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March 2015 Legislative Update

Check out our Nonprofit Bill Tracker for the 2015 Utah Legislative Session, up to date as of March 5, 2015.

pdf2015 Utah Nonprofit Bill Tracker

HB283: Training Seminar

Recently UNA held a presentation conducted by Ryan Roberts, CPA, from the Utah State Auditor's office. This presentation was provided to help the nonprofit community have a better understanding about the current implementation of HB 283, also known as the Nonprofit Entity Recipient of State Money Act (Utah Code 63J-9). UNA members can view slides and other tools from the presentation on our Training Media page. (Need a member login? Contact UNA)

pdfUtah Representative Ronda Menlove's Intent of HB283

UNA Action Alert: "America Gives More Act"

Why this legislation is important: If passed, this act would strengthen charitable giving across Utah and the U.S. by increasing the capacity of the emergency food network, land conservation efforts, and it would encourage charitable giving. A wide variety of people and businesses will benefit from this bi-partisan agreement.

  • It renews and makes permanent expired charitable giving incentives that promote donations of nutritious food to food banks, conservation of land, and contributions from individual retirement accounts directly to charitable organizations.
  • The bill will raise the tax deduction from 10% to 15% of the food inventory contributor's net income.
  • It enacts standards for determining the basis of contributed food for taxpayers other than C corporations, and determining the fair market value of such food.
  • Lastly, the bill also would permit taxpayers to claim charitable deductions from the previous year up through April 15.

What you can do: Earlier this summer, the U.S. House of Representatives passed the America Gives More Act by a strong, bi-partisan vote of 277 to 130. It is now scheduled at the Finance committee in the Senate. We encourage you to contact your Utah Senators Hatch and Lee, and share your support of this bill and its potential impact on Utah's most vulnerable populations, and its impact on charitable giving. Below are their contact links.

Find a summary and complete text and track American Gives More Act.

Feedback: Please let us know if you have contacted your senators, and if you have received a response.

March 18, 2014 UNA Legislative Update


UNA followed three bills in the most recent Utah legislative session impacting Utah's nonprofit community.
UNA's most active involvement this year was HB 283 where we submitted 16 recommendations and 14 were successfully adopted.

An interim study will be conducted this summer to further study this issue and look at broadening the bill to include private contracting entities as well. UNA will be part of this work.

We will also be working to clarify the impact of this bill to nonprofits and encourage state entities and nonprofits to work together to streamline the contracting process and to come up with win/win solutions that will provide benefits and clarification for both entities.

We will continue to keep you posted as well as identify ways you can be involved. UNA will also be providing training for nonprofits regarding the HB283 impacts to ensure full understanding and successful integration. Please watch our training calendar for these events.

HB283 Third Substitute Nonprofit Entity Receipt of Government Money

pdfRead UNA's Original Position Statement on HB 283

Highlighted Provisions:
• Impacts nonprofit organizations that receive over $500,000 of state funding or 51% of their budget is federal, state and local funding (Lines 80-82).
• Works to provide a method of communication between the State Auditor's office and State Departments overseeing grants (Lines 96-107).
• Ensures nonprofit board members have a basic understanding of their responsibilities as board members (Lines 119-124).
• States conditions for providing state grant money to a nonprofit entity (Line132).

Sponsors: Representative Menlove and Senator Bramble

HB350 Removal of Directors of Nonprofit Corporations

Highlighted Content:

This bill modifies provisions related to the removal of a board of director member of a nonprofit corporation.
The voting members may remove one or more directors elected by them with or without cause unless the bylaws provide that directors may be removed only for cause. If a director is elected by a voting group, only that voting group may participate in the vote to remove that director. Unless otherwise provided in the bylaws, a director may be removed when the director is elected by the voting members, only if a majority of the voting members votes to remove the director; or when the director is elected by a voting group, only if a majority of the voting group votes to remove the director (Lines 28-39).

Sponsors: Representative Pitcher and Senator J. Stevenson

SB133 Benefit Corporation Amendments


Benefit Corporations are designed to be a new class of corporation that are required by law to create a material positive impact on society and the environment and to meet higher standards of accountability and transparency.

This bill enacts the Benefit Corporation Act, including:
• Providing for the application
• Providing for incorporation and/or election to become a benefit corporation
• Allowing for termination of benefit corporation status
• Providing for a benefit director
• Imposing standards of conduct for directors
• Providing for a benefit officer
• Establishing a right of action
• Requiring an annual benefit report (see Lines 12-26)

Sponsors: Senator Valentine and Representative Stratton

UNA has launched a public awareness campaign that unifies, elevates, and strengthens Utah's collective nonprofit voice.

UNA's public policy statement is a guide to nonprofit policy action. It outlines the purpose of UNA public policy involvement, sets criteria for determining UNA's position on legislative issues, and provides policy procedures for action on issues that affect Utah's nonprofit organizations.

UNA's public policy statement also serves as a template for other nonprofit organizations formulating their own policy statements.

Public Policy StatementApplication for Endorsement

Up-to-date information on current issues affecting Utah's nonprofit organizations will be posted here. Please help us raise the nonprofit voice on these important policies.

Paying for Indirect Costs Essential to Success, New Report Finds

C
haritable nonprofits are less efficient and effective than they can be due to government policies and practices regarding payment for indirect costs, a new report from the National Council of Nonprofits finds. Investing for Impact: Indirect Costs Are Essential for Success details how a combination of governments' inconsistent terminology, arbitrary application of those terms, and unrealistic expectations impair the ability of nonprofits to deliver services that governments at all levels contract with them to provide. The report reviews research documenting that unrealistic reimbursement practices erode the ability of nonprofits to achieve outcomes and weakens the viability of the entire sector to provide services on behalf of governments.

"This new report documents the harm created by government policies and practices that effectively force nonprofits to subsidize government programs by covering the actual indirect costs that are incurred while performing contracted services for governments. This approach is not only unfair, but also unsustainable as nonprofits struggle in perpetual survival mode," said Tim Delaney, President and CEO of the National Council of Nonprofits.

Investing for Impact offers practical solutions that governments at all levels can adopt to strengthen the government-nonprofit contracting relationship while ensuring higher-performing partners and cost savings for taxpayers. The Council of Nonprofits calls on policymakers at all levels to

  1. provide and apply clear and consistent definitions;
  2. reimburse nonprofits for their legitimate indirect costs;
  3. allow nonprofits to utilize a standard indirect cost rate (e.g., 25%) or negotiate a rate based on actual costs;
  4. standardize grant and contract language to ensure consistency; and
  5. stop legislatively mandating artificially low limits on indirect costs in various funding streams.

For more on the report and on the Council of Nonprofits' government-nonprofit contracting reform initiative, go to www.govtcontracting.org

UNA Letters to Congressmen and Senators: Tax Reform and the Charitable Incentive

As the July 26 decision on tax reform approached, UNA sent the following letter to Utah Congressmen and Senators thanking them for their support of maintaining the charitable incentive and urging them to preserve it. Check out the articles within the letter: Congressmen_letter.pdf

Voter Engagement Pays Off in 2012

Nonprofits that worked to lift the voices of the communities they serve had a significant impact on voter engagement in the 2012 elections, according to a recently release report from Nonprofit VOTE. The report, America Goes to the Polls 2012, found that an estimated 58.7 percent of those eligible turned out to vote last November 6th – exceeding, with the exception of 2008’s record-breaking year, voter turnout in presidential elections for the past 40 years. This unexpected increase happened despite various obstacles that voters faced across the U.S., including a hurricane and last-minute policy changes that contributed to uncertainty and complications at the polls.

Minnesota, Wisconsin, and Colorado ranked in the top slots for voter turnout last year, with Hawai’i trailing in last place. Among the ten states that preformed the best, seven offered Election Day Registration. The report also discovered that as many as 33 to 40 percent of Americans voted early, an increase from 31 percent in 2008.

Sequestration and Nonprofits in Utah

When Washington policymakers failed to reach agreement to stop the $85 billion in arbitrary budget cuts known as “sequestration,” they let loose a wide array of cuts and changes that are likely to be felt first and frequently by charitable nonprofits. We feel the best way to demonstrate the adverse effect of sequestration on our communities is for charitable nonprofits like yours to share the stories and data of what it means to the people you serve. That is why the website GiveVoice.org has been launched by the National Council of Nonprofits.

As a member of the Utah Nonprofits Association, you are part of the nation’s largest network of charitable nonprofits, connected through the National Council of Nonprofits. This network is mobilizing to (a) alert the nonprofit community about how the new federal sequestration cuts will affect almost every charitable nonprofit in America – even those without any government contracts – and (b) start documenting the effects of the sequestration cuts on the work of nonprofits and the communities we all serve.

The cuts mean that nonprofit staff members and board members must raise billions of dollars more this year alone to handle the resulting increased demands for services. We encourage you to visit GiveVoice.orgto see how sequestration will have multiple ripple effects and then share your data and stories about what the cuts mean to the work of your nonprofit (including changes to your own staffing levels) at Givevoice.org/share-nonprofit-story so state, subsector, and national trends can be analyzed and the story of the impact documented and demonstrated.

Historically, the nonprofit community has suffered, because it has been fragmented and separated into silos. GiveVoice.org allows nonprofits here in Utah to be unified and strengthened as we elevate our collective voice for the public good.

If you are willing to be interviewed by the media about your organization’s sequestration impacts, please let UNA know by calling 801-496-1800 or emailing gtolman@utahnonprofits.org.

Also check out UNA's sequestration press release.

Protect the Charitable Giving Incentive

fiscal cliff cliff The charitable giving incentive is in danger of being reduced or eliminated. Please help us send Congress a message: Don’t throw nonprofits off the fiscal cliff! >

Urge our national leaders to protect the charitable giving incentive and oppose spending cuts by taking >two simple actions >.

Learn more about the fiscal cliff’s impact on nonprofits and the charitable giving incentive.

What's at Stake?>

The Fiscal Cliff: > Congress is running out of time to reach an agreement on nearly $55 billion in arbitrary spending cuts to domestic programs and $500 billion in tax hikes that will weaken many public programs and services performed by nonprofits, increase demand on nonprofits, and slow the economy if no action is taken by December 31. The Congressional Budget Office and many economists are predicting a double-dip recession if no action is taken by policymakers in Washington to steer the country away from the automatic spending cuts and tax increases known as the fiscal cliff.

Significant Threat to Charitable Donations: > Democrats and Republicans alike are pointing to an alternative proposal that would raise some tax revenue but devastate the work of nonprofits and the communities they serve. Policymakers are giving serious consideration to a plan to cap itemized deductions - including charitable deductions - at $17,000 or $25,000 for an individual. By all accounts, this approach would have the most significant, adverse impact on the work of charitable nonprofits because a cap on itemized deductions would be fully used up by fixed-cost deductions, such as for mortgage interest and state/local taxes.A cap would leave little or no room for discretionary gifts to the work of the charities in ourcommunities. >

Background

>The fiscal cliff contains two major threats to charitable nonprofits. The first threat comes from the automatic $54.6 billion across-the-board sequestration cuts scheduled to occur on January 2, 2013. These spending cuts to domestic programs will both (a) increase the public's demand for services provided by nonprofits and (b) reduce funds for governments to pay their contracts with nonprofits.

The arbitrary and across-the-board spending cuts to domestic programs that are due to take effect on January 2 will be added on top of four straight years of cuts at the local, state, and federal levels, including $1 trillion in cuts authorized by Congress in recent years. During this recession the workload of many of the state's nonprofits has increased as poverty levels have risen. Nationwide, research shows that the demands on the nonprofit sector have soared since at least 2008, increasing 85 percent in 2011, on top of a 77 percent increase in 2010, a 77 percent increase in 2009, and a 73 percent increase in 2008. After years of a struggling economy, nonprofits simply do not have the capacity to continue to bear this additional burden.

 

The second threat comes from how Congress and the President will avert the fiscal cliff - whether permanently or with a short-term fix. First suggested during the presidential campaign by Governor Romney, policymakers are giving serious consideration to a "bi-partisan" proposal to cap all itemized deductions at a specific level, such as $17,000 or $25,000 per individual taxpayer. Yet the national average for all deductions - health care, mortgage interest, state/local taxes paid, and charitable giving - is more than $26,000.

Such a cap would eliminate any tax incentive for donations to charities. The big fixed-cost deductions, such as for mortgage interest (national average of $10,640 in 2010) and state/local taxes (national average of $11,593 in 2010), that combined total $22,233, would eat away the entire deduction at the levels being discussed, leaving no room for discretionary gifts to the work of charities.

A cap on the charitable deduction could deal the final blow to many nonprofits, adding to the several layers of cuts that have already left many organizations struggling to keep their doors open and services going. Maintaining the charitable giving incentive is essential to the ongoing work of nonprofit organizations in delivering needed services, enhancing quality of life, and uplifting the spirit of faith, innovation, and inspiration in local communities across Texas and America.

Regardless of political party or philosophy, politicians presume that nonprofit organizations will just step in to fill the gaps and address the needs in our communities. Capping the charitable deduction will make such presumptions impossible, harming a sector of the economy that currently employs about 10 percent of the workforce nationally, and hurting individuals throughout the state who will no longer receive needed programs and services.

Take action!


Street Light Fees

dt.common.streams.StreamServer.clsUNA sent letters to Salt Lake City Council members urging them to vote against the implementation of a street light "fee."

Read more here: http://bit.ly/X3CFh8

The streetlight fee was passed at the Tuesday, December 11 Salt Lake City Council meeting.

Read more here:

http://www.sltrib.com/sltrib/news/55447963-78/council-simonsen-fee-neighborhood.html.csp

http://www.ksl.com/?nid=148&sid=23354794

City street lighting is vital to the safety and security of our city, but balancing the budget on the backs of Salt Lake City’s nonprofit organizations will only increase the city’s problems.

There are over 700 nonprofits in Salt Lake City listed in the IRS August 2012 database, and this “fee” would impact services nonprofits provide to clients in Salt Lake City.

A recent Utah Nonprofits Association sampling survey showed that 66.7% of Utah’s nonprofits are going to fall short of their revenue goals in 2012. When asked how they were going to deal with this situation, 50% reported that they would need to turn away clients in 2013.

Nonprofit status is given in recognition to the contributions to society that charitable nonprofits make on a daily basis. Charitable nonprofits reduce the burden of governments in countless ways which is a large reason that properties of nonprofits are tax exempt. The last five years has delivered one cut after another to Utah’s nonprofits from business donations and yearly reductions in government-funded services. When the public cannot get the help it needs from government, it turns to nonprofit organizations, and government expects nonprofits to step up and fill in the gaps with no additional monetary aid. Salt Lake City’s nonprofit organizations being asked to pay fees for street lighting, places an additional burden on nonprofits that the organizations simply cannot afford in their already cash-strapped budgets. Nonprofit organizations are tax exempt for a reason—so they can provide valuable services that government and business do not provide.


Three Simple Things Elected Officials Can Do to Help Utah's Nonprofits

House ChamberThe National Council of Nonprofits has identified three nonpartisan, non-controversial policy solutions that, if adopted by elected statewide and local officials, will apply the problem-solving skills of charitable nonprofits to many of the issues policymakers will face at the state and local levels in 2013. The new report, "Three Simple Things Statewide and Local Elected Officials Can Do...to Strengthen Communities, Improve Government, and Save Taxpayers Money," calls on newly-elected officials and current office holders to:

  1. Establish a Government-Nonprofit Task Force charged with streamlining contracting to cut needless red tape and lower costs for nonprofits and taxpayers.
  2. Create a Nonprofit Liaison to establish ongoing opportunities for elected statewide and local officials and charitable nonprofits to work together on regulatory and policy issues impacting charitable nonprofits and the communities they serve.
  3. Extend state small business programs to small community-based nonprofits, because nonprofits are job creators too.

While charitable nonprofits may not endorse or oppose political candidates or parties, they are free to advocate for the issues that impact their ability to fulfill their missions.

You can help get the word out by raising these issues with your elected officials at meetings and events. Let us know what they say.

Click here to find your elected officials.

An immediate series of sequestration cuts to community services will take effect and threaten thousands of Utah jobs, families, and communities if a Congressional agreement is not reached today. Chris Bray, Executive Director of Utah Nonprofits Association states, “Demand for nonprofit services are up and financial resources are down. These cuts come on top of a five-year challenging financial period. Business donations to nonprofits have been declining or flat, and there have been reductions in the availability of state and federal grants. During this same time period, philanthropy foundations have seen a significant rise in applications for available funds.”

 

The cuts have been framed as an impersonal budget deficit fix for the future, but they will have significant impacts now. Sequestration in Utah means approximately $347,000 in funding cuts to services that provide meals for seniors through the Nutrition Assistance for Seniors program; up to $59,000 in cuts to the STOP Violence Against Women Program resulting in up to 200 fewer victims being served; and up to 400 children being cut from Head Start and Early Head Start services. See a complete list of Utah impacts here . Such losses will have lasting impacts on Utah’s communities and citizens.

Nonprofits are encouraged to contact UNA to tell their story on how sequestration will fully impact their organization. UNA is providing strategic and financial planning resources to assist nonprofits during this difficult and critical time.

Some content was provided by The Washington Post . To read the full article please click here