Posted on Dec 22, 2003

Capitol Hill Visits CCIMs and CPMs at the Library of Congress. Photo courtesy of Photographics of Washington, D.C. OVERVIEW On April 29, 2003, 80 CCIMs and 220 CPM©s participated in the 2003 IREM/CCIM Capitol Hill Visits. These CCIMs, CPM©s and ARM©s attended 160 meetings scheduled with Congressional offices in order to educate legislators about commercial real estate investment and management issues. A summary of that platform follows, along with status reports and a tally of Representatives and Senators who, as a direct result of the IREM/CCIM Capitol Hill Visits, signed on as co-sponsors. The date corresponding with the Legislators’ names indicates when their signature was recorded. In addition, Sen. Richard Shelby of Alabama and primary sponsor of the Community Choice in Real Estate Act was awarded the IREM/CCIM Legislator of the Year Award. Eric Higgins, CCIM and Mary Carolyn Boothby, CPM, both from Alabama, as well as CCIM and IREM Presidents, Barry Spizer, CCIM and Patty Nooney, CPM, CCIM, were on hand to personally award Sen. Shelby for his outstanding efforts in championing commercial real estate issues on Capitol Hill. From left: Bob McMillan, RPAC; Sen. Richard Shelby, AL; Eric Higgins, CCIM; Mary Carolyn-Boothby, CPM. Photo courtesy of Photographics of Washington, D.C. Photos All of the photos here are courtesy of Photographics of Washington, D.C. To obtain prints of the photos you see here and others, go to http://www.pgphotography.net and enter password “IREM” where prompted. The Capitol Hill Visit photos are located on pages 12- 14. A link will be provided for a request form and price list. ISSUES UPDATE Bankruptcy Reform We support four bankruptcy provisions - eliminating the cap on single asset bankruptcy, providing protections for shopping center owners, requiring repayment of condominium association and homeowners’ association fees, and eliminating the loophole for residential rental tenants. The House has passed HR 975. There is still no bill in the Senate. Leadership in the Senate is hoping they can bring HR 975 directly to the floor, avoiding a conference. Any such activity is expected after the Independence Day holiday. Encourage your U.S. Senators to bring H.R. 975 to the floor of the Senate for consideration. Federal Reserve/Department of Treasury Proposed Rule We oppose changes or interpretations in present federal regulations that would permit any banks or bank holding companies or subsidiaries to enter the field of real estate brokerage and property management beyond properties owned by these institutions. HR 111 now has 231 co-sponsors. There are 18 co-sponsors in the Senate. With more than half of the House of Representatives supporting the legislation, we will continue to urge for the bill to be brought to the floor for a vote. H.R. 111 – Community Choice Cosponsors Rep. George R. Nethercutt, Jr. (WA) – 4/30/2003 Rep. Thomas E. Petri (WI-6) – 5/9/2003 Rep. Trent Franks (AZ-2) – 5/20/2003 Rep. Denise L. Majette (GA-4) – 5/21/2003 S. 98 – Community Choice Cosponsors Sen. George V. Voinovich (OH) – 5/15/2003 Sen. Harry M. Reid (NV) – 5/19/2003 Sen. John E. Ensign (NV) – 5/19/2003 Sen. Barbara Boxer (CA) – 5/20/2003 Ask your U.S. Representative and/or Senator to cosign H.R. 111 or S. 98 if they have not already done so. Depreciation/Tenant Leasehold Improvements We support reducing the depreciable lives tenant improvements to 10 years from 39 years, to conform more closely to the term of the lease. The recently passed tax bill, The Jobs and Growth Tax Relief Reconciliation Act (JGTA), included provisions expanding bonus depreciation for leasehold improvements. A temporary 30% bonus depreciation provision was enacted in March 2002 that applies to all equipment and to leasehold improvements. That provision was scheduled to expire on September 11, 2004. The recovery period for leasehold improvements remains at 39 years. Thus, for the duration of this provision, a taxpayer making leasehold improvements may deduct 50% of the cost of the improvement plus 1/39th of the remaining amount of the investment. The so-called “close out” provisions of current law remain in effect, so remaining balances may be deducted at the termination of a lease. The JGTA increases the bonus to 50% for property acquired and placed in service after May 5, 2003 and before January 1, 2005. To be eligible for the 50% allowance, any binding contracts (or an agreement to purchase) must have been entered into after May 5, 2003. Property subject to a contract before May 6, 2003 will continue to qualify for the 30% bonus. Both the 30% and 50% bonus provisions will expire January 1, 2005. (This has the effect of extending the 30% bonus from its original expiration of September 11, 2004 through to the end of 2004.) In limited circumstances, property will remain eligible for bonus depreciation until January 1, 2006, so along as a binding contract was in place before January 1, 2005. When the bonus rules expire, the depreciable life for leasehold improvements will remain at its current level of 39 year. HR 1634 – Tenant Leasehold Improvements Cosponsors Rep. William H. Jefferson (LA-2) – 4/30/2003 Rep. David Vitter (LA-1) – 4/30/2003 Rep. George R. Nethercutt, Jr. (WA-5) – 4/30/2003 Rep. Dale E. Kildee (MI-5) – 5/15/2003 Rep. Ernie Fletcher (KY-6) – 6/2/2003 Rep. Thomas Tancredo (CO-6) – 4/30/2003 Rep. Ed Pastor (AZ-4) – 5/15/2003 Rep. Zach Wamp (TN-3) – 5/15/2003 Rep. Rush D. Holt (NJ-12) – 5/22/2003 S. 576 – Tenant Leasehold Improvements Cosponsors Sen. Saxby Chambliss (GA) – 6/3/2003 ADA Notification The Americans with Disabilities Act does not allow plaintiffs to collect damages for violations to the law. Instead, defendants who lose must pay plaintiffs' legal fees. Unscrupulous attorneys have taken advantage of these opportunities to rake in high fees. We support notification to property owners prior to legal action. There are now 48 cosponsors in the House. The House Committee on Small Business held a hearing on this issue. The bill has been referred to the Subcommittee on the Constitution, of the House Judiciary Committee. H.R. 728 – ADA Notification Cosponsors Rep. George Nethercutt, Jr. (WA-5) – 4/29/2003 Rep. Lee Terry (NE-2) – 5/7/2003 Rep. Joe Barton (TX-6) – 6/3/2003 Ask your U.S. Representative or Senator to cosign H.R. 728 if they have not already done so. Expensing of Building Security Equipment In the wake of September 11, property owners nationwide are taking steps to improve the security of their properties to protect their tenants, visitors, and guests. We believe these significant expenses should be tax deductible; to assist building owners in more immediately meeting the security needs of our nation. The 50% bonus depreciation provision noted above applies to any purchase of equipment or to leasehold between now and 2005. If categorized as such, security equipment would be included. However, the expensing provision will phase out and will no longer be available if total investment in equipment/leasehold exceeds $400,000. HR 1259 – Building Security Equipment Rep. Jim Gibbons (NV-2) – 5/19/2003 Rep. Steve Chabot (OH-1) – 5/19/2003 Rep. Sue Myrick (NC-9) – 5/19/2003 Rep. Ernie Fletcher (KY-6) – 6/2/2003 CCIMs and CPMs at the Library of Congress. Photo courtesy of Photographics of Washington, D.C.