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CAA News Today

Legislative Update

posted by Christopher Howard — Nov 16, 2006

In contrast to the House version of the Interior Appropriations bill, in which the National Endowment for the Arts and the National Endowment for the Humanities received an increase of $5 million each, the Senate Appropriations Committee approved level funding for both endowments. The Senate did include an increase for the Department of Education’s Arts in Education program and for the Corporation for Public Broadcasting (CPB). The House version, on the other hand, followed President George W. Bush’s request for severe cuts to CPB and for zeroing out Arts in Education. Historically the Senate has reversed the president’s recommendation. The full Senate has yet to vote on the bill and, at press time, it seems unlikely it will pass a separate Interior Appropriations bill. Congress is slated to recess through the November elections, which leaves little time for it to complete unfinished legislation, including the Interior Appropriations bills that fund all federal programs. Congress will most likely put off appropriations legislation and pass a continuing resolution to keep the government running at the previous fiscal year’s funding levels through November, when it returns for a lame-duck session to finish the appropriations process. Regardless of whether most spending bills are acted on separately or grouped into a large omnibus package, House and Senate Appropriations Committees need to begin conferencing on fiscal year 2007 spending before the end of the calendar year. Meaningful work on the Interior bill is not expected until after the November election.

In other legislative news, the Senate passed the Pension Protection Act of 2006, which contains a series of provisions designed to stimulate charitable giving and eliminate perceived abuses of charity laws by donors and nonprofit organizations. President Bush signed the measure into law in August. The legislation provides a provision including appraisal reform, increased penalties and fines for excess benefit transactions, and a change to the tax treatment of fractional gifts that greatly restricts donors’ abilities to stretch out gifts of art over several years, which is important for gifts of major artworks. The provision is expected to have a negative effect on museums’ ability to acquire art from private donors. The museum community is working to make recommendations to Congress to eliminate or change the fractional-gift provision as lawmakers consider introducing a bill to revise the measure. Among the charitable incentives included in the legislation is one that would allow donors age 70½ or older to make tax-free distributions of up to $100,000 directly to charitable organizations from either traditional Individual Retirement Accounts (IRA) or a Roth IRA. As enacted, the law is effective only for two years. The legislation does not include the long-sought “artist deduction” that would allow artists to claim a fair-market-value tax deduction when they donate their own works to collecting or educational institutions; nor does it include a charitable-giving provision allowing people who do not itemize deductions on their returns to write off a portion of their charitable donations, something the nonprofit community has repeatedly asked for.