Issues update.

The strength of an association's advocacy program lies in its extensive grassroots network and the diligence of its members, as illustrated by the opposition to the proposed association investment tax in the 2000 and 2001 budgets. Associations again demonstrated their collective strength as President Bush signed corrective Section 527 legislation into law November 2, removing the duplicative disclosure requirements placed on state and local political action committees (PACs) that had plagued thousands of associations for more than two years--a huge victory for associations.

With a multifaceted public policy program and with the support of a volunteer Public Policy Committee, ASAE is already laying the groundwork with members of the 108th Congress. ASAE will sponsor events such as American Associations Day March 19-20 when hundreds of association executives will come to Washington, D.C., early in the new Congress to set the stage and meet with their lawmakers. ASAE will also continue to host the Alliance Forum speaker series that brings together association leaders with members of Congress in a small setting to discuss a wide range of topics.

Association advocacy played a major role in the achievement of these tangible results. Several issues cut across all associations, and one of ASAE's roles is to act on behalf of the association community to lobby on pertinent issues. Involvement at the grassroots level helps ASAE promote the value of associations to society and affect legislation that pertians to members. In another example of advocacy at work, the tremendous efforts of AS AE's grassroots team during the past two years ensured that every member of Congress heard concerns about the Section 527 legislation and the unnecessary reporting requirements.

In the current economic climate, with shrinking revenues and budget deficits at both the federal and state levels, associations must remain focused to fight any attempt to tax the investment income of 501(c)(6) organizations as a potential revenue raiser. ASAE will also continue to showcase the value of associations to society through the Associations Advance America program. Supported by the strength of its grassroots network, ASAE and its members will remain poised to address the issues that arise and to spread the Associations Advance America message to Congress, the administration, key opinion leaders, and the general public.

What follows is a brief update on some of the key issues that ASAE is currently addressing:

Association health plans. With backing from many members of Congress, as well as outspoken support for association health plans by President George W. Bush, ASAE will continue to push for the passage of Association Health Plan legislation in the 108th Congress.

Disclosure issues. Last year, the General Accounting Office released a report calling the IRS's oversight of charities inadequate The GAO report was requested by Sens. Max Baucus (D-MT) and Charles Grassley (R-IA), who have publicly expressed concern about holding charities accountable to their donors. ASAE will closely monitor Form 990 changes in the next year.

Postal legislation. ASAE continues to monitor postal legislation--supported by a number of corporations, nonprofit organizations, and other mailing associations--that would require the White House to appoint a commission to evaluate the current state of the United States Postal Service.

Spousal travel deduction. ASAE looks to work with Congress to garner additional support from members for the restoration of business meal and spousal travel deductibility which could aid association executives as well as the travel industry.

State lobby tax. In addition to supporting complete repeal of the lobby tax as it applies to state lobbying, ASAE has also focused its legislative work on possible incremental reforms that would at least ease the significant administrative burdens that this law poses to associations.

Charitable giving legislation. ASAE will work for a charitable giving bill that, among other things, offers tax incentives to individuals and companies to encourage charitable giving including a provision allowing for a deduction for nonitemizers.

ASAE is also supporting legislation, which was included as part of the Senate version of the CARE Act, to modify the control test for certain controlled subsidiaries. Under a law passed in 1997, the definition of control under Section 512(b)(13) was changed from 80 percent to 50 percent, This has caused previously exempt passive income to be taxed under unrelated business income tax (UBIT) at the parent level in many organizations. The provision in the CARE bill would essentially restore the 50 percent test in cases where rent and other passive payments are based on fair market considerations.

Other tax issues. With talk of tax simplification efforts continuing on Capitol Hill, ASAE will work with members to determine where the tax-exempt community fits in with these proposals.

For a more detailed explanation of these and other issues, or if you have any questions or concerns, contact ASAE's Public Policy Department at 202-626-2703 or visit www.asaenet.org/policy. To become an ASAE Advocate, visit capwiz.com/asae/home.