ACR Legislative Update: January 25, 2008

Update from Capitol Hill: As we begin the New Year, Congress is at work contemplating new tax policies for 2008, most notably, an economic stimulus package to help boost the economy in the wake of the sub-prime mortgage crisis.

In keeping with the view in Washington that a proposal must be “temporary, timely, and targeted,” President Bush announced last week his proposal for $145 billion in income tax relief and incentives for businesses – to be put in place as soon as possible.

On Thursday, we learned that Congressional leadership had reached a “tentative” deal with the Administration to provide for a tax rebate of up to $600 for single taxpayers and $1,200 for those filing jointly. Additionally, the package would:
Double the amount a small business can deduct for new investments; and
Increase the conforming loan limits for Fannie Mae and Freddie Mac from $417,000 to $625,500.

For more information on the package, click here.

IRA Charitable Rollover: Last year, Congress adjourned before expanding or extending the law enacted in the wake of Hurricane Katrina that would allow individuals to contribute up to $100,000 from their Individual Retirement Account (IRA) to a charity, without counting the distribution as income.

The provision has broad support from many on Capitol Hill as well as in the community and there continues to be a great deal of urgency to get the provision retroactively extended. While the economic stimulus package has garnered the vast majority of headlines from Capitol Hill in the first part of the legislation session, we do expect the IRA Charitable Rollover, as well as other tax items that expired at the end of last year, to be considered in the Spring – likely as part of another moving tax bill.

New Member on the Senate Finance Committee – Senate Minority Leader Mitch McConnell (R-KY) has announced that Senator John Sununu (R-NH) will be appointed to the Senate Finance Committee. Senator Sununu will fill the void that was left after the sudden retirement of former Senate Minority Whip Trent Lott (R-MS).

For additional information, please click here.

Update from the States: California. This week, the California State Assembly considered legislation – AB 624 – that would impose new disclosure requirements on foundations (public, private and corporate) with assets over $250 million.

According to the legislation, which was sponsored by Assemblyman Joe Coto, foundations would be required to collect and publicly report information regarding the composition of a foundation’s board of trustees as well as information on how much of their grant portfolio is going to minority-led organizations. Information such as the race, gender, ethnicity and sexual orientation of board members would be required under this legislation.

Further, we understand that the California State Assembly will vote on the legislation on Monday, January 28th. In the California State Legislature, like in the United States Congress, bills must pass through both chambers before being sent to the executive office – the Governor’s office. There is currently not a California Senate companion bill to AB 624, making timing on the issue uncertain.

Please click here to view the statement of Philanthropy Roundtable President Adam Meyerson on the California legislation.

Philanthropy in the News: On Tuesday, January 22nd, there was an editorial in the New York Times entitled, “Charity Begins in Washington”. The editorial raises the fundamental question of whether certain charitable contributions – say, to the ballet, symphony, museum, etc. – should be tax-deductible.

According to the author, “Philanthropic contributions are usually tax-free. They directly reduce the government’s ability to engage in public spending. Perhaps the government should demand a role in charities’ allocation of resources in exchange for the tax deduction. Or maybe the deduction should go altogether. Experts estimate that tax breaks motivate 25 to 30 percent of contributions.”

Click here to view the article in its entirety.

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