Committee weighs bill to bar Delaware nonprofits from endorsing candidates; members press on penalties and enforcement

The House Economic Development, Banking, Insurance and Commerce Committee heard testimony and questions on House Bill 392, legislation that would prohibit Delaware nonprofits from endorsing or opposing candidates and ban use of charitable funds for partisan purposes.

The bill’s sponsor said the measure is intended to “protect Delaware’s nonprofit sector from partisan political pressure” and mirror the long-standing federal Johnson Amendment that ties tax-exempt status to nonpartisanship. The sponsor told the committee the measure “aligns fully with existing federal standards,” while adding state-level oversight and coordination among the Department of Justice, Department of State and periodic reviews by the state auditor.

Melissa Hawkins, executive vice president and chief external affairs officer for Dana, told lawmakers the bill would not bar neutral voter guides that present both candidates fairly: “The key around the voter guide is presenting both sides fairly,” she said, and added that making a monetary contribution to a candidate with tax-exempt funds would violate federal rules.

Opponents during public comment raised free‑speech and enforcement concerns. Rich Bryant, speaking against the bill, said HB 392 “goes beyond existing federal tax law and directly restricts protected free speech by nonprofits” and warned the proposal would create civil penalties and exclusion from grants. Bryant said the federal IRS framework already governs political campaign speech and cautioned against “arbitrary enforcement and viewpoint discrimination.”

Committee members repeatedly pressed the sponsor on a section that had included civil penalties and a five‑year ineligibility for state grants. One member described five years of ineligibility as “a kiss of death for some of our grassroots nonprofits,” and asked whether the penalty would be applied when a single board member acted improperly. The sponsor told the committee an amendment in the packet would address several drafting concerns and that she was “committed to working with you to clear that up before it moves forward.”

After a motion to release the bill and a roll-call, staff reported the committee did not yet have enough signatures to report the measure out; the sponsor said she would walk the bill to other members to seek additional support. No final release or committee-enacted penalties were recorded during the hearing.

Next steps: Committee staff said the sponsor will circulate amendments and continue discussions with members before attempting to secure signatures for release.