[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4762 Enrolled Bill (ENR)]

        H.R.4762

                       One Hundred Sixth Congress

                                 of the

                        United States of America


                          AT THE SECOND SESSION

           Begun and held at the City of Washington on Monday,
             the twenty-fourth day of January, two thousand


                                 An Act


 
To amend the Internal Revenue Code of 1986 to require 527 organizations 
                 to disclose their political activities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REQUIRED NOTIFICATION OF SECTION 527 STATUS.

    (a) In General.--Section 527 of the Internal Revenue Code of 1986 
(relating to political organizations) is amended by adding at the end 
the following new subsection:
    ``(i) Organizations Must Notify Secretary That They Are Section 527 
Organizations.--
        ``(1) In general.--Except as provided in paragraph (5), an 
    organization shall not be treated as an organization described in 
    this section--
            ``(A) unless it has given notice to the Secretary, 
        electronically and in writing, that it is to be so treated, or
            ``(B) if the notice is given after the time required under 
        paragraph (2), the organization shall not be so treated for any 
        period before such notice is given.
        ``(2) Time to give notice.--The notice required under paragraph 
    (1) shall be transmitted not later than 24 hours after the date on 
    which the organization is established.
        ``(3) Contents of notice.--The notice required under paragraph 
    (1) shall include information regarding--
            ``(A) the name and address of the organization (including 
        any business address, if different) and its electronic mailing 
        address,
            ``(B) the purpose of the organization,
            ``(C) the names and addresses of its officers, highly 
        compensated employees, contact person, custodian of records, 
        and members of its Board of Directors,
            ``(D) the name and address of, and relationship to, any 
        related entities (within the meaning of section 168(h)(4)), and
            ``(E) such other information as the Secretary may require 
        to carry out the internal revenue laws.
        ``(4) Effect of failure.--In the case of an organization 
    failing to meet the requirements of paragraph (1) for any period, 
    the taxable income of such organization shall be computed by taking 
    into account any exempt function income (and any deductions 
    directly connected with the production of such income).
        ``(5) Exceptions.--This subsection shall not apply to any 
    organization--
            ``(A) to which this section applies solely by reason of 
        subsection (f)(1), or
            ``(B) which reasonably anticipates that it will not have 
        gross receipts of $25,000 or more for any taxable year.
        ``(6) Coordination with other requirements.--This subsection 
    shall not apply to any person required (without regard to this 
    subsection) to report under the Federal Election Campaign Act of 
    1971 (2 U.S.C. 431 et seq.) as a political committee.''.
    (b) Disclosure Requirements.--
        (1) Inspection at internal revenue service offices.--
            (A) In general.--Section 6104(a)(1)(A) of the Internal 
        Revenue Code of 1986 (relating to public inspection of 
        applications) is amended--
                (i) by inserting ``or a political organization is 
            exempt from taxation under section 527 for any taxable 
            year'' after ``taxable year'';
                (ii) by inserting ``or notice of status filed by the 
            organization under section 527(i)'' before ``, together'';
                (iii) by inserting ``or notice'' after ``such 
            application'' each place it appears;
                (iv) by inserting ``or notice'' after ``any 
            application'';
                (v) by inserting ``for exemption from taxation under 
            section 501(a)'' after ``any organization'' in the last 
            sentence; and
                (vi) by inserting ``or 527'' after ``section 501'' in 
            the heading.
            (B) Conforming amendment.--The heading for section 6104(a) 
        of such Code is amended by inserting ``or notice of status'' 
        before the period.
        (2) Inspection of notice on internet and in person.--Section 
    6104(a) of such Code is amended by adding at the end the following 
    new paragraph:
        ``(3) Information available on internet and in person.--
            ``(A) In general.--The Secretary shall make publicly 
        available, on the Internet and at the offices of the Internal 
        Revenue Service--
                ``(i) a list of all political organizations which file 
            a notice with the Secretary under section 527(i), and
                ``(ii) the name, address, electronic mailing address, 
            custodian of records, and contact person for such 
            organization.
            ``(B) Time to make information available.--The Secretary 
        shall make available the information required under 
        subparagraph (A) not later than 5 business days after the 
        Secretary receives a notice from a political organization under 
        section 527(i).''.
        (3) Inspection by committee of congress.--Section 6104(a)(2) of 
    such Code is amended by inserting ``or notice of status of any 
    political organization which is exempt from taxation under section 
    527 for any taxable year'' after ``taxable year''.
        (4) Public inspection made available by organization.--Section 
    6104(d) of such Code (relating to public inspection of certain 
    annual returns and applications for exemption) is amended--
            (A) by striking ``and Applications for Exemption'' and 
        inserting ``, Applications for Exemption, and Notices of 
        Status'' in the heading;
            (B) by inserting ``or notice of status under section 
        527(i)'' after ``section 501'' and by inserting ``or any notice 
        materials'' after ``materials'' in paragraph (1)(A)(ii);
            (C) by inserting or ``or such notice materials'' after 
        ``materials'' in paragraph (1)(B); and
            (D) by adding at the end the following new paragraph:
        ``(6) Notice materials.--For purposes of paragraph (1), the 
    term `notice materials' means the notice of status filed under 
    section 527(i) and any papers submitted in support of such notice 
    and any letter or other document issued by the Internal Revenue 
    Service with respect to such notice.''.
    (c) Failure To Make Public.--Section 6652(c)(1)(D) of the Internal 
Revenue Code of 1986 (relating to public inspection of applications for 
exemption) is amended--
        (1) by inserting ``or notice materials (as defined in such 
    section)'' after ``section)''; and
        (2) by inserting ``and notice of status'' after ``exemption'' 
    in the heading.
    (d) Effective Date.--
        (1) In general.--Except as provided in paragraphs (2) and (3), 
    the amendments made by this section shall take effect on the date 
    of the enactment of this section.
        (2) Organizations already in existence.--In the case of an 
    organization established before the date of the enactment of this 
    section, the time to file the notice under section 527(i)(2) of the 
    Internal Revenue Code of 1986, as added by this section, shall be 
    30 days after the date of the enactment of this section.
        (3) Information availability.--The amendment made by subsection 
    (b)(2) shall take effect on the date that is 45 days after the date 
    of the enactment of this section.

SEC. 2. DISCLOSURES BY POLITICAL ORGANIZATIONS.

    (a) Required Disclosure of 527 Organizations.--Section 527 of the 
Internal Revenue Code of 1986 (relating to political organizations), as 
amended by section 1(a), is amended by adding at the end the following 
new section:
    ``(j) Required Disclosure of Expenditures and Contributions.--
        ``(1) Penalty for failure.--In the case of--
            ``(A) a failure to make the required disclosures under 
        paragraph (2) at the time and in the manner prescribed 
        therefor, or
            ``(B) a failure to include any of the information required 
        to be shown by such disclosures or to show the correct 
        information,
    there shall be paid by the organization an amount equal to the rate 
    of tax specified in subsection (b)(1) multiplied by the amount to 
    which the failure relates.
        ``(2) Required disclosure.--A political organization which 
    accepts a contribution, or makes an expenditure, for an exempt 
    function during any calendar year shall file with the Secretary 
    either--
            ``(A)(i) in the case of a calendar year in which a 
        regularly scheduled election is held--
                ``(I) quarterly reports, beginning with the first 
            quarter of the calendar year in which a contribution is 
            accepted or expenditure is made, which shall be filed not 
            later than the fifteenth day after the last day of each 
            calendar quarter, except that the report for the quarter 
            ending on December 31 of such calendar year shall be filed 
            not later than January 31 of the following calendar year,
                ``(II) a pre-election report, which shall be filed not 
            later than the twelfth day before (or posted by registered 
            or certified mail not later than the fifteenth day before) 
            any election with respect to which the organization makes a 
            contribution or expenditure, and which shall be complete as 
            of the twentieth day before the election, and
                ``(III) a post-general election report, which shall be 
            filed not later than the thirtieth day after the general 
            election and which shall be complete as of the twentieth 
            day after such general election, and
            ``(ii) in the case of any other calendar year, a report 
        covering the period beginning January 1 and ending June 30, 
        which shall be filed no later than July 31 and a report 
        covering the period beginning July 1 and ending December 31, 
        which shall be filed no later than January 31 of the following 
        calendar year, or
            ``(B) monthly reports for the calendar year, beginning with 
        the first month of the calendar year in which a contribution is 
        accepted or expenditure is made, which shall be filed not later 
        than the twentieth day after the last day of the month and 
        shall be complete as if the last day of the month, except that, 
        in lieu of filing the reports otherwise due in November and 
        December of any year in which a regularly scheduled general 
        election is held, a pre-general election report shall be filed 
        in accordance with subparagraph (A)(i)(II), a post-general 
        election report shall be filed in accordance with subparagraph 
        (A)(i)(III), and a year end report shall be filed not later 
        than January 31 of the following calendar year.
        ``(3) Contents of report.--A report required under paragraph 
    (2) shall contain the following information:
            ``(A) The amount of each expenditure made to a person if 
        the aggregate amount of expenditures to such person during the 
        calendar year equals or exceeds $500 and the name and address 
        of the person (in the case of an individual, including the 
        occupation and name of employer of such individual).
            ``(B) The name and address (in the case of an individual, 
        including the occupation and name of employer of such 
        individual) of all contributors which contributed an aggregate 
        amount of $200 or more to the organization during the calendar 
        year and the amount of the contribution.
    Any expenditure or contribution disclosed in a previous reporting 
    period is not required to be included in the current reporting 
    period.
        ``(4) Contracts to spend or contribute.--For purposes of this 
    subsection, a person shall be treated as having made an expenditure 
    or contribution if the person has contracted or is otherwise 
    obligated to make the expenditure or contribution.
        ``(5) Coordination with other requirements.--This subsection 
    shall not apply--
            ``(A) to any person required (without regard to this 
        subsection) to report under the Federal Election Campaign Act 
        of 1971 (2 U.S.C. 431 et seq.) as a political committee,
            ``(B) to any State or local committee of a political party 
        or political committee of a State or local candidate,
            ``(C) to any organization which reasonably anticipates that 
        it will not have gross receipts of $25,000 or more for any 
        taxable year,
            ``(D) to any organization to which this section applies 
        solely by reason of subsection (f)(1), or
            ``(E) with respect to any expenditure which is an 
        independent expenditure (as defined in section 301 of such 
        Act).
        ``(6) Election.--For purposes of this subsection, the term 
    `election' means--
            ``(A) a general, special, primary, or runoff election for a 
        Federal office,
            ``(B) a convention or caucus of a political party which has 
        authority to nominate a candidate for Federal office,
            ``(C) a primary election held for the selection of 
        delegates to a national nominating convention of a political 
        party, or
            ``(D) a primary election held for the expression of a 
        preference for the nomination of individuals for election to 
        the office of President.''.
    (b) Public Disclosure of Reports.--
        (1) In general.--Section 6104(d) of the Internal Revenue Code 
    of 1986 (relating to public inspection of certain annual returns 
    and applications for exemption), as amended by section 1(b)(4), is 
    amended--
            (A) by inserting ``Reports,'' after ``Returns,'' in the 
        heading;
            (B) in paragraph (1)(A), by striking ``and'' at the end of 
        clause (i), by inserting ``and'' at the end of clause (ii), and 
        by inserting after clause (ii) the following new clause:
                ``(iii) the reports filed under section 527(j) 
            (relating to required disclosure of expenditures and 
            contributions) by such organization,''; and
            (C) in paragraph (1)(B), by inserting ``, reports,'' after 
        ``return''.
        (2) Disclosure of contributors allowed.--Section 6104(d)(3)(A) 
    of such Code (relating to nondisclosure of contributors, etc.) is 
    amended by inserting ``or a political organization exempt from 
    taxation under section 527'' after ``509(a))''.
        (3) Disclosure by internal revenue service.--Section 6104(d) of 
    such Code is amended by adding at the end the following new 
    paragraph:
        ``(6) Disclosure of reports by internal revenue service.--Any 
    report filed by an organization under section 527(j) (relating to 
    required disclosure of expenditures and contributions) shall be 
    made available to the public at such times and in such places as 
    the Secretary may prescribe.''.
    (c) Failure To Make Public.--Section 6652(c)(1)(C) of the Internal 
Revenue Code of 1986 (relating to public inspection of annual returns) 
is amended--
        (1) by inserting ``or report required under section 527(j)'' 
    after ``filing)'';
        (2) by inserting ``or report'' after ``1 return''; and
        (3) by inserting ``and reports'' after ``returns'' in the 
    heading.
    (d) Effective Date.--The amendment made by subsection (a) shall 
apply to expenditures made and contributions received after the date of 
the enactment of this Act, except that such amendment shall not apply 
to expenditures made, or contributions received, after such date 
pursuant to a contract entered into on or before such date.

SEC. 3. RETURN REQUIREMENTS RELATING TO SECTION 527 ORGANIZATIONS.

    (a) Return Requirements.--
        (1) Organizations required to file.--Section 6012(a)(6) of the 
    Internal Revenue Code of 1986 (relating to political organizations 
    required to make returns of income) is amended by inserting ``or 
    which has gross receipts of $25,000 or more for the taxable year 
    (other than an organization to which section 527 applies solely by 
    reason of subsection (f)(1) of such section)'' after ``taxable 
    year''.
        (2) Information required to be included on return.--Section 
    6033 of such Code (relating to returns by exempt organizations) is 
    amended by redesignating subsection (g) as subsection (h) and 
    inserting after subsection (f) the following new subsection:
    ``(g) Returns Required by Political Organizations.--In the case of 
a political organization required to file a return under section 
6012(a)(6)--
        ``(1) such organization shall file a return--
            ``(A) containing the information required, and complying 
        with the other requirements, under subsection (a)(1) for 
        organizations exempt from taxation under section 501(a), and
            ``(B) containing such other information as the Secretary 
        deems necessary to carry out the provisions of this subsection, 
        and
        ``(2) subsection (a)(2)(B) (relating to discretionary 
    exceptions) shall apply with respect to such return.''.
    (b) Public Disclosure of Returns.--
        (1) Returns made available by secretary.--
            (A) In general.--Section 6104(b) of the Internal Revenue 
        Code of 1986 (relating to inspection of annual information 
        returns) is amended by inserting ``6012(a)(6),'' before 
        ``6033''.
            (B) Contributor information.--Section 6104(b) of such Code 
        is amended by inserting ``or a political organization exempt 
        from taxation under section 527'' after ``509(a)''.
        (2) Returns made available by organizations.--
            (A) In general.--Paragraph (1)(A)(i) of section 6104(d) of 
        such Code (relating to public inspection of certain annual 
        returns, reports, applications for exemption, and notices of 
        status) is amended by inserting ``or section 6012(a)(6) 
        (relating to returns by political organizations)'' after 
        ``organizations)''.
            (B) Conforming amendments.--
                (i) Section 6104(d)(1) of such Code is amended in the 
            matter preceding subparagraph (A) by inserting ``or an 
            organization exempt from taxation under section 527(a)'' 
            after ``501(a)''.
                (ii) Section 6104(d)(2) of such Code is amended by 
            inserting ``or section 6012(a)(6)'' after ``section 6033''.
    (c) Failure To File Return.--Section 6652(c)(1) of the Internal 
Revenue Code of 1986 (relating to annual returns under section 6033) is 
amended--
        (1) by inserting ``or section 6012(a)(6) (relating to returns 
    by political organizations)'' after ``organizations)'' in 
    subparagraph (A)(i);
        (2) by inserting ``or section 6012(a)(6)'' after ``section 
    6033'' in subparagraph (A)(ii);
        (3) by inserting ``or section 6012(a)(6)'' after ``section 
    6033'' in the third sentence of subparagraph (A); and
        (4) by inserting ``or 6012(a)(6)'' after ``section 6033'' in 
    the heading.
    (d) Effective Date.--The amendments made by this section shall 
apply to returns for taxable years beginning after June 30, 2000.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.