HR 4799119th CongressIn Committee

Ban Corporate PACs Act

Introduced: Jul 29, 2025

Sponsor: Rep. Harder, Josh [D-CA-9] (D-California)

Economy & Taxes

Standard Summary

Comprehensive overview in 1-2 paragraphs

The Ban Corporate PACs Act would overhaul how corporate political fundraising works by moving the authority to establish and operate separate segregated funds (SSFs) from for-profit corporations to nonprofit corporations (as defined by the tax code). In practice, this would ban traditional corporate PACs unless they are organized as nonprofit corporations. The bill also tightens who may contribute to these funds, allowing only executive and administrative personnel (and not stockholders or their families) to donate. It also extends the same nonprofit-sponsor approach to government contractors. The act is effective upon enactment, with a one-year transition for any existing SSFs that are not already tied to a nonprofit corporation.

Key Points

1Core change: Only nonprofit corporations may establish or operate separate segregated funds for political purposes; for-profit corporations may no longer run corporate PACs.
2Definition of nonprofit corporation: A 501(c) organization exempt from federal income tax, with an exception for those that would be ineligible to receive tax-exempt status if they establish such a fund.
3Restriction on contributions: Donations to these funds would be limited to executive and administrative personnel of the nonprofit; stockholders, families of stockholders, and related personnel would be excluded.
4Government contractors: The bill changes treatment of government contractors to nonprofit corporations for purposes of these funds and related provisions.
5Effective date and transition: The Act takes effect immediately upon enactment; existing SSFs not organized as nonprofit corporations must terminate and disburse their balances within one year.

Impact Areas

Primary affected groups- Corporations with political giving activities (traditional corporate PACs): would be barred from operating SSFs unless reorganized as nonprofit corporations.- Nonprofit corporations that could host or operate SSFs: would become the new vehicle for political fundraising, subject to the defined eligibility criteria.- Campaign committees and political committees that receive or interact with these funds.Secondary affected groups- Corporate executives and administrative personnel (potential donors): their ability to fund political activity would be narrowed to the nonprofit sponsor’s personnel.- Stockholders and family members of stockholders: eliminated as potential donors to SSFs under the bill.- Government contractors: redefined in terms of their eligibility to participate in these funds.Additional impacts- Compliance and transitional requirements: existing SSFs not yet organized as nonprofit corporations face a one-year wind-down.- Potential shifts in campaign finance dynamics and influence, with a move away from traditional corporate PACs toward nonprofit-sponsored funds with restricted donor bases.- Regulatory and tax considerations: additional clarification and enforcement may be needed to align with IRS rules for 501(c) organizations and FECA provisions.

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