Senate Finance Committee Unveils Health Care Bill - America's Healthy Future Act of 2009

After the month-long August congressional recess, lawmakers returned to Capitol Hill in September, continuing the ongoing discussions about how to fund the overhaul of our current health care system.  On September 16 Senator Max Baucus (D-MT), Chairman of the Senate Finance Committee, unveiled his version of healthcare reform, "America's Healthy Future Act of 2009."  The America's Healthy Future Act contains 564 amendments, 31 of the amendments call for capping itemized deductions of upper-income taxpayers at 35 percent.   The bill would:

• Require nonprofit hospitals "to conduct a community health needs assessment at least once every three years and adopt an implementation strategy to meet the community needs." Also, it requires  the Internal Revenue Service to review information about a hospital's community-benefit activities, currently reported on the Form 990 informational tax return, at least once every three years and the Secretary of the Treasury and the Secretary of Health and Human Services "to annually report to Congress the levels of charity care, bad debt, expenses, unreimbursed costs of means-tested government programs, and unreimbursed costs of non-means tested government programs incurred by private tax-exempt, taxable, and government hospitals as well as the cost of community benefit activities incurred by private tax-exempt hospitals."
• Offer federal tax credits to small businesses, but it would benefit only employers that pay income tax - a category that excludes most nonprofit groups.  As one of several hundred amendments that senators have offered to Senator Baucus's text have proposed that "nonprofit entities that meet the eligibility requirements of the small business credit would be eligible to receive the credit." Independent Sector, a coalition of charities and foundations, has proposed that the tax credit be applied to the amount that employers send to the government to cover income taxes withheld for their employees - an approach that would cover nonprofit groups.

The bill was scheduled for markup by the Senate Committee on Finance yesterday. Modifications to the Chairman's Mark - America's Healthy Future Act of 2009.

IRS Update

·         Raises Fee for Applications for Tax-Exempt Status
The Internal Revenue Service says it will raise the fee it charges organizations to apply for tax-exempt status as charities beginning with applications that are postmarked after January 3, 2010.For organizations with annual gross receipts that average more than $10,000 during the four years before they file their application, the fee increases from $750 to $850.  For organizations with annual gross receipts that average $10,000 or less during the four years before applying, the fee goes from $300 to $400.  But the IRS said that it will lower some fees sometime next year after it makes available a Web-based software program, known as Cyber Assistant, that is designed to help organizations "prepare a complete and accurate" application for charity status, which is called the Form 1023.  Read the IRS release

·         IRS Turns Down Ideas to Redesign Tax Return for Foundations
The Internal Revenue Service has rejected suggestions that it redesign the informational tax return filed by private foundations and simplify the filing rules for small private foundations.  The tax agency rebuffed the ideas of the federal Taxpayer Advocacy Panel, made up of 99 "citizen volunteers" from across the country. The panel noted that all private foundations must file the return, known as the Form 990-PF. "Having just finished redesigning [the] Form 990, we are keenly aware of the costs involved, to the agency and third parties, of major form redesigns," the IRS said. "We have not observed sufficient support from the sector that would facilitate implementation of a redesigned Form 990-PF in the near term. Further, it would have to compete with other redesign projects, some of which are more pressing."  The IRS said it was appropriate "to take a 'wait and see' approach" to changing the form for foundations. "While the redesigned Form 990 has been well-received, it has not yet been tested by the filing community," the IRS said. "We believe it prudent to first evaluate the Form 990's use for a few filing seasons before undertaking a massive redesign of the Form 990-PF."  Read the article

·          On-line Tool to Help Exempt Organizations Complete 2008 Form 990. 
The Service's new tool uses a practical example to show organizations how to navigate key areas of the redesigned Form 990 and Schedules.  The online resource includes a series of seven short on-line videos explaining how to complete key sections of the Form 990 and highlights some of the key changes in the Form.  The case study includes a set of facts describing organizational and financial aspects of EODR, and a completed Form 990 based on those facts. A video series walks you through key reporting issues common to most organizations required to file Form 990.

Updates from the State Capitol

Recently Signed Law

• As of September 11, this session 39 bills have been passed by the legislature and signed into law. The most recent, 2009 Wisconsin Act 39, signed on August 13, 2009, lowered the minimum hunting age to 10 years old as part of a newly-created hunting mentorship program. The law went into effect September 1.  A list of enacted legislation from the 2009 session can be viewed at: http://www.legis.wi.gov/2009/data/acts/.

Recent Bill Introductions

·         2009 Assembly Bill 413, introduced on September 4, would allow judges to increase the maximum period of imprisonment if a day care provider commits sexual assault or causes bodily harm to a child.

·         The Legislative Council introduced 2009 Senate Bill 279 on August 28, and 2009 Assembly Bill 408 on August 31. The bills were prepared by the Council's Special Committee on Domestic Biofuels.

·         2009 Assembly Bill 406, introduced on August 31, would require that anyone challenging a person's right to vote must be a resident of the same ward or election district of the elector he or she wishes to challenge and would require the challenger to provide proof of residence.

·         2009 Senate Bill 275, introduced on August 26, would prohibit employment discrimination based on an applicant's credit history.

Articles and Reports

Poverty in the United States, 2008
The recent U.S. Census Bureau poverty statistics are put in historical and geographical perspective.

How Foundations Can Do the Most to Advance the Needs of Minorities
At this time last year, the foundation world was swept up in a healthy and heated debate about diversity following the proposal of a new California law that would have required large private foundations to report race and ethnicity data about all grantees. One year after the proposal of A.B. 624, Robert K. Ross, President and CEO of the California Endowment, notes the bill did start meaningful conversation in the field on issues of inclusion. Though the law was not enacted, in an opinion piece for the Chronicle of Philanthropy, he asks what foundations learned as a result of the situation and what we can do differently.

Bending the Curve: Effective Steps to Address Long-Term Health Care Spending Growth  suggests that ensuring health coverage for Americans will require a structural overhaul that will reward providers for higher quality care at lower costs. 

Long-Term Cost of the American Affordable Health Choices Act of 2009 from the Peter G. Peterson Foundation looks at the long-term budget implications of enacting the current proposed legislation. According to the report, while the plan costs would be sound from 2010 to 2019, an expected rapid growth in healthcare costs would inflate the federal cost to $1.01 trillion for the years 2020 to 2029. CEO David M. Walker asserts that "for healthcare reform to be fiscally responsible, it must not just pay for itself over ten years and beyond, it should also result in a significant reduction in the tens of trillions of dollars in the federal government's unfunded healthcare promises."

Upcoming Programs

Thursday, October 8
Noon to 1:30 p.m.
Marquette University Law School, Sensenbrenner Hall, 3rd floor
Lunch will be provided, no charge

This program is cosponsored by the Milwaukee Legal Initiative for Nonprofit Corporations, a public-service program of Marquette University Law School, and the Helen Bader Institute for Nonprofit Management at the University of Wisconsin - Milwaukee. More information and reserve your spot by September 30.

DFW Day at the Capitol: Meet With Members of WI Legislature

Thursday, November 12
Madison, WI

Engaging legislative members and their staffs is critical to maintaining and enhancing a political environment that promotes philanthropy and charitable giving.  The Day at the Capitol is a great opportunity for your Members of the Wisconsin State Legislature to hear directly from you.  If you are interested in participating or have additional questions, contact Rose Lillich at rlillich@dfwonline.org or 414-270-1978.