2013 IREM Legislative and Leadership Summit
By: Brian Lozell, CPM, VP of Legislative Affairs
This year the IREM Leadership and Legislative Summit was held from April 6-10 in Washington, DC. Attending were: Photo left to right: June McCrory, CPM(The Missner Group), Kris Haskins, CPM (Hammes Compnay), Brian Lozell, CPM (Seneca Real Estate Advisors), Kimmberly Donnely, CPM(DK Living) and Kim Sisney, CPM (Urban Innovations). They were joined by Greg Martin, CPM(DK Living) and CCIM Patrick Brady (Steinco).
The summit included a number of informative presentations and panels on the topic of leadership including: Succession Planning for Chapter Leadership, Management Techniques, Risk Management and “Women in Real Estate Management Changing the World”.
The highlight of the Summit was the visit to Capital Hill to meet with the women and men that make the laws that govern our industry. This year IREM asked us to bring 3 action items to “The Hill”: Carried Interest, Internet Sales Tax Fairness and Lead Paint removal in commercial buildings.
We met with a member of Senator Dick Durbin’s staff as well as staff members from the offices of Representative Danny Davis, Representative Bobby Rush and Representative Mike Quigley.
Summary of the issues presented:
Issue: Real estate accounts for almost half of the 2.5 million partnerships in the United States. A carried interest is designed to act as an incentive for a general partner to maintain and enhance the value of the real estate so that the operation of the property is a value added proposition. Unlike hedge fund managers, capital gains treatment for general partners involved in real estate partnerships is an appropriate incentive for risk taking. The proposed tax increase on carried interests would be an increase on a substantial amount of real estate activity in an already volatile and recovering sector of the economy.
Action: Based on the fact that making changes would hinder the flow of capital into real estate markets, we requested that the Senator and Congressman oppose an increase to the tax treatment of carried interest for real estate partnerships.
Internet Sales Tax Fairness
Issue: Under current law, purchases made on the internet are subject to sales tax through what is known as a use tax. Consumers who live in a state with a sales tax are legally required to pay sales tax, but few are even aware of the obligation. States cannot require on-line retailers to collect a sales tax on their own. Only congress can create a level playing field for online and brick and mortar retailers. House Bill H.R. 684 and Senate Bill S.336 will provide tax collection authority to the states that meet simplification for collection of sales tax.
Action: Senator Durbin and Representatives Rush and Quigley have already co-sponsored the bill. We are pleased to report that as the result of our meeting with Representative Davis’ office, he has agreed to sign onto the bill. Successful passage will mean an additional $1 billion in sales tax (from internet purchases) collected in Illinois.
Issue: The Environmental Protection Agency (EPA) has begun promulgating a rule to regulate renovation and remodeling activities in public and commercial buildings. EPA is now requesting public input into lead paint hazards in these buildings. However, EPA still has yet to complete a finding of any “hazard” in these property types or demonstrate a regulatory need. Studies done for residential housing simply cannot apply to commercial and public buildings, which have significantly different tenancies, cycles of property improvements, and presence of target audiences such as children or the elderly.
Action: We requested that the Senator and Representatives sign onto a letter expressing concern with EPA’s process and data collection to date.