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Legislative Update Archive
FEDERAL
STATE OF PENNSYLVANIA
Charitable Sector Reforms (2004-2006)
2006 |
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November 7, 2006 |
>> Read our briefing paper on
H.R. 4: "What
the New Charities Law Means to You"
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September 11, 2006 |
>> Read an analysis
of the charitable provisions contained in the Pension
Protection Act of 2006 prepared by for Grantmakers
of Western Pennsylvania by Carolyn Duronio, Esq.
of ReedSmith LLP.
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August 17, 2006 |
President Bush
signs the Pension Protection Act of 2006 (H.R. 4),
which enacts into law charitable giving incentives,
such as the IRA Charitable Rollover, as well as a
number of reforms designed to cut down on abuses
of charity tax laws by donors and nonprofit organizations.
The Council on Foundation’s Legal team has
been interpreting the H.R. 4 legislation to assess
its implications for grantmakers. Their analysis,
including a summary of the IRA charitable rollover
and a document that describes the changes in intermediate
sanctions rules for supporting organizations, is
posted on the H.R.
4 Resources section of their Web site.
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August 7, 2006 |
On Thursday, August 3rd, the U.S. Senate
passed the Pension Protection Act of 2006 (H.R. 4),
legislation that includes charitable reforms and incentives,
by a vote of 93-5. The bill will be sent to President
Bush, who is expected to sign it into law shortly.The
Council on Foundations has been closely monitoring
this legislation and is urging Congress to quickly
amend the law to extend the IRA charitable rollover
incentive to donor-advised funds and supporting organizations
when they return in September. The Council also advises
that several provisions of the bill will take effect
immediately upon the bill’s enactment (the date
the President signs the legislation) and a few are
retroactive. Among the provisions that require
immediate attention by grantmakers are:
• The prohibition on grants by private
foundations to Type III supporting organizations
other than those that are “functionally
integrated.” Somewhat simplified,
a functionally integrated Type III supporting organization
is one that provides its support by carrying on
activities that its supported organizations would
otherwise have to do themselves rather than by
providing grants to the supported organizations. This
provision, enacted upon signature, also bars grants
to any type of supporting organization if someone,
who is a disqualified person with respect to the
private foundation, controls the supporting organization
or the organization it supports. Note that
this provision only bars grants to the supporting
organization. It does not affect grants made
directly to the supported organization even if
control is present.
• The prohibition on the payment of grants,
loans, compensation or similar payments from a donor-advised
fund to the donor, the advisor, members of their
families, or businesses they control. Because
expense reimbursements are considered to be “similar” payments,
community foundations that permit donors to raise
money for advised funds will be prohibited from using
the advised fund’s assets to reimburse donors’ expenses
effective on the date of enactment.
• The prohibition on all
three types of supporting organizations from the
payment of grants, loans, compensation or similar
payments to the supporting organization’s substantial
contributor, members of his or her family, and businesses
they control. This prohibition is retroactive,
applying to any transaction occurring after July
25, 2006, the date that HR 4 passed the House.
• The IRA charitable rollover incentive
is effective upon signature for contributions made
during 2006 and 2007. It permits individuals
who have reached 70 ½ to exclude from income
of up to $100,000 a year in retirement plan assets
of contributing to a qualifying charity. Split-interest
gifts and gifts to donor-advised funds, supporting
organizations, and private foundations do not qualify
for the incentives.>> Additional information
and analysis of H.R. 4 is available on the Council
on Foundation's H.R.
4 Resources Page and on Independent
Sector's Web site.
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August 2, 2006 |
On Friday, July 28, the House of Representatives
passed the Pension Protection Act of 2006 (H.R.
4), legislation that includes charitable reform
and incentive provisions. House leaders chose to include
charitable reforms and incentives in the pension bill,
which the House passed. While many of the provisions
mirror those dropped earlier this year from the final
tax reconciliation bill, the Council on Foundation,
is very concerned about two provisions in the bill:
• The exclusion of donor-advised funds, supporting
organizations and private foundations as qualified recipients
of IRA charitable rollover gifts, and
• The application of the private foundation excess
business holdings rule to donor-advised funds
By a vote of 230-180, the House also passed a trifecta
bill (H.R. 5970), so named because it
includes business tax cut extensions, a permanent
reduction of the estate tax and an increase in
the minimum wage.
Now that both bills have passed the House, Senate
Republican leaders hope to attract enough moderate
Senate Democrats to get the 60 votes they need to
pass the trifecta bill. If H.R. 5970 passes, then
the Senate will consider H.R. 4. If H.R. 5970 fails,
Senate leaders may decide to wait on passing a pension
reform bill until Congress returns to Washington
in September.
>> View
the Council’s Summary of the Charitable Provisions
on H.R. 4.
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2005 |
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November 18, 2005 |
The Senate passed the Tax Relief
Act of 2005 (S. 2020), a bill that included
a number of charitable giving incentives and reforms
relevant to the charitable sector. Provisions in
the new bill included those passed in previous legislative
attempts, such as the IRA charitable rollover and
non-itemizer deduction, as well as new rules for
donor-advised funds and supporting organizations.
The House of Representatives is considering and
is expected to pass its own tax relief legislation
soon. Unlike S. 2020, the House version does not
contain any charitable reform provisions. A House-Senate
conference to reconcile differences between the two
tax bills is expected in mid-December.
>> For more detailed information on the provisions
of S. 2020, visit the Council on Foundations Charitable
Reform Resource Center or the Public
Affairs area on Independent Sector's Web site.
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Sept. 28, 2005 |
Senators Rick Santorum (R-PA) and Joseph
Lieberman (D-CT) reintroduced the bipartisan CARE
(Charity, Recovery and Empowerment) Act of 2005 (S.
1780) in the Senate. A companion bill was
also introduced in the House by Representatives Roy
Blunt (R-MO) and Harold Ford, Jr. (D-TN).
Provisions of the 2005 CARE Act would allow those
who do not itemize their charitable gifts to deduct
a portion of their charitable contributions; permit
individuals to make tax-free contributions to charity
from IRAs, provide incentives for corporate charitable
contributions, and allow low-income workers to build
assets through matched savings accounts.
Santorum said the bill is likely to be coupled with
charity reform measures, adding that he has talked
to Finance Committee Chair Chuck Grassley (R-IA) about
reaching a "middle ground" on charity reforms.
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June 22, 2005 |
Members of the Panel on the Nonprofit Sector delivered
its Final Report to Senate Finance
Committee Chairman Charles Grassley (R-IA) and IRS
Commissioner Mark Everson. The 116-page report addresses
issues such as donor-advised funds, Type III supporting
organizations, gifts of appreciated property, compensation
and administrative expenses. The Panel’s report
recommends over 120 actions to be taken by charitable
organizations, by Congress, and by the Internal Revenue
Service, which together would strengthen the sector’s
transparency, governance, and accountability.
The Panel is encouraging charitable organizations,
once they have read the report, to sign on to it
as a way to demonstrate their commitment to the highest
possible ethical standards.
>> Click
here to download a copy of the final report
or here to
submit a request for a printed copy.
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April 20, 2005 |
The House Committee on Ways and Means holds a hearing
titled, “An Overview of the Tax-Exempt Sector.”
According to Ways and Means Committee Chairman Bill Thomas
(R-CA), the hearing is designed to, “examine the
legal history of the tax-exempt sector; its size, scope
and impact on the economy; the need for congressional
oversight; IRS oversight of the sector; and what the
IRS is doing to improve compliance with the law.”
>>View the Chairman’s
full press release or read the Council
on Foundations' hearing summary.
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April 5, 2005 |
The Senate Finance Committee holds a hearing on "Charities
and Charitable Giving: Proposals for Reform".
Among those who invited to give testimony at the hearing
are: Diana Aviv, president of Independent
Sector; Mark W. Everson, the commissioner
of the Internal Revenue Service; Leon Panetta,
a former White House chief of staff and director of
the Panetta Institute; George K. Yin,
chief of staff at the Joint Committee on Taxation;
and Brian Gallagher, president of
United Way of America.
>> Read summaries of the proceedings preparaed
by the Council
on Foundations and the National
Council on Nonprofit Associations.
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March 9, 2005 |
A record 180 foundation representatives participate
in the 2005
Foundations on the Hill event, a day co-sponsored
by the Council on Foundations and the Forum of Regional
Associations of Grantmakers to inform Members of Congress
about the important role foundations play in improving
communities across the country and around the world.
This year’s event included representation from
33 states and the District of Columbia. Participants
met with 66 Senators and more than 170 Representatives
and/or their staff members.
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March 1, 2005 |
After an exhaustive and inclusive process, the Panel
on the Nonprofit Sector submits its Interim
Report to the Senate Finance Committee.
The report focuses on four areas: (1) Actions the sector
can take on a voluntary basis to improve governance
and ethical conduct; (2) Ways to increase transparency
of charitable sector operations; (3) Additional legislation
that is necessary to ensure that tax exempt dollars
are used exclusively for charitable purposes; and (4)
Stronger enforcement of existing law by federal and
state oversight officials. The complete report contains
the eight principles that the Panel used to guide its
work and an executive summary.
The Panel encourages organizations to sign-on to
the Interim Report in order to demonstrate the sector’s
commitment to the highest possible ethical standards.
The Panel will continue its work and is expected
to release its final report to the Senate Finance Committee
around June 20th.
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February 28, 2005 |
The IRS issues a press release naming “abuse
of charitable organizations and deductions” as
one of 12 tax scams included in its “2005
Dirty Dozen”, an annual list it compiles
to remind taxpayers to be wary of schemes that promise
to eliminate or significantly reduce taxes.
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February 7, 2005 |
President Bush releases his FY06 budget proposal,
asking Congress for $6.59 billion in tax incentives
for charitable giving, including $3 billion over 10
years for the IRA charitable rollover. The President’s
budget also calls for the replacement of the “two-tier”
structure of the excise tax on private foundation investment
earnings with a single tax rate of one percent. Both
the IRA charitable rollover and the simplification of
the private foundation excise tax have appeared in previous
budgets. Notably absent from the FY06 budget proposal
is the charitable deduction for non-itemizing taxpayers,
a provision that appeared in last year’s budget.
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February 1, 2005 |
Senator Rick Santorum (R-PA) reintroduces the Charitable
Aid, Recovery, and Empowerment (CARE) Act as part
of S. 6, one of the Senate Majority
Leader’s top 10 priority bills for the 109th
Congress. The CARE Act includes provisions that
would allow tax-free distributions from IRAs donated
to charities during the donor's lifetime and a
charitable deduction for non-itemizing taxpayers,
as well as welfare reform and family tax provisions.
A Senate staff person indicated that while the
CARE Act is likely to move as a separate, stand-alone
bill, its inclusion in the majority’s top 10
bills signals that charitable giving legislation
will be a priority in the new Congress.
Historical Note: In the 108th Congress, the CARE
Act (S. 476) passed the Senate by a vote of 95-5.
Its companion bill, H.R. 7, passed the House by a
vote of 408-13. Political issues unrelated to the
bill prevented the reconciliation of the House and
Senate versions.
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January 27, 2005 |
The Joint Committee on Taxation releases the 435-page
report “Options
to Improve Tax Compliance and Reform Tax Expenditures”.
Prepared at the request of Senate Finance Committee
Chairman Charles Grassley and Ranking Member Max Baucus,
the report includes a number of proposals designed
to close the $311 billion gap between taxes owed and
collected.
A large portion of the report (118 pages) examines
possible changes to the law governing foundation
and nonprofit donations. The proposals in the report
could be used as potential offsets for revenue-losing
initiatives. Some of these items include:
• A five-year review of exempt status of public
charities and private foundations;
• Reform of intermediate sanctions and extension
of certain reforms to private foundations;
• Increase in the amount of excise taxes imposed
on public charities, social welfare organizations,
and private foundations;
• Limitation of charitable deduction for contributions
of clothing and household items; and
• Reforming rules for charitable contributions
of property.
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2004 |
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December 2004 |
108th Congress adjourns without any further action
on charitable sector reforms.
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October 12, 2004 |
Panel
on the Nonprofit Sector is formed
and begins their work of preparing recommendations
for Congress to improve the oversight and governance
of charitable organizations. The Panel is comprised
of 24 nonprofit and philanthropic leaders whose
organizations encompass great diversity in location,
mission, perspective, and scope of work. Paul
Brest, president, William and Flora Hewlett
Foundation, of Menlo Park, CA, and Cass
Wheeler, chief executive officer, American
Heart Association, of Dallas, TX, are named co-chairs.
Diana Aviv, president and CEO of Independent Sector,
serves as the Panel’s executive director.
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September 22, 2004 |
Senators Grassley and Baucus issue a letter to Diana
Aviv, president and CEO of Independent Sector, asking
her to “convene an independent panel on the nonprofit
sector to consider and recommend actions that will
strengthen good governance, ethical conduct, and effective
practice of public charities and private foundations.”
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July 22, 2004 |
Senate Finance Committee chair, Charles Grassley
(R-IA), and ranking member, Max Baucus (D-MT), convened
a roundtable to hear thoughts and concerns of the nonprofit
community with regard to the bipartisan staff discussion
draft on proposed reforms for nonprofit organizations.
Staff invited 18 individuals, including the Council
on Foundations President and CEO Dot Ridings, to
submit written papers commenting on the bipartisan
discussion draft and to participate in the roundtable
discussion. The Council's
comment paper focused on proposals that
primarily affect grantmakers.
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June 22, 2004 |
U.S. Senate Finance Committee began its inquiry
into possible reforms in the nonprofit sector with
a wide-ranging hearing that focused on three key issues:
(1) Abuses in the industry; (2) Governance challenges;
and (3) Ways to improve regulatory oversight.
A 19-page
discussion draft authored by Senate
Finance Committee staff served as the basis for
the hearing.
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DVG Members: The summary of a policy
briefing and Washington Update with John A. Edie (held
on 12/6/04), is available for your review in the DVG Members
Area (password required).
Back to Top
The Charitable Giving Act of 2003 (H.R. 7)
The Charitable Giving Act of 2003-H.R.
7 was passed by the House of Representatives on September
17, 2003 by a vote of 408-13. The process
to craft a conference agreement between H.R. 7 and S. 476
(the Senate companion bill) stalled in the Senate in the fall
of 2003, and Congress has taken no further
action on these bills.
What's Next
The House and Senate versions of the bill (H.R. 7 S. 476)
must be “conferenced” by the two houses of Congress,
led by Senator Chuck Grassley (R-IA), Chairman of the House
Finance Committee, and Rep. Bill Thomas (R-CA), Chairman of
the Ways and Means Committee.
According to the Council on Foundations, the big debate during
this conference committee is expected to be over the issue
of paying for the bill. The Senate version has an estimated
cost of $14.6 billion. Revenue-raising provisions intended
to reduce tax avoidance achieved through corporate transactions
and bookkeeping practices would offset all but $1.4 billion
of the cost. However, the House version, with an estimated
cost of $12.7 billion, has no revenue raisers or offsets.
According to Independent
Sector, Senator Rick Santorum (R-PA) has promised to continue
working for a House-Senate conference that would allow the
Charitable Giving Act, which passed both the House and the
Senate by overwhelming margins, to proceed to the President
for signature and enactment into law.
Further Information:
Additional resources and links are available on the Government
Relations & Public Policy section of the Council
on Foundations' Web site.
MAJOR PROVISIONS of the bill affecting private
foundations in Section 105 include:
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Reduces the excise tax on net investment
income of private foundations to 1%.
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Modifies the Section 4941(a)(1) excise tax on self-dealing
from 5% to 25%. (Expected to be narrowed to only affect
self-dealing violations related to compensation.)
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Does not allow the following administrative expenses
to be treated as qualifying distributions: [The Treasury
Department is directed to write regulations for the
provisions under this bullet.]
>>Any administrative expense which is NOT directly
attributable to direct charitable activities, grant
selection activities, grant monitoring and administrative
activities, compliance with applicable Federal, State,
or local law, or furthering public accountability of
the private foundation.
>>Any compensation paid to a person who is considered
a disqualified person to the extent that such compensation
exceeds an annual rate of $100,000, adjusted for inflation.
>> Any expenses incurred for transportation by
air unless such transportation is regularly-scheduled
coach-class commercial air transportation. (Expected
to be modified to "Any expenses incurred for transportation
by air to the extent that they exceed coach fare or
the equivalent".)
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Effective date is for taxable years beginning after
December 31, 2003. (Expected to be modified to "taxable
years beginning after December 31, 2004.") |
Other important provisions of the bill include:
Section 101 - Deduction for portion of charitable
contribution to be allowed to individuals who do not itemize
deductions
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Allows a direct charitable
deduction from adjusted gross income for the portion
of charitable cash contributions that exceed $250 ($500
in the case of a joint return) but do not exceed $500
($1000 in the case of a joint return).
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Effective date is December 31, 2003
and expires in taxable years beginning after December
31, 2005.
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Requires that the Secretary of the
Treasury issue a report by December 31, 2005 studying
the effect of this amendment on increased charitable
giving and taxpayer compliance.
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Section 102- Tax-free distributions from individual
retirement plans for charitable purposes
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Exclusion from gross income from traditional
or Roth IRAs.
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Applies to transfers made by the owner of the IRA
on or after the owner turn 70½ years of age.
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Applies to both direct transfers of cash or transfers
to split-interest entities.
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Effective date is for distributions made on or after
December 31, 2003.
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>> Click
here to view the pertinent excerpts from the Chairman's
Mark on H.R. 7.
Additional reading on this issue:
• "History
and Analysis of the Laws Governing Qualifying Distributions
of Private Foundations" by Marcus S. Owens,
Caplin & Drysdale (11/20/01)
• "Pushing
Grant Makers" by Ian Wilhelm and Brad Wolverton
for The Chronicle of Philanthropy (5/8/03)
Back to Top
THE
CARE ACT of 2003 (S. 476)
On April 9, 2003, the U.S. Senate passed the CARE Act of 2003
by a vote of 95 to five. The companion bill in the House (H.R.
7) was passed by the House in September 2003 (see above for
further information). Senators failed to take action by close
of the Congressional session to conference the two bills.
Background: Sponsored by Senator Charles
E. Grassley (R-IA), S.
476 was designed to “provide incentives
for charitable contributions by individuals and businesses,
to improve the public disclosure of activities of exempt organizations,
and to enhance the ability of low-income Americans to gain
financial security by building assets, and for other purposes.”
The bill calls for $12.7 billion in new tax breaks for charitable
giving and additional spending for social services.
Of two amendments that were debated before final passage,
one amendment was adopted that incorporated some of the provisions
from the broader version of the CARE Act (S. 272) introduced
earlier this year by Senators Rick Santorum (R-PA) and Joseph
Lieberman (D-CT).
Title I of this legislation establishes
and modifies Charitable Giving Incentives
aimed at creating increased tax incentives for charitable
giving by both individuals and corporations. This includes
an amendment to the IRS code to allow a non-itemizer deduction
for individual taxpayers (single filers would be allowed to
deduct total contributions over $250 up to a ceiling of $500;
for joint filers, the amounts are $500 up to a ceiling of
$1,000), and allows for tax-free distributions to
charities from individual retirement accounts (donors
aged 59 ½ and over may rollover amounts from a traditional
or Roth IRA to create a life income gift to a charity; donors
aged 70 ½ and over may make direct cash contributions
to a charity).
Other incentives included in the legislation are:
- Charitable deductions for contributions of food and book
inventories;
- Expansion of the charitable deduction for scientific property
used for research and for computer technology and equipment
used for educational purposes;
- An adjustment to the basis of S corporation stock for certain
charitable contributions;
- An enhanced deductions for charitable contributions of literary,
musical, artistic and scholarly compositions;
- And mileage reimbursements for charitable volunteers excluded
from gross income.
Other major provisions of the bill include:
Title II: Proposals Improving the
Oversight of Tax-Exempt Organizations - (Sec. 201)
Revises provisions concerning the public inspection of documents
concerning tax-exempt organizations to make more information
available for public inspection.
Title III: Other Charitable And Exempt Organization
Provisions - (Sec. 301) Modifies the excise tax on
unrelated business taxable income of charitable remainder
trusts.
Title IV: Social Services Block Grant - (Sec. 401) Restores
funds for the Social Services Block Grant.
Title V: Individual Development Accounts -
(Sec. 501) Savings for Working Families Act of 2002 - Defines
an Individual Development Account (IDA) as an account established
as part of an individual development account program that
meets certain specified requirements. Defines Individual Development
Parallel Accounts as accounts for matching funds and earnings
dedicated to IDA owners at qualified financial institutions.
Defines a qualified financial institution as any person authorized
to be a trustee of any individual retirement account under
the Code. Defines qualified IDA programs as certain programs,
established upon approval of the Secretary, under which IDAs
and Individual Development Parallel Accounts are held in a
trust by a qualified financial institution.
Title VI: Management of Exempt Organizations
- Authorizes appropriations to carry out the administration
of exempt organizations by the IRS. Authorizes appropriations
with respect to the administration of provisions concerning
political organizations.
Title VII: Revenue Provisions - Subtitle
A: Provisions Designed to Curtail Tax Shelters - (Sec. 701)
Sets forth rules for use in applying the economic substance
doctrine, including defining economic substance.
History: In June 2002, the Senate Finance
Committee passed a version of the Charity Aid, Recovery and
Empowerment Act of 2002 (The CARE Act), which was largely
based on the bill (S. 1924) by the same name introduced by
Senators Joseph Lieberman (D-CT) and Rick Santorum (R-PA).
The bill was patterned after President Bush’s Faith-Based
Initiative. Supporters were unable to bring The CARE Act to
the Senate floor for a vote before the close of the Congressional
session in December 2002. The CARE Act of 2003 (S. 272) was
reintroduced by Senator Santorum for consideration in January
2003 and referred to the Senate Finance Committee.
Back to Top
EXCISE TAX
Further action on the Excise Tax is currently tied to the
conference bill that will be crafted from H.R. 7 and S. 476
(see above).
Note: Proposals affecting the foundation excise tax are under
consideration in the 109th Congress (2005).
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>>What
is the Excise Tax?
Private foundations generally are subject to a two-percent
excise tax on their investment income. The tax is reduced
to one percent in any year in which the foundation’s
charitable distributions exceed the average level of its
distributions over the preceding five years. If a foundation
makes a substantial increase in its charitable spending
in a given year, it raises its five-year average spending
level, thus increasing its excise tax rate to two percent.
As a result of this two-tier structure, private foundations
suffer adverse excise tax consequences when they increase
their grantmaking in a particular year to respond to a
charitable need. |
Back to Top
ESTATE TAX
(H.R. 8)
On June 13, 2003, H.R. 8, a proposal that would make the
estate tax repeal permanent beginning in 2010, was passed
by the House of Representatives by a vote of 264 to 163. Passage
is less likely in the Senate, where last year permanent repeal
fell six short of the 60 votes needed for passage.
>> For further information, read the Estate
Tax Reform page on Independent Sector's Web site.
Background: In May 2001, Congress passed
H.R. 1836, the $1.35 trillion tax-cut bill. The final agreement
included estate tax repeal, but full repeal will only be in
effect for one year (January 1, 2010 to December 31, 2010),
at which point the repeal -- as well as all other components
of the bill -- is scheduled to sunset, or end, and current
tax law will prevail. Between now and then, the top marginal
rate will drop from its current amount of 55 percent to 45
percent by 2007, and the wealth exemption will jump from $675,000
to $1 million next year (5 years earlier than current law
provides for) and will go up to $3.5 million by 2009.
Although there are varying opinions about the how a permanent
repeal of the estate tax would impact philanthropy, a 1997
study, “Impact of Tax Restructuring on Tax-Exempt
Organizations” prepared by Price Waterhouse and
Caplin & Drysdale and commissioned by the Council on Foundations
and Independent Sector, suggests that bequests to charities
could plunge between $5 billion and $6 billion a year without
the estate tax.
A 2002 proposal offered by Senators Phil Gramm (R-TX) and
Jon Kyl (R-AZ) to make the estate tax repeal permanent failed
in the Senate by a vote of 54 to 44, which needed a 60-vote
supermajority for passage. Senator Gramm indicated that he
would continue to seek permanent repeal of the estate tax.
>> Read this summary
of the most-recent OBM Watch study
(August 2004) that indicates that repeal of the
Estate Tax would substantially reduce charitable giving.
>> Read OMB Watch's Policy
Summary on The Estate Tax and Charitable Giving.
>> Read an opinion piece by Center
for Budget and Policy Priorities the
about the repeal of the estate tax.
• View state-by-state
summary sheets (2 pages each) reflecting the
current relationship between estates and the state's economic
well-being.
Back to Top
STATE OF PENNSYLVANIA
September 2006 |
Earlier this year, the Pennsylvania House of Representatives
passed H.B. 632, which would: (1)
increase the audit triggering threshold for all charitable
organizations from the current $125,000 in annual contributions
to $300,000; (2) permit the use of a review or compilation
for charities raising less than $300,000 annually;
and (3) restrict the use of compilation to charities
raising less than $100,000. The bill is intended
to enable smaller charities to direct more of their
charitable dollars to programs and services, rather
than to costly audits, while preserving a significant level
of transparency and public accountability.
The bill is has been stalled in the Senate State
Government Committee since April. The Pennsylvania
Association of Nonprofit Organizations (PANO) has
been working with the House of Representatives and
a number of organizations on this bill, including
Association of Fundraising Professionals (AFP) and
Pennsylvania Institute of Certified Public Accountants
(PICPA), and is encouraging public support to place
the amended bill on the Senate calendar for a final
vote.
>> To learn more about this legislation, link
to PANO’s
public policy webpage or contact David Ross, PANO
Public Policy Officer at david@pano.org. |
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February 2, 2006 |
The Pennsylvania legislature is currently considering
legislation (Senate Bill 854 Sales Tax Expansion
Update) that would subject nonprofits to a
6% sales tax on membership dues, management consulting
services and program service revenues. The sales tax
provision was also added to the House bill. The bill
is now in conference committee.
>> Read the testimony submitted
by DVG in opposition to this legislation.
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December 14, 2005 |
The Pennsylvania House expects to consider TABOR
type spending cap legislation [House Bill 2082] some
time this week. According to the Pennsylvania Association
of Nonprofit Organizations (PANO), "TABOR" (Taxpayer
Bill of Rights) type spending cap legislation would
limit state spending to a fixed percentage over last
year's budget, based on some economic indicator or
index, like the national cost of living increase.
Surpluses would be split 35% to a Rainy Day Fund,
and 65% to be returned to the taxpayers through lower
state personal income taxes.
While supporters argue that TABOR forces government
to act more efficiently, opponents say that the legislation
will decrease the number and quality of non-mandated
services.
If enacted in this fiscal year, an estimated $2 billion
in cuts to Pennsylvania’s current $24 billion
budget would result. Once eliminated from the state
budget, it would be extremely difficult for programs
to have funding restored under TABOR.
These Web sites offer additional analysis of the TABOR
legislation:
>> The
Coalition for Common Sense Priorities
>> Issues
PA
>> PANO
>> Pennsylvania
Budget and Policy Center
To read the language of HB 2082 or find your state
legislator, link to the PA
General Assembly Web site. |
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