SEC. 4911. TAX ON EXCESS EXPENDITURES TO INFLUENCE
LEGISLATION.
4911(a) TAX IMPOSED. --
4911(a)(1) IN GENERAL. --There is hereby imposed on the excess
lobbying expenditures of any organization to which this section
applies a tax equal to 25 percent of the amount of the excess
lobbying expenditures for the taxable year.
4911(a)(2) ORGANIZATIONS TO WHICH THIS SECTION APPLIES. --This
section applies to any organization with respect to which an
election under section 501(h)[(i)] (relating to lobbying expenditures
by public charities) is in effect for the taxable year.
4911(b) EXCESS LOBBYING EXPENDITURES. --For purposes of this
section, the term "excess lobbying expenditures" means,
for a taxable year, the greater of --
4911(b)(1) the amount by which the lobbying expenditures made
by the organization during the taxable year exceed the lobbying
nontaxable amount for such organization for such taxable year,
or
4911(b)(2) the amount by which the grass roots expenditures
made by the organization during the taxable year exceed the
grass roots nontaxable amount for such organization for such
taxable year.
4911(c) DEFINITIONS. --For purposes of this section --
4911(c)(1) LOBBYING EXPENDITURES. --The term "lobbying
expenditures" means expenditures for the purpose of influencing
legislation (as defined in subsection (d)).
4911(c)(2) LOBBYING NONTAXABLE AMOUNT. --The lobbying nontaxable
amount for any organization for any taxable year is the lesser
of (A) $1,000,000 or (B) the amount determined under the following
table:
If the exempt purpose
expenditures are -- The lobbying nontaxableamount is --
Not over $500,000 ......... 20 percent of the exempt purpose
ex-penditures.
Over $500,000 but not over $100,000 plus 15 percent of the
$1,000,000 .................. excessof the exempt purpose
expendituresover $500,000.
Over $1,000,000 but not $175,000 plus 10 percent of the
over $1,500,000 ............. excessof the exempt purpose
expendituresover $1,000,000.
Over $1,500,000 ........... $225,000 plus 5 percent of the
excessof the exempt purpose
expendituresover $1,500,000.
4911(c)(3) GRASS ROOTS EXPENDITURES. --The term "grass
roots expenditures" means expenditures for the purpose
of influencing legislation (as defined in subsection (d) without
regard to paragraph (1)(B) thereof).
4911(c)(4) GRASS ROOTS NONTAXABLE AMOUNT. --The grass roots
nontaxable amount for any organization for any taxable year
is 25 percent of the lobbying nontaxable amount (determined
under paragraph (2)) for such organization for such taxable
year.
4911(d) INFLUENCING LEGISLATION. --
4911(d)(1) GENERAL RULE. --Except as otherwise provided in
paragraph (2), for purposes of this section, the term "influencing
legislation" means --
4911(d)(1)(A) any attempt to influence any legislation through
an attempt to affect the opinions of the general public or any
segment thereof, and
4911(d)(1)(B) any attempt to influence any legislation through
communication with any member or employee of a legislative body,
or with any government official or employee who may participate
in the formulation of the legislation.
4911(d)(2) EXCEPTIONS. --For purposes of this section, the
term "influencing legislation", with respect to an
organization, does not include --
4911(d)(2)(A) making available the results of nonpartisan analysis,
study, or research;
4911(d)(2)(B) providing of technical advice or assistance (where
such advice would otherwise constitute the influencing of legislation)
to a governmental body or to a committee or other subdivision
thereof in response to a written request by such body or subdivision,
as the case may be;
4911(d)(2)(C) appearances before, or communications to, any
legislative body with respect to a possible decision of such
body which might affect the existence of the organization, its
powers and duties, tax-exempt status, or the deduction of contributions
to the organization;
4911(d)(2)(D) communications between the organization and its
bona fide members with respect to legislation or proposed legislation
of direct interest to the organization and such members, other
than communications described in paragraph (3); and
4911(d)(2)(E) any communication with a government official
or employee, other than --
4911(d)(2)(E)(i) a communication with a member or employee
of a legislative body (where such communication would otherwise
constitute the influencing of legislation), or
4911(d)(2)(E)(ii) a communication the principal purpose of
which is to influence legislation.
4911(d)(3) COMMUNICATIONS WITH MEMBERS. --
4911(d)(3)(A) A communication between an organization and any
bona fide member of such organization to directly encourage
such member to communicate as provided in paragraph (1)(B) shall
be treated as a communication described in paragraph (1)(B).
4911(d)(3)(B) A communication between an organization and any
bona fide member of such organization to directly encourage
such member to urge persons other than members to communicate
as provided in either subparagraph (A) or subparagraph (B) of
paragraph (1) shall be treated as a communication described
in paragraph (1)(A).
4911(e) OTHER DEFINITIONS AND SPECIAL RULES. --For purposes
of this section --
4911(e)(1) EXEMPT PURPOSE EXPENDITURES. --
4911(e)(1)(A) IN GENERAL. --The term "exempt purpose expenditures"
means, with respect to any organization for any taxable year,
the total of the amounts paid or incurred by such organization
to accomplish purposes described in section 170(c)(2)(B) (relating
to religious, charitable, educational, etc., purposes).
4911(e)(1)(B) CERTAIN AMOUNTS INCLUDED. --The term "exempt
purpose expenditures" includes --
4911(e)(1)(B)(i) administrative expenses paid or incurred for
purposes described in section 170(c)(2)(B), and
4911(e)(1)(B)(ii) amounts paid or incurred for the purpose
of influencing legislation (whether or not for purposes described
in section 170(c)(2)(B)).
4911(e)(1)(C) CERTAIN AMOUNTS EXCLUDED. --The term "exempt
purpose expenditures" does not include amounts paid or
incurred to or for --
4911(e)(1)(C)(i) a separate fundraising unit of such organization,
or
4911(e)(1)(C)(ii) one or more other organizations, if such
amounts are paid or incurred primarily for fundraising.
4911(e)(2) LEGISLATION. --The term "legislation"
includes action with respect to Acts, bills, resolutions, or
similar items by the Congress, any State legislature, any local
council, or similar governing body, or by the public in a referendum,
initiative, constitutional amendment, or similar procedure.
4911(e)(3) ACTION. --The term "action" is limited
to the introduction, amendment, enactment, defeat, or repeal
of Acts, bills, resolutions, or similar items.
4911(e)(4) DEPRECIATION, ETC., TREATED AS EXPENDITURES. --In
computing expenditures paid or incurred for the purpose of influencing
legislation (within the meaning of subsection (b)(1) or (b)(2))
or exempt purpose expenditures (as defined in paragraph (1)),
amounts properly chargeable to capital account shall not be
taken into account. There shall be taken into account a reasonable
allowance for exhaustion, wear and tear, obsolescence, or amortization.
Such allowance shall be computed only on the basis of the straight-line
method of depreciation. For purposes of this section, a determination
of whether an amount is properly chargeable to capital account
shall be made on the basis of the principles that apply under
subtitle A to amounts which are paid or incurred in a trade
or business.
4911(f) AFFILIATED ORGANIZATIONS. --
4911(f)(1) IN GENERAL. --Except as otherwise provided in paragraph
(4), if for a taxable year two or more organizations described
in section 501(c)(3) are members of an affiliated group of organizations
as defined in paragraph (2), and an election under section 501(h)
is effective for at least one such organization for such year,
then --
4911(f)(1)(A) the determination as to whether excess lobbying
expenditures have been made and the determination as to whether
the expenditure limits of section 501(h)(1) have been exceeded
shall be made as though such affiliated group is one organization,
4911(f)(1)(B) if such group has excess lobbying expenditures,
each such organization as to which an election under section
501(h) is effective for such year shall be treated as an organization
which has excess lobbying expenditures in an amount which equals
such organization's proportionate share of such group's excess
lobbying expenditures,
4911(f)(1)(C) if the expenditure limits of section 501(h)(1)
are exceeded, each such organization as to which an election
under section 501(h) is effective for such year shall be treated
as an organization which is not described in section 501(c)(3)
by reason of the application of 501(h), and
4911(f)(1)(D) subparagraphs (C) and (D) of subsection (d)(2),
paragraph (3) of subsection (d), and clause (i) of subsection
(e)(1)(C) shall be applied as if such affiliated group were
one organization.
4911(f)(2) DEFINITION OF AFFILIATION. --For purposes of paragraph
(1), two organizations are members of an affiliated group of
organizations but only if --
4911(f)(2)(A) the governing instrument of one such organization
requires it to be bound by decisions of the other organization
on legislative issues, or
4911(f)(2)(B) the governing board of one such organization
includes persons who --
4911(f)(2)(B)(i) are specifically designated representatives
of another such organization or are members of the governing
board, officers, or paid executive staff members of such other
organization, and
4911(f)(2)(B)(ii) by aggregating their votes, have sufficient
voting power to cause or prevent action on legislative issues
by the first such organization.
4911(f)(3) DIFFERENT TAXABLE YEARS. --If members of an affiliated
group of organizations have different taxable years, their expenditures
shall be computed for purposes of this section in a manner to
be prescribed by regulations promulgated by the Secretary.
4911(f)(4) LIMITED CONTROL. --If two or more organizations
are members of an affiliated group of organizations (as defined
in paragraph (2) without regard to subparagraph (B) thereof),
no two members of such affiliated group are affiliated (as defined
in paragraph (2) without regard to subparagraph (A) thereof),
and the governing instrument of no such organization requires
it to be bound by decisions of any of the other such organizations
on legislative issues other than as to action with respect to
Acts, bills, resolutions, or similar items by the Congress,
then --
4911(f)(4)(A) in the case of any organization whose decisions
bind one or more members of such affiliated group, directly
or indirectly, the determination as to whether such organization
has paid or incurred excess lobbying expenditures and the determination
as to whether such organization has exceeded the expenditure
limits of section 501(h)(1) shall be made as though such organization
has paid or incurred those amounts paid or incurred by such
members of such affiliated group to influence legislation with
respect to Acts, bills, resolutions, or similar items by the
Congress, and
4911(f)(4)(B) in the case of any organization to which subparagraph
(A) does not apply, but which is a member of such affiliated
group, the determination as to whether such organization has
paid or incurred excess lobbying expenditures and the determination
as to whether such organization has exceeded the expenditure
limits of section 501(h)(1) shall be made as though such organization
is not a member of such affiliated group.
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