In This Week's Edition of Snapshot…
- Brady’s Tax Package Headed for a Vote
- Congress Likely to Pass Short-Term Spending Bill to Avoid Shutdown
- Gov. Ducey appoints Rep. Martha McSally to Fill Senate Seat Held by McCain
- Senate Votes to Overturn Treasury Changes to Schedule B
- Mulvaney Named White House Chief of Staff
- Nonprofit Integrity, Law Enforcement Protections at Risk in Michigan
- Charitable Tax Credits Advance in Michigan Legislature
- Washington State Overtime Rulemaking Continues
Later today, the House is expected to debate and pass Ways and Means Chairman Kevin Brady’s (R-TX) tax package (H.R. 88). According to POLITICO Pro Morning Tax, “…after one final tweak, the House GOP’s year-end bill is on the fast track to the Rules Committee on Wednesday [yesterday] and to a floor vote as soon as Thursday. That comes after Ways and Means Chairman Kevin Brady (R-TX) released a new version of H.R. 88 (115) on Monday that includes a pair of tax extenders, as your Morning Tax author noted—a credit for railroad track maintenance that would be made permanent and a preference for biodiesel and renewable diesel that would be extended and then phased out.”
While the bill does contain a provision to repeal the unrelated business income tax (UBIT) on transportation and parking benefits for nonprofits, it also includes language that would effectively destroy the Johnson Amendment—which prohibits charitable 501(c)(3) organizations 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. The Council has joined other groups in the nonprofit sector in sending a letter to every member of Congress denouncing the inclusion of this provision in the bill. The legislation is unlikely to be taken up by the Senate before the end of the 115th Congress.
Last night, the Senate passed a short-term spending package that would avert a partial shutdown of the federal government by providing funding through early February 2019. According to POLITICO, “The legislation was passed by voice vote and will keep the government open until Feb. 8, provided the House will pass it. Senate Majority Leader Mitch McConnell (R-KY) said the Senate will remain in session on Thursday pending House action on the spending bill… ‘We have to see what the House does with what we just sent them,’ [Sen.] McConnell said. Senators have been urged to stay in D.C. on Thursday by party leaders.”
The Senate’s action came a day after the White House signaled that it would not force a shutdown, despite President Donald Trump’s previous insistence that any year-end spending bill include $5 billion in border wall funding. Last week, President Trump indicated that he was willing to shut down the federal government if Congress did not include the amount he wanted for a border wall.
The House is expected to pass the government funding measure later today and President Trump is expected to sign the bill shortly after.
On Tuesday, Arizona Gov. Doug Ducey (R) appointed Rep. Martha McSally (R-AZ) to fill the Senate seat formerly held by Sen. John McCain (R-AZ), who died in August. Rep. McSally was defeated by Sen.-elect Kyrsten Sinema (D-AZ) in the midterm elections for the other Arizona Senate seat. Representative McSally will succeed Sen. Jon Kyl (R-AZ), who was appointed by Gov. Ducey to fill Sen. McCain’s seat after his death. Senator Kyl will step down at the end of the year.
Gov. Ducey’s decision to appoint Rep. McSally seems to be at least in part related to her chances of holding the Senate seat for the Republican party in the 2020 special election. After the announcement, Rep. McSally—who during the campaign distanced herself from Sen. McCain while aligning with President Trump—praised the late Senator, calling him a “giant in the Senate, an Arizona icon and an American hero,” the Washington Post reported. Representative McSally went on to say that she would commit to hold herself “to the standard of service that Senator McCain exemplified: putting country before self and always striving to do the right thing for Arizonans.”
Representative McSally—who is a former Air Force pilot and the first woman to fly in combat—will be sworn in on January 3 after Sen.-elect Sinema, who will become Arizona’s senior senator. Arizona will be one of six states with two female senators.
Last week, the Senate voted to pass S.J. Res. 64—legislation that would nullify the changes announced by the Treasury Department this summer regarding donor disclosure for certain nonprofits. The changes made by Treasury mean nonprofit groups—except for 501(c)(3)s—are no longer required to file the Schedule B (which requires the disclosure of names and addresses of donors who contribute $5,000 or more in the filing year) of their Forms 990.
In a press release, Sen. Ron Wyden (D-OR) stated, “Today the Senate voted on a bipartisan basis to throw out Trump’s dark money rule and bring transparency back to our elections. This is a huge first step in America’s fight against anonymous political insiders looking to tighten their grip on Washington. I urge Paul Ryan to act swiftly on this issue of great importance and lead the House in reversing course on the Trump administration’s reckless decision.”
On Friday, President Donald Trump announced that acting Office of Management and Budget (OMB) Director Mick Mulvaney would also be his acting chief of staff. According to the New York Times, “Mr. Trump made the announcement on Twitter, one week after his first choice for the job, Nick Ayers, a Georgia political operative who is now Vice President Mike Pence’s chief of staff, took himself out of the running, citing family considerations. The sometimes chaotic search process that went on in between served as another measure of the often frenetic manner of decision making in the Trump White House.”
Mr. Mulvaney will not resign his position as OMB director while he also serves as acting White House chief of staff; however, OMB Deputy Director Russ Vought will take over the everyday operations for OMB in Mr. Mulvaney’s absence.
Exclusive from our colleagues at the National Council of Nonprofits.
Michigan is on the verge of becoming the darkest “dark money” state in the union as outgoing Gov. Rick Snyder (R) considers whether to sign a bill on his desk passed during the legislature’s lame-duck session. Legislation that has passed the state Senate and House (SB 1176) would prohibit the Attorney General's Office and other public agencies from requesting or requiring tax-exempt organizations to disclose any “personal information,” which is defined as “data of any kind that directly or indirectly identifies a person as a member, supporter, or volunteer of, or donor of financial or nonfinancial support.” The measure applies to charitable nonprofits and foundations, as well as social welfare nonprofits that have increasingly utilized undisclosed donations (“dark money”) to run partisan issue ads that attack candidates for public office during campaigns.
The Detroit Free Press reports that the bill is motivated by a concern by conservatives that the incoming Governor and Attorney General, both Democrats, would require disclosures of the names of donors to their offices. The leading paper in the state explains, however, that “One reason the secrecy is a concern is that political officeholders including [Gov.] Snyder and state lawmakers in many cases set up nonprofit groups and the public has no way of knowing who might be influencing the decisions of such officials through their donations.” Other opponents are concerned that preventing law enforcement from seeing such information would effectively obstruct efforts to identify bad actors and prevent them from abusing legitimate charitable organizations. The Free Press reports that the Governor has not said whether he will sign the bill.
On a more positive note, two bills restoring charitable giving incentives in the state have passed the Michigan House of Representatives and await hearing in the Senate before the New Year. One measure creates a 50 percent state tax credit for contributions to community foundations that meet certain criteria. The second bill creates a 50 percent tax credit for charitable donations to community shelters for homeless persons, food kitchens, or food banks. Both tax credits would be capped at $100 for individuals and $200 for married couples.
As a precursor to the expected actions coming this spring by the U.S. Department of Labor to alter the overtime rules for most employers, including nonprofits and foundations, Washington State regulators are considering raising the threshold for determining who is and is not a salaried employee. The Washington State Department of Labor and Industries is seeking public comments on updating the state’s overtime pay exemption threshold. The draft rule calls for treating all workers as hourly employees entitled to overtime pay if they earn less than between two and two-and-a-half times the state minimum wage for a 40-hour week, setting the threshold at between $960 and $1,200 per week, or $49,920 and $62,400 per year.
Washington Nonprofits recently conducted a survey to assess the impact of the proposed rules on nonprofits and their employees. Based on the responses of more than 400 organizations, the report of the state association of nonprofits identifies four points that must be considered as final rules are promulgated, and that apply as well to nonprofits across the nation as overtime regulations are revised: