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ADISA Continues to Press the Issues in D.C. Meetings

May 10, 2017

The month of May has seen a near frantic pace from trade associations in delivering their messages to Capitol Hill in the wake of potential upcoming legislation. In the past two weeks, leaders from ADISA and other trade groups and coalitions have met with several government and regulatory officials to make the case for delaying the DOL Fiduciary Rule, as well as pressing for preservation of the 1031 Like-Kind Exchange in any possible tax reform strategy. 

“There are several legislative angles to pursue, and we are trying to have our members' voice heard on the Hill," said ADISA’s president, John Grady, a partner with DLA Piper. "However, the key to ensuring a full and fair reconsideration of the DOL's Fiduciary Rule and accompanying 'best interest contract' exemption lies with the White House. The Administration can rightly postpone the Rule's current implementation date and ensure that a comprehensive and thorough approach to evaluating the Rule's impact on retirement savers and their advisors takes place. And perhaps ensure that the SEC has an opportunity to weigh in on these important issues." According to Grady, if another postponement doesn't occur, the Rule will go into effect on June 9, 2017. 
 

Another issue—and one that indeed rests mostly with Congress—is tax reform, and this has vital effects for the financial service industry, particularly 1031 Like-Kind Exchanges. ADISA’s Executive Director/CEO, John Harrison, met at length with Senator Tim Scott (R-SC) and others to reiterate the strong benefits of LKEs to the economy as a whole. The South Carolina delegation are known for their leadership and support of LKEs, especially Congressman Tom Rice (R-SC), who himself as a tax attorney has knowledge and experience with LKEs, according to his staff member in charge of tax issues, Robert Cusmano. Harrison_Scott_small.jpg

“It’s unfair to even link LKEs with any kind of specific tax maneuver or so-called ‘loophole,’ for it is an economic stimulus pure and simple,” said Harrison. “ADISA is proud to have co-sponsored two studies showing the great benefit to the bottom line GDP of our country by LKEs; everyone in Congress we have dealt with, who sees these numbers, is in awe of the magnitude of LKEs' importance to the GDP across several industries. If we look at the Ernst & Young study, we see over a $13 billion per year value of LKEs to the economy as a whole,” noted Harrison, “and our academic study by professors from Syracuse and University of Florida showed that about 6 percent of all commercial real estate transactions involve LKEs in some way. That involvement lowers holding time and gives incentive to ‘buy up’ to improved properties. This means LKEs accelerate demand, thus helping to raise the value to property owners.”

According to ADISA’s Legislative & Regulatory Committee Chair, Catherine Bowman, ADISA’s largest efforts on LKEs are in preparing educational material for congressional staffers and in answering questions regarding how LKEs actually work. “Even though those in financial services know how the LKE stimulus aids with commercial real estate, many on the congressional staff level still need to know more,” said Bowman. ADISA is currently preparing a “sequel” to its popular Guide to Alternatives which will be solely dedicated to Like-Kind Exchanges, designed especially for congressional staff involved with tax and budget issues.