[House Report 106-702]
[From the U.S. Government Publishing Office]
106th Congress Report
HOUSE OF REPRESENTATIVES
2d Session 106-702
======================================================================
FULL AND FAIR POLITICAL ACTIVITY DISCLOSURE ACT OF 2000
_______
June 27, 2000.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
_______
Mr. Archer, from the Committee on Ways and Means, submitted the
following
R E P O R T
together with
DISSENTING VIEWS
[To accompany H.R. 4717]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 4717) to amend the Internal Revenue Code of 1986 to
require 527 organizations and certain other tax-exempt
organizations to disclose their political activities, having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
CONTENTS
Page
I. Summary and Background...........................................8
A. Purpose and Summary................................. 8
B. Background and Need for Legislation................. 9
C. Legislative History................................. 9
II. Explanation of the Bill..........................................9
A. Present Law......................................... 9
B. Reasons for Change.................................. 12
C. Explanation of Provisions........................... 15
III. Votes of the Committee..........................................22
IV. Budget Effects of the Bill......................................23
A. Committee Estimates of Budgetary Effects............ 23
B. Budget Authority and Tax Expenditures............... 24
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 24
V. Other Matters To Be Discussed Under the Rules of the House......26
A. Committee Oversight Findings and Recommendations.... 26
B. Summary of Findings and Recommendations of the
Committee on Government Reform and Oversight....... 26
C. Constitutional Authority Statement.................. 26
D. Information Relating to Unfunded Mandates........... 26
E. Applicability of House Rule XXI5(b)................. 26
F. Tax Complexity Analysis............................. 26
VI. Changes in Existing Law Made by the Bill as Reported............27
VII. Dissenting Views................................................40
The amendment is as follows:
Strike out all after the enacting clause and insert in lieu
thereof the following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Full and Fair Political Activity
Disclosure Act of 2000''.
SEC. 2. INCREASED REPORTING OF POLITICAL ACTIVITIES.
(a) In General.--Subpart A of part III of subchapter A of chapter 61
of the Internal Revenue Code of 1986 (relating to information
concerning persons subject to special provisions) is amended by
inserting after section 6033 the following new section:
``SEC. 6033A. RETURNS RELATING TO POLITICAL ACTIVITIES.
``(a) General Reporting Requirements.--
``(1) In general.--Every organization to which this
subsection applies for a reporting period shall submit a return
to the Secretary for such period. Such return shall include--
``(A) a detailed description of such organization's
disclosable activities during the reporting period and
the purpose and intended results for the major
categories of expenditures for such activities,
including the candidates intended to be affected,
``(B) a list identifying--
``(i) each expenditure made for a disclosable
activity during the reporting period in an
amount in excess of the threshold amount, and
``(ii) the name and address of each person to
whom the organization made any expenditure
required to be reported under clause (i), and
``(C) in the case of a reportable contributor--
``(i) the name and address of the contributor
(and, if the contributor is an individual, the
contributor's occupation and employer),
``(ii) the aggregate amount of contributions
made by such contributor,
``(iii) the name and address of the person
(if any) on whose behalf the contributor made
any payment to such organization, and
``(iv) if any payment by the contributor was
designated for a beneficiary other than such
organization (including amounts which are in
any way earmarked or otherwise directed through
an intermediary), the name and address of the
intended beneficiary.
The information required under the preceding sentence for any
reporting period shall be set forth separately for such period
and in the aggregate for such period and preceding reporting
periods during the calendar year.
``(2) Organizations to which subsection applies.--This
subsection shall apply to any organization described in or
subject to section 527 if--
``(A) such organization is described in paragraph
(4), (5), or (6) of section 501(c), or
``(B) such organization is a 527 organization.
``(3) Exception for non-527 organizations having aggregate
disclosable expenditures of less than $10,000.--This subsection
shall not apply to an organization described in paragraph
(2)(A) for any reporting period if the aggregate expenditures
of the organization for disclosable activities during the
period beginning on January 1 of the calendar year in which the
reporting period begins and ending on the last day of the
reporting period are less than $10,000.
``(4) Reportable contributor.--
``(A) In general.--For purposes of paragraph (1), the
term `reportable contributor' means any person if the
aggregate of the contributions and membership dues,
fees, and assessments (within the meaning of section
527) received by the organization from such person
during the testing period exceeds the threshold amount.
``(B) Exception for dues not attributable to
disclosable activities.--
``(i) In general.--At the election of the
organization, the only dues taken into account
under subparagraph (A) shall be dues
attributable to expenditures for disclosable
activities.
``(ii) Portion of dues attributable to
disclosable activities.--For purposes of clause
(i), the portion of dues attributable to
expenditures for disclosable activities of an
organization is the amount which bears the same
ratio to the total amount of dues as the
expenditures of the organization which are
disclosable under paragraph (1) for the testing
period bears to the total expenditures of the
organization for such period.
``(C) Testing period.--For purposes of this
paragraph, the term `testing period' means, with
respect to any reporting period, the period--
``(i) beginning on January 1 of the calendar
year in which the reporting period begins, and
``(ii) ending on the last day of the
reporting period.
``(5) Special rule for earmarked contributions deposited into
a segregated disclosable activities fund.--
``(A) In general.--In the case of an organization
described in paragraph (4), (5), or (6) of section
501(c), paragraph (1)(C) shall apply only with respect
to amounts received which are earmarked for a
disclosable activity if the organization elects--
``(i) to maintain a segregated disclosable
activities fund,
``(ii) to deposit into such fund only and all
amounts received by such organization which are
earmarked by the contributor for a disclosable
activity, and
``(iii) to make no expenditures for
disclosable activities other than from such
fund.
In the case of such a fund, subsection (d) shall not
apply and the threshold amount shall be $1,000.
``(B) Noncompliance.--In the case of an organization
with respect to which an election is in effect under
subparagraph (A) and which fails to comply with a
requirement in subparagraph (A) during any reporting
period, subparagraph (A) shall not apply to such period
or any subsequent reporting period during the calendar
year in which such period begins.
``(C) De minimis expenditures.--Failures to meet the
requirement of subparagraph (A)(iii) with respect to de
minimis amounts shall not be treated as a failure to
comply with such requirement.
``(6) Threshold amount.--For purposes of this section, the
term `threshold amount' means--
``(A) $200 in the case of a 527 organization, and
``(B) $1,000 in any other case.
``(b) Disclosable Activities.--For purposes of this section--
``(1) 527 organizations.--In the case of a 527 organization,
the term `disclosable activities' means all activities of the
organization.
``(2) Other organizations.--In the case of an organization
described in paragraph (4), (5), or (6) of section 501(c), the
term `disclosable activities' means--
``(A) a 527-type activity,
``(B) establishing, administering, or soliciting
contributions to a 527 organization,
``(C) contributing directly or indirectly to a 527
organization,
``(D) contributing directly or indirectly to an
organization which is described in paragraph (4), (5),
or (6) of section 501(c) and which is required to file
a return under this section for the year in which the
contribution is received or for any of the 3 preceding
years (or would be required to file such a return had
this section been in effect for such years), and
``(E) any mass media communication (including any
mass mailing) which is not a 527-type activity and
which--
``(i) mentions a clearly identified candidate
for election for Federal office (including any
individual who has formed an exploratory
committee for such election) or the political
party of such candidate, or
``(ii) contains the picture or other likeness
of such candidate.
``(3) Exception for communication with members.--Subparagraph
(E) of paragraph (2) shall not apply to communication with bona
fide members of the organization unless such communication
urges such members to communicate with another person or to
take an action as a result of such communication.
``(c) Additional Information From 527 Organizations.--
``(1) Statement of organization.--
``(A) In general.--Every 527 organization shall file
a statement of organization with the Secretary (in such
form and manner as the Secretary shall prescribe) which
contains the information described in subparagraph (B).
Such statement shall be filed not later than 10 days
after the date that such organization is established
(or, in the case of an organization in existence on the
date of the enactment of this section, not later than
10 days after such date of enactment).
``(B) Statement of organization.--The information
described in this subparagraph is--
``(i) the name and address of the 527
organization,
``(ii) the name, address, relationship, and
type of any person which is directly or
indirectly related to or affiliated with such
527 organization,
``(iii) the name, address, and position of
the custodian of books and accounts of the 527
organization,
``(iv) the name and address of the treasurer
of the 527 organization, and
``(v) a listing of all banks, safety deposit
boxes, and other depositories used by the 527
organization.
``(C) Changes in information.--If there is a change
in circumstances such that the most recent statement
filed under this paragraph is no longer accurate, the
527 organization shall file a corrected statement with
the Secretary (in such manner as the Secretary shall
prescribe) not later than 10 days after the date that
the statement first ceased to be accurate.
``(D) Related and affiliated persons.--For purposes
of subparagraph (B)(ii), a person is directly or
indirectly related to or affiliated with a 527
organization if such person, at any time during the 3-
year period ending on the date such statement is
submitted to the Secretary--
``(i) was in a position to exercise
substantial direct or indirect influence over
the process of collecting or disbursing the
exempt purpose funds of such organization, or
``(ii) was in a position to exercise
substantial, overall direct or indirect
influence over the activities of such
organization.
``(2) Other information.--
``(A) In general.--In addition to the information
required by subsection (a), every 527 organization
shall include the information described in subparagraph
(B) on the return required under subsection (a).
``(B) Information described.--The information
described in this subparagraph is--
``(i) a certification, under penalty of
perjury, whether such expenditure is made in
cooperation, consultation, or concert with, or
at the request or suggestion of, any candidate
for public office or any authorized committee
of such candidate or agent of such committee or
candidate,
``(ii) the name, address, and business
purpose of any entity, as well as whether the
entity purports to be exempt from tax under
this title and (if so) the provision under
which the entity purports to be so exempt,
which made (in the aggregate for the reporting
period) a contribution in excess of the
threshold amount to the 527 organization, and
``(iii) the original source and the intended
ultimate recipient of all contributions made by
a person, either directly or indirectly, on
behalf of any particular person, including
contributions which are in any way earmarked or
otherwise directed through any intermediary.
``(d) Reporting Periods and Due Dates for Returns and Statements.--
``(1) In general.--The reporting periods and deadlines for
filing returns and statements required by this section shall
be--
``(A) determined under paragraph (2), (3), or (4),
whichever is selected by the reporting organization,
and
``(B) in the case of disclosable activities which are
independent expenditures, determined under paragraph
(5).
``(2) Quarterly reports, etc.--
``(A) Calendar years having a regularly scheduled
election.--In the case of a calendar year in which a
regularly scheduled election is held--
``(i) Quarterly reports.--
``(I) Period.--The reporting periods
shall be the calendar quarters
beginning with the first quarter of the
calendar year in which a contribution
is accepted or expenditure is made for
a disclosable activity.
``(II) Filing deadline.--Reports
under this clause shall be filed not
later than the 15th 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) Pre-election report.--
``(I) Period.--A pre-election report
with respect to an election shall be
filed for the period ending on the 20th
day before the election and beginning
on the first day of the calendar
quarter which includes such 20th day.
``(II) Filing deadline.--A pre-
election report shall be filed not
later than the 12th day before (or
posted by registered or certified mail
not later than the 15th day before) any
election with respect to which the
organization makes a contribution or
expenditure for a disclosable activity.
``(iii) Post-general election report.--
``(I) Period.--A post-general
election report with respect to an
election shall be filed for the period
ending on the 20th day after the
election and beginning on the first
day of the calendar quarter which
includes such 20th day.
``(II) Filing deadline.--A post-
general election report shall be filed
not later than the 30th day after the
general election.
``(B) Other calendar years.--In the case of any other
calendar year--
``(i) Semiannual reports.--The reporting
periods shall be--
``(I) the 1st 6 months of the
calendar year, and
``(II) the 2d 6 months of such year.
``(ii) Filing deadlines.--The report for the
period described in clause (i)(I) shall be
filed no later than July 31, and the report for
the period described in clause (i)(II) shall be
filed no later than January 31 of the following
calendar year.
``(C) Special elections.--The Secretary shall set
filing dates for reports to be filed with respect to
organizations filing under this paragraph with respect
to special elections. The Secretary shall require no
more than one pre-election report for each election and
one post-election report for the election which fills
the vacancy. The Secretary may waive any reporting
obligation of organizations required to file for
special elections if any report required by this
paragraph is required to be filed within 10 days of a
report required under this subparagraph. The Secretary
shall establish the reporting dates within 5 days of
the setting of such election.
``(D) Exception from quarterly report.--The
requirement to file a quarterly report under
subparagraph (A)(i) for a calendar quarter shall be
waived if the organization is required to file a pre-
election report under subparagraph (A)(ii) during the
period beginning on the 5th day after the close of the
calendar quarter and ending on the 15th day after the
close of the calendar quarter.
``(3) Monthly reports, etc.--
``(A) Period.--The reporting periods shall be monthly
for all calendar years beginning with the first month
of the calendar year in which a contribution is
accepted or expenditure is made for a disclosable
activity.
``(B) Filing deadline.--Reports under this paragraph
shall be filed not later than the 20th day after the
last day of the month.
``(C) Reports in lieu of november and december
reports during election years.--In lieu of filing the
reports otherwise due under this paragraph in November
and December of any year in which a regularly scheduled
general election is held--
``(i) a pre-general election report shall be
filed in accordance with paragraph (2)(A)(ii),
``(ii) a post-general election report shall
be filed in accordance with paragraph
(2)(A)(iii), and
``(iii) a year-end report shall be filed not
later than January 31 of the following calendar
year.
``(4) Certain organizations file annually.--
``(A) In general.--In the case of a 527 organization
described in subparagraph (B)--
``(i) the reporting period shall be such
organization's taxable year, and
``(ii) the due date for the returns and
statements required by this section shall be
the due date (without regard to extensions) for
filing the return of tax for such year, whether
or not such organization is required to file a
return for such taxable year.
``(B) Organization described.--An organization is
described in this subparagraph if such organization is
a 527 organization which is organized and operated
exclusively for the purpose of securing the nomination,
election, or appointment of a clearly identified
candidate for State, local, or judicial office.
``(5) Reporting of independent expenditures.--
``(A) In general.--In the case of a disclosable
activity which is an independent expenditure by an
organization to which subsection (a) applies, the
organization shall file the statement described in
subparagraph (B).
``(B) Statement.--The statement described in this
subparagraph is a statement (filed in accordance with
paragraph (1)(A) unless subparagraph (C) applies) which
includes the information required under subsection
(a)(1) with respect to such independent expenditure.
``(C) Separate reporting with respect to independent
expenditures made within 20 days of election.--The
statement required by subparagraph (B) in the case of a
disclosable activity which is an independent
expenditure described in subparagraph (A) aggregating
$1,000 or more made after the 20th day, but more than
24 hours, before any election shall be filed within 24
hours after such independent expenditure is made. Such
statement shall be filed with the Secretary.
``(e) Definitions.--For purposes of this section--
``(1) 527 organization.--The term `527 organization' means
any political organization (as defined by section 527(e)(1)).
``(2) 527-type activity.--The term `527-type activity' means
influencing or attempting to influence the selection,
nomination, election, or appointment of any individual to any
Federal, State, or local public office or office in a political
organization, or the election of Presidential or Vice-
Presidential electors, whether or not such individual or
electors are selected, nominated, elected, or appointed. Such
term includes the making of expenditures relating to an office
described in the preceding sentence which, if incurred by the
individual, would be allowable as a deduction under section
162(a).
``(3) Contributions.--The term `contributions' has the
meaning given to such term by section 271(b)(2).
``(4) Expenditures.--The term `expenditures' has the meaning
given to such term by section 271(b)(3).
``(f) Special Rules.--
``(1) Electronic filing.--The Secretary shall develop
procedures for submission in electronic form of returns and
statements required to be filed under this section.
``(2) Paperwork and burden reduction for organizations
otherwise disclosing information.--An organization shall not be
required to file any return or statement under this section for
any period if, with respect to such period, such organization
submits to the Secretary, under penalty of perjury, a certified
statement that the organization has made a filing, which is
publicly available, with another Federal agency which includes
all of the information required to be included in such return
or statement and which specifies the public location where such
information may be found.''.
(b) Public Inspection of Returns and Statements.--
(1) In general.--Section 6104 of such Code (relating to
publicity of information required from certain exempt
organizations and certain trusts) is amended by adding at the
end the following new subsection:
``(e) Inspection of Documents Relating to Political Activities of
Certain 501(c) Organizations and 527 Organizations.--
``(1) In general.--In the case of any organization required
to submit a document under section 6033A--
``(A) a copy of such document shall be made available
by such organization for inspection during regular
business hours by any individual at the principal
office of such organization and, if such organization
regularly maintains 1 or more regional or district
offices having 3 or more employees, at each such
regional or district office, and
``(B) upon request of an individual made at such
principal office or such a regional or district office,
a copy of such document shall be provided to such
individual without charge other than a reasonable fee
for any reproduction and mailing costs.
The request described in subparagraph (B) must be made in
person or in writing. If such request is made in person, such
copy shall be provided immediately and, if made in writing,
shall be provided within 30 days.
``(2) Annual income tax returns of 527 organizations.--In the
case of an organization required to file a return under section
6012(a)(6), the requirements of paragraph (1) shall also apply
to such return.
``(3) Timely availability.--
``(A) In general.--Except as provided in subparagraph
(B), documents required to be available under this
subsection shall be available no later than 2 business
days after being filed.
``(B) Exception.--Subparagraph (A) shall not apply
to--
``(i) any document filed under section 6033A
with respect to an annual period, and
``(ii) any return filed under section
6012(a)(6).
``(4) 3-year limitation on inspection documents.--Paragraphs
(1) and (2) shall apply to any document only during the 3-year
period beginning on the last day prescribed for its filing
(determined with regard to any extension of time for filing).
``(5) Limitation on providing copies.--A rule similar to the
rule of subsection (d)(4) shall apply for purposes of this
subsection.''.
(2) Inspection of information returns and income tax returns
of political organizations.--Subsection (b) of section 6104 of
such Code (relating to inspection of annual information
returns) is amended to read as follows:
``(b) Inspection of Information Returns and Income Tax Returns of
Political Organizations.--
``(1) In general.--The information required to be furnished
by sections 6033, 6033A, 6034, and 6058 (together with the
names and addresses of such organizations and trusts) and
returns filed under section 6012(a)(6) shall be made available
to the public at such times and in such places as the Secretary
may prescribe.
``(2) Exceptions.--
``(A) Nondisclosure of names and addresses of
contributors.--
``(i) In general.--Nothing in this subsection
shall authorize the Secretary to disclose the
name or address of any contributor to any
organization or trust which is required to
furnish such information.
``(ii) Exception.--Clause (i) shall not apply
to a private foundation (as defined in section
509(a)), a 527 organization (as defined in
section 6033A(e)), or information on a return
under section 6033A(a) of an organization
described in paragraph (4), (5) or (6) of
section 501(c).
``(B) Religious and apostolic organizations.--In the
case of an organization described in section 501(d),
this subsection shall not apply to copies referred to
in section 6031(b) with respect to such organization.
``(3) Special rules for information under section 6033a.--
``(A) Timely availability.--Documents filed under
section 6033A (other than with respect to an annual
period) shall be available under paragraph (1) no later
than 2 business days after being filed.
``(B) Availability on world wide web.--To the extent
practicable, documents filed under section 6033A shall
also be made available to the public on the world wide
web.
``(4) Cooperation with other federal agencies.--The Secretary
may cooperate with another Federal agency to carry out the
requirements of this subsection with respect to returns and
statements required to be filed under section 6033A.''.
(c) Penalties for Failure To File Documents or Provide Public
Inspection of Documents.--
(1) Penalty for failure to report disclosable activities.--
Subsection (c) of section 6652 of such Code is amended by
redesignating paragraphs (2), (3), and (4) as paragraphs (3),
(4), and (5), respectively, and by inserting after paragraph
(1) the following new paragraph:
``(2) Information under section 6033a.--
``(A) In general.--In the case of--
``(i) a failure to file a document required
under section 6033A (relating to returns
relating to political activities) at the time
and in the manner prescribed therefor
(determined without regard to any extension of
time for filing), or
``(ii) a failure to include any of the
information required to be shown on such a
return or statement or to show the correct
information,
there shall be paid by the organization an amount equal
to the rate of tax specified in section 527(b)(1)
multiplied by the amount to which the failure relates.
``(B) Public inspection.--In the case of a failure to
comply with the requirements of section 6104(e) at the
time and in the manner prescribed therefor (determined
without regard to any extension of time for filing),
there shall be paid by the person failing to meet such
requirements $20 for each day during which such failure
continues. The maximum penalty imposed under this
subparagraph on all persons for failures with respect
to any 1 statement shall not exceed $10,000.
``(C) Additional penalty on managers of 527
organizations.--
``(i) In general.--The Secretary may make a
written demand on any 527 organization subject
to penalty under subparagraph (A) specifying
therein a reasonable future date by which the
return or statement shall be filed (or the
information furnished) for purposes of this
subparagraph.
``(ii) Failure to comply with demand.--If any
person fails to comply with any demand under
clause (i) on or before the date specified in
such demand, there shall be paid by the person
failing to so comply $10 for each day after the
expiration of the time specified in such demand
during which such failure continues. The
maximum penalty imposed under this subparagraph
on all persons for failures with respect to any
1 statement shall not exceed $5,000.''.
(2) Other penalties.--
(A) Section 6685 of such Code (relating to assessable
penalty with respect to public inspection requirements
for certain tax-exempt organizations) is amended--
(i) by striking ``subsection (d)'' and
inserting ``subsection (d) or (e)'', and
(ii) by striking ``return or application''
each place it appears and inserting ``return,
application, or statement''.
(B) Section 7207 of such Code (relating to fraudulent
returns, statements, and other documents) is amended by
striking ``subsection (d)'' and inserting ``subsection
(d) or (e)''.
(d) Conforming Amendments.--
(1) Section 527 of such Code is amended by adding at the end
the following new subsection:
``(i) Cross References.--
``(1) For reporting and inspection requirements, see
sections 6033A and 6104.
``(2) For penalties for failure to file returns and
statements, see sections 6652, 6685, and 7207.''.
(2) The table of sections for subpart A of part III of
subchapter A of chapter 61 of such Code is amended by inserting
after the item relating to section 6033 the following new item:
``Sec. 6033A. Returns relating to
political activities.''.
(e) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to----
(A) expenditures made and contributions received with
respect to disclosable activities in reporting periods
beginning after the date of the enactment of this Act,
and
(B) expenditures made and contributions received in
annual reporting periods ending after the date of the
enactment of this Act, except that only expenditures
and contributions described in subparagraph (A) shall
be taken into account.
(2) Statement of organization.--Paragraph (1) of section
6033A(c) of the Internal Revenue Code of 1986 (as added by this
section) shall take effect on the date of the enactment of this
Act.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
Purpose
The bill, H.R. 4717, as amended (``The Full and Fair
Political Activity Disclosure Act of 2000'') requires increased
reporting and disclosure by section 527 organizations and by
certain other tax-exempt organizations with respect to their
political activities.
The bill has a negligible effect on Federal fiscal year
budget receipts over the fiscal years 2001-2005.
Summary
The bill adopts reporting and disclosure requirements
applicable to the political activities of section 527
organizations and certain other tax-exempt organizations. Under
the bill, section 527 organizations and civic leagues and
social welfare organizations (described in section 501(c)(4)),
labor, agricultural, and horticultural organizations (described
in section 501(c)(5)), and business leagues, chambers of
commerce, trade associations, and professional football leagues
(described in section 501(c)(6)) generally are required to file
returns with the Secretary of the Treasury to report
contributions and expenditures relating to their political
activities. These returns are required to be made available to
the public by the organization and by the Internal Revenue
Service (``IRS''). In addition, section 527 organizations are
required to file a statement of organization with the Secretary
of the Treasury.
B. Background and Need for Legislation
The provisions approved by the Committee reflect the need
for increased reporting of activities by section 527
organizations and certain other tax-exempt organizations with
respect to political activities.
C. Legislative History
Subcommittee hearing
The Subcommittee on Oversight held a hearing on June 20,
2000, with respect to the political activities of tax-exempt
organizations and section 527 political organizations.
Committee action
The bill, H.R. 4717, was introduced by Mr. Houghton on June
22, 2000. The Committee on Ways and Means marked up the bill on
June 22, 2000, and approved the bill with a Chairman's
amendment in the nature of a substitute, by a roll call vote of
23 yeas and 14 nays, with a quorum present.
II. EXPLANATION OF THE BILL
A. Present Law
Overview
Present-law section 501(c) provides for twenty-seven
different categories of nonprofit organizations that generally
are exempt from Federal income tax. Among the types of
organizations described in section 501(c) are: civic leagues
and social welfare organizations (described in section
501(c)(4)); labor, agricultural, and horticultural
organizations (described in section 501(c)(5)); and business
leagues, chambers of commerce, trade associations, and
professional football leagues (described in section 501(c)(6)).
Section 527 provides a limited tax-exempt status to
``political organizations,'' meaning a party, committee,
association, fund, account, or other organization (whether or
not incorporated) organized and operated primarily for the
purpose of directly or indirectly accepting contributions or
making expenditures (or both) for an ``exempt function.'' These
organizations are generally exempt from Federal income tax on
contributions they receive, but are subject to tax on their net
investment income and certain other income at the highest
corporate income tax rate (currently 35 percent). Donors are
exempt from gift tax on their contributions to such
organizations. For purposes of section 527, the term ``exempt
function'' means: the function of influencing or attempting to
influence the selection, nomination, election or appointment of
any individual to any Federal, State, or local public office or
office in a political organization, or the election of
Presidential or Vice-Presidential electors, whether or not such
individual or electors are selected, nominated, elected, or
appointed. Thus, by definition, the purpose of a section 527
organization is to accept contributions or make expenditures
for political campaign (and similar) activities.
Present-law rules governing political activities of tax-exempt
organizations
The Federal tax rules applicable to political activities of
tax-exempt organizations depend on the nature of the
organization and the nature and extent of the activities. There
is no bright-line test for determining whether particular
activities are political campaign activities, lobbying
activities, or other activities (e.g., educational activity).
Tax-exempt organizations other than those described in
section 501(c)(3) generally are permitted to engage in
political activities. For many of these organizations,
political activities are inconsistent with the purpose for
which the particular organization was established; thus, most
such organizations do not engage in any significant political
activities. However, for those organizations (such as civic
leagues and social welfare organizations (described in section
501(c)(4)), labor, agricultural, and horticultural
organizations (described in section 501(c)(5)), and business
leagues, chambers of commerce, trade associations, and
professional football leagues (described in section 501(c)(6)))
that do engage in significant political activities, such
activities cannot be the primary activities of such an
organization.
Even though a non-501(c)(3) tax-exempt organization that
engages in political activities will generally retain its tax-
exempt status so long as such activities are not the primary
means of accomplishing its purposes, such activities will
result in the organization being subject to tax under section
527(f) on the lesser of the amount of its investment income or
the amount expended on political activities. However, a non-
501(c)(3) organization may establish a separate segregated
fund, which may be treated as a separate organization under
section 527(f)(3), so that the expenditures and net investment
income of the fund will not be attributed to the sponsoring
organization.
Present-law filing and disclosure requirements
Recognition of tax-exempt status
Most non-section 501(c)(3) organizations are not required
to notify the IRS that they are seeking recognition of their
tax-exempt status. Such organizations may voluntarily file
exemption applications in order to establish their
qualifications for tax exemption with the IRS.
Section 527 organizations are subject to no notification
requirement when they are formed and there is no separate
application for recognition of status as a section 527
organization. However, an organization wishing to receive
confirmation of its status as a section 527 organization may
request a written determination from the IRS in the form of a
private letter ruling.
Annual filing requirements
Tax-exempt organizations generally are required to file an
annual information return with the IRS. An organization that
has not received a determination of its tax-exempt status, but
that claims tax-exempt status under section 501(a), is subject
to the same annual reporting requirements and exceptions as
organizations that have received a tax-exemption determination.
Most tax-exempt organizations are required to file annually
Form 990 (Return of Organization Exempt From Income Tax).
Section 501(c) organizations are required to disclose on their
Form 990 for each year the total amount of direct or indirect
political expenditures made by the organization during the
year. No detailed accounting of such expenditures is required.
In addition, the Form 990 requires tax-exempt organizations to
report the total amount of dues and contributions received by
the organization during the taxable year. Tax-exempt
organizations generally are required to report with the Form
990 a list of major contributors (i.e., generally persons
making gifts of $5,000 or more during the year).
Section 527 political organizations are not required to
file Form 990. If a section 527 political organization has
taxable income, it is required annually to file Form 1120-POL
(U.S. Income Tax Return for Certain Political Organizations);
however, if the political organization does not have taxable
income, the Form 1120-POL is not required to be filed. A tax-
exempt organization (other than a section 501(c)(3)
organization) also is required to file Form 1120-POL if the
organization's political expenditures and net investment income
both exceed $100 for the year and must disclose on the Form 990
the fact that it has filed the Form 1120-POL. If such atax-
exempt organization establishes and maintains a section 527(f)(3)
separate segregated fund, the fund may be required to file Form 1120-
POL if the fund has taxable income.
Because it is an income tax return, the Form 1120-POL
requires information related to the amount of income and
deductible expenses of the filing organization (or separate
segregated fund) for the year. The Form 1120-POL does not
contain information relating to the political activities of the
organization or contributors to the organization and does not
require such organizations to report even their total expenses
relating to political activities. Thus, the Form 1120-POL does
not contain information relating to contributors to the
organization or the specific activities of the organization (or
fund).
Disclosure requirements
Under present law, section 501(c) organizations are
required to make a copy of their application for recognition of
tax-exempt status (and certain related documents) and their
annual information return (Form 990) available for inspection
by any individual during regular business hours at the
organization's principal office or any regional or district
office that has three or more employees. All tax-exempt
organizations are required to comply with requests made in
person or in writing by individuals who seek a copy of the
organization's Form 990 for any of the organization's three
most recent taxable years. Upon such a request, the
organization is required to supply copies without charge other
than a reasonable fee for reproduction and mailing costs. If
the request for copies is made in person, then the organization
must provide such copies immediately. If the request for copies
is made in writing, then copies must be provided within 30
days. An organization is not required to supply copies if its
application or Form 990 is widely available, such as on the
World Wide Web.
Upon written request to the IRS, members of the general
public also are permitted to inspect annual information returns
of tax-exempt organizations and applications for recognition of
tax-exempt status (and related documents). A person making such
a written request is notified by the IRS when the material is
available for inspection, and where notes may be taken of the
material open for inspection, photographs taken with the
person's own equipment, or copies of such material obtained
from the IRS for a fee. Annual information returns must be made
available for a three-year period beginning with the due date
for the return (including any extension of time for filing).
Tax-exempt organizations described in section 501(c) and
section 527 organizations are not required to disclose their
Forms 1120-POL to the general public. In addition, most tax-
exempt organizations are not required to disclose to the
general public the names of contributors.
Separability clause
Under present law, if any provision of the Internal Revenue
Code or the application of any such provision to any person or
circumstance is held invalid, the remainder of the Internal
Revenue Code and its application to any other person or
circumstance is not affected.
B. Reasons for Change
Recent press reports have focused on the use of section 527
political organizations to fund political activities that are
not disclosed to the public under either the Federal tax law or
under the Federal election laws. These reports make clear that
section 527 organizations are being used in ways that were not
necessarily contemplated when section 527 was enacted in 1975.
Based on recent IRS rulings, the Committee believes that the
activities of many of these organizations are being limited to
ensure that the organizations are not engaged in express
advocacy that would be reported and disclosed under the Federal
election laws. Thus, the Committee finds that section 527
organizations are being used to exploit the lack of information
reporting and disclosure under the present-law Federal tax
rules. This finding is supported by the fact that IRS
Statistics of Income data show a clear trend toward increased
use of section 527 organizations in recent years and by the
fact that the IRS has been asked to rule on a number of
occasions with respect to section 527 organizations that, by
their charter, cannot engage in express advocacy.
In addition, the Committee believes that the use of tax-
exempt organizations generally to engage in political
activities is substantial and increasing. For example, an
Associated Press story (reporting that the National Education
Association, the nation's largest teachers union, spent
millions of dollars to ``help elect `pro-education candidates',
produce political training guides, and gather teachers' voting
records,'' but reported no expenditures for political
activities to the Internal Revenue Service) was cited during
the Committee's markup on the issue of political activities by
tax-exempt organizations.\1\ Thus, the Committee believes that
any solution to the present-law problems relating to the lack
of disclosure of information by section 527 organizations must
also address the growing use of certain other tax-exempt
organizations to engage in significant political activities and
the limited disclosure that is required with respect to such
activities under present law.
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\1\ Margasak, Larry and Solomon, John AP, 6/22/2000.
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The Committee understands that there is no bright-line test
under present law for determining when the activities of a tax-
exempt organization are political activities or educational
activities. The IRS determines whether an organization is
participating or intervening, directly or indirectly, in a
political campaign based upon all of the facts and
circumstances of each case. Unlike a bright-line test, the
facts and circumstances test of present law permits the
definition of political activity to be flexible to address a
changing political environment. The Committee believes that the
IRS is, in fact, administering the law in this area through its
ruling process. The Committee understands that more than 100
rulings (or other forms of guidance) have been issued on the
issue of whether any particular activities of a tax-exempt
organization are political, lobbying, or educational
activities. The Committee urges the IRS to continue to provide
guidance to tax-exempt organizations to provide clear
guidelines with respect to the delineation of nonpartisan
educational activities and partisan political activities.
Tax-exempt organizations are required under present law to
report their aggregate political expenditures on their annual
return (Form 990). In order to satisfy this reporting
requirement, organizations are required to keep records of such
political expenditures. Indeed, the Committee is aware that
tax-exempt organizations are reporting substantial aggregate
political expenditures on their Form 990s. In 1994, nearly
1,300 section 501(c)(4), section 501(c)(5), and section
501(c)(6) organizations reported a total of over $29 million in
political expenditures on their Form 990s. However, under
present law, such organizations are not required to provide any
detailed description or accounting of such activities to the
IRS or to the public. In addition, there are no substantial
dollar penalties under present law to encourage proper
classification and disclosure of such activities. In the
absence of rules requiring detailed disclosure of their
political activities with adequate dollar penalties for failure
to disclose, organizations have no strong incentives to make a
reasoned determination of whether their activities are
educational or political and to disclose them accurately.
The Committee believes that enhancing the information
reported to the IRS with respect to section 527 organizations
and section 501(c)(4), section 501(c)(5), and section 501(c)(6)
organizations would enable the IRS to better monitor whether
such organizations are complying with the present-law rules
requiring the organizations to pay tax on the net investment
income used to engage in political activities. Furthermore,
requiring additional reporting of activities that appear to be
political in nature would assist the IRS in its efforts to
ensure that organizations are not impermissibly characterizing
certain activities as educational, rather than political.
In addition, the Committee believes that, given the tax
benefits conferred under present law (e.g., the benefits of
tax-exempt status to section 501(c)(4), section 501(c)(5), and
section 501(c)(6) organizations and the benefits of the gift
tax exemption for contributions to section 527 organizations),
the public interest is served by greater public disclosure of
information relating to the political activities of such
organizations, including a detailed listing of expenditures for
political activities and the source of funds (i.e.,
contributions) used for this purpose. Public disclosure of
information enables the general public to provide oversight of
the political activities of these organizations.
These enhanced disclosure and reporting rules are intended
to make no changes to the present-law substantive rules
regarding the extent to which tax-exempt organizations are
permitted to engage in political activities. Thus, the
Committee bill is not intended to alter the involvement of such
organizations in the political process, but rather it is
intended to shed sunlight on these activities so that the
general public can be informed as to the types and extent of
activities in which such organizations engage. This increased
information will assist individuals in determining, for
example, whether to make a contribution to any specific tax-
exempt organization.
The Committee understands that some people contend that the
oversight of political activities in the bill, which merely
requires reporting of additional information to the IRS and
making such information public, is unconstitutional. The
Committee believes that this argument has already been
considered and rejected by the Supreme Court with respect to
section 501(c)(3) organizations and that the analysis with
respect to other tax-subsidized organizations, including
section 527 organizations, would be the same. The Committee
notes that the Supreme Court hasheld that, when Congress
chooses simply not to provide a tax subsidy with respect to certain
activities by a section 501(c)(3) organization, no First Amendment or
Fifth Amendment rights have been infringed. In its decision in Regan v.
Taxation With Representation of Washington,\2\ the Supreme Court
addressed the issue of the rules restricting section 501(c)(3)
organizations from engaging in any substantial lobbying activities. The
Court stated that tax exemptions and tax deductions are subsidies that
are administered through the Federal tax system. The Court noted that
tax exemption has much the same effect as a cash grant to an
organization of the amount of tax it would have to pay if it were not
tax exempt. The Court held that a legislature's decision not to
subsidize the exercise of a fundamental right does not infringe that
right and, therefore, is not subject to strict scrutiny by the courts.
The Court also noted that the organization in the Taxation With
Representation \3\ case had the ability to reorganize itself to avoid
the proscription on substantial lobbying by section 501(c)(3)
organizations. The Committee believes that, because the Committee's
bill does not change the present-law rules relating to the ability of
section 501(c)(4), section 501(c)(5), and section 501(c)(6)
organizations and section 527 organizations to engage in certain
activities, the analysis of the Supreme Court in Taxation With
Representation \4\ should apply. It is difficult to imagine that the
Supreme Court would conclude that it is constitutional to eliminate a
tax subsidy for certain activities, but not constitutional to require
that organizations comply with reporting requirements with respect to
those activities so that the IRS can monitor compliance with the law.
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\2\ 461 U.S. 540 (1983).
\3\ Id.
\4\ Id.
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The Committee notes that section 501(c)(4), section
501(c)(5), and section 501(c)(6) organizations can avoid the
reporting and disclosure requirements of the bill by using a
special rule for earmarked contributions deposited into a
segregated disclosable activities fund. This point addresses
the argument made by some that requiring an organization to
report its contributors denies such contributors their right to
free association and free speech. The Committee finds that, by
permitting organizations to earmark contributions for political
activities and to deposit such contributions in a segregated
fund, contributors need only be disclosed if they earmark their
contributions for political activities.
The Committee understands that some believe that the bill
is unconstitutional under the rationale found in Buckley v.
Valeo \5\, which declared certain Federal election laws
unconstitutional due to, among other things, vagueness.
However, because the bill does not regulate political
activities, but instead merely requires the disclosure of such
activities and because the bill relies on present-law section
527, which has not been constitutionally challenged, the
Committee does not believe that this criticism has merit.
---------------------------------------------------------------------------
\5\ 424 U.S. 1 (1976).
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The Committee finally notes that, by establishing
thresholds above which expenditures and contributors are
disclosed, the bill focuses reporting and disclosure on
activities, expenditures, and contributors of more than de
minimis amounts.
For the foregoing reasons, the Committee finds it
appropriate to adopt reporting and disclosure requirements
applicable to the political activities of and contributors to
section 527 organizations, to expand the reporting of political
activity expenditures with respect to section 501(c)(4),
section 501(c)(5), and section 501(c)(6) organizations, and
generally to require the reporting of contributors to section
501(c)(4), section 501(c)(5), and section 501(c)(6)
organizations.
C. Explanation of Provisions
In general
The bill adopts reporting and disclosure requirements
applicable to the political activities of and contributors to
section 527 organizations, expands the reporting of political
activity expenditures with respect to civic leagues and social
welfare organizations (described in section 501(c)(4)), labor,
agricultural, and horticultural organizations (described in
section 501(c)(5)), and business leagues, chambers or commerce,
trade associations, and professional football leagues
(described in section 501(c)(6)), and generally requires the
reporting of contributors to section 501(c)(4), section
501(c)(5), and section 501(c)(6) organizations. Under the bill,
section 527 organizations and section 501(c)(4), section
501(c)(5), and section 501(c)(6) organizations generally are
required to file returns with the Secretary of the Treasury to
report contributions and expenditures relating to their
disclosable activities. In addition, section 527 organizations
are required to file a statement of organization with the
Secretary of the Treasury.
Information required to be disclosed
Under the bill, a section 501(c)(4), section 501(c)(5), or
section 501(c)(6) organization or a section 527 organization
subject to the reporting and disclosure requirements is
required to include the following information in its return
reports:
(1) a detailed description of the organization's
disclosable activities during the reporting period and
the purpose and intended results for the major
categories of expenditures for such disclosable
activities, including the candidates intended to be
affected by the expenditures;
(2) a list containing each expenditure made for a
disclosable activity during the reporting period in
excess of $200 (in the case of expenditures by section
527 organizations) and $1,000 (in the case of
expenditures by section 501(c)(4), section 501(c)(5),
and section 501(c)(6) organizations subject to the
reporting and disclosure requirement);
(3) a list containing the name and address of each
person to whom the organization made any expenditure
during the reporting period in an aggregate amount in
excess of $200 (in the case of expenditures by section
527 organizations) and $1,000 (in the case of
expenditures by section 501(c)(4), section 501(c)(5),
and section 501(c)(6) organizations subject to the
reporting and disclosure requirement); and
(4) in the case of a reportable contributor,
(a) the name and address of the contributor
(and, if the contributor is an individual, the
contributor's occupation and employer),
(b) the aggregate amount of contributions
made by such contributor,
(c) the name and address (if any) of the
person on whose behalf the contributor made a
payment to the organization, and
(d) the name and address of any intended
beneficiary of a payment that was designated
for a beneficiary other than the organization
to which the payment was made (including
amounts earmarked or otherwise directed through
an intermediary).
In the case of a section 527 organization, the following
additional information is required to be included on the
return:
(1) a certification, under penalty of perjury,
whether an expenditure is made in cooperation,
consultation, or concert with, or at the request or
suggestion of, any candidate for public office or any
authorized committee or agent of such a candidate;
(2) the name, address, and business purpose of any
entity that is a reportable contributor during the
reporting period;
(3) in the case of an entity described in (2),
whether the entity claims to be exempt from tax and the
basis for the tax-exempt status; and
(4) the original source and the intended ultimate
recipient of all contributions made by a person
directly or indirectly, including contributions that
are earmarked or otherwise directed through an
intermediary.
Under the bill, this information must be provided for the
applicable reporting period and cumulatively for the calendar
year.
The bill defines the term contribution to include a gift,
subscription, loan, advance, or deposit of money, or anything
or value, and includes a contract, promise, or agreement to
make a contribution, whether or not legally enforceable. It is
assumed that such term includes all grants and transfers of
money. In addition, the term expenditure includes a payment,
distribution, loan, advance, deposit, or gift of money, or
anything of value, and includes a contract, promise, or
agreement to make an expenditure, whether or not legally
enforceable.
Reporting periods and due dates
Under the bill, the reporting periods and deadlines
generally are the same as those required for reports under 2
U.S.C. 434(a) codifying the Federal Election Campaign Act of
1971 (``FECA''). In general, the FECA specifies different
reporting periods and deadlines depending upon whether it is an
election or non-election year and the nature of the
organization (i.e., principal campaign committee of a candidate
for the House of Representatives or Senate, principal campaign
committee of a candidate for the office of President, or a
political committee other than an authorized committee of a
candidate). Under the FECA, reporting can be required monthly,
quarterly, or semi-annually and special pre- and post-general
election reports are required.
As under the FECA, there is separate reporting of
independent expenditures made within 20 days of an election.
For this purpose, the term ``independent expenditure'' is
intended to bedefined by reference to mass media communications
as described in the definition of disclosable activities, below.
In the case of a section 501(c)(4), a section 501(c)(5), or
a section 501(c)(6) organization, the reporting and disclosure
requirements do not apply for any reporting period if the
aggregate expenditures of the organization for disclosable
activities are less than $10,000 for the period beginning
January 1 of the calendar year through the end of the reporting
period.
Under the bill, in the case of a section 527 organization
organized and operated exclusively for the purpose of securing
the nomination, election, or appointment of a candidate for
State, local, or judicial office, the reporting period is the
organization's taxable year and the deadline for reporting is
the due date for the organization's annual return, whether or
not the organization is required to file an annual return.
Definition of reportable contributor
Under the bill, a reportable contributor means any person
if the aggregate of such person's contributions and membership
dues, fees, and assessments (as defined in section 527)
received by the organization from the person exceed $200 (in
the case of a section 527 organization) or $1,000 (in the case
of a section 501(c)(4) organization, a section 501(c)(5)
organization, or a section 501(c)(6) organization subject to
the reporting and disclosure requirements) during the period
beginning January 1 and ending on the last day of the
applicable reporting period.
In determining the amount of dues of any person, an
organization may elect under the bill only to take into account
dues that are attributable to the disclosable activities of the
organization. For purposes of this election, the portion of
dues attributable to expenditures for disclosable activities is
the amount that bears the same ratio to the total amount of the
dues of the organization as the expenditures for disclosable
activities bears to the total expenditures of the organization
for the period.
In addition, the bill provides a special election for
earmarked contributions deposited into a segregated disclosable
activities fund by a section 501(c)(4) organization, a section
501(c)(5) organization, or a section 501(c)(6) organization.
Under the election, an organization may limit the rule
requiring disclosure of reportable contributors to those
persons contributing to the segregated disclosable activities
fund. This election is available only if the organization (1)
maintains a separate, segregated fund for such contributions,
(2) deposits into such fund only and all amounts received by
the organization that are earmarked for a disclosable activity,
and (3) makes expenditures for disclosable activities only from
such separate fund. If the organization makes the election to
use this special rule, but fails to satisfy all of the
requirements for the election during a reporting period, the
exception to the general rule on reportable contributors does
not apply for the reporting period or for any subsequent
reporting period during the calendar year. However, under the
bill, failure to meet the requirement of (3), above, with
respect to de minimis amounts is not treated as a failure to
satisfy all of the requirements for the election. If an
organization makes this election, the segregated disclosable
activities fund is not treated as a section 527 organization
solely for purposes of the reporting and disclosure
requirements. Thus, the applicable dollar threshold amount is
$1,000, rather than $200 in such a case.
Definition of disclosable activities
Under the bill, in the case of a section 527 organization,
disclosable activities include all activities of the
organization.
In the case of an organization described in section
501(c)(4), section 501(c)(5), or section 501(c)(6), disclosable
activities are:
(1) section 527-type activities (i.e., activities to
influence or attempt to influence the selection,
nomination, election, or appointment of any individual
to any Federal, State, or local public office or office
in a political organization, or the election of
Presidential or Vice-Presidential electors, as defined
in section 527);
(2) establishing, administering, or soliciting
contributions to a section 527 organization;
(3) contributing directly or indirectly to a section
527 organization;
(4) contributing directly or indirectly to a section
501(c)(4), section 501(c)(5), or section 501(c)(6)
organization that is required, by reason of its
disclosable activities, to file a return for the year
for which the contribution is made or for any of the
preceding three years (or would have been required to
file a return if the bill had been in effect in the
preceding three years); and
(5) any mass media communication (including any mass
mailing) that is not a section 527-type activity and
that mentions a clearly identified candidate for
election for Federal office (including an individual
who has formed an exploratory committee for such an
election) or the political party of such a candidate or
any mass media communication (including any mass
mailing) that contains the picture or other likeness of
such an individual or candidate.
The definition contained in (4), above, is intended to
exempt from the definition of a disclosable activity any
contribution to a section 501(c)(4), section 501(c)(5), or
section 501(c)(6) organization if the ultimate transferee
organization does not itself engage in disclosable activities.
Thus, for example, if a section 501(c)(4) organization, which
does not directly engage in any disclosable activities,
transfers contributions to another section 501(c)(4), which
does not engage in any disclosable activities for the current
(and has not done so for the three preceding years), the
contributing organization is not required to report the
transfer as a disclosable activity. On the other hand, if a
section 501(c)(4) organization, which does not engage in any
otherwise disclosable activities during the year, makes a
contribution to a section 501(c)(4) organization that does
engage in such activities (or has engaged in such activities
during any of the preceding three years), then the transferor
organization is required to treat the transfer as a disclosable
activity under the bill and, if the amount transferred is at
least $10,000 (the applicable threshold at which the reporting
requirements apply), the organization is subject to the
reporting and disclosure requirements under the bill. This rule
is intended to ensure that section 501(c)(4), section
501(c)(5), and section 501(c)(6) organizations do not avoid the
reporting and disclosure requirements by making transfers to
other such organizations.
For purposes of the rule treating a mass media
communication as a disclosable activity (i.e., an activity
described in (5), above), the term ``mass media'' includes mass
media as described in Treasury regulations section 56.4911-
2(b)(5)(iii) relating to the definition of grass roots
lobbying. In addition, an activity described in (5), above, is
not treated as a disclosable activity if the activity relates
solely to bona fide members of the organization. Thus,
communications with bona fide members of an organization
generally are not treated as disclosable activities. However,
this exception does not apply to any communication that urges
the members of the organization to communicate with another
person or urges such members to take an action as a result of
the communication. In addition, an activity described in (5),
above, that otherwise is treated as a 527-type activity in (1),
above, is not treated as a disclosable activity under (5),
above, but rather is described in (1), above. Thus, the
exception for activities relating to bona fide members of the
organization does not apply to a 527-type activity as under the
present-law tax rules.
Statement of organization by section 527 organization
Under the bill, every 527 organization is required to file
a statement of organization with the Secretary of the Treasury
no later than 10 days after the date that the organization is
established or, in the case of an organization in existence on
the date of enactment of the bill, no later than 10 days after
the date of enactment.
The statement of organization is required to contain the
following information:
(1) the name and address of the organization;
(2) the name, address, relationship, and type of any
person that is directly or indirectly related to or
affiliated with the organization;
(3) the name, address, and position of the custodian
of books and accounts of the organization;
(4) the name and address of the treasurer of the
organization;
(5) a listing of all banks, safety deposit boxes, and
other depositories used by the organization.
In addition, under the bill, if the information contained
in the statement of organization ceases to be accurate, the
organization is required to file a corrected statement with the
Secretary of the Treasury no later than 10 days after the
information ceases to be accurate.
For purposes of the statement of organization, a person is
considered directly or indirectly related to or affiliated with
a political organization if, at any time during the 3-year
period ending on the date of the statement, the person was in a
position to exercise substantial direct or indirect influence
(whether or not as a officer of the organization) over the
process of collecting or disbursing the exempt purpose funds of
the organization or was in a position to exercise substantial,
overall direct or indirect influence over the activities of the
organization.
Filing procedures
Under the bill, the Secretary of the Treasury is directed
to develop procedures for submission in electronic form of the
returns and statements required under the bill. In addition,
the bill provides that an organization is not required to file
any return or statement for any period, if the organization
submits to the Secretary of the Treasury, under penalty of
perjury, a certified statement that the organization has made a
filing for such period that is publicly available with another
Federal agency and that such filing includes all of the
information otherwise required to be filed under the bill and
specifies the public location where such information may be
found. Thus, for example, a section 527 organization that is
subject to reporting and disclosure requirements under the
Federal election law may file a certified statement with the
Secretary if all of the information that is otherwise required
to be disclosed under the bill is disclosed in the filing under
the Federal election law.
Public inspection of statements and returns
Under the bill, the present-law public inspection
requirements of section 6104 are extended to the returns
required to be filed under the bill and to the statement of
organization required to be filed for section 527
organizations. In addition, under the bill, the income tax
return (Form 1120-POL) filed by a section 527 organization (or
a segregated fund of another tax-exempt organization that is
treated as a section 527 organization) is subject to the public
inspection requirements. Thus, a copy of the return or
statement of organization is required to be made available by
the organization for inspection during regular business hours
at the principal office of the organization and, if the
organization maintains at least one regional or district office
with 3 or more employees, at each such regional or district
office. In addition, an individual is permitted to request in
person or in writing a copy of such statement of organization
and the organization is required to provide such a copy without
charge other than a reasonable fee for any reproduction and
mailing costs. If such a request is made in person, it must be
provided immediately. If the request is made in writing, it
must be provided within 30 days. As under present law, the
public disclosure requirement may be satisfied by making the
information widely available, such as on the World Wide Web.
The bill generally requires documents that are required to
be made publicly available to be available no later than 2
business days after being filed. However, this rule does not
apply to the annual returns required by the bill or to the Form
1120-POL. In addition, the public disclosure requirement
applies to any document during the 3-year period beginning on
the last date prescribed for its filing.
The bill also provides that the present-law rules
permitting public disclosure by the Secretary of the Treasury
of the Form 990 filed by tax-exempt organizations also applies
(1) to any returns and statements required to be filed under
the bill and (2) the Form 1120-POL. Thus, such information
shall be made available to the public at such times and in such
places as the Secretary may prescribe. Under the bill, such
information is required to be made available publicly no later
than two business days after the return containing such
information is filed and, to the extent practicable, will be
made available to the public on the World Wide Web. The
present-law rule that prohibits the Secretary from disclosing
the names and address of contributors does not apply to any
section 527 organization or to any section 501(c)(4),
501(c)(5), or 501(c)(6) organization required to provide such
information on returns required to be filed under the bill. The
Secretary of the Treasury is permitted to cooperate with
another Federal agency to carry out the requirements with
respect to public inspection of returns and statements required
to be filed under the bill. Thus, for example, the Secretary
could arrange for the Federal Election Commission to process
the reports required by this bill and make them available to
the public.
Penalties
The penalty for failure to file properly the returns or
statements required under the bill is an amount equal to the
tax rate applicable to section 527 organizations (i.e., 35
percent) multiplied by the amount to which the failure relates.
In the case of the failure to report an expenditure or
contribution as required under the bill, the amount to which
the failure relates is the amount of the expenditure or
contribution required to be disclosed. In the case of a failure
to provide full information (for example, the name and address
of a contributor) with respect to an expenditure or
contribution, the amount to which the failure relates is the
amount of such expenditure or contribution. If an organization
fails to file a return as required, the amount to which the
failure relates is the total amount of expenditures and
contributions that should have been reported on the return.
The bill permits the Secretary of Treasury to make a
written demand of a section 527 organization of a reasonable
future date by which a return or statement will be filed. Any
person who fails to comply with such a written demand is
subject to a penalty of $10 per day for each day after the
expiration of the time specified in the demand for filing, up
to a maximum penalty with respect to such statement of $5,000.
The penalty for failure to satisfy the public inspection
requirements with respect to a statement of organization is $20
for each day during which such failure continues up to a
maximum of $10,000 with respect to each failure.
Separability clause
The bill does not modify the present-law separability
clause contained in the Internal Revenue Code. Thus, if any
portion of the bill is held invalid, any portions of the bill
not found to be invalid remain in effect.
Effective date
The bill is generally effective for expenditures made and
contributions received with respect to disclosable activities
taking place in reporting periods beginning after the date of
enactment and expenditures made and contributions received with
respect to disclosable activities taking place after the date
of enactment in annual reporting periods ending after the date
of enactment. The statement of organization required to be
filed by section 527 organizations is effective on the date of
enactment. The Committee intends that, within five days after
the date of enactment. the Secretary shall issue guidance on
the manner in which these organizations can comply with the
required disclosures.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statements are made
concerning the votes of the Committee on Ways and Means in its
consideration of the bill, H.R. 4717.
Motion to Report the bill
The bill, H.R. 4717, as amended, was ordered favorably
reported by a roll call vote of 23 yeas to 14 nays (with a
quorum being present). The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representatives Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer..................... X ........ ......... Mr. Rangel....... ........ ........ .........
Mr. Crane...................... X ........ ......... Mr. Stark........ ........ ........ .........
Mr. Thomas..................... X ........ ......... Mr. Matsui....... ........ X .........
Mr. Shaw....................... X ........ ......... Mr. Coyne........ ........ X .........
Mrs. Johnson................... X ........ ......... Mr. Levin........ ........ X .........
Mr. Houghton................... X ........ ......... Mr. Cardin....... ........ X .........
Mr. Herger..................... X ........ ......... Mr. McDermott.... ........ X .........
Mr. McCrery.................... X ........ ......... Mr. Kleczka...... ........ X .........
Mr. Camp....................... X ........ ......... Mr. Lewis (GA)... ........ X .........
Mr. Ramstad.................... X ........ ......... Mr. Neal......... ........ X .........
Mr. Nussle..................... X ........ ......... Mr. McNulty...... ........ X .........
Mr. Johnson.................... X ........ ......... Mr. Jefferson.... ........ X .........
Ms. Dunn....................... X ........ ......... Mr. Tanner....... ........ X .........
Mr. Collins.................... X ........ ......... Mr. Becerra...... ........ X .........
Mr. Portman.................... X ........ ......... Mrs. Thurman..... ........ X .........
Mr. English.................... X ........ ......... Mr. Doggett...... ........ X .........
Mr. Watkins.................... X ........ .........
Mr. Hayworth................... X ........ .........
Mr. Weller..................... X ........ .........
Mr. Hulshof.................... X ........ .........
Mr. McInnis.................... X ........ .........
Mr. Lewis (KY)................. X ........ .........
Mr. Foley...................... X ........ .........
----------------------------------------------------------------------------------------------------------------
Votes on Amendments
A roll call vote was conducted on the following amendment
to the Chairman's amendment in the nature of a substitute.
A substitute amendment by Mr. Coyne, was defeated by a roll
call vote of 14 yeas to 23 nays. The vote was as follows:
----------------------------------------------------------------------------------------------------------------
Representatives Yea Nay Present Representatives Yea Nay Present
----------------------------------------------------------------------------------------------------------------
Mr. Archer...................... ........ X ......... Mr. Rangel........ ........ ........ .......
Mr. Crane....................... ........ X ......... Mr. Stark......... ........ ........ .......
Mr. Thomas...................... ........ X ......... Mr. Matsui........ X ........ .......
Mr. Shaw........................ ........ X ......... Mr. Coyne......... X ........ .......
Mrs. Johnson.................... ........ X ......... Mr. Levin......... X ........ .......
Mr. Houghton.................... ........ X ......... Mr. Cardin........ X ........ .......
Mr. Herger...................... ........ X ......... Mr. McDermott..... X ........ .......
Mr. McCrery..................... ........ X ......... Mr. Kleczka....... X ........ .......
Mr. Camp........................ ........ X ......... Mr. Lewis (GA).... X ........ .......
Mr. Ramstad..................... ........ X ......... Mr. Neal.......... X ........ .......
Mr. Nussle...................... ........ X ......... Mr. McNulty....... X ........ .......
Mr. Johnson..................... ........ X ......... Mr. Jefferson..... X ........ .......
Ms. Dunn........................ ........ X ......... Mr. Tanner........ X ........ .......
Mr. Collins..................... ........ X ......... Mr. Becerra....... X ........ .......
Mr. Portman..................... ........ X ......... Mrs. Thurman...... X ........ .......
Mr. English..................... ........ X ......... Mr. Doggett....... X ........ .......
Mr. Watkins..................... ........ X .........
Mr. Hayworth.................... ........ X .........
Mr. Weller...................... ........ X .........
Mr. Hulshof..................... ........ X .........
Mr. McInnis..................... ........ X .........
Mr. Lewis (KY).................. ........ X .........
Mr. Foley....................... ........ X .........
----------------------------------------------------------------------------------------------------------------
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d)(2) of Rule XIII of the Rules
of the House of Representatives, the following statement is
made concerning the effects on the budget of the revenue
provisions of the bill, H. R. 4717, as reported.
The bill is estimated to have the following effects on
budget receipts for fiscal years 2000-2005:
ESTIMATED BUDGET EFFECTS OF H.R. 4717, THE ``FULL AND FAIR POLITICAL ACTIVITY DISCLOSURE ACT OF 2000,'' AS
REPORTED BY THE COMMITTEE ON WAYS AND MEANS--FISCAL YEARS 2001-2005
[Millions of Dollars)
----------------------------------------------------------------------------------------------------------------
Provision Effective 2001 2002 2003 2004 2005 2001-05
----------------------------------------------------------------------------------------------------------------
Require Section 527 Organizations and Certain Tax- [1] Negligible Revenue Effect
Exempt Organizations to Disclose Their Political
Activities and Contributors........................
----------------------------------------------------------------------------------------------------------------
[1] Effective for expenditures made and contributions received in reporting periods beginning after the date of
enactment and for expenditures made and contributions received in annual reporting periods ending after the
date of enactment. The general reporting requirements of disclosable activities are effective on the date of
enactment.
Source: Joint Committee on Taxation.
B. Statement Regarding New Budget Authority and Tax Expenditures
Budget authority
In compliance with clause 3(c)(2) of Rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority.
Tax expenditures
In compliance with clause 2(c)(2) of Rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill does not involve increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of Rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the Congressional Budget Office (``CBO''), the
following statement by CBO is provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, June 27, 2000.
Hon. Bill Archer,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 4717, the Full and
Fair Political Activity Disclosure Act of 2000.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is John R.
Righter.
Sincerely,
Barry B. Anderson
(For Dan L. Crippen, Director).
Enclosure.
congressional budget office cost estimate
H.R. 4717.--Full and Fair Political Activity Disclosure Act of 2000
H.R. 4717 would require certain private, nonprofit
organizations to disclose their political expenditures and
contributions to the Internal Revenue Service (IRS). Political
organizations, as defined by section 527 of the tax code, would
be required to report any contributions or expenditures of $200
or more. The bill would require certain tax-exempt
organizations that spend more than $10,000 on election-related
activities--such as civic and business groups and labor and
agriculture organizations--to disclose contributions and
expenditures of $1,000 or more. H.R. 4717 would require that
these organizations and the IRS both make the reported
information available to the public.
The bill would require the IRS to make the reported
information available within two business days of its filing.
The IRS also would be responsible for issuing regulations and
ensuring that organizations comply with the bill's provisions,
although it is possible that the bill would allow the IRS to
enter into an interagency agreement to have the Federal
Election Commission (FEC) perform such work on its behalf.
Implementing H.R. 4717 would increase administrative costs
of the IRS, but CBO has not had sufficient time to estimate the
amount of such higher costs, which would be subject to the
availability of appropriated funds. If implementing the bill
would require that the IRS develop new systems to accept,
catalogue, and make available the reported information within
two days, the costs could be substantial. Alternately, if the
IRS were able to enter into an interagency agreement with the
FEC to accept and post the information on the IRS's behalf, the
costs would likely be significantly less since the FEC already
performs such work for political candidates and parties.
Because the bill would create new penalties for violating
campaign finance disclosure laws, pay-as-you-go procedures
would apply. However, CBO estimates that additional payments to
the federal government from such penalties, which are
classified as governmental receipts (revenues), would total
less than $500,000 a year.
The Joint Committee on Taxation (JCT) has determined that
the bill's requirements on section 527 organizations and
certain tax-exempt organizations to disclose their political
activities and contributions would be private-sector mandates
as defined in the Unfunded Mandates Reform Act (UMRA). JCT
estimates that the aggregate cost to the private-sector to
comply with these mandates would not exceed the threshold
established in UMRA ($109 million in 2000, adjusted annually
for inflation) in any of the first five fiscal years after
enactment. The bill contains no intergovernmental mandates as
defined in UMRA and would not affect the budgets of state,
local, or tribal governments.
The CBO staff contact is John R. Righter. This estimate was
approved by Peter H. Fontaine, Deputy Assistant Director for
Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER
THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendations
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives (relating to oversight findings),
the Committee advises that it was a result of the Committee's
oversight review concerning the reporting of information by
tax-exempt organizations that the Committee concluded that it
is appropriate and timely to enact the provisions included in
the bill as reported.
B. Summary of Findings and Recommendations of the Committee on
Government Reform
With respect to clause 3(c)(4) of rule XII of the Rules of
the House of Representatives, the Committee advises that no
oversight findings or recommendations have been submitted to
this Committee by the Committee on Government Reform with
respect to the provisions contained in the bill.
C. Constitutional Authority Statement
With respect to clause 3(d)(1) of rule XIII of the Rules of
the House of Representatives (relating to Constitutional
Authority), the Committee states that the Committee's action in
reporting this bill is derived from Article I of the
Constitution, Section 8 (``The Congress shall have Power To lay
and collect Taxes, Duties, Imposts and Excises * * * ''), and
from the 16th Amendment to the Constitution.
D. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Act of 1995 (P.L. 104-4).
The Committee has determined that the provisions of the
bill contain Federal private sector mandates. The estimated
aggregate amounts that the private sector will be required to
spend in order to comply with the Federal private sector
mandate is less than $100 million in any of the first five
fiscal years. The Committee has determined that the bill does
not impose a Federal intergovernmental mandate on State, local,
and tribal governments.
E. Applicability of House Rule XXI 5(b)
Rule XXI 5(b) of the Rules of the House of Representatives
provides, in part, that ``No bill or joint resolution,
amendment, or conference report carrying a Federal income tax
rate increase shall be considered as passed or agreed to unless
determined by a vote of not less than three-fifths of the
Members.'' The Committee has carefully reviewed the provisions
of the bill, and states that the provisions of the bill do not
involve any Federal income tax rate increase within the meaning
of the rule.
F. Tax Complexity Analysis
Section 4022(b) of the Internal Revenue Service Reform and
Restructuring Act of 1998 (the ``IRS Reform Act'') requires the
Joint Committee on Taxation (in consultation with the Internal
Revenue Service and the Department of the Treasury) to provide
a tax complexity analysis. The complexity analysis is required
for all legislation reported by the House Committee on Ways and
Means, the Senate Committee on Finance, or any committee of
conference if the legislation includes a provision that
directly or indirectly amends the Internal Revenue Code and has
widespread applicability to individuals or small businesses.
The staff of the Joint Committee on Taxation has determined
that a complexity analysis is not required under section
4022(b) of the IRS Reform Act because the bill contains no
provisions that amend the Internal Revenue Code and that have
``widespread applicability'' to individuals or small
businesses.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
In compliance with clause 3(e) of rule XIII of the Rules of
the House of Representatives, changes in existing law made by
the bill, as reported, are shown as follows (existing law
proposed to be omitted is enclosed in black brackets, new
matter is printed in italics, existing law in which no change
is proposed is shown in roman):
INTERNAL REVENUE CODE OF 1968
Subtitle A--Income Taxes
* * * * * * *
CHAPTER 1--NORMAL TAXES AND SURTAXES
* * * * * * *
Subchapter F--Exempt organizations
* * * * * * *
PART VI--POLITICAL ORGANIZATIONS
* * * * * * *
SEC. 527. POLITICAL ORGANIZATIONS.
(a) * * *
* * * * * * *
(i) Cross References.--
(1) For reporting and inspection requirements, see sections
6033A and 6104.
(2) For penalties for failure to file returns and statements,
see sections 6652, 6685, and 7207.
* * * * * * *
Subtitle F--Procedure and Administration
* * * * * * *
CHAPTER 61--INFORMATION AND RETURNS
* * * * * * *
Subchapter A--Returns and Records
* * * * * * *
PART III--INFORMATIONAL RETURNS
* * * * * * *
Subpart A--Information Concerning Persons Subject to Special Provisions
Sec. 6031. Return of partnership income.
* * * * * * *
Sec. 6033A. Returns relating to political activities.
* * * * * * *
SEC. 6033A. RETURNS RELATING TO POLITICAL ACTIVITIES.
(a) General Reporting Requirements.--
(1) In general.--Every organization to which this
subsection applies for a reporting period shall submit
a return to the Secretary for such period. Such return
shall include--
(A) a detailed description of such
organization's disclosable activities during
the reporting period and the purpose and
intended results for the major categories of
expenditures for such activities, including the
candidates intended to be affected,
(B) a list identifying--
(i) each expenditure made for a
disclosable activity during the
reporting period in an amount in excess
of the threshold amount, and
(ii) the name and address of each
person to whom the organization made
any expenditure required to be reported
under clause (i), and
(C) in the case of a reportable contributor--
(i) the name and address of the
contributor (and, if the contributor is
an individual, the contributor's
occupation and employer),
(ii) the aggregate amount of
contributions made by such contributor,
(iii) the name and address of the
person (if any) on whose behalf the
contributor made any payment to such
organization, and
(iv) if any payment by the
contributor was designated for a
beneficiary other than such
organization (including amounts which
are in any way earmarked or otherwise
directed through an intermediary), the
name and address of the intended
beneficiary.
The information required under the preceding sentence
for any reporting period shall be set forth separately
for such period and in the aggregate for such period
and preceding reporting periods during the calendar
year.
(2) Organizations to which subsection applies.--This
subsection shall apply to any organization described in
or subject to section 527 if--
(A) such organization is described in
paragraph (4), (5), or (6) of section 501(c),
or
(B) such organization is a 527 organization.
(3) Exception for non-527 organizations having
aggregate disclosable expenditures of less than
$10,000.--This subsection shall not apply to an
organization described in paragraph (2)(A) for any
reporting period if the aggregate expenditures of the
organization for disclosable activities during the
period beginning on January 1 of the calendar year in
which the reporting period begins and ending on the last
day of the reporting period are less than $10,000.
(4) Reportable contributor.--
(A) In general.--For purposes of paragraph
(1), the term ``reportable contributor'' means
any person if the aggregate of the
contributions and membership dues, fees, and
assessments (within the meaning of section 527)
received by the organization from such person
during the testing period exceeds the threshold
amount.
(B) Exception for dues not attributable to
disclosable activities.--
(i) In general.--At the election of
the organization, the only dues taken
into account under subparagraph (A)
shall be dues attributable to
expenditures for disclosable
activities.
(ii) Portion of dues attributable to
disclosable activities.--For purposes
of clause (i), the portion of dues
attributable to expenditures for
disclosable activities of an
organization is the amount which bears
the same ratio to the total amount of
dues as the expenditures of the
organization which are disclosable
under paragraph (1) for the testing
period bears to the total expenditures
of the organization for such period.
(C) Testing period.--For purposes of this
paragraph, the term ``testing period'' means,
with respect to any reporting period, the
period--
(i) beginning on January 1 of the
calendar year in which the reporting
period begins, and
(ii) ending on the last day of the
reporting period.
(5) Special rule for earmarked contributions
deposited into a segregated disclosable activities
fund.--
(A) In general.--In the case of an
organization described in paragraph (4), (5),
or (6) of section 501(c), paragraph (1)(C)
shall apply only with respect to amounts
received which are earmarked for a disclosable
activity if the organization elects--
(i) to maintain a segregated
disclosable activities fund,
(ii) to deposit into such fund only
and all amounts received by such
organization which are earmarked by the
contributor for a disclosable activity,
and
(iii) to make no expenditures for
disclosable activities other than from
such fund.
In the case of such a fund, subsection (d)
shall not apply and the threshold amount shall
be $1,000.
(B) Noncompliance.--In the case of an
organization with respect to which an election
is in effect under subparagraph (A) and which
fails to comply with a requirement in
subparagraph (A) during any reporting period,
subparagraph (A) shall not apply to such period
or any subsequent reporting period during the
calendar year in which such period begins.
(C) De minimis expenditures.--Failures to
meet the requirement of subparagraph (A)(iii)
with respect to de minimis amounts shall not be
treated as a failure to comply with such
requirement.
(6) Threshold amount.--For purposes of this section,
the term ``threshold amount'' means--
(A) $200 in the case of a 527 organization,
and
(B) $1,000 in any other case.
(b) Disclosable Activities.--For purposes of this section--
(1) 527 organizations.--In the case of a 527
organization, the term ``disclosable activities'' means
all activities of the organization.
(2) Other organizations.--In the case of an
organization described in paragraph (4), (5), or (6) of
section 501(c), the term ``disclosable activities''
means--
(A) a 527-type activity,
(B) establishing, administering, or
soliciting contributions to a 527 organization,
(C) contributing directly or indirectly to a
527 organization,
(D) contributing directly or indirectly to an
organization which is described in paragraph
(4), (5), or (6) of section 501(c) and which is
required to file a return under this section
for the year in which the contribution is
received or for any of the 3 preceding years
(or would be required to file such a return had
this section been in effect for such years),
and
(E) any mass media communication (including
any mass mailing) which is not a 527-type
activity and which--
(i) mentions a clearly identified
candidate for election for Federal
office (including any individual who
has formed an exploratory committee for
such election) or the political party
of such candidate, or
(ii) contains the picture or other
likeness of such candidate.
(3) Exception for communication with members.--
Subparagraph (E) of paragraph (2) shall not apply to
communication with bona fide members of the
organization unless such communication urges such
members to communicate with another person or to take
an action as a result of such communication.
(c) Additional Information From 527 Organizations.--
(1) Statement of organization.--
(A) In general.--Every 527 organization shall
file a statement of organization with the
Secretary (in such form and manner as the
Secretary shall prescribe) which contains the
information described in subparagraph (B). Such
statement shall be filed not later than 10 days
after the date that such organization is
established (or, in the case of an organization
in existence on the date of the enactment of
this section, not later than 10 days after such
date of enactment).
(B) Statement of organization.--The
information described in this subparagraph is--
(i) the name and address of the 527
organization,
(ii) the name, address, relationship,
and type of any person which is
directly or indirectly related to or
affiliated with such 527 organization,
(iii) the name, address, and position
of the custodian of books and accounts
of the 527 organization,
(iv) the name and address of the
treasurer of the 527 organization, and
(v) a listing of all banks, safety
deposit boxes, and other depositories
used by the 527 organization.
(C) Changes in information.--If there is a
change in circumstances such that the most
recent statement filed under this paragraph is
no longer accurate, the 527 organization shall
file a corrected statement with the Secretary
(in such manner as the Secretary shall
prescribe) not later than 10 days after the
date that the statement first ceased to be
accurate.
(D) Related and affiliated persons.--For
purposes of subparagraph (B)(ii), a person is
directly or indirectly related to or affiliated
with a 527 organization if such person, at any
time during the 3-year period ending on the
date such statement is submitted to the
Secretary--
(i) was in a position to exercise
substantial direct or indirect
influence over the process of
collecting or disbursing the exempt
purpose funds of such organization, or
(ii) was in a position to exercise
substantial, overall direct or indirect
influence over the activities of such
organization.
(2) Other information.--
(A) In general.--In addition to the
information required by subsection (a), every
527 organization shall include the information
described in subparagraph (B) on the return
required under subsection (a).
(B) Information described.--The information
described in this subparagraph is--
(i) a certification, under penalty of
perjury, whether such expenditure is
made in cooperation, consultation, or
concert with, or at the request or
suggestion of, any candidate for public
office or any authorized committee of
such candidate or agent of such
committee or candidate,
(ii) the name, address, and business
purpose of any entity, as well as
whether the entity purports to be
exempt from tax under this title and
(if so) the provision under which the
entity purports to be so exempt, which
made (in the aggregate for the
reporting period) a contribution in
excess of the threshold amount to the
527 organization, and
(iii) the original source and the
intended ultimate recipient of all
contributions made by a person, either
directly or indirectly, on behalf of
any particular person, including
contributions which are in any way
earmarked or otherwise directed through
any intermediary.
(d) Reporting Periods and Due Dates for Returns and
Statements.--
(1) In general.--The reporting periods and deadlines
for filing returns and statements required by this
section shall be--
(A) determined under paragraph (2), (3), or
(4), whichever is selected by the reporting
organization, and
(B) in the case of disclosable activities
which are independent expenditures, determined
under paragraph (5).
(2) Quarterly reports, etc.--
(A) Calendar years having a regularly
scheduled election.--In the case of a calendar
year in which a regularly scheduled election is
held--
(i) Quarterly reports.--
(I) Period.--The reporting
periods shall be the calendar
quarters beginning with the
first quarter of the calendar
year in which a contribution is
accepted or expenditure is made
for a disclosable activity.
(II) Filing deadline.--
Reports under this clause shall
be filed not later than the
15th 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) Pre-election report.--
(I) Period.--A pre-election
report with respect to an
election shall be filed for the
period ending on the 20th day
before the election and
beginning on the first day of
the calendar quarter which
includes such 20th day.
(II) Filing deadline.--A pre-
election report shall be filed
not later than the 12th day
before (or posted by registered
or certified mail not later
than the 15th day before) any
election with respect to which
the organization makes a
contribution or expenditure for
a disclosable activity.
(iii) Post-general election report.--
(I) Period.--A post-general
election report with respect to
an election shall be filed for
the period ending on the 20th
day after the election and
beginning on the first day of
the calendar quarter which
includes such 20th day.
(II) Filing deadline.--A
post-general election report
shall be filed not later than
the 30th day after the general
election.
(B) Other calendar years.--In the case of any
other calendar year--
(i) Semiannual reports.--The
reporting periods shall be--
(I) the 1st 6 months of the
calendar year, and
(II) the 2d 6 months of such
year.
(ii) Filing deadlines.--The report
for the period described in clause
(i)(I) shall be filed no later than
July 31, and the report for the period
described in clause (i)(II) shall be
filed no later than January 31 of the
following calendar year.
(C) Special elections.--The Secretary shall
set filing dates for reports to be filed with
respect to organizations filing under this
paragraph with respect to special elections.
The Secretary shall require no more than one
pre-election report for each election and one
post-election report for the election which
fills the vacancy. The Secretary may waive any
reporting obligation of organizations required
to file for special elections if any report
required by this paragraph is required to be
filed within 10 days of a report required under
this subparagraph. The Secretary shall
establish the reporting dates within 5 days of
the setting of such election.
(D) Exception from quarterly report.--The
requirement to file a quarterly report under
subparagraph (A)(i) for a calendar quarter
shall be waived if the organization is required
to file a pre-election report under
subparagraph (A)(ii) during the period
beginning on the 5th day after the close of the
calendar quarter and ending on the 15th day
after the close of the calendar quarter.
(3) Monthly reports, etc.--
(A) Period.--The reporting periods shall be
monthly for all calendar years beginning with
the first month of the calendar year in which a
contribution is accepted or expenditure is made
for a disclosable activity.
(B) Filing deadline.--Reports under this
paragraph shall be filed not later than the
20th day after the last day of the month.
(C) Reports in lieu of november and december
reports during election years.--In lieu of
filing the reports otherwise due under this
paragraph in November and December of any year
in which a regularly scheduled general election
is held--
(i) a pre-general election report
shall be filed in accordance with
paragraph (2)(A)(ii),
(ii) a post-general election report
shall be filed in accordance with
paragraph (2)(A)(iii), and
(iii) a year-end report shall be
filed not later than January 31 of the
following calendar year.
(4) Certain organizations file annually.--
(A) In general.--In the case of a 527
organization described in subparagraph (B)--
(i) the reporting period shall be
such organization's taxable year, and
(ii) the due date for the returns and
statements required by this section
shall be the due date (without regard
to extensions) for filing the return of
tax for such year, whether or not such
organization is required to file a
return for such taxable year.
(B) Organization described.--An organization
is described in this subparagraph if such
organization is a 527 organization which is
organized and operated exclusively for the
purpose of securing the nomination, election,
or appointment of a clearly identified
candidate for State, local, or judicial office.
(5) Reporting of independent expenditures.--
(A) In general.--In the case of a disclosable
activity which is an independent expenditure by
an organization to which subsection (a)
applies, the organization shall file the
statement described in subparagraph (B).
(B) Statement.--The statement described in
this subparagraph is a statement (filed in
accordance with paragraph (1)(A) unless
subparagraph (C) applies) which includes the
information required under subsection (a)(1)
with respect to such independent expenditure.
(C) Separate reporting with respect to
independent expenditures made within 20 days of
election.--The statement required by
subparagraph (B) in the case of a disclosable
activity which is an independent expenditure
described in subparagraph (A) aggregating
$1,000 or more made after the 20th day, but
more than 24 hours, before any election shall
be filed within 24 hours after such independent
expenditure is made. Such statement shall be
filed with the Secretary.
(e) Definitions.--For purposes of this section--
(1) 527 organization.--The term ``527 organization''
means any political organization (as defined by section
527(e)(1)).
(2) 527-type activity.--The term ``527-type
activity'' means influencing or attempting to influence
the selection, nomination, election, or appointment of
any individual to any Federal, State, or local public
office or office in a political organization, or the
election of Presidential or Vice-Presidential electors,
whether or not such individual or electors are
selected, nominated, elected, or appointed. Such term
includes the making of expenditures relating to an
office described in the preceding sentence which, if
incurred by the individual, would be allowable as a
deduction under section 162(a).
(3) Contributions.--The term ``contributions'' has
the meaning given to such term by section 271(b)(2).
(4) Expenditures.--The term ``expenditures'' has the
meaning given to such term by section 271(b)(3).
(f) Special Rules.--
(1) Electronic filing.--The Secretary shall develop
procedures for submission in electronic form of returns
and statements required to be filed under this section.
(2) Paperwork and burden reduction for organizations
otherwise disclosing information.--An organization
shall not be required to file any return or statement
under this section for any period if, with respect to
such period, such organization submits to the
Secretary, under penalty of perjury, a certified
statement that the organization has made a filing,
which is publicly available, with another Federal
agency which includes all of the information required
to be included in such return or statement and which
specifies the public location where such information
may be found.
* * * * * * *
Subchapter B--Miscellaneous Provisions
* * * * * * *
SEC. 6104. PUBLICITY OF INFORMATION REQUIRED FROM CERTAIN EXEMPT
ORGANIZATIONS AND CERTAIN TRUSTS.
(a) * * *
[(b) Inspection of Annual Information Returns.--The
information required to be furnished by sections 6033, 6034,
and 6058, together with the names and addresses of such
organizations and trusts, shall be made available to the public
at such times and in such places as the Secretary may
prescribe. Nothing in this subsection shall authorize the
Secretary to disclose the name or address of any contributor to
any organization or trust (other than a private foundation, as
defined in section 509(a)) which is required to furnish such
information. In the case of an organization described in
section 501(d), this subsection shall not apply to copies
referred to in section 6031(b) with respect to such
organization.]
(b) Inspection of Information Returns and Income Tax Returns
of Political Organizations.--
(1) In general.--The information required to be
furnished by sections 6033, 6033A, 6034, and 6058
(together with the names and addresses of such
organizations and trusts) and returns filed under
section 6012(a)(6) shall be made available to the
public at such times and in such places as the
Secretary may prescribe.
(2) Exceptions.--
(A) Nondisclosure of names and addresses of
contributors.--
(i) In general.--Nothing in this
subsection shall authorize the
Secretary to disclose the name or
address of any contributor to any
organization or trust which is required
to furnish such information.
(ii) Exception.--Clause (i) shall not
apply to a private foundation (as
defined in section 509(a)), a 527
organization (as defined in section
6033A(e)), or information on a return
under section 6033A(a) of an
organization described in paragraph
(4), (5) or (6) of section 501(c).
(B) Religious and apostolic organizations.--
In the case of an organization described in
section 501(d), this subsection shall not apply
to copies referred to in section 6031(b) with
respect to such organization.
(3) Special rules for information under section
6033a.--
(A) Timely availability.--Documents filed
under section 6033A (other than with respect to
an annual period) shall be available under
paragraph (1) no later than 2 business days
after being filed.
(B) Availability on world wide web.--To the
extent practicable, documents filed under
section 6033A shall also be made available to
the public on the world wide web.
(4) Cooperation with other federal agencies.--The
Secretary may cooperate with another Federal agency to
carry out the requirements of this subsection with
respect to returns and statements required to be filed
under section 6033A.
* * * * * * *
(e) Inspection of Documents Relating to Political
Activities of Certain 501(c) Organizations and 527
Organizations.--
(1) In general.--In the case of any organization
required to submit a document under section 6033A--
(A) a copy of such document shall be made
available by such organization for inspection
during regular business hours by any individual
at the principal office of such organization
and, if such organization regularly maintains 1
or more regional or district offices having 3
or more employees, at each such regional or
district office, and
(B) upon request of an individual made at
such principal office or such a regional or
district office, a copy of such document shall
be provided to such individual without charge
other than a reasonable fee for any
reproduction and mailing costs.
The request described in subparagraph (B) must be made
in person or in writing. If such request is made in
person, such copy shall be provided immediately and, if
made in writing, shall be provided within 30 days.
(2) Annual income tax returns of 527 organizations.--
In the case of an organization required to file a
return under section 6012(a)(6), the requirements of
paragraph (1) shall also apply to such return.
(3) Timely availability.--
(A) In general.--Except as provided in
subparagraph (B), documents required to be
available under this subsection shall be
available no later than 2 business days after
being filed.
(B) Exception.--Subparagraph (A) shall not
apply to--
(i) any document filed under section
6033A with respect to an annual period,
and
(ii) any return filed under section
6012(a)(6).
(4) 3-year limitation on inspection documents.--
Paragraphs (1) and (2) shall apply to any document only
during the 3-year period beginning on the last day
prescribed for its filing (determined with regard to
any extension of time for filing).
(5) Limitation on providing copies.--A rule similar
to the rule of subsection (d)(4) shall apply for
purposes of this subsection.
* * * * * * *
CHAPTER 68--ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE
PENALTIES
* * * * * * *
Subchapter A--Additions to the Tax, Additional Amounts
* * * * * * *
PART I--GENERAL PROVISIONS
SEC. 6652. FAILURE TO FILE CERTAIN INFORMATION RETURNS, REGISTRATION
STATEMENTS, ETC.
(a) * * *
* * * * * * *
(c) Returns by Exempt Organizations and by Certain Trusts.--
(1) * * *
(2) Information under section 6033a.--
(A) In general.--In the case of--
(i) a failure to file a document
required under section 6033A (relating
to returns relating to political
activities) at the time and in the
manner prescribed therefor (determined
without regard to any extension of time
for filing), or
(ii) a failure to include any of the
information required to be shown on
such a return or statement or to show
the correct information,
there shall be paid by the organization an
amount equal to the rate of tax specified in
section 527(b)(1) multiplied by the amount to
which the failure relates.
(B) Public inspection.--In the case of a
failure to comply with the requirements of
section 6104(e) at the time and in the manner
prescribed therefor (determined without regard
to any extension of time for filing), there
shall be paid by the person failing to meet
such requirements $20 for each day during which
such failure continues. The maximum penalty
imposed under this subparagraph on all persons
for failures with respect to any 1 statement
shall not exceed $10,000.
(C) Additional penalty on managers of 527
organizations.--
(i) In general.--The Secretary may
make a written demand on any 527
organization subject to penalty under
subparagraph (A) specifying therein a
reasonable future date by which the
return or statement shall be filed (or
the information furnished) for purposes
of this subparagraph.
(ii) Failure to comply with demand.--
If any person fails to comply with any
demand under clause (i) on or before
the date specified in such demand,
there shall be paid by the person
failing to so comply $10 for each day
after the expiration of the time
specified in such demand during which
such failure continues. The maximum
penalty imposed under this subparagraph
on all persons for failures with
respect to any 1 statement shall not
exceed $5,000.
[(2)] (3) Returns under section 6034 or 6043(b).--
(A) * * *
* * * * * * *
[(3)] (4) Reasonable cause exception.--No penalty
shall be imposed under this subsection with respect to
any failure if it is shown that such failure is due to
reasonable cause.
[(4)] (5) Other special rules.--
(A) * * *
* * * * * * *
Subchapter B--Assessable Penalties
* * * * * * *
PART I--GENERAL PROVISIONS
* * * * * * *
SEC. 6685. ASSESSABLE PENALTY WITH RESPECT TO PUBLIC INSPECTION
REQUIREMENTS FOR CERTAIN TAX-EXEMPT ORGANIZATIONS.
In addition to the penalty imposed by section 7207 (relating
to fraudulent returns, statements, or other documents), any
person who is required to comply with the requirements of
[subsection (d)] subsection (d) or (e) of section 6104 and who
fails to so comply with respect to any [return or application]
return, application, or statement, if such failure is willful,
shall pay a penalty of $5,000 with respect to each such [return
or application] return, application, or statement.
* * * * * * *
CHAPTER 75--CRIMES, OTHER OFFENSES AND FORFEITURES
* * * * * * *
Subchapter A--Crimes
* * * * * * *
PART I--GENERAL PROVISIONS
* * * * * * *
SEC. 7207. FRAUDULENT RETURNS, STATEMENTS, OR OTHER DOCUMENTS.
Any person who willfully delivers or discloses to the
Secretary any list, return, account, statement, or other
document, known by him to be fraudulent or to be false as to
any material matter, shall be fined not more than $10,000
($50,000 in the case of a corporation), or imprisoned not more
than 1 year, or both. Any person required pursuant to
subsection (b) of section 6047 or pursuant to [subsection (d)]
subsection (d) or (e) of section 6104 to furnish any
information to the Secretary or any other person who willfully
furnishes to the Secretary or such other person any information
known by him to be fraudulent or to be false as to any material
matter shall be fined not more than $10,000 ($50,000 in the
case of a corporation), or imprisoned not more than 1 year, or
both.
* * * * * * *
VII. DISSENTING VIEWS
We sought unsuccessfully to have the Ways and Means
Committee Members come together, on a bipartisan basis, and
report legislation to address the election finance abuses
involving Internal Revenue Code section 527 organizations.
These organizations do not apply for tax-exempt status with the
Internal Revenue Service nor file annual returns with the IRS
describing their activities and contributors. These entities
often are multi-million dollar ``slush accounts'' set up
specifically to influence an election. These tax-exempt section
527's operate in total secrecy outside the view of the public.
Legislation to require full disclosure of the activities
and sponsors of section 527 organizations was introduced by
Congressman Lloyd Doggett months ago. Since that time, the
substance of his bill, H.R. 4168, was voted down by the
Republicans twice in Committee, and twice in the House of
Representatives. It was only after the House Republican
Leadership learned that identical legislation offered by
Senator McCain and others passed the Senate, on a bipartisan
basis, that the House Republicans relented and announced
``hearings'' and a ``bigger'' bill to be considered by the
House before the July 4th recess. Unfortunately, this was only
a way to assure that section 527 disclosure would never be
enacted into law.
The ``poison pill'' they planned to add to the section 527
disclosure bill was well-planned and quite comprehensive. It
now is contained in the Committee bill. The Republicans faced,
however, one major problem in keeping a straight face during
debate on the Republicans' bill in Committee. That is, the
Oversight Subcommittee hearing testimony two days earlier
specifically, and repeatedly, argued against exactly what the
Republicans have now done in their bill. In contrast, the
Democratic Substitute does exactly what the witnesses urged and
has bipartisan support.
The testimony before the Oversight Subcommittee on June 20,
2000, uniformly urged quick action on disclosure by section 527
entities. In shutting down the secrecy of section 527 entities,
witnesses agreed that those intent on hiding their activities
and funding sources would move, with a little creativity in
words and methods, to other tax-exempt and taxable entities. In
developing any broader legislation, the witnesses repeatedly
said that any expansions beyond section 527 organizations
should apply fairly to all entities--taxable and tax-exempt.
Further, the legislation must be narrow in focus, clear in
definition, and tied in time to the election process so as to
withstand any First Amendment challenge.
In the words of Senator McCain, ``Let's not let the perfect
be the enemy of the good. Greater disclosure is not a black and
white issue. We can, and should, all agree that greater
disclosure is better than the status quo as it exists today.
And, yes, while we work to develop the best bill possible, we
must also move forward expeditiously.'' He emphasized the
critical importance of bipartisanship in this very sensitive
area and recommended targeted and reasonable expansions into
tax-exempt and taxable activities.
The Executive Director of the Center for Responsive
Politics, a well-respected, non-partisan research organization
that monitors and analyzes campaign contributions in federal
elections, was clear in his message. He stated, ``The fact is,
if Saddam Hussein wanted to plunk $100 million into a barrage
of TV ads the final week before we pick our next president he
could do it. He could also fly under the radar with direct mail
pieces, or pre-recorded phone messages, to every mailbox and
telephone in America. So could the American Trial Lawyers
Association, the Teamsters Union, Philip Morris, the National
Rifle Association, the Sierra Club, or Microsoft--all without
anyone knowing where the money came from or how much was even
spent. They have found the ultimate loophole in these 527
committees, which are seen as 100% political by the IRS, and
100% non-political by the FEC. This legal alchemy has
effectively rendered their finances 100% invisible.''
A broad bipartisan group of Members presented a fair and
reasonable legislative approach to Subcommittee Chairman
Houghton by letter dated June 15, 2000. The letter sets forth
principles that could be enacted into law, in short-order on a
bipartisan basis, and would eliminate the widely-publicized
abuse of section 527 organizations. First, the legislation
should contain the provisions contained in Congressman
Doggett's bill to require disclosure by section 527
organizations. The Senate already has taken the important first
step in this process by passing the legislation proposed by
Senators McCain, Feingold and Lieberman. Second, the disclosure
requirements outside the context of section 527's must be
narrowly focused, as in the approach taken in legislation
authored by Senators Snowe and Jeffords. This, or a version
similar to this, is the best way to avoid constitutional
challenges. Third, the disclosure requirements outside the
context of section 527 must be evenhanded and applicable to all
types of entities spending significant sums on electioneering
activities. This letter and the testimony at the hearing are
totally consistent with the Democratic Substitute.
The Democratic Substitute: (1) provides for the section 527
organization reporting and disclosure requirements of the
Doggett bill; (2) requires reporting by all organizations
(taxable and nontaxable) which spend more than $10,000 in any
calendar year on electioneering and related disclosure of
contributors who provide the organization more than $1,000 in
any calendar year; (3) clearly defines ``electioneering''
activities as any mass media communication (radio, television,
newspapers and other periodicals of general circulation,
billboards, paid Internet advertising, and mass mailings to
non-members) that refers to a clearly identified candidate for
Federal office or that urges support or opposition to a
specific political party and which is made 90 days before a
generalelection or 60 days before a primary; and (4) applies
the reporting disclosure requirements to all receipts and disbursements
during calendar year 2000 and subsequent years.
The Majority of the Committee deliberately chose to
disregard the Oversight Subcommittee testimony and the
principles outlined by Members of the House and Senate on a
bipartisan basis. Instead, they chose to write punitive and
unconstitutional legislation. An article in the Wall Street
Journal on Friday, June 23, 2000, stated the underlying motive
for writing such legislation. A Republican lawmaker, who chose
not to be identified, is quoted as stating ``this is all about
self preservation.''
The legislation reported by the Committee is designed to
ensure that no restraints on section 527 organizations will be
enacted this year. The Republican bill exempts all of year 2000
from the new disclosure rules by considering only expenditures
and contributions ``received in reportable periods after date
of enactment.'' Since reportable periods are calendar quarters,
this means that unlimited political activities with no
disclosure reporting can occur before October 1, 2000 and, with
pre-funding, unreported political ads could be run after
October 1 through the end of this year.
The Republican legislation reported by the Committee is
seriously deficient in its failure to impose reporting
requirements on taxable entities making ``section 527-like''
expenditures. There is no rationale for not applying the same
rules to corporations as the Republicans see fit to apply to
tax-exempt social welfare groups, business leagues, and unions.
The shift of hidden electioneering activities from section 527
entities to other tax-exempt and taxable operations is known,
and the Republicans have failed to address the latter in any
way. Instead, they have found it appropriate to apply their
rules only to tax-exempt groups such as the NAACP, National
Right to Life Committee, League of Women Voters, environmental
advocacy groups, unions and trade associations. The Committee
bill does not in any way require disclosure from taxable
corporations.
The Republican legislation reported by the Committee
subjects tax-exempt organizations to overly broad and uncertain
disclosure requirements. Organizations would be required to
disclose all activities intended to influence Federal elections
with no guidance as to what those uncertain terms mean and what
conduct is at risk. During the Committee markup, when asked
whether voter registration drives, voter education efforts,
``get out the vote'' efforts, or issue advocacy groups fell
within the Republican's definition of political activity, the
answer was ``it depends on the facts and circumstances.'' This
is another way of saying ``your guess is as good as mine.'' The
Committee bill is extremely vague and does not have a
meaningful definition of what activities are subject to
reporting and the disclosure of contributors. This is unfair to
tax-exempt organizations serving the needs of this country and
unfair to those wishing to support them.
Under the Republican bill, if an organization makes the
wrong guess about whether its activities fall within their
uncertain definition, the organization and its managers are
subject to large penalties, which could have a chilling effect
on organization members exercising their rights of association
and free speech.
Further, the Republican bill will require disclosure when
one organization contributes funds to another organization--
even if the use of those contributions by the recipient
organization is totally for nonpolitical reasons. For example,
the national chapter of a gay rights or civil rights
organization would be required to report expenditures and its
membership list for transfers of funds to any of its local
affiliates, even if the transfers had nothing to do with
influencing an election.
The disclosure of contributor lists is serious business.
The Republican bill would require an organization subject to
the disclosure requirements to list and place in the public
domain the name, address, occupation and employer of each
contributor of more than $1,000 to the organization. This is
not acceptable on a broad scale without a compelling reason.
Some organizations subject to the broad reach of the Committee
bill's disclosure requirements are defending unpopular causes.
Exposure of their contributors creates the potentiality of
retribution from employers or other individuals who disagree
with the goals of the organization.
We oppose the Committee bill because it is wrong. We oppose
the Committee bill because it is unfair and does not address
the abuse by covering both tax-exempt and taxable entities
engaged in political activities. We oppose the Committee bill
because it is unconstitutionally vague and impinges on
Americans' freedom of speech and freedom of association. The
Committee bill is not narrowly focused on the acts of political
electioneering and not broadly designed to cover all the
players.
Charles B. Rangel.
Pete Stark.
Richard E. Neal.
Jim McDermott.
John Lewis.
Jerry Kleczka.
Lloyd Doggett.
William J. Coyne.
Karen L. Thurman.
Ben Cardin.
John S. Tanner.
Xavier Becerra.
Wm. J. Jefferson.