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

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

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

    (a) Exemption From Reporting Requirements.--
            (1) In general.--Section 527(j)(5) of the Internal Revenue 
        Code of 1986 (relating to coordination with other requirements) 
        is amended by striking ``or'' at the end of subparagraph (D), 
        by striking the period at the end of subparagraph (E) and 
        inserting ``, or'', and by adding at the end the following:
                    ``(F) to any organization described in paragraph 
                (7), but only if, during the calendar year--
                            ``(i) such organization is required by 
                        State or local law to report, and such 
                        organization reports, information regarding 
                        each separate expenditure and contribution 
                        (including information regarding the person who 
                        makes such contribution or receives such 
                        expenditure) with respect to which information 
                        would otherwise be required to be reported 
                        under this subsection, and
                            ``(ii) such information is made public by 
                        the agency with which such information is filed 
                        and is publicly available for inspection in a 
                        manner similar to reports under section 
                        6104(d)(1).
        An organization shall not be treated as failing to meet the 
        requirements of subparagraph (F)(i) solely because the minimum 
        amount of any expenditure or contribution required to be 
        reported under State or local law is greater (but not by more 
        than $100) than the minimum amount required under this 
        subsection.''.
            (2) Description of organization.--Section 527(j) of such 
        Code is amended by adding at the end the following:
            ``(7) Certain organizations.--An organization is described 
        in this paragraph if--
                    ``(A) such organization is not described in 
                subparagraph (A), (B), (C), or (D) of paragraph (5),
                    ``(B) such organization does not engage in any 
                exempt function activities other than activities for 
                the purpose of influencing or attempting to influence 
                the selection, nomination, election, or appointment of 
                any individual to any State or local public office or 
                office in a State or local political organization, and
                    ``(C) no candidate for Federal office or individual 
                holding Federal office--
                            ``(i) controls or materially participates 
                        in the direction of such organization,
                            ``(ii) solicits any contributions to such 
                        organization, or
                            ``(iii) directs, in whole or in part, any 
                        expenditure made by such organization.''.
    (b) Exemption From Requirements for Annual Return Based on Gross 
Receipts.--Paragraph (6) of section 6012(a) of the Internal Revenue 
Code of 1986 (relating to persons required to make returns of income) 
is amended by striking ``organization, which'' and all that follows 
through ``section)'' and inserting ``organization--
                    ``(A) which has political organization taxable 
                income (within the meaning of section 527(c)(1)) for 
                the taxable year, or
                    ``(B) which--
                            ``(i) is not a political committee of a 
                        State or local candidate or an organization to 
                        which section 527 applies solely by reason of 
                        subsection (f)(1) of such section, and
                            ``(ii) has gross receipts of--
                                    ``(I) in the case of political 
                                organization described in section 
                                527(j)(5)(F), $100,000 or more for the 
                                taxable year, and
                                    ``(II) in the case of any other 
                                political organization, $25,000 or more 
                                for the taxable year''.
    (c) Effective Date.--The amendments made by this section shall take 
effect as if included in the amendments made by Public Law 106-230.

SEC. 3. NOTIFICATION OF INTERACTION OF REPORTING REQUIREMENTS.

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

SEC. 4. WAIVER OF PENALTIES.

    (a) Waiver of Filing Penalties.--Section 527 of the Internal 
Revenue Code of 1986 is amended by adding at the end the following:
    ``(k) Authority To Waive.--The Secretary may waive all or any 
portion of the--
            ``(1) tax assessed on an organization by reason of the 
        failure of the organization to give notice under subsection 
        (i), or
            ``(2) penalty imposed under subsection (j) for a failure to 
        file a report,
on a showing that such failure was due to reasonable cause and not due 
to willful neglect.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply to any tax assessed or penalty imposed after June 30, 2000.
Amends the Internal Revenue Code to: (1) exempt State and local candidate committees from specified notification requirements; (2) exempt State and local political committees from specified reporting and annual gross receipts-based return requirements; and (3) authorize the Secretary of the Treasury to waive certain related penalties.Directs the Secretary to publicize the effects of the amendments made by this Act.
A bill to amend section 527 of the Internal Revenue Code of 1986 to eliminate notification and return requirements for State and local candidate committees and avoid duplicate reporting by certain State and local political committees of information required to be reported and made publicly available under State law.