Current Advocacy Issues
BOMA Day(s) on the Hill
Denver Metro BOMA members will visit the Colorado State Capitol on
Monday, February 13, 2012 from 8:30 a.m. to noon to hear from state
legislators, learn how laws are made and visit the House and Senate
Chambers. Be sure to mark your calendars for this important
event.
BOMA is also set to take over Capitol Hill in Washington D.C. on
February 1, 2012. Join your BOMA peers and colleagues as they hit the
halls of Capitol Hill during the BOMA International National Issues
Conference. There’s nothing more invigorating than playing your
part in the political process and meeting face–to–face with
legislators on the issues that impact commercial real estate. It’s
one of the most effective ways we communicate our message. And whether
you’re a NIC pro or a first–timer, we’ll prepare you
to speak with lawmakers during the "How to Lobby Workshop." Plus, NIC
attendees will hear first–hand from Congressional guest speakers
and Keynote Speaker Tucker Carlson.
Leasehold Depreciation Provision Lapses while Payroll Tax Cut is
Extended
Prior to leaving Washington in 2011, Congress approved a
two–month payroll tax cut extension just eight days before its
scheduled expiration. Typically, this 12.4 percent tax is split evenly
between employees and employers. However, a bill President Obama signed
into law in 2010 reduced the employees’ portion to 4.2 percent
while employers continued to pay 6.2 percent in 2011. The payroll tax
cut extension became the primary issue of concern in the remaining days
and weeks of the first half of the 112th Congress. This meant less focus
by lawmakers on the expiring package of tax "extenders," which includes
the 15–year timeline for leasehold improvements. Consequently,
building owners must return to depreciating leasehold improvements over
a 39–year period. BOMA International will continue to raise
awareness of the adverse economic impact this tax change will have and
continue to advocate for extension of the 15–year provision in
2012 and beyond. BOMA will also continue to push for it to be considered
on a permanent basis in the context of overall tax reform.
IGCC Final Action Hearings Prove Successful for BOMA
The final public hearings to determine the content of the 2012
International Green Construction Code (IGCC) wrapped up in November 2011
in Phoenix and BOMA secured approval for most of our major objectives.
The new IGCC is set to be published in March 2012 and will be available
for local and state jurisdictional adoption and implementation at that
time. BOMA’s codes advocacy staff worked with other real estate
trade groups and local building officials to support significant
modifications to the Version 2.0 draft of the code that will make it
more user–friendly and less onerous for the commercial real estate
industry. BOMA led efforts to approve making IGCC an
“overlay” to the minimum health and safety construction
codes with restrictions so that no permits are to be issued under the
IGCC alone. We also received overwhelming support from building
officials for making ASHRAE’s green code, Standard 189.1,
available at the project owner’s discretion as an alternate
compliance path.
FASB and IASB Reverse Earlier Decision on Lease Accounting
In 2011 the Financial Accounting Standards Board (FASB) and
International Accounting Standards Board (IASB) issued a joint exposure
draft that, if implemented, will completely revamp the way leases are
accounted for by both lessees and lessors. Generally speaking, the
proposed changes would move the cost of operating leases from a
disclosure in the footnotes onto the balance sheet. In December 2010,
BOMA and hundreds of other organizations submitted comments in
opposition to the exposure draft. After making some progress on
addressing the issues raised by BOMA and others, the FASB and IASB
reversed their earlier decision to continue straight–line expense
recognition for most operating leases. BOMA has posted relevant
information on this topic and will continue to keep you updated as we
learn more.
IGCBOMA Visits Colorado's
Capitol
On March 18, 2011, Denver Metro BOMA
members converged on the Colorado State Capitol for BOMA’s Annual
Day on the Hill. Several legislators spoke at the event, including Rep.
Amy Stephens, Rep. Cheri Gerou, Senator Michael Johnston, Rep. Sal
Pace, Senator Mike Kopp and Matt Cheroutes from the Governor's
Office of Economic Development and International Trade. In addition to
discussing issues of importance to the commercial real estate industry,
participants also heard an overview of how legislation is made at the
state level and got to visit the House gallery while
proceedings were being conducted.
BOMA Visits Congressional Representatives in Denver during Local
2011 NIC
Each year BOMA International holds a
National Issues Conference (NIC) which includes having BOMA members from
all over the country visit with their Congressional representatives and
senators on Capitol Hill in Washington D.C. and share with them
BOMA’s issues. Because the dates of NIC coincided with a
congressional recess when legislators would be back in their home
states, BOMA International changed the format to a local NIC. During the
week between March 21 and 28, 2011, Denver Metro BOMA members met with
the following Representatives, Diana DeGette, 1st Congressional
District; Jared Polis, 2nd Congressional District; Mike Coffman, 6th
Congressional District and Ed Perlmutter, 7th Congressional District.
One of the major benefits to meeting with the legislators locally is
that we were able to include constituents from each district in the
meetings. We asked the representatives to support making the 15 year
depreciation schedule for leasehold improvements permanent, to support
legislation creating tax incentives for energy efficiency retrofits and
to join the Congressional Real Estate Caucus.
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BOMA Impact Study
Learn more about the "Contribution of Office
Building Operating Outlays on the U.S. and States’ Economies in
2009,” which details the impact of commercial office space on the
national and local economies. This effort was funded through the
Industry Defense Fund and provides all BOMA local associations with
valuable data for their advocacy and membership outreach. Read just the Colorado Report.
These figures give a powerful snapshot of our industry’s
contribution to the economy, the jobs it supports and the subsequent
earnings it generates. Some of the highlights of the report include:
- For each dollar of outlay for office building operations, the
national economy gained $2.90 with the result that $40.8 billion in
annual operating outlays contributed a total of $118.4 billion to GDP in
2009;
- For each dollar of outlay for office building operations, workers in
the U.S. realized an increase of $0.92 in personal earnings with the
result that $40.8 billion in annual operating outlays generated a total
of $37.6 billion in new earnings for workers residing within these
office market areas and respective state economies in 2009; and
- For each $1 million in outlays for office building operations, 24.4
jobs were supported nationwide with the result that $40.8 billion in
annual operating outlays supported a total of 994,728 jobs across all
sectors of the national economy in 2009. This is in addition to the more
than one million jobs supported directly as a result of these outlays
for office building operations.
The study also drills into the economic impact
of office space in each of the markets served by BOMA’s local
associations. This information is detailed in Table 2 of the report and
is broken out into four data columns: total outlay, total, per earnings
and jobs.
- Total outlay is the total annual outlay for office building
operations for commercial office buildings exceeding 10,000 square feet
and not owner occupied. Government-owned office buildings are also
excluded.
- Total output represents the total contribution of the annual outlays
for office building operations in each office market to their respective
state or metropolitan area’s economy (gross state product/gross
regional economy).
- Per earnings represents the new personal earnings generated as a
result of the office building operating outlays. These personal earnings
represent new income that accrues to workers residing in the state or
metropolitan area within which the local associations are located. This
is new income earned by workers in businesses that benefit from the
payroll spending of employees involved in the office building operations
and the re-spending of the outlays across all sectors of the respective
state or metropolitan area economies.
- The jobs column represents the employment impact of the total office
building operating outlays for each of BOMA local association. These
figures exclude jobs that directly support, manage or maintain office
buildings (these are estimated at 20-25 full-time job equivalents per
100,000 square feet of office building). They do include those in
businesses benefitting from payroll spending which tend to be local jobs
in consumer goods and services, as well as those involved in the
production and transport of materials used to clean and repair office
buildings.
BOMA Intervenes in Xcel Cases
Denver Metro BOMA is part of the
Colorado Energy Consumers group (CEC), represented by
Holland & Hart, to protect the interests of BOMA members on an
ongoing basis in matters before the PUC. CEC monitors and intervenes on
cases before the PUC that could impact its members organizations. CEC
intervened in three major
cases in 2010-11. Although the final results are not yet memorialized in
the Commission's decision, the following are the preliminary
outcomes.:
1) DSM Incentives – Xcel (the Company) requested
an increase in DSM incentives for 2010 and 2011. CEC successfully argued
and held Xcel’s incentives award in 2010 and 2011 to a 25% cap,
down from the 40% cap they requested. The result also forces the
Company to exercise budgetary discipline in implementing proposed
cost-effective DSM programs.
2)
HB 10-1001 Renewable Energy Standard
– CEC argued that Xcel should not be allowed to automatically
overcharge customers today to pay for renewable costs down the road.
Commission agreed.
3)
HB 10-1365 Clear Air Clean Jobs Bill
(conversion of coal fired power plants to natural gas) – PUC
adopted CEC’s recommendation and rejected Xcel’s requested
Emission Reduction Adjustment (ERA) Rider. The commission felt that the
Company did not meet the burden of proof to entitle it to special cost
recovery treatment as requested by the ERA. This spares ratepayers from
beginning to pay for those investments as early as Jan. 2011.
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