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104TH CONGRESS

2D SESSION H. R. 2910

To amend the Internal Revenue Code of 1986 to clarify the restrictions

on the lobbying and campaign activities of churches.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 31, 1996

Mr. CRANE (for himself and Mr. RANGEL) 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 clarify

the restrictions on the lobbying and campaign activities

of churches.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. CLARIFICATION OF RESTRICTION ON LOBBY4 ING AND CAMPAIGN ACTIVITIES OF CHURCH5 ES.

6 (a) IN GENERAL.—Section 501 of the Internal Reve7 nue Code of 1986 (relating to exemption from tax on cor8 porations, certain trusts, etc.) is amended by redesignat9 ing subsection (n) as subsection (o) and by inserting after

10 subsection (m) the following new subsection:
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1 ‘‘(n) EXPENDITURES BY CHURCHES, ETC., TO IN2 FLUENCE LEGISLATION OR PARTICIPATE IN CAMPAIGN

3 ACTIVITIES.—

4 ‘‘(1) EXPENDITURES TO INFLUENCE LEGISLA5 TION.—An organization to which this subsection ap6 plies shall be denied exemption from taxation under

7 subsection (a) because a substantial part of the ac8 tivities of such organization consists of carrying on

9 propaganda, or otherwise attempting, to influence

10 legislation, but only if such organization normally

11 makes lobbying expenditures (as defined in section

12 4911(d)) for each taxable year in excess of an

13 amount equal to 20 percent of such organization’s

14 gross revenues for such year.

15 ‘‘(2) EXPENDITURES TO PARTICIPATE IN CAM16 PAIGNS.—An organization to which this subsection

17 applies shall be denied exemption from taxation

18 under subsection (a) because such organization par19 ticipates in, or intervenes in (including the publish20 ing or distributing of statements), any political cam21 paign on behalf of (or in opposition to) any can22 didate for public office, but only if such organization

23 normally makes expenditures for such purpose for

24 each taxable year in excess of an amount equal to
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1 5 percent of such organization’s gross revenues for

2 such year.

3 ‘‘(3) AGGREGATE LIMIT.—An organization to

4 which this subsection applies shall be denied exemp5 tion from taxation under subsection (a) if the aggre6 gate of the expenditures described in paragraph (1)

7 and the expenditures described in paragraph (2)

8 which such organization normally makes for each

9 taxable year exceeds an amount equal to 20 percent

10 of such organization’s gross revenues for such year.

11 ‘‘(4) GROSS REVENUES.—For purposes of this

12 subsection, the term ‘gross revenues’ means the sum

13 of—

14 ‘‘(A) the organization’s gross income for

15 the taxable year, and

16 ‘‘(B) the aggregate contributions and gifts

17 received by such organization during such year.

18 ‘‘(5) ORGANIZATIONS TO WHICH SUBSECTION

19 APPLIES.—This subsection shall apply to any dis20 qualified organization (as defined in subsection

21 (h)(5)) which is described in subsection (c)(3).

22 ‘‘(6) AFFILIATED ORGANIZATIONS.—If, for any

23 taxable year, 2 or more organizations to which this

24 subsection applies are members of an affiliated
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1 group of organizations (as defined in section

2 4911(f)(2))—

3 ‘‘(A) paragraphs (1), (2), (3), and (4) shall

4 be applied by treating such group as 1 organi5 zation, and

6 ‘‘(B) if such group exceeds the expenditure

7 limitation of paragraph (1), (2), or (3), each or8 ganization to which this subsection applies

9 which is a member of such group shall be treat10 ed as not described in subsection (c)(3).

11 The preceding sentence shall not be applied so as to

12 treat an organization which is not (without regard to

13 the preceding sentence) exempt from tax by reason

14 of paragraph (1), (2), or (3) as being so exempt.’’

15 (b) EFFECTIVE DATE.—The amendment made by

16 subsection (a) shall apply to taxable years beginning after

17 the date of the enactment of this Act.

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