To amend the Internal Revenue Code of 1986 to provide a tax credit for certain political contributions and to eliminate the Presidential Campaign Fund.

SECTION 1. TAX CREDIT FOR CERTAIN POLITICAL CONTRIBUTIONS.

    (a) In General.--Subpart A of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 22 the 
following new section:

``SEC. 23. CREDIT FOR POLITICAL CONTRIBUTIONS.

    ``(a) In General.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to one-half of all political 
contributions, and all newsletter fund contributions, paid by the 
taxpayer during the taxable year.
    ``(b) Limitations.--
            ``(1) Maximum credit.--The credit allowed by subsection (a) 
        shall not exceed $100 ($200 in the case of a joint return).
            ``(2) Verification.--The credit allowed by subsection (a) 
        shall be allowed, with respect to any political contribution or 
        newsletter fund contribution, only if such contribution is 
        verified in such manner as the Secretary shall prescribe by 
        regulation.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Candidate.--The term `candidate' means, with respect 
        to any Federal, State, or local elective public office, an 
        individual who--
                    ``(A) publicly announces before the close of the 
                calendar year following the calendar year in which the 
                political contribution is made that the individual is a 
                candidate for nomination or election to such office; 
                and
                    ``(B) meets the qualifications prescribed by law to 
                hold such office.
            ``(2) National political party.--The term `national 
        political party' means--
                    ``(A) in the case of political contributions made 
                during a taxable year of the taxpayer in which the 
                electors of President and Vice President are chosen, a 
                political party presenting candidates or electors for 
                such offices on the official election ballot of ten or 
                more States; or
                    ``(B) in the case of political contributions made 
                during any other taxable year of the taxpayer, a 
                political party which met the qualifications described 
                in subparagraph (A) in the last preceding election of a 
                President and Vice President.
            ``(3) Newsletter fund.--The term `newsletter fund' means a 
        fund described in section 527(g)(1).
            ``(4) Political contribution.--The term `political 
        contribution' means a contribution or gift of money, or the 
        fair market value of a contribution or gift of property, to--
                    ``(A) an individual who is a candidate for 
                nomination or election to any Federal, State, or local 
                elective public office in any primary, general, or 
                special election, for use by such individual to further 
                the candidacy of the individual for nomination or 
                election to such office;
                    ``(B) any committee, association, or organization 
                (whether or not incorporated) organized and operated 
                exclusively for the purposes of influencing, or 
                attempting to influence, the nomination or election of 
                one or more individuals who are candidates for 
                nomination or election to any Federal, State, or local 
                elective public office, for use by such committee, 
                association, or organization to further the candidacy 
                of such individual or individuals for nomination or 
                election to such office;
                    ``(C) the national committee of a national 
                political party;
                    ``(D) the State committee of a national political 
                party as designated by the national committee of such 
                party; or
                    ``(E) a local committee of a national political 
                party as designated by the State committee of such 
                party designated under subparagraph (D).
            ``(5) State and local.--The term `State' means the various 
        States and the District of Columbia; and the term `local' means 
        a political subdivision or part thereof, or two or more 
        political subdivisions or parts thereof, of a State.''.
    ``(d) Cross References.--

                                ``For transfer of appreciated property 
to a political organization, see section 84.
                                ``For certain indirect contributions to 
political parties, see section 276.''.
    (b) Conforming Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such Code (relating to 
nonrefundable personal credits) is amended by inserting after the item 
relating to section 22 the following new item:

                              ``Sec. 23. Credit for political 
                                        contributions.''
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31 of the calendar year 
in which this Act is enacted.

SEC. 2. PRESIDENTIAL CAMPAIGN FUND.

    (a) Repeal of Provisions Concerning Presidential Campaign Fund.--
The following provisions of such Code are hereby repealed:
            (1) Part VIII of subchapter A of chapter 61 of subtitle F 
        of such Code (relating to designation of income tax payments to 
        Presidential Election Campaign Fund).
            (2) Subtitle H (relating to financing of Presidential 
        election campaigns).
    (b) Conforming Amendments.--
            (1) Table of parts.--The table of parts of subchapter A of 
        chapter 61 of subtitle F of such Code is amended by striking 
        the item relating to part VIII.
            (2) Table of subtitles.--The table of subtitles of such 
        Code is amended by striking the item relating to subtitle H.
    (c) Effective Dates.--
            (1) Designation of income tax payments to fund.--The 
        amendment made by subsection (a)(1) applies to taxable years 
        beginning after December 31, 1996.
            (2) Financing of presidential election campaigns.--The 
        amendment made by subsection (a)(2) shall take effect on the 
        date that is 2 years after the date of the enactment of this 
        Act, except that no payment may be made from the Presidential 
        Election Campaign Fund or the Presidential Primary Matching 
        Payment Account with respect to any Presidential election 
        occurring more than 2 years after the date of the enactment of 
        this Act.
    (d) Amounts Remaining in Funds.--The Secretary of the Treasury 
shall deposit into the Treasury of the United States as miscellaneous 
receipts any amounts that remain, on the date that is 2 years after the 
date of the enactment of this Act, in the Presidential Election 
Campaign Fund or the Presidential Primary Matching Payment Account.

Summary: Amends the Internal Revenue Code to allow an individual a tax credit equal to one-half of all political contributions and all newsletter fund contributions paid during the taxable year. Limits such credit to $100 . Eliminates the Presidential Election Campaign Fund.