Nevada lawmakers receive backlash from nonprofits over vote

U.S. Reps. Susie Lee and Mark Amodei received criticism from Nevada nonprofits after they voted for a bill that nonprofits say could be weaponized by an unfriendly administration to undermine them.

The House on Thursday passed HR9495, or the Stop Terror-Financing and Tax Penalties on American Hostages Act, which calls to postpone tax filing deadlines for Americans taken hostage abroad and their families.

The nonprofits take issue with another part of the bill, which would allow the government to terminate the tax-exempt status of “terrorist supporting organizations.” They argue the wording is vague and could be used as a weapon for “suppressing dissent and punishing political opponents.”

The nonprofit organizations wrote that the measure “creates a pathway for political abuse that could devastate civil society organizations and chill free speech” by granting the Secretary of the Treasury “virtually unfettered discretion” to designate a nonprofit as a terrorist supporting organization.

“Because the proposal vests vast unilateral discretion in the Secretary of Treasury, it creates a high risk of politicized and discriminatory enforcement,” wrote Athar Haseebullah, executive director of the ACLU of Nevada, in a letter to Lee. The letter included opposition from over a dozen nonprofits, including Planned Parenthood Votes Nevada, Make the Road Nevada and the Great Basin Water Network.

Haseebullah said in a statement that Trump’s handpicked head of the Treasury Department could revoke organizations’ nonprofit statuses in an arbitrary fashion. If the administration, for instance, declares undocumented immigrants as terrorists, churches and other organizations that provide support to them could lose their tax-exempt status, he said.

“Congresswoman Lee’s ‘yes’ vote here is a betrayal of our most vulnerable communities and the people who serve those communities,” Haseebullah said.

Lee, who was one of 15 Democrats to support the bill, said in a statement that the bipartisan bill would protect American hostages and their families from unnecessary financial harm and “ensure we are holding our nation’s adversaries accountable to keep Americans safe.”

House Ways and Means Committee Chairman Jason Smith, R-Missouri, said on the House floor the bill received bipartisan support earlier in the year, but Democrats voted against it now that Donald Trump will be president.

“Congress must act to stop this abuse of our tax code that is funding terrorism around the world,” Smith said in his opening statement. “We must act to end the unfair tax treatment of Americans who have already suffered enough — and whose families have suffered enough — from being held hostage or wrongfully detained abroad.”

Smith said on X that the group Alliance for Global Justice funded a terrorist-linked Samidoun Palestinian Prisoner Solidarity Network, which the U.S. Treasury Department confirmed was a “sham charity.”

An earlier version of the bill that included language that would affect nonprofits passed the House in April in a 382-11 vote.

The IRS already has the authority to terminate the tax-exempt status of a terrorist organization. A terrorist organization is defined as one that the Secretary of State has designated or is one that is designated pursuant to an executive order. Examples include Hamas, Hezbollah and ISIS but also Segunda Marquetalia, a Colombian terrorist group, according to the State Department’s website.

HR9495 would expand the existing law to permit the Secretary of the Treasury to terminate the tax-exempt status of a “terrorist supporting organization.”

The bill defines a “terrorist supporting organization” as one that has provided material support or resources to a terrorist organization during the preceding three-year period.

Before designating any organization as a terrorist supporting organization, the secretary must provide a description of the material support or resources, and the organization would have the opportunity to “cure” the issue by getting the support or resources returned to the organizations and certifying that it will not provide any further support or resources, according to the bill.

Rep. Dina Titus, D-Nev., was an original co-sponsor of the bill but voted in opposition. In an interview with the Las Vegas Review-Journal, she said the bill she originally co-sponsored was just about allowing people who are taken hostage not to have to pay back taxes, but then Republicans tacked on the provision about an organization’s nonprofit status.

“I was forced to vote against my own bill because it had been attacked by this poison pill,” Titus said.

Shelbie Swartz, executive director of the Institute for a Progressive Nevada, said her organization is “deeply disappointed — and frankly, irate — that Congresswoman Susie Lee and Congressman Mark Amodei would vote in favor of a bill that would threaten the organizations that empower and serve their constituents every day.”

Swartz urged senators Catherine Cortez Masto and Jacky Rosen to vote against the bill in the Senate.

Contact Jessica Hill at jehill@reviewjournal.com. Follow @jess_hillyeah on X.