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WASHINGTON, DC-Two key issues pending in Congress of key importance to the real estate community--the extension of a 15-year leasehold improvement depreciation and immediate deductibility for brownfields cleanup costs--appear likely to be headed for successful conclusion by the Memorial Day weekend, and perhaps as soon as this week. According to Stephen M. Renna, senior vice president and counsel of the Real Estate Roundtable, these measures, originally part of a $70-billion tax reconciliation package, are likely going to be part of a separate House-Senate conference committee on pension reform legislation.
"There is no controversy about the provisions," Renna says. "The only controversy, and that is being resolved, is the process on how to get them passed. " It could be done as early as this week."
These so-called tax extender provisions, which the Real Estate Roundtable has been tracking since last year, were part of the original House and Senate tax reconciliation bills passed in 2005 and carried over this year, the organization reports. They expired at the end of 2005; once passed in conference they will be reinstated retroactively to Jan. 1, 2006.
Roundtable officials also note that the brownfields extender language in both the House and Senate bills makes petroleum cleanup costs eligible for expensing for the first time. "The fact that the House and Senate both addressed leasehold improvement and brownfields cleanup costs in their respective bills improves prospects that these extensions will be retained in the final bicameral conference report," it said in a recent update on the situation."The delay in passage has been due to a mild dispute over procedural tactics between House Ways and Means Committee chairman Bill Thomas (R-CA), and Senate Finance Committee chairman Charles Grassley (R-IA). Both were in agreement over the content of the extenders, according to Renna. Grassley, however, wanted to have the extenders voted on at the same time as the tax reconciliation legislation. Moving it to a separate House-Senate Committee was apparently his preferred outcome.
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Erika Morphy
Erika Morphy has been writing about commercial real estate at GlobeSt.com for more than ten years, covering the capital markets, the Mid-Atlantic region and national topics. She's a nerd so favorite examples of the former include accounting standards, Basel III and what Congress is brewing.
