SEC. 2. LIMITATION ON COVERED POLITICAL EXPENDI-
TURES 
BY 
SOCIAL 
WELFARE 
ORGANIZA-
TIONS. 
(a) IN GENERAL.—Section 501(c)(4) of the Internal 
Revenue Code of 1986 is amended by adding at the end 
the following: 
‘‘(C)(i) Subparagraph (A) shall not apply 
to an entity for a taxable year if more than 10 
percent of the total expenditures for the taxable 
year are covered political expenditures. 
‘‘(ii) For purposes of this subparagraph, 
the term ‘covered political expenditures’ means 
direct or indirect expenditures for an exempt 
function described in section 527(e)(2). 
‘‘(iii) The Secretary shall prescribe such 
regulations as may be necessary or appropriate 
to prevent the avoidance of clause (i), including 
regulations relating to a direct or indirect 
transfer of all or part of the assets of an entity 
to an entity controlled (directly or indirectly) by 
the same person or persons who control the 
transferor entity.’’. 
(b) EXPANSION OF POLITICAL ORGANIZATION DEFI-
NITION.—Section 527(e)(1) of such Code is amended by 
striking ‘‘organized and operated primarily for the pur-
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pose of’’ and inserting ‘‘, unless such organization is not 
established under this section,’’. 
(c) POLITICAL INTERVENTION ADDED TO EXEMPT 
FUNCTION DEFINITION.—Section 527(e) of such Code is 
amended— 
(1) in paragraph (2)— 
(A) by striking ‘‘includes the making of ex-
penditures relating to an office described in the 
preceding sentence which, if incurred by the in-
dividual, would be allowable as a deduction 
under section 162(a).’’ and inserting ‘‘in-
cludes— 
‘‘(A) 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), 
and 
‘‘(B) political intervention.’’, and 
(B) by adding at the end the following new 
paragraph: 
‘‘(6) POLITICAL
INTERVENTION.—The term 
‘political intervention’ has the meaning given to such 
term by section 4956.’’. 
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(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made in taxable 
years beginning after December 31, 2020. 
SEC. 3. POLITICAL INTERVENTION. 
(a) 
DISCLOSURE
REQUIREMENT.—Section 
6104(d)(3) of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new subpara-
graph: 
‘‘(C) CERTAIN
501(C)(4)
ORGANIZATIONS 
MUST DISCLOSE CERTAIN DONORS.—In the case 
of 
an 
organization 
described 
in 
section 
501(c)(4) that spends funds on political inter-
vention (as defined in section 4956), such orga-
nization shall be required to disclose the name 
and address of any contributor donating $5,000 
or more to such organization, and such infor-
mation shall be made open to public inspection 
in 
the 
manner 
described 
in 
subsection 
(a)(1)(A).’’. 
(b) POLITICAL
INTERVENTION
DEFINED.—Sub-
chapter C of chapter 42 of subtitle D of the Internal Rev-
enue Code of 1986 is amended by adding at the end the 
following new section: 
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‘‘SEC. 4956. POLITICAL INTERVENTION. 
‘‘(a) POLITICAL INTERVENTION DEFINED.—For pur-
poses of this section, the term ‘political intervention’ 
means (except as provided in subsection (b)), with respect 
to activities conducted by an organization in relation to 
Federal, State, local, and foreign election campaigns of 
candidates for public office— 
‘‘(1) express advocation— 
‘‘(A) for the election, defeat, nomination, 
or recall of a political candidate, 
‘‘(B) for the election or defeat of can-
didates affiliated with a specific political party, 
‘‘(C) that voters select candidates for sup-
port or opposition based on one or more criteria 
that clearly distinguish certain candidates from 
other candidates, or 
‘‘(D) the making of contributions to a can-
didate’s campaign, a political party, or (unless 
the contribution is restricted so that it must not 
be used to support political intervention) any 
other political organization within the meaning 
of section 527(e)(1), 
‘‘(2) communication to any part of the elec-
torate, other than an express advocacy communica-
tion within the meaning of clause (i), if the commu-
nication— 
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‘‘(A) refers to a political candidate, and 
‘‘(B) reflects a view on such candidate, and 
‘‘(3) political use of resources. 
‘‘(b) EXCEPTIONS.—A communication described in 
subsection (a) shall not constitute political intervention 
if— 
‘‘(1) it does not consist of paid mass media ad-
vertising, and 
‘‘(2) it falls under one of the following excep-
tions: 
‘‘(A) COMMUNICATIONS
TO
INFLUENCE 
OFFICIAL ACTION.—Commentary on a public of-
ficial that has a direct, limited, and reasonable 
relationship to specific actions the official may 
yet perform within his or her current term of 
office without mention of any election or voting 
in an election, or of the official’s candidacy or 
opponent. 
‘‘(B) VOTER EDUCATION.—Voter education 
activities or the dissemination of materials that 
compare two or more candidates for an office, 
including materials disclosing the views of the 
organization on political issues, if the commu-
nication consists solely of content in which the 
time, text, or space is offered in equal shares to 
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each of the participating candidates, and the or-
ganization’s share of content is no greater than 
the share available to any of the participating 
candidates. The opportunity to participate, in-
cluding a full description of the opportunity and 
of the organization’s share of the content, if 
any, must be given to all candidates meeting an 
objective threshold of viability for nomination or 
election to the office at least 72 hours in ad-
vance of the final preparation of the commu-
nication. 
‘‘(C) SELF-DEFENSE COMMUNICATIONS.— 
A response by the organization to a public or 
publicly-reported statement by a candidate or 
candidates that either (i) attacks the organiza-
tion itself, or (ii) comments upon a specific pub-
lic policy position that the organization has 
taken publicly in furtherance of its exempt pur-
pose within the prior year, or (iii) results in 
press inquiries to the organization that were 
not solicited subsequent to the candidate’s 
statement by the organization. The response by 
the organization must be educational, limited 
topically to addressing the candidate’s state-
ment, and as to (i) or (ii), disseminated in a 
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manner commensurate in medium and scale, 
and proximate in time, to the publicity of the 
candidate’s statement, and as to (iii), limited to 
dissemination to the requesting press organiza-
tion. 
‘‘(D) PERSONAL, ORAL REMARKS AT OFFI-
CIAL MEETINGS.—Oral remarks made by any-
one other than a candidate who is present in 
person at an official meeting of an organization 
held in a single room or location, so long as— 
‘‘(i) no announcement of the meeting 
refers to any candidate, party, election, or 
voting, and 
‘‘(ii) a disclaimer is made to those in 
attendance, stating that remarks are the 
speaker’s personal opinion and are not 
made on behalf of the organization. 
This exception covers only oral remarks made 
by and to persons in attendance, and not any 
other form of communication or redistribution 
of those remarks, whether written, electronic, 
recorded, broadcast, or otherwise transmitted. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) CANDIDATE.—The term ‘candidate’ means 
a person who offers himself or herself for election to 
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public office or whose election the person conducting 
the activity or making the expenditure in question 
expressly proposes, supports, or opposes. 
‘‘(2) ELECTION.—The term ‘election’ means a 
process culminating in a vote by the public to deter-
mine whether a candidate will serve in a public of-
fice, including primary, general, special, and runoff 
elections, nominations by caucus, convention, or 
other means, and recall and confirmation votes. 
‘‘(3) PAID MASS MEDIA ADVERTISING.— 
‘‘(A) IN GENERAL.—The term ‘paid mass 
media advertising’ means communication to the 
general public placed for a fee on one of the fol-
lowing media operated by another person: a 
broadcast, cable, or satellite facility, newspaper, 
magazine, outdoor advertising facility, mass 
mailing service, telephone bank, or another per-
son’s website or internet communications serv-
ice. 
‘‘(B) MASS
MAILING.—The term ‘mass 
mailing’ means— 
‘‘(i) a mailing by United States mail 
or facsimile, 
‘‘(ii) of more than 500 pieces of mail 
matter of an identical or substantially 
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similar nature within any 30-day period, 
and 
‘‘(iii) that is not voter education mate-
rials. 
‘‘(4) POLITICAL
USE
OF
RESOURCES.—The 
term ‘political use of resources’— 
‘‘(A) means— 
‘‘(i) the provision any of an organiza-
tion’s resources, tangible or intangible, in-
cluding monetary or in-kind, goods, serv-
ices, or facilities, by gift, loan, sale, rental, 
or any other method of transfer to another 
person or entity, if— 
‘‘(I) the transferee uses such re-
sources to support or oppose any can-
didate’s election to public office, 
‘‘(II) such use is reasonably fore-
seeable, and 
‘‘(III) if the transferor has not 
taken reasonable steps to prevent such 
use, 
‘‘(ii) any other transfer that is a re-
portable contribution related to one or 
more candidates for elective public office, 
to a political party, or (unless the transfer 
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is restricted so that it must not be used to 
support political intervention) to any other 
political organization within the meaning 
of section 527(e)(1), and 
‘‘(iii) any other use of an organiza-
tion’s resources in support of or opposition 
to a candidate, if not specifically allowed 
under a Revenue Ruling or other Federal 
tax authority, and 
‘‘(B) does not include a transfer that is— 
‘‘(i) made in a transaction in which 
the fair market value of goods or services 
provided by the organization does not ex-
ceed the value of the consideration received 
in exchange, 
‘‘(ii) similar to other transactions con-
ducted by the organization, and 
‘‘(iii) without preference for or against 
any candidate. 
‘‘(d) REGULATIONS.—The Secretary shall prescribe 
such regulations and other guidance as may be appro-
priate or necessary to carry out the purposes of this sec-
tion.’’. 
(c) CONFORMING AMENDMENTS.— 
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(1) The heading for subchapter C of chapter 42 
of such Code is amended by adding at the end the 
following: ‘‘; Political Intervention’’. 
(2) The table of sections for such subchapter C 
is amended by adding at the end the following: 
‘‘Sec. 4956. Political intervention.’’. 
(3) The item in the table of subchapters of such 
chapter 42 relating to subchapter C is amended to 
read as follows: 
‘‘SUBCHAPTER C. POLITICAL EXPENDITURES OF SECTION 501(c)(3) 
ORGANIZATIONS; POLITICAL INTERVENTION.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to contributions made in taxable 
years beginning after December 31, 2020. 
Æ 
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