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Oregon fraternals bill derailed -- at least for now...

February 19, 2018
After two hearings on proposed amendments to an Oregon bill that would have, among other things, shortened the contestability period under life insurance policies, a combined industry effort defeated those amendments last week. However, there is another bill in the Oregon legislature which affects the fraternal tax exemption and presents some interesting challenges for the Alliance. On the bright side, the bill affects all insurers by imposing a new excise tax on commercial, fraternal, life, health and property/casualty companies. So, we aren’t the only group in the spotlight forced to defend ourselves against the impact of a badly misguided piece of legislation. On the dark side, the bill contains very specific provisions related to fraternal taxation and regulation. Our inclusion in the bill appears to be an intentional effort to target fraternals. There is at least one lawmaker in the state who may think the fraternal model has outlived its usefulness. That's a troubling notion and one that we need to work hard to overcome, not just with this particular legislator, but for lawmakers in every state and in Congress. While it appears the tax bill may not move forward this session, it could rear its head again in 2019, so it's not time to pop the champagne corks yet. What makes the situation in Oregon even more difficult is the fact that Alliance societies simply don't have that many members in the state. Unlike South Dakota, where one-in-eight residents is a member of a fraternal, Oregon's fraternal population is much smaller, which makes it difficult to accurately document the impact of our community service activities and identify qualified individuals to provide testimony at legislative hearings. In order to make sure our voice is being heard, the Alliance retained a qualified local lobbyist with experience on tax and financial services issues and with a thorough understanding of the unique features of Oregon's political environment. Without that type of local representation -- or the financial resources needed to acquire it -- bills may have had a much better chance of moving forward. The Oregon situation provides a vivid example of why you belong to the Alliance and why we take every threat to fraternals and the tax exemption so seriously. Whether you operate in Oregon or not, the Alliance's efforts to defeat these bills help preserve, protect, and promote the viability of YOUR exemption in every statehouse and on Capitol Hill. Because a repeal of the fraternal exemption, even in a relatively small state, could mean the unraveling of the tax exemption nationally. Think of a slight tug on a loose thread in a sweater. Next thing you know, all you have is a pile of yarn. We're fully dedicated to ensuring that this does not happen. But in order to accomplish that noble mission, it's going to take more than Alliance staff and professional lobbyists. We need every society to do its part and communicate the fraternal messages to policymakers at all levels of government. This is not just good public policy, it's good business, too. Want to know how you can help? Contact me at jannotti@fraterrnalalliance.org for some suggestions.  Or post ideas that you've used here for all to see and share.