[Congressional Record Volume 155, Number 185 (Thursday, December 10, 2009)]
[Extensions of Remarks]
[Page E2936]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                           REIT ENERGY GRANTS

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                         HON. LINDA T. SANCHEZ

                             of california

                    in the house of representatives

                      Wednesday, December 9, 2009

  Ms. LINDA T. SANCHEZ of California. Madam Speaker, I rise today to 
introduce the ``Sustainable Property Grants Act of 2009,'' legislation 
that would allow real estate investment trusts (REITs) to fully benefit 
from the energy grants included in the American Recovery and 
Reinvestment Act of 2009 (the Recovery Act).
  Congress created REITs in 1960 to enable investors from all walks of 
life to own professionally managed, income-producing real estate. REITs 
combine the capital of many investors to benefit from a diversified 
portfolio of income-producing real estate, including apartments, health 
care facilities, hotels, offices and warehouses. REITs are required to 
distribute at least 90 percent of their taxable income. Most distribute 
their entire taxable income.
  Buildings represent about 40 percent of all energy use and 
approximately 70 percent of all electricity consumption in the United 
States, but REITS, which own 6 billion square feet of commercial real 
estate, cannot currently access tax incentives designed to reduce their 
energy use. Providing incentives for REITs to engage in energy 
efficiency projects could significantly contribute to achieving our 
energy reduction goals.
  That is why I am introducing legislation today to amend the Recovery 
Act to allow REITs to participate fully in the energy grants in lieu of 
tax credits program.
  Section 1603 of the Recovery Act provides Energy Grants to companies 
that invest in qualifying renewable energy projects. These grants are 
intended to encourage qualifying investments by taxpayers whose tax 
liability is not sufficient to benefit from existing energy credits. In 
fact, the Recovery Act Energy Grants were designed as a substitute for 
energy credits during the current economic downturn since many 
taxpayers have inadequate tax liability to use the credits. Despite 
being designed for this purpose, the Energy Grants provision in the 
Recovery Act have been interpreted to benefit a REIT only to the extent 
it retains taxable income, which most do not.
  This legislation would further existing Congressional policy and 
promote the greatest possible participation in efforts to increase the 
use of renewable energy. REITs would be afforded the same economic 
incentives as other property owners to make investments in renewable 
energy projects. With enough critical mass, these types of investments 
should help fuel the U.S. economy's growth, create additional jobs and, 
over time, reduce American reliance on foreign oil.
  I hope that you will join me in supporting this legislation.

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