[Congressional Record Volume 148, Number 37 (Tuesday, April 9, 2002)]
[Senate]
[Page S2415]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mrs. HUTCHISON (for herself, Mr. Lieberman, Mr. McCain, Mr. 
        Feingold, and Mr. Levin):
  S. 2078. A bill to amend section 527 of the Internal Revenue Code of 
1986 to eliminate notification and return requirements for State and 
local political committees and candidate committees and avoid duplicate 
reporting by certain State and local political committees of 
information required to be reported and made publicly available under 
State law, and for other purposes; to the Committee on Finance.
  Mrs. HUTCHISON. Madam President, today I am pleased to again be 
offering legislation that will solve a significant issue for State and 
local legislators and candidates across the country and which I know is 
of serious concern.
  Two years ago, Congress enacted the Full and Fair Political 
Activities Disclosure Act of 2000, Public Law 106-230, a law that 
imposed new IRS reporting requirements on political organizations 
claiming tax-exempt status under Section 527 of the Internal Revenue 
Code. The purpose of this law was to uncover so-called ``stealth 
PACs,'' tax-exempt groups which, prior to the enactment of this law, 
did not have to disclose any contributions or expenditures and were 
free to influence elections in virtual anonymity. While Public Law 106-
230 was intended to target ``stealth PACs,'' it has had the unintended 
consequence of imposing burdensome and duplicative reporting 
requirements on State and local candidates who are not involved in any 
federal election activities. In many States like Texas, state and local 
candidates already file detailed reports with their state election 
officials.
  To correct this problem, I have worked closely with Senator 
Lieberman, among others, to develop legislation that would exempt state 
and local candidates from some of the IRS reporting requirements of 
Public Law 106-230. We have done this in a way that solves the problem 
but without creating new loopholes that would allow ``stealth'' 
organizations to reemerge. This legislation is the product of 
bipartisan and I would like to thank those who have supported our 
efforts, including Senator McCain, Senator Feingold, and Senator Levin 
who join me and Senator Lieberman on this bill today. I originally 
offered legislation on this issue last year and it was included in the 
tax cut bill, the Economic Growth and Tax Relief Reconciliation Act of 
2001. Unfortunately, our provision was dropped from the bill in 
conference.
  Since then, P.L. 106-230 has created an increasingly heavy burden on 
local and State candidates. This is exacerbated by the fact that many 
candidates were not aware of the notification requirements and could 
now face severe penalties. It is time to take action and get this issue 
resolved. The bill we introduce today solves this problem while also 
addressing some issues that have been raised since we first made this 
effort last year. The deadline for the most burdensome reporting 
requirements is fast approaching in May. Congress has delayed too long. 
I again urge my colleagues to support this bill and to solve the 
problem that we created and to do so now.
                                 ______