I
107TH CONGRESS
1ST SESSION
H. R. 1676
To amend the Internal Revenue Code of 1986 to avoid duplicate reporting
of information on political activities of certain State and local political
organizations, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 2, 2001
Mr. DOGGETT (for himself, Mr. STARK, Mr. MATSUI, Mr. COYNE, Mr. LEVIN,
Mr. CARDIN, Mr. MCDERMOTT, Mr. KLECZKA, Mr. LEWIS of Georgia,
Mr. MCNULTY, Mr. JEFFERSON, Mr. BECERRA, Mrs. THURMAN, Mr.
ALLEN, Mr. BACA, Mr. BALDACCI, Mr. BENTSEN, Mr. CLEMENT, Mr.
DAVIS of Florida, Mr. DOOLEY of California, Mr. EDWARDS, Mr.
ETHERIDGE, Mr. FARR of California, Mr. FILNER, Mr. FROST, Mr. GON-
ZALEZ, Mr. GORDON, Mr. GREEN of Texas, Mr. HALL of Ohio, Mr. HIN-
CHEY, Mr. HINOJOSA, Ms. JACKSON-LEE of Texas, Ms. EDDIE BERNICE
JOHNSON of Texas, Mrs. JONES of Ohio, Mr. TURNER, Mr. LAFALCE,
Mr. LAMPSON, Mr. MCGOVERN, Mr. MCINTYRE, Mr. MOORE, Mr. NAD-
LER, Mr. OLVER, Mr. REYES, Ms. RIVERS, Mr. RODRIGUEZ, Ms.
SANCHEZ, Mr. SANDLIN, Mr. ORTIZ, Mr. STENHOLM, Mr. WAXMAN, and
Ms. WOOLSEY) 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 avoid dupli-
cate reporting of information on political activities of
certain State and local political organizations, and for
other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. MODIFICATIONS OF REPORTING REQUIRE-
MENTS FOR CERTAIN STATE AND LOCAL PO-
LITICAL ORGANIZATIONS.
(a) NOTIFICATION.—Paragraph (5) of section 527(i)
of the Internal Revenue Code of 1986 (relating to organi-
zations 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 new subparagraph:
‘‘(C) which is a political committee of a
State or local candidate.’’.
(b) REPORTING.—Paragraph (5) of section 527(j) of
such Code (relating to required disclosures of expenditures
and contributions) is amended by striking ‘‘or’’ at the end
of at the end of subparagraph (D), by redesignating sub-
paragraphs (C), (D), and (E) as subparagraphs (D), (E),
and (F), respectively, and by inserting after subparagraph
(B) the following new subparagraph:
‘‘(C) to any organization which is an ex-
empt State or local political organization,’’.
(c) ANNUAL RETURN REQUIREMENTS.—Paragraph
(6) of section 6012(a) of such Code is amended to read
as follows:
‘‘(6)(A) Except as provided by subparagraphs
(B) and (C), every political organization (within the
meaning of section 527(e)(1)), and every fund treat-
ed under section 527(g) as if it constituted a polit-
ical organization, which has—
‘‘(i) political organization taxable income
(within the meaning of section 527(c)(1)) for
the taxable year, or
‘‘(ii) gross receipts of $25,000 or more for
the taxable year (other than an organization to
which section 527 applies solely by reason of
subsection (f)(1) of such section).
‘‘(B) Subparagraph (A)(ii) shall not apply to an
organization which is a political committee of a
State or local candidate (within the meaning of sec-
tion 527(i)(5)(C)).
‘‘(C) In the case of an exempt State or local po-
litical organization (as defined in section 527(e)(5)),
subparagraph (A)(ii) shall be applied by substituting
‘$100,000’ for ‘$25,000’.’’.
(d) EXEMPT STATE OR LOCAL POLITICAL ORGANIZA-
TION.—Subsection (e) of section 527 of such (relating to
other definitions) is amended by adding at the end the
following new paragraph:
‘‘(5) EXEMPT STATE OR LOCAL POLITICAL OR-
GANIZATION.—
‘‘(A) IN
GENERAL.—The term ‘exempt
State or local political organization’ means a
political organization which—
‘‘(i) does not engage in exempt func-
tion activity other than solely in influ-
encing or attempting to influence the selec-
tion, nomination, election, or appointment
of any individual to any State or local pub-
lic office or office in a State or local polit-
ical organization,
‘‘(ii) is subject to State or local re-
quirements to submit reports (and so re-
ports)—
‘‘(I) regarding each separate ex-
penditure from and contribution to,
such organization, and
‘‘(II) including information re-
garding the person who makes such
contribution or receives such expendi-
ture,
which would otherwise be required to be
reported under this section, and
‘‘(iii) with respect to which the reports
referred to in clause (ii) are made public
by the agency with which such reports are
filed and are publicly available for inspec-
tion in a manner similar to that required
by section 6104(d)(1).
‘‘(B) MINIMUM REPORTABLE AMOUNTS.—
An organization shall not be treated as failing
to meet the requirements of subparagraph
(A)(ii) solely because the minimum amount of
any expenditure or contribution required to be
reported under State or local law is not more
than $100 greater than the minimum amount
required to be reported under subsection (j)
with respect to such expenditure or contribu-
tion.
‘‘(C) PARTICIPATION
OF
FEDERAL
CAN-
DIDATE
OR
OFFICE
HOLDER.—The term ‘ex-
empt State or local political organization’ shall
not include any organization otherwise de-
scribed in subparagraph (A) if a candidate for
nomination or election to Federal elective office
or an individual who holds such office—
‘‘(i) controls or materially participates
in the direction of the organization,
‘‘(ii) solicits contributions to the orga-
nization, or
‘‘(iii) directs, in whole or in part, dis-
bursements by the organization.’’.
(e) WAIVER OF FILING PENALTIES.—Section 527 of
such Code 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.’’.
(f) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the amend-
ments made by Public Law 106–230.
SEC. 2. TECHNICAL CORRECTIONS TO SECTION 527 ORGA-
NIZATION DISCLOSURE PROVISIONS.
(a) UNSEGREGATED FUNDS NOT TO AVOID PEN-
ALTY.—Paragraph (4) of section 527(i) of the Internal
Revenue Code of 1986 (relating to failure to notify) is
amended by adding at the end the following new sentence:
‘‘For purposes of the preceding sentence, the term ‘exempt
function income’ means any amount described in a sub-
‘‘(7) ELECTRONIC FILING.—The Secretary shall
develop procedures for submission in electronic form
of notices required to be filed under this subsection
and reports required to be filed under subsection
(j).’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall take effect as if included in the amend-
ments made by Public Law 106–230.
Æ