tax incentive, the NMTC was also extended in year-end tax legislation.
• Energy Legislation – In September, the Senate Energy and Natural Resources Committee approved the Energy Savings and Industrial Competitiveness Act (S. 2137). The bill contains NAIOP-supported language directing federal agencies to take into account return on investment and technological feasibility when developing energy-efficiency building codes. The legislation is positioned to advance in the Senate in 2020.
• EPA's Energy Star – The Environmental Protection Agency changed its scoring models for its Energy Star Portfolio Manager, which is used to gauge the energy-efficiency of buildings, leading to lowered-scores for many properties. NAIOP and its real estate allies noted some problems with the changes, resulting in the EPA reviewing the changes. The Senate energy legislation makes improvements to the program by requiring expanded data collection.
Unfortunately, Congress did not enact a needed technical correction to the tax code regarding the length of time over which tenant leasehold improvements can be depreciated before they adjourned. The qualified leasehold improvement (QIP) fix was caught up in last second negotiations and trade-offs involving unrelated tax provisions. Our efforts over the course of the year have resulted in QIP legislation reaching 60 sponsors in the Senate and almost 300 supporters in the House of Representatives, and this strong bipartisan support is a good sign that it will be addressed in 2020.
In February next year, 300 leaders from our chapters will gather in Washington for our annual Chapter Leadership and Legislative Retreat, and many will travel to Capitol Hill to meet with elected officials and share our legislative priorities, which will include passage of QIP, transportation and infrastructure, and other issues that may be addressed during a busy election year. I look forward to keeping you updated on our progress and sharing our agenda in the new year.
My thanks to each and every one of our members who have supported our industry through helping advance our legislative agenda on local, state, provincial and federal levels. We couldn't be as effective without your support and engagement, and I thank you for your ongoing participation.
Best holiday wishes,
Thomas J. Bisacquino
President and CEO | NAIOP