What You Need to Know About Public Policy This Week...
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Please note: the Council is closed next Friday for Juneteenth, so there will not be a new edition of Snapshot unless major news affecting the philanthropic sector is announced.
On June 9, 2021, Senators Angus King (I-ME) and Chuck Grassley (R-IA) introduced the Accelerating Charitable Efforts (ACE) Act (S.1981). The Council opposes this legislation. Although we understand foundations have a range of views on this proposal, we believe the changes in the bill will not achieve the ends we are all seeking to realize – greater support for nonprofits and communities, now and in the future, as we work together to advance the greater good.
Council staff just prepared a section-by-section summary of the bill. In addition, our staff continue to review the bill and are making a major push to talk to Congressional offices and the press to share how these provisions will negatively impact foundations and the charitable sector.
Last, the Council, along with our national partners, sent a letter to the Hill today raising our concerns with the legislation.
The Council is engaged in conversation with our members, philanthropic partners, and Congressional offices about the legislation. In addition, we will continue tracking the legislation and provide updates as they happen in Snapshot. At this time, the bill has not yet been introduced in the House of Representatives, but Sen. King has said that his office has had interest from some House offices.
Take our action alert to voice your opposition to the legislation with your members of Congress. The alert includes an already completed message that you can edit before sending.
The House and Senate Budget Committees both held several hearings on the president’s fiscal year 2022 budget request. Shalanda Young, Acting Director of the Office of Management and Budget, testified at both hearings.
On Tuesday, the Senate Finance Committee held a hearing on the Internal Revenue Service’s (IRS) budget, during which Republicans and Democrats disagreed about President Biden’s stated desire to provide additional funding to the IRS to increase tax enforcement. The issue was also raised in a House Ways and Means Committee hearing on tax compliance Thursday, where members raised concerns with increased scrutiny on taxpayers.
The House and Senate Appropriations Committees will continue hearings next week as members work to finalize legislation to fund the government. The House Appropriations Committee will likely begin to schedule markups of their appropriations bills in the coming weeks as Chairwoman Rosa DeLauro (D-CT) earlier indicated that she expected the full House to consider at least some of the bill in July. The federal government’s next fiscal year begins on October 1, 2021.
While cryptocurrency continues to grow in popularity, the U.S. government has very few channels through which to police or regulate it. Still as more organizations, including foundations and other charitable organizations, choose to accept cryptocurrency, the IRS has pressed Congress to clarify cryptocurrency rules and regulations.
In a Senate Finance Committee hearing on the IRS budget, Commissioner Charles Rettig asked the committee for more clarity on cryptocurrency. Current IRS practice is to treat digital currencies as property and tax appreciation when currencies are sold in the same ways it taxes capital gains. The issue was raised again during a joint hearing between the House Ways and Means Subcommittees on Oversight and Select Revenue Measures on improving tax administration. Rep. Adrian Smith (R-NE) pointed to the need for clear and consistent rules around cryptocurrency as a key area in which policymakers can act to bolster tax compliance without damaging economic growth.
The Federal Emergency Management Agency has released an updated COVID-19 Healthcare Resource Roadmap. Developed to assist state, local, Tribal, and territorial authorities in their responses to COVID-19, the Roadmap describes how supplemental funds from the CARES Act and American Rescue Plan Act, as well as ongoing federally funded programs, can be used to implement solutions to the ongoing public health crisis.
Exclusive from our colleagues at the National Council of Nonprofits.
Using Federal Funds to Level Unemployment Trust Fund Balances
Policymakers in at least 29 states so far have allocated or proposed to use a portion of their American Rescue Plan Act dollars to shore up state unemployment insurance trust funds. As made clear under a Treasury Interim Final Rule released last month, states may use their share of the $350 billion State and Local Fiscal Recovery Fund to restore their unemployment trust funds to pre-pandemic levels. This decision is of significance to nonprofits with employees because it allows states to avoid significant automatic tax increases on contributing employers as well as pay reimbursing employers for amounts that did not receive the same federal or state support. Lawmakers in California, Georgia, Maryland, Ohio, and Wyoming have all announced transfers ranging from $25 million to $1.1 billion.
Additionally, some states are devoting some of their ARPA funds to repay unemployment loans from the federal government. Hawai`i lawmakers appropriated $700 million of previous federal stimulus monies to avoid insolvency and make loan payments at the end of their legislative session. The Louisiana legislature is considering allocating $300 million for their unemployment trust fund. West Virginia Governor Justice has proposed devoting $600 million to repay the federal unemployment loan, but other federal monies may also be used for the repayment. State unemployment trust funds were quickly depleted during the pandemic as state officials paid out unprecedented unemployment insurance claims to laid off workers. Seventeen states had solvency levels below the recommended standard at the beginning of 2021, and 19 states had outstanding state Federal Unemployment Account loan balances totaling nearly $52 billion as of the end of May.