S 2515119th CongressIn Committee

Ban Corporate PACs Act

Introduced: Jul 29, 2025

Sponsor: Sen. Kelly, Mark [D-AZ] (D-Arizona)

Economy & Taxes

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Ban Corporate PACs Act would change federal campaign finance law to prohibit corporate-run political action committees (PACs) and require any fund used for political purposes to be organized as a nonprofit corporation (a 501(c) entity). In practice, this means for-proﬁt corporations would no longer operate separate segregated funds (SSFs) as corporate entities; only nonprofit corporations would be allowed to establish and operate SSFs for political activity. The bill also narrows who can contribute to these funds (limited to executive and administrative personnel), and it alters government contractor rules to apply to nonprofit corporations rather than for-profit firms. It would take effect upon enactment, with existing non‑ nonprofit funds allowed to continue, but any non‑ nonprofit funds established as of enactment that aren’t nonprofit corporations would have to terminate within one year.

Key Points

1Prohibits corporate SSFs: The bill amends FECA to strike “a corporation” and substitute “a nonprofit corporation” in the provision governing separate segregated funds, effectively banning corporate SSFs and political committees run by for-profit corporations.
2New nonprofit-corporation definition: A nonprofit corporation, for this purpose, must be a 501(c) organization exempt under 501(a) of the Internal Revenue Code, with a limitation that it cannot be a corporation that would be ineligible for exemption if it runs a separate fund under this subsection.
3Restricted solicitation of contributions: Unlike current law, the bill would allow contributions to nonprofit SSFs only from executive or administrative personnel (removing stockholders and their families from eligibility). The language tightens who can give to these funds.
4Government contractors: The bill requires that government contractors be treated as nonprofit corporations for purposes of contributions to SSFs, replacing the prior approach that allowed for-profit corporations to participate.
5Transition and effective date: The amendments take effect on enactment. Existing SSFs that are not nonprofit corporations as of enactment must terminate and distribute their balances within one year.

Impact Areas

Primary group/area affected: For-profit corporations that currently sponsor corporate PACs would be barred from operating SSFs under this framework; they would need to reorganize as nonprofit corporations (if eligible) or discontinue such activity. Executives and administrative personnel would face new limits on who can contribute.Secondary group/area affected: Nonprofit corporations (especially those formed under 501(c) to serve as SSFs) would become the primary vehicles for political fundraising at the federal level; 501(c)(3) organizations are effectively discouraged due to the exemption-ineligibility caveat, while 501(c)(4), 501(c)(6), and other non‑profit forms could potentially operate such funds.Additional impacts:- Transition burden: Existing SSFs would need to wind down if they do not meet the nonprofit-corporation criteria, with a one-year deadline to disburse funds, potentially disrupting ongoing political contributions.- Government contracting: Contractors would need to coordinate through nonprofit entities, potentially altering how they fund or support political activity.- Legislative/political dynamic: The measure aims to reduce corporate influence in federal elections by moving funds from for-profit corporate PACs to nonprofit entities, which could shift fundraising practices and oversight considerations.

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