The United States House of Representatives has passed the controversial Stop Terror-Financing and Tax Penalties on American Hostages Act.H.R. 9495) this morning, November 21, after being defeated in an initial vote last week. The bill, which must pass the Democratic-majority Senate before it can be signed into law, would give the executive branch the authority to strip the tax-exempt status of nonprofits — including arts organizations — if they are found to be “disruptive and financing illegal activities at the national level and terrorism abroad.”
Civil rights organizations, activist groups and nonprofits have sounded the alarm about the bill, warning that the legislation’s vague language would give newly elected President Donald Trump unlimited power to attack pro-Palestinian groups and perceived political enemies. After the bill failed to pass with a supermajority (two-thirds) of the votes last week, a format hearing resurrected the legislation in the House of Representatives, this time with only a simple majority requirement. According to the American Civil Liberties Union (ACLU), 100,000 messages were sent to members of Congress last week urging them to oppose the bill.
While 52 Democrats did not support the bill until its initial passage on November 12 15 voted in favor today. The legislation passed by a vote of 219 in favor to 184, with the majority of support coming from Republicans.
“This is a disturbing state of affairs, especially for the arts, where nonprofits are prominent players in the form of museums, alternative art spaces, galleries and even some publications, not to mention higher education institutions,” wrote Hyperallergic Editor-in-chief Hrag Vartanian earlier this week.
If the bill becomes law, nonprofits including universities and media outlets that “materially” support “disruptive and illegal activities at home and terrorism abroad” could lose their 510(c) tax exemption, which many organizations rely on to stay afloat financially. The legislation could also ensure that no new nonprofits are created.
In a joint statement After the bill was initially rejected last week, a coalition of Arab and Muslim affinity organizations characterized the law as “a move designed to chill freedom of expression and suppress advocacy on behalf of Palestinian human rights.”
“Such legislation threatened the constitutional rights of American nonprofits, houses of worship and advocacy groups – regardless of their political orientation,” the group wrote.
The House of Representatives’ fiscal body, known as the Committee on Ways and Means, which crafted the bill, wrote in a description published today that the function of the bill was to end “the tax exemption of U.S. organizations that provide substantial support to proven terrorist groups, such as Hamas” and to “provide fair tax treatment to Americans held hostage or wrongfully incarcerated are being held abroad.”
The House Committee claimed evidence was found suggesting that “several” tax-exempt groups used their financial names to “foster anti-Semitic activity,” including nonprofits that provided money to non-tax-exempt groups such as Students for Justice in Palestine.
Reached for comment by Hyperallergicthe Association of Art Museum Directors, which has more than 200 members in the United States, Canada and Mexico, shared a November 15 statement published in part by Independent Sector and the National Council of Nonprofits, organizations to which the museum group contributes.
“We strongly support stopping bad actors from using nonprofits to fund terrorism,” the statement read. But the bill “creates redundancies and confusion while providing the executive branch with sweeping new powers that can be abused,” the bill continues.
Hyperallergic has contacted Independent Curators International and the American Association of Museums for comment.
On November 18 300 non-profit organizations have sent a letter to House Speaker Mike Johnson and House Democratic Minority Leader Hakeem Jeffries, warning that the bill risks “discriminatory enforcement.”
“The executive branch could use this authority to target its political opponents and use the fear of crippling legal costs, the stigma of the appointment, and donors fleeing controversy to stifle dissent and limit speech and advocacy. cooling,” the message said.
