In This Week's Edition of Snapshot...
Key Legislation Introduced
- Universal Giving Pandemic Response Act (S.4032): Senator James Lankford (R-OK) introduced the Universal Giving Pandemic Response Act (S.4032) The legislation builds on a provision included in the CARES Act. It would allow taxpayers to claim an above-the-line deduction for their charitable giving on their federal taxes for tax years 2019 and 2020 of around $4,000 for individuals and 8,000 for married couples filing jointly. As nonprofits around the country continue to face challenges related to COVID-19, this bill is one step to help provide these vital entities with the resources they need to continue to provide individuals and communities with the services needed at this critical time. Co-sponsors of the bill include Senators Coons (D-DE), Lee (R-UT), Shaheen (D-NH), Scott (R-SC), and Klobuchar (D-MN). In the House, companion legislation (H.R.7324) was introduced by Representatives Walker (R-NC) and Pappas (D-NH). The Council on Foundations supports the legislation.
- Protecting Nonprofits from Catastrophic Cash Flow Strain Act (H.R. 4001): Last week, Senator Tim Scott (R-SC) introduced legislation to address an issue impacting many nonprofits related to unemployment insurance. Since several nonprofits are “reimbursing employers”, they reimburse states for their share of the unemployment benefits collected by former employees instead of paying the unemployment insurance tax. In April, guidance issued by the Department of Labor required such employers to pay 100 percent of unemployment costs upfront and later get reimbursed, placing another economic hardship on nonprofits that are already struggling. The Protecting Nonprofits from Catastrophic Cash Flow Strain Act (H.R. 4001) would clarify that such employers are only responsible for 50 percent of the costs upfront. Senator Sherrod Brown (D-OH), Chairman Chuck Grassley (R-IA), and Ranking Member Ron Wyden (D-OR) are original cosponsors of the legislation.
What happened this week in Congress?
- On Thursday, June 25, the George Floyd Justice in Policing Act (H.R.7021) passed the House by a bipartisan vote of 236-181 after several hours of debate. On Wednesday, June 24, the Senate failed to proceed to Senator Tim Scott’s (R-SC) JUSTICE Act (S. 3985), the Senate Republican proposal on police reform. Before the vote, Minority Leader Chuck Schumer (D-NY) announced that Senate Democrats would not support the bill. The path for moving a bill through the Senate is not clear at this point.
- The Government Accountability Office (GAO) issued a report on Thursday illustrating the problems with the federal government’s rapid distribution of $2.6 trillion in pandemic aid. Among the findings: about $1.4 billion out of $270 billion — went to more than 1 million dead people; close to 450,000 people missed out on stimulus payments for their kids, there are risks of fraud in the Paycheck Protection Loans, and the nation needs a national aviation-preparedness plan for communicable disease outbreaks. The GAO is the non-partisan investigative arm of Congress, aka the “congressional watchdog.”
- The House Committee on Financial Services announced a hearing on June 30 with Treasury Secretary Steven Mnuchin and Federal Reserve Board Chairman Jerome Powell.
- The House will consider a major infrastructure package next week. The Moving Forward Act (H.R.2) includes investments to rebuild and maintain our nation’s roads, bridges, transit systems, and other surface transportation needs, but it also proposes investments to support infrastructure needs related to education, childcare, broadband, housing and community development. PoliticoPro has a DataPoint infographic that depicts the spending priorities in the bill.
President Trump took the following executive actions this week:
- A June 22 proclamation that went into effect June 24 temporarily barring new immigrants entry to the country on a slate of employment-based visas, including the H-1B for high-skilled workers, amid the coronavirus pandemic. The restrictions are set to last through the end of the year and will prevent hundreds of thousands of new immigrants who were expected to rely on the visas for entry into the U.S. to work in industries ranging from tech and consulting to landscaping and seasonal jobs at resorts.
- An Executive Order (EO) on Strengthening the Child Welfare System for America’s Children was signed on June 24 to strengthen the foster care and child adoption system in three key areas:
- Improving Partnerships by encouraging robust partnerships between state agencies and public, private, faith-based, and community organizations.
- Improving Access to Resources for foster and adoptive parents.
- Improving Oversight of federal oversight of key statutory requirements.
The Administration for Children and Families (ACF) at the Department of Health and Human Services is responsible for carrying out this White House mandate.
Department of Agriculture
USDA has announced the availability of $5 million for six Supplemental Nutrition Assistance Program (SNAP) Employment &Training National Partnership Grant awards. The resources will support nonprofit national organizations with broad member or affiliate networks that provide direct workforce development services to low-income and low-skilled individuals, including SNAP participants. Funds must be used to create new organizational capacity, including staff and other infrastructure needs, to provide SNAP E&T technical assistance and training to network member or affiliate organizations. Applications are due July 22.
Department of Commerce
As of June 18, 61.5% of households have responded to the Census. The Bureau continues to urge households to respond by completing and mailing back the paper questionnaire or responding online or by phone at 844-330-2020, using the provided Census ID. For funders wanting to understand where the Bureau’s operations with the 2020 Census stand, consult the Funders Committee for Civic Participation’s 2020 Census Key Milestones Update.
Of note, in areas with large Latino populations, the self-response rate has lagged behind the national average, according to a data analysis by The National Association of Latino Elected and Appointed Officials Educational Fund, in partnership with NBCUniversal Telemundo Enterprises. The report shows that less than 20% of Puerto Ricans have responded to the Census, and self-response rates in Arizona, California, Florida, New Mexico, New York and Texas are also lagging.
On June 24, the Bureau hosted a virtual event to announce the winners of the 2020 Census “Get Out the Count” video prize challenge. Census Accelerate awarded a total of $50,000 to the top three most engaging, short videos that demonstrate the importance of the 2020 Census, encouraging viewers to self-respond.
Also released this week were the Bureau’s Community Resilience Estimates that measure the ability of a population to absorb, endure, and recover from the impacts of disasters, including weather-related and disease-related hazard events, such as COVID-19. The new experimental data tool shows risk level by state, county, and tract.
National Weather Service
The National Weather Service is seeking public input on changes to the “Watch, Warning, and Advisory” system. The NWS is striving to support a weather-ready nation by ensuring that Americans are aware of and prepared for the variety of weather- and water-based hazards we experience across the country every day. Find information on summer weather safety on the NWS website.
Department of Health and Human Services
On June 23, the HHS Office of Minority Health (OMH) announced the selection of the Morehouse School of Medicine as the awardee for a new $40 million initiative to fight COVID-19 in racial and ethnic minority, rural, and socially vulnerable communities.
Department of Homeland Security
Federal Emergency Management Agency
FEMA reports as of June 24:
- 287,312 COVID-19 testing samples were processed at federally run Community-Based Testing Sites (CBTS) and 712,849 samples were processed at public-private partnership testing sites.
- Out of 41 original Community-Based Testing Sites, 13 continue to operate as federally run sites, 20 have transitioned to state management, and eight have closed in consultation with the states.
- HHS has established a public-private partnership with pharmacy and retail companies to accelerate testing. To find locations, visit the COVID-19 Community-based Testing Sites page.
- Under the CBTS public-private partnership, there are currently 623 live sites in 48 states Washington, D.C. and Puerto Rico conducting testing.
Department of Justice
DOJ has urged the Supreme Court to invalidate the Affordable Care Act in a legal brief filed Thursday. The Department said the 2010 health law is invalid because Congress in 2017 ended the financial penalty for not having health insurance, though it did not take effect until 2019. It claimed that the entire ACA thus must fall with the individual mandate, i.e., that the individual mandate is no longer a valid exercise of Congress’s legislative authority considering Congress’s elimination of the penalty for noncompliance. Supreme Court consideration of the ACA will not happen until the fall at the earliest, with any decision likely coming after Election Day.
Department of the Treasury
On June 18, the IRS Large Business and International (LB&I) Division Commissioner announced that as soon as it reopens on July 15, the IRS plans to open several hundred new audits involving high-income individuals, and letters will go out through September. This is important for foundations because the audits will focus on high-income individuals who have a connection with at least one pass-through entity such as a partnership or S-Corporation, or a connection with a private foundation. The IRS is using data analytics and cooperation across divisions to make these audits as effective as possible. Similarly, the IRS Tax-Exempt and Government Entities (TEGE) Division commissioner has identified over 1,000 cases of private foundations that are connected to high income or high net worth individuals. The IRS is particularly interested in auditing whether those private foundations have engaged in prohibited “self-dealing,” such as making loans to a disqualified person.
Department of the Veterans Affairs
VA is easing women service members’ transition from active duty to civilian life with its Women’s Health Transition Training program which offers free online sessions on VA benefits and services for women, including eligibility and enrollment for VA health care. These are live, interactive, and confidential sessions offered Monday through Friday, during June and July.
Exclusive from our colleagues at the National Council of Nonprofits.
Nonprofits, States Seek Unemployment Reimbursement Solutions
While Congressional action could provide complete relief from crippling unemployment costs faced by nonprofits and local and tribal governments that had elected to self-insure under their state unemployment laws, several states are taking steps to provide some protections to those employers. The U.S. Labor Department currently interprets the CARES Act to require that these reimbursing employers immediately pay their states for 100 percent of the costs of benefits paid to laid-off and furloughed employees while most other employers are protected from increased unemployment costs this year. An executive order by Michigan Governor Whitmer relieves all employers – reimbursing and contributing alike – of unemployment costs associated with COVID-19-related layoffs. To ease the unfair burden, last month, Texas Governor Abbott extended payment deadlines until the end of the year “for designated reimbursing employers that are required to pay a share of unemployment benefits,” which includes nonprofits. The executive action also waived interest and penalty charges, but did not reduce or eliminate the payment for benefits provided. Similarly, Pennsylvania has granted no-interest delays of payments for 120 days in the hopes that Congress will clarify and alleviate the burdens on nonprofits and others. Lawmakers in New Jersey are considering a measure to exempt reimbursing employers payments in lieu of contributions for benefits paid out during the public health emergency. The legislation would also protect contributing employers from adjustments to experience ratings due to the pandemic payouts.
Other states have been more creative in their approaches, to the benefit or detriment of nonprofits. Illinois recently enacted a law that requires reimbursing employers to make payments in lieu of contributions of 50% of the unemployment benefits paid to former employees and then request reimbursement from the state for those same payments. The alternative before the law was to pay 100 percent of benefits and get reimbursement of 50 percent. In Ohio, nonprofits are receiving notices in their statements that nonprofits will not receive cash refunds from the state resulting from the CARES Act, but rather will see a credit on their account to be redeemed only if there are future unemployment costs.