Nonprofit policy updates from across the nation

From the National Council of Nonprofit Associations

New Hampshire Supreme Court Affirms Nonprofit Property Tax Exemption. On March 14, in Town of Peterborough v. The MacDowell Colony, Inc., the nonprofit’s charitable property tax exemption for 420 acres of land devoted to the promotion, study, research, and production of the arts was affirmed. The Court used a four factor test based on the state definition of “charitable” that had been further articulated in a 2007 case to the benefit of an elder care facility. Given the recent result in Minnesota denying a property tax exemption due to a fee structure for services, in Under the Rainbow Child Care Center v. Goodhue County, the language in New Hampshire should be studied for use in other jurisdictions challenging nonprofit tax exemptions. For more information on the MacDowell Colony case, visit the website of the New Hampshire Center for Nonprofits.

Bill Introduced to Delay Medicaid Regulatory Cutbacks. “Protecting the Medicaid Safety Net Act of 2008” (HR 5613)  was introduced on March 14 by House Energy and Commerce Committee Chair John Dingell (D-MI) and Congressman Tim Murphy (R-PA). The bill would delay seven of the Medicaid regulations the Administration has announced it will implement until April 1, 2009. Senior Legislative Associate Andrea Maresca of the National Governors Association informs NCNA that while the Congressional Budget Office estimates the regulations would result in a reduction in federal Medicaid expenditures of almost $20 billion over five years, a recent report by the House Committee on Oversight and Government Reform based on responses from 43 states, estimated states could lose almost $50 billion in federal Medicaid funds over five years.

Budget and Appropriations Updates. Congressional  FY 2009 Budget Resolution: Late on March 13 and early in the morning of March 14, the House and Senate adopted $3 trillion budget resolutions for Fiscal Year 2009. While the resolutions are similar in terms of broad policy outlines and priorities, they differ on the total amount of discretionary spending and whether to offset the cost of a one-year patch to the Alternative Minimum Tax (AMT).  The congressional budget resolution is a non-binding blueprint for the direction of budget policy over the next five fiscal years and sets the overall amount of money the twelve appropriations subcommittees will have to allocate to individual programs under their jurisdiction in each chamber. Part of the voting in constructing the budget resolution involved substantial attention to the estate tax. Of several versions offered for a new estate tax structure, Senator Baucus’ version gathered the most votes in the Senate with a mid-range exemption of $7 million per couple and a 45% tax rate.

Also, language on the IRA charitable rollover was incorporated as an amendment into the Senate version of the Resolution which states the intention to reinstate expired tax relief, “such as enhanced charitable giving from individual retirement accounts, including life-income gifts.” Next stop: the Conference Committee where a $4 billion difference in discretionary spending and the issue of offsets for the AMT provision for next year have to be addressed. The House version includes instructions to provide offsets, while the Senate provides no offsets in violation of pay-as-you-go (PAYGO) rules. OMBWatch, 3/18/08, 3/14/08

Farm Bill. The Food and Energy Security Act of 2007 continues its struggle to passage as the most recent House and Senate Agricultural Committees’ road map met with disapproval by Senator Baucus of the Senate Finance Committee (SFC). He objects to a $3 billion diversion from disaster recovery funds to conservation efforts. The SFC needs to identify the funds to pay for the $10 billion in spending proposed over the accepted baseline, while the Bush Administration continues to state that it will veto any new taxes proposed to pay for increases over the spending baseline. Due to a one-month extension enacted earlier this month, the new deadline for congressional resolution is April 18. President Bush has said he will sign a one-year extension of the current farm bill if the new reauthorization is not achieved by that date. CQ Today Online News, 3/18/08, 3/14/08, 3/12/08

Photo ID Requirements for Voting Debated and Challenged. At a March 12 hearing of the Senate Committee on Rules and Administration, the highly partisan debate on voter fraud continued, with nonpartisan witnesses cautioning against exaggeration of fraudulent conduct. Democrats claim that voter fraud is a ruse to disenfranchise poor, minority, and elderly voters, while Republicans believe there is a real problem with voter impersonation. Claims of voter fraud form the basis for new state laws requiring voters to present photo identification at the polls. Georgia, Missouri, and Indiana have all passed such laws while similar legislation is pending in 18 other states. See a compilation from the Brennan Center for Justice. The U.S. Supreme Court will be deciding Crawford v. Marion County Election Board this year, in which the constitutionality of Indiana’s voter ID law has been challenged. See the Supreme Court Wiki to read the briefs. OMBWatch, 3/18/08

College Loan Forgiveness Provision in the New Higher Education Act Could Help Nonprofits. The College Opportunity and Affordability Act of 2008, (HR 4137) which has passed the House and Senate with overwhelming support, overhauls and renews the Higher Education Act of 1965 for the first time since 1998. Its college loan forgiveness provisions hold special interest for all nonprofits, as it provides for forgiveness to employees working in “an area of national need” in amounts up to $2000 a year, each year for five years. Areas of national need include positions that exist in the nonprofit sector such as early childhood educators, nurses, ESL teachers serving low-income communities, those engaged in national service, and mental health professionals. In addition, the omission of all 501(c)(3) employees (as compared to their inclusion in the loan forgiveness language of the College Cost Reduction and Access Act of 2007 (CCRAA)) may be a technical error. NCNA has requested that key State Association members inquire and advocate for creating a similar definition of “public service” jobs in the pending bill, as we did with CCRAA. CQ 3/7/08

GIVE Act Stalled. The first reauthorization bill for the Corporation for National and Community Service has stalled in Congress despite broad bipartisan support. The Generations Invigorating Volunteering and Education (GIVE) Act (HR 2857) would allow the Corporation to operate more efficiently, be more responsive to state and local needs, leverage more resources, and mobilize more citizens to meet pressing needs. The Corporation has been funded on an annual appropriations basis since 1997. The law would expand the benefits of Americorps programs and awards for participants and many nonprofits. In a recent NCNA Public Policy call, Frank Trinity, Counsel for the Corporation stated that it will be a “surprise” if Congress passes the bill this session, but that the existing bill, as approved by the House Education and Labor Committee on a unanimous vote, would be re-introduced next session.

IRS updates

• New Form 990. Join us on April 3 at 2 pm EDT, to learn more about the Form and the soon-to-be-released instructions, and to have your questions answered. Register for the webinar with Ronald J. Schultz, Senior Technical Advisor to the Commissioner, Tax Exempt/Government Entities.
• Economic Stimulus Payments. The IRS is asking nonprofits to assist in efforts to reach out to those Americans who may be eligible for the 2008 economic stimulus payment, but who normally have no requirement to file a tax return. People who receive certain Social Security, Veterans Affairs, Railroad Retirement or wages from earned income or combat pay may be eligible and not know it. See the IRS webpage for flyers and more information. 

State Nonprofit Policy Updates

Special Update: 17 States Facing Deficits Propose Budget Cuts. The Center on Budget and Policy Priorities reports that at least 17 of the 22 states facing budget deficits have proposed budget cuts that threaten vulnerable populations, healthcare, and education. Visit the Center's website to learn where states are targeting their cutbacks and read their Special Series on Dealing with Deficits: How States Can Respond.

In March, state legislators introduced dozens of bills that impact all nonprofits in their respective states. Below is a partial list of these bills, listed alphabetically by state. Unless otherwise noted, the bills below have not become law.

State Policy News

AK | Alaska Permanent Fund Dividend Donation
HB 166 would allow electronic filers to the Alaska permanent fund dividend to direct monies from dividend payments to one or more of the educational organizations, community foundations, or charitable organizations listed in the application.

AL | Proof of Lawful Presence: Nonprofit Exemption
SB 226 would both require any person 14 years of age or older to provide proof of being lawfully in the United States before receiving certain public benefits and simultaneously exempt nonprofit organizations from adhering to these same provisions.

CA | Temporary Service Pay Schedule
AB 1902 would amend existing law, calling for employers of temporary service workers to pay them on a weekly basis as opposed to the current biweekly schedule. The bill further calls for daily payment if the employee is performing day-to-day client services or is serving a client who is engaged in a trade dispute.

CT | Employee Sick Leave
SB 217 would require all employers – including nonprofits – with more than 25 employees to offer paid sick leave, and establishes formulas for how the amount of time is to be accrued and how it may be exercised by the employee.

CT | Municipal Set-Asides
SB 537 proposes conditions under which nonprofits could qualify as minority and/or small businesses to receive special consideration for contracts related to municipal development.

FL | Florida Security and Immigration Compliance Act: Nonprofit Exemption
HB 159 would create and simultaneously exempt nonprofits from the "Florida Security and Immigration Compliance Act,” which proposes to prohibit public employers from entering into contracts with providers who are not registered and participating in the federal work authorization program, which confirms U.S. legal presence of employees.

FL | Statewide Legacy Communities Initiative
SB 2748 would officially establish a redevelopment effort deemed the “Statewide Legacy Communities Initiative,” and would include local nonprofit organizations on the preferred list of actors to participate in development projects.

GA | Charitable Solicitations
HB 1104 would amend certain charitable solicitation provisions to clarify certain terms, specify certain solicitation requirements, and update registration procedures. 

GA | Bingo Licensing
HB 1151 would relax current bingo licensing procedures, instead requiring that an organization sponsoring bingo events alternatively submit a statement affirming their exempt status under the income tax laws of the state.

GA | Alcoholic Beverage Permits
HB 1243 would revise provisions relating to the issuance of temporary permits for sale of alcoholic beverages by nonprofit organizations, extending the permissible duration of the event from one to three days, and increasing the number of permits per year from two to six.

IA | Bingo Rules and Licensing
HF 2573 would permit a fair or community festival of no more than four days in length to conduct bingo pending payment of a $25 licensing fee, and provide that no more than one bingo occasion is conducted for each day of the event. The bill would require that the event be held by a community group, defined as an Iowa nonprofit, tax-exempt organization established for the promotion of the arts, history, culture, ethnicity, historic preservation, tourism, economic development, or municipal libraries.

IA | Uniform Prudent Management of Institutional Funds Act
HF 2576/SF 2316 would create the "Uniform Prudent Management of Institutional Funds Act" and set guidelines for charitable institutions concerning the management and investment of the funds (including endowments) in accordance with modern prudence standards based upon both the Uniform Prudent Investor Act (UPIA) and the Uniform Management of Institutional Funds Act (UMIFA).

IA | Compensation Disclosure
HF 2617 would require disclosure of compensation issued to a corporation's chief executive officer, chief financial officer, and other executive-level administrators on the corporation’s biennial report, which would become an article of public record.

IA | Sustainable Community Development Initiative
SF 2327 would call for the Iowa Department of Economic Development to establish a sustainable community development initiative tasked with ensuring that current programs promote sustainability, cooperate with local/state governments, and provide technical and financial assistance to pilot projects, which could include nonprofit organizations. Additionally, the bill would authorize an annual expenditure of $500,000 from the “Grow Iowa Values Fund" and would call for the development of an internet site to promote the sustainability initiative.

LA | Code of Ethics
SB 369 would offer a new ethics code for elected officials, but assert that participation in the activities and programs sponsored by a nonprofit organization do not constitute an ethical violation. For additional information, visit the public policy and advocacy webpage of the Louisiana Association of Nonprofit Organizations.

MA | Property Sale and Transfer
HB 2855/SB 1781 would allow the state, prior to the sale/conversion of tax-exempt property, the right of first-refusal/direct purchase, respectively, and would further enable the state to pass on such rights to nonprofit organizations in order that they may acquire the tax-exempt property.

MA | Qualified Repeal of Property Tax Exemption
HB 3168 would establish that any not-for-profit institution that has accumulated more than $500,000,000 in an endowment or net worth, or any combination of the two, shall not be exempt from real estate taxes; would further allow for their tax payments to subsidize the real estate tax burden of low and moderate income state residents. 

ME | Fund Revenue Use Provisions
LD 2015 would prohibit a candidate certified for public campaign funds from using fund revenues to pay him/herself, a member of the candidate's immediate family, a contributor to the candidate's household or business income, or a nonprofit affiliated with the candidate or the candidate's family, except to reimburse for goods/property provided to the campaign. For more information, visit the Maine Association of Nonprofits’ policy page.

MO | Prohibition on Storm Water Usage Fees
HB 1455 would prohibit third class cities from imposing storm water usage fees on property owned by churches, public schools, nonprofit organizations, or other political subdivisions.

MO | Public Assistance Recipient Qualifications: Nonprofit Exemption
HB 1626 would prohibit non-United States citizens/permanent residents from receiving state or local public assistance, unless provision of the service is mandated under federal law or the service is being provided by a nonprofit organization.

NE | Lawful Proof of Presence: Nonprofit Exemption
LB 963 would exempt nonprofit organizations from the list of entities required to establish lawful proof of presence in the United States by those persons seeking to receive services.

NJ | Legislators’ Code of Ethics
SCR 85/ACR 159 provide that, in compliance with the proposed legislators’ code of ethics, participation in the activities and programs sponsored by a nonprofit organization does not constitute an ethical violation. For more information, refer to the advocacy information provided by the Center for Non-Profit Corporations.

RI | Electronic Incorporation Filing
SB 2604 would allow nonprofit corporations to file incorporation papers electronically with the secretary of state's office.

SC | Electronic Registration
HB 4848 would attempt to reduce burdensome paperwork, improve communication, and increase access and transparency by promoting the use of technological resources to accept and transmit required forms and registration materials for various state agencies.Visit the South Carolina Association of Nonprofit Organizations’ policy page for further study.

TN | Sensitive Information Protection Standards
HB 2148/SB 1573 would mandate that agencies, companies, and nonprofits are responsible for the safekeeping and protection of personal information, including social security numbers, and would charge those found negligent in this regard to the penalties associated with a Class B misdemeanor. 

WA | Raffle Rules
HB 2489/SB 6829 would require that raffle tickets bearing an individual number are sold for not more than one hundred dollars each, or a greater amount as determined by the commission’s issuance of a special rule.

WA | Building Communities Fund
HB 3125 would create the building communities fund and authorize capital and technical assistance grants to nonprofit organizations, local governments, or federally recognized Indian tribes in distressed communities. The project would focus on the acquisition, construction, or rehabilitation of facilities used for the delivery of nonresidential community services, including social service centers, multipurpose community centers, and cultural centers.

WA | Economic Development Initiatives Sponsorship
HB 3266/SB 6855 would mandate that the community economic revitalization board provide financial assistance for projects deemed consistent with the workforce training and education goals and objectives adopted by the Washington state economic development commission. In describing the program, nonprofit organizations are included in the list of potential participants.

The Nonprofit Congress and Lobby Day 2008

On June 1-4, 2008, hundreds of nonprofit professionals will converge on our nation's capital to act collectively for positive change. Will you be one of them? Convene in our nation’s capital, connect with peers across the country and commit to creating positive change at the 2008 Nonprofit Congress - Convene · Connect · Commit.

Join fellow nonprofit from across the nation for the National Nonprofit Congress Meeting, the first ever Nonprofit Expo, Poster Sessions featuring nonprofits from around the country, and Lobby Day 2008. We will carry the message of a united nonprofit sector to Capitol Hill, meet with our Congressional delegations, and let them know about the impact nonprofits are having in the communities they represent. This is your opportunity to strengthen your relationship with your elected officials, inform them about the issues affecting the sector, and invite them to visit your organization during the next recess. For more information and to register, visit the Nonprofit Congress website.

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