A Congressional Perspective: Representative Gary G. Miller
By: Rep. Gary G. Miller, R-Calif., vice chairman of the U.S. House of Representatives Financial Services Committee
Gary G. Miller
Republican Rep. Gary G. Miller represents California’s 31st Congressional District in the U.S. House of Representatives. He is vice chairman of the Financial Services Committee, which oversees U.S. banks, stock exchanges, real estate markets and the insurance industry, and a senior member of the Transportation and Infrastructure Committee, which is responsible for the nation’s highways, railroads, airports and water infrastructure. In addition, he is chairman of the Building a Better America Caucus, a congressional organization promoting high-quality growth.
Before entering public service, Miller founded the G. Miller Development Company, which expanded from building single-family and custom homes to eventually developing planned communities. Development magazine recently spoke with Miller about various policies and politics that have the potential to impact the commercial real estate industry in 2014 and beyond.
Development: The partisan rhetoric in politics has made it difficult for members of Congress to reach across the aisle to find compromise on a host of legislative issues. Do you see any willingness from Democrats and Republicans to come together on any particular issues this year?
Miller: Members of Congress are universally concerned about the economy and job creation. However, Congress is reflective of the country, and therefore there are many different views about what the federal government needs to do to help move the economic recovery forward. Members are in disagreement about the impact of federal government intervention, with some saying it is beneficial and others arguing it is detrimental. Members are also in disagreement about our federal budget, with some arguing for policies to increase revenue and others arguing for a less bloated system.
In my experience in business, I have found that deals can be reached as long as all sides are willing to come together for a common purpose. Compromise can be achieved, but it requires give and take from all sides. Congress acts when there is agreement about the problem. This year, I would expect the reauthorization of existing programs to be the most likely area of Congressional action, because this is where there is agreement about the role of the federal government.
Development: Considering that 2014 is an election year, are there any major legislative items you think Congress will address before the elections? What about during a lame duck session (i.e., when the current Congress meets after its successor is elected, but before the successor’s term begins)?
Miller: Passing big legislative items is always difficult, and becomes increasingly complicated as we get closer to the election. In order to pass major legislation, both sides need to agree on the problem and the goal. I am optimistic that this has just about been achieved, and that Congress can finish work this year on the following reauthorizations: the Water Resources Development Act of 2013 (WRDA), the Moving Ahead for Progress in the 21st Century Act (MAP-21, also known as the federal transportation bill) and the Terrorism Risk Insurance Act of 2002 (TRIA). If any of these bills are not finished by June, it is likely they won’t be completed until the lame duck session, following the November elections.
Development: There has been talk of comprehensive tax reform for several years. Do you think that Congress is poised to address this issue? If not, do you see any tax bills or a tax extenders package (one to extend tax breaks that have been renewed periodically but that expired on January1) being passed?
Miller: Tax reform is one of the most complicated issues we face today. Everyone can agree that tax reform is necessary; however, it is extremely difficult to build consensus about what should be done. The recent bipartisan budget agreement and the Consolidated Appropriations Act, 2014, are encouraging signs that we are moving forward on important fiscal matters. Ways and Means Committee Chairman Dave Camp, R-Mich., has been working diligently to develop a broad tax reform package. However, a comprehensive tax reform bill faces an uphill battle during an election year. If we are unable to achieve real tax reform, Congress will need to work on a tax extenders package.
Development: Reauthorization of TRIA, which is set to expire at the end of 2014, is crucial for the commercial real estate industry. What challenges does it face, and are we likely to see an extension of the current program before the end of the year?
Miller: TRIA is a crucial program for the commercial real estate industry because it is impossible for insurance companies to accurately model and price for the risk of a major terrorist attack. As vice chairman of the House Financial Services Committee, which has jurisdiction over the program, I am working to ensure that Congress reauthorizes TRIA as soon as possible. The committee held hearings last year and is working to put forward legislation that can be signed into law before the program expires.
Development: The federal transportation bill is currently set to expire in September. Infrastructure spending is a priority for commercial real estate. Do you believe that Congress will reauthorize a new transportation bill, or do you see a series of short-term extensions in the foreseeable future?
Miller: As chairman of the House Transportation and Infrastructure Committee, Bill Shuster, R-Pa., has been one of the most effective chairmen with whom I have had the pleasure to work. The support he was able to build for the Water Resources Development Act of 2013 (WRDA) reauthorization bill in the House was nothing short of miraculous. Should the House and Senate agree on WRDA, it will be the first time an agreement has been reached since 2007.
While highway reauthorization is more complicated, Chairman Shuster has produced a road map for success. I served on the committee’s Special Freight Panel, which was designed to assess the problems our nation’s transportation system faces from a multimodal perspective. The Freight Panel’s report will be very informative for the upcoming highway reauthorization bill. Under Chairman Shuster’s leadership, I am confident that our committee will be able to work toward reauthorizing a new transportation bill.
Selected For You
Many in Congress want to change the tax treatment of carried interest compensation from capital gains to ordinary income. A "carried interest" (also known as a "promoted interest" or a "promote" in the real estate industry) is a financial interest in the long-term capital gain of a development. The “carried interest” is given to a general partner (GP), usually the developer, by the limited partners (LPs), the investors in the partnership.
The New Markets Tax Credit (NMTC) Program was established in 2000 as part of the Community Renewal Tax Relief Act of 2000 and aims to foster revitalization efforts in low-income and impoverished communities across the United States. The NMTC Program provides tax credit incentives to investors for equity investments in a certified Community Development Entity (CDE) whose primary mission is to invest in low-income communities. The credit equals 39 percent of the investment paid out over seven years: 5 percent each year for three years; and 6 percent in the final four years. The NMTC program has been used in conjunction with local efforts to spearhead redevelopment efforts, including commercial real estate development, in many areas.