II

Calendar No. 606

106TH CONGRESS

2D SESSION S. 2742

To amend the Internal Revenue Code of 1986 to increase disclosure for

certain political organizations exempt from tax under section 527 and

section 501(c), and for other purposes.

IN THE SENATE OF THE UNITED STATES

JUNE 15, 2000

Mr. SMITH of Oregon (for himself, Mr. ABRAHAM, Mr. ASHCROFT, Mr.

BURNS, Mr. SANTORUM, Mr. GORTON, Mrs. HUTCHISON, Mr. ALLARD,

Mr. BENNETT, Mr. COVERDELL, Mr. GREGG, Mr. HELMS, Mr. THOMAS,

Mr. INHOFE, Mr. MACK, Mr. WARNER, Mr. BUNNING, Mr. LOTT, Mr.

MCCONNELL, Mr. CRAPO, and Mr. ROBERTS) introduced the following

bill; which was read the first time.

JUNE 16, 2000

Read the second time and placed on the calendar

A BILL

To amend the Internal Revenue Code of 1986 to increase

disclosure for certain political organizations exempt from

tax under section 527 and section 501(c), and for other

purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,
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1 SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

2 (a) SHORT TITLE.—This Act may be cited as the

3 ‘‘Tax-Exempt Political Disclosure Act’’.

4 (b) TABLE OF CONTENTS.—The table of contents for

5 this Act is as follows:

Sec. 1. Short title; table of contents.

TITLE I—SECTION 527 ORGANIZATIONS

Sec. 101. Required notification of section 527 status.

Sec. 102. Disclosures by political organizations.

Sec. 103. Return requirements relating to section 527 organizations.

TITLE II—TAX-EXEMPT BUSINESS AND LABOR ORGANIZATIONS

ENGAGING IN POLITICAL ACTIVITY

Sec. 201. Notification and disclosures of certain section 501 organizations.

Sec. 202. Random audits.

Sec. 203. Nonseverability.

6 TITLE I—SECTION 527

7 ORGANIZATIONS

8 SEC. 101. REQUIRED NOTIFICATION OF SECTION 527 STA9 TUS.

10 (a) IN GENERAL.—Section 527 of the Internal Rev11 enue Code of 1986 (relating to political organizations) is

12 amended by adding at the end the following new sub13 section:

14 ‘‘(i) ORGANIZATIONS MUST NOTIFY SECRETARY

15 THAT THEY ARE SECTION 527 ORGANIZATIONS.—

16 ‘‘(1) IN GENERAL.—Except as provided in para17 graph (5), an organization shall not be treated as an

18 organization described in this section—
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1 ‘‘(A) unless it has given notice to the Sec2 retary, electronically and in writing, that it is to

3 be so treated, or

4 ‘‘(B) if the notice is given after the time

5 required under paragraph (2), the organization

6 shall not be so treated for any period before

7 such notice is given.

8 ‘‘(2) TIME TO GIVE NOTICE.—The notice re9 quired under paragraph (1) shall be transmitted not

10 later than 24 hours after the date on which the or11 ganization is established.

12 ‘‘(3) CONTENTS OF NOTICE.—The notice re13 quired under paragraph (1) shall include informa14 tion regarding—

15 ‘‘(A) the name and address of the organi16 zation (including any business address, if dif17 ferent) and its electronic mailing address,

18 ‘‘(B) the purpose of the organization,

19 ‘‘(C) the names and addresses of its offi20 cers, highly compensated employees, contact

21 person, custodian of records, and members of

22 its Board of Directors,

23 ‘‘(D) the name and address of, and rela24 tionship to, any related entities (within the

25 meaning of section 168(h)(4)), and
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1 ‘‘(E) such other information as the Sec2 retary may require to carry out the internal

3 revenue laws.

4 ‘‘(4) EFFECT OF FAILURE.—In the case of an

5 organization failing to meet the requirements of

6 paragraph (1) for any period, the taxable income of

7 such organization shall be computed by taking into

8 account any exempt function income (and any de9 ductions directly connected with the production of

10 such income).

11 ‘‘(5) EXCEPTIONS.—This subsection shall not

12 apply to any organization—

13 ‘‘(A) to which this section applies solely by

14 reason of subsection (f)(1), or

15 ‘‘(B) which reasonably anticipates that it

16 will not have gross receipts of $25,000 or more

17 for any taxable year.

18 ‘‘(6) COORDINATION WITH OTHER REQUIRE19 MENTS.—This subsection shall not apply to any per20 son required to report under the Federal Election

21 Campaign Act of 1971 (2 U.S.C. 431 et seq.) as a

22 political committee.’’.

23 (b) DISCLOSURE REQUIREMENTS.—

24 (1) INSPECTION AT INTERNAL REVENUE SERV25 ICE OFFICES.—
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1 (A) IN GENERAL.—Section 6104(a)(1)(A)

2 of the Internal Revenue Code of 1986 (relating

3 to public inspection of applications) is

4 amended—

5 (i) by inserting ‘‘or a political organi6 zation is exempt from taxation under sec7 tion 527 for any taxable year’’ after ‘‘tax8 able year’’,

9 (ii) by inserting ‘‘or notice of status

10 filed by the organization under section

11 527(i)’’ before ‘‘, together’’,

12 (iii) by inserting ‘‘or notice’’ after

13 ‘‘such application’’ each place it appears,

14 (iv) by inserting ‘‘or notice’’ after

15 ‘‘any application’’,

16 (v) by inserting ‘‘for exemption from

17 taxation under section 501(a)’’ after ‘‘any

18 organization’’ in the last sentence, and

19 (vi) by inserting ‘‘OR 527’’ after ‘‘SEC20 TION 501’’ in the heading.

21 (B) CONFORMING AMENDMENT.—The

22 heading for section 6104(a) of such Code is

23 amended by inserting ‘‘OR NOTICE OF STATUS’’

24 before the period.
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1 (2) INSPECTION OF NOTICE ON INTERNET AND

2 IN PERSON.—Section 6104(a) of such Code is

3 amended by adding at the end the following new

4 paragraph:

5 ‘‘(3) INFORMATION AVAILABLE ON INTERNET

6 AND IN PERSON.—

7 ‘‘(A) IN GENERAL.—The Secretary shall

8 make publicly available, on the Internet and at

9 the offices of the Internal Revenue Service—

10 ‘‘(i) a list of all political organizations

11 which file a notice with the Secretary

12 under section 527(i), and

13 ‘‘(ii) the name, address, electronic

14 mailing address, custodian of records, and

15 contact person for such organization.

16 ‘‘(B) TIME TO MAKE INFORMATION AVAIL17 ABLE.—The Secretary shall make available the

18 information required under subparagraph (A)

19 not later than 5 business days after the Sec20 retary receives a notice from a political organi21 zation under section 527(i).’’.

22 (3) INSPECTION BY COMMITTEE OF CON23 GRESS.—Section 6104(a)(2) of such Code is amend24 ed by inserting ‘‘or notice of status of any political

25 organization which is exempt from taxation under
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1 section 527 for any taxable year’’ after ‘‘taxable

2 year’’.

3 (4) PUBLIC INSPECTION MADE AVAILABLE BY

4 ORGANIZATION.—Section 6104(d) of such Code (re5 lating to public inspection of certain annual returns

6 and applications for exemption) is amended—

7 (A) by striking ‘‘AND APPLICATIONS FOR

8 EXEMPTION’’ and inserting ‘‘, APPLICATIONS

9 FOR EXEMPTION, AND NOTICES OF STATUS’’ in

10 the heading,

11 (B) by inserting ‘‘or notice of status under

12 section 527(i)’’ after ‘‘section 501’’ and by in13 serting ‘‘or any notice materials’’ after ‘‘mate14 rials’’ in paragraph (1)(A)(ii),

15 (C) by inserting or ‘‘or such notice mate16 rials’’ after ‘‘materials’’ in paragraph (1)(B),

17 and

18 (D) by adding at the end the following new

19 paragraph:

20 ‘‘(6) NOTICE MATERIALS.—For purposes of

21 paragraph (1), the term ‘notice materials’ means the

22 notice of status filed under section 527(i) and any

23 papers submitted in support of such notice and any

24 letter or other document issued by the Internal Rev25 enue Service with respect to such notice.’’.
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1 (c) FAILURE TO MAKE PUBLIC.—Section

2 6652(c)(1)(D) of the Internal Revenue Code of 1986 (re3 lating to public inspection of applications for exemption)

4 is amended—

5 (1) by inserting ‘‘or notice materials (as defined

6 in such section)’’ after ‘‘section)’’, and

7 (2) by inserting ‘‘AND NOTICE OF STATUS’’

8 after ‘‘EXEMPTION’’ in the heading.

9 (d) EFFECTIVE DATE.—

10 (1) IN GENERAL.—Except as provided in para11 graphs (2) and (3), the amendments made by this

12 section shall take effect on the date of the enactment

13 of this section.

14 (2) ORGANIZATIONS ALREADY IN EXISTENCE.—

15 In the case of an organization established before the

16 date of the enactment of this section, the time to file

17 the notice under section 527(i)(2) of the Internal

18 Revenue Code of 1986, as added by this section,

19 shall be 30 days after the date of the enactment of

20 this section.

21 (3) INFORMATION AVAILABILITY.—The amend22 ment made by subsection (b)(2) shall take effect on

23 the date that is 45 days after the date of the enact24 ment of this section.
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1 SEC. 102. DISCLOSURES BY POLITICAL ORGANIZATIONS.

2 (a) REQUIRED DISCLOSURE OF 527 ORGANIZA3 TIONS.—Section 527 of the Internal Revenue Code of

4 1986 (relating to political organizations), as amended by

5 section 101(a), is amended by adding at the end the fol6 lowing new section:

7 ‘‘(j) REQUIRED DISCLOSURE OF EXPENDITURES AND

8 CONTRIBUTIONS.—

9 ‘‘(1) DENIAL OF EXEMPTION.—An organization

10 shall not be treated as an organization described in

11 this section unless it makes the required disclosures

12 under paragraph (2).

13 ‘‘(2) REQUIRED DISCLOSURE.—A political orga14 nization which accepts a contribution, or makes an

15 expenditure, for an exempt function during any cal16 endar year shall file with the Secretary either—

17 ‘‘(A)(i) in the case of a calendar year in

18 which a regularly scheduled election is held—

19 ‘‘(I) quarterly reports, beginning with

20 the first quarter of the calendar year in

21 which a contribution is accepted or expend22 iture is made, which shall be filed not later

23 than the 15th day after the last day of

24 each calendar quarter, except that the re25 port for the quarter ending on December

26 31 of such calendar year shall be filed not
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1 later than January 31 of the following cal2 endar year,

3 ‘‘(II) a pre-election report, which shall

4 be filed not later than the 12th day before

5 (or posted by registered or certified mail

6 not later than the 15th day before) any

7 election with respect to which the organiza8 tion makes a contribution or expenditure,

9 and which shall be complete as of the 20th

10 day before the election, and

11 ‘‘(III) a post-general election report,

12 which shall be filed not later than the 30th

13 day after the general election and which

14 shall be complete as of the 20th day after

15 such general election, and

16 ‘‘(ii) in the case of any other calendar

17 year, a report covering the period beginning

18 January 1 and ending June 30, which shall be

19 filed no later than July 31 and a report cov20 ering the period beginning July 1 and ending

21 December 31, which shall be filed no later than

22 January 31 of the following calendar year, or

23 ‘‘(B) monthly reports for the calendar

24 year, beginning with the first month of the cal25 endar year in which a contribution is accepted
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1 or expenditure is made, which shall be filed not

2 later than the 20th day after the last day of the

3 month and shall be complete as if the last day

4 of the month, except that, in lieu of filing the

5 reports otherwise due in November and Decem6 ber of any year in which a regularly scheduled

7 general election is held, a pre-general election

8 report shall be filed in accordance with sub9 paragraph (A)(i)(II), a post-general election re10 port shall be filed in accordance with subpara11 graph (A)(i)(III), and a year end report shall

12 be filed not later than January 31 of the fol13 lowing calendar year.

14 ‘‘(3) CONTENTS OF REPORT.—A report re15 quired under paragraph (2) shall contain the fol16 lowing information:

17 ‘‘(A) The amount of each expenditure

18 made to a person if the aggregate amount of

19 expenditures to such person during the calendar

20 year equals or exceeds $500 and the name and

21 address of the person (in the case of an indi22 vidual, including the occupation and name of

23 the employer of such individual).

24 ‘‘(B) The name and address (in the case of

25 an individual, including the occupation and
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1 name of the employer of such individual) of all

2 contributors which contributed an aggregate

3 amount of $200 or more to the organization

4 during the calendar year and the amount of the

5 contribution.

6 Any expenditure or contribution disclosed in a pre7 vious reporting period is not required to be included

8 in the current reporting period.

9 ‘‘(4) CONTRACTS TO SPEND OR CONTRIBUTE.—

10 For purposes of this subsection, a person shall be

11 treated as having made an expenditure or contribu12 tion if the person has contracted or is otherwise obli13 gated to make the expenditure or contribution.

14 ‘‘(5) COORDINATION WITH OTHER REQUIRE15 MENTS.—This subsection shall not apply—

16 ‘‘(A) to any person required to report

17 under the Federal Election Campaign Act of

18 1971 (2 U.S.C. 431 et seq.) as a political com19 mittee,

20 ‘‘(B) to any State or local committee of a

21 political party or political committee of a State

22 or local candidate,

23 ‘‘(C) to any organization which reasonably

24 anticipates that it will not have gross receipts

25 of $25,000 or more for any taxable year,
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1 ‘‘(D) to any organization to which this sec2 tion applies solely by reason of subsection

3 (f)(1), or

4 ‘‘(E) with respect to any expenditure which

5 is an independent expenditure (as defined in

6 section 301 of such Act).

7 ‘‘(6) ELECTION.—For purposes of this sub8 section, the term ‘election’ means—

9 ‘‘(A) a general, special, primary, or runoff

10 election for a Federal office,

11 ‘‘(B) a convention or caucus of a political

12 party which has authority to nominate a can13 didate for Federal office,

14 ‘‘(C) a primary election held for the selec15 tion of delegates to a national nominating con16 vention of a political party, or

17 ‘‘(D) a primary election held for the ex18 pression of a preference for the nomination of

19 individuals for election to the office of Presi20 dent.’’.

21 (b) PUBLIC DISCLOSURE OF REPORTS.—

22 (1) IN GENERAL.—Section 6104(d) of the In23 ternal Revenue Code of 1986 (relating to public in24 spection of certain annual returns and applications
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1 for exemption), as amended by section 101(b)(4), is

2 amended—

3 (A) by inserting ‘‘REPORTS,’’ after ‘‘RE4 TURNS,’’ in the heading,

5 (B) in paragraph (1)(A), by striking ‘‘and’’

6 at the end of clause (i), by inserting ‘‘and’’ at

7 the end of clause (ii), and by inserting after

8 clause (ii) the following new clause:

9 ‘‘(iii) the reports filed under section

10 527(j) (relating to required disclosure of

11 expenditures and contributions) by such

12 organization,’’, and

13 (C) in paragraph (1)(B), by inserting ‘‘,

14 reports,’’ after ‘‘return’’.

15 (2) DISCLOSURE OF CONTRIBUTORS AL16 LOWED.—Section 6104(d)(3)(A) of such Code (relat17 ing to nondisclosure of contributors, etc.) is amend18 ed by inserting ‘‘or a political organization exempt

19 from taxation under section 527’’ after ‘‘509(a))’’.

20 (3) DISCLOSURE BY INTERNAL REVENUE SERV21 ICE.—Section 6104(d) of such Code, as amended by

22 section 101(b)(4), is amended by adding at the end

23 the following new paragraph:

24 ‘‘(7) DISCLOSURE OF REPORTS BY INTERNAL

25 REVENUE SERVICE.—Any report filed by an organi-
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1 zation under section 527(j) (relating to required dis2 closure of expenditures and contributions) shall be

3 made available to the public at such times and in

4 such places as the Secretary may prescribe.’’.

5 (c) FAILURE TO MAKE PUBLIC.—Section

6 6652(c)(1)(C) of the Internal Revenue Code of 1986 (re7 lating to public inspection of annual returns) is

8 amended—

9 (1) by inserting ‘‘or report required under sec10 tion 527(j)’’ after ‘‘filing)’’,

11 (2) by inserting ‘‘or report’’ after ‘‘1 return’’,

12 and

13 (3) by inserting ‘‘AND REPORTS’’ after ‘‘RE14 TURNS’’ in the heading.

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

16 subsection (a) shall apply to expenditures made and con17 tributions received after the date of enactment of this Act,

18 except that such amendment shall not apply to expendi19 tures made, or contributions received, after such date pur20 suant to a contract entered into on or before such date.

21 SEC. 103. RETURN REQUIREMENTS RELATING TO SECTION

22 527 ORGANIZATIONS.

23 (a) RETURN REQUIREMENTS.—

24 (1) ORGANIZATIONS REQUIRED TO FILE.—Sec25 tion 6012(a)(6) of the Internal Revenue Code of
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1 1986 (relating to political organizations required to

2 make returns of income) is amended by inserting

3 ‘‘or which has gross receipts of $25,000 or more for

4 the taxable year (other than an organization to

5 which section 527 applies solely by reason of sub6 section (f)(1) of such section)’’ after ‘‘taxable year’’.

7 (2) INFORMATION REQUIRED TO BE INCLUDED

8 ON RETURN.—Section 6033 of such Code (relating

9 to returns by exempt organizations) is amended by

10 redesignating subsection (g) as subsection (h) and

11 inserting after subsection (f) the following new sub12 section:

13 ‘‘(g) RETURNS REQUIRED BY POLITICAL ORGANIZA14 TIONS.—In the case of a political organization required

15 to file a return under section 6012(a)(6)—

16 ‘‘(1) such organization shall file a return—

17 ‘‘(A) containing the information required,

18 and complying with the other requirements,

19 under subsection (a)(1) for organizations ex20 empt from taxation under section 501(a), and

21 ‘‘(B) containing such other information as

22 the Secretary deems necessary to carry out the

23 provisions of this subsection, and
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1 ‘‘(2) subsection (a)(2)(B) (relating to discre2 tionary exceptions) shall apply with respect to such

3 return.’’.

4 (b) PUBLIC DISCLOSURE OF RETURNS.—

5 (1) RETURNS MADE AVAILABLE BY SEC6 RETARY.—

7 (A) IN GENERAL.—Section 6104(b) of the

8 Internal Revenue Code of 1986 (relating to in9 spection of annual information returns) is

10 amended by inserting ‘‘6012(a)(6),’’ before

11 ‘‘6033’’.

12 (B) CONTRIBUTOR INFORMATION.—Sec13 tion 6104(b) of such Code is amended by in14 serting ‘‘or a political organization exempt from

15 taxation under section 527’’ after ‘‘509(a)’’.

16 (2) RETURNS MADE AVAILABLE BY ORGANIZA17 TIONS.—

18 (A) IN GENERAL.—Paragraph (1)(A)(i) of

19 section 6104(d) of such Code (relating to public

20 inspection of certain annual returns, reports,

21 applications for exemption, and notices of sta22 tus) is amended by inserting ‘‘or section

23 6012(a)(6) (relating to returns by political or24 ganizations)’’ after ‘‘organizations)’’.

25 (B) CONFORMING AMENDMENTS.—
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1 (i) Section 6104(d)(1) of such Code is

2 amended in the matter preceding subpara3 graph (A) by inserting ‘‘or an organization

4 exempt from taxation under section

5 527(a)’’ after ‘‘501(a)’’.

6 (ii) Section 6104(d)(2) of such Code

7 is amended by inserting ‘‘or section

8 6012(a)(6)’’ after ‘‘section 6033’’.

9 (c) FAILURE TO FILE RETURN.—Section 6652(c)(1)

10 of the Internal Revenue Code of 1986 (relating to annual

11 returns under section 6033) is amended—

12 (1) by inserting ‘‘or section 6012(c)(6) (relating

13 to returns by political organizations)’’ after ‘‘organi14 zations)’’ in subparagraph (A)(i),

15 (2) by inserting ‘‘or section 6012(c)(6)’’ after

16 ‘‘section 6033’’ in subparagraph (A)(ii),

17 (3) by inserting ‘‘or section 6012(c)(6)’’ after

18 ‘‘section 6033’’ in the third sentence of subpara19 graph (A), and

20 (4) by inserting ‘‘OR 6012(c)(6)’’ after ‘‘SECTION

21 6033’’ in the heading.

22 (d) EFFECTIVE DATE.—The amendments made by

23 this section shall apply to returns for taxable years begin24 ning after June 30, 2000.
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1 TITLE II—TAX-EXEMPT BUSI2 NESS AND LABOR ORGANIZA3 TIONS ENGAGING IN POLIT4 ICAL ACTIVITY

5 SEC. 201. NOTIFICATION AND DISCLOSURES OF CERTAIN

6 SECTION 501 ORGANIZATIONS.

7 (a) NOTIFICATION; ANNUAL REPORT.—Part I of

8 subchapter F of chapter 1 of the Internal Revenue Code

9 of 1986 is amended by adding at the end the following

10 new section:

11 ‘‘SEC. 506. ADDITIONAL DISCLOSURE REQUIREMENTS FOR

12 CERTAIN ORGANIZATIONS DESCRIBED IN

13 PARAGRAPH (5) OR (6) OF SECTION 501(C).

14 ‘‘(a) REQUIRED DISCLOSURES.—

15 ‘‘(1) IN GENERAL.—An organization described

16 in paragraph (2) shall not be treated as an organiza17 tion described in section 501(c) for any taxable year

18 if such organization does not meet the requirements

19 under subsections (b) and (c) for any portion of

20 such taxable year.

21 ‘‘(2) ORGANIZATION.—An organization is de22 scribed in this paragraph if—

23 ‘‘(A) such organization is—

24 ‘‘(i) a labor organization described in

25 section 501(c)(5), or
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1 ‘‘(ii) a business league, chamber of

2 commerce, or board of trade described in

3 section 501(c)(6), and

4 ‘‘(B) such organization makes, or is rea5 sonably anticipated to make, directly or indi6 rectly, an aggregate amount of expenditures in

7 excess of $25,000 for any calendar year for

8 communications to the general public which—

9 ‘‘(i) mention—

10 ‘‘(I) an election for Federal of11 fice,

12 ‘‘(II) a candidate for Federal of13 fice,

14 ‘‘(III) an individual holding Fed15 eral office, or

16 ‘‘(IV) a political party, or

17 ‘‘(ii) contain the likeness of such can18 didate or individual.

19 ‘‘(3) AFFILIATED ORGANIZATIONS.—

20 ‘‘(A) IN GENERAL.—For purposes this sec21 tion, if an organization described in paragraph

22 (2)(A) is a member of an affiliated group, the

23 contributions and expenditures of each member

24 of such group shall be treated as contributions

25 and expenditures of the organization. The Sec-
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1 retary shall prescribe such regulations as nec2 essary to ensure that such contributions and ex3 penditures are not taken into account more

4 than once with respect to such organization.

5 ‘‘(B) SPECIAL RULE.—Notwithstanding

6 subparagraph (A), contributions and expendi7 tures of a member of an affiliated group which

8 is higher in the chain of includible members of

9 the group than the organization described in

10 paragraph (2)(A) shall not be treated as con11 tributions or expenditures of such organization.

12 This subparagraph shall not apply to contribu13 tions and expenditures between members of the

14 affiliated group.

15 ‘‘(C) AFFILIATED GROUP.—For purposes

16 of subparagraph (A), persons shall be treated

17 as members of the same affiliated group if—

18 ‘‘(i) such persons are treated as one

19 employer under subsection (a) or (b) of

20 section 52,

21 ‘‘(ii) such persons are related entities

22 under section 168(h)(4), or

23 ‘‘(iii) such persons are related in such

24 other manner as may be prescribed in reg25 ulations as the Secretary determines nec-
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1 essary to prevent avoidance of the require2 ments of this section.

3 If an organization establishes or maintains a

4 separate segregated fund which is not a polit5 ical committee under section 301(4) of the Fed6 eral Election Campaign Act of 1971 (2 U.S.C.

7 431(4)), such organization and fund shall be

8 treated as a member of the same affiliated

9 group.

10 ‘‘(b) REQUIRED NOTICE.—

11 ‘‘(1) IN GENERAL.—An organization described

12 in subsection (a)(2) shall file a notice with the Sec13 retary, in such manner as the Secretary requires,

14 that such organization is so described.

15 ‘‘(2) TIME TO GIVE NOTICE.—The notice re16 quired under paragraph (1) shall be transmitted not

17 later than 24 hours after the date such organization

18 first makes, or reasonably expects to make, an ag19 gregate amount of expenditures described in sub20 section (a)(2)(B).

21 ‘‘(3) CONTENTS OF NOTICE.—The notice re22 quired under paragraph (1) shall include informa23 tion regarding—
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1 ‘‘(A) the name and address of the organi2 zation (including any business address, if dif3 ferent) and its electronic mailing address,

4 ‘‘(B) the purpose of the organization,

5 ‘‘(C) the names and addresses of its offi6 cers, highly compensated employees, contact

7 person, custodian of records, and members of

8 its Board of Directors,

9 ‘‘(D) the name and address of, and rela10 tionship to, any related entities (within the

11 meaning of section 168(h)(4)), and

12 ‘‘(E) such other information as the Sec13 retary may require to carry out the internal

14 revenue laws.

15 ‘‘(c) REQUIRED REPORTS.—An organization de16 scribed in subsection (a)(2) shall file with the Secretary—

17 ‘‘(1)(A) in the case of a calendar year in which

18 a regularly scheduled election is held—

19 ‘‘(i) quarterly reports, beginning with the

20 first quarter of the calendar year in which an

21 amount of expenditures described in subsection

22 (a)(2)(B) is made, which shall be filed not later

23 than the 15th day after the last day of each

24 calendar quarter, except that the report for the

25 quarter ending on December 31 of such cal-
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1 endar year shall be filed not later than January

2 31 of the following calendar year,

3 ‘‘(ii) a pre-election report, which shall be

4 filed not later than the 12th day before (or

5 posted by registered or certified mail not later

6 than the 15th day before) any election with re7 spect to which the organization makes an ex8 penditure, and which shall be complete as of the

9 20th day before the election, and

10 ‘‘(iii) a post-general election report, which

11 shall be filed not later than the 30th day after

12 the general election and which shall be complete

13 as of the 20th day after such general election,

14 and

15 ‘‘(B) in the case of any other calendar year, a

16 report covering the period beginning January 1 and

17 ending June 30, which shall be filed no later than

18 July 31 and a report covering the period beginning

19 July 1 and ending December 31, which shall be filed

20 no later than January 31 of the following calendar

21 year, or

22 ‘‘(2) monthly reports for the calendar year, be23 ginning with the first month of the calendar year in

24 which an amount of expenditures described in sub25 section (a)(2)(B) is made, which shall be filed not
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1 later than the 20th day after the last day of the

2 month and shall be complete as if the last day of

3 the month, except that, in lieu of filing the reports

4 otherwise due in November and December of any

5 year in which a regularly scheduled general election

6 is held, a pre-general election report shall be filed

7 in accordance with paragraph (1)(A)(ii), a post-gen8 eral election report shall be filed in accordance with

9 paragraph (1)(A)(iii), and a year end report shall

10 be filed not later than January 31 of the following

11 calendar year.

12 ‘‘(d) CONTENTS OF REPORT.—

13 ‘‘(1) IN GENERAL.—The report required under

14 subsection (c) shall contain itemized information and

15 the amount of any item contained in the report,

16 including—

17 ‘‘(A) any direct or indirect expenditure in

18 an aggregate amount of $500 or more for the

19 calendar year made in connection with a com20 munication to any person which—

21 ‘‘(i) mentions—

22 ‘‘(I) a Federal election,

23 ‘‘(II) a candidate for Federal of24 fice,
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1 ‘‘(III) an individual holding Fed2 eral office, or

3 ‘‘(IV) a political party, or

4 ‘‘(ii) contains the likeness of such can5 didate or individual,

6 ‘‘(B) the name and address of any person

7 (in the case of an individual, including the occu8 pation and name of the employer of such indi9 vidual) to whom expenditures described in sub10 paragraph (A) are made in an aggregate

11 amount of $500 or more during the calendar

12 year,

13 ‘‘(C) the name, occupation, annual salary,

14 and the name of the employer of an individual

15 who is employed by an organization described in

16 subsection (a)(2) or any member of the affili17 ated group of organizations with respect to such

18 organization (within the meaning of subsection

19 (a)(3)), if such individual spends more than 20

20 percent of their paid working hours during any

21 month in connection with a communication de22 scribed in subparagraph (A),

23 ‘‘(D) the name and address of any person

24 (in the case of an individual, including the occu25 pation and name of the employer of such indi-
27

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1 vidual) which makes an aggregate amount of

2 contributions to such organization or any such

3 affiliated organization in an amount of $200 or

4 more for the calendar year, and

5 ‘‘(E) the aggregate amount of membership

6 dues or fees received by such organization for

7 the reporting period.

8 Any expenditure, contribution, or other amount dis9 closed in a previous reporting period is not required

10 to be included in the current reporting period.

11 ‘‘(2) ITEMIZATION.—For purposes of paragraph

12 (1), information required to be reported shall be re13 ported in such detail and manner to allow a deter14 mination of the nature and purpose of such item,

15 including—

16 ‘‘(A) the identity of the candidate, indi17 vidual holding Federal office, or political party

18 mentioned in a communication or the identity

19 of such candidate or individual the likeness of

20 whom appears in the communication,

21 ‘‘(B) the purposes of such communication,

22 and

23 ‘‘(C) which organization or such related or24 ganization made such expenditure.

25 ‘‘(f) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) CONTRIBUTION.—The term ‘contribution’

2 shall have the meaning given such term in section

3 271(b)(3), except such term shall not include any

4 amount received as a membership due or fee.

5 ‘‘(2) EXPENDITURE.—The term ‘expenditure’

6 shall have the same meaning given such term in sec7 tion 271(b)(4).

8 ‘‘(g) CONTRACT TO USE FUNDS.—For purposes of

9 this section, an organization shall be treated as having

10 made or received any contribution or expenditure if the

11 organization has otherwise obligated to make or receive

12 such contribution or expenditure.

13 ‘‘(h) COORDINATION WITH OTHER REQUIRE14 MENTS.—This section shall apply to any person in addi15 tion to any report required under the Federal Election

16 Campaign Act of 1971 (2 U.S.C. 431 et seq.).’’.

17 (b) AVAILABILITY OF NOTICE BY IRS.—Section

18 6104(a) of the Internal Revenue Code of 1986, as amend19 ed by section 101(b)(2), is amended by adding at the end

20 the following new paragraph:

21 ‘‘(4) NOTICE INFORMATION AVAILABLE IN PER22 SON.—

23 ‘‘(A) IN GENERAL.—The Secretary shall

24 make publicly available at the offices of the In25 ternal Revenue Service—
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1 ‘‘(i) a list of all organizations which

2 file a notice with the Secretary under sec3 tion 506(b), and

4 ‘‘(ii) the name, address, electronic

5 mailing list, custodian of records, and con6 tact person for such organization.

7 ‘‘(B) TIME TO MAKE INFORMATION AVAIL8 ABLE.—The Secretary shall make available the

9 information required under subparagraph (A)

10 not later than 10 business days after the Sec11 retary receives notice from an organization

12 under section 506(b).’’.

13 (c) AVAILABILITY OF REPORTS.—

14 (1) BY THE ORGANIZATION.—Section

15 6104(d)(1)(A)(iii) of the Internal Revenue Code of

16 1986, as added by section 102(b)(1), is amended by

17 inserting ‘‘or section 506(c)’’ after ‘‘contributions)’’.

18 (2) DISCLOSURE OF CONTRIBUTORS AL19 LOWED.—Section 6104(d)(3)(A) of such Code, as

20 amended by section 102(b)(2), is amended by insert21 ing ‘‘or an organization described in section

22 506(a)(2)’’ after ‘‘527’’.

23 (3) BY THE IRS.—Section 6104(d) of such

24 Code, as amended by section 102(b)(3), is amended

25 by adding at the end the following new paragraph:
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1 ‘‘(8) CERTAIN REPORTS AVAILABLE IN PERSON

2 AND ON INTERNET.—

3 ‘‘(A) IN GENERAL.—The Secretary shall

4 make publicly available, on the Internet and at

5 the offices of the Internal Revenue Service, any

6 report filed by an organization under section

7 506(c).

8 ‘‘(B) TIME TO MAKE INFORMATION AVAIL9 ABLE.—The Secretary shall make available the

10 information required under subparagraph (A)

11 not later than 10 business days after the Sec12 retary receives such information from an orga13 nization under section 506(c).’’.

14 (d) REGULATIONS.—The Secretary of the Treasury

15 shall promulgate such regulations as the Secretary deter16 mines necessary to carry out the provisions of this section.

17 (e) CONFORMING AMENDMENT.—The table of sec18 tions for part I of subchapter F of chapter 1 of the Inter19 nal Revenue Code of 1986 is amended by adding at the

20 end the following new item:

‘‘Sec. 506. Additional disclosure requirements for certain organizations described in paragraph (5) or (6) of section

501(c).’’.

21 (f) EFFECTIVE DATES.—

22 (1) IN GENERAL.—Except as provided in para23 graphs (2) and (3), the amendments made by this
31

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1 section shall take effect on the date which is 60 days

2 after the date of the enactment of this section.

3 (2) ORGANIZATIONS ALREADY IN EXISTENCE.—

4 In the case of an organization established before the

5 date of enactment of this section, the time to file the

6 notice required under section 506(b) of the Internal

7 Revenue Code of 1986, as added by subsection (a),

8 shall be the later of—

9 (A) 30 days after the date of the enact10 ment of this section, or

11 (B) the date required under such section.

12 (3) SUBSECTION (a).—The amendment made

13 by subsection (a) shall apply to amounts disbursed

14 or received after the date of enactment of this sec15 tion, except that such amendment shall not apply to

16 amounts disbursed or received after such date pur17 suant to a contract entered into on or before such

18 date.

19 SEC. 202. RANDOM AUDITS.

20 The Secretary of the Treasury may conduct random

21 audits and investigations of any organization to ensure

22 compliance with this Act and the amendments made by

23 this Act.
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1 SEC. 203. NONSEVERABILITY.

2 If any provision of or amendment made by this title,

3 or the application of any provision or amendment made

4 by this title to any person, is held to be invalid, all provi5 sions of and any amendments made by this title shall be

6 invalid.

Calendar No. 606

106TH CONGRESS

2D SESSION S. 2742

A BILL

To amend the Internal Revenue Code of 1986 to

increase disclosure for certain political organizations exempt from tax under section 527 and section 501(c), and for other purposes.

JUNE 16, 2000

Read the second time and placed on the calendar