[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 7799 Introduced in House (IH)]

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119th CONGRESS
  2d Session
                                H. R. 7799

 To amend the Internal Revenue Code of 1986 to provide that 501(c)(3) 
 organizations are liable for the use of funding provided as a fiscal 
                                sponsor.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 4, 2026

  Mr. Moran introduced the following bill; which was referred to the 
                      Committee on Ways and Means

_______________________________________________________________________

                                 A BILL


 
 To amend the Internal Revenue Code of 1986 to provide that 501(c)(3) 
 organizations are liable for the use of funding provided as a fiscal 
                                sponsor.

    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 ``Stop Proxy Organizations Nurturing 
Subversive Operations and Riots Act'' or the ``SPONSOR Act''.

SEC. 2. LIABILITY OF TAX-EXEMPT FISCAL SPONSORS FOR SPONSORED 
              ACTIVITIES.

    Section 501 of the Internal Revenue Code of 1986 is amended by 
adding at the end the following new subsection:
    ``(s) Liability of Fiscal Sponsors for Sponsored Activities.--
            ``(1) In general.--If--
                    ``(A) an organization described in subsection 
                (c)(3) expends funds for a fiscal sponsorship, and
                    ``(B) a deduction under section 170 is allowed to 
                any donor, or such organization represents to any donor 
                that the donor is entitled to a deduction under section 
                170, with respect to a contribution to the organization 
                for purposes of such fiscal sponsorship,
        then the organization shall bear any criminal liability related 
        to or arising from such fiscal sponsorship, and any civil 
        liability concerning a covered activity related to or arising 
        from such fiscal sponsorship.
            ``(2) Covered activity.--For purposes of this subsection, 
        the term `covered activity' means--
                    ``(A) aiding and abetting an act of international 
                terrorism committed, planned, or authorized by an 
                organization that had been designated as a foreign 
                terrorist organization under section 219 of the 
                Immigration and Nationality Act (8 U.S.C. 1189), as of 
                the date on which such act of international terrorism 
                was committed, planned, or authorized, by knowingly 
                providing substantial assistance, or conspiring with 
                the person who committed such an act of international 
                terrorism,
                    ``(B) by force or a specified and credible threat 
                of force, or by physical obstruction, intentionally 
                injuring, intimidating or interfering with or 
                attempting to injure, intimidate or interfere with any 
                person lawfully exercising or seeking to exercise a 
                constitutional right, or
                    ``(C) by using force or a specified credible threat 
                of force or by physically blocking the movement of any 
                article or commodity in commerce to intentionally 
                prevent the lawful movement of interstate and 
                intrastate commerce.
        For purposes of the preceding sentence, the term `intimidate' 
        means to place an individual in reasonable apprehension of 
        bodily harm to such individual or to another.
            ``(3) Fiscal sponsorship.--For purposes of this subsection, 
        the term `fiscal sponsorship means' a relationship in which an 
        organization described in subsection (c)(3)--
                    ``(A) agrees to receive and administer funds on 
                behalf of a project or organization that is not exempt 
                from tax under subsection (a), and
                    ``(B) retains discretion and control over such 
                funds to ensure they are used for the purposes for 
                which such organization was organized and operated.
            ``(4) Presumption of responsibility.--An organization to 
        which paragraph (1) applies is presumed to be responsible for 
        ensuring that the manner in which its funds are used under any 
        fiscal sponsorship complies with applicable laws, regulations, 
        and tax obligations.
            ``(5) Defenses.--The liability established by this 
        subsection does not bar the organization described in 
        subsection (c)(3) from defenses based on exercise of due 
        diligence and reasonable oversight.''.
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