In This Week's Edition of Snapshot…
- New Bill to Expand Foundation Scholarship Programs Introduced in House
- Ways and Means Unveils Tax Reform 2.0 Summary
- Senate Finance to Hold Hearing for Treasury/IRS Nominees
- Senate Seeks to Avoid Shutdown Threats by Bundling Spending Bills
- Primary Runoff Election Held in Georgia
- In the States: Kentucky Lawmakers Look to Modernize Laws for Nonprofits, Texas Attorney General at Odds with Localities Over Sick Leave, New York City Comptroller Calls for Prompt Contracting Reforms
On Tuesday, Representatives Darin LaHood (R-IL) and Terri Sewell (D-AL) introduced the Workforce Development Through Post-Graduation Scholarships Act (H.R. 6486)—which would allow charitable foundations to administer post-graduation scholarship grant programs to combat “brain drain,” stimulate regional economic growth, and help address the growing student debt crisis.
A post-graduation scholarship is a charitable grant that foundations would make to attract individuals to make their homes and build their careers in a community where their skills are needed. Similar to a traditional scholarship, a post-graduation scholarship would be awarded as a tax-exempt grant to an individual—who has already completed a degree or technical program in a career field that is needed in a particular region—in order to pay off a portion of the individual’s student loans. As with traditional scholarships, these programs would establish eligibility requirements as well as a process to verify that those requirements continue to be met through the duration of the scholarship award agreement.
The Council engaged closely with the lead sponsors of this bill and their staff throughout the drafting process to ensure that this legislation embodied well-informed, carefully written public policy to strengthen foundations’ ability to serve their communities. On Wednesday, we sent a letter to every House office urging representatives to cosponsor this bill. Please join us in encouraging your Representatives to cosponsor H.R. 6486.
For more information on post-graduation scholarships, please visit the Council’s website.
On Tuesday, House Republicans released their framework for “Tax Reform 2.0,” which is the first step in their push to vote on further tax cuts legislation this fall. According to the Wall Street Journal, “Retirement and savings incentives, which include an expansion of 529 college savings accounts and penalty-free access to retirement accounts for newborn-baby care, make up one of the three bills in the House GOP’s ‘Tax Reform 2.0’ package. The centerpiece of the package is an extension of last year’s tax cuts for individuals and so-called pass-through businesses beyond their 2025 expiration date, though that is unlikely to draw enough Democratic votes to become law.”
The House is scheduled to leave for its traditional August recess this week and will be back in session in September. House Ways and Means Committee Chairman Kevin Brady (R-TX) hopes to have a vote on the legislation when the House is back in session. According to Chairman Brady’s press release, “House Ways and Means Committee Chairman Kevin Brady (R-TX) released a listening session framework for ‘Tax Reform 2.0.’ This framework launches the listening sessions that will occur with lawmakers and constituents back home as Ways and Means Republicans work to make our new pro-growth tax code even stronger for our families and Main Street businesses.”
Tax Reform 2.0 is largely seen as a messaging bill, as the Senate has shown little appetite to take up whatever the House passes this fall.
The Senate Finance Committee held a hearing this morning to consider the President’s nominees: Michael Desmond to serve as IRS chief counsel and assistant Treasury general counsel, and Justin Muzinich for Treasury deputy secretary. Both candidates have previously worked at the Treasury Department.
Mr. Desmond a tax lawyer from California, worked at Treasury during President George W. Bush’s administration. He also worked in the Justice Department’s tax division under President Bill Clinton. Mr. Muzinich—whose background is in investment—has worked as Secretary Mnuchin’s counselor, which allowed the nominee to play an essential role during the negotiations of last year’s tax overhaul.
Today’s hearing comes after Treasury recently ended its longstanding policy of donor disclosure requirements for most nonprofits (Schedule B)—which includes a wide variety of political groups. Last week, the 13 Democrats on the Finance Committee voted against Chuck Rettig’s nomination to be confirmed as IRS Commissioner in protest of this change. All 14 Republican Senators on Committee voted in favor of confirmation.
Senate leadership appears to be coalescing around a bipartisan plan to pass a package of spending bills earlier than usual in order to head off a potential government shutdown threat this fall. According to POLITICO Pro, “Senate leaders are closing in on a groundbreaking bipartisan strategy to fund the majority of government operations this summer, including the Pentagon, in a pointed bid to avoid a government shutdown. … Senate Majority Leader Mitch McConnell [R-KY] and Minority Leader Chuck Schumer [D-NY] have agreed to bind Congress’ two largest appropriations bills into a single package in coming weeks, which holds the potential to become law before an Oct. 1 spending deadline. A Senate vote on that fiscal 2019 package is likely to take place in the next few weeks, according to multiple lawmakers and aides. It would include the Defense, S. 3159, and Labor-HHS-Education[LHHS], S.3158, spending bills.”
Congress usually passes the Defense spending bill on a bipartisan basis early in the appropriations process, but House and Senate leaders often leave the LHHS spending bill for last, as it is more controversial and often includes “riders”—unrelated policy measures that are meant to either make a bill more attractive to certain lawmakers in attempt to secure their vote or to attach a controversial measure to a must-pass bill. The POLITICO article goes on to note that while some House appropriators are signaling support for this approach, the legislation will not necessarily face an easy path to the president’s desk through the lower chamber.
In the weeks ahead, we will include updates from the midterm election trail. This is intended to provide nonpartisan, matter-of-fact election news about the primary races that will play a key role in the outcome of the November elections.
This Tuesday, Georgia Secretary of State Brian Kemp defeated Lieutenant Governor Casey Cagle to secure the Republican nomination for governor. In the general election this November, he will face off against the Democratic nominee: former House Minority Leader Stacey Abrams, who if elected would become the first African-American female governor in the United States.
Exclusive from our colleagues at the National Council of Nonprofits.
A new law is modernizing the Kentucky nonprofit corporations code to provide more flexibility and greater guidance to nonprofits in the Commonwealth. The statute—passed unanimously in both chambers—clarifies board of directors’ size and conflicts of interest, addresses structure and authority of boards and advisory committees, allows use of technology, provides statutory authority to remove board members, gives nonprofits control over membership access and inspection rights, and provides for distribution of assets. The clarification and guidance is being hailed by nonprofits for “ultimately allowing these vital organizations to spend more time doing what they do best—helping to create strong, vibrant communities,” said Danielle Clore, Executive Director and CEO of the Kentucky Nonprofit Network, which also published updates and next steps to aid nonprofits. Several states have enacted updates to their nonprofit corporation laws in recent years, and the trend is likely to continue in 2019.
The Texas Attorney General is warning cities and localities in the state to think twice before mandating that employers provide paid sick leave to employees. The Attorney General sent a letter to the San Antonio mayor this month stating that state law preempts municipal law and the City is in violation of the Texas Minimum Wage Act. The letter comes after a ballot question was approved by voters to require all businesses with more than five employees, including nonprofits, to provide sick leave benefits. The City Council is considering the letter, stating, “This is a tough spot for the council to be in, but we can make the right decision with sound legal analysis and total public transparency.” Separately, the State is currently in litigation with the City of Austin for a similar ordinance slated to go into effect October 1.
The New York City Comptroller is urging the City to fix broken contracting systems, including calling for the creation of a public tracking system, clear metrics, and strict timeframes throughout the procurement process to bring a basic level of transparency and accountability into the government-nonprofit contracting system. Earlier this summer a report from the New York City Comptroller found that 90 percent of the City’s human services contracts with nonprofit providers were submitted for registration after the start date had passed, something prohibited under City law. Because payments cannot be made to nonprofits for providing services until a contract is registered, at least 90 percent of nonprofits are also dealing with extremely late payments. New York City maintains a bridge loan fund that nonprofits can borrow against in these situations. Last year, nonprofits had to take out 751 loans worth $149.9 million dollars to bridge the gap between when they provided services on behalf of the City and when the City finally paid them for doing so.