Included in this Round-Up
- January 2021 Context
- Report from Capitol Hill Day, Jan 13, 2021
- National Privacy Legislation
- Privacy Legislation: Activity in the States
- USPS Postal Rates & Postal Reform Legislation
- Universal Charitable Deduction
- Expanding the IRA Charitable Rollover
- Update on Executive Order Combating Race and Sex Stereotyping
- Donor Privacy (Schedule B, Form 990)
We are entering a period of major transition in Washington with a new President inaugurated on January 20, and control of the Senate shifting from the Republicans to the Democrats.
What will this change of the control of the White House and the Senate mean to the nonprofit sector? At this point it is too early to tell, particularly given that the issues we care about most largely do not fit into an easy description where one of the two parties favors our position, while the other party opposes us. Very simply, the legislative agenda of The Nonprofit Alliance is, at its heart, bipartisan in nature.
Report from Capitol Hill Day
Just seven days after the Capitol was overrun by an angry, violent mob, The Nonprofit Alliance conducted its fifth Capitol Hill Day, and our second that was virtual rather than face-to-face with legislators and their staffs. Over 20 TNPA members from across the country joined these virtual meetings to advocate for issues important to us, exercising our First Amendment right “to petition the Government for a redress of grievances.” And importantly, we did so peaceably.
It was a fast-paced day, nine meetings in all.
The centerpiece meeting of the day was with Senator Tom Carper (D-DE), who was the co-author of the landmark Postal Reform Act of 2006. Senator Carper was very generous with his time, allowing for a robust discussion about the state of the Postal Service.
First, Senator Carper focused on the need for postal reform legislation, which would relieve the USPS of the enormous liability of funding retiree healthcare costs by moving postal employees to Medicare. The Senator emphasized that while there is support for moving this liability to Medicare on the committee with postal jurisdiction (Senate Homeland Security & Governmental Affairs), the jurisdiction over Medicare, since it is funded via a tax, is with the Senate Finance Committee. Accordingly, we will be lobbying the Senate Finance Committee, as well as the companion House tax-writing committee, Ways & Means, on this issue.
Next, we considered the challenge posed by the Postal Regulatory Commission (PRC) having claimed the power through its rulemaking authority to upend the CPI cap incorporated in the Postal Reform Act of 2006. Should the rule survive legal challenge, we could see future postal rate increases substantially higher than the rate of inflation.
Accordingly, while Congress is technically “insulated” from the issue of postal rates, leaving that to the PRC, The Nonprofit Alliance will nonetheless be asking Congress to put pressure on the Postal Service to restrain from placing unfair burdens on our sector when it is stretched to the limit – as it currently is.
During our 8 other meetings on January 13, we covered the full panoply of issues important to TNPA:
We had an additional postal meeting with the staff of Senator Gary Peters (D-MI). Senator Peters is the incoming chair of the Senate committee with postal jurisdiction (Homeland Security & Governmental Affairs).
We had three meetings on the need for national privacy legislation, including a meeting with the staff of Congresswoman Cathy McMorris Rodgers (R-WA). Congresswoman McMorris Rodgers is the incoming top Republican on the House Energy & Commerce Committee, the committee with principal jurisdiction over privacy legislation in the House.
We had a meeting with the staff of Senator Tim Scott (R-SC). Senator Scott is a cosponsor of legislation to expand the Universal Charitable Deduction and make this provision of the Tax Code permanent.
We also had two meetings on the issue of expanding the IRA Charitable Rollover.
All-in-all, it was a very successful day and laid a solid foundation to continue moving our issues forward in the 117th U.S. Congress.
National Privacy Legislation
While Senate Republicans were generally supportive of enactment of national privacy legislation, Senate Democratic control could pose a hurdle toward enacting this badly needed legislation.
On the other hand, in the House, one of the key advocates for national privacy legislation is a Democrat, Congresswoman Suzan DelBene (D-WA). In the last Congress, Congresswoman DelBene had a very thoughtful privacy bill, which had 34 co-sponsors, all Democrats. The Congresswoman plans to reintroduce her bill in the new Congress, with some modifications and seeking bipartisan co-sponsorship.
What this means for nonprofits: Stay tuned!
TNPA will continue to work closely with Congresswoman DelBene on her legislation.
National privacy legislation has been, and will continue to be, a top legislative priority of The Nonprofit Alliance. We will continue our bipartisan efforts in both the House and Senate.
Overall, it is too early to get a clear read how Congress will move forward on national privacy legislation, let alone what will be the position of the incoming Biden Administration.
The need for one national privacy standard, rather than being subject to a “patchwork quilt” of varying and often contradictory state privacy laws continues as a major challenge. The coronavirus pandemic slowed down this issue in the states in 2020, but in 2021 we already face the challenge of a number of states considering privacy laws (in addition to California which already has its own). Individual state bills are detailed below.
A few key elements are necessary for any effective national privacy statute, including:
- Federal legislation as a ceiling rather than a floor, pre-empting state-by-state compliance variations
- Opt-out (rather than opt-in) frameworks to provide consumers with choice and control
- Litigation must be filed in federal court – not state courts – to better ensure a more uniform application of the law
- No private right of action, which would result in numerous, often frivolous, class action lawsuits being filed.
Privacy Legislation: Activity in the States
As anticipated, privacy legislation is coming back in full force. The pandemic derailed over twenty such legislative efforts in 2020. The five noted below are just the beginning. If this alone doesn’t make the case for federal pre-emption, the need will be crystal-clear when another one or two dozen states follow suit before spring is over.
Minnesota HF 36, sponsored by Rep. Mohamud Noor, DFL-Minneapolis, was referred to the House Commerce, Finance, and Policy Committee on January 7. The bill contains robust disclosure requirements before personal information is collected and additional disclosures with an opt-out before personal information may be sold to a third party. It also includes a private right of action. Coverage is limited to “businesses.”
New York SB 1349, sponsored by Sen. Brad Holyman, D-Manhattan, was referred to the Senate Consumer Protection Committee on January 11. The bill would require a business that retains a customer’s personal information to make that information available to the customer free of charge upon request. If a business discloses the information to third parties it would be required to provide the names and contact information of the third parties that received the information and the categories of personal information that were disclosed. The companion bill, AB 400, sponsored by Asm. Nily Rozic, D-Queens, was referred to the Assembly Consumer Affairs and Protection Committee on January 6.
North Dakota HB 1330, sponsored by Rep. Jim Kasper, R-Fargo, was referred to the House Industry, Business, and Labor Committee on January 13. The bill would prohibit a “covered entity” (no explicit exemption for nonprofits) from selling a user’s data unless that user opts-in to allow the sale. A covered entity that violates the bill’s provisions would be civilly liable to the user for a minimum of $10,000.
Washington SB 5062, sponsored by Sen. Reuven Carlyle, D-Seattle, was referred to the Senate Environment, Energy, and Technology Committee on January 11. The bill is scheduled for an executive session in that committee on January 21 at 10:30 AM. It is modeled on California’s comprehensive privacy law and gives consumers broad rights of notification, data deletion, and opt-outs. The bill contains only a very narrow private right of action and explicitly does not cover nonprofits (but, ominously, only until July 31, 2026). Given the extensive work on the legislation in previous sessions, the bill is expected to move quickly to passage.
Oregon HB 2392, a tax on sales of data sponsored by Rep. Pam Marsh, D-Ashland, was pre-filed and will be considered when the legislature convenes on January 19. The bill would impose a tax of five percent of the gross receipts for business engaging in the sale of state resident’s personal information.
The tax bill, as well as the data privacy bills, have their reach (jurisdiction) circumscribed by constitutional limitations. Some bills attempt to address these issues (to a degree) with legislative language where others are silent. In either case, the limitations remain.
USPS Postal Rates & Postal Reform Legislation
As noted above in the summary of Hill Day, the Postal Regulatory Commission (PRC) has used its rulemaking authority to upend the Consumer Price Index (CPI) cap of the Postal Reform Act of 2006.
What this means for nonprofits: Significant Concern.
The PRC has opened up the possibility of postal rate increases that are substantially higher than the rate of inflation, starting as early as mid-2021.
Accordingly, while Congress is technically “insulated” from the issue of postal rates, leaving that to the PRC, The Nonprofit Alliance will nonetheless be asking Congress to put pressure on the Postal Service to restrain these potentially large rate increases.
We will also be playing the “long game” of advocating for comprehensive postal reform legislation, particularly as it relates to moving the enormous cost of funding postal employees retiree healthcare costs from the USPS to Medicare.
Universal Charitable Deduction
The $900 Billion Relief Package signed into law in December raised the cap on the Universal Charitable Deduction from a flat $300 for 2020 (passed as part of the first major Coronavirus Relief Package in March 2020) to $600 for married couples filing jointly and $300 for individuals for 2021.
What this means for nonprofits: Good News!
Importantly, this deduction is “above the line” which means that a taxpayer does not have to itemize in order to claim the deduction. This greatly expands the number of taxpayers (and donors) who are eligible for a tax break for their charitable giving.
Bottom Line: TNPA will continue our sustained effort on this very important provision of the Tax Code, working to raise the cap on the universal charitable deduction, and ultimately, make it a permanent part of the Tax Code.
Exanding the IRA Charitable Rollover
The House is positioned in early 2021 to raise the current limit from $100,000 to $130,000 on the amount an individual can contribute annually to an IRA Charitable Rollover, starting at age 70 1/2.
What this means for nonprofits: A win looks likely…
Now TNPA wants to make sure the Senate does the same.
To make the rollover even more broadly available, TNPA will continue advocating for also lowering the age of eligibility to establish an IRA Charitable Rollover from age 70½ to 65. Specifically, the provision we sought would allow people between age 65 and 70 1/2 to make a one-time payment of up to $100,000 to establish an IRA Charitable Rollover.
With 10,000 baby boomers turning 65 each day, and a number of them with large IRAs, this could be an important measure to increase contributions to our sector.
Executive Order Combating Race and Sex Stereotyping
The Executive Order (EO) issued by President Trump on September 22 to ban diversity trainings was temporarily blocked in federal court last month on the basis of First Amendment free speech. The plaintiffs in the case, one of several pending lawsuits challenging the EO, were a group of nonprofit organizations that work on behalf of the LGBT community.
President-Elect Biden is broadly expected to fully rescind the EO.
Donor Privacy (Schedule B, Form 990)
New York AB 1141, sponsored by Asm. Amy Paulin, D-Scarsdale, was referred to the Assembly Governmental Operations Committee on January 7. The bill would require sensitive data concerning 501(c)3 nonprofits that is reported to the Attorney General or Deparment of State to be used solely for the purpose of enforcing existing laws and would prohibit the publication of financial disclosure records that include the names, addresses or telephone numbers of donors and the amounts donated.
This appears to be a patch, possibly endorsed by the New York AG. It corrects hasty legislation attached to NY’s 2020 budget which, apparently, would have obliged the Department of State to make complete Forms 990 (including unredacted Schedules B) available to the public.