In this Week’s Edition of Snapshot…
- Tax Reform Update: POTUS Meets with Congressional Leaders About Tax Reform
- Cabinet Nominations Progress in Congress
- Bill Introduced to Allow Expanded Political Activity by Nonprofits
- President Trump Issues more Executive Orders
- SCOTUS Nominee Announced
- Crackdown on NGOs by Indian and Pakistani Governments
- In the States: Challenges to Property Taxes by States Continue
- Former Vice President Biden and wife to launch charitable foundation
- Opinion: A Statement on Immigration and American Opportunity
In the coming months, we will provide weekly updates with new developments in the tax reform process.
Amid the flurry of activity in Washington this week, tax reform is still moving forward. According to the White House press office, President Trump was scheduled to meet with Ways and Means Chairman Kevin Brady (R-TX), and Senate Finance Committee Chairman and Ranking Member, Orrin Hatch (R-UT) and Ron Wyden (D-OR).
The purpose of this meeting was to provide this group with an opportunity to discuss the differences in their approaches to tax reform, and try to find middle ground.
Also in recent tax reform news, the Urban-Brookings Tax Policy Center recently released a report about the potential impact of repealing or altering various deductions (i.e. mortgage, charitable) that has been a topic of discussion in tax reform.
A day after Senate Democrats delayed two of President Trump’s Cabinet nominees, they were able to advance out of committee and will next be considered before the full Senate.
Under regular order, cabinet nominees must be passed out of the committee of jurisdiction by a majority vote prior to being considered by the full Senate.
Both Steve Mnuchin, President Trump’s pick to lead the Department of Treasury, and Congressman Tom Price (R-GA), Trump’s pick to lead the Department of Health and Human Services (HHS), were approved with only Republicans voting. This came after Republican members of the Senate Finance Committee unilaterally changed the rules to allow a vote to take place without Democrats present. A Politico article noted, “‘They have nobody to blame but themselves,’ Utah Republican Sen. Orrin Hatch (R-UT), chairman of the Finance Committee, said after Democrats refused to show up for the second straight day of scheduled votes on Mnuchin and Price.”
Democrats were boycotting the committee meetings as they believed both Mnuchin and Price had misled the committee during their testimony and wanted more information from the nominees before voting whether or not to confirm them.
Additionally, the nomination of Sen. Jeff Sessions (R-AL) for Attorney General was delayed by Democrats by a day; however, there was no boycott of the vote and Sessions was narrowly cleared out of the Senate Judiciary Committee along a party-line vote of 11-9. Democrats have been concerned about Sessions’ close ties to President Trump—he was one of Trump’s earliest supporters and an advisor on the campaign—and Sessions potential ability to be independent from possible pressure from the president. His nomination will soon be considered before the full Senate for confirmation.
This Wednesday, Senator James Lankford (R-OK) introduced the Free Speech Fairness Act (S. 264)in a joint press conference with House Majority Whip Steve Scalise (R-LA)—who introduced a companion bill with identical language in the House.
Currently, charitable 501(c)(3) organizations are prohibited from participating in, or intervening in (including the publishing and distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office—a restriction that is sometimes referred to as the “Johnson Amendment.” This bill would create an exception to this part of the Internal Revenue Code, allowing 501(c)(3) charitable organizations to “speak about government or electoral activity without the threat of retribution from the Internal Revenue Service.”
This bill does not, however, appear to go quite as far as H.R. 172 that was introduced earlier this year by Congressman Walter Jones (R-NC)—which called for a complete repeal the Johnson Amendment.
During President Trump’s campaign he frequently discussed his opposition to the Johnson Amendment. Just this morning at the National Prayer Breakfast, President Trump reiterated his commitment to repealing the amendment, stating: “I will get rid of and totally destroy the Johnson Amendment and allow our representatives of faith to speak freely and without fear of retribution.”
Over the past week, President Donald Trump has issued a handful of executive orders with sweeping implications. One of these orders, issued late last week, suspends the entry of refugees from seven countries (Iran, Iraq, Libya, Somalia, Sudan, Syria and Yemen) for a period of 90 days.
The reason cited for this order is to protect the United State from potential terrorists until a more thorough vetting process is established. The order was met with confusion around its implementation, and sparked protests in airports across the country. Though the debate about the constitutionality of this action is ongoing, Democrats in both Congressional chambers were quick to introduce bills to rescind the action (H.R. 724, S. 240, S. 274).
In addition to this executive order, President Trump also issued an executive order that would require two federal regulations to be repealed for every one new regulation that is introduced. This could have significant implications on forthcoming regulations from the Department of Treasury and IRS—including those on donor advised funds, self-dealing, and international grantmaking.
This Tuesday, President Trump announced his nomination of Neil Gorsuch to fill the vacant seat on the U.S. Supreme Court bench left by Antonin Scalia’s death last February.
According to Business Insider, “Gorsuch, from Colorado, graduated from Harvard Law School and clerked for Supreme Court Justices Byron White and Anthony Kennedy. Gorsuch was nominated to the 10th Circuit US Court of Appeals in 2006 by President George W. Bush. He was confirmed by a voice vote.”
Gorsuch’s nomination is expected to face stiff Democratic opposition and a likely filibuster (under the filibuster, Supreme Court nominees currently need 60 votes to be confirmed and Republicans only have 52 Senate seats).
Some Democrats have about previous positions that Judge Gorsuch has taken and view him as too far out of the mainstream to be a member of the Supreme Court. Additionally, Democrats are objecting to the fact that President Obama’s pick to fill Scalia’s seat, Merrick Garland, was filibustered by Senate Republicans and never given an up-or-down vote.
Nongovernmental organizations (NGOs) in India and Pakistan have been facing increased restrictions, linked in both countries to allegations of engaging in “anti-national” activities.
The Interior Ministry in Pakistan recently issued a dozen letters to national NGOs in Punjab Province ordering them to stop work. Several NGOs are challenging this ban and have filed petitions with the Lahore High Court, with hearings scheduled for later this month.
In October 2015, the Pakistani government imposed a new Policy for Regulations of INGOs in Pakistan that restricted the operations of international NGOs in the country. The regulations require all INGOs to register and obtain prior permission from the Ministry of Interior to carry out any activities in the country, and restrict their operations to specific issues and geographical areas. Registrations for 121 national Pakistani NGOs were also recently cancelled by the Islamabad Capital Territory Administration on the basis that they were “getting funds from foreign donors but not letting the administration know about [the] exact source and use of these funds”.
Likewise, tensions have been rising in India between the Government, NGOs, and foreign funders. More than 200 local NGOs in India, licensed under the Foreign Contribution Regulation Act (FCRA), have been forced to suspend or cease their operations because of cancelations of licenses which allow them to receive foreign donations. The Government claims that NGOs are engaging in “anti-national" activities.
These actions represent the latest move in crackdowns on local and international NGOs, which have included a shutdown of their offices and the imposition of strict restrictions on their activities in both countries. The NGOs have viewed the restrictions on their foreign sources of funding and general harassment by government agencies as part of a broader effort by the governments to suppress dissent. The Council will continue to monitor these developments and provide relevant updates to our members accordingly.
Exclusive from our colleagues at the National Council of Nonprofits.
Legislatures across the country are considering measures to chip away at nonprofit property tax exemptions by focusing on compensation, giving power to local governments to weigh in, or rewriting the rules on the scope of the exemption.
A bill in Montana would revoke the property tax exemption for any nonprofit that compensates executives more than $250,000 per year. The Montana Nonprofit Association has explained to the bill sponsor the lack of a logical relationship between tax exemption and compensation levels, and stressed the need for nonprofit professionals to earn salaries near or at market in a given industry in order to attract qualified leaders. A similar bill in Connecticut would deny a property tax exemption to any nonprofit organization that pays an administrator $500,000 or more per year in salary and bonuses. A measure last year would have only applied to nonprofit hospitals.
Another Connecticut bill would empower local legislative bodies to deny tax exemption for property as a result of a change in ownership or change in use of such property on or after the effective date of the bill.
Nonprofit hospitals in New Hampshire are targeted in legislation that seeks to limit property tax exemptions only to the main hospital campus. Specifically, it retains the exemption only for the building, land associated with such building, and personal property contained therein which is the main campus of the hospital’s facility. The bill would deny the exemption to other property of such hospital not located at the main campus, even if charitable services are provided there.
Finally, legislation in New York proposes a significant rewrite and narrowing of nonprofit property tax exemption. The bill would change the definition of "used exclusively" to limit the exemption to charitable purposes, something that would be "strictly construed" to exclude uses that are merely "helpful to the tax exempt organization." The measure also seeks to increase the burden of proof and severely narrow the definition of each tax exempt entity type (e.g. "educational purposes") required for substantiating the use of "each acre" to receive property tax exemption.
Former Vice President Joe Biden and his wife, Dr. Jill Biden, will continue supporting the issues they addressed while in the White House through the creation of their Biden Foundation.
The foundation, launched Wednesday, will be focused on seven pillars:
- Foreign policy,
- Community colleges and military families,
- Strengthening the middle class,
- The cancer initiative,
- Protecting the children, and
- Ending violence against women.
The Biden Foundation has already stated they will not accept foreign donations. Ultimately, the couple hopes the foundation will “… ensure that everyone — no matter their income level, race, gender, age, or sexuality — is treated with dignity and gets a fair shot at achieving the American Dream.”
President & CEO of the Lumina Foundation and Council Board Member, Jamie Merisotis, provided his personal insight on the Immigration and Refugee Executive Order in an statement this week.
He calls on the American people to reflect on how this may affect our nation’s ideals, and encourages staying true to values that the United States has traditionally held. Further, he discusses the role immigrants and diversity plays in higher learning and our nation’s competitive edge. “Our nation's pool of talent and our democracy will be damaged and diminished if our nation abandons its historical commitment to welcoming immigrants into our communities—including our communities of higher learning,” he asserts in the piece.
Merisotis ends by promoting a return to previous, more embracive policies.