I 
107TH CONGRESS 
2D SESSION 
H. R. 5596 
To amend section 527 of the Internal Revenue Code of 1986 to eliminate 
notification and return requirements for State and local party committees 
and 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, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
OCTOBER 10, 2002 
Mr. BRADY of Texas (for himself, Mr. DOGGETT, Mr. VITTER, Mr. POMEROY, 
Mr. SHAYS, and Mr. MEEHAN) introduced the following bill; which was 
referred to the Committee on Ways and Means 
A BILL 
To amend section 527 of the Internal Revenue Code of 
1986 to eliminate notification and return requirements 
for State and local party committees and candidate com-
mittees and avoid duplicate reporting by certain State 
and local political committees of information required 
to be reported and made publicly available under State 
law, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
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SECTION 1. EXEMPTION FOR CERTAIN STATE AND LOCAL 
POLITICAL COMMITTEES FROM NOTIFICA-
TION REQUIREMENTS. 
(a) EXEMPTION
FROM
NOTIFICATION
REQUIRE-
MENTS.—Paragraph (5) of section 527(i) of the Internal 
Revenue Code of 1986 (relating to organizations must no-
tify 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 or which is a State or 
local committee of a political party.’’. 
(b) EFFECTIVE DATE.—The amendments 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 PO-
LITICAL COMMITTEES FROM REPORTING RE-
QUIREMENTS. 
(a) IN GENERAL.—Section 527(j)(5) of the Internal 
Revenue Code of 1986 (relating to coordination with other 
requirements) is amended by redesignating subparagraphs 
(C), (D), and (E) as subparagraphs (D), (E), and (F), 
respectively, and by inserting after subparagraph (B) the 
following new subparagraph: 
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‘‘(C) to any organization which is a quali-
fied State or local political organization,’’. 
(b) QUALIFIED STATE OR LOCAL POLITICAL ORGA-
NIZATION.—Subsection (e) of section 527 of the Internal 
Revenue Code of 1986 (relating to other definitions) is 
amended by adding at the end the following new para-
graph: 
‘‘(5) QUALIFIED STATE OR LOCAL POLITICAL 
ORGANIZATION.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
State or local political organization’ means a 
political organization— 
‘‘(i) all the exempt functions of which 
are solely for the purposes 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, 
‘‘(ii) which is subject to State law that 
requires the organization to report (and it 
so reports)— 
‘‘(I) information regarding each 
separate expenditure from and con-
tribution to such organization, and 
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‘‘(II) information regarding the 
person who makes such contribution 
or receives such expenditure, 
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 (I) made pub-
lic by the agency with which such reports 
are filed, and (II) made publicly available 
for inspection by the organization in the 
manner described in section 6104(d). 
‘‘(B) CERTAIN STATE LAW DIFFERENCES 
DISREGARDED.—An organization shall not be 
treated as failing to meet the requirements of 
subparagraph (A)(ii) solely by reason of 1 or 
more of the following: 
‘‘(i) The minimum amount of any ex-
penditure or contribution required to be re-
ported under State law is not more than 
$300 greater than the minimum amount 
required to be reported under subsection 
(j). 
‘‘(ii) The State law does not require 
the organization to identify 1 or more of 
the following: 
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‘‘(I) The employer of any person 
who makes contributions to the orga-
nization. 
‘‘(II) The occupation of any per-
son who makes contributions to the 
organization. 
‘‘(III) The employer of any per-
son who receives expenditures from 
the organization. 
‘‘(IV) The occupation of any per-
son who receives expenditures from 
the organization. 
‘‘(V) The purpose of any expendi-
ture of the organization. 
‘‘(VI) The date any contribution 
was made to the organization. 
‘‘(VII) The date of any expendi-
ture of the organization. 
‘‘(C) DE MINIMIS ERRORS.—An organiza-
tion shall not fail to be treated as a qualified 
State or local political organization solely be-
cause such organization makes de minimis er-
rors in complying with the State reporting re-
quirements and the public inspection require-
ments described in subparagraph (A) as long as 
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the organization corrects such errors within a 
reasonable period after the organization be-
comes aware of such errors. 
‘‘(D) PARTICIPATION
OF
FEDERAL
CAN-
DIDATE OR OFFICE HOLDER.—The term ‘quali-
fied 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 public 
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 (unless the Secretary determines 
that such solicitations resulted in de mini-
mis contributions and were made without 
the prior knowledge and consent, whether 
explicit or implicit, of the organization or 
its officers, directors, agents, or employ-
ees), or 
‘‘(iii) directs, in whole or in part, dis-
bursements by the organization.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall take effect as if included in the amend-
ments made by Public Law 106–230. 
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SEC. 3. EXEMPTION FROM ANNUAL RETURN REQUIRE-
MENTS. 
(a) INCOME TAX RETURNS REQUIRED ONLY FOR 
POLITICAL
ORGANIZATION
TAXABLE
INCOME.—Para-
graph (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 ‘‘or which has’’ and all 
that follows through ‘‘section)’’. 
(b) INCOME TAX RETURNS NOT SUBJECT TO DIS-
CLOSURE.— 
(1) DISCLOSURE
BY
THE
SECRETARY.—Sub-
section (b) of section 6104 of such Code (relating to 
disclosure by the Secretary of annual information re-
turns) is amended by striking ‘‘6012(a)(6),’’. 
(2) PUBLIC
INSPECTION.—Subsection (d) of 
section 6104 of such Code (relating to public inspec-
tion of certain annual returns) is amended— 
(A) in paragraph (1)(A)(i) by striking ‘‘or 
section 6012(a)(6) (relating to returns by polit-
ical organizations)’’, and 
(B) in subparagraph (2) by striking ‘‘or 
section 6012(a)(6)’’. 
(c) INFORMATION RETURNS.—Subsection (g) of sec-
tion 6033 of such Code (relating to returns required by 
political organizations) is amended to read as follows: 
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