Issue Overview
The Unregulated Pregnancy Clinic (UPC) industry is large and widespread. More than 2,600 pregnancy centers operate in all 50 states,138 most of which affiliate with one or more of three national organizations: Care Net, Heartbeat International, and National Institute of Family and Life Advocates (NIFLA).
Over the past three years, [State] has granted $XXXX to pregnancy centers. XX pregnancy centers operate in [State], and XX has received funding from the state. However, there is little transparency in the grant reporting or accounting process.
National data suggest that pregnancy centers have considerable income outside of state funding. Based on IRS 990 forms, approximately 2,100 pregnancy center locations had more than $1.9 billion in revenues, meaning that the average pregnancy center has revenues from all sources of about $905,000 a year.139
National data suggest that pregnancy centers hold considerable assets. About 2,100 pregnancy center locations reported on IRS 990 forms that they have $2.5 billion in assets, an average of almost $1.2 million per facility.140
It is routine for state grantees of all types to submit reports and evaluations. Such a requirement is also almost universally required for state grants relating to education, health care, and social services. Nevertheless, some [insert what your state calls UPCs] fail to meet these reporting requirements. [Give examples if you can; unfortunately, it seems common for UPCs to fail their reporting requirements.]
It is routine for state grantees of all types to account for the use of funds honestly and straightforwardly. Nevertheless, some [insert what your state calls UPCs] charge the state far more for products used and services administered – such as pregnancy tests, ultrasounds, STD/STI tests, diapers, packs of baby wipes, baby clothing outfits, car seats, strollers, cribs, and containers of baby formula – than they paid. These mark-ups may exceed 50 or 100 percent of the product’s actual price.
Taxpayer dollars should not be wasted or misallocated. The legislature and the state administration have an obligation to ensure that funds granted to any nonprofit are spent efficiently and effectively. The American Medical Association urges “any entity offering crisis pregnancy services…be transparent with respect to their funding and sponsorship relationships.”141 That’s not too much to ask.
SECTION 1. SHORT TITLE
This Act shall be called the “Responsible Use of Public Health Dollars Act.”
SECTION 2. FINDINGS
1. Over the past XXX years, the State of [State] has granted more than [$ Amount] to [insert what the state calls UPCs], including [$ Amount] over the past three years.
2. As part of the grant process, a [insert what the state calls UPCs] agrees to submit reports and evaluations [within 60 days after the grant period ends]. Such a requirement is also almost universally mandated for state grants relating to education, health care and social services.
3. Nevertheless, some grantees are failing to meet these reporting requirements. [Give examples if you can. Unfortunately, it seems common for UPCs to fail to report or provide inadequate reports.]
4. As part of the grant process, [insert what the state calls UPCs] list prices that they are charging the state for products such as pregnancy tests, ultrasounds, STD/STI tests, diapers, packs of baby wipes, baby clothing outfits, car seats, strollers, cribs, and containers of baby formula.
5. However, some [insert what the state calls UPCs] excessively mark up these prices, a kind of handling charge, when billing the state. These mark-ups may exceed 50 or 100 percent of the actual price of the product. It is an unreasonable use of state funds to pay for excessive mark-ups.
6. Tax dollars should not be wasted or misallocated. The legislature and the state administration have an obligation to ensure that funds granted to any nonprofit are spent efficiently and effectively.
SECTION 3. REPORTING AND ACCOUNTING REQUIRED
After section XXX, the following new section XXX shall be inserted:
(A) PROPER REPORTING
1. A [insert what the state calls UPCs] shall not qualify for a state grant under any program if the grant applicant has failed to file any report or meet any statutory, regulatory or contract requirement of any prior state grant.
2. Any funds due or owed to a [insert what the state calls a UPC] that has failed to file a required report will be held and not released until all required reports are received and reviewed.
3. Any [insert what the state calls a UPC] that fails to comply with reporting requirements will be prohibited from applying for any further funding for a six-month period beginning the day after any report was overdue.
(B) PROPER ACCOUNTING
1. A [insert what the state calls UPCs] shall not qualify for a state grant under any program if the facility lists a price for a product provided to clients that exceeds [ten percent] more than the actual price the facility paid for that product.
2. Any [insert what the state calls a UPC] that fails to comply with the accounting requirement in this subsection shall be prohibited from applying for any further funding for a six-month period beginning the day after it has been established that the state was charged in excess of [ten percent] more than the actual price the facility paid.
SECTION 4. EFFECTIVE DATE
This law shall become effective on July 1, 20XX.
