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APPROVAL OF OCTOBER MINUTES
Sue asked whether any corrections need to be made to the October minutes. Amy noted that she'd originally omitted Sharen's name from the list of attendees, and had already made that correction. Ralph moved that the minutes be approved as corrected. Sharen seconded the motion. All approved by voice vote.
WEB SITE UPDATE
Sue reported that she'd contacted several charities in the Missoula area regarding cross-linking their web sites with the Task Force's. All were enthusiastic about it, and will follow up with Galen individually. No other Task Force members had discussed the notion of cross-linking with any other endowed organizations.
Sue asked that, before the next meeting, everyone look over the list of endowments on our web site and find out a) if those not hyperlinked actually do have a web site that we should link to, and b) whether any organizations with endowments are missing from the list (especially in those counties for which we have no endowments listed).
Linda Reed said that she would send the list of endowments that MCF has to Amy, who will forward it to appropriate Task Force members for follow up and to Galen for posting on the web site.
Galen said that he still needs to put the side list of links that are on all of the internal pages onto the home page. He has posted all of the minutes to date.
Sue noted that we'd discussed at previous meetings the idea of advertising the web site - especially to legislators. She thought perhaps that could be discussed again at some point. Aidan reminded that the last legislative session we sent a letter to all legislators before the session, referencing the web site. She thought it might be a good idea to send out a similar letter of introduction this session. Aidan will think through how we might better use the web site during the legislative session.
UPDATE ON CHARITABLE GIFT ANNUITIES LEGISLATION
Jim had a copy of the final draft of the bill being put forward by the Insurance Commissioner regarding the regulation of charities issuing charitable gift annuities. He thought the bill looked very good, with no substantive changes since the last discussion.
Judy Wing asked for a summary of the bill. Jim explained that it is an exemption bill, based on a model crafted by the National Association of Insurance Commissioners. In order to be exempt from regulation in this area, a charity has to have a minimum net worth of $300,000 or a minimum of $100,000 in unrestricted cash or cash equivalents, exclusive of the assets funding the annuity contract. The organization has to be in operation for 3 years, or be a successor or affiliate of an organization that has been in operation at least 3 years, and it must maintain a separate annuity fund with at least half of the assets of the annuity. Jim pointed out that this threshold is quite reasonable relative to other states (Hawaii, for example, requires a net worth of $5 million). He explained that the Insurance Commissioner felt the need to distinguish between commercial annuities and charitable gift annuities in the Montana Code, and the bill cites federal code defining those terms.
Aidan asked who would be carrying the bill. Jim didn't know; it will be filed at the request of the Insurance Commissioner, but it hasn't yet been submitted. Jim suggested that the Task Force support the bill - take a position on it and solicit endorsements from national experts (like Conrad Teitell) - but not carry it. He thought that our response to smaller charities who might be confused by the bill, or in a panic about funding, should be that it is a good bill that establishes boundaries that a charity really needs in order to successfully write charitable gift annuities, and that it is being put forward by the Insurance Commissioner, with or without the Task Force. We provided guidance, at their request, to make the bill work best for Montana.
Aidan asked Jim whether he would write a one-paragraph summary of the bill and why the Task Force supports it. She thought is could include the endorsements of national experts and be used as a handout during the session. Jim said he would write something.
Sharen warned that, because it is not our bill and it is not finalized yet, it might create confusion to spread information about the bill before it's actually in the process. All agreed.
TAX CREDIT ADMINISTRATIVE RULES
Jim noted that there will be a public hearing on November 25th on proposed amendments to the administrative rules for the Montana Endowment Tax Credit. He said the proposed changes are basically housekeeping - making the rules current with the revised tax credit law passed in the special session - and that they were well done. He added that the proposed rule amendments can't be changed again without another public notice. Once they are approved, he though the Task Force should post the current rules on the web site. Aidan said she would give Kurt Alme a call indicting the Task Force's support of the proposed rule changes.
TASK FORCE FINANCIAL STATEMENT
Ralph passed around the most recent financial statement for the Task Force, reflecting activity through October 31, 2002. It showed a beginning fund balance of $3,199.05 with $2,500 in revenues and $1,294.20 in expenses during the period, for an ending fund balance of $4,404.85. He noted that the statement does not reflect $750 received thus far from the fall fundraising letter that was sent out by some of the Task Force members. Sue and Ralph asked those who have not yet sent their letters out to do so, and for everyone to make follow-up phone calls.
TAX CREDIT ANALYSIS
Aidan noted that the Governor's draft budget contains neither a reduction nor a repeal of the tax credit. She also noted that, of the 700+ bill draft requests that have been filed thus far, only one deals with the tax credit, making an addition to it that somewhat changes the intent of the law.
Amy distributed a report from Steve Browning (which was previously e-mailed to Task Force members) and Cindy Utterback that analyzes the first five years of the tax credit. Jim commented that they did a very thorough job, and that it clearly shows that $1 "given up" in tax credit is generating more than $3 for Montana charities. He assumes the numbers they used are conservative. The report shows that more than $74 million in endowments has been created over the 5-year period. It also quantifies some of the new taxable income generated by planned gifts for the fifth year, demonstrating a revenue offset.
Aidan suggested that the pre-session letter to legislators incorporatevpieces of Steve and Cindy's report. Alternatively, we could hold a reception that would be an educational event - especially for new legislators - on this issue. Jim suggested that the Task Force put together a piece similar to the "6 Reasons the Tax Credit is Good for Montana" piece we'd put together several years ago. Judy Held thought it should be a stronger statement than "good for Montana" - perhaps "necessary?"
There was discussion about the future of the tax credit in the upcoming session, given the budget shortfall and the cuts that were made to the credit in the special session. Ralph moved that the Task Force work in the legislature to preserve the tax credit, and immediately work to educate legislators - especially reaching out to new legislators - about how the Montana Endowment Tax Credit benefits Montana causes.
There was discussion following the motion. There was general agreement that the tax credit needs to be maintained, both because its positive impacts are only now starting to be felt as it has taken some time to educate people about it, and because if it is taken away or put on hold for the short-term, it might be difficult to re-establish at some later date. Sue asked for a vote on Ralph's motion. Judy Wing voted against the motion; all other members present voted in favor.
Aidan proposed assigning a subcommittee of 3-4 Task Force members to help work on materials that the Task Force would distribute to legislators before the session begins. Jim suggested that Aidan identify those members who's help she could most use, and contact them when she needs them.
Sue asked Aidan to bring to the next meeting a list of all legislators, which the group could divide up in order to ensure that key legislators are contacted.
NEXT MEETING
It was decided that the next meeting should be held at what used to be the regular time: Thursday, December 12, from 10 a.m. to 2 p.m. at the Livestock Building.
Meeting adjourned at 1:45 p.m.
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