TO: FRIENDS OF THE AMERICAN COUNCIL ON GIFT
ANNUITIES WITH INTERESTS IN NEW YORK STATE

FROM: JAMES B. POTTER
CHAIR, STATE REGULATIONS COMMITTEE
AMERICAN COUNCIL ON GIFT ANNUITIES

DATE: APRIL 5, 2000

SUBJECT: YOUR HELP IS NEEDED NOW TO GET NEW YORK ASSEMBLY BILL A#9673 (RE: GIFT ANNUITY RESERVES) OUT OF ASSEMBLY COMMITTEE.

Your help is needed NOW ...

To get New York Assembly Bill A#9673 (re Gift Annuity Reserves) out of Assembly Committee.

Last Fall, we were NOT successful in getting the New York Legislature to change the floor for Gift Annuity Reserves, after which a charity must file for a Permit, from $80,000 to $500,000. (If adjusted for inflation, this $80,000 Reserve amount, placed in the New York State Laws in 1941, would now be more than $900,000.) Please read on.

The new higher floor of $500,000 (only some 55% of what it should be, if adjusted for inflation), was approved by the New York State Senate in 1999, and we have a promise from Governor Pataki that he will sign it, if we can get it approved by the New York State Assembly.

It is presently bottled up in the Insurance Committee of the New York State Assembly and ONLY a ground swell of support by non-profits will get the bill to the Floor of the Assembly where it can be voted up or down on its merits.

The Assembly Bill A# 9673, to raise the minimum Gift Annuity Reserve amount from $80,000 to $500,000 is stuck in the Assembly Insurance Committee. If your organization is based in New York and issues charitable gift annuity agreements, OR, is outside of New York but issues gift annuity agreements to New York residents, you need to contact the Chair of the Assembly Insurance Committee (Assemblyman Pete Grannis, see address below), as well as your local Assembly member, if you are a New York charity.

If this bill is going to pass this legislative session, the nonprofit community MUST rally behind it. IF this effort FAILS, it is doubtful that New York will ever see any relaxation of the current stringent laws on the issuance of gift annuities. If it does pass, the Governor will sign it, and this will mean that charities will not have to file for a New York Permit until their gift annuity fund is larger than about $900,000 ($500,000 in Reserves). Even if they do file, they will not get a permit until their Fund passes that threshold.

Keep in mind this the first part of TWO efforts, spaced a year apart. IF we get this new threshold for Gift Annuity Reserves (which has not been changed since 1941), we will attempt to get New York to accept the same investment guidelines as followed by Maryland, namely the Prudent Investor Rule.

But, we cannot get the investment rules changed without making this change first. Several key Legislators, the New York State Bar Association, ACGA and NCPG are in support of these goals, but we must handle them in this sequence, if we hope to be successful. We have been told by the key legislators, that the NAIC Exclusion from Regulation draft will NOT pass in New York. And even the permit issuing draft has little chance unless we can first get these two changes in the New York Law. We are the critical point where your help is needed NOW. If this dies in committee again, due to Chairman Grannis, there is little hope we can be successful later.

These two changes will mean that charities across America can issue gift annuity agreements to New York residents without having to maintain all of their Annuity Reserves for their whole gift annuity fund invested largely in U.S. Treasuries, as they do now.

Please write your Assembly member to support this legislation and also to act as a cosponsor of A#9673. It is particularly important if your Assembly member is also a member of the Insurance Committee (listed below), to urge support and cosponsorship the bill. Assemblyman Grannis should be copied on all communications with Assembly members regarding A#9673.

Please write your Assembly person and copy Pete Grannis, the chair of the Insurance Committee. If your Assembly member is on the Insurance Committee, it is ESSENTIAL that you write. Get your Board members to write as well, even if your Annuity Fund is larger than the new threshold. For this is just the first step in getting the investment rules relaxed.

If you are not based in New York State, but issue gift annuity agreements to New York residents, write the Chair of the Committee, Pete Grannis, asking him to let Assembly Bill A#9763 come up for a vote this year.

If we do not show a ground swell of support for this issue and get this bill passed this year, we will most likely NOT have an opportunity to change the investment guidelines for the Reserve Account from the most stringent investment rules to a far more liberal approach, that of investing for a total return under the Prudent Investor Rules as used by Maryland.

Time is of the essence... Please send a letter supporting this raise in Reserve Requirements to $500,000 NOW. Get your Board members to do this as well. The number of letters we can generate will determine if we are successful in this effort.

Some facts for your letter -- But please write your own letter ...

I urge your support of and your cosponsorship of Assembly Bill A#9673. This bill increases the threshold from $80,000, set in 1941, to $500,000 before a charity must file an Application for a Permit to Issue Charitable Gift Annuities and to file annual reports with the New York Insurance Department. If indexed for inflation, this figure would now be over $900,000!

New York is one of only 10 states that even impose regulations on charities issuing charitable gift annuities, with New York being the most stringent. A charitable gift annuity is the most popular of the various charitable life income arrangements. New York charities are at a competitive disadvantage to those in other states. Many smaller organizations find the New York laws confusing and also must incur the added expense of registration and reporting. This deters many New York institutions from adding this vehicle to their fund raising programs. The Salvation Army, UJA of New York, religious organizations, churches, synagogues and social service organizations use this technique very heavily.

Your support for the passage of Assembly Bill A#9673 will be most sincerely appreciated by every charitable organization in the State of New York and their boards.

Sincerely,

Who should you write?

1) Your New York State Assembly member
2) Chairman of New York Assembly Insurance Department, Assemblyman A. Pete Grannis

To find your state Assembly member, go to ... http://www.voter.com
Click on the "My Officials" button on the left side of the main screen.

IMPORTANT:

1) Be sure to ask for not only support but co-sponsorship of Bill A#9673.
2) If your assembly member is listed below as an Insurance Committee member, it is really important to contact them for support and co-sponsorship.

NEW YORK ASSEMBLY INSURANCE COMMITTEE

(First Address: Local office. "LOB" Address is their Albany Address. Send same letter to EACH address. Albany: Legislative Office Building Albany, NY 12248. Be sure to send a copy of every letter to the Insurance Committee Chair, Assemblyman Grannis. HE is the one bottling up this legislation in his committee.)

Thomas W. Alfano (R)
E.A.B. Bldg., 925 Hempstead Tpk., Franklin Square, NY 11010
LOB#323

Philip M. Boyle (R-C)
17 E. Main St., Bayshore, NY 11706
LOB#529

Nancy Calhoun (R-C)
Stewart Int'l. Airport, 2011 "D" St., New Windsor, NY 12553
LOB#318

Ann Margaret E. Carrozza (D)
33-17 Francis Lewis Blvd., Bayside, NY 11358
LOB#528

Joan K. Christensen (D)
4317 E. Genesee St. R-103, Syracyse, NY 13214
LOB#502

Adele Cohen (D)
2965 Ocean Pkwy., Brooklyn, NY 11235
LOB#430

Samuel Colman (D)
1 Blue Hill Plaza, S-116, P.O. Box 1549, Pearl River, NY 10965
LOB#939

Mrs. Vivian E. Cook (D)
142-15 Rockaway Blvd., S. Ozone Park, NY 11436
LOB#331

Ms. Lena Cymbrowitz (D)
1800 Sheepshead Bay Rd., Brooklyn, NY 11235
LOB#819

Mr. Adriano Espaillat (D)
210 Sherman Ave., Suite A, New York, NY 10033
LOB# 429

Donna Ferrara (R)
150 Post Ave, Westbury, NY 11590
LOB#719

Richard N. Gottfried (D)
270 Broadway, Rm.1516, New York, NY 10007
LOB#822

Alexander B. Pete Grannis (D-L)- CHAIR (Chair of Insurance Committee)
1672 First Ave., New York, NY 10128
LOB#712

Stephen B. Kaufman (D)
2910 Bruckner Blvd., Bronz, NY 10475
LOB# 742

Dr. Joel M. Miller (R-C)
22 IBM Rd., Kandr Bldg. S-104, Poughkeepsie, NY 12601
LOB#531

Ivan C. Lafayette (D)
33-46 92nd St. S-1W, Jackson Heights, NY 11372
LOB#824

Rhonda S. Jacobs (D-L)
3 Hillel Place, Brooklyn, NY 11210
LOB#733

Nettie Mayersohn (D-L)
65-01 Fresh Meadow La., Flusing, NY 11365
LOB#746

Mark Weprin (D)
61-08A 224th St., Bayside, NY 11364
LOB#920

Robert C. Oaks (R-C)
10 Leach Rd., Lyons, NY 14489
LOB#718

N. Nick Perry (D)
942 Utica Ave., Brooklyn, NY 11203
LOB#452

James Gary Pretlow (D)
6 Gramatan Ave. S-407, Mt. Vernon, NY 10550
LOB#650

Peter M. Rivera (D)
1506 Castle Hill Ave., Bronx, NY 10462
LOB#555

David S. Sidikman (D)
146A Manetto Hill Rd. Plainview, NY 11803
LOB#921

Sandra Lee Wirth (R)
1500 Union RD. S-201, W.Seneca, NY 14224
LOB#431