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House Republicans have renewed a push to pass a bill that would allow the treasury department to strip non-profit groups it deems to be supporting “terrorism” of their tax-exempt status.
The so-called “non-profit killer” bill would give the government broad powers to sanction civil society organizations. Progressive groups have rallied in opposition to the bill in recent days, arguing that Donald Trump’s administration could invoke it to punish his political opponents.
The measure “would be profoundly damaging to all sorts of non-profits”, said the American Civil Liberties Union federal policy counsel, Kia Hamadanchy. “There’s the stigma of being called a terrorist-supporting organization, there are banks who may not want to transact with you once you have that status, there are donors who may not want to give you money because they’re afraid, themselves, of being called supporters of terrorism.”
The bill, titled Stop Terror-Financing and Tax Penalties on American Hostages Act, or HR 9495, failed to clear the House of Representatives last week after members attempted to fast-track it by suspending House rules, which would have required a supermajority to pass. When it failed, Republicans brought it back through the House rules committee – paving the way for a floor vote on Wednesday or Thursday, this time requiring only a simple majority.
The bill ties the non-profit policy to a widely supported measure easing tax obligations for Americans unjustly imprisoned abroad.
When it was first introduced, progressive activists warned that the bill would be used to crack down on Palestinian advocacy groups, which politicians frequently accuse of supporting Hamas – a US-designated terrorist organization.
“The only reason it has a chance of passing is because of the assumption that it will only target groups that advocate for Palestinians’ rights,” said Edward Ahmed Mitchell, deputy director of the Council on American-Islamic Relations (Cair). Fifty-two Democrats voted in support for the bill when it went up before a vote last week.
Hamadanchy added that there were “real due process concerns” with the bill, given that it establishes no evidentiary standard for the Department of the Treasury to use in determining whether a non-profit has provided material support for terrorism – leaving enforcement virtually to the treasury’s discretion. The process the bill outlines for identifying and sanctioning non-profits includes 90 days of notice for the non-profit to clear its name before the treasury issues a final finding.
Organizations identified for this designation by the treasury could pursue a review by the IRS or appeal through the courts – a lengthy process that critics warn would drain non-profits’ resources, even if the terrorism claim is baseless.
“This is very much something that will also just chill speech and chill advocacy, because of the number of organizations that will avoid taking certain positions or speaking out because they’re trying to avoid this designation,” said Hamadanchy.
Mitchell, from Cair, called the proposal “one of the most ill-advised and dangerous bills that we’ve seen introduced in Congress in recent years with a chance of becoming law”.
In recent days, the bill has sparked broad condemnation from non-profit groups including Amnesty International, the Hispanic Federation and the National Council of Nonprofits, which advocates for charitable non-profit organizations in the US.
The pressure from such a range of organizations will probably move some of the Democrats who voted in favor of the bill last week to change course.
“I have heard loud and clear from folks in my district and understand the concerns of my constituents, non-profit leaders and their staff,” said the New Mexico congressman Gabe Vasquez in a statement. “The incoming administration’s recent cabinet nominations give me little faith that this tool would be used as originally intended.”
Vasquez, who voted to pass the bill last week, said he will oppose it this time. Still, the bill has a strong likelihood of passing the Republican-controlled House.
If it is eventually signed into law, the measure will almost certainly end up in court.
“This is an executive authority that can be really abused [and] there is not necessarily a lot of recourse outside of litigation options,” said Hamadanchy. “That’s why we’re gonna do everything we can to make sure it doesn’t actually become law.”
