Public Policy Update - August 2020
Each month, SECF provides members with monthly updates on the latest public policy developments in Washington and state capitols around the region, analyzing their possible impact on the charitable sector. If you would like to see an issue featured in a future Public Policy Update, contact Jaci Bertrand, SECF's vice president of member engagement, at firstname.lastname@example.org.
Fate of Next COVID Relief Package Unclear
As of this afternoon, the state of the next COVID-19 relief bill, including provisions affecting philanthropy and nonprofits, remained fluid.
Senate Majority Leader Mitch McConnell (R-KY) released the $1 trillion HEALS Act last week. However, several Republican senators are opposed to key provisions of the bill. That, combined with the need to achieve 60 votes to overcome a filibuster, means McConnell has to negotiate not only with his own party, but also with Democrats, whose votes will be essential to passing any legislation.
Pressure has been added by rising jobless claims and the expiration of both a federal eviction moratorium and enhanced unemployment assistance (UI), which was providing an extra $600 per week to those unemployed due to the pandemic.
More PPP Loans Possible: As of today, the HEALS Act includes another round of funding for the Paycheck Protection Program, which offers forgivable loans to small businesses and nonprofits. However, only organizations with fewer than 300 employees that can also show a 50 percent decline in revenue will be eligible for the next round. The proposal also includes liability protections for businesses, schools and nonprofits that reopen, a top priority for Republicans.
No Charitable Deduction Expansion – So Far: The HEALS Act does not include an expansion of the $300 temporary universal charitable deduction that passed as part of the CARES Act in March. There are still negotiations ahead, during which the senators who have championed the expansion could urge leadership to include the provision before final passage. If that is unsuccessful, senators may be able to propose adding an expansion via an amendment during floor debate. There are also members of the House, from both sides of the aisle, calling for an expansion of the universal charitable deduction in the next bill. Most recently, a group led by Reps. Chris Smith (R-NJ), Henry Cuellar (D-TX) and Doug Lamborn (R-CO) sent a Dear Colleague letter to leadership asking for an expansion, which you can find here.
Payout Mandates Appear Unlikely: Neither the HEALS Act nor the HEROES Act, which the House passed in May, include payout mandates for foundations or donor-advised funds. A group called Patriotic Millionaires group and others have been advocating for a 10 percent mandatory private foundation payout and the same for donor-advised funds, both for three years, to aid with COVID relief. While the issue could arise again, it has not gained much traction so far on Capitol Hill.
Negotiations are continuing and the provisions of the Senate legislation could change significantly before a vote on passage. If legislation does pass the Senate, we will provide another update recapping its key provisions and its chances of becoming law.
California DAF Proposal Unlikely to Become Law This Year
A bill in the California Legislature that could have placed significant reporting requirements on donor-advised funds will likely not become law this year.
A.B. 2936, which had already passed the Legislature’s lower chamber, would have allowed the state Attorney General to engage in rulemaking to implement reporting requirements on donor-advised funds (DAFs). The legislation placed no restrictions on the Attorney General’s rulemaking authority – DAF sponsors could be required to disclose who is giving to them and what charities they are granting to.
However, the state Senate Judiciary Committee has reportedly decided to not move the legislation forward this year due to other bills taking priority. The legislation, or a similar proposal, could be resurrected in 2021 – if that happens, we will monitor the situation closely.