The Internal Revenue Service (IRS) has said that state and local PACs that have failed to register could owe millions in penalties, and they are evaluating how to proceed.

A substitute bill sponsored by Reps. Shays and Meehan passed the House of Representatives at 2:40 a.m. this morning by a vote of 240- 189. 198 Democrats and 41 Republicans voted for the bill. During the debate the sponsors entered colloquy language into the record that clarifies the FEC's role in defining exceptions to issue advocacy restictions for broadcasts that are "wholly unrelated to an election." The FEC will need to act within 90 days of the effective date of the law. (The colloquy language is not yet on the GPO website, but the text is included at the end of this alert).

Just before news of September 11th's tragic events reached Capitol Hill Majority Whip Tom DeLay (R-TX) and Rep. Walter Jones (R-NC) held a news conference to promote HR 2357, the Houses of Worship Political Speech Protection Act. It would allow religious congregations to support or oppose candidates for office without losing their tax exemption or ability to receive deductible contributions, as long as election related efforts do not amount to a substantial portion of their overall activities.

OMB Watch's proposed campaign finance reform language to protect the advocacy rights of charities. A. Option 1: General Exceptions to Issue Advocacy Prohibitions for Nonpartisan Candidate Debates and Forums, Voter Registration and Get Out the Vote Activity and Non-Electoral Issue Advocacy by Charities