By Erin Corcoran

For the past 22 years, Senate Minority Leader Mitchell McConnell (R-KY) has been an influential policy-maker on Capitol Hill.

Previously, McConnell served as the Majority Whip in the 108th and 109th Congresses and as chairman of the National Republican Senatorial Committee during the 1998 and 2000 election cycles. He currently serves as a senior member of the Appropriations, Agriculture and Rules Committees.

McConnell’s state of Kentucky is home to several properties that are owned by more than 52 REITs and Kentucky is homebase to two listed REITs. “A major reason many REITs, as well as other businesses, are drawn to Kentucky is because there is no better place to live and work,” he says. “Our state welcomes business and enterprise, and our citizens have a proud history of a strong work ethic.”

McConnell sat down with Portfolio to discuss preserving and protecting Americans’ retirement savings, the Terrorism Risk Insurance Extension Act (TRIEA) and the Sarbanes-Oxley Act (SOX).

On Being Senate Minority Leader

On Nov. 15, 2006, McConnell was unanimously elected the Republican Leader in the Senate by his colleagues. “I am honored to serve my Republican colleagues as their leader in the Senate. We face many opportunities and challenges as a new, but numerically powerful, minority,” he says.

McConnell states that the Republican conference is committed to using every opportunity to promote core values, such as strengthening American resources and creativity in order to move toward energy independence, securing the United States from its enemies and tackling the pressing health care needs of U.S. citizens.

Additionally, McConnell points out that over the course of history, a divided government has produced powerful results with both parties taking credit and risks by making tough, but necessary, choices. “We will cooperate with the majority where we can. We will continue to shape legislation and will proudly stop those initiatives that are unwise,” he says.

In fact, McConnell goes on to say that politics at its best is a competition of ideas, which is the foundation of a working democracy. “It is important to remember that leadership requires us to look beyond partisan differences for solutions to the many challenges that face our nation,” he says.

NAREIT Bill Tracker
Here is a look at current REIT and real estate-related bills on the Congressional floor.
Name	What the bill would do	Next Steps
H.R. 1147, REIT Investment Diversification and Empowerment Act (RIDEA), sponsored by Representatives Joseph Crowley (D-NY) and Eric Cantor (R-VA)	Foreign currency gains generated by REITs operating outside the United States would qualify under REIT gross income tests. Updates the safe harbor test for dealer sales so that 1) the holding period requirement would be reduced from four years to two years; and 2) the 10% sales limit would be measured by value rather than tax basis. Healthcare facilities could be leased by a REIT to its TRS under the same rules applying to lodging facilities. U.S. REITs could own foreign REIT stock under the same rules applying to the ownership of U.S. REITs. The limit on TRS securities would be increased from 20% to 25%.	Introduce companion bill in the Senate.
Terrorism Risk Insurance Revision and Extension Act 2007 (TRIREA)	NAREIT supports new legislation that would ensure that affordable insurance against terrorism continues to be available to property owners. Extension bill introduced in House and Senate (H.R. 2761) on June 18.	Bill mark-up expected after the July 4 recess and voted on House floor soon after. Senate will most likely introduce a bill and hold hearings in September.
H.R. 2014, Leasehold Improvement Depreciation Act of 2007, sponsored by Representative Joseph Crowley (D-NY) and Representative Jerry Weller (R-IL)	Makes permanent the 15-year leasehold improvement deduction for qualified leasehold improvements. Decreases depreciation recovery period (currently at 39 years) to 15 years.	Request members of House Ways and Means Committee to cosponsor Introduce companion bill in the Senate.

On Pension and Retirement Savings

Preserving and protecting American workers’ retirement savings has been a key issue in Washington in recent years. McConnell says that Congress should start protecting and preserving Social Security. “The looming retirement of the baby boom generation will place a huge economic burden on America’s workers,” he says. “Additionally, I believe that private savings are an important component of a secure retirement. We can take further steps to expand savings and retirement financial tools, such as Roth IRAs and other tax deferred accounts.

Last August, Congress reformed the rules for privately funded pension plans by enacting the Pension Protection Act of 2006 (PPA) with a strong bipartisan vote. This law was the biggest change for U.S. pensions since the Employment Retirement Income Security Act (ERISA) was enacted in 1974. “The PPA tightens rules for privately funded plans and addresses concerns about their long-term viability,” McConnell says.

On TRIREA

The Terrorism Risk Insurance Revision and Extension Act of 2007 (TRIREA) is important to commercial real estate as well as other industries. This law has assured industries that affordable insurance against terrorism will be available to property owners, and is slated to expire on Dec. 31, 2010.

“All Americans should be proud of the way our economy has recovered after the devastating attacks of September 11,” McConnell says. “Timely enactment of pro-growth tax policy played an important role, but it was the hard work and resiliency of America’s private sector that once again drove the recovery.”

McConnell says he will continue to evaluate the Terrorism Risk Insurance program, bearing in mind that the private sector often provides more creative and flexible solutions than the Federal government. “Congress should evaluate the program based on several criteria, such as looking at emerging private markets for this coverage, prohibitive costs and specific threats that could have catastrophic consequences.”

On Sarbanes-Oxley Legislation

The Sarbanes-Oxley Act of 2002 increased requirements for all U.S. public companies by regulating standards for boards, management and public accounting firms.

In the last 12 months, many in the business community have recommended changes to the requirements imposed by the Sarbanes-Oxley legislation, and the SEC has recently approved final regulations intended to focus internal audits only on more closely defined material matters.

McConnell says that Congress should continue to focus attention on the flight of capital from the United States due to Sarbanes-Oxley’s strict standards. “Our leadership in the world on this front is eroding, and that may have serious long-term economic consequences,” he says. “The SEC needs to quickly evaluate these matters so we can assess the implementation of Sarbanes-Oxley.”