HR 9771 — Stopping Foreign Influence in Elections Act of 2026

CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

 In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows.

 Changes in Existing Law Made by the Bill, as Reported

 In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

 INTERNAL REVENUE CODE OF 1986

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Subtitle A--Income Taxes

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CHAPTER 1--NORMAL TAXES AND SURTAXES

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Subchapter F--EXEMPT ORGANIZATIONS

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PART I--GENERAL RULE

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SEC. 501. EXEMPTION FROM TAX ON CORPORATIONS, CERTAIN TRUSTS, ETC.

 (a) Exemption from taxation.--An organization described in 
subsection (c) or (d) or section 401(a) shall be exempt from 
taxation under this subtitle unless such exemption is denied 
under section 502 or 503.
 (b) Tax on unrelated business income and certain other 
activities.--An organization exempt from taxation under 
subsection (a) shall be subject to tax to the extent provided 
in parts II, III, and VI of this subchapter, but 
(notwithstanding parts II, III, and VI of this subchapter) 
shall be considered an organization exempt from income taxes 
for the purpose of any law which refers to organizations exempt 
from income taxes.
 (c) List of exempt organizations.--The following 
organizations are referred to in subsection (a):
 (1) Any corporation organized under Act of Congress 
 which is an instrumentality of the United States but 
 only if such corporation--
 (A) is exempt from Federal income taxes--
 (i) under such Act as amended and 
 supplemented before July 18, 1984, or
 (ii) under this title without regard 
 to any provision of law which is not 
 contained in this title and which is 
 not contained in a revenue Act, or
 (B) is described in subsection (l).
 (2) Corporations organized for the exclusive purpose 
 of holding title to property, collecting income 
 therefrom, and turning over the entire amount thereof, 
 less expenses, to an organization which itself is 
 exempt under this section. Rules similar to the rules 
 of subparagraph (G) of paragraph (25) shall apply for 
 purposes of this paragraph.
 (3) Corporations, and any community chest, fund, or 
 foundation, organized and operated exclusively for 
 religious, charitable, scientific, testing for public 
 safety, literary, or educational purposes, or to foster 
 national or international amateur sports competition 
 (but only if no part of its activities involve the 
 provision of athletic facilities or equipment), or for 
 the prevention of cruelty to children or animals, no 
 part of the net earnings of which inures to the benefit 
 of any private shareholder or individual, no 
 substantial part of the activities of which is carrying 
 on propaganda, or otherwise attempting, to influence 
 legislation (except as otherwise provided in subsection 
 (h)), and which does not participate in, or intervene 
 in (including the publishing or distributing of 
 statements), any political campaign on behalf of (or in 
 opposition to) any candidate for public office.
 (4)(A) Civic leagues or organizations not organized 
 for profit but operated exclusively for the promotion 
 of social welfare, or local associations of employees, 
 the membership of which is limited to the employees of 
 a designated person or persons in a particular 
 municipality, and the net earnings of which are devoted 
 exclusively to charitable, educational, or recreational 
 purposes.
 (B) Subparagraph (A) shall not apply to an entity 
 unless no part of the net earnings of such entity 
 inures to the benefit of any private shareholder or 
 individual.
 (5) Labor, agricultural, or horticultural 
 organizations.
 (6) Business leagues, chambers of commerce, real-
 estate boards, boards of trade, or professional 
 football leagues (whether or not administering a 
 pension fund for football players), not organized for 
 profit and no part of the net earnings of which inures 
 to the benefit of any private shareholder or 
 individual.
 (7) Clubs organized for pleasure, recreation, and 
 other nonprofitable purposes, substantially all of the 
 activities of which are for such purposes and no part 
 of the net earnings of which inures to the benefit of 
 any private shareholder.
 (8) Fraternal beneficiary societies, orders, or 
 associations--
 (A) operating under the lodge system or for 
 the exclusive benefit of the members of a 
 fraternity itself operating under the lodge 
 system, and
 (B) providing for the payment of life, sick, 
 accident, or other benefits to the members of 
 such society, order, or association or their 
 dependents.
 (9) Voluntary employees' beneficiary associations 
 providing for the payment of life, sick, accident, or 
 other benefits to the members of such association or 
 their dependents or designated beneficiaries, if no 
 part of the net earnings of such association inures 
 (other than through such payments) to the benefit of 
 any private shareholder or individual. For purposes of 
 providing for the payment of sick and accident benefits 
 to members of such an association and their dependents, 
 the term ``dependent'' shall include any individual who 
 is a child (as defined in section 152(f)(1)) of a 
 member who as of the end of the calendar year has not 
 attained age 27.
 (10) Domestic fraternal societies, orders, or 
 associations, operating under the lodge system--
 (A) the net earnings of which are devoted 
 exclusively to religious, charitable, 
 scientific, literary, educational, and 
 fraternal purposes, and
 (B) which do not provide for the payment of 
 life, sick, accident, or other benefits.
 (11) Teachers' retirement fund associations of a 
 purely local character, if--
 (A) no part of their net earnings inures 
 (other than through payment of retirement 
 benefits) to the benefit of any private 
 shareholder or individual, and
 (B) the income consists solely of amounts 
 received from public taxation, amounts received 
 from assessments on the teaching salaries of 
 members, and income in respect of investments.
 (12)(A) Benevolent life insurance associations of a 
 purely local character, mutual ditch or irrigation 
 companies, mutual or cooperative telephone companies, 
 or like organizations; but only if 85 percent or more 
 of the income consists of amounts collected from 
 members for the sole purpose of meeting losses and 
 expenses.
 (B) In the case of a mutual or cooperative telephone 
 company, subparagraph (A) shall be applied without 
 taking into account any income received or accrued--
 (i) from a nonmember telephone company for 
 the performance of communication services which 
 involve members of the mutual or cooperative 
 telephone company,
 (ii) from qualified pole rentals,
 (iii) from the sale of display listings in a 
 directory furnished to the members of the 
 mutual or cooperative telephone company, or
 (iv) from the prepayment of a loan under 
 section 306A, 306B, or 311 of the Rural 
 Electrification Act of 1936 (as in effect on 
 January 1, 1987).
 (C) In the case of a mutual or cooperative electric 
 company, subparagraph (A) shall be applied without 
 taking into account any income received or accrued--
 (i) from qualified pole rentals, or
 (ii) from any provision or sale of electric 
 energy transmission services or ancillary 
 services if such services are provided on a 
 nondiscriminatory open access basis under an 
 open access transmission tariff approved or 
 accepted by FERC or under an independent 
 transmission provider agreement approved or 
 accepted by FERC (other than income received or 
 accrued directly or indirectly from a member),
 (iii) from the provision or sale of electric 
 energy distribution services or ancillary 
 services if such services are provided on a 
 nondiscriminatory open access basis to 
 distribute electric energy not owned by the 
 mutual or electric cooperative company--
 (I) to end-users who are served by 
 distribution facilities not owned by 
 such company or any of its members 
 (other than income received or accrued 
 directly or indirectly from a member), 
 or
 (II) generated by a generation 
 facility not owned or leased by such 
 company or any of its members and which 
 is directly connected to distribution 
 facilities owned by such company or any 
 of its members (other than income 
 received or accrued directly or 
 indirectly from a member),
 (iv) from any nuclear decommissioning 
 transaction, or
 (v) from any asset exchange or conversion 
 transaction.
 (D) For purposes of this paragraph, the term 
 ``qualified pole rental'' means any rental of a pole 
 (or other structure used to support wires) if such pole 
 (or other structure)--
 (i) is used by the telephone or electric 
 company to support one or more wires which are 
 used by such company in providing telephone or 
 electric services to its members, and
 (ii) is used pursuant to the rental to 
 support one or more wires (in addition to the 
 wires described in clause (i)) for use in 
 connection with the transmission by wire of 
 electricity or of telephone or other 
 communications.
For purposes of the preceding sentence, the term ``rental'' 
includes any sale of the right to use the pole (or other 
structure).
 (E) For purposes of subparagraph (C)(ii), the term 
 ``FERC'' means--
 (i) the Federal Energy Regulatory Commission, 
 or
 (ii) in the case of any utility with respect 
 to which all of the electricity generated, 
 transmitted, or distributed by such utility is 
 generated, transmitted, distributed, and 
 consumed in the same State, the State agency of 
 such State with the authority to regulate 
 electric utilities.
 (F) For purposes of subparagraph (C)(iv), the term 
 ``nuclear decommissioning transaction'' means--
 (i) any transfer into a trust, fund, or 
 instrument established to pay any nuclear 
 decommissioning costs if the transfer is in 
 connection with the transfer of the mutual or 
 cooperative electric company's interest in a 
 nuclear power plant or nuclear power plant 
 unit,
 (ii) any distribution from any trust, fund, 
 or instrument established to pay any nuclear 
 decommissioning costs, or
 (iii) any earnings from any trust, fund, or 
 instrument established to pay any nuclear 
 decommissioning costs.
 (G) For purposes of subparagraph (C)(v), the term 
 ``asset exchange or conversion transaction'' means any 
 voluntary exchange or involuntary conversion of any 
 property related to generating, transmitting, 
 distributing, or selling electric energy by a mutual or 
 cooperative electric company, the gain from which 
 qualifies for deferred recognition under section 1031 
 or 1033, but only if the replacement property acquired 
 by such company pursuant to such section constitutes 
 property which is used, or to be used, for--
 (i) generating, transmitting, distributing, 
 or selling electric energy, or
 (ii) producing, transmitting, distributing, 
 or selling natural gas.
 (H)(i) In the case of a mutual or cooperative 
 electric company described in this paragraph or an 
 organization described in section 1381(a)(2)(C), income 
 received or accrued from a load loss transaction shall 
 be treated as an amount collected from members for the 
 sole purpose of meeting losses and expenses.
 (ii) For purposes of clause (i), the term ``load loss 
 transaction'' means any wholesale or retail sale of 
 electric energy (other than to members) to the extent 
 that the aggregate sales during the recovery period do 
 not exceed the load loss mitigation sales limit for 
 such period.
 (iii) For purposes of clause (ii), the load loss 
 mitigation sales limit for the recovery period is the 
 sum of the annual load losses for each year of such 
 period.
 (iv) For purposes of clause (iii), a mutual or 
 cooperative electric company's annual load loss for 
 each year of the recovery period is the amount (if any) 
 by which--
 (I) the megawatt hours of electric energy 
 sold during such year to members of such 
 electric company are less than
 (II) the megawatt hours of electric energy 
 sold during the base year to such members.
 (v) For purposes of clause (iv)(II), the term ``base 
 year'' means--
 (I) the calendar year preceding the start-up 
 year, or
 (II) at the election of the mutual or 
 cooperative electric company, the second or 
 third calendar years preceding the start-up 
 year.
 (vi) For purposes of this subparagraph, the recovery 
 period is the 7-year period beginning with the start-up 
 year.
 (vii) For purposes of this subparagraph, the start-up 
 year is the first year that the mutual or cooperative 
 electric company offers nondiscriminatory open access 
 or the calendar year which includes the date of the 
 enactment of this subparagraph, if later, at the 
 election of such company.
 (viii) A company shall not fail to be treated as a 
 mutual or cooperative electric company for purposes of 
 this paragraph or as a corporation operating on a 
 cooperative basis for purposes of section 1381(a)(2)(C) 
 by reason of the treatment under clause (i).
 (ix) For purposes of subparagraph (A), in the case of 
 a mutual or cooperative electric company, income 
 received, or accrued, indirectly from a member shall be 
 treated as an amount collected from members for the 
 sole purpose of meeting losses and expenses.
 (I) In the case of a mutual or cooperative electric 
 company described in this paragraph or an organization 
 described in section 1381(a)(2), income received or 
 accrued in connection with an election under section 
 45J(e)(1) shall be treated as an amount collected from 
 members for the sole purpose of meeting losses and 
 expenses.
 (J) In the case of a mutual or cooperative telephone 
 or electric company described in this paragraph, 
 subparagraph (A) shall be applied without taking into 
 account any income received or accrued from--
 (i) any grant, contribution, or assistance 
 provided pursuant to the Robert T. Stafford 
 Disaster Relief and Emergency Assistance Act or 
 any similar grant, contribution, or assistance 
 by any local, State, or regional governmental 
 entity for the purpose of relief, recovery, or 
 restoration from, or preparation for, a 
 disaster or emergency, or
 (ii) any grant or contribution by any 
 governmental entity (other than a contribution 
 in aid of construction or any other 
 contribution as a customer or potential 
 customer) the purpose of which is substantially 
 related to providing, constructing, restoring, 
 or relocating electric, communication, 
 broadband, internet, or other utility 
 facilities or services.
 (13) Cemetery companies owned and operated 
 exclusively for the benefit of their members or which 
 are not operated for profit; and any corporation 
 chartered solely for the purpose of the disposal of 
 bodies by burial or cremation which is not permitted by 
 its charter to engage in any business not necessarily 
 incident to that purpose and no part of the net 
 earnings of which inures to the benefit of any private 
 shareholder or individual.
 (14)(A) Credit unions without capital stock organized 
 and operated for mutual purposes and without profit.
 (B) Corporations or associations without capital 
 stock organized before September 1, 1957, and operated 
 for mutual purposes and without profit for the purpose 
 of providing reserve funds for, and insurance of shares 
 or deposits in--
 (i) domestic building and loan associations,
 (ii) cooperative banks without capital stock 
 organized and operated for mutual purposes and 
 without profit,
 (iii) mutual savings banks not having capital 
 stock represented by shares, or
 (iv) mutual savings banks described in 
 section 591(b).
 (C) Corporations or associations organized before 
 September 1, 1957, and operated for mutual purposes and 
 without profit for the purpose of providing reserve 
 funds for associations or banks described in clause 
 (i), (ii), or (iii) of subparagraph (B); but only if 85 
 percent or more of the income is attributable to 
 providing such reserve funds and to investments. This 
 subparagraph shall not apply to any corporation or 
 association entitled to exemption under subparagraph 
 (B).
 (15)(A) Insurance companies (as defined in section 
 816(a)) other than life (including interinsurers and 
 reciprocal underwriters) if--
 (i)(I) the gross receipts for the taxable 
 year do not exceed $600,000, and
 (II) more than 50 percent of such gross 
 receipts consist of premiums, or
 (ii) in the case of a mutual insurance 
 company--
 (I) the gross receipts of which for 
 the taxable year do not exceed 
 $150,000, and
 (II) more than 35 percent of such 
 gross receipts consist of premiums.
 Clause (ii) shall not apply to a company if any 
 employee of the company, or a member of the employee's 
 family (as defined in section 2032A(e)(2)), is an 
 employee of another company exempt from taxation by 
 reason of this paragraph (or would be so exempt but for 
 this sentence).
 (B) For purposes of subparagraph (A), in determining 
 whether any company or association is described in 
 subparagraph (A), such company or association shall be 
 treated as receiving during the taxable year amounts 
 described in subparagraph (A) which are received during 
 such year by all other companies or associations which 
 are members of the same controlled group as the 
 insurance company or association for which the 
 determination is being made.
 (C) For purposes of subparagraph (B), the term 
 ``controlled group'' has the meaning given such term by 
 section 831(b)(2)(B)(ii),1 except that in 
 applying section 831(b)(2)(B)(ii) 1 for 
 purposes of this subparagraph, subparagraphs (B) and 
 (C) of section 1563(b)(2) shall be disregarded.
 (16) Corporations organized by an association subject 
 to part IV of this subchapter or members thereof, for 
 the purpose of financing the ordinary crop operations 
 of such members or other producers, and operated in 
 conjunction with such association. Exemption shall not 
 be denied any such corporation because it has capital 
 stock, if the dividend rate of such stock is fixed at 
 not to exceed the legal rate of interest in the State 
 of incorporation or 8 percent per annum, whichever is 
 greater, on the value of the consideration for which 
 the stock was issued, and if substantially all such 
 stock (other than nonvoting preferred stock, the owners 
 of which are not entitled or permitted to participate, 
 directly or indirectly, in the profits of the 
 corporation, on dissolution or otherwise, beyond the 
 fixed dividends) is owned by such association, or 
 members thereof; nor shall exemption be denied any such 
 corporation because there is accumulated and maintained 
 by it a reserve required by State law or a reasonable 
 reserve for any necessary purpose.
 (17)(A) A trust or trusts forming part of a plan 
 providing for the payment of supplemental unemployment 
 compensation benefits, if--
 (i) under the plan, it is impossible, at any 
 time prior to the satisfaction of all 
 liabilities, with respect to employees under 
 the plan, for any part of the corpus or income 
 to be (within the taxable year or thereafter) 
 used for, or diverted to, any purpose other 
 than the providing of supplemental unemployment 
 compensation benefits,
 (ii) such benefits are payable to employees 
 under a classification which is set forth in 
 the plan and which is found by the Secretary 
 not to be discriminatory in favor of employees 
 who are highly compensated employees (within 
 the meaning of section 414(q)), and
 (iii) such benefits do not discriminate in 
 favor of employees who are highly compensated 
 employees (within the meaning of section 
 414(q)). A plan shall not be considered 
 discriminatory within the meaning of this 
 clause merely because the benefits received 
 under the plan bear a uniform relationship to 
 the total compensation, or the basic or regular 
 rate of compensation, of the employees covered 
 by the plan.
 (B) In determining whether a plan meets the 
 requirements of subparagraph (A), any benefits provided 
 under any other plan shall not be taken into 
 consideration, except that a plan shall not be 
 considered discriminatory--
 (i) merely because the benefits under the 
 plan which are first determined in a 
 nondiscriminatory manner within the meaning of 
 subparagraph (A) are then reduced by any sick, 
 accident, or unemployment compensation benefits 
 received under State or Federal law (or reduced 
 by a portion of such benefits if determined in 
 a nondiscriminatory manner), or
 (ii) merely because the plan provides only 
 for employees who are not eligible to receive 
 sick, accident, or unemployment compensation 
 benefits under State or Federal law the same 
 benefits (or a portion of such benefits if 
 determined in a nondiscriminatory manner) which 
 such employees would receive under such laws if 
 such employees were eligible for such benefits, 
 or
 (iii) merely because the plan provides only 
 for employees who are not eligible under 
 another plan (which meets the requirements of 
 subparagraph (A)) of supplemental unemployment 
 compensation benefits provided wholly by the 
 employer the same benefits (or a portion of 
 such benefits if determined in a 
 nondiscriminatory manner) which such employees 
 would receive under such other plan if such 
 employees were eligible under such other plan, 
 but only if the employees eligible under both 
 plans would make a classification which would 
 be nondiscriminatory within the meaning of 
 subparagraph (A).
 (C) A plan shall be considered to meet the 
 requirements of subparagraph (A) during the whole of 
 any year of the plan if on one day in each quarter it 
 satisfies such requirements.
 (D) The term ``supplemental unemployment compensation 
 benefits'' means only--
 (i) benefits which are paid to an employee 
 because of his involuntary separation from the 
 employment of the employer (whether or not such 
 separation is temporary) resulting directly 
 from a reduction in force, the discontinuance 
 of a plant or operation, or other similar 
 conditions, and
 (ii) sick and accident benefits subordinate 
 to the benefits described in clause (i).
 (E) Exemption shall not be denied under subsection 
 (a) to any organization entitled to such exemption as 
 an association described in paragraph (9) of this 
 subsection merely because such organization provides 
 for the payment of supplemental unemployment benefits 
 (as defined in subparagraph (D)(i)).
 (18) A trust or trusts created before June 25, 1959, 
 forming part of a plan providing for the payment of 
 benefits under a pension plan funded only by 
 contributions of employees, if--
 (A) under the plan, it is impossible, at any 
 time prior to the satisfaction of all 
 liabilities with respect to employees under the 
 plan, for any part of the corpus or income to 
 be (within the taxable year or thereafter) used 
 for, or diverted to, any purpose other than the 
 providing of benefits under the plan,
 (B) such benefits are payable to employees 
 under a classification which is set forth in 
 the plan and which is found by the Secretary 
 not to be discriminatory in favor of employees 
 who are highly compensated employees (within 
 the meaning of section 414(q)),
 (C) such benefits do not discriminate in 
 favor of employees who are highly compensated 
 employees (within the meaning of section 
 414(q)). A plan shall not be considered 
 discriminatory within the meaning of this 
 subparagraph merely because the benefits 
 received under the plan bear a uniform 
 relationship to the total compensation, or the 
 basic or regular rate of compensation, of the 
 employees covered by the plan, and
 (D) in the case of a plan under which an 
 employee may designate certain contributions as 
 deductible--
 (i) such contributions do not exceed 
 the amount with respect to which a 
 deduction is allowable under section 
 219(b)(3),
 (ii) requirements similar to the 
 requirements of section 
 401(k)(3)(A)(ii) are met with respect 
 to such elective contributions,
 (iii) such contributions are treated 
 as elective deferrals for purposes of 
 section 402(g), and
 (iv) the requirements of section 
 401(a)(30) are met.
 For purposes of subparagraph (D)(ii), rules similar to 
 the rules of section 401(k)(8) shall apply. For 
 purposes of section 4979, any excess contribution under 
 clause (ii) shall be treated as an excess contribution 
 under a cash or deferred arrangement.
 (19) A post or organization of past or present 
 members of the Armed Forces of the United States, or an 
 auxiliary unit or society of, or a trust or foundation 
 for, any such post or organization--
 (A) organized in the United States or any of 
 its possessions,
 (B) at least 75 percent of the members of 
 which are past or present members of the Armed 
 Forces of the United States and substantially 
 all of the other members of which are 
 individuals who are cadets or are spouses, 
 widows, widowers, ancestors, or lineal 
 descendants of past or present members of the 
 Armed Forces of the United States or of cadets, 
 and
 (C) no part of the net earnings of which 
 inures to the benefit of any private 
 shareholder or individual.
 (21)(A) A trust or trusts established in writing, 
 created or organized in the United States, and 
 contributed to by any person (except an insurance 
 company) if--
 (i) the purpose of such trust or trusts is 
 exclusively--
 (I) to satisfy, in whole or in part, 
 the liability of such person for, or 
 with respect to, claims for 
 compensation for disability or death 
 due to pneumoconiosis under Black Lung 
 Acts,
 (II) to pay premiums for insurance 
 exclusively covering such liability,
 (III) to pay administrative and other 
 incidental expenses of such trust in 
 connection with the operation of the 
 trust and the processing of claims 
 against such person under Black Lung 
 Acts, and
 (IV) to pay accident or health 
 benefits for retired miners and their 
 spouses and dependents (including 
 administrative and other incidental 
 expenses of such trust in connection 
 therewith) or premiums for insurance 
 exclusively covering such benefits; and
 (ii) no part of the assets of the trust may 
 be used for, or diverted to, any purpose other 
 than--
 (I) the purposes described in clause 
 (i),
 (II) investment (but only to the 
 extent that the trustee determines that 
 a portion of the assets is not 
 currently needed for the purposes 
 described in clause (i)) in qualified 
 investments, or
 (III) payment into the Black Lung 
 Disability Trust Fund established under 
 section 9501, or into the general fund 
 of the United States Treasury (other 
 than in satisfaction of any tax or 
 other civil or criminal liability of 
 the person who established or 
 contributed to the trust).
 (B) No deduction shall be allowed under this chapter 
 for any payment described in subparagraph (A)(i)(IV) 
 from such trust.
 (C) Payments described in subparagraph (A)(i)(IV) may 
 be made from such trust during a taxable year only to 
 the extent that the aggregate amount of such payments 
 during such taxable year does not exceed the excess (if 
 any), as of the close of the preceding taxable year, 
 of--
 (i) the fair market value of the assets of 
 the trust, over
 (ii) 110 percent of the present value of the 
 liability described in subparagraph (A)(i)(I) 
 of such person.
The determinations under the preceding sentence shall be made 
by an independent actuary using actuarial methods and 
assumptions (not inconsistent with the regulations prescribed 
under section 192(c)(1)(A)) each of which is reasonable and 
which are reasonable in the aggregate.
 (D) For purposes of this paragraph:
 (i) The term ``Black Lung Acts'' means part C 
 of title IV of the Federal Mine Safety and 
 Health Act of 1977, and any State law providing 
 compensation for disability or death due to 
 that pneumoconiosis.
 (ii) The term ``qualified investments'' 
 means--
 (I) public debt securities of the 
 United States,
 (II) obligations of a State or local 
 government which are not in default as 
 to principal or interest, and
 (III) time or demand deposits in a 
 bank (as defined in section 581) or an 
 insured credit union (within the 
 meaning of section 101(7) of the 
 Federal Credit Union Act, 12 U.S.C. 
 1752(7)) located in the United States.
 (iii) The term ``miner'' has the same meaning 
 as such term has when used in section 402(d) of 
 the Black Lung Benefits Act (30 U.S.C. 902(d)).
 (iv) The term ``incidental expenses'' 
 includes legal, accounting, actuarial, and 
 trustee expenses.
 (22) A trust created or organized in the United 
 States and established in writing by the plan sponsors 
 of multiemployer plans if--
 (A) the purpose of such trust is 
 exclusively--
 (i) to pay any amount described in 
 section 4223(c) or (h) of the Employee 
 Retirement Income Security Act of 1974, 
 and
 (ii) to pay reasonable and necessary 
 administrative expenses in connection 
 with the establishment and operation of 
 the trust and the processing of claims 
 against the trust,
 (B) no part of the assets of the trust may be 
 used for, or diverted to, any purpose other 
 than--
 (i) the purposes described in 
 subparagraph (A), or
 (ii) the investment in securities, 
 obligations, or time or demand deposits 
 described in clause (ii) of paragraph 
 (21)(D),
 (C) such trust meets the requirements of 
 paragraphs (2), (3), and (4) of section 
 4223(b), 4223(h), or, if applicable, section 
 4223(c) of the Employee Retirement Income 
 Security Act of 1974, and
 (D) the trust instrument provides that, on 
 dissolution of the trust, assets of the trust 
 may not be paid other than to plans which have 
 participated in the plan or, in the case of a 
 trust established under section 4223(h) of such 
 Act, to plans with respect to which employers 
 have participated in the fund.
 (23) Any association organized before 1880 more than 
 75 percent of the members of which are present or past 
 members of the Armed Forces and a principal purpose of 
 which is to provide insurance and other benefits to 
 veterans or their dependents.
 (24) A trust described in section 4049 of the 
 Employee Retirement Income Security Act of 1974 (as in 
 effect on the date of the enactment of the Single-
 Employer Pension Plan Amendments Act of 1986).
 (25)(A) Any corporation or trust which--
 (i) has no more than 35 shareholders or 
 beneficiaries,
 (ii) has only 1 class of stock or beneficial 
 interest, and
 (iii) is organized for the exclusive purposes 
 of--
 (I) acquiring real property and 
 holding title to, and collecting income 
 from, such property, and
 (II) remitting the entire amount of 
 income from such property (less 
 expenses) to 1 or more organizations 
 described in subparagraph (C) which are 
 shareholders of such corporation or 
 beneficiaries of such trust.
 For purposes of clause (iii), the term ``real 
 property'' shall not include any interest as a tenant 
 in common (or similar interest) and shall not include 
 any indirect interest.
 (B) A corporation or trust shall be described in 
 subparagraph (A) without regard to whether the 
 corporation or trust is organized by 1 or more 
 organizations described in subparagraph (C).
 (C) An organization is described in this subparagraph 
 if such organization is--
 (i) a qualified pension, profit sharing, or 
 stock bonus plan that meets the requirements of 
 section 401(a),
 (ii) a governmental plan (within the meaning 
 of section 414(d)),
 (iii) the United States, any State or 
 political subdivision thereof, or any agency or 
 instrumentality of any of the foregoing, or
 (iv) any organization described in paragraph 
 (3).
 (D) A corporation or trust shall in no event be 
 treated as described in subparagraph (A) unless such 
 corporation or trust permits its shareholders or 
 beneficiaries--
 (i) to dismiss the corporation's or trust's 
 investment adviser, following reasonable 
 notice, upon a vote of the shareholders or 
 beneficiaries holding a majority of interest in 
 the corporation or trust, and
 (ii) to terminate their interest in the 
 corporation or trust by either, or both, of the 
 following alternatives, as determined by the 
 corporation or trust:
 (I) by selling or exchanging their 
 stock in the corporation or interest in 
 the trust (subject to any Federal or 
 State securities law) to any 
 organization described in subparagraph 
 (C) so long as the sale or exchange 
 does not increase the number of 
 shareholders or beneficiaries in such 
 corporation or trust above 35, or
 (II) by having their stock or 
 interest redeemed by the corporation or 
 trust after the shareholder or 
 beneficiary has provided 90 days notice 
 to such corporation or trust.
 (E)(i) For purposes of this title--
 (I) a corporation which is a qualified 
 subsidiary shall not be treated as a separate 
 corporation, and
 (II) all assets, liabilities, and items of 
 income, deduction, and credit of a qualified 
 subsidiary shall be treated as assets, 
 liabilities, and such items (as the case may 
 be) of the corporation or trust described in 
 subparagraph (A).
 (ii) For purposes of this subparagraph, the term 
 ``qualified subsidiary'' means any corporation if, at 
 all times during the period such corporation was in 
 existence, 100 percent of the stock of such corporation 
 is held by the corporation or trust described in 
 subparagraph (A).
 (iii) For purposes of this subtitle, if any 
 corporation which was a qualified subsidiary ceases to 
 meet the requirements of clause (ii), such corporation 
 shall be treated as a new corporation acquiring all of 
 its assets (and assuming all of its liabilities) 
 immediately before such cessation from the corporation 
 or trust described in subparagraph (A) in exchange for 
 its stock.
 (F) For purposes of subparagraph (A), the term ``real 
 property'' includes any personal property which is 
 leased under, or in connection with, a lease of real 
 property, but only if the rent attributable to such 
 personal property (determined under the rules of 
 section 856(d)(1)) for the taxable year does not exceed 
 15 percent of the total rent for the taxable year 
 attributable to both the real and personal property 
 leased under, or in connection with, such lease.
 (G)(i) An organization shall not be treated as 
 failing to be described in this paragraph merely by 
 reason of the receipt of any otherwise disqualifying 
 income which is incidentally derived from the holding 
 of real property.
 (ii) Clause (i) shall not apply if the amount of 
 gross income described in such clause exceeds 10 
 percent of the organization's gross income for the 
 taxable year unless the organization establishes to the 
 satisfaction of the Secretary that the receipt of gross 
 income described in clause (i) in excess of such 
 limitation was inadvertent and reasonable steps are 
 being taken to correct the circumstances giving rise to 
 such income.
 (26) Any membership organization if--
 (A) such organization is established by a 
 State exclusively to provide coverage for 
 medical care (as defined in section 213(d)) on 
 a not-for-profit basis to individuals described 
 in subparagraph (B) through--
 (i) insurance issued by the 
 organization, or
 (ii) a health maintenance 
 organization under an arrangement with 
 the organization,
 (B) the only individuals receiving such 
 coverage through the organization are 
 individuals--
 (i) who are residents of such State, 
 and
 (ii) who, by reason of the existence 
 or history of a medical condition--
 (I) are unable to acquire 
 medical care coverage for such 
 condition through insurance or 
 from a health maintenance 
 organization, or
 (II) are able to acquire such 
 coverage only at a rate which 
 is substantially in excess of 
 the rate for such coverage 
 through the membership 
 organization,
 (C) the composition of the membership in such 
 organization is specified by such State, and
 (D) no part of the net earnings of the 
 organization inures to the benefit of any 
 private shareholder or individual.
 A spouse and any qualifying child (as defined in 
 section 24(c)) of an individual described in 
 subparagraph (B) (without regard to this sentence) 
 shall be treated as described in subparagraph (B).
 (27)(A) Any membership organization if--
 (i) such organization is established before 
 June 1, 1996, by a State exclusively to 
 reimburse its members for losses arising under 
 workmen's compensation acts,
 (ii) such State requires that the membership 
 of such organization consist of--
 (I) all persons who issue insurance 
 covering workmen's compensation losses 
 in such State, and
 (II) all persons and governmental 
 entities who self-insure against such 
 losses, and
 (iii) such organization operates as a non-
 profit organization by--
 (I) returning surplus income to its 
 members or workmen's compensation 
 policyholders on a periodic basis, and
 (II) reducing initial premiums in 
 anticipation of investment income.
 (B) Any organization (including a mutual insurance 
 company) if--
 (i) such organization is created by State law 
 and is organized and operated under State law 
 exclusively to--
 (I) provide workmen's compensation 
 insurance which is required by State 
 law or with respect to which State law 
 provides significant disincentives if 
 such insurance is not purchased by an 
 employer, and
 (II) provide related coverage which 
 is incidental to workmen's compensation 
 insurance,
 (ii) such organization must provide workmen's 
 compensation insurance to any employer in the 
 State (for employees in the State or 
 temporarily assigned out-of-State) which seeks 
 such insurance and meets other reasonable 
 requirements relating thereto,
 (iii)(I) the State makes a financial 
 commitment with respect to such organization 
 either by extending the full faith and credit 
 of the State to the initial debt of such 
 organization or by providing the initial 
 operating capital of such organization, and 
 (II) in the case of periods after the date of 
 enactment of this subparagraph, the assets of 
 such organization revert to the State upon 
 dissolution or State law does not permit the 
 dissolution of such organization, and
 (iv) the majority of the board of directors 
 or oversight body of such organization are 
 appointed by the chief executive officer or 
 other executive branch official of the State, 
 by the State legislature, or by both.
 (28) The National Railroad Retirement Investment 
 Trust established under section 15(j) of the Railroad 
 Retirement Act of 1974.
 (29) CO-OP health insurance issuers.--
 (A) In general.--A qualified nonprofit health 
 insurance issuer (within the meaning of section 
 1322 of the Patient Protection and Affordable 
 Care Act) which has received a loan or grant 
 under the CO-OP program under such section, but 
 only with respect to periods for which the 
 issuer is in compliance with the requirements 
 of such section and any agreement with respect 
 to the loan or grant.
 (B) Conditions for exemption.--Subparagraph 
 (A) shall apply to an organization only if--
 (i) the organization has given notice 
 to the Secretary, in such manner as the 
 Secretary may by regulations prescribe, 
 that it is applying for recognition of 
 its status under this paragraph,
 (ii) except as provided in section 
 1322(c)(4) of the Patient Protection 
 and Affordable Care Act, no part of the 
 net earnings of which inures to the 
 benefit of any private shareholder or 
 individual,
 (iii) no substantial part of the 
 activities of which is carrying on 
 propaganda, or otherwise attempting, to 
 influence legislation, and
 (iv) the organization does not 
 participate in, or intervene in 
 (including the publishing or 
 distributing of statements), any 
 political campaign on behalf of (or in 
 opposition to) any candidate for public 
 office.
 (d) Religious and apostolic organizations.--The following 
organizations are referred to in subsection (a): Religious or 
apostolic associations or corporations, if such associations or 
corporations have a common treasury or community treasury, even 
if such associations or corporations engage in business for the 
common benefit of the members, but only if the members thereof 
include (at the time of filing their returns) in their gross 
income their entire pro rata shares, whether distributed or 
not, of the taxable income of the association or corporation 
for such year. Any amount so included in the gross income of a 
member shall be treated as a dividend received.
 (e) Cooperative hospital service organizations.--For purposes 
of this title, an organization shall be treated as an 
organization organized and operated exclusively for charitable 
purposes, if--
 (1) such organization is organized and operated 
 solely--
 (A) to perform, on a centralized basis, one 
 or more of the following services which, if 
 performed on its own behalf by a hospital which 
 is an organization described in subsection 
 (c)(3) and exempt from taxation under 
 subsection (a), would constitute activities in 
 exercising or performing the purpose or 
 function constituting the basis for its 
 exemption: data processing, purchasing 
 (including the purchasing of insurance on a 
 group basis), warehousing, billing and 
 collection (including the purchase of patron 
 accounts receivable on a recourse basis), food, 
 clinical, industrial engineering, laboratory, 
 printing, communications, record center, and 
 personnel (including selection, testing, 
 training, and education of personnel) services; 
 and
 (B) to perform such services solely for two 
 or more hospitals each of which is--
 (i) an organization described in 
 subsection (c)(3) which is exempt from 
 taxation under subsection (a),
 (ii) a constituent part of an 
 organization described in subsection 
 (c)(3) which is exempt from taxation 
 under subsection (a) and which, if 
 organized and operated as a separate 
 entity, would constitute an 
 organization described in subsection 
 (c)(3), or
 (iii) owned and operated by the 
 United States, a State, the District of 
 Columbia, or a possession of the United 
 States, or a political subdivision or 
 an agency or instrumentality of any of 
 the foregoing;
 (2) such organization is organized and operated on a 
 cooperative basis and allocates or pays, within 81/2 
 months after the close of its taxable year, all net 
 earnings to patrons on the basis of services performed 
 for them; and
 (3) if such organization has capital stock, all of 
 such stock outstanding is owned by its patrons.
For purposes of this title, any organization which, by reason 
of the preceding sentence, is an organization described in 
subsection (c)(3) and exempt from taxation under subsection 
(a), shall be treated as a hospital and as an organization 
referred to in section 170(b)(1)(A)(iii).
 (f) Cooperative service organizations of operating 
educational organizations.--For purposes of this title, if an 
organization is--
 (1) organized and operated solely to hold, commingle, 
 and collectively invest and reinvest (including 
 arranging for and supervising the performance by 
 independent contractors of investment services related 
 thereto) in stocks and securities, the moneys 
 contributed thereto by each of the members of such 
 organization, and to collect income therefrom and turn 
 over the entire amount thereof, less expenses, to such 
 members,
 (2) organized and controlled by one or more such 
 members, and
 (3) comprised solely of members that are 
 organizations described in clause (ii) or (iv) of 
 section 170(b)(1)(A)--
 (A) which are exempt from taxation under 
 subsection (a), or
 (B) the income of which is excluded from 
 taxation under section 115,
 then such organization shall be treated as an 
 organization organized and operated exclusively for 
 charitable purposes.
 (g) Definition of agricultural.--For purposes of subsection 
(c)(5), the term ``agricultural'' includes the art or science 
of cultivating land, harvesting crops or aquatic resources, or 
raising livestock.
 (h) Expenditures by public charities to influence 
legislation.--
 (1) General rule.--In the case of an organization to 
 which this subsection applies, exemption from taxation 
 under subsection (a) shall be denied because a 
 substantial part of the activities of such organization 
 consists of carrying on propaganda, or otherwise 
 attempting, to influence legislation, but only if such 
 organization normally--
 (A) makes lobbying expenditures in excess of 
 the lobbying ceiling amount for such 
 organization for each taxable year, or
 (B) makes grass roots expenditures in excess 
 of the grass roots ceiling amount for such 
 organization for each taxable year.
 (2) Definitions.--For purposes of this subsection--
 (A) Lobbying expenditures.--The term 
 ``lobbying expenditures'' means expenditures 
 for the purpose of influencing legislation (as 
 defined in section 4911(d)).
 (B) Lobbying ceiling amount.--The lobbying 
 ceiling amount for any organization for any 
 taxable year is 150 percent of the lobbying 
 nontaxable amount for such organization for 
 such taxable year, determined under section 
 4911.
 (C) Grass roots expenditures.--The term 
 ``grass roots expenditures'' means expenditures 
 for the purpose of influencing legislation (as 
 defined in section 4911(d) without regard to 
 paragraph (1)(B) thereof).
 (D) Grass roots ceiling amount.--The grass 
 roots ceiling amount for any organization for 
 any taxable year is 150 percent of the grass 
 roots nontaxable amount for such organization 
 for such taxable year, determined under section 
 4911.
 (3) Organizations to which this subsection applies.--
 This subsection shall apply to any organization which 
 has elected (in such manner and at such time as the 
 Secretary may prescribe) to have the provisions of this 
 subsection apply to such organization and which, for 
 the taxable year which includes the date the election 
 is made, is described in subsection (c)(3) and--
 (A) is described in paragraph (4), and
 (B) is not a disqualified organization under 
 paragraph (5).
 (4) Organizations permitted to elect to have this 
 subsection apply.--An organization is described in this 
 paragraph if it is described in--
 (A) section 170(b)(1)(A)(ii) (relating to 
 educational institutions),
 (B) section 170(b)(1)(A)(iii) (relating to 
 hospitals and medical research organizations),
 (C) section 170(b)(1)(A)(iv) (relating to 
 organizations supporting government schools),
 (D) section 170(b)(1)(A)(vi) (relating to 
 organizations publicly supported by charitable 
 contributions),
 (E) section 170(b)(1)(A)(ix) (relating to 
 agricultural research organizations),
 (F) section 509(a)(2) (relating to 
 organizations publicly supported by admissions, 
 sales, etc.), or
 (G) section 509(a)(3) (relating to 
 organizations supporting certain types of 
 public charities) except that for purposes of 
 this subparagraph, section 509(a)(3) shall be 
 applied without regard to the last sentence of 
 section 509(a).
 (5) Disqualified organizations.--For purposes of 
 paragraph (3) an organization is a disqualified 
 organization if it is--
 (A) described in section 170(b)(1)(A)(i) 
 (relating to churches),
 (B) an integrated auxiliary of a church or of 
 a convention or association of churches, or
 (C) a member of an affiliated group of 
 organizations (within the meaning of section 
 4911(f)(2)) if one or more members of such 
 group is described in subparagraph (A) or (B).
 (6) Years for which election is effective.--An 
 election by an organization under this subsection shall 
 be effective for all taxable years of such organization 
 which--
 (A) end after the date the election is made, 
 and
 (B) begin before the date the election is 
 revoked by such organization (under regulations 
 prescribed by the Secretary).
 (7) No effect on certain organizations.--With respect 
 to any organization for a taxable year for which--
 (A) such organization is a disqualified 
 organization (within the meaning of paragraph 
 (5)), or
 (B) an election under this subsection is not 
 in effect for such organization,
 nothing in this subsection or in section 4911 shall be 
 construed to affect the interpretation of the phrase, 
 ``no substantial part of the activities of which is 
 carrying on propaganda, or otherwise attempting, to 
 influence legislation,'' under subsection (c)(3).
 (8) Affiliated organizations.--For rules regarding 
 affiliated organizations, see section 4911(f).
 (i) Prohibition of discrimination by certain social clubs.--
Notwithstanding subsection (a), an organization which is 
described in subsection (c)(7) shall not be exempt from 
taxation under subsection (a) for any taxable year if, at any 
time during such taxable year, the charter, bylaws, or other 
governing instrument, of such organization or any written 
policy statement of such organization contains a provision 
which provides for discrimination against any person on the 
basis of race, color, or religion. The preceding sentence to 
the extent it relates to discrimination on the basis of 
religion shall not apply to--
 (1) an auxiliary of a fraternal beneficiary society 
 if such society--
 (A) is described in subsection (c)(8) and 
 exempt from tax under subsection (a), and
 (B) limits its membership to the members of a 
 particular religion, or
 (2) a club which in good faith limits its membership 
 to the members of a particular religion in order to 
 further the teachings or principles of that religion, 
 and not to exclude individuals of a particular race or 
 color.
 (j) Special rules for certain amateur sports organizations.--
 (1) In general.--In the case of a qualified amateur 
 sports organization--
 (A) the requirement of subsection (c)(3) that 
 no part of its activities involve the provision 
 of athletic facilities or equipment shall not 
 apply, and
 (B) such organization shall not fail to meet 
 the requirements of subsection (c)(3) merely 
 because its membership is local or regional in 
 nature.
 (2) Qualified amateur sports organization defined.--
 For purposes of this subsection, the term ``qualified 
 amateur sports organization'' means any organization 
 organized and operated exclusively to foster national 
 or international amateur sports competition if such 
 organization is also organized and operated primarily 
 to conduct national or international competition in 
 sports or to support and develop amateur athletes for 
 national or international competition in sports.
 (k) Treatment of certain organizations providing child 
care.--For purposes of subsection (c)(3) of this section and 
sections 170(c)(2), 2055(a)(2), and 2522(a)(2), the term 
``educational purposes'' includes the providing of care of 
children away from their homes if--
 (1) substantially all of the care provided by the 
 organization is for purposes of enabling individuals to 
 be gainfully employed, and
 (2) the services provided by the organization are 
 available to the general public.
 (l) Government corporations exempt under subsection (c)(1).--
For purposes of subsection (c)(1), the following organizations 
are described in this subsection:
 (1) The Central Liquidity Facility established under 
 title III of the Federal Credit Union Act (12 U.S.C. 
 1795 et seq.).
 (2) The Resolution Trust Corporation established 
 under section 21A 1 of the Federal Home Loan 
 Bank Act.
 (3) The Resolution Funding Corporation established 
 under section 21B of the Federal Home Loan Bank Act.
 (4) The Patient-Centered Outcomes Research Institute 
 established under section 1181(b) of the Social 
 Security Act.
 (m) Certain organizations providing commercial-type insurance 
not exempt from tax.--
 (1) Denial of tax exemption where providing 
 commercial-type insurance is substantial part of 
 activities.--An organization described in paragraph (3) 
 or (4) of subsection (c) shall be exempt from tax under 
 subsection (a) only if no substantial part of its 
 activities consists of providing commercial-type 
 insurance.
 (2) Other organizations taxed as insurance companies 
 on insurance business.--In the case of an organization 
 described in paragraph (3) or (4) of subsection (c) 
 which is exempt from tax under subsection (a) after the 
 application of paragraph (1) of this subsection--
 (A) the activity of providing commercial-type 
 insurance shall be treated as an unrelated 
 trade or business (as defined in section 513), 
 and
 (B) in lieu of the tax imposed by section 511 
 with respect to such activity, such 
 organization shall be treated as an insurance 
 company for purposes of applying subchapter L 
 with respect to such activity.
 (3) Commercial-type insurance.--For purposes of this 
 subsection, the term ``commercial-type insurance'' 
 shall not include--
 (A) insurance provided at substantially below 
 cost to a class of charitable recipients,
 (B) incidental health insurance provided by a 
 health maintenance organization of a kind 
 customarily provided by such organizations,
 (C) property or casualty insurance provided 
 (directly or through an organization described 
 in section 414(e)(3)(B)(ii)) by a church or 
 convention or association of churches for such 
 church or convention or association of 
 churches,
 (D) providing retirement or welfare benefits 
 (or both) by a church or a convention or 
 association of churches (directly or through an 
 organization described in section 414(e)(3)(A) 
 or 414(e)(3)(B)(ii)) for the employees 
 (including employees described in section 
 414(e)(3)(B)) of such church or convention or 
 association of churches or the beneficiaries of 
 such employees, and
 (E) charitable gift annuities.
 (4) Insurance includes annuities.--For purposes of 
 this subsection, the issuance of annuity contracts 
 shall be treated as providing insurance.
 (5) Charitable gift annuity.--For purposes of 
 paragraph (3)(E), the term ``charitable gift annuity'' 
 means an annuity if--
 (A) a portion of the amount paid in 
 connection with the issuance of the annuity is 
 allowable as a deduction under section 170 or 
 2055, and
 (B) the annuity is described in section 
 514(c)(5) (determined as if any amount paid in 
 cash in connection with such issuance were 
 property).
 (n) Charitable risk pools.--
 (1) In general.--For purposes of this title--
 (A) a qualified charitable risk pool shall be 
 treated as an organization organized and 
 operated exclusively for charitable purposes, 
 and
 (B) subsection (m) shall not apply to a 
 qualified charitable risk pool.
 (2) Qualified charitable risk pool.--For purposes of 
 this subsection, the term ``qualified charitable risk 
 pool'' means any organization--
 (A) which is organized and operated solely to 
 pool insurable risks of its members (other than 
 risks related to medical malpractice) and to 
 provide information to its members with respect 
 to loss control and risk management,
 (B) which is comprised solely of members that 
 are organizations described in subsection 
 (c)(3) and exempt from tax under subsection 
 (a), and
 (C) which meets the organizational 
 requirements of paragraph (3).
 (3) Organizational requirements.--An organization 
 (hereinafter in this subsection referred to as the 
 ``risk pool'') meets the organizational requirements of 
 this paragraph if--
 (A) such risk pool is organized as a 
 nonprofit organization under State law 
 provisions authorizing risk pooling 
 arrangements for charitable organizations,
 (B) such risk pool is exempt from any income 
 tax imposed by the State (or will be so exempt 
 after such pool qualifies as an organization 
 exempt from tax under this title),
 (C) such risk pool has obtained at least 
 $1,000,000 in startup capital from nonmember 
 charitable organizations,
 (D) such risk pool is controlled by a board 
 of directors elected by its members, and
 (E) the organizational documents of such risk 
 pool require that--
 (i) each member of such pool shall at 
 all times be an organization described 
 in subsection (c)(3) and exempt from 
 tax under subsection (a),
 (ii) any member which receives a 
 final determination that it no longer 
 qualifies as an organization described 
 in subsection (c)(3) shall immediately 
 notify the pool of such determination 
 and the effective date of such 
 determination, and
 (iii) each policy of insurance issued 
 by the risk pool shall provide that 
 such policy will not cover the insured 
 with respect to events occurring after 
 the date such final determination was 
 issued to the insured.
 An organization shall not cease to qualify as a 
 qualified charitable risk pool solely by reason of the 
 failure of any of its members to continue to be an 
 organization described in subsection (c)(3) if, within 
 a reasonable period of time after such pool is notified 
 as required under subparagraph (E)(ii), such pool takes 
 such action as may be reasonably necessary to remove 
 such member from such pool.
 (4) Other definitions.--For purposes of this 
 subsection--
 (A) Startup capital.--The term ``startup 
 capital'' means any capital contributed to, and 
 any program-related investments (within the 
 meaning of section 4944(c)) made in, the risk 
 pool before such pool commences operations.
 (B) Nonmember charitable organization.--The 
 term ``nonmember charitable organization'' 
 means any organization which is described in 
 subsection (c)(3) and exempt from tax under 
 subsection (a) and which is not a member of the 
 risk pool and does not benefit (directly or 
 indirectly) from the insurance coverage 
 provided by the pool to its members.
 (o) Treatment of hospitals participating in provider-
sponsored organizations.--An organization shall not fail to be 
treated as organized and operated exclusively for a charitable 
purpose for purposes of subsection (c)(3) solely because a 
hospital which is owned and operated by such organization 
participates in a provider-sponsored organization (as defined 
in section 1855(d) of the Social Security Act), whether or not 
the provider-sponsored organization is exempt from tax. For 
purposes of subsection (c)(3), any person with a material 
financial interest in such a provider-sponsored organization 
shall be treated as a private shareholder or individual with 
respect to the hospital.
 (p) Suspension of tax-exempt status of terrorist 
organizations.--
 (1) In general.--The exemption from tax under 
 subsection (a) with respect to any organization 
 described in paragraph (2), and the eligibility of any 
 organization described in paragraph (2) to apply for 
 recognition of exemption under subsection (a), shall be 
 suspended during the period described in paragraph (3).
 (2) Terrorist organizations.--An organization is 
 described in this paragraph if such organization is 
 designated or otherwise individually identified--
 (A) under section 212(a)(3)(B)(vi)(II) or 219 
 of the Immigration and Nationality Act as a 
 terrorist organization or foreign terrorist 
 organization,
 (B) in or pursuant to an Executive order 
 which is related to terrorism and issued under 
 the authority of the International Emergency 
 Economic Powers Act or section 5 of the United 
 Nations Participation Act of 1945 for the 
 purpose of imposing on such organization an 
 economic or other sanction, or
 (C) in or pursuant to an Executive order 
 issued under the authority of any Federal law 
 if--
 (i) the organization is designated or 
 otherwise individually identified in or 
 pursuant to such Executive order as 
 supporting or engaging in terrorist 
 activity (as defined in section 
 212(a)(3)(B) of the Immigration and 
 Nationality Act) or supporting 
 terrorism (as defined in section 
 140(d)(2) of the Foreign Relations 
 Authorization Act, Fiscal Years 1988 
 and 1989); and
 (ii) such Executive order refers to 
 this subsection.
 (3) Period of suspension.--With respect to any 
 organization described in paragraph (2), the period of 
 suspension--
 (A) begins on the later of--
 (i) the date of the first publication 
 of a designation or identification 
 described in paragraph (2) with respect 
 to such organization, or
 (ii) the date of the enactment of 
 this subsection, and
 (B) ends on the first date that all 
 designations and identifications described in 
 paragraph (2) with respect to such organization 
 are rescinded pursuant to the law or Executive 
 order under which such designation or 
 identification was made.
 (4) Denial of deduction.--No deduction shall be 
 allowed under any provision of this title, including 
 sections 170, 545(b)(2), 642(c), 2055, 2106(a)(2), and 
 2522, with respect to any contribution to an 
 organization described in paragraph (2) during the 
 period described in paragraph (3).
 (5) Denial of administrative or judicial challenge of 
 suspension or denial of deduction.--Notwithstanding 
 section 7428 or any other provision of law, no 
 organization or other person may challenge a suspension 
 under paragraph (1), a designation or identification 
 described in paragraph (2), the period of suspension 
 described in paragraph (3), or a denial of a deduction 
 under paragraph (4) in any administrative or judicial 
 proceeding relating to the Federal tax liability of 
 such organization or other person.
 (6) Erroneous designation.--
 (A) In general.--If--
 (i) the tax exemption of any 
 organization described in paragraph (2) 
 is suspended under paragraph (1),
 (ii) each designation and 
 identification described in paragraph 
 (2) which has been made with respect to 
 such organization is determined to be 
 erroneous pursuant to the law or 
 Executive order under which such 
 designation or identification was made, 
 and
 (iii) the erroneous designations and 
 identifications result in an 
 overpayment of income tax for any 
 taxable year by such organization,
 credit or refund (with interest) with respect 
 to such overpayment shall be made.
 (B) Waiver of limitations.--If the credit or 
 refund of any overpayment of tax described in 
 subparagraph (A)(iii) is prevented at any time 
 by the operation of any law or rule of law 
 (including res judicata), such credit or refund 
 may nevertheless be allowed or made if the 
 claim therefor is filed before the close of the 
 1-year period beginning on the date of the last 
 determination described in subparagraph 
 (A)(ii).
 (7) Notice of suspensions.--If the tax exemption of 
 any organization is suspended under this subsection, 
 the Internal Revenue Service shall update the listings 
 of tax-exempt organizations and shall publish 
 appropriate notice to taxpayers of such suspension and 
 of the fact that contributions to such organization are 
 not deductible during the period of such suspension.
 (q) Special rules for credit counseling organizations.--
 (1) In general.--An organization with respect to 
 which the provision of credit counseling services is a 
 substantial purpose shall not be exempt from tax under 
 subsection (a) unless such organization is described in 
 paragraph (3) or (4) of subsection (c) and such 
 organization is organized and operated in accordance 
 with the following requirements:
 (A) The organization--
 (i) provides credit counseling 
 services tailored to the specific needs 
 and circumstances of consumers,
 (ii) makes no loans to debtors (other 
 than loans with no fees or interest) 
 and does not negotiate the making of 
 loans on behalf of debtors,
 (iii) provides services for the 
 purpose of improving a consumer's 
 credit record, credit history, or 
 credit rating only to the extent that 
 such services are incidental to 
 providing credit counseling services, 
 and
 (iv) does not charge any separately 
 stated fee for services for the purpose 
 of improving any consumer's credit 
 record, credit history, or credit 
 rating.
 (B) The organization does not refuse to 
 provide credit counseling services to a 
 consumer due to the inability of the consumer 
 to pay, the ineligibility of the consumer for 
 debt management plan enrollment, or the 
 unwillingness of the consumer to enroll in a 
 debt management plan.
 (C) The organization establishes and 
 implements a fee policy which--
 (i) requires that any fees charged to 
 a consumer for services are reasonable,
 (ii) allows for the waiver of fees if 
 the consumer is unable to pay, and
 (iii) except to the extent allowed by 
 State law, prohibits charging any fee 
 based in whole or in part on a 
 percentage of the consumer's debt, the 
 consumer's payments to be made pursuant 
 to a debt management plan, or the 
 projected or actual savings to the 
 consumer resulting from enrolling in a 
 debt management plan.
 (D) At all times the organization has a board 
 of directors or other governing body--
 (i) which is controlled by persons 
 who represent the broad interests of 
 the public, such as public officials 
 acting in their capacities as such, 
 persons having special knowledge or 
 expertise in credit or financial 
 education, and community leaders,
 (ii) not more than 20 percent of the 
 voting power of which is vested in 
 persons who are employed by the 
 organization or who will benefit 
 financially, directly or indirectly, 
 from the organization's activities 
 (other than through the receipt of 
 reasonable directors' fees or the 
 repayment of consumer debt to creditors 
 other than the credit counseling 
 organization or its affiliates), and
 (iii) not more than 49 percent of the 
 voting power of which is vested in 
 persons who are employed by the 
 organization or who will benefit 
 financially, directly or indirectly, 
 from the organization's activities 
 (other than through the receipt of 
 reasonable directors' fees).
 (E) The organization does not own more than 
 35 percent of--
 (i) the total combined voting power 
 of any corporation (other than a 
 corporation which is an organization 
 described in subsection (c)(3) and 
 exempt from tax under subsection (a)) 
 which is in the trade or business of 
 lending money, repairing credit, or 
 providing debt management plan 
 services, payment processing, or 
 similar services,
 (ii) the profits interest of any 
 partnership (other than a partnership 
 which is an organization described in 
 subsection (c)(3) and exempt from tax 
 under subsection (a)) which is in the 
 trade or business of lending money, 
 repairing credit, or providing debt 
 management plan services, payment 
 processing, or similar services, and
 (iii) the beneficial interest of any 
 trust or estate (other than a trust 
 which is an organization described in 
 subsection (c)(3) and exempt from tax 
 under subsection (a)) which is in the 
 trade or business of lending money, 
 repairing credit, or providing debt 
 management plan services, payment 
 processing, or similar services.
 (F) The organization receives no amount for 
 providing referrals to others for debt 
 management plan services, and pays no amount to 
 others for obtaining referrals of consumers.
 (2) Additional requirements for organizations 
 described in subsection (c)(3).--
 (A) In general.--In addition to the 
 requirements under paragraph (1), an 
 organization with respect to which the 
 provision of credit counseling services is a 
 substantial purpose and which is described in 
 paragraph (3) of subsection (c) shall not be 
 exempt from tax under subsection (a) unless 
 such organization is organized and operated in 
 accordance with the following requirements:
 (i) The organization does not solicit 
 contributions from consumers during the 
 initial counseling process or while the 
 consumer is receiving services from the 
 organization.
 (ii) The aggregate revenues of the 
 organization which are from payments of 
 creditors of consumers of the 
 organization and which are attributable 
 to debt management plan services do not 
 exceed the applicable percentage of the 
 total revenues of the organization.
 (B) Applicable percentage.--
 (i) In general.--For purposes of 
 subparagraph (A)(ii), the applicable 
 percentage is 50 percent.
 (ii) Transition rule.--
 Notwithstanding clause (i), in the case 
 of an organization with respect to 
 which the provision of credit 
 counseling services is a substantial 
 purpose and which is described in 
 paragraph (3) of subsection (c) and 
 exempt from tax under subsection (a) on 
 the date of the enactment of this 
 subsection, the applicable percentage 
 is--
 (I) 80 percent for the first 
 taxable year of such 
 organization beginning after 
 the date which is 1 year after 
 the date of the enactment of 
 this subsection, and
 (II) 70 percent for the 
 second such taxable year 
 beginning after such date, and
 (III) 60 percent for the 
 third such taxable year 
 beginning after such date.
 (3) Additional requirement for organizations 
 described in subsection (c)(4).--In addition to the 
 requirements under paragraph (1), an organization with 
 respect to which the provision of credit counseling 
 services is a substantial purpose and which is 
 described in paragraph (4) of subsection (c) shall not 
 be exempt from tax under subsection (a) unless such 
 organization notifies the Secretary, in such manner as 
 the Secretary may by regulations prescribe, that it is 
 applying for recognition as a credit counseling 
 organization.
 (4) Credit counseling services; debt management plan 
 services.--For purposes of this subsection--
 (A) Credit counseling services.--The term 
 ``credit counseling services'' means--
 (i) the providing of educational 
 information to the general public on 
 budgeting, personal finance, financial 
 literacy, saving and spending 
 practices, and the sound use of 
 consumer credit,
 (ii) the assisting of individuals and 
 families with financial problems by 
 providing them with counseling, or
 (iii) a combination of the activities 
 described in clauses (i) and (ii).
 (B) Debt management plan services.--The term 
 ``debt management plan services'' means 
 services related to the repayment, 
 consolidation, or restructuring of a consumer's 
 debt, and includes the negotiation with 
 creditors of lower interest rates, the waiver 
 or reduction of fees, and the marketing and 
 processing of debt management plans.
 (r) Additional requirements for certain hospitals.--
 (1) In general.--A hospital organization to which 
 this subsection applies shall not be treated as 
 described in subsection (c)(3) unless the 
 organization--
 (A) meets the community health needs 
 assessment requirements described in paragraph 
 (3),
 (B) meets the financial assistance policy 
 requirements described in paragraph (4),
 (C) meets the requirements on charges 
 described in paragraph (5), and
 (D) meets the billing and collection 
 requirement described in paragraph (6).
 (2) Hospital organizations to which subsection 
 applies.--
 (A) In general.--This subsection shall apply 
 to--
 (i) an organization which operates a 
 facility which is required by a State 
 to be licensed, registered, or 
 similarly recognized as a hospital, and
 (ii) any other organization which the 
 Secretary determines has the provision 
 of hospital care as its principal 
 function or purpose constituting the 
 basis for its exemption under 
 subsection (c)(3) (determined without 
 regard to this subsection).
 (B) Organizations with more than 1 hospital 
 facility.--If a hospital organization operates 
 more than 1 hospital facility--
 (i) the organization shall meet the 
 requirements of this subsection 
 separately with respect to each such 
 facility, and
 (ii) the organization shall not be 
 treated as described in subsection 
 (c)(3) with respect to any such 
 facility for which such requirements 
 are not separately met.
 (3) Community health needs assessments.--
 (A) In general.--An organization meets the 
 requirements of this paragraph with respect to 
 any taxable year only if the organization--
 (i) has conducted a community health 
 needs assessment which meets the 
 requirements of subparagraph (B) in 
 such taxable year or in either of the 2 
 taxable years immediately preceding 
 such taxable year, and
 (ii) has adopted an implementation 
 strategy to meet the community health 
 needs identified through such 
 assessment.
 (B) Community health needs assessment.--A 
 community health needs assessment meets the 
 requirements of this paragraph if such 
 community health needs assessment--
 (i) takes into account input from 
 persons who represent the broad 
 interests of the community served by 
 the hospital facility, including those 
 with special knowledge of or expertise 
 in public health, and
 (ii) is made widely available to the 
 public.
 (4) Financial assistance policy.--An organization 
 meets the requirements of this paragraph if the 
 organization establishes the following policies:
 (A) Financial assistance policy.--A written 
 financial assistance policy which includes--
 (i) eligibility criteria for 
 financial assistance, and whether such 
 assistance includes free or discounted 
 care,
 (ii) the basis for calculating 
 amounts charged to patients,
 (iii) the method for applying for 
 financial assistance,
 (iv) in the case of an organization 
 which does not have a separate billing 
 and collections policy, the actions the 
 organization may take in the event of 
 non-payment, including collections 
 action and reporting to credit 
 agencies, and
 (v) measures to widely publicize the 
 policy within the community to be 
 served by the organization.
 (B) Policy relating to emergency medical 
 care.--A written policy requiring the 
 organization to provide, without 
 discrimination, care for emergency medical 
 conditions (within the meaning of section 1867 
 of the Social Security Act (42 U.S.C. 1395dd)) 
 to individuals regardless of their eligibility 
 under the financial assistance policy described 
 in subparagraph (A).
 (5) Limitation on charges.--An organization meets the 
 requirements of this paragraph if the organization--
 (A) limits amounts charged for emergency or 
 other medically necessary care provided to 
 individuals eligible for assistance under the 
 financial assistance policy described in 
 paragraph (4)(A) to not more than the amounts 
 generally billed to individuals who have 
 insurance covering such care, and
 (B) prohibits the use of gross charges.
 (6) Billing and collection requirements.--An 
 organization meets the requirement of this paragraph 
 only if the organization does not engage in 
 extraordinary collection actions before the 
 organization has made reasonable efforts to determine 
 whether the individual is eligible for assistance under 
 the financial assistance policy described in paragraph 
 (4)(A).
 (7) Regulatory authority.--The Secretary shall issue 
 such regulations and guidance as may be necessary to 
 carry out the provisions of this subsection, including 
 guidance relating to what constitutes reasonable 
 efforts to determine the eligibility of a patient under 
 a financial assistance policy for purposes of paragraph 
 (6).
 (s) Treatment of Organizations Making Disqualified Political 
Committee Contributions.--
 (1) In general.--In the case of any organization 
 described in subsection (c) which makes a disqualified 
 political committee contribution--
 (A) if such contribution is the first 
 disqualified political committee contribution 
 made by such organization, there shall be 
 imposed a tax on such organization of an amount 
 equal to 100 percent of such contribution,
 (B) if such contribution is the second 
 disqualified political committee contribution 
 made by such organization, there shall be 
 imposed a tax on such organization of an amount 
 equal to 200 percent of such contribution, or
 (C) if such contribution is any disqualified 
 political committee contribution subsequent to 
 the second disqualified political committee 
 contribution made by such organization--
 (i) there shall be imposed a tax on 
 such organization of an amount equal to 
 200 percent of such contribution, and
 (ii) such organization shall not be 
 exempt from taxation under subsection 
 (a) during the 2-year period beginning 
 on the date on which such contribution 
 is made.
 (2) Rule of application for organizations not making 
 disqualified political committee contributions for 2 
 years.--In the case of any organization described in 
 subsection (c) which does not make a disqualified 
 political committee contribution during any 2-year 
 period, any determination of the number of such 
 contributions made by such organization for purposes of 
 paragraph (1) shall be made without regard to any 
 contribution made before such 2-year period.
 (3) Disqualified political committee contributions.--
 For purposes of this subsection, the term 
 ``disqualified political committee contributions'' has 
 the meaning given such term in section 6720D(b).

 * * * * * * *

Subtitle F--Procedure and Administration

 * * * * * * *

 CHAPTER 68--ADDITIONS TO THE TAX, ADDITIONAL AMOUNTS, AND ASSESSABLE 
PENALTIES

 * * * * * * *

Subchapter B--ASSESSABLE PENALTIES

 * * * * * * *

 PART I--GENERAL PROVISIONS

 * * * * * * *
Sec. 6720D. Contributions to political committees from certain tax 
 exempt organizations that accept contributions from foreign 
 nationals.

 * * * * * * *

SEC. 6720D. CONTRIBUTIONS TO POLITICAL COMMITTEES FROM CERTAIN TAX 
 EXEMPT ORGANIZATIONS THAT ACCEPT CONTRIBUTIONS FROM 
 FOREIGN NATIONALS.

 (a) In General.--Any specified tax exempt organization that 
makes any disqualified political committee contribution shall 
pay a penalty equal to twice the amount of such contribution.
 (b) Disqualified Political Committee Contribution.--For 
purposes of this section--
 (1) In general.--The term ``disqualified political 
 committee contribution'' means, with respect to any 
 organization described in section 501(c), any 
 contribution made by such organization to a political 
 entity if such organization received, during the 
 testing period, any contribution or gift (within the 
 meaning of section 6033(b)(5)) from a foreign national 
 (as defined in section 319(b) of the Federal Election 
 Campaign Act of 1971).
 (2) Political entity.--The term ``political entity'' 
 means--
 (A) a political committee (as defined in 
 section 301 of the Federal Election Campaign 
 Act of 1971), or
 (B) any organization described in section 
 501(c)(4) and exempt from taxation under 
 section 501(a).
 (3) Testing period.--The term ``testing period'' 
 means, with respect to any contribution by an 
 organization described in section 501(c), the 2-year 
 period ending on the date of such contribution, except 
 that such period shall not include any period before 
 the date of the enactment of this section.
 (4) Reliance on representation.--For purposes of 
 paragraph (1), an organization may rely on the 
 representation of a donor as to the nationality of such 
 donor unless such organization knows or should have 
 known that such representation is false.
 (c) Specified Tax Exempt Organization.--For purposes of this 
section, the term ``specified tax exempt organization'' means, 
with respect to any taxable year, any organization described in 
section 501(c) which is required to file an annual return under 
section 6033(a)(1) for such taxable year if--
 (1) the gross receipts of such organization for the 
 preceding taxable year equal or exceed $200,000, or
 (2) the assets of such organization (determined as of 
 the close of such preceding taxable year) equal or 
 exceed $500,000.

 * * * * * * *

 VI. DISSENTING VIEWS

 Committee Democrats oppose H.R. 9771, Stopping Foreign 
Influence in Elections Act of 2026. This bill does nothing to 
address the affordability crisis or bring relief to families 
struggling under the weight of higher health care bills, pain 
at the pump, or rising grocery costs. The Majority would rather 
manufacture problems involving charities and unions than stand 
up to the President, root out corruption, and lower costs for 
constituents. The Committee could have marked up legislation to 
revoke his tax immunity agreement, dissolve the ballroom 
project, or turn off the President's trade-related price hikes, 
if only the Majority would stiffen their spines.
 This bill is the Majority's direct attack on charities and 
unions. This bill is redundant, overly broad, and onerous. We 
all agree that protecting American elections from foreign 
influence is imperative. However, this bill requires 
``specified'' tax-exempt organizations--i.e., organizations 
that file Form 990--that make a ``disqualified political 
committee contribution'' to pay a penalty equal to two times 
the amount of the contribution. A ``disqualified political 
committee contribution'' is any contribution made by such 
organization to a ``political entity'' if the tax-exempt 
organization received any contribution or gift from a foreign 
national during the two-year period ending on the date of the 
contribution. The bill defines ``political entity'' as a 
political committee or any organization described in Section 
501(c)(4) (e.g., a social welfare organization).
 H.R. 9771 is overly broad in its application to 
organizations. It applies to any tax-exempt organization 
described in Section 501(c) that files a Form 990, including 
unions, civil rights organizations, food banks, community 
health centers, business leagues, and trade associations. 
Committee Democrats offered an amendment to exclude unions from 
this bill, which was defeated on a party-line vote. It is 
unclear if union dues count as ``contributions'' for purposes 
of the bill. If ``contribution'' in the context of a labor 
union were to be interpreted to mean union dues, then any time 
an employer hires a guestworker or a person with temporary 
protected status, and that worker exercises their fundamental 
right to join the union and pay dues, the union would be 
disqualified from donating to a political action committee 
(PAC) or a Section 501(c)(4) or face dire tax consequences.
 Labor unions take the workforce as an employer employs it 
and represent all the workers in a bargaining unit. A 
represented employer could hire one foreign national into the 
bargaining unit. That foreign national could be fully 
authorized to work in this country. Once the employer places 
that foreign national into the bargaining unit, the union is 
obligated to represent them, and they are entitled to 
participate. When they pay their dues to the union and any 
portion of those dues is considered a contribution under H.R. 
9771, the union's right to fully participate in the political 
process is restricted by the bill. As a result, the bill forces 
one of two consequences: knocking unions out of the political 
process or dividing the workforce and weakening unions. Both 
consequences are plainly to the detriment of U.S. workers.
 Additionally, H.R. 9771 is overly broad in its definition 
of ``political entity.'' It subjects Section 501(c) 
organizations to penalties (including possible loss of tax 
exemption for two years) for contributions made to any Section 
501(c)(4) organization. The penalties also apply regardless of 
whether the social welfare organization engages in political 
activities or the contribution was made for a permissible 
charitable purpose. Under this bill, a Section 501(c)(3) 
charitable nonprofit receiving a single foreign contribution 
would face penalties for contributing to Section 501(c)(4) 
organizations for any number of reasons unrelated to political 
campaigns. Section 501(c)(4) organizations should not be 
included in the definition of ``political entity.''
 Furthermore, the bill also is onerous. It places an undue 
risk on Section 501(c) organizations that receive contributions 
from foreign nationals. It effectively forces them to learn the 
nationality of their donors, even donors contributing small 
amounts of cash (there is not a de minimis threshold in the 
bill). Currently, nonprofits do not collect this information 
with respect to donations. Expanding the list of questions 
nonprofits must ask and the information they must keep and/or 
report could damage relationships with their donors and 
community, chilling charitable giving and hurting the 
communities these nonprofits support.
 For these reasons, we oppose this bill.
 Sincerely,
 Richard E. Neal,
 Ranking Member.