H.R. 4717 (106th): Full and Fair Political Activity Disclosure Act of 2000

106th Congress, 1999–2000. Text as of Jun 22, 2000 (Introduced).

Status & Summary | PDF | Source: GPO

HR 4717 IH

106th CONGRESS

2d Session

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.

IN THE HOUSE OF REPRESENTATIVES

June 22, 2000

Mr. HOUGHTON (for himself, Mr. ENGLISH, Mrs. JOHNSON of Connecticut, Mr. CASTLE, Mr. MCINNIS, Mr. COX, Mr. RAMSTAD, Mr. SMITH of Michigan, Mr. SHAW, Mr. OSE, Mr. FRELINGHUYSEN, and Mr. WALDEN of Oregon) introduced the following bill; which was referred to the Committee on Ways and Means


A BILL

To amend the Internal Revenue Code of 1986 to require 527 organizations and certain other tax-exempt organizations to disclose their political activities.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ‘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 amount of each contribution 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 an organization if such organization--

        ‘(A) is described in paragraph (4), (5), or (6) of section 501(c), or

        ‘(B) 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 SEPARATE, SEGREGATED 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 separate, segregated 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.

        Such a fund shall not be treated as a 527 organization for purposes of this section.

        ‘(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) IN GENERAL- For purposes of this section, the term ‘disclosable activities’ means--

        ‘(A) a 527-type activity,

        ‘(B) establishing, administering, or soliciting contributions to a 527 organization,

        ‘(C) contributing to an organization which is described in paragraph (4), (5), or (6) of section 501(c) or which is a 527 organization, and

        ‘(D) any mass media communication (including any mass mailing) which is not a 527-type activity and which--

          ‘(i) mentions an individual holding Federal office or 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 an individual or candidate, or

          ‘(ii) contains the likeness of such an individual or candidate.

      ‘(2) EXCEPTION FOR COMMUNICATION WITH MEMBERS- Subparagraph (D) of paragraph (1) shall not apply to communication with bona fide members of the organization.

    ‘(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- For purposes of this section--

      ‘(1) ORGANIZATIONS OTHER THAN 527 ORGANIZATIONS- In the case of an organization described in paragraph (4), (5), or (6) of section 501(c)--

        ‘(A) IN GENERAL- The term ‘reporting period’ means--

          ‘(i) a calendar quarter, and

          ‘(ii) a calendar year.

        ‘(B) DUE DATE-

          ‘(i) QUARTERLY RETURN- The due date for each return required by this section for a calendar quarter shall be the 15th day after the end of the quarter.

          ‘(ii) ANNUAL RETURN- The due date for the return required by this section for a calendar year shall be the date prescribed by the Secretary.

      ‘(2) 527 ORGANIZATIONS- In the case of a 527 organization--

        ‘(A) IN GENERAL- The reporting periods and deadlines for filing returns and statements required by this section shall be the same as the periods and deadlines set forth for reports under paragraph (4) of section 304(a) of Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)). The Secretary shall issue such guidance as may be necessary concerning the filing deadlines for such returns and statements.

        ‘(B) CERTAIN ORGANIZATIONS FILE ANNUALLY- In the case of a 527 organization described in subparagraph (C)--

          ‘(i) subparagraph (A) shall not apply,

          ‘(ii) the reporting period shall be such organization’s taxable year, and

          ‘(iii) 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.

        ‘(C) 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.

    ‘(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 an exempt function (as defined in section 527(e)(2)).

      ‘(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 subsection (a) or (c) 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 by subsection (a) or (c), as the case may be, 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(d)), 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 highest rate of tax specified in section 11(b) 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 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.