Advocacy Briefing

1
Advocacy Briefing Karen Penafiel BOMA
International National Advisory Council 2009
SpringConference
2
The First 100 Days

• Stimulus Bill
• Energy and Climate Change
• Tax
• Labor

3
National Issues Conference

• Over 125 Real Estate Professionals went to
  Capitol Hill
• Energy, Tax, Card Check
• Met with over 130 Congressional Offices
• Congressional Speakers
• House Majority Leader Steny Hoyer
• Rep. Mike Rogers (Energy Commerce)
• Rep. Steve Driehaus (Financial Services)

4
Stimulus Bill The American Recovery
Reinvestment Act

• Energy efficiency and green collar job creation
  were just one piece of the 787 billion pie
• 16.8 billion for energy efficiency and renewable
  energy
• These funds are primarily flowing through state
  and local government
• 3.2 billion for Energy Efficiency and
  Conservation Block Grants
• 3.1 billion for the State Energy Program
• 7.7 billion for General Services Administration
  most for energy efficiency retrofits to federal
  buildings
• Significant boost to Department of Energys
  buildings programs

5
Stimulus Package Benefits

• What does this mean for us?
• BOMA is working with state and local governments
  to ensure that private sector building retrofits
  are at the top of the priority list
• BOMA is working with DOE to help identify needs
  within the commercial real estate industry
• DOE funding will help enhance buildings programs,
  such as the Commercial Real Estate Energy
  Alliance (CREEA)

6
Energy and Climate Change

• House American Clean Energy and Security Act of
  2009
• Draft bill in circulation
• Hearings held week of April 20
• Committee vote before Memorial Day
• House action expected early Summer
• Senate Legislation currently being drafted
• Committee action to begin mid-May

7
Energy and Climate Change

• Energy bill provisions with direct RE impact
• Advanced Building Codes
• Retrofit for Energy and Environmental Performance
  (REEP)
• Building Labeling Statement of Energy
  Performance
• Energy Efficiency Resource Standard (EERS)

8
Advanced Building Codes

• Target in comparison to ASHRAE 90.1 (2004)
• 30 by 2010
• 50 by 2016
• If voluntary consensus effort fails, DOE will set
  standard

9
Retrofit for Energy Environmental Performance
(REEP) Program

• Incentive federal funds will be administered
  through State Energy Offices under the State
  Energy Program
• Commercial program
• 1000 to support a free or low-cost building
  audit but must implement improvements within 1
  year and achieve at least 20 energy reduction
• 0.15 per square foot of retrofit area for 20-30
  energy reductions
• 0.75/sf for 30-40 reductions
• 1.60/sf for 40-50 reductions
• 2.50/sf for exceeding 50
• Incentives for water reductions renewable
  energy

10
Building Labeling

• EPA to develop model performance labels
• Display achieved performance and designed
  performance data
• Residential and commercial
• Single-occupancy and multitenant buildings
• Label must be made accessible to new and
  prospective
• Owners
• Lenders
• Tenants
• Occupants
• Other relevant parties

11
Energy Efficiency Resource Standard

• Sets minimum levels of electricity and natural
  gas savings to be achieved through utility
  efficiency programs, building energy codes,
  appliance standards, and related efficiency
  measures
• Accelerates utility investment in energy-saving
  technologies, products and practices
• Creates an incentive structure in which it is in
  the interest of a utility to improve the asset
  value of commercial and residential buildings by
  helping to invest in energy efficiency
  improvements.

12
Timeline for House Action

• Hearings held week of April 20
• Subcommittee markup - week of May 4
• Committee markup week of May 11
• To House Floor after Memorial Day

13

• Tax Issues
• Capital Gains
• Presidents budget proposes to raise the rate
  from 15 to 20 for families making over 250,000
• Sen. Mike Crapo (R-ID) introduced S. 567,
  legislation that makes permanent the 15 rate on
  capital gains and dividends

14
Tax Issues

• Carried Interest
• Presidents budget proposes to characterize
  carried interest as ordinary income rather than a
  capital gain for tax purposes
• Rep. Sander Levin (D-MI) introduced H.R. 1935,
  legislation that addresses recharacterizing
  carried interest as ordinary income in greater
  detail

15

• Tax Issues
• Leashold Depreciation
• Fifteen year depreciation schedule approved
  through the end of 2009 as part of the tax
  extenders package in October 2008
• Tax extenders legislation has yet to be
  introduced

16
Labor Issues

• Card Check/Employee Free Choice Act
• Introduced in both the House and Senate
  (H.R.1409/S.560)
• Would effectively eliminate secret ballot
  elections for unionization
• Provides for mandatory arbitration if labor
  agreement not reached in 120 days
• Chances for passage in Senate took a set-back
  when Sen. Arlen Specter (R-PA) announced he would
  oppose the bill - making defeating a filibuster
  impossible

17

• State and Local Affairs
• Top Issues in 2009
• American Recovery and Reinvestment Act
• Local BOMA associations working to help direct
  to retrofit projects that work for CRE
• Card Check
• Political atmosphere in states shifted Democratic
• Grassroots strategy includes lobbying local/state
  governments for supporting legislation and
  resolutions
• Right to work states may see a high level of
  lobbying
• State Budgets
• Must resolve a cumulative budget gap exceeding
  281
• billion

18
BOMAPAC

• 2009 GOAL 60,000
• 2008 Total 40,000

19
Codes, Standards Regulatory Initiatives
20
Energy Codes

• Development of the next generation of model
  energy codes is well underway with very
  aggressive targets to reduce energy use in
  buildings constructed after 2009
• 2010 edition of the ASHRAE 90.1 commercial
  building energy code is scheduled for completion
  in 2009 with targeted energy use reductions of
  30 over the 2004 edition
• Currently, the 90.1 project committee has
  achieved a 20 reduction but with paybacks for
  increased insulation, more efficient glass, and
  other measures exceeding 30-year paybacks
• 2009 International Energy Conservation Code is
  now available 10 energy use reduction over the
  2006 edition

21
Green Building Codes

• BOMA is representing the commercial real estate
  industry in the development of national model
  green building codes
• ICC/NAHB Standard 700 - green building code for
  residential buildings and residential units in
  other buildings is now available
• ASHRAE 189.1 green building code for commercial
  and other buildings (and residential buildings
  over 3 stories) is scheduled for completion in
  late 2009 and published early in 2010
• A green building standard under development by
  GBI is nearing completion and should be available
  in late 2009 this is a guideline standard but
  will possibly be employed by municipalities as
  they enact green building programs at the local
  level
• ICC recently announced their intention to develop
  a green building code that would also cover
  buildings within the scope of ASHRAE 189.1 ICC
  estimates this code will be completed in 2011 and
  published as part of the 2012 ICC code editions

22
ICC Code Development

• The 2009-2010 code development cycle is underway
  with a June 1st code change proposal deadline
• BOMA anticipates a large number of proposals for
  much more stringent structural, egress and fire
  provisions, many resulting from the National
  Institute for Standards Technology World
  Trade Center study

23

• For More Information
• E-News
• Bi-weekly advocacy news briefings
• Online at www.boma.org
• The BOMA Magazine
• Advocacy News in every issue

24
Questions?

• Karen Penafiel
• Vice President, Advocacy
• BOMA International
• 1101 15th Street, NW, Suite 800
• Washington, DC 20005
• 202-326-6323
• kpenafiel_at_boma.org