[Congressional Record (Bound Edition), Volume 148 (2002), Part 15]
[House]
[Pages 20812-20816]
[From the U.S. Government Publishing Office, www.gpo.gov]




 ELIMINATING NOTIFICATION AND RETURN REQUIREMENTS FOR STATE AND LOCAL 
               PARTY COMMITTEES AND CANDIDATE COMMITTEES

  Mr. BRADY of Texas. Mr. Speaker, I ask unanimous consent that the 
Committee on Ways and Means be discharged from further consideration of 
the bill (H.R. 5596) to amend section 527 of the Internal Revenue Code 
of 1986 to eliminate notification and return requirements for State and 
local party 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, and ask for its immediate 
consideration in the House.
  The Clerk read the title of the bill.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  Mr. DOGGETT. Mr. Speaker, reserving the right to object, I do find 
most objectionable a procedure that brings up important legislation 
after many Members have departed.
  It is particularly ironic that this bill which has not been before 
any committee of the House or voted upon by any Member of the House up 
until tonight and which deals with open government should be brought up 
in this manner. A genuine commitment to openness and public 
participation requires applying these concepts to more than just the 
bills that one may not like or be opposed to. The need for a more 
complete discussion of this particular bill is all the more apparent 
because of the extended history surrounding it.
  This bill seeks to correct a problem that was produced by a process 
not unlike that we are having tonight. In other words, the error that 
this bill seeks to address is the result of a hurried-up process that 
did not involve full participation by all in this House. This measure 
concerns the first substantive reform of our campaign laws that 
occurred during the period from 1979 all the way up until the year 
2000. And in the spring of 2000 it became apparent that the use of 
stealth PACS, that is, a form of political action committee in which 
the donors and the expenditures would not be known, so-called 527 
committees, might become a significant

[[Page 20813]]

factor in the political activity of that year.
  Accordingly, I have introduced legislation in the spring of 2000 to 
put a stop to this, and sought unsuccessfully on at least two occasions 
in the Committee on Ways and Means and here on the floor of the House 
to correct this problem but was blocked on the floor at least by fairly 
narrow efforts in getting those reforms adopted.
  Finally, after months of delay, the House Republican leadership 
reversed course and brought up a 527 bill for consideration in this 
House, but it did so late at night, even later than tonight here in 
Washington, with the bill text presented essentially as the floor 
consideration got under way. No amendments were permitted and the 
debate was truncated.
  Because this process occurred in this way and because the bill was 
presented rapidly, it was also presented sloppily. And as a result of 
the sloppy way in which it was presented, some problems were created. 
During the full Committee on Ways and Means consideration of this 
issue, the gentleman from Pennsylvania (Mr. Coyne) and I had offered a 
comprehensive alternative. That was an alternative that recognized that 
State and local elected officials were already filing some of these 
reports and that they ought not to have to pay the price for the need 
to reform at the Federal level by having to make duplicative filings. 
None of that language that the gentleman from Pennsylvania (Mr. Coyne) 
and I proposed was included in the bill that was rushed through the 
House late one evening in an effort to prevent broader 527 reform.
  The bill was quickly signed into law and by September of the year 
2000 it became apparent that there was a problem for State and local 
officials. More and more of them recognized they were now going to have 
burdensome and in some cases conflicting reporting requirements at the 
Federal level, in addition to the reports that they were already filing 
at the State or local level.
  Accordingly, I introduced legislation in September of the year 2000 
to correct the problem that I had not created. I recognized then that 
while this was not a bipartisan problem, it did deserve a bipartisan 
solution. Unfortunately, the same people who created the problem 
refused to correct it in the year 2000.
  In the new Congress of 2001 I refiled legislation to address this 
problem and indeed even tried to move it on the Corrections Calendar of 
this House; but, again, the same crowds expressed their objection to 
doing so and to correcting a problem for which our State and local 
officials have had to file duplicative reports during all this time.
  Finally, in April of this year, almost two years after this problem 
had been created, one got an indication of why it had never been 
corrected when H.R. 3391 was offered. That was the Taxpayer Protection 
and IRS Accountability Act to which at the last minute provisions 
dealing with 527s were added in the Committee on Ways and Means. I 
referred then in committee and on the floor to that as a loophole 
exploitation act because it attempted to undermine the bipartisan 
campaign finance law called the Shays-Meehan Act even before that law 
could take effect.
  In the committee, I offered as an alternative language that Senator 
Hutchinson from Texas and Senator Lieberman had proposed in the Senate, 
offered it verbatim to deal with this issue of duplicative reporting 
without opening new loopholes. That was also rejected in the committee 
on the same basis that earlier legislation had been rejected on a party 
line vote.
  Fortunately, this House on a bipartisan basis rejected H.R. 3391, 
what I would refer to as the loophole exploitation act. And it is only 
that action of the House in rejecting that measure that presents us 
this opportunity tonight. Because as I read it, H.R. 5596 basically 
takes the language that I offered in the Committee on Ways and Means 
earlier in the year, language that sought to offer a bipartisan 
approach to this and builds on it in a couple of ways.
  It first adds a provision that the public should be made fully aware 
of that will exempt Members of this House, Members of the House and 
Senate, Federal, State and local candidate committees and national 
party committees from filing what is known as the 990 information form. 
That is information that we would not been required to file in the 
past. It is information that is really designed for charities, 
nonprofits, to file. And it is most cumbersome and awkward, as all 
Members have found when they prepared their 990 forms this year, to 
apply it to Members of Congress because the IRS has not changed the 
form to reflect the fact that we are in a different situation and there 
are different needs for information and the filing of forms for 
individuals in a political situation than occurs for nonprofits around 
the country. So many of the questions are inapplicable.
  It has been a problem for many to complete that form. I suppose that 
changing this provision is not a great loss, but it is clear that less 
information will be available than exists under the current law there. 
And in return for that change made, there are some other changes that I 
think are positive. These are modest changes, but they are changes that 
will make more accessible the access to information on Web sites. So 
that the information as I proposed back in the year 2000 for electronic 
filing would occur but there would be a searchable Web site.
  And it is because these provisions seem to have merit and because I 
have been advised by my colleague from Texas (Mr. Brady) who I know has 
worked diligently to try to bring people together behind this proposal, 
that I am advised by him that the Senate is ready if we act on this 
measure tonight in this unusual way to approve it immediately without 
any language changes before the recess, and that this process will 
assure that the measure gets signed into law immediately and will 
accelerate the pace at which this modest improvement in public access 
to the 527 data begins to occur, that I agree, and only because of 
that, to this very extraordinary process.
  Mr. Speaker, I yield to my colleague from Texas (Mr. Brady) who I am 
sure has some words he wants to say about this process.
  Mr. BRADY of Texas. Mr. Speaker, I thank my colleague from Texas for 
yielding.
  Mr. Speaker, the legislation before us is a necessary and timely 
piece of legislation introduced with the leadership from my colleague 
from Texas (Mr. Doggett), my other colleagues, the gentleman from 
Louisiana (Mr. Vitter), the gentleman from North Dakota (Mr. Pomeroy), 
the gentleman from Connecticut (Mr. Shays), and the gentleman from 
Massachusetts (Mr. Meehan) to correct some of the duplicate reporting 
requirements that many State and local candidate committees and State 
and local political action committees face under the current section 
527 disclosure requirements.
  In short, as my colleague has stated, this legislation eliminates 
most of the duplicative reporting burdens that State and local 
candidate committees now face. That allows us to focus on the true 
intent of the legislation, those stealth Federal PACS, and for those 
organizations that monitor campaign activity, the bill requires the 
Internal Revenue Service to help upgrade their Web site to improve the 
searchability of the public data provided to the IRS.
  This legislation was negotiated on a bipartisan, bicameral basis. It 
has support from groups such as Common Cause and Public Citizen, 
Campaign Finance Institute, the National Council of State Legislatures, 
the American Society of Association Executives, as well as our Senate 
leaders, the Senator from Connecticut, Mr. Lieberman, the Senator from 
Texas, Mrs. Hutchison. It addresses most of the concerns the parties 
have.
  Is it a perfect bill? No. There are areas I personally would like to 
see changed but I think it is an excellent compromise. It is a solid, 
solid improvement over the current law for everyone, and I think the 
broad range of support demonstrates it is a fair bill.
  Mr. Speaker, I want to thank my colleague from Texas (Mr. Doggett) 
for his passion and dedication and leadership on campaign finance 
issues.

[[Page 20814]]

  Mr. Speaker, I rise today in support of H.R. 5596. I introduced this 
legislation with my colleagues Lloyd Doggett, David Vitter, Earl 
Pomeroy, Chris Shays, and Marty Meehan to correct some of the duplicate 
reporting requirements that many state/local candidate committees and 
state/local PACs face under the current Section 527 disclosure 
requirements.
  This legislation was negotiated on a bipartisan, bicameral basis and 
I believe is a good compromise at addressing most of the concerns had 
by all the parties interested in this issue. Is it a perfect bill, no. 
But, it will improve the current law for everyone and I think the broad 
range of support demonstrates it is a fair bill and a win-win for 
everyone.
  In short, this legislation the bill eliminates most of the 
duplicative reporting burdens state and local campaign committees now 
face. And for those organizations that monitor campaign activity, the 
bill requires the IRS to upgrade their website to improve the 
searchability of the public data provided to the IRS.
  Under current law, within 24 hours of establishment, virtually all 
527s must file a short form (Form 8871) notifying the IRS of their 
existence and providing information about who they are, the top people 
who work for them, where the organization is located and how it can be 
contacted.
  This bill removes state/local candidates and state/local party 
committees from filing this form. Federal candidates and committees 
already reported to FEC never had file Form 8871. So now, the only 
filers of Form 8871 will be state/local PACs and non-FEC filing groups 
active in federal elections. The bill will now also require these 
groups to update form if they move or if some material change occurs, 
etc.
  Additionally, 527 organizations must file reports (Form 8872) 
identifying contributors who give them more than $200 and expenditures 
of over $500. H.R. 5596 exempts ``qualified'' state/local groups that 
engage in only state or local activity and that are subject to a state 
reporting regime. It also places restrictions on federal candidates or 
office holders from materially participating in a 527 group that 
receives an exemption.
  Regarding Form 8872, the bill requires a 527 group to add the date 
and purpose of expenditures and the date of contributions as required 
information on the Form 8872. And, 527 groups with contributions over 
$50,000 will be required to file electronically.
  The 2000 law added Section 527 organizations to the list of tax-
exempt organizations that have to file annual, public information 
returns to the IRS--so-called 990 forms. 990s contain aggregate 
information about the filing organization's income and expenditures, 
among other things. The law also directed most 527s to file Form 1120 
tax returns, even if they did not have taxable income. The bill removes 
the filing requirement for organizations with gross receipts of $25,000 
or more.
  With respect to Form 990, H.R. 5696 exempts all PACS that report to 
FEC from filing Form 990. It exempts all state/local candidate and 
party committees, as well as qualified state/local PACS, except those 
with over $100,000 in annual receipts from filing Form 990.
  But to make all this information more user friendly, the bill 
requires the Internal Revenue Service to upgrade their website to 
improve the searchability of data.

  H.R. 5596--Legislation to Reform Section 527 Political Organization 
                               Disclosure

       Purpose: To amend section 527 of the Internal Revenue Code 
     of 1986 to eliminate notification and return requirements for 
     State and local party 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, the bill makes the following changes to current 
     law:


                    Initial Registration (Form 8871)

       The bill removes state/local candidates and state/local 
     party committees from filing. Federal candidates and 
     committees already reported to FEC never had file Form 8871.
       The only filers will be state/local PACs and non-FEC filing 
     groups active in federal elections. The bill will now require 
     these groups to update form if they move or if some material 
     change occurs, etc.


                     Periodic Reporting (Form 8872)

       The bill exempts ``qualified'' state/local groups that 
     engage in only state or local activity and that are subject 
     to a state reporting regime. The bill places restrictions on 
     federal candidates or office holders from materially 
     participating in a 527 group that receives an exemption.
       The bill requires a 527 group to add the date and purpose 
     of expenditures and the date of contributions as required 
     information on the Form 8872.
       The bill requires 527 groups with contributions over 
     $25,000 to file Form 8872. Those with contributions over 
     $50,000 are required to file electronically.


               Annual Income Tax Filling (Form 1120-POL)

       The bill removes the filing requirement for organizations 
     with gross receipts of $25,000 or more.


                    Information Reporting (Form 990)

       The bill exempts all PACs that report to FEC from filing 
     Form 990
       The bill exempts all state/local candidate and party 
     committees from filing Form 990
       The bill exempts qualified state/local PACs, except those 
     with over $100,000 in annual receipts from filing Form 990.
       The bill requires the IRS to modify Form 990 to make it 
     more useful.


                          Other New Provisions

       The bill requires the Internal Revenue Service to upgrade 
     their website to improve the searchability of data.

                              {time}  2030

  Mr. DOGGETT. Mr. Speaker, hoping that the gentleman from Texas is 
correct about all aspects of the bill and appreciative of his comments, 
I remove my reservation.
  The SPEAKER pro tempore (Mr. Simpson). Is there objection to the 
request of the gentleman from Texas?
  There was no objection.
  The Clerk read the bill, as follows:

                               H.R. 5597

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

     SECTION 1. EXEMPTION FOR CERTAIN STATE AND LOCAL POLITICAL 
                   COMMITTEES FROM NOTIFICATION REQUIREMENTS.

       (a) Exemption From Notification Requirements.--Paragraph 
     (5) of section 527(i) of the Internal Revenue Code of 1986 
     (relating to organizations must notify Secretary that they 
     are section 527 organizations) is amended by striking ``or'' 
     at the end of subparagraph (A), by striking the period at the 
     end of subparagraph (B) and inserting ``, or'', and by adding 
     at the end the following:
       ``(C) which is a political committee of a State or local 
     candidate or which is a State or local committee of a 
     political party.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the amendments made by 
     Public Law 106-230.

     SEC. 2. EXEMPTION FOR CERTAIN STATE AND LOCAL POLITICAL 
                   COMMITTEES FROM REPORTING REQUIREMENTS.

       (a) In General.--Section 527(j)(5) of the Internal Revenue 
     Code of 1986 (relating to coordination with other 
     requirements) is amended by redesignating subparagraphs (C), 
     (D), and (E) as subparagraphs (D), (E), and (F), 
     respectively, and by inserting after subparagraph (B) the 
     following new subparagraph:
       ``(C) to any organization which is a qualified State or 
     local political organization,''.
       (b) Qualified State or Local Political Organization.--
     Subsection (e) of section 527 of the Internal Revenue Code of 
     1986 (relating to other definitions) is amended by adding at 
     the end the following new paragraph:
       ``(5) Qualified state or local political organization.--
       ``(A) In general.--The term `qualified State or local 
     political organization' means a political organization--
       ``(i) all the exempt functions of which are solely for the 
     purposes of influencing or attempting to influence the 
     selection, nomination, election, or appointment of any 
     individual to any State or local public office or office in a 
     State or local political organization,
       ``(ii) which is subject to State law that requires the 
     organization to report (and it so reports)--

       ``(I) information regarding each separate expenditure from 
     and contribution to such organization, and
       ``(II) information regarding the person who makes such 
     contribution or receives such expenditure,

     which would otherwise be required to be reported under this 
     section, and
       ``(iii) with respect to which the reports referred to in 
     clause (ii) are (I) made public by the agency with which such 
     reports are filed, and (II) made publicly available for 
     inspection by the organization in the manner described in 
     section 6104(d).
       ``(B) Certain state law differences disregarded.--An 
     organization shall not be treated as failing to meet the 
     requirements of subparagraph (A)(ii) solely by reason of 1 or 
     more of the following:
       ``(i) The minimum amount of any expenditure or contribution 
     required to be reported under State law is not more than $300 
     greater than the minimum amount required to be reported under 
     subsection (j).
       ``(ii) The State law does not require the organization to 
     identify 1 or more of the following:

       ``(I) The employer of any person who makes contributions to 
     the organization.

       ``(II) The occupation of any person who makes contributions 
     to the organization.
       ``(III) The employer of any person who receives 
     expenditures from the organization.
       ``(IV) The occupation of any person who receives 
     expenditures from the organization.
       ``(V) The purpose of any expenditure of the organization.

[[Page 20815]]

       ``(VI) The date any contribution was made to the 
     organization.
       ``(VII) The date of any expenditure of the organization.

       ``(C) De minimis errors.--An organization shall not fail to 
     be treated as a qualified State or local political 
     organization solely because such organization makes de 
     minimis errors in complying with the State reporting 
     requirements and the public inspection requirements described 
     in subparagraph (A) as long as the organization corrects such 
     errors within a reasonable period after the organization 
     becomes aware of such errors.
       ``(D) Participation of federal candidate or office 
     holder.--The term `qualified State or local political 
     organization' shall not include any organization otherwise 
     described in subparagraph (A) if a candidate for nomination 
     or election to Federal elective public office or an 
     individual who holds such office--
       ``(i) controls or materially participates in the direction 
     of the organization,
       ``(ii) solicits contributions to the organization (unless 
     the Secretary determines that such solicitations resulted in 
     de minimis contributions and were made without the prior 
     knowledge and consent, whether explicit or implicit, of the 
     organization or its officers, directors, agents, or 
     employees), or
       ``(iii) directs, in whole or in part, disbursements by the 
     organization.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     Public Law 106-230.

     SEC. 3. EXEMPTION FROM ANNUAL RETURN REQUIREMENTS.

       (a) Income Tax Returns Required Only for Political 
     Organization Taxable Income.--Paragraph (6) of section 
     6012(a) of the Internal Revenue Code of 1986 (relating to 
     persons required to make returns of income) is amended by 
     striking ``or which has'' and all that follows through 
     ``section)''.
       (b) Income Tax Returns Not Subject to Disclosure.--
       (1) Disclosure by the secretary.--Subsection (b) of section 
     6104 of such Code (relating to disclosure by the Secretary of 
     annual information returns) is amended by striking 
     ``6012(a)(6),''.
       (2) Public inspection.--Subsection (d) of section 6104 of 
     such Code (relating to public inspection of certain annual 
     returns) is amended--
       (A) in paragraph (1)(A)(i) by striking ``or section 
     6012(a)(6) (relating to returns by political 
     organizations)'', and
       (B) in subparagraph (2) by striking ``or section 
     6012(a)(6)''.
       (c) Information Returns.--Subsection (g) of section 6033 of 
     such Code (relating to returns required by political 
     organizations) is amended to read as follows:
       ``(g) Returns Required by Political Organizations.--
       ``(1) In general.--This section shall apply to a political 
     organization (as defined by section 527(e)(1)) which has 
     gross receipts of $25,000 or more for the taxable year. In 
     the case of a political organization which is a qualified 
     State or local political organization (as defined in section 
     527(e)(5)), the preceding sentence shall be applied by 
     substituting `$100,000' for `$25,000'.
       ``(2) Annual returns.--Political organizations described in 
     paragraph (1) shall file an annual 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), with 
     such modifications as the Secretary considers appropriate to 
     require only information which is necessary for the purposes 
     of carrying out section 527, and
       ``(B) containing such other information as the Secretary 
     deems necessary to carry out the provisions of this 
     subsection.
       ``(3) Mandatory exceptions from filing.--Paragraph (2) 
     shall not apply to an organization--
       ``(A) which is a State or local committee of a political 
     party, or political committee of a State or local candidate,
       ``(B) which is a caucus or association of State or local 
     officials,
       ``(C) which is an authorized committee (as defined in 
     section 301(6) of the Federal Election Campaign Act of 1971) 
     of a candidate for Federal office,
       ``(D) which is a national committee (as defined in section 
     301(14) of the Federal Election Campaign Act of 1971) of a 
     political party,
       ``(E) which is a United States House of Representatives or 
     United States Senate campaign committee of a political party 
     committee,
       ``(F) which is required to report under the Federal 
     Election Campaign Act of 1971 as a political committee (as 
     defined in section 301(4) of such Act), or
       ``(G) to which section 527 applies for the taxable year 
     solely by reason of subsection (f)(1) of such section.
       ``(4) Discretionary exception.--The Secretary may relieve 
     any organization required under paragraph (2) to file an 
     information return from filing such a return if the Secretary 
     determines that such filing is not necessary to the efficient 
     administration of the internal revenue laws.''.
       (d) Effective Date.--The amendments made by this section 
     shall take effect as if included in the amendments made by 
     Public Law 106-230.

     SEC. 4. NOTIFICATION OF INTERACTION OF REPORTING 
                   REQUIREMENTS.

       (a) In General.--The Secretary of the Treasury, in 
     consultation with the Federal Election Commission, shall 
     publicize--
       (1) the effect of the amendments made by this Act, and
       (2) the interaction of requirements to file a notification 
     or report under section 527 of the Internal Revenue Code of 
     1986 and reports under the Federal Election Campaign Act of 
     1971.
       (b) Information.--Information provided under subsection (a) 
     shall be included in any appropriate form, instruction, 
     notice, or other guidance issued to the public by the 
     Secretary of the Treasury or the Federal Election Commission 
     regarding reporting requirements of political organizations 
     (as defined in section 527 of the Internal Revenue Code of 
     1986) or reporting requirements under the Federal Election 
     Campaign Act of 1971.

     SEC. 5. WAIVER OF FILING AMOUNTS.

       (a) Waiver of Filing Amounts.--Section 527 of the Internal 
     Revenue Code of 1986 is amended by adding at the end the 
     following:
       ``(k) Authority To Waive.--The Secretary may waive all or 
     any portion of the--
       ``(1) tax assessed on an organization by reason of the 
     failure of the organization to comply with the requirements 
     of subsection (i), or
       ``(2) amount imposed under subsection (j) for a failure to 
     comply with the requirements thereof,
     on a showing that such failure was due to reasonable cause 
     and not due to willful neglect.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to any tax assessed or amount imposed after June 
     30, 2000.

     SEC. 6. MODIFICATIONS TO SECTION 527 ORGANIZATION DISCLOSURE 
                   PROVISIONS.

       (a) Unsegregated Funds Not To Avoid Tax.--Paragraph (4) of 
     section 527(i) of the Internal Revenue Code of 1986 (relating 
     to failure to notify) is amended by adding at the end the 
     following new sentence: ``For purposes of the preceding 
     sentence, the term `exempt function income' means any amount 
     described in a subparagraph of subsection (c)(3), whether or 
     not segregated for use for an exempt function.''.
       (b) Procedures for Assessment and Collection of Amounts.--
     Paragraph (1) of section 527(j) of the Internal Revenue Code 
     of 1986 (relating to required disclosure of expenditures and 
     contributions) is amended by adding at the end the following 
     new sentence: ``For purposes of subtitle F, the amount 
     imposed by this paragraph shall be assessed and collected in 
     the same manner as penalties imposed by section 6652(c).''.
       (c) Duplicate Written Filings Not Required.--Subparagraph 
     (A) of section 527(i)(1) of the Internal Revenue Code of 1986 
     is amended by striking ``, electronically and in writing,'' 
     and inserting ``electronically''.
       (d) Application of Fraud Penalty.--Section 7207 of the 
     Internal Revenue Code of 1986 (relating to fraudulent 
     returns, statements, and other documents) is amended by 
     striking ``pursuant to subsection (b) of section 6047 or 
     pursuant to subsection (d) of section 6104'' and inserting 
     ``pursuant to section 6047(b), section 6104(d), or subsection 
     (i) or (j) of section 527''.
       (e) Contents and Filing of Report.--
       (1) Contents.--Section 527(j)(3) of the Internal Revenue 
     Code of 1986 (relating to contents of report) is amended--
       (A) by inserting ``, date, and purpose'' after ``The 
     amount'' in subparagraph (A), and
       (B) by inserting ``and date'' after ``the amount'' in 
     subparagraph (B).
       (2) Electronic filing.--Section 527(j) of such Code is 
     amended by adding at the end the following new paragraph:
       ``(7) Electronic filing.--Any report required under 
     paragraph (2) with respect to any calendar year shall be 
     filed in electronic form if the organization has, or has 
     reason to expect to have, contributions exceeding $50,000 or 
     expenditures exceeding $50,000 in such calendar year.''.
       (3) Electronic filing and access of required disclosures.--
     Section 527 of such Code, as amended by section 5(a), is 
     amended by redesignating subsection (k) as subsection (l) and 
     by inserting after subsection (j) the following new 
     subsection:
       ``(k) Public Availability of Notices and Reports.--
       ``(1) In general.--The Secretary shall make any notice 
     described in subsection (i)(1) or report described in 
     subsection (j)(7) available for public inspection on the 
     Internet not later than 48 hours after such notice or report 
     has been filed (in addition to such public availability as 
     may be made under section 6104(d)(7)).
       ``(2) Access.--The Secretary shall make the entire database 
     of notices and reports which are made available to the public 
     under paragraph (1) searchable by the following items (to the 
     extent the items are required to be included in the notices 
     and reports):
       ``(A) Names, States, zip codes, custodians of records, 
     directors, and general purposes of the organizations.
       ``(B) Entities related to the organizations.

[[Page 20816]]

       ``(C) Contributors to the organizations.
       ``(D) Employers of such contributors.
       ``(E) Recipients of expenditures by the organizations.
       ``(F) Ranges of contributions and expenditures.
       ``(G) Time periods of the notices and reports.

     Such database shall be downloadable.''.
       (f) Contents of Notice.--Section 527(i)(3) of the Internal 
     Revenue Code of 1986 (relating to contents of notice) is 
     amended by striking ``and'' at the end of subparagraph (D), 
     by redesignating subparagraph (E) as subparagraph (F), and by 
     inserting after subparagraph (D) the following new 
     subparagraph:
       ``(E) whether the organization intends to claim an 
     exemption from the requirements of subsection (j) or section 
     6033, and''.
       (g) Timing of Notice in Case of Material Change.--
       (1) In general.--Subparagraph (B) of section 527(i)(1) of 
     the Internal Revenue Code of 1986 (relating to general 
     notification requirement) is amended by inserting ``or, in 
     the case of any material change in the information required 
     under paragraph (3), for the period beginning on the date on 
     which the material change occurs and ending on the date on 
     which such notice is given'' after ``given''.
       (2) Time to give notice.--Section 527(i)(2) of the Internal 
     Revenue Code of 1986 (relating to time to give notice) is 
     amended by inserting ``or, in the case of any material change 
     in the information required under paragraph (3), not later 
     than 30 days after such material change'' after 
     ``established''.
       (3) Effect of failure.--Paragraph (4) of section 527(i) of 
     the Internal Revenue Code of 1986 (relating to effect of 
     failure) is amended by inserting before the period at the end 
     the following: ``or, in the case of a failure relating to a 
     material change, by taking into account such income and 
     deductions only during the period beginning on the date on 
     which the material change occurs and ending on the date on 
     which notice is given under this subsection''.
       (h) Effective Dates.--
       (1) Subsections (a) and (b).--The amendments made by 
     subsections (a) and (b) shall apply to failures occurring on 
     or after the date of the enactment of this Act.
       (2) Subsection (c).--The amendments made by subsection (c) 
     shall take effect as if included in the amendments made by 
     Public Law 106-230.
       (3) Subsection (d).--The amendment made by subsection (d) 
     shall apply to reports and notices required to be filed on or 
     after the date of the enactment of this Act.
       (4) Subsections (e)(1) and (f).--The amendments made by 
     subsections (e)(1) and (f) shall apply to reports and notices 
     required to be filed more than 30 days after the date of the 
     enactment of this Act.
       (5) Subsections (e)(2) and (e)(3).--The amendments made by 
     subsections (e)(2) and (e)(3) shall apply to reports required 
     to be filed on or after June 30, 2003.
       (6) Subsection (g).--
       (A) In general.--The amendments made by subsection (g) 
     shall apply to material changes on or after the date of the 
     enactment of this Act.
       (B) Transition rule.--In the case of a material change 
     occurring during the 30-day period beginning on the date of 
     the enactment of this Act, a notice under section 527(i) of 
     the Internal Revenue Code of 1986 (as amended by this Act) 
     shall not be required to be filed under such section before 
     the later of--
       (i) 30 days after the date of such material change, or
       (ii) 45 days after the date of the enactment of this Act.

     SEC. 7. EFFECT OF AMENDMENTS ON EXISTING DISCLOSURES.

       Notices, reports, or returns that were required to be filed 
     with the Secretary of the Treasury before the date of the 
     enactment of the amendments made by this Act and that were 
     disclosed by the Secretary of the Treasury consistent with 
     the law in effect at the time of disclosure shall remain 
     subject on and after such date to the disclosure provisions 
     of section 6104 of the Internal Revenue Code of 1986.

  The bill was ordered to be engrossed and read a third time, was read 
the third time, and passed, and a motion to reconsider was laid on the 
table.

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