Nonprofit policy updates from across the nation

From the National Council of Nonprofit Associations

Federal court blocks enforcement of Ohio restrictions on voter registration drives –In the case Project Vote v. Blackwell, a federal judge on Feb. 11 issued a permanent injunction against enforcement of an Ohio law which limited the ability of nonprofits to register citizens to vote. The Ohio law passed in 2006 would have required staff and volunteer voter registration workers to personally deliver new registrations to the State, instead of to their supervisor. Failure to comply was a felony.

Jocelyn Travis, Director of OhioVOTES, hailed this as “a major victory. Many groups traditionally doing voter registration felt very vulnerable and confused and some groups just stopped doing it. We need nonprofits to engage underrepresented clients in voting. Everyone needs to know that they can influence policy."

OhioVOTES is a project of the Nonprofit Voter Engagement Network. Network Director Bridgette Rongitsch said, “This law erected barriers that would prevent citizens from joining together with their communities to help increase democratic participation. Instead, our collective efforts should focus on how to encourage the millions of eligible voters who do not participate in a given election.” Other states that have passed restrictions on voter registration include California, Colorado, Florida, Georgia, Maryland, Missouri, New Mexico and Washington.

Proposed Medicaid regulatory cutbacks opposed by states – Beginning March 3, proposed regulations under Medicaid will be issued that would: Ban the use of federal Medicaid money to help pay for the training of doctors, a use allowed since the inception of Medicaid more than 40 years ago; set new limits on Medicaid payments to hospitals and nursing homes operated by states, cities, counties and other units of government; and limit Medicaid coverage of rehabilitation services for people with disabilities, including serious mental illnesses. The federal government and the states share the cost of Medicaid, which provides health insurance to more than 60 million low-income people, including 30 million children.

Governors of both parties and the National Association of State Legislators are vigorously opposing the rules, as the regulations would shift at least $12 billion in costs to the states over the next 5 years, forcing them to consider service cutbacks. These rules would take effect at a time when the subprime mortgage crisis is diminishing state tax revenues. Congress delayed some of the rules last year, but they will soon take effect unless Congress intervenes again.

The proposed federal budget – President Bush’s proposed FY 2009 budget of $3.1 trillion, released Feb. 4, contained numerous provisions important to the nonprofit sector. Areas of concern include elimination of the estate tax and substantial cuts in non-security discretionary spending. OMBWatch said the proposed “cuts are spread out ... but particularly target programs at the Departments of Education and Agriculture, which account for more than half of the 151 programs that would be drastically cut or eliminated under the President’s budget. The Department of Education would see 47 programs eliminated, including programs that seek to prevent alcohol abuse, improve teacher quality, increase family literacy, and mentor children. Funding for after-school education programs funded through the 21st Century Learning Opportunities program would be cut by 26 percent. The Department of Agriculture would lose 19 programs. The Department of Health and Human Services would see its budget cut by 2.1 percent, or 4.2 percent when adjusted for inflation. Medicare and Medicaid spending is reduced by over $200 billion over the next 5 years.

On the plus side, the proposed budget makes permanent the IRA Charitable Rollover provision and expands SCHIP funding by over $19 billion with $4 billion more in funds each year for five years.

Farm bill – Frustrating negotiations continue between the House and Senate on the Food and Energy Security Act of 2007, which funds nutrition and food stamp programs and includes charitable giving incentives for food inventories and land conservation. Even if lawmakers meet their March 15 deadline and sufficiently satisfy the pay-as-you-go rules the House Democrats are trying to enforce, there remains a possibility that the President will veto the bill for exceeding its baseline spending guideline of $280 billion over five years. The most recent House proposal cuts $3 billion from an $11.5 billion increase in food stamps and nutrition programs. Senate funding includes over $5 billion for a permanent disaster relief fund that would help farmers through drought, flood and fire, and agricultural and energy tax incentives. The White House is trying to reduce funding of agricultural subsidies due to pressure from the World Trade Organization.

College Cost Reduction and Access Act: Negotiated rulemaking on loan forgiveness continues – The negotiated rulemaking team on the loan forgiveness provision of CCRAA will be completing its work towards proposed rules in its final session March 4 through 6. One focus is further definitions that cover nonprofit employees who work in the sector for ten years while making payments. Full-time employment is defined as a minimum of 36 hours per week. The status of the regulations in progress can be followed on the Department of Education website. Meanwhile, the President’s proposed FY 2009 Budget would delay the effective date on the calculation of the 10 year period for loan forgiveness in CCRAA from Oct. 1, 2007 to July 1, 2009.

Limits on “Robocalls” during federal election campaigns – The Robocall Privacy Act of 2008, SB 2624, introduced Feb. 12, would place restrictions on prerecorded messages, known as robocalls, made 30 days before a primary and 60 days before a general election. The bill would not affect calls made by volunteers in phone banks. To learn more about the rationale of sponsor Senator Dianne Feinstein read her press release.

IRS updates

• e-Postcard filing system – Find information about the e-Postcard filing requirements and a link to the filing system on the IRS website. Small tax-exempt organizations whose gross receipts are normally $25,000 or less may be required to electronically submit Form 990-N, also known as the e-Postcard. The first e-Postcards are due in 2008 for tax years ending on or after Dec. 31, 2007. The e-Postcard is due every year by the 15th day of the 5th month after the close of the nonprofit’s tax year. For example, if the nonprofit's tax year ended on Dec. 31, 2007, the e-Postcard is due May 15, 2008. At the time of filing, the IRS website will send the filer to its trusted partner, the Urban Institute, to complete the online form. There is no paper form. The Pension Protection Act of 2006 added this filing requirement to ensure that the IRS and potential donors have current information about your organization.
• IRS updates guidance on best practices – For an easy map to The Life Cycle Of a Public Charity, see the IRS website. Narrative guidance on all aspects of running a nonprofit is also available.

State Nonprofit Policy Updates

Highlights:

• Minnesota: Moratorium on nonprofit property tax – The Minnesota Council of Nonprofits has been advocating a legislative reversal of last year’s state supreme court decision in Under the Rainbow Child Care Center vs. Goodhue County. MCN has negotiated a one-year moratorium on enforcement with the Department of Revenue while the parties jointly develop solid, comprehensive language for nonprofit tax preferences going forward. In a year with poor prospects of any tax legislation becoming law, the Council claims this as a victory.
• California: "California Volunteers" attains cabinet-level status – Governor Arnold Schwarzenegger announced Feb. 26 that he is creating a cabinet-level office for volunteer management, which will be the first such position in the country. The executive director of the governor’s commission for volunteerism, California Volunteers, will gain expanded duties as a cabinet secretary, playing a role in disaster-related planning and response efforts, and coordinating volunteers at disaster sites. The office will also manage donations that flow into the state for disaster relief, a responsibility now held by the state’s Office of Emergency Response. The state is also facing a budget crisis, with a deficit of billions of dollars. Part of the role of the elevated office will be to secure more private and corporate money for volunteerism efforts.

State-by-state updates:

In January, 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.

Alabama: Management of institutional funds – HB 8 would repeal the Uniform Management of Educational Institutional Funds Act and would adopt the Uniform Prudent Management of Institutional Funds Act.The new bill would provide a standard of conduct for managers of charities/institutional fund, and would limit the costs associated with the fund’s management. Finally, the bill would allow an institution to delegate managerial functions and would establish a policy for releasing/modifying restrictions on donations.

Arkansas: Automated communications ban – HB 380 would prohibit the use of an automated telephone system, device, or fax machine to: communicate recorded messages for the purpose of offering goods for sale; provide information related to those goods; solicit information/gather data; or promote a political campaign.

Arizona: Property sales to nonprofits – HB 2219 states that counties with a population of 100,000 persons or less may sell, within twelve months after the effective date of this act, without appraisal or public auction and at a price determined by the county board of supervisors, any real or personal property that is currently being leased by the county to any nonprofit entity.

California: Demographic data disclosure – AB 624 would require a private foundation with assets over $250,000,000 to collect specified ethnic and gender data pertaining to its governance and grant-making. Required information would include at least the following: the racial and gender composition of the board of directors/trustees; the number of grants awarded to specified organizations serving ethnic minority communities; and the percentage of grant dollars awarded to specified organizations in which 50% or more of the board members are ethnic minorities. The bill would require these private foundations to disclose the information on its website (if one exists), and in its annual report.

California: Alcohol permit allowance – AB 1964 would increase the number of special alcohol permits to three (from one) per calendar year for nonprofits seeking to use the permits for fundraising activities.

Colorado: Management of institutional funds – HB 1173 would replace the Uniform Management of Institutional Funds Act with the Uniform Prudent Management of Institutional Funds Act, and establish the same management and investment standards for trust funds, nonprofit corporations and other entities. The bill would also require that those tasked with the management and investment of funds act in the best interest of the organization. The bill would also offer protection for the nonprofit group should the executor violate these regulations. For more information, visit the Colorado Nonprofit Association’s policy page.

Connecticut: Aid in lieu of property taxes – HB 5293 would provide a state grant in lieu of taxes to municipalities in which 25 percent of the real property is exempt from taxation. The bill would reduce the financial burden on municipalities that have substantial loss of tax revenue due to property owned by tax-exempt organizations.

Florida: Ownership transfer – HB 833/SB 1622 require that transfers of ownership interest in nonprofit cooperative associations be recorded, and that excise tax on these transfers be based upon the true amount of consideration paid. The bill was signed into law and takes effect on July 1, 2008.

Iowa: Charity oversight fund – SB 2194 would create a charity oversight fund, supported by registration fees, to support the oversight and regulation of persons organized or doing business in this state on a nonprofit, public benefit basis. The registration fee would be $30; electronic filers would pay a reduced $25 fee.

Indiana: Nonprofit communications – HB 1187 would deem communication by a nonprofit as fair and reasonable if provided in person or via mail, telephone, email, or other electronic device and permits radio transmission if the nonprofit has more than 1,000 members.

Kentucky: Charitable donations – HB 539 would require that a for-profit organization collecting donated items for future resale permanently affix to the bin or receptacle the name and the telephone or email address of the collector and a statement indicating that the person collecting is not a charity. Visit the Nonprofit Leadership Initiative’s policy page for more information.

Massachusetts: Reimbursement for services – SB 65 would reform the Commonwealth’s human service industry procurement system to more appropriately reimburse human service providers for the care they provide.

Maryland: Government representation and participation – HB 1341/SB 596 would authorize a nonprofit association to institute, defend, intervene, or participate in certain governmental proceedings under appropriate circumstances and to use its name on behalf of its members. Additionally, the bill would require an unincorporated nonprofit association to designate a resident agent and file the person’s written consent with the State Department of Assessments and Taxation. For more information, visit the policy and advocacy page of Maryland Association of Nonprofit Organizations’ website.

New York: Volunteerism initiative – SB 6966 would expand volunteerism by making use of AARP’s database and institutes volunteer certificate programs which train volunteers and individuals in programs to use the volunteers.

Pennsylvania: Revenue sharing – HB 2018 would provide for an annual revenue sharing program for municipalities that have high percentages of tax–exempt property. For more information visit the Pennsylvania Association of Nonprofit Organizations website.

Wisconsin: Reporting threshold – AB 881 would raise the financial statement and audit thresholds for nonprofits based on the amount of annual charitable contributions received. If passed, the bill would require the filing of a financial statement by nonprofits having received more than $400,000 in charitable contributions if raised independently and $100,000 if raised using a professional fund-raiser. If a nonprofit raises between $100,000 and $200,000 without the aid of a professional fund-raiser, a financial statement certified by a CPA must be filed.

West Virginia: Civil liability – SB 561 would modify the circumstances under which a director of governmental or nonprofit entities is relieved from civil liability by exempting from protection those directors who are found to have intentionally caused damage.

West Virginia: Training requirement – SB 583 would re-enact an existing law requiring that directors and members of the board of directors of nonprofits that receive state funding participate in at least three hours of training.

West Virginia: State fee exemption – HB 4579 would exempt volunteer and nonprofit organizations from paying the annual attorney-in-fact fee paid to the Secretary of State, unless services are actually rendered.

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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