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2000 Policy Positions
of the Southern Legislative Conference

6. POLICY POSITION ON SECTION 527 ORGANIZATIONS


BACKGROUND

Candidates funds, committees and other political organizations have been traditionally tax exempt and not required to register under Section 527 of the Internal Revenue Code, and have not been required to disclose to the Internal Revenue Service data regarding expenditures and contributions. However, Congress, in a swift, four-day procedure without public notice, committee hearing or debate, enacted a new law requiring local and state candidates who ever anticipate raising $25,000 in any year to register and – depending on exemptions or contributions – file electronic public reports monthly or quarterly. These reports will require considerable information about the donor – including employers – and on all expenditures, all of which will be posted on the Internet. In addition, Congress has imposed a 35% penalty on candidates and organizations for noncompliance with this new law. Some election officials have been alerting state and local candidates and campaign committees that they must now register under the new law.

RECOMMENDATION

The Southern Legislative Conference of The Council of State Governments urges Congress to clarify this new legislation to specifically exempt state and local candidates and committees from the Section 527 requirements.


Adopted by the Southern Legislative Conference, August 8, 2000, Biloxi, MS

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