1. The 2011 Texas Legislative Session:
What Happened and What’s Next
Robert Pinhero, Vice Chair for Public Policy and Advocacy, Texas
Association of Nonprofit Organizations (TANO)
A look at the Texas Association of Nonprofit Organization's final legislative report
for 2011, examining legislation affecting the nonprofit sector as a whole. In
addition to explaining new legislation, we'll also take a look at bills that failed to
pass, since it's likely that we will see them again in the future. Find out what our
sector needs to do to ensure our voices are heard and how to stay within the
legal boundaries of advocacy and lobbying.
Presented at the Texas Nonprofit Summit 2011

2. 8001 Centre Park Drive, Suite 120
Austin, TX 78754
(512) 381-1490
(512) 381-1499 Fax
info@tano.org
www.tano.org
82nd Texas Legislature, 2011 Regular Session
SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS
(as of 7/7/11)
Compiled by Richard W. Meyer, Attorney at Law
(512) 451-8145 rickmeyer@tano.org
Final TANO legislative report for 2011:
The Texas Legislature ended its 82nd Regular Session on May 30, and numerous bills were
presented as listed here that directly or indirectly affect the interests of nonprofit organizations. The
following summary lists bills and issues that should be of concern to leaders in the nonprofit sector in
Texas. Almost 6,000 bills were filed, and the state’s budget challenges occupied most of the legislators’
attention during the 140-day Regular Session. The First Called Session was intended to complete
unfinished budgetary issues and to consider other special subjects designated by the Governor, and it
ended June 29.
Bills that passed are underlined. A notation in italics following a bill summary indicates the bill’s
status at the end of the session.
Important issues monitored by TANO during the 2011 Regular Session include:
• Passage on May 19 of the bill to continue the state’s nonprofit capacity-building task force and
inclusion of all stakeholders such as TANO (HB 1965, signed by the Governor)
• Concern from nonprofit leaders regarding proposed expansion of the Attorney General’s
investigatory authority over nonprofits, foundations and trusts (HB 2921, SB 342—did not pass)
• Passage of a bill to protect free speech and advocacy rights of individuals and organizations by
permitting an accelerated court review and dismissal of a suit that is determined to be without
merit (HB 2973, signed by the Governor)
• Passage of a bill that limits disclosures of personal data and internal information that can be
required of nonprofits, trusts or foundations that contract with public agencies (HB 3573, signed
by the Governor)
• Clarification of health laws regulating non-commercially produced food items that are prepared
for sale at organization fundraising events, gatherings, or farmers’ markets (HB 1139, HB 2084,
HB 3387—bills did not pass)
• State legislation to roll back the imposition by local governments of “PILOT” fees (payments in
lieu of taxes) on property owned by nonprofit, charitable and religious organizations (SB 714, HB
1022—did not pass).
TANO SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS
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3. Issues raised in the 2011 First Called Session include:
• State revenues generated by purchases of extra-fee specialty auto license plates will not be
diverted to the state’s general fund, as proposed in the Regular Session, but will continue to
benefit the organization or cause they advocate, thanks to attention to this issue (SB 1, First
Called Session, signed by the Governor).
• Persons registering as lobbyists for nonprofit organizations will see a 50 percent increase in their
annual fee, and those representing Section 501(c)(6) organizations will now be able to benefit
from this special registration fee category and reduced reporting requirements (SB 1).
Bills considered in the 2011 legislature affected nonprofits in the following areas:*
Advancing and regulating nonprofit organizations:
HB 1965: The promising nonprofit capacity-building initiative from HB 492 enacted in the 2009
legislative session created the Task Force on Strengthening Nonprofit Capacity. Its work will be
continued by HB 1965 along with an expanded Interagency Coordinating Group, now expanded to
include executives representing 20 large state agencies. Both groups are tasked with improving
contracting relationships with state government, cooperating and collaborating with community and faith-
based organizations, identifying duplications in nonprofits’ activities, and identifying gaps in state
services that nonprofits could fill. These efforts establish a long-needed “footprint” in the state
government realm and advance the nonprofit sector’s importance in public affairs. Passed by House and
Senate; signed by the Governor, eff. 9/1/11.
HB 2921 (=SB 342) **: Would significantly expand the authority of the Attorney General’s Office to
investigate the internal operations of charitable organizations, without bringing formal criminal or civil
charges, if the Attorney General has reason to believe that an unlawful act is occurring or is about to
occur. Any charity or foundation could be required to provide, under oath, answers to questions
regarding alleged unlawful activity, produce any document maintained and requested, or have its
representative personally questioned and examined under oath by state investigators. HB 2921 voted
favorably from House State Affairs Committee; no House floor action. SB 342 left pending in Senate
Business and Industry Committee.
SB 587: The Attorney General will have venue to bring a Probate Code enforcement or investigatory
action in Travis County against a nonprofit entity located anywhere in the state that is claimed to be
violating its duties as a charitable trust. Passed Senate and House; signed by the Governor, eff. 9/1/11.
HB 593: The State Auditor would have authority to examine and audit the books and records of any
grantee of federal ARRA “stimulus” funds (American Recovery and Reinvestment Act). No committee
action.
Fundraising activities of nonprofit organizations:
HB 457: Charitable organizations conducting raffles will be permitted to expand their efforts with online
solicitations to their supporters. Passed by House and Senate; signed by Governor, eff. 5/27/11.
HB 1139: Would define and extend state health regulations and permit requirements applicable to a
“cottage food production operation”—non-commercial or home-produced food for limited sale—
TANO SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS
3

4. including “…at an event held or sponsored by a religious or nonprofit organization”. Left pending in the
House Public Health Committee. HB 2084 also defines certain “cottage food production operations” with
lesser permitting requirements. Passed committee, no House floor action. HB 3387 would regulate
similar sales at farmers’ markets. Passed House; left pending in Senate Health and Human Services
Committee.
HB 372: In this proposed repeal of a remnant of the English common law—the Rule Against
Perpetuities—charitable giving of high-wealth individuals could be affected. The rule prevents personal
wealth from being permanently tied up with trusts or other legal instruments in perpetuity and for the
benefit of limited beneficiaries or heirs. Reported favorably from House Judiciary and Civil
Jurisprudence Committee; no House floor action.
HB 1682: Pressuring or coercing school district employees to participate in charitable
giving activities is prohibited. Passed House and Senate; signed by the Governor, eff. 9/1/11.
HB 1806: Regulation of “fishing tournament fraud” and enforcement actions are strengthened. Passed
House and Senate; signed by Governor, eff. 5/21/11.
Amendments to the Texas Non-Profit Corporation Law, Chapter 22, Bus. Org. Code:
SB 748: Makes minor changes to the nonprofit corporation law detailing the procedure for an interested
director to disclose a conflict of interest to his/her board before acting on a transaction, contract or other
matter. Passed by Senate and House; signed by the Governor, eff. 9/1/11.
Amendments to charitable immunity statutes in Chapter 84, Civil Practices and Remedies Code:
SB 1846: A nonprofit will be able to access additional types of insurance policies, as well as self-insured
plans, to comply with the financial responsibility requirements of Chapter 84 that entitle the organization
and its leaders to certain immunity against legal claims. Passed Senate and House, signed by Governor,
eff. 5/9/11.
Various professionals and individuals would be added to the list of persons specifically granted Chapter
84 legal immunity while performing voluntary services: Social workers, HB 823, no House floor vote.
Licensed family/marriage therapists, SB 1336, no committee action.
Exemptions from state taxes now extended to nonprofit entities, and ‘PILOT’ fees:
SB 1051 (=HB 1308): A select state review commission would periodically review all credits,
exemptions and special treatment under the state’s tax laws. SB 1051, left pending in Senate Finance
Committee. HB 1308, left pending in House Ways and Means Committee.
HB 3201, HB 784: The Texas Sunset Advisory Commission would periodically undertake a re-
examination (“sunset”) of all exemptions under the state’s tax laws, including the exemptions from
property, sales and business taxes enjoyed by charitable organizations. HB 3201, left pending in House
Ways and Means Committee.
TANO SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS
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5. SB 714 (=HB 1022): Drainage fees (PILOTs) imposed by the City of Houston on utility-using tax-
exempt properties owned by charitable and religious organizations would be banned by state law. PILOT
refers to “payments in lieu of taxes.” SB 714 passed by Senate; no House committee action. On
4/6/2011, the Houston City Council passed an ordinance exempting churches and schools from the
previously-enacted drainage fees, in response to the local public outcry and the state legislation
referenced above. See also HB 3169.
SB 609: Property-based municipal drainage fees will not be imposed on housing authority properties
owned by a municipality. Passed Senate and House; signed by the Governor, eff. 9/1/11.
HB 645: An applicant in behalf of a charitable organization’s request for property tax exemption will not
have to list his/her personal identification information on the State Comptroller’s forms. Passed by
House and Senate, signed by the Governor, eff. 9/1/11.
SB 1757: Would amend Tax Code Section 11.18 (which details categories of property uses exempt from
property tax) by including academic support for youth, in addition to athletic program support. No
hearing in Senate Finance Committee.
Nonprofit board, officer, employment, volunteer and fundraising issues:
HB 3252, HB 178, HB 202: Organizations contracting with the state must clear employee status through
a federal government-certified data verification service. HB 3252 reported favorably from the House
State Affairs Committee; HB 178 and 202 left pending. HB 878 includes subcontractors in the required
verification process. HB 140, no committee hearing. See also SB 84.
HB 73: Criminal history checks would be required of all state employees, interns, volunteers, contractors
and subcontractors related to state agency contracting and spending. Left pending in House State Affairs
Committee.
HB 1553: Any public agency or nonprofit employer receiving state funds would have to report the
citizenship of any person served by programs. Left pending in House State Affairs Committee.
Open meetings / open records issues:
HB 3573: Forbids a government entity from entering into a contract with a foundation, trust, or charitable
organization with contract terms that also require the disclosure of the race, religion, gender, national
origin, age, ethnicity, marital status, sexual orientation, or political affiliation of persons managing or
benefitting from the foundation, trust or organization. Passed by House and Senate, signed by the
Governor, eff. 9/1/11.
SB 1571: Provides that a nonprofit organization that performs a public function is governed by
Government Code, Chapter 552 (public information disclosure laws). Passed Senate committee, Senate
floor vote never held.
SB 1829: Limits the scope of public information laws affecting a chamber of commerce or a nonprofit
organization that provides economic development services to a public agency. Passed Senate; no action
by House State Affairs Committee.
TANO SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS
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6. Public advocacy / Ethics Commission (lobbying) issues:
HB 2973: Provides for an accelerated court review and possible dismissal of a groundless suit against a
person or group advocating for basic free-speech rights. Passed House and Senate; signed by the
Governor, eff. 9/1/11.
HB 160: Permits a streamlined court review and dismissal of “slap” suits--harassing or groundless
lawsuit brought against a complaining person or group critical of another interest group, in a public
controversy--and determined by the court to be brought to silence the opponent. No committee action.
HB 508 (= SB 128): Former legislators would be forbidden from lobbying for two years, except if
lobbying for nonprofit organizations, disabilities, and low-income advocacy groups, and if acting without
compensation. No committee action on either bill.
Nonprofit social service organization and property owner association issues:
SB 142: A long and comprehensive bill affecting only property owner associations. Passed Senate; no
House floor action. See also HB 3347, reported favorably from House Business and Industry Committee.
HB 2869, passed by House and Senate, signed by the Governor, eff. 9/1/11. HB 3348, reported favorably
from House Business and Industry Committee.
HB 2328: Property owner associations would be regulated by the Texas Finance Commission, with
annual registration, reporting requirements and governance standards.
Reported favorably from House Business and Industry Committee.
Other bills:
HB 8: Will effectively ban creation of new “land transfer fees” in Texas. These fees are often recorded
as part of permanent subdivision restrictions, which subsequently require payment by the seller of a
percentage of the sales price to a designated party each time the parcel is resold. The claim by fee
proponents that a small percentage of the fee collected is often designated to benefit a local charitable
organization appears outweighed by broad opposition to this hidden fee, which is also the subject of
review by federal regulators of residential loans. Passed House and Senate; signed by the Governor, eff.
9/1/11.
HB 1599: Would permit the Texas Corrections Industries (prison industries) to offer its products and
services for sale to nonprofit organizations as well as public agencies. Pending in House Corrections
Committee.
HB 421: Qualified nonprofit corporations would be eligible to receive ownership of remainder right-of-
way properties determined by TXDOT to be unusable for its purposes.
No committee action.
___________________________________
TANO SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS
6

7. *The above list does not include bills introduced relating to the following:
Nonprofit hospitals, health care or nursing institutions and plans; credit unions; electric or agricultural
cooperatives; private and charter schools and colleges; cemetery corporations; quasi-public nonprofit
entities.
**Many bills have an identical “companion” bill in the other house, bearing a different bill number.
Access bills, background information, and current status at Texas Legislature Online,
www.capitol.state.tx.us
___________________________________
*The above list does not include bills introduced relating to the following: Nonprofit hospitals, health
care or nursing institutions and plans; credit unions; electric or agricultural cooperatives; private and
charter schools and colleges; cemetery corporations; quasi-public nonprofit entities.
**Many bills have an identical “companion” bill in the other house, bearing a different bill number.
Access bills, background information, and current status at Texas Legislature Online,
www.capitol.state.tx.us
TANO SUMMARY OF ISSUES AFFECTING NONPROFIT ORGANIZATIONS
7

8. What is Advocacy?
Public support for or commendation of a particular cause or policy.
What is Lobbying?
Lobbying consists of communications that are intended to influence specific
legislation. Lobbying communications are of two kinds—direct and grass
roots.
A direct lobbying communication is generally one made to either a legislator,
an employee of a legislative body, or any other government employee who
may participate in the formulation of the legislation. It must refer to a
specific piece of legislation and express a view on it.
A grass roots lobbying communication is generally an attempt to influence
specific legislation by encouraging the public, other than the organization’s
members, to contact legislators about that legislation. It must refer to
specific legislation, reflect a view on it and encourage the recipient to take
lobbying action on it.
8

9. 9

10. LOBBYING RULES FOR ELECTING AND
NONELECTING CHARITIES
Electing Charity Nonelecting Charity
20% of first $500,000 of Less than a “substantial” part of
“exempt purpose activities; IRS employs subjective
Lobbying Limits expenditures” and decreasing “balancing” test*
percentages after that, up to
$1 million cap
Count in determining “substantial”
Volunteer and other Cost- Do not count against limits on
free Activities lobbying
Lobbying Definition Defined, with specific Not defined, no specific exclusions
exclusions for invited in statute or regulations
testimony; nonpartisan
analysis, study & research;
self defense
Excessive Lobbying 25% excise tax on excess over 5% excise tax on all lobbying
Penalty for Organization limits in any year expenses if substantial lobbying
results in revocation
Excessive Lobbying No specific liability 5% if “substantial” lobbying
Penalty for Organization’s willfully or unreasonably
Officers/Directors authorized
Revocation of Tax Status If lobbying exceeds 150% of If “substantial” lobbying in any one
limits generally over 4 years year
Recordkeeping Must document all lobbying Must document all lobbying
expenses, both grassroots and activities and expenses
direct
Numbers only are required: Detailed description of the
Tax Form 990A grassroots and overall legislative activities and a
lobbying expenditures and classified schedule of the
percentages of “exempt expenses paid or incurred
purpose expenditures” that
these expenditures comprise
Audit Exposure No difference, whether electing or nonelecting
*The factors the IRS will “balance” in determining if lobbying is “substantial” include the importance of
lobbying activities to the organization’s objectives and circumstances, the organization’s expenditures
on lobbying activities, and the organization’s overall level of spending and activity.
10

11. 11

12. Form 5768 Election/Revocation of Election by an Eligible
Section 501(c)(3) Organization To Make
(Rev. September 2009)
Expenditures To Influence Legislation
Department of the Treasury For IRS
Internal Revenue Service (Under Section 501(h) of the Internal Revenue Code) Use Only
Name of organization Employer identification number
Number and street (or P.O. box no., if mail is not delivered to street address) Room/suite
City, town or post office, and state ZIP + 4
1 Election—As an eligible organization, we hereby elect to have the provisions of section 501(h) of the Code, relating to
expenditures to influence legislation, apply to our tax year ending and
all subsequent tax years until revoked. (Month, day, and year)
Note: This election must be signed and postmarked within the first taxable year to which it applies.
2 Revocation—As an eligible organization, we hereby revoke our election to have the provisions of section 501(h) of the Code,
relating to expenditures to influence legislation, apply to our tax year ending
(Month, day, and year)
Note: This revocation must be signed and postmarked before the first day of the tax year to which it applies.
Under penalties of perjury, I declare that I am authorized to make this (check applicable box) election revocation
on behalf of the above named organization.
(Signature of officer or trustee) (Type or print name and title) (Date)
To make or revoke the election, enter b. An integrated auxiliary of a church or
General Instructions the ending date of the tax year to which of a convention or association of
Section references are to the Internal the election or revocation applies in item churches, or
Revenue Code. 1 or 2, as applicable, and sign and date c. A member of an affiliated group of
Section 501(c)(3) states that an the form in the spaces provided. organizations if one or more members
organization exempt under that section Eligible organizations. A section of such group is described in a or b
will lose its tax-exempt status and its 501(c)(3) organization is permitted to of this paragraph.
qualification to receive deductible make the election if it is not a Affiliated organizations. Organizations
charitable contributions if a substantial disqualified organization (see below) and are members of an affiliated group of
part of its activities are carried on to is described in: organizations only if (1) the governing
influence legislation. Section 501(h), 1. Section 170(b)(1)(A)(ii) (relating to instrument of one such organization
however, permits certain eligible section educational institutions), requires it to be bound by the decisions
501(c)(3) organizations to elect to make of the other organization on legislative
limited expenditures to influence 2. Section 170(b)(1)(A)(iii) (relating to
hospitals and medical research issues, or (2) the governing board of one
legislation. An organization making the such organization includes persons (i)
election will, however, be subject to an organizations),
who are specifically designated
excise tax under section 4911 if it 3. Section 170(b)(1)(A)(iv) (relating to
representatives of another such
spends more than the amounts organizations supporting government
organization or are members of the
permitted by that section. Also, the schools),
governing board, officers, or paid
organization may lose its exempt status 4. Section 170(b)(1)(A)(vi) (relating to executive staff members of such other
if its lobbying expenditures exceed the organizations publicly supported by organization, and (ii) who, by
permitted amounts by more than 50% charitable contributions), aggregating their votes, have sufficient
over a 4-year period. For any tax year in 5. Section 509(a)(2) (relating to voting power to cause or prevent action
which an election under section 501(h) is organizations publicly supported by on legislative issues by the first such
in effect, an electing organization must admissions, sales, etc.), or organization.
report the actual and permitted amounts
6. Section 509(a)(3) (relating to For more details, see section 4911
of its lobbying expenditures and grass
organizations supporting certain types and section 501(h).
roots expenditures (as defined in section
of public charities other than those Note. A private foundation (including a
4911(c)) on its annual return required
section 509(a)(3) organizations that private operating foundation) is not an
under section 6033. See Part II-A of
support section 501(c)(4), (5), or (6) eligible organization.
Schedule C (Form 990 or Form 990-EZ).
organizations).
Each electing member of an affiliated Where to file. Mail Form 5768 to the
group must report these amounts for Disqualified organizations. The Department of the Treasury, Internal
both itself and the affiliated group as a following types of organizations are not Revenue Service Center, Ogden, UT
whole. permitted to make the election: 84201-0027.
a. Section 170(b)(1)(A)(i) organizations
(relating to churches),
Cat. No. 12125M Form 5768 (Rev. 9-2009)
12

13. Advocacy Strategies
Be an Informed Advocate Organize a Letter Campaign
Find Out Who Represents You Connect Legislators to Local Efforts
Share Your Story Work with the Media
Make the Community Connection Make a Legislative Office Visit
Communicate with Your Representatives Testify at the Capitol
Become a Direct Action Organizer
13

14. Summary
U nder current law, taxpayers who itemize deduc-
tions may deduct the amount they donate to charities
donate to charities and what types of organizations
receive those donations. CBO also investigated how
from their adjusted gross income (AGI) when determin- changing the structure of tax incentives for giving would
ing how much they owe in federal income taxes. That affect the tax subsidy (the cost in forgone revenues to
deduction gives people who itemize an incentive to con- the federal government), the overall level of charitable
tribute to charities. Like other forms of preferential tax giving, and the extent to which different income groups
treatment, the deduction also costs the federal govern- benefit from the tax preference. Specifically, CBO looked
ment revenues that it might otherwise collect. At current at 11 options for altering the current income tax treat-
levels of charitable giving, the cost of that deduction—
ment of charitable giving, which can be grouped into
measured as the additional revenues that could be col-
4 categories:
lected if the deduction was eliminated—will total about
$230 billion between 2010 and 2014, according to the  Retaining the current deduction for itemizers but
Joint Committee on Taxation (JCT).1
adding a floor.
Numerous proposals have been made in recent years to
 Allowing all taxpayers to claim the deduction, with or
alter the income tax treatment of charitable giving by
without a floor.
individual donors. Some proposals aim to reduce the
cost to the government by imposing a floor (or minimum  Replacing the deduction with a nonrefundable credit
level) that a person’s charitable giving would have to
for all taxpayers, equal to 25 percent of a taxpayer’s
exceed to qualify for preferential tax treatment. Other
charitable donations, with or without a floor.
proposals would extend the current charitable deduction
to taxpayers who do not itemize deductions or would
 Replacing the deduction with a nonrefundable credit
replace the current deduction with a nonrefundable tax
for all taxpayers, equal to 15 percent of a taxpayer’s
credit available to all taxpayers who make charitable
charitable donations, with or without a floor.
contributions.2
For each of the four categories, CBO analyzed two
For this analysis, the Congressional Budget Office (CBO)
examined how much taxpayers in various income groups potential floors: a fixed dollar amount ($500 for single
taxpayers and $1,000 for couples filing a joint return)
and a percentage of income (2 percent of AGI). Only
1. A deduction for charitable contributions also exists under the cor-
porate income tax. JCT estimates a much smaller five-year cost for contributions in excess of the floor would be deductible
that deduction: about $17 billion. See Joint Committee on Taxa- or eligible for a credit. The analysis uses data for 2006,
tion, Estimates of Federal Tax Expenditures for Fiscal Years 2010– the most recent year for which the Internal Revenue Ser-
2014, JCS-3-10 (December 15, 2010), www.jct.gov/publications
vice’s public-use sample of individual income tax returns
.html?func=startdown&id=3718.
is available. The tax treatment of charitable contributions
2. Taxpayers can use tax credits to reduce their income tax liability is generally the same today as it was in 2006; however,
(the amount they owe). Nonrefundable credits can lower income
tax liability to zero, but excess credits cannot be used to increase because of rising incomes and contribution amounts, the
tax refunds. In contrast, refundable credits that exceed income tax options that include a fixed dollar floor would have a
liability are paid to taxpayers as refunds. somewhat different impact today than presented here.
14
CBO

15. 10 OPTIONS FOR CHANGING THE TAX TREATMENT OF CHARITABLE GIVING
Table 3.
Total Donations and Tax Subsidies Under Current Law and
Eleven Policy Options, 2006
Change in Total Change in
Total Contributions from Tax Subsidy from
Floor for Contributions Current-Law Level Tax Subsidy Current-Law Level
Eligible (Billions of Billions of (Billions of Billions of
Donations 2006 dollars) Dollars Percent 2006 dollars) Dollars Percent
Current Law
Deduction Available
Only to Itemizers No floor 203.0 n.a. n.a. 40.9 n.a. n.a.
Options to Change Current Law
Keep Deduction Available
Only to Itemizers but
Add Floor
Option 1 $500/$1,000 202.5 -0.5 -0.2 35.4 -5.5 -13.5
Option 2 2 percent of AGI 200.0 -3.0 -1.5 25.2 -15.7 -38.5
Extend Deduction to
All Filers
Option 3 No floor 205.0 2.0 1.0 46.1 5.2 12.8
Option 4 $500/$1,000 203.8 0.8 0.4 38.4 -2.5 -6.1
Option 5 2 percent of AGI 201.1 -1.9 -0.9 27.8 -13.1 -32.1
Convert Deduction to
25 Percent Nonrefundable
Credit for All Filers
Option 6 No floor 205.7 2.7 1.3 48.0 7.1 17.4
Option 7 $500/$1,000 204.5 1.5 0.7 38.5 -2.4 -5.8
Option 8 2 percent of AGI 202.0 -1.0 -0.5 29.0 -11.9 -29.2
Convert Deduction to
15 Percent Nonrefundable
Credit for All Filers
Option 9 No floor 195.2 -7.8 -3.9 27.6 -13.3 -32.6
Option 10 $500/$1,000 194.4 -8.6 -4.2 21.9 -19.0 -46.5
Option 11 2 percent of AGI 193.0 -10.0 -4.9 16.3 -24.6 -60.1
Source: Congressional Budget Office.
Notes: The simulation results are for tax year 2006, and all figures are at 2006 levels.
n.a. = not applicable; $500/$1,000 = $500 for individual filers and $1,000 for joint filers; AGI = adjusted gross income.
Extending the current deduction to all filers or making a $500/$1,000 floor would raise donations by $1.5 billion
relatively large nonrefundable tax credit available to all and boost federal revenues by $2.4 billion. Other floors
filers would have the opposite effect: increasing both set sufficiently low could be combined with a deduction
donations and the tax subsidy. However, CBO’s analysis or a 25 percent tax credit to achieve a similar result.
indicates that if either of those approaches was combined
with a contribution floor, it would be possible to raise If a much smaller credit for all filers, such as 15 percent,
donations while simultaneously reducing the tax subsidy. was combined with a floor, the effect on total donations
For instance, combining a 25 percent tax credit with a and the total tax subsidy would be more like that of
15
CBO

16. 16