Estate tax reform moves forward.The estate tax debate took an unexpected and promising turn at the end of June when lawmakers abandoned efforts to pass full repeal and instead passed a compromise reform bill favored by NAA/NMHC.
The move comes after the Senate earlier in June again failed to secure the 60 votes needed to overcome a filibuster filibuster, term used to designate obstructionist tactics in legislative assemblies. It has particular reference to the U.S. Senate, where the tradition of unlimited debate is very strong. It was not until 1917 that the Senate provided for cloture (i.e. and bring a full repeal bill to the floor. After that vote, Senate leaders persuaded the House, which has passed full repeal legislation several times, to cooperate and approve a reform bill. This is a noteworthy concession by Republican leaders that full repeal is unlikely to pass.
This new bicameral The division of a legislative or judicial body into two components or chambers.
The Congress of the United States is a bicameral legislature, since it is divided into two houses, the Senate and the House of Representatives. strategy effectively tracks NAA/NMHC's position and elevates the prospect for final action by Congress this year. NAA/NMHC have long opposed repeal and have instead favored reform of the estate tax to preserve the step-up in basis Step-Up In Basis
The readjustment of the value of an appreciated asset for tax purposes upon inheritance. With a step-up in basis, the value of the asset is determined to be the higher market value of the asset at the time of inheritance, not the value at which the original party for inherited property. Without stepped-up basis, heirs of commercial property owners would escape the estate tax but would be subject to substantial capital gains taxes.
As part of the new reform strategy, on June 22, the House of Representatives passed a bill (HR 5638) that would increase the estate and gift tax exemption tax exemption, immunity from the requirement of paying taxes. Federal, state, and usually local law provide exemption from taxation for a wide variety of organizations, usually not-for-profit, such as churches, colleges, universities, health care providers, various amount to $5 million per person effective Jan. 1, 2010, and lower the tax rate on estates valued between $5 million and $25 million to the capital gains tax rate--currently 15 percent. Estates worth more than $25 million would be taxed at twice the capital gains tax rate. Most significantly, HR 5638 would preserve the "stepped-up" basis for inherited property by repealing the modified carryover basis rules that are scheduled to go into effect in 2010.
The Senate, which still needs a 60-vote super majority to overcome an expected filibuster, was scheduled to consider the bill before the July 4 recess. On June 27, however, Senate Majority Leader Bill Frist (R-Tenn.) announced that he would not bring the bill to the floor until after the recess. Although the Senate outcome is too close to call, if it does pass, President Bush is expected to sign it. NAA/NMHC members are reminded that unless Congress acts, the estate tax will be repealed in 2010, but in 2011 it will revert to pre-2001 levels--a $1 million exemption and a 55 percent rate.
Do-Not-Fax Rules 60 Into Effect
Apartment firms are reminded that federal "Do-Not-Fax" rules go into effect on Aug. 1. The new rules, created by the Junk Fax Junk faxes are a form of telemarketing where unsolicited advertisements are sent via fax transmission. Junk faxes are the faxed equivalent of spam or junk mail. Proponents of this advertising medium often use the terms broadcast fax or fax advertising Prevention Act of 2005, override earlier Federal Communications Commission Federal Communications Commission (FCC), independent executive agency of the U.S. government established in 1934 to regulate interstate and foreign communications in the public interest. (FCC (1) (Federal Communications Commission, Washington, DC, www.fcc.gov) The U.S. government agency that regulates interstate and international communications including wire, cable, radio, TV and satellite. The FCC was created under the U.S. ) regulations strenuously opposed by NAA/NMHC that would have required written permission before sending any commercial fax, including to prospects who had requested the information.
The new law allows businesses, political organizations and industry associations to send unsolicited commercial faxes as long as they have an "established business relationship" (EBR EBR East Baton Rouge
EBR Environmental Bill of Rights (Ontario, Canada)
EBR European Business Register (European Economic Interest Group)
EBR Established Business Relationship
EBR Experimental Breeder Reactor ) with the recipient. The FCC's final rules codify codify to arrange and label a system of laws. the EBR exemption. While the FCC rules implementing the law do not limit the duration of an EBR, the law does authorize the Commission to consider such limits.
Fannie, Freddie Holdings Under Review
The Bush Administration signaled a more aggressive stance against Fannie Mae Fannie Mae: see Federal National Mortgage Association. and Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation. as Congress continues to struggle to pass GSE GSE
general somatic efferent system. reform legislation. The U.S. Department of Housing and Urban Development (HUD Hud (hd), a pre-Qur'anic prophet of Islam. Hud unsuccessfully exhorted his South Arabian people, the Ad, to worship the One God. ) on June 13 announced that it will review Fannie Mae's and Freddie Mac's investment holdings to make sure they comply with their congressionally mandated mission. The same day, the Treasury Department said it will review its debt approval process for Fannie and Freddie.
According to according to
1. As stated or indicated by; on the authority of: according to historians.
2. In keeping with: according to instructions.
3. HUD Secretary Alphonso Jackson, the HUD review will examine whether Fannie and Freddie are handling their investments consistent with public policy goals and whether each is using the profits it derives as a government-sponsored enterprise for the purposes intended.
The Treasury Department review, on the other hand, will evaluate what the appropriate timing should be for GSE requests for debt approval and whether additional information is needed, such as the amount of total debt outstanding, the estimated rate at which the debt will be offered and the maturity of the debt obligations.
Meanwhile, GSE reform legislation (S 190) remains stuck in the Senate. The House passed its version of GSE legislation (HR 1461) in October. The Senate Banking Committee passed its bill last July, but there is no schedule to bring the bill to the full Senate for a vote. Both bills create a new independent agency to supervise Fannie Mae and Freddie Mac and the 12 federal home loan banks Federal Home Loan Banks
The institutions that regulate and lend to savings and loan associations. The Federal Home Loan Banks play a role analogous to that played by the Federal Reserve Banks vis-à-vis member commercial banks. . Both bills place certain restrictions on the size of the mortgage portfolios of the GSEs.
The Senate bill differs from the House bill on two critical counts. First, the Senate bill places severe restrictions on the multifamily housing mortgages eligible to be held in the portfolios of the GSEs, which NAA/NMHC oppose. The other is that the House bill would require the GSEs to contribute 5 percent of their after-tax profits to a low-income housing fund. The Senate bill does not include an affordable housing provision.
Exit Tax Relief Bill Introduced in Senate
Sen. Charles Schumer (D-N.Y.) introduced a bill (S 3616) on June 29 to provide an incentive to preserve federally assisted, affordable housing stock by offering owners "exit tax" relief. The bill would address potential tax consequences that discourage affordable owners from selling their properties. Specifically, the bill would waive the depreciation recapture depreciation recapture
See recapture of depreciation. tax liability if investors sell their federally assisted property to a "qualified preservation entity" who agrees to invest new capital in the property and to preserve the property as affordable housing for another 30 years.
Eligible properties include housing receiving assistance under the Section 8, Section 221(d)(3), Section 236 and rural housing Section 515 programs.
Demographic Forces Favor Rental Housing
According to Harvard University's 2006 "The State of the Nation's Housing" report, for the first time in years, the Years, The
the seven decades of Eleanor Pargiter’s life. [Br. Lit.: Benét, 1109]
See : Time number of renter households has risen. It also noted that as the Echo Boomers and same-age immigrants and second-generation Americans move into adulthood, demographic forces will favor rental housing over for-sale housing.
According to the report, the number of renter households should increase by at least 1.8 million by 2015. Importantly, minorities will be responsible for the entire gain, eventually accounting for the majority of renter households. The report also indicated that although numbers have barely increased in more than a decade, the characteristics of renter households have changed dramatically. With rapid growth of the nation's Hispanic and Asian populations, the minority share of renter households swelled from 31 percent in 1990 to 43 percent in 2004.
Looking at the broader housing market, foreign-born and minority households will continue to be the fastest-growing segments. The minority share of all households should expand from 28 percent in 2005 to more than 32 percent in 2015.
In a special section on Hispanic households, the report said that even though Hispanics still represent less than 11 percent of all households, they accounted for 27 percent of net household growth in 1995-2005. During the next 10 years, growth in the number of Hispanic households could exceed the 4.7 million projected increase among non-Hispanic whites.
While the total number of Hispanic households increased 58 percent during the 1990s, the number living in non-metro areas rose by 71 percent. The full report is available on Harvard's Web site at www.jchs.harvard.edu/publications/markets/son2006/.
Proposed Hiring Verification Regulations issued
The Department of Homeland Security Noun 1. Department of Homeland Security - the federal department that administers all matters relating to homeland security
executive department - a federal department in the executive branch of the government of the United States (DHS DHS Department of Homeland Security (USA)
DHS Department of Human Services
DHS Department of Health Services
DHS Demographic and Health Surveys
DHS Dirhams (Morocco national currency) ) issued two proposed rules designed to improve compliance with federal immigration laws immigration laws npl → leyes fpl de inmigración
immigration laws npl → lois fpl sur l'immigration
immigration laws npl and reduce the employment of unauthorized aliens. The first proposal (71 FR 34510) would permit U.S. businesses to digitize their I-9 employment forms, which are used to verify eligibility to work in the United States. A law passed by Congress allows employers to digitally store I-9s as of April 28, 2005. The DHS proposal sets the performance standards required for employers to complete, sign and store I-9s electronically.
The second proposal (71 FR 34281) addresses job applicants whose Social Security numbers (SSN SSN
Social Security Number ) do not match government records. According to DHS, approximately 10 percent of SSNs employers submit result in a "no match" letter. The proposed regulation would help employers to respond to a "no match" letter. Importantly, it would also be a safe harbor Safe Harbor
1. A legal provision to reduce or eliminate liability as long as good faith is demonstrated.
2. A form of shark repellent implemented by a target company acquiring a business that is so poorly regulated that the target itself is less attractive. for employers acting in good faith to comply by codifying the steps that an employer should reasonably take in resolving a "no match" letter.
Information compiled by NAA/NMHC Joint Legislative Staff: Senior Vice President for Government Affairs Jim Arbury; Vice President of Housing Policy Lisa Blackwell; Vice President of Capital Markets and Technology David Cardwell; Vice President of Property Management Jeanne McGlynn Delgado; Vice President of Communications Kim Duty; Vice President of Environment Eileen Lee; Tax Advisor Howard Menell; Vice President of Building Codes Ron Nickson; Chief Economist Mark Obrinsky; and Director of Property Operations Betsy Feigin Befus.