Washington Snapshot: Senate Budget Committee Bi-Partisan Bill to Reform Federal Budgeting Process; Treasury Department Proposed Rules on Minimum Required Distributions

In This Week's Edition of Snapshot...

• Congressional Calendar
• Getting Federal Appropriations Back on Track… Again
• Senate Budget Committee Bi-Partisan Bill to Reform Federal Budgeting Process
• Joint Economic Committee Report: Reforming the Charitable Deduction
• Opportunity Zones Continue to Undergo Congressional Scrutiny
• Census Bureau: 2020 Census Info
• Treasury Department Proposed Rules on Minimum Required Distributions
• Happening in the States

News from the Hill

Congressional Calendar 

The House will reconvene on November 12. The Senate has been in session this week and will return after the Veterans Day holiday weekend. Both Chambers will be off the week of Thanksgiving, returning on December 3.

Getting Federal Appropriations Back on Track... Again

ALERT- JUST IN: According to Politico, the House will pass a stopgap spending measure the week of Nov. 18 but it is not yet known what the next deadline date will be.

Sen. Richard Shelby (R-AL) and other top appropriators plan to meet Tuesday in an attempt to revive spending talks and work through outstanding issues, including funding for the wall and allocations for the 12 spending bills that fund day-to-day operations of the federal government. Government funding is set to expire on Nov. 21.

Congressional leaders in both parties support passing a bill to fund the government through December, a deadline intended to pressure negotiators to finish all 12 spending bills before the end of the year. Earlier this week, a White House spokesman told reporters that President Trump will support a continuing resolution as long as it doesn’t limit his ability to spend money on the border wall. House and Senate appropriators have been waiting for a signal from the White House on whether Trump will accept less than the $5 billion proposed by Senate Republicans for the wall, acknowledging that he’s unlikely to get that much with Democrats refusing to provide any funding.

Senate Budget Committee Bi-Partisan Bill to Reform Federal Budgeting Process

The Senate Budget Committee on Wednesday advanced a bipartisan bill to revamp the federal budgeting process, that members of both parties have called dysfunctional at best. Chairman Mike Enzi (R-WY) and Sen. Sheldon Whitehouse (D-RI) introduced the legislation, S. 2765 (116), last week. The bill would move the budget resolution to a two-year cycle while maintaining annual appropriations, and among other things would link debt limit legislation automatically to the approved budget resolution. The committee approved the bill in a 15-6 vote.

Joint Economic Committee Report: Reforming the Charitable Deduction

The Joint Economic Committee Republicans, under the leadership of Senator Mike Lee (R-UT) and as part of their Social Capital project, issued a report this week on reforming the charitable deduction. The report stated that the “current [charitable deduction] policy has a number of flaws that limit its impact and are in need of reform. The decline in civil society only strengthens the importance of protecting charitable institutions and giving from undue taxation.” The report contains charts and graphs and analysis of the data related to charitable giving. The report lists a number of options to make the charitable deduction more widely available.

Opportunity Zones Continue to Undergo Congressional Scrutiny

Restrictions on investing in Opportunity Zones would get tougher under new legislation announced Thursday by Senate Finance Committee ranking member Ron Wyden (D-Ore.). The bill would tighten eligibility, requiring that 90 percent of Opportunity Zone property must be used within the Zone, up from a threshold of 70 percent in the original legislation that established the program, H.R. 1 (115).

Wyden's bill would also expand the list of businesses that don't qualify for the tax break, adding stadiums, luxury sports boxes, storage facilities and housing that is unaffordable to existing residents of a Zone. Businesses already excluded include golf and country clubs, massage parlors and alcohol establishments. Wyden wants new reporting requirements including annual public information reports on how money was used to invest in Opportunity Zones.

The zones are meant to spur new development in economically distressed areas and offer investors a break on capital gains taxes. However, the program has been under growing scrutiny after news reports alleging political interference in the zones.

Looking Ahead to 2021

Senate Finance Chairman Chuck Grassley (R-IA) has signaled that he will once more become Senate Judiciary Chairman and leave his current position as Senate Finance Chairman in 2021 if Republicans keep the Senate majority in 2020. Some lobbyists “in the know” expect that current Senate Banking Chairman Mike Crapo (R-Idaho), currently second in seniority on Finance, would take over that top spot when Grassley makes the switch.

On A Lighter Note

The Capitol Hill Christmas tree is about to make an 1,800-mile trek from New Mexico. Arrival -- November 25. Light Up Ceremony -- December 4.

Executive & Regulatory News

Census Bureau: 2020 Census

• The Census Bureau confirmed that Florida and Nebraska are the two states that have declined to form Complete Count Commissions; however, there are a number of local Commissions in both states. Texas and Vermont have committed and are in the process of doing so; South Dakota is still undecided.
• The Census Bureau confirmed that it will post on its Response Outreach Area Mapper (ROAM) the census tract designations for Internet First, the on-line and telephone response invitation to start; Internet Choice, mailed and hand delivered paper forms; and bilingual materials (English/Spanish), exclusive to the Internet First/Choice designations the week of November 18.

Treasury Department Proposed Rules on Minimum Required Distributions

The Department released a proposed regulation Thursday relating to the updating of the life expectancy guidelines used to calculate how much people must take out of their retirement accounts and other tax-favored employer-provided retirement programs when they reach 70.5 years old. This effort was undertaken due to President Trump’s August 2018 Executive Order. The changes are meant to reduce required minimum distributions, which would allow participants to retain larger amounts in their retirement plans to account for the possibility they may live longer. The plan would take effect in 2021.

Happening in the States

New Report Shows Economic Impact of Nonprofits in Texas

A new report from United Ways of Texas (UWT) highlights the important contributions the nonprofit sector makes to local communities and the broader Texas economy. UWT recently released Built for Texas: The Impact and Opportunity of the Nonprofit Sector that illustrates how nonprofits are economic drivers in their own right, supporting the state economy and the quality of life.

Built for Texas’ key findings:

• One in eight Texas private sector jobs are in or tied directly to the nonprofit sector, making the nonprofit sector in Texas a significant employer.
• Texas nonprofits contribute approximately $110 billion annually to the economy through wages paid, retail and wholesale purchases, and professional services contracts.
• The number of Texas nonprofits has more than doubled in the past decade—by almost 10% per year—demonstrating both the need for support and responsiveness of our communities.
• More than 95% of Texas’ nonprofits have a healthy debt to asset ratio—they have more assets than liabilities—pointing to the sector’s responsibility and commitment to innovative business practices.

Exclusive from our Colleagues at the National Council of Nonprofits

States Expanding Overtime Protections Beyond New Federal Rule

This coming Tuesday, November 5, is Election Day in many jurisdictions as voters will opt for candidates for public office in some states and decide the fate of numerous ballot measures in a few more. Voters in Mississippi, New Jersey, and Virginia will pick winners in nearly 400 seats in their legislatures. Gubernatorial races are being held in Kentucky, Louisiana, and Mississippi. Six additional states are holding elections to consider twenty statewide ballot measures. Taxes, criminal justice, redistricting, affordable housinThe Governor of Michigan announced last month her intention to increase the number of people qualifying for overtime pay by raising the minimum salary threshold under state law for determining whether employees can be categorized as exempt white-collar employees. As discussed in detail during the Council of Nonprofits’ Nonprofit Overtime Webinar on November 5, the Overtime Final Rule from the U.S. Department of Labor increases the salary minimum to $684 per week (about $35,500/year). Governor Whitmer reportedly will seek a higher threshold more in line with the level initially set by the Obama Labor Department in 2016, which would be about $51,000 per year now. If successful, Michigan would join several other states that have set state overtime standards that are higher than federal law. California and New York have adopted minimum thresholds of about $62,000 and $58,000 respectively. Maine sets the minimum salary threshold at $36,000/year based on a multiple of the state minimum wage (which is rising to $12/hour in January). A final rule adopted by Pennsylvania recently will raise the threshold to $45,500 by 2022, and a pending proposal in Washington State would up the pay level that qualifies a salaried person for overtime to nearly $80,000 by 2026. g, disability rights as well as funding for transportation, education and flood infrastructure are all hot topics. Oklahoma voters will consider Medicaid expansion after grassroot supporters managed to collect nearly twice the number of signatures needed. Colorado voters will decide whether to pare back the austere budgeting restrictions known as Taxpayer Bill of Rights (TABOR). If successful, the measure would repeal the mandatory taxpayer refund provision in the law and shift any surplus revenues to public schools, higher education and transportation. Local ballot measures range from dozens of tax advisory notes to help shape policy and fund the state operating budget in Oregon to 45 ballot measures across California, including one to restrict campaign contributions and require certain disclaimers.

North Carolina Ends State Taxation of IRA Charitable Rollovers

North Carolina enacted a bill last week that, among other things, ends the state taxation of IRA charitable rollovers. For federal tax purposes, individuals ages 70½ and older may make tax-free distributions to charitable nonprofits from their individual retirement accounts (IRAs). Until now, North Carolina donors who used the IRA charitable rollover had to pay state taxes on these charitable contributions. The new law ends this state tax on donations to nonprofits through IRAs, simplifying the process for donors and allowing them to contribute more fully to nonprofits from their IRAs. Donors may begin to use the IRA charitable rollover on their taxes this year.