Washington Snapshot: House Ways and Means Committee; Revisiting Opportunity Zones Designations?

In This Week's Edition of Snapshot...

• House Ways and Means Committee
• Revisiting Opportunity Zones Designations?
• Department of Treasury
• The Federal Reserve
• Department of Commerce
• Department of Housing and Urban Development
• Department of Transportation
• Happening in the States
   

News from the Hill

The Senate impeachment trial of President Donald Trump is taking a front seat in Congress this week.  While the Senate is focused on the trial, the House is not in session and will return on January 27.

House Ways and Means Committee

Chairman Richard Neal (D-MA) announced that the Committee will hold a hearing on January 29 to examine how to pay for a federal infrastructure package, one of the priorities of House Democrats this session. Philanthropic funders may want to keep an eye on the discussions as some projects that emerge could be ripe for impact investing partnerships with local government and other private capital for critical improvements in distressed communities or sustainable development projects. Any progress on the passage of a comprehensive bill would likely be a protracted process in this election year, with limited chance of passage before the election in November.

Revisiting Opportunity Zones Designations?

PolitcoPro is reporting this week that Sen. Tim Scott (R-SC) is exploring possible legislation to give governors a chance to reconsider their designations of Opportunity Zones in their states. Suggesting that there may have been some “bad decisions” or decisions that might be revisited if a second chance were available, Sen. Scott seems to be looking to give governors a chance to do some corrections. It has been reported that some of the designations may have missed the mark and do not fall into low-income census tracks that were to be used as the mapping framework.

Executive & Regulatory News

Department of Treasury

Good news for the nation’s nonprofits and churches! The IRS has now posted instructions to show how nonprofit organizations can obtain refunds on the repealed employee benefits parking tax, retroactive back to 2018 when the tax took effect. The tax was included in the 2017 Tax Cut and Jobs Act.

Also, on the regulatory front, the IRS is continuing to work this calendar year to promulgate various regulations required by the passage of the 2017 Tax Cut and Jobs Act. Getting these regulations out the door is a priority before they start ticking down the list generated from the 2019 tax provisions that passed in December. These regulations are being queued up for later this year.

Items related to exempt organizations on the IRS’s IRS Priority Guidance list (for the period July 1, 2019 – June 30, 2020) that are expected:

1. Guidance revising Rev. Proc. 80-27 regarding group exemption letters.
2. Guidance on circumstances under which a LLC can qualify for recognition under §501(c)(3).
3. Final regulations on §506, as added by the PATH Act of 2015. Temporary and proposed regulations were published on July 12, 2016. (PUBLISHED 07/23/19 in FR as TD 9873.)
4. Final regulations on §509(a)(3) supporting organizations. Proposed regulations were published on February 19, 2016.
5. Guidance under §4941 regarding a private foundation's investment in a partnership in which disqualified persons are also partners.
6. Regulations regarding the excise taxes on donor advised funds and fund management.
7. Regulations and other guidance under §6033. [PUBLISHED 09/10/2019 in FR as REG-102508-16 (NPRM).]

The Federal Reserve

In a new report, The College Wealth Divide Continues to Grow, the Federal Reserve Bank of St. Louis, documents that the college wealth premium has increased threefold since the 1970s. The analysis corroborates the strong increase in the difference between college and noncollege income since the early 1980s. However, while a college degree seems to help households to earn more, it does not increase the probability of making it into the top 10 percent of the nation’s wealth distribution.

Department of Commerce

Census Bureau

The 2020 Census begins this week -- in Alaska -- where the majority of villagers are Alaska Native. American Indians and Alaska Natives living on reservations were the most undercounted population group in the 2010 Census where there are more than 80,000 tribal citizens who make up the 229 federally recognized tribes in Alaska. With this effort, the Update Enumerate operation begins, where census takers enumerate in-person in the most rural and remote communities in the country. (Update Enumerate areas are notated in blue on the Hard-To-Count 2020 map.)

The Census Bureau recently announced that it needs additional enumerators in all 50 states, especially in Hawaii, Indiana, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, North Carolina, Ohio, Pennsylvania, Rhode Island, South Carolina, Vermont, Washington, West Virginia, and Wisconsin.

Department of Housing and Urban Development

HUD Secretary Ben Carson announced on January 7 that the Trump Administration is proposing a change in an affirmatively further fair housing (AFFH) rule. The current rule is intended to ensure that communities confront and address racial segregation in housing. The rationale is that local governments have been overburdened by the requirements. The proposed rule would redefine fair housing standards to reduce regulatory burdens and eliminate the assessment tool used to map racial segregation under the 2015 Affirmatively Furthering Fair Housing rule.

Comments may be submitted by mail to: Regulations Division, Office of General Counsel, Department of Housing and Urban Development, 451 7th Street, SW, Room 10276, Washington, DC 20410-0500.

Department of Transportation

DOT’s website is a resource for data and information related to federal investment in major infrastructure projects in and around Opportunity Zones (OZs). The information is intended to encourage further economic investment in OZs. A recently published interactive map shows data sets for major federal highway projects, commuter/light rail stations, airports and more.

Happening in the States

A bill is working its way through the California legislature that would require donor-advised-fund sponsors to report disbursements on a fund-by-fund basis. The bill, California AB 1712, was originally filed last February and an amended version is making its way through the current legislative session. This bill would require the Attorney General to adopt rules and regulations requiring a donor-advised fund to include specified information in reports to the Attorney General for the purpose of helping the Attorney General determine whether the funds or accounts managed by the donor-advised fund are being administered properly. The bill would also prohibit the disclosure of the personal information that identifies an individual donor and would exempt a donor-advised fund sponsoring organization from disclosure requirements if it meets specified, self-certified conditions.

The bill passed its first hurdle on January 14 and originally had to pass the Assembly by January 31 to stay alive in this session. However, the Chronicle of Philanthropy reported on January 23 that the bill was pulled back by the sponsor to “strengthen its language and address outstanding privacy concerns.” The plan is to resubmit a replacement bill by the end of February.

Exclusive from our Colleagues at the National Council of Nonprofits

New Jersey Mandates Severance for Mass Layoffs

With the signature of Governor Murphy this week, New Jersey became the first state in the country to require larger employers, including nonprofits, to pay severance to laid-off workers in certain circumstances. The new law, which takes effect immediately, requires employers with at least 100 employees in the state to provide 90-days’ notice before a layoff of at least 50 people. It mandates that affected workers be paid one week’s severance for every year of service, with an additional four-week penalty if the employer does not provide the requisite advance notice. The law reportedly was motivated by the 2,000 people who lost their jobs when Toys “R” Us suddenly closed its doors.

While the first workplace law of the year, a recent trend suggests that employment policy will likely be very active in 2020. Multiple states considered paid leave bills in 2019. Maine enacted a law requiring employers, including nonprofits, with 11 or more employees to provide paid leave up to 40 hours per year for employees. Colorado set up a study of a paid family and medical leave program and numerous other states, including some in more conservative parts of the country, are expected to reconsider bills that didn’t quite make it through the legislative process last year. Tennessee, for example, continues to consider a mass-layoff bill not as extensive as the New Jersey law while a bill in New York would place restrictions on employer access to social media and other persona account information. In short, the states are not waiting for Congress to set workplace standards.