Volume IX, Number 1 - January 2004

In this bulletin:

•	Agenda for Action - Capitol Hill Visits April 26 & 27, 2004
•	Bush Signs Anti-Spam Law
•	EPA Promotes Water Submetering
•	Fair and Accurate Credit Transactions Act (FACT Act)
•	IRS Green Lights Electronic Filing For Business Tax Returns
•	Treasury Issues Depreciation Guidance
•	Do I Need A Privacy Policy?

Agenda For Action – Capitol Hill Visits April 26 & 27, 2004

CCIM Institute is gearing up to build on the success of last year’s Capitol Hill visits. Last year, approximately 100 CCIMs, along with 220 CPMs and ARMs of the Institute of Real Estate Management. This year, the REALTORS® Commercial Alliance will be joining forces with IREM and the CCIM Institute to present a unified front for commercial real estate on Capitol Hill. The visits will begin with an Orientation and Issues Briefing session from 3:30-5:30pm on Monday, April 26, followed by a reception. On Tuesday participants will take to the Hill, meeting with Senators and Representatives on a range of issues vital to commercial real estate and property management. The Capitol Hill visits are a great opportunity to network with your colleagues in property management and commercial real estate while influencing issues that are important to your business and livelihood.

Stay tuned for the launch of the online registration page and the unveiling of http://www.hillvisit.com your one-stop shop for all things having to do with the 2004 Hill Visits!

In the meantime, to register, send your name and e-mail address to Charles Achilles at cachille@irem.org or at (312) 329-6020.

Bush Signs Anti-Spam Law

Bush signed the “Can-Spam” bill into law on Tuesday, December 16, 2003 with an effective date of January 1, 2004. The law does not ban unsolicited commercial e-mails; however, it does identifies a series of practices that must be observed by senders of commercial e-mails. The bill requires senders to:

•	Include a legitimate return email and physical postal address,
•	Include a functioning opt-out mechanism, clear and conspicuous notice of the opportunity to opt-out and requires senders to honor any such opt-out request,
•	Include a clear and conspicuous notice that the message is an advertisement or solicitation, and
•	Clearly identify messages with pornographic or sexual content as such.

In addition, the bill prohibits senders from falsifying or disguising their true identity and bans the use of incorrect, misleading or fraudulent subject lines.

Opponents of the law do not just include those who send unsolicited commercial e-mails. Many of those who opposed the “Controlling the Assault of Non-Solicited Pornography and Marketing Act” believe that the law will do little to interrupt the flood of commercial e-mail. For example, 34 states have enacted laws regulating or banning spam and the new federal law effectively renders them null and void. Washington had a law allowing consumers to sue spammers and California and Delaware had “opt-in” standards that prohibited commercial e-mails without a prior business relationship. Also taking into consideration the international component of the problem, some congresspersons, such as Rep. John Dingell (MI-D), are already talking about revisiting the law in the near future to make up for any shortfalls.

The Federal Trade Commission has been assigned enforcement authority of the law. Much like the rules and regulations that were published in the summer of 2003 regarding the “Do Not Call” Registry, the FTC will be assessing the new anti-spam law and putting forth new rules and regulations in the next year. CCIM Institute will continue to monitor these regulatory developments.

EPA Promotes Water Submetering

On December 23, EPA published a final rule changing their policy on water submetering in apartment buildings. In the past, properties that submetered were treated as if they were public water systems, and could be subject to all testing and water quality rules. In this final rule, EPA acknowledges the disincentive this policy places on multifamily properties that wish to submeter. Instead, EPA will now exempt properties that submeter water from the requirement imposed on public water systems. However, EPA fell short of allowing this exemption for properties that utilize a Ratio Utility Billing System (RUBS) or other alternative water billing methods. With respect to other property types, EPA left that determination up to the individual state agencies with jurisdiction over water systems. Submetering has been proven to promote water conservation, and EPA's new policy will encourage more properties to do so.

Fair and Accurate Credit Transactions Act (FACT Act)

On December 4, 2003, President Bush signed into law H.R. 2622, the Fair and Accurate Credit Transactions Act, which permanently reauthorizes the Federal preemption of state consumer protection laws with regard to credit reports. The bill also provides consumers with new tools to fight identity theft, such as a national fraud alert system, and offers free annual access to credit reports.

The FACT Act requires regulators to devise a list of red flag indicators of identity theft, drawn from the patterns and practices of identity thieves. Regulators will be required to evaluate the use of these indicators in their compliance examinations of financial institutions, and impose fines when disregard of the indicators has resulted in losses to customers.

The FACT Act ensures that consumers have the right to a free credit report every year, enabling them to review the report for any unauthorized activity which may result from identity theft. The bill also requires that merchants display only the last five digits of a credit card number on store receipts.

Other provisions of the bill will permit identity theft victims to make a single call to receive advice and set off a nationwide fraud alert in order to protect their credit standing. Credit reporting agencies that receive fraud alerts from consumers will be obliged to follow procedures to ensure that any future requests are by the actual consumer, and not an identity thief. The law also enables active duty military personnel to place special alerts on their files when they are deployed overseas.

The Federal Reserve Board (FRB) and the Federal Trade Commission (FTC) requested public commentary on whether the proposed schedule of effective dates (December 31, 2003) would allow affected entities a reasonable period of time to comply with the Act and newly created provisions and whether the proposed effective dates should be changed. Commentary was due on January 12, 2004.

IRS Green Lights Electronic Filing For Business Tax Returns

Effective December 19, 2003, the Internal Revenue Service (IRS) eliminated regulatory impediments to the electronic filing of tax returns and other forms filed by corporations, partnerships and other businesses. This is in response to the 1998 Internal Revenue Service Restructuring and Reform Act (Public Law 105-206) which set a long-range goal for the IRS to have at least 80 percent of all Federal tax returns filed electronically by 2007. The IRS was required to establish a 10-year strategic plan to eliminate barriers to electronic filing.

The IRS identified a number of regulatory provisions that impeded businesses from filing electronically. The new regulations eliminate impediments for taxable years beginning after December 31, 2002 and generally affect taxpayers who must file any of the following forms:

•	FORM 926, “Return by a U.S. Transferor of Property to a Foreign Corporation”,
•	FORM 972, “Consent of Shareholder To Include Specific Amount in Gross Income”,
•	FORM 973, “Corporation Claim for Deduction for Consent Dividends”,
•	FORM 982, “Reduction of Tax Attributes Due to Discharge of Indebtedness (and Section 1082 Basis Adjustment)”,
•	FORM 1120, “U.S. Corporation Income Tax Return”,
•	FORM 1120S, “U.S. Income Tax Return for an S Corporation”,
•	FORM 1122, “Authorization and Consent of Subsidiary Corporation To Be Included in a Consolidated Income Tax Return”,
•	FORM 5471, “Information Return of U.S. Persons With Respect to Certain Foreign Corporations”,
•	FORM 5712-A, “Election and Verification of the Cost Sharing or Profit Split Method Under Section 936(h)(5)”, and
•	FORM 8832, “Entity Classification Election.”

For a PDF copy of the final regulations, please contact Charles Achilles at cachille@irem.org.

Treasury Issues Depreciation Guidance

On December 30, 2003, the Treasury Department issued proposed, temporary, and final regulations to clarify which changes in depreciation are changes in method of accounting.

In recent years, uncertainty has existed regarding whether a change in the period of recovery of depreciable property was a change in method of accounting. The regulations provide that a change in the period of recovery specifically assigned by the Code, the regulations, or other published guidance is indeed a change in method of accounting. The regulations also provide, however, that a change in the useful life of depreciable property is not a change in method of accounting if the useful life of the property is not specifically assigned by the Code, the regulations, or other published guidance. In addition, the regulations provide that a change in depreciation method or convention is a change in method of accounting.

CCIM Institute is in the process of analyzing these proposed regulations in order to provide commentary by the April 1, 2004 deadline. If you would like to participate in the drafting of the commentary letter, please contact Charles Achilles at cachille@irem.org.

Do I Need A Privacy Policy?

In 2001, Congress passed landmark legislation to modernize the banking and financial services industries for the first time since the depression era. One provision of this bill, the Gramm-Leach-Bliley Act, requires certain businesses to disclose to their consumers how they collect and use nonpublic personal information about them. These requirements apply only to those engaging in “financial activities” or activities that are “closely related to banking.” The Federal Reserve Board has determined that “leasing real or personal property (or acting as agent, broker, or advisor in such leasing) without operating, maintaining or repairing the property” falls into the category “closely related to banking”. These provisions are limited to consumer transactions, so commercial leasing activities are also not subject to these requirements. However, it may be a good business and risk management decision to have a privacy policy in place even if you are not subject to these requirements in order to be sure that employees do not misuse consumer credit information in violation of the Fair Credit Reporting Act or local consumer privacy laws.

For more information on writing a privacy policy download this PDF, "Creation of a Required Gramm-Leach-Bliley Privacy Disclosure Form".

2004 CCIM Institute Legislative Leadership
Bruce Baker, CCIM, Chair, Director
Raymond Boro, CCIM, Vice-Chair, Director

CCIM Institute Legislative Staff
Charles Achilles, IREM VP Legislation & Research, (312) 329-6020, cachille@irem.org

back to the top ^