In This Week's Edition of Snapshot...
- Opportunity Zones Accountability Legislation
- BUDGET BRIEFING: No Caps, No Deal
- Disaster Aid Package in Sight?
- Pell Grants and Other Education Bills
- No Plan for Third Round of Opportunity Zones Rules
- New DOL Grants Available
- States Tax Policy Changes and Census Funding
A bipartisan group of senators —Tim Scott (R-S.C.), Cory Booker (D-N.J.), Maggie Hassan (D-N.H.) and Todd Young (R-I.N.) rolled out new legislation last week that would force the Treasury Department to track the effectiveness of Opportunity Zones. Senators had previously expressed concern that oversight provisions for the program were stripped out by the chamber's parliamentarian during the Tax Cuts and Jobs Act of 2017 deliberation process, impacting the program's effects on issues such as poverty reduction and job creation. Lawmakers had included various yardsticks in draft legislation of the 2017 tax cuts, but they were deleted by the Senate's parliamentarian, who called them a violation of the chamber's arcane budget reconciliation rules.
The new legislation, S.1344, would also require the agency to chart the number of Opportunity Zone funds, how many assets they hold and what types of investments they make, among other things.
Opportunity Zones are designed to spur economic growth in areas deemed underdeveloped by giving investors a break on capital gains taxes on money reinvested into high-impact projects.
House Democrats have been marking up their appropriations bills adding up the defense and nondefense amounts outlined by Budget Chairman John Yarmuth’s (D-KY) spending cap proposal (H.R. 2021). House Republicans are offering almost no support for Democratic appropriations bills, citing the lack of a broader fiscal 2020 spending-level agreement. While some GOP appropriators are warm to the bills, generally Republicans are consistently opposing them as they hope to pressure Democrats to negotiate a bipartisan top-line spending level for defense and nondefense funds.
President Trump left a meeting with Senate Majority Leader Mitch McConnell on Tuesday morning seemingly open to a deal with Democrats to raise the budget caps that will cause strict spending cuts in the fall. The president is notably warmer than some of his staff on the possibility of avoiding the blunt budget cuts that will hit if there's no new fiscal deal. Fiscal hard-liners inside the White House Office of Management and Budget have been urging Trump to hold firm on the cuts. But, the Senate majority leader is eager to avoid the impact of the automatic spending cuts, or sequester, and has spoken at least twice with House Speaker Nancy Pelosi about raising the strict budget caps.
Defense spending will be cut by $71 billion if no action is taken, while approximately $55 billion in domestic spending will be slashed.
Congress is close to unlocking billions of dollars in disaster relief for ailing communities, if negotiators get beyond demands of several powerful key Members of Congress Senate Majority Leader Mitch McConnell committed Tuesday afternoon to holding a vote next week on the multibillion-dollar aid package, H.R. 2157, that has been held up since December. The legislation, which would deliver at least $17 billion for communities recovering from hurricanes, wildfires and flooding has been stymied for months over major disagreements about aid for Puerto Rico. Democrats are insisting on more money allocated and President Donald Trump has declared the territory unfit to manage extra federal funds.
Several deals need to be made around “pet” projects put forth by McConnell, Senate Appropriations Chairman Richard Shelby (R-Ala.) and the president in order to strike a compromise.
Lawmakers racing to wrap up the bill this week must decide whether to include provisions McConnell seeks to ensure hemp farmers qualify for crop insurance by 2020; language Shelby wants for freeing up billions of dollars in harbor maintenance funds; and cash Trump is after to handle the influx of immigrants at the southern border – all unrelated issues to disaster recovery.
According to PoliticoPro, the White House late last week submitted a revised budget request to Congress that calls for eliminating nearly $3.9 billion from the Pell surplus, far greater than the proposed $2 billion cancellation of the surplus that Trump's budget proposed when released in March.
The updated budget request asks Congress for $1.6 billion in new funding for NASA that the Trump administration is calling a "down payment" on a mission to return American astronauts to the moon by 2024. It also would restore nearly $18 million in proposed cuts to Special Olympics funding.
Any cut to the Pell surplus would not affect the grants awarded to low-income students to attend college this year. The Congressional Budget Office estimated earlier this month that the Pell Grant program's surplus would be nearly $8 billion at the beginning of fiscal 2020.
Congress canceled $600 million in Pell surplus funding in last year's education funding law for fiscal 2019. House Democrats' bill for the Education Department that was approved by the Appropriations Committee last week does not seek to cut any surplus funding from the Pell program. The Senate has not yet released its version of the Labor-HHS-Education spending bill.
Also On The Education Front
HEA watch: Sen. Lamar Alexander (R-TN), the Senate HELP chairman, wants his committee to markup a bill reauthorizing the Higher Education Act this month. Sen. Alexander and Sen. Patty Murray (D-WA), the top Democrat on the committee, have been working on the bill. It’s the latest attempt to pass what would be the first reauthorization of the federal higher education law in more than a decade. However, their bill has not yet been released.
School spending: The House committee overseeing education funding plans is expected to mark up the fiscal 2020 spending bill by May 8. Watch for possible efforts by Democrats to use the bill to bar guns from schools.
The IRS and Treasury Department have no plan for a third round of proposed regulations for the 2017 tax overhaul’s Opportunity Zones tax break. Instead, officials indicated they are leaning toward issuing sub-regulatory guidance to address remaining uncertainties. Officials are also determining how to address the fact that the second batch of proposed rules altered the first. Treasury likely won’t finish the first set as-is, and then change those in a second set of final rules for the tax breaks, which are meant to fuel economic development in low-income areas.
The Employment and Training Administration at the U.S. Department of Labor (DOL), in partnership with the Appalachian Regional Commission (ARC) and the Delta Regional Authority (DRA), announced that funds will be available for demonstration grant projects supporting alignment of workforce development with existing strategies and plans for economic development and diversification in rural communities within the Appalachian and Delta regions hard hit by economic transition and recovering slowly.
Eligible applicants can propose to expand the impact of existing workforce development initiatives, as well as provide valuable career, training, and support services to eligible individuals in counties and parishes and/or areas currently underserved by other resources. These grants support workforce development activities that prepare dislocated workers, new entrants to the workforce, and incumbent workers for good jobs in high-demand occupations aligned with a regional or community economic development strategy.
Exclusive from our colleagues at the National Council of Nonprofits.
Policymakers in 44 states considered or are considering more than 275 bills directly affecting nonprofit tax policy this year, largely in response to the 2017 federal tax law and landmark U.S Supreme Court case South Dakota v. Wayfair. The bills ranged from complete overhauls of the state tax code, including creating or removing a flat tax, to imposing local and state sales tax rates on remote sellers. Lawmakers in Arkansas made short order of passing tax reform to cut the top income tax rate by a full percent earlier in the year. Lawmakers in Idaho conformed certain portions of the state tax code to the federal tax code, retroactive to January 1, 2019. Legislation is still pending in Illinois, Louisiana, Maine, Minnesota, Rhode Island, and Wisconsin that would make adjustments to state tax rates and brackets as well as personal exemptions and state standard deductions, all of which may affect future charitable giving incentives. A bill in Colorado awaiting the Governor’s signature would modernize the exemption for nonprofits’ occasional sales. Under the bill, nonprofits with annual net revenues of up to $45,000, increased from $25,000, would be exempt, and sales would no longer be limited 12 days per year.
More states are moving legislation to ensure funding for a fair, accurate, and complete count. Colorado Governor Polis has a bill on his desk to create a 2020 Census outreach program to provide grants to government agencies and departments, school districts, and nonprofits for outreach, promotion, and education to focus on hard-to-count communities. The bill appropriates $6 million for the efforts. The Washington State budget bill included $15 million for the Office of Financial Management to prepare for the 2020 Census by completing community outreach and communication, nonprofit outreach, preparing documents in multiple languages, and providing technical assistance. Five million dollars will be held in reserve until January 1 for “contracting with community-based organizations with historical access to and credibility with hard-to-count people to support outreach to the hardest to count and last-mile efforts.” The bill is awaiting the Governor’s signature.
Lawmakers in North Dakota approved appropriating $1 million for Census programming in the state after an undercount in 2010, specifically among new oil workers. Legislators in Georgia agreed to provide $1.5 million to the state Complete Count Committee for a targeted statewide marketing, educational, and messaging campaign to the hard-to-count areas. These states join eleven others that have enacted laws to spend more than $131.7 million, including more than $100 million from California alone, for fear of inadequate federal funding.