[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 355 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 355
To amend the Internal Revenue Code of 1986 with respect to nonprofit
organizations.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 31, 2001
Mr. Jones of North Carolina (for himself and Mr. Hostettler) introduced
the following bill; which was referred to the Committee on Ways and
Means
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 with respect to nonprofit
organizations.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Nonprofit Political Speech
Protection Act''.
SEC. 2. TAX-EXEMPT ORGANIZATIONS PERMITTED TO ENGAGE IN POLITICAL
CAMPAIGNS, ETC.
(a) In General.--Paragraph (3) of section 501(c) of the Internal
Revenue Code of 1986 is amended by striking ``which does not
participate in, or intervene in'' and all that follows and inserting
``no substantial part of the activities of which is participating in,
or intervening in (including the publishing or distributing of
statements), any political campaign on behalf of (or in opposition to)
any candidate for public office (except as otherwise provided in
subsection (h)).''.
(b) Expansion of Election Under Section 501(h).--
(1) In general.--So much of subsection (h) of section 501
of such Code as precedes paragraph (2) is amended to read as
follows:
``(h) Expenditures by Public Charities To Influence Legislation or
for Political Campaigns.--
``(1) General rules.--
``(A) Expenditures to influence legislation.--In
the case of an organization to which this subsection
applies, exemption from taxation under subsection (a)
shall be denied because a substantial part of the
activities of such organization consists of carrying on
propaganda, or otherwise attempting, to influence
legislation, but only if such organization normally--
``(i) makes lobbying expenditures in excess
of the lobbying ceiling amount for such
organization for each taxable year, or
``(ii) makes grass roots expenditures in
excess of the grass roots ceiling amount for
such organization for each taxable year.
``(B) Expenditures for political campaigns.--In the
case of an organization to which this subsection
applies, exemption from taxation under subsection (a)
shall be denied because a substantial part of the
activities of such organization consists of
participating in, or intervening in (including the
publishing or distributing of statements), any
political campaign on behalf of (or in opposition to)
any candidate for public office, but only if such
organization normally makes political expenditures (as
defined in section 4911(e)) in excess of the political
campaign ceiling amount for such organization for each
taxable year.''
(2) Political campaign ceiling amount.--Paragraph (2) of
section 501(h) of such Code is amended by adding at the end the
following new subparagraphs:
``(E) Political campaign ceiling amount.--The
political campaign ceiling amount for any organization
is 150 percent of the political campaign nontaxable
amount, determined under section 4911(e).''
(3) Conforming amendment.--Paragraph (7) of section 501(h)
of such Code is amended by striking ``the interpretation'' and
all that follows and inserting ``the interpretation under
subsection (c)(3) of the material following `private
shareholder or individual'.''
(c) Comparable Test for Charitable Contribution Deduction.--
Subparagraph (D) of section 170(c)(2) of such Code is amended by
striking ``and which does not participate in, or intervene in'' and
inserting ``or by reason of participating in, or intervening in''.
(d) Revision of Excise Taxes.--
(1) So much of chapter 41 of such Code as precedes
subsection (c) of section 4911 is amended to read as follows:
``CHAPTER 41--PUBLIC CHARITIES
``Sec. 4911. Tax on excess lobbying and
political expenditures.
``Sec. 4912. Tax on disqualifying
lobbying and political
expenditures of certain
organizations.
``SEC. 4911. TAX ON EXCESS LOBBYING AND POLITICAL EXPENDITURES.
``(a) Tax Imposed.--
``(1) In general.--There is hereby imposed on the excess
lobbying and political expenditures of any organization to
which this section applies a tax equal to 25 percent of the
amount of the excess lobbying and political expenditures for
the taxable year.
``(2) Organizations to which this section applies.--This
section applies to any organization with respect to which an
election under section 501(h) (relating to lobbying and
political expenditures by public charities) is in effect for
the taxable year.
``(b) Excess Lobbying and Political Expenditures.--For purposes of
this section, the term `excess lobbying and political expenditures'
means, for a taxable year, the sum of--
``(1) the greater of--
``(A) the amount by which the lobbying expenditures
made by the organization during the taxable year exceed
the lobbying nontaxable amount for such organization
for such taxable year, or
``(B) the amount by which the grass roots
expenditures made by the organization during the
taxable year exceed the grass roots nontaxable amount
for such organization for such taxable year, plus
``(2) the amount by which the political expenditures made
by the organization during the taxable year exceed the
political campaign nontaxable amount for such organization for
such taxable year.''
(2) Section 4911 of such Code is amended by redesignating
subsections (e) and (f) as subsections (f) and (g) and by
inserting after subsection (d) the following new subsection:
``(e) Definitions Relating to Political Expenditures.--For purposes
of this section--
``(1) Political expenditures.--
``(A) In general.--The term `political expenditure'
means any amount paid or incurred by a section
501(c)(3) organization in any participation in, or
intervention in (including the publication or
distribution of statements), any political campaign on
behalf of (or in opposition to) any candidate for
public office.
``(B) Certain other expenditures included.--In the
case of an organization which is formed primarily for
purposes of promoting the candidacy (or prospective
candidacy) of an individual for public office (or which
is effectively controlled by a candidate or prospective
candidate and which is availed of primarily for such
purposes), the term `political expenditure' includes
any of the following amounts paid or incurred by the
organization:
``(i) Amounts paid or incurred to such
individual for speeches or other services.
``(ii) Travel expenses of such individual.
``(iii) Expenses of conducting polls,
surveys, or other studies, or preparing papers
or other materials, for use by such individual.
``(iv) Expenses of advertising, publicity,
and fundraising for such individual.
``(v) Any other expense which has the
primary effect of promoting public recognition,
or otherwise primarily accruing to the benefit,
of such individual.
``(2) Political campaign nontaxable amount.--
``(A) In general.--The lobbying nontaxable amount
for any organization for any taxable year is the lesser
of (i) $1,000,000 or (ii) the amount determined under
the following table:
``If the exempt purpose The lobbying nontaxable amount is--
expenditures are--
Not over $500,000..............
20 percent of the exempt
purpose expenditures.
Over $500,000 but not over
$1,000,000.
$100,000 plus 15 percent of the
excess of the exempt
purpose expenditures
over $500,000.
Over $1,000,000 but not over
$1,500,000.
$175,000 plus 10 percent of the
excess of the exempt
purpose expenditures
over $1,000,000.
Over $1,500,000................
$225,000 plus 5 percent of the
excess of the exempt
purpose expenditures
over $1,500,000.
``(B) Exempt purpose expenditures.--
``(i) In general.--The term `exempt purpose
expenditures' means, with respect to any
organization for any taxable year, the total of
the amounts paid or incurred by such
organization to accomplish purposes described
in section 170(c)(2)(B) (relating to religious,
charitable, educational, etc., purposes).
``(ii) Certain amounts included.--The term
`exempt purpose expenditures' includes--
``(I) administrative expenses paid
or incurred for purposes described in
section 170(c)(2)(B), and
``(II) political expenditures paid
or incurred (whether or not for
purposes described in section
170(c)(2)(B)).
``(iii) Certain amounts excluded.--The term
`exempt purpose expenditures' does not include
amounts paid or incurred to or for--
``(I) a separate fundraising unit
of such organization, or
``(II) one or more other
organizations, if such amounts are paid
or incurred primarily for
fundraising.''
(3) Subsection (g) of section 4911 of such Code, as
redesignated by paragraph (2), is amended by striking ``excess
lobbying expenditures'' each place it appears and inserting
``excess lobbying and political expenditures''.
(4)(A) Section 4912 of such Code is amended--
(i) in the heading by striking ``lobbying
expenditures'' and inserting ``lobbying and political
expenditures'', and
(ii) in the text by striking ``lobbying
expenditures'' and inserting ``lobbying and political
expenditures''.
(B) Paragraph (2) of section 4912(d) of such Code is
amended to read as follows:
``(2) Organization manager.--The term `organization
manager' means--
``(A) any officer, director, or trustee of the
organization (or individual having powers or
responsibilities similar to those of officers,
directors, or trustees of the organization), and
``(B) with respect to any expenditure, any employee
of the organization having authority or responsibility
with respect to such expenditure.''
(e) Other Conforming Amendments.--
(1) Subchapter C of chapter 42 of such Code is hereby
repealed.
(2) Section 4962 of such Code is amended by striking
subsection (c).
(3) Sections 4963 and 7422(g) of such Code are each amended
by striking ``4955,'' each place it appears.
(4) Paragraph (10) of section 6033(b) of such Code is
amended by adding ``and'' at the end of subparagraph (A), by
striking ``and'' at the end of subparagraph (B), and by
striking subparagraph (C).
(5) Section 6213(e) of such Code is amended by striking
``4955 (relating to taxes on political expenditures),''.
(6) The table of subchapters for chapter 42 of such Code is
amended by striking the item relating to subchapter C.
(7) Section 6852 (relating to termination assessments in
case of flagrant political expenditures of section 501(c)(3)
organizations) is hereby repealed.
(8) Clause (v) of section 6091(b)(1)(B) of such Code is
amended by striking ``or 6852(a)''.
(9) Sections 6211(b)(1) and 6212(c)(1) of such Code are
each amended by striking ``or 6852''.
(10) Sections 6213(a), 6234(e)(3), 6863, and 7429(g) of
such Code are each amended by striking ``, 6852,'' each place
it appears.
(11) Section 7429(a)(1)(A) of such Code is amended by
striking ``6852(a),''.
(12) Paragraph (3) of section 7611(i) of such Code is
amended by striking ``, section 6852 (relating to termination
assessments in case of flagrant political expenditures of
section 501(c)(3) organizations),''.
(13) The table of sections for part I of subchapter A of
chapter 70 of such Code is amended by striking the item
relating to section 6852.
(14) Subchapter A of chapter 76 of such Code is amended by
striking section 7409 and by redesignating section 7410 as
section 7409.
(15) The table of sections for such subchapter A is amended
by striking the last 2 items and inserting the following new
item:
``Sec. 7409. Cross references.''.
(f) Effective Date.--The amendments made by this section shall
apply to expenditures made after the date of the enactment of this Act.
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