As the halfway mark of 2021 came and went, we wrapped up one of our busiest policy advocacy quarters of the past decade. As we continue our important efforts this year, we want to take a moment to share an update with all of you on what we accomplished together in Q2 and our key focuses for the road ahead.
Preserving Section 1031: With the Senate currently negotiating a bipartisan infrastructure package, our members have been on-the-ground in Washington to talk to Democrats about their go-forward agenda, including reconciliation and the proposed pay-fors for the American Families Plan.
We’re proud to share that the IPA has participated in more than 40 meetings with lawmakers on the House Ways and Means Committee and the Senate Finance Committee, including the Committee tax writing staff to discuss the importance of preserving like-kind exchanges in their current form. Last week, we hosted a successful fly-in, where our members led fundraisers for champions of the Section1031 like-kind exchange. We’ll share a full update from these meetings in the coming days.
Also, in early June, we hosted an advocacy workshop with a group of industry thought leaders to discuss collectively leveraging our resources in this effort. Specific initiatives have been undertaken including additional in-person meetings with influential members of Congress and targeted advertising to encourage individuals to engage with their representatives. To that end, through grassroots efforts led by the IPA, advocates have sent over 10,000 letters to almost 500 legislators, including all U.S. Senators.
Finally, as we look ahead, are members are planning another fly-in in September with additional fundraisers. To stay apprised of like-kind exchange market updates, visit our website dedicated to 1031 like-kind exchange advocacy, where you can directly engage with your members of Congress to support and preserve this important tax provision.
FIRPTA Parity: As we highlighted in our FIRPTA Advocacy Alert in May, the IPA and our FIRPTA Task Force are extremely proud that H.R. 3123, the “Parity for Non-Traded REITs Act,” was officially introduced in the U.S. House of Representatives, led by Reps. Tom Suozzi (D-NY) and Darin LaHood (R-IL).
Since the legislation was introduced, we’ve been working closely with Reps. Suozzi, LaHood and others to move this legislation forward and identify cosponsors in the House. During IPA Summit, many of our Congressional meetings were focused on adding co-sponsors to H.R. 3123 and introducing a companion bill in the U.S. Senate to secure bicameral support. We have additional meetings scheduled with members of the House Ways and Means Committee following up on a “Dear Colleague” letter sent by Reps. Suozzi and LaHood seeking co-sponsorship. Additionally, the IPA worked on a joint letter in support of the bill that has been signed by nine leading associations, including Nareit, The Real Estate Roundtable, National Association of Realtors, and the National Multifamily Housing Council. While bill passage is typically a multi-year effort, we are pushing for inclusion in a 2021 tax bill.
To learn more about how a small change to FIRPTA is set to modernize our industry, check out my recent guest column featured on the DI Wire.
IPA Summit: During IPASummit, thought leaders from the IPA community discussed the most salient issues impacting our industry.
In addition to our work on Section 1031 and FIRPTA, we asked Congressional leaders to urge the Treasury Department to continue to streamline the process for distributing rental assistance payments, and to vigorously oversee the distribution of those payments to assure payments are made to landlords for past due rents and other housing costs in follow up to an op-ed we published in The Hill.
We also educated lawmakers on the impact modernizing the defined contribution system, by allowing access to real estate, public and private credit and other real assets, could have for American retirement savers, the economic recovery from COVID-19 and new infrastructure initiatives.
Fiduciary Standards: Throughout the first half of the year, we’ve started to build an understanding of how Gary Gensler’s Securities and Exchange Commission will treat Regulation Best Interest and received additional guidance from the Department of Labor on its Investment Advice Exemption.
In the short term, Gensler’s outlook on Reg BI is unlikely to lead to new rule changes but instead may use examinations, enforcement and guidance to ensure that that rule is fully complied with as written. At the DOL, we anticipate further regulatory and/or sub-regulatory actions which may impact the Investment Advice Exemption and other existing exemptions as well as the five-part investment advice test, which we will be tracking closely.
In a related effort, we are currently working closely with a coalition of industry groups to address concerns about the NASAA Part II Regulation Best Interest Survey. We will share additional updates on this effort and other fiduciary standard issues that emerge in the second half of this year.
We will continue all of our important policy advocacy work in the coming months leading up to this year’s IPA Vision event in Chicago on September 27-29, where you will hear more on the most salient issues impacting our industry.
If you have any questions, please don’t hesitate to reach out to Tony or me.
SVP, Government Affairs and General Counsel
Institute for Portfolio Alternatives