Global Public Policy
Both the House and Senate are lining up to put together a final assistance package before a summer recess in August. ICSC has sent its legislative priorities to Congress. Our advocacy is focused on obtaining relief for our members, who thus far have largely been left out of federal assistance. In addition to immediate passage of broad economic support, ICSC has urged policymakers to consider the following proposals to address the urgent fiscal needs of our sector:
Economic Support for Essential Business Expenses – Many impacted businesses have been left out of current economic support measures, leaving a significant liquidity gap to stay current with essential business expenses, including rent. ICSC leads American’s Recovery Fund Coalition of more than 150 business groups representing 58 million pre-COVID-19 workers seeking creation of a federal grant program, such as H.R. 7671, the Small Business Comeback Act, to provide rapid liquidity over a prospective 4-month period to businesses impaired by the coronavirus to help retain and rehire employees and also pay the essential expenses such as rent and vendor debt that are critical to sustaining economic activity.
Commercial Real Estate Borrower Relief/Clarification of Title IV and the Main Street Lending Program (MSLP) – ICSC has called on Congress to direct the Department of Treasury and the Federal Reserve to use some of the remaining funds set aside as part of Title IV of the CARES Act to create a temporary liquidity facility to provide a federal guaranty to financial institutions based on the purchase of preferred equity in commercial real estate as a stand-alone program, as called for in the Helping Open Properties Endure (HOPE) Act, or through modification of the Main Street Lending Program. We continue to request changes to the Main Street Lending Program’s eligibility standards and debt ratio determination methodology to be consistent with conventional underwriting metrics of the real estate industry. Due to the restrictive nature of CMBS loan covenants, preferred equity in the underlying asset instead of debt is an important consideration.
Business Liability Relief – As businesses like shopping centers and their tenants begin to re-open, they need clarity in rules and regulations to ensure the safety of their employees and customers and prevent unnecessary litigation. ICSC has advocated that Congress enact a safe harbor for businesses or institute a federal pause in all COVID-19 related negligence lawsuits. We expect the imminent release of “The Safe to Work Act,” a business liability measure in the Senate to address such concerns.
Targeted Tax Relief – ICSC supports providing liquidity through the tax code to struggling business, such as extending net operating loss relief, providing a tax credit to defray the additional cost of disinfecting and safety equipment to protect workers and customers, and updating REIT rules to allow property owners to invest in struggling tenants. Congress should also exempt taxation on phantom income from loan modification, forgiveness or cancellation.
On July 24 the House approved a $259.5 billion spending package, which together with the HEROES Act passed earlier in the summer, are markers by the Democrats’ as to what they want in the next big bill. The latest House bill, H.R. 7608, provides funding for the departments of State, Interior, Agriculture, Veterans Affairs and other agencies but also has “poison pill” provisions, which means it is unlikely to be heard in the Senate. While Congress may address appropriations in August, the more likely scenario is passing some sort of continuing resolution or spending bill that keeps the government open beyond September 30, the fiscal year end.
At present, it is unclear how ambitious the next assistance package will be or how long Congress will remain in Washington next month. Much depends on Senate Leadership’s ability to navigate the Administration, the House and intraparty differences. ICSC will keep you informed of developments along the way.
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