In This Week's Edition of Snapshot…
- Spending Debate Postponed as Congress Honors Former President George H. W. Bush
- Bill Including Repeal of New UBIT Provision Pulled from Consideration
- Michigan Bill Seeks to Obstruct Nonprofit Oversight
News from the Hill
Funding for part of the federal government is set to expire on Friday, and Congress was expected to vigorously debate the remaining spending bills this week. However, with the death of former President George H. W. Bush last Friday, Congress plans to push the spending deadline to Dec. 21. On Monday, the House canceled this week’s votes to honor the former president. The body of the country’s 41st president was flown to Washington, DC, on Monday to lie in state at the Capitol—an honor reserved for America’s most eminent citizens. Former President Bush was then honored with a state funeral at the National Cathedral before his body was flown back to Texas.
The legislation that includes the two-week delay in the federal funding deadline (H.J. Res. 143) passed by unanimous consent in the House today, and by voice vote in the Senate; it is expected that President Donald Trump will sign the legislation soon. According to NPR, “[The bill] gives negotiators an extra two weeks to finalize legislation to fund roughly a dozen agencies, including critical areas like the State Department and the Departments of Homeland Security and Transportation. But it is the fight over money for President Trump's planned wall on the U.S. border with Mexico that has been the main sticking point in the talks so far. President Trump is demanding $5 billion for the wall, but top Democratic leaders say they can't support that level of money. After Bush's death late Friday, top Hill leaders decided they didn't want to disrupt the Washington remembrances of the former president with a food fight over immigration—a divisive issue with hardened positions on both sides.”
Congress will return next week to continue hashing out their remaining differences, including on funding for President Trump’s proposed border wall. Democrats so far have only committed to working with Republicans and the president on $1.6 billion in new border security funding. A meeting with Senate Minority Leader Chuck Schumer (D-NY), House Speaker-designee Nancy Pelosi (D-CA), and President Trump scheduled for Tuesday—presumably to discuss the border wall/border security funding—was postponed due to former President Bush’s death.
Last Wednesday, House Ways and Means Committee Chairman Kevin Brady (R-TX) introduced a manager’s amendment to the tax package that included a provision to repeal the unrelated business income tax (UBIT) on transportation and parking benefits for nonprofits. The UBIT provision was adopted in the 2017 tax code overhaul.
According to POLITICO Morning Tax, Brady said on the matter, “We are proactively eliminating any potential uncertainty for our churches and community organizations so nothing distracts them from their core mission."
The bill was expected to be considered on the House floor last Friday, but was unexpectedly pulled due to “disagreements among Republicans over the guts of the bill as well as the absence of many defeated members who were no-shows in the Capitol.” Chairman Brady had hoped to bring the bill to the floor this week; however, as mentioned previously, the House canceled votes for the week to honor former President George H.W. Bush.
The Council welcomes the move to repeal the new UBIT provision that was imposed on charities and hopes Congress will work to provide relief before the end of the year.
Exclusive from our colleagues at the National Council of Nonprofits.
A last-minute bill in the waning days of the 2018 Michigan legislative session threatens to diminish the ability of state law enforcement to properly oversee tax-exempt entities, including charitable nonprofits. The measure (SB 1176) would prohibit public agencies from requiring tax-exempt organizations from disclosing personal information, such as donor names and contributions. Supporters of the bill claim it is intended to protect donors from potential political retaliation. However, states that normally require such disclosures maintain protections for donor privacy and prevent public dissemination of the confidential information. Opponents of the bill are concerned that it would effectively block efforts by law enforcement to prevent bad actors from abusing legitimate charitable organizations and that the measure amounts to a gag rule that would make secret money in politics even more opaque.
The pending Michigan legislation would apply equally to nonpartisan charitable nonprofits and foundations, that are prohibited from supporting or opposing candidates for public office under the protections of the Johnson Amendment, and other tax-exempt organizations, namely social welfare organizations, that routinely participate in partisan, election-related activities. The bill passed the Senate last week and is expected to be taken up by the full House soon. This and several other last-minute bills come as the Republican-controlled Legislature anticipates the swearing in of a new governor and attorney general, both Democrats.
The effort to add new donor protections (per proponents) or layers of obfuscation (per opponents) is not new. Earlier this year, the West Virginia Senate passed a narrower version of the bill, only to see it die at the end of that state’s legislative session. The West Virginia version would have prohibited state and local governments from releasing, allowing to be released, or being required to release the association of individuals with 501(c)(3) organizations, while also exempting all donor information from requests pursuant to the Freedom of Information Act. Opponents of the West Virginia measure objected to the effort to impose an overly broad ban on legitimate law-enforcement inquiries.