In a surprising development, 15 U.S. House Democrats sided with Republicans to pass a bill that could give unprecedented power to incoming President Trump, posing a serious threat to democratic freedoms. The “Stop Terror-Financing and Tax Penalties on American Hostages Act” (H.R. 9495) was approved in the House on Thursday, Nov. 21, by a vote of 219-184.
The bill would allow the U.S. Treasury Secretary to designate nonprofit organizations as “terrorist-supporting” and revoke their tax-exempt status without due process. As the Senate reconvenes in January, this article explores the potential consequences of this bill for Minnesotans, should it become law.
Implications for Minnesota
For Minnesota, the passage of this bill could have far-reaching effects on the nonprofit sector, which plays a vital role in addressing issues like human rights, social justice, and refugee aid. The broad powers granted under this bill could lead to the unjust targeting of organizations in the state. Without judicial oversight, nonprofits could be unfairly labeled as supporting terrorism, causing them to lose their tax-exempt status, which could severely disrupt crucial community services.
Critics argue that the bill invites abuse of power, threatening free speech and curtailing dissent. The Minnesota Council of Nonprofits (MCN), the largest statewide nonprofit association in the U.S., has expressed concern that although H.R. 9495 may have noble intentions, it could have damaging consequences for nonprofits.
The bill has drawn comparisons to laws used by authoritarian regimes in countries like Hungary and Nicaragua, where similar tactics have been used to stifle opposition and shut down organizations. Minnesotans who value a strong civil society have reason to be alarmed at the potential misuse of this power.
While the bill does include provisions offering tax relief to Americans held hostage abroad, many believe these provisions could be passed separately without granting such expansive and unchecked authority to the Treasury Department.
MCN also contends that H.R. 9495 undermines due process. Section 4 of the bill would allow the Treasury Secretary to designate organizations as “terrorist-supporting” with minimal transparency, giving those accused just 90 days to prove their innocence — an infringement on constitutional protections.
Political responses
Minnesota Rep. Angie Craig, one of the Democrats who voted in favor of the bill, cited the tax relief provisions for Americans held abroad as her initial reason for supporting H.R. 9495. However, after growing concerns about how the bill might be used by the incoming administration, Craig announced she would vote against the bill in future votes.
“As the president-elect has rolled out his cabinet nominees, I’ve become increasingly concerned that H.R. 9495 would be used inappropriately by the incoming administration,” Craig explained. “I’ve heard from constituents in my district and nonprofit leaders across Minnesota who share those concerns. For those reasons, I will vote against H.R. 9495 and will continue to do what’s in the best interest of Minnesotans.”
Craig’s change of position mirrors rising unease among Minnesota voters and nonprofit leaders about the broader implications of the bill. Her decision reflects her commitment to representing her district and prioritizing policies that protect the state’s best interests.
A victory for Minnesota nonprofits
The Minnesota Council of Nonprofits is proud of how the state’s nonprofit community mobilized to influence Rep. Craig’s vote, changing her stance from yes to no. Last week, 52 Democrats voted in favor of H.R. 9495, but that number dropped to just 15 after constituents voiced their concerns. Each phone call, email, and effort to rally others made a significant difference..
