II 

109TH CONGRESS 

2D SESSION S. 2511 

To amend the Federal Election Campaign Act of 1971 to clarify when 

organizations described in section 527 of the Internal Revenue Code 

of 1986 must register as political committees, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 5, 2006 

Mr. MCCAIN introduced the following bill; which was read twice and referred 

to the Committee on Rules and Administration 

A BILL 

To amend the Federal Election Campaign Act of 1971 to 

clarify when organizations described in section 527 of 

the Internal Revenue Code of 1986 must register as 

political committees, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘527 Reform Act of 

5 2006’’. 


cprice-sewell on PROD1PC66 with BILLS
2 

•S 2511 IS

1 SEC. 2. TREATMENT OF SECTION 527 ORGANIZATIONS. 

2 (a) DEFINITION OF POLITICAL COMMITTEE.—Sec3 tion 301(4) of the Federal Election Campaign Act of 1971 

4 (2 U.S.C. 431(4)) is amended— 

5 (1) by striking the period at the end of sub6 paragraph (C) and inserting ‘‘; or’’; and 

7 (2) by adding at the end the following: 

8 ‘‘(D) any applicable 527 organization.’’. 

9 (b) DEFINITION OF APPLICABLE 527 ORGANIZA10 TION.—Section 301 of such Act (2 U.S.C. 431) is amend11 ed by adding at the end the following new paragraph: 

12 ‘‘(27) APPLICABLE 527 ORGANIZATION.— 

13 ‘‘(A) IN GENERAL.—For purposes of para14 graph (4)(D), the term ‘applicable 527 organi15 zation’ means a committee, club, association, or 

16 group of persons that— 

17 ‘‘(i) has given notice to the Secretary 

18 of the Treasury under section 527(i) of the 

19 Internal Revenue Code of 1986 that it is 

20 to be treated as an organization described 

21 in section 527 of such Code; and 

22 ‘‘(ii) is not described in subparagraph 

23 (B). 

24 ‘‘(B) EXCEPTED ORGANIZATIONS.—A com25 mittee, club, association, or other group of per26 sons described in this subparagraph is— 


cprice-sewell on PROD1PC66 with BILLS
3 

•S 2511 IS

1 ‘‘(i) an organization described in sec2 tion 527(i)(5) of the Internal Revenue 

3 Code of 1986; 

4 ‘‘(ii) an organization which is a com5 mittee, club, association or other group of 

6 persons that is organized, operated, and 

7 makes disbursements exclusively for paying 

8 expenses described in the last sentence of 

9 section 527(e)(2) of the Internal Revenue 

10 Code of 1986 or expenses of a newsletter 

11 fund described in section 527(g) of such 

12 Code; 

13 ‘‘(iii) an organization which is a com14 mittee, club, association, or other group 

15 that consists solely of candidates for State 

16 or local office, individuals holding State or 

17 local office, or any combination of either, 

18 but only if the organization refers only to 

19 one or more non-Federal candidates or ap20 plicable State or local issues in all of its 

21 voter drive activities and does not refer to 

22 a Federal candidate or a political party in 

23 any of its voter drive activities; or 

24 ‘‘(iv) an organization described in sub25 paragraph (C). 


cprice-sewell on PROD1PC66 with BILLS
4 

•S 2511 IS

1 ‘‘(C) APPLICABLE ORGANIZATION.—For 

2 purposes of subparagraph (B)(iv), an organiza3 tion described in this subparagraph is a com4 mittee, club, association, or other group of per5 sons whose election or nomination activities re6 late exclusively to— 

7 ‘‘(i) elections where no candidate for 

8 Federal office appears on the ballot; or 

9 ‘‘(ii) one or more of the following pur10 poses: 

11 ‘‘(I) Influencing the selection, 

12 nomination, election, or appointment 

13 of one or more candidates to non-Fed14 eral offices. 

15 ‘‘(II) Influencing one or more ap16 plicable State or local issues. 

17 ‘‘(III) Influencing the selection, 

18 appointment, nomination, or con19 firmation of one or more individuals 

20 to non-elected offices. 

21 ‘‘(D) EXCLUSIVITY TEST.—A committee, 

22 club, association, or other group of persons 

23 shall not be treated as meeting the exclusivity 

24 requirement of subparagraph (C) if it makes 


cprice-sewell on PROD1PC66 with BILLS
5 

•S 2511 IS

1 disbursements aggregating more than $1,000 

2 for any of the following: 

3 ‘‘(i) A public communication that pro4 motes, supports, attacks, or opposes a 

5 clearly identified candidate for Federal of6 fice during the 1-year period ending on the 

7 date of the general election for the office 

8 sought by the clearly identified candidate 

9 (or, if a runoff election is held with respect 

10 to such general election, on the date of the 

11 runoff election). 

12 ‘‘(ii) Any voter drive activity during a 

13 calendar year, except that no disburse14 ments for any voter drive activity shall be 

15 taken into account under this subpara16 graph if the committee, club, association, 

17 or other group of persons during such cal18 endar year— 

19 ‘‘(I) makes disbursements for 

20 voter drive activities with respect to 

21 elections in only 1 State and complies 

22 with all applicable election laws of 

23 that State, including laws related to 

24 registration and reporting require25 ments and contribution limitations; 


cprice-sewell on PROD1PC66 with BILLS
6 

•S 2511 IS

1 ‘‘(II) refers to one or more non2 Federal candidates or applicable State 

3 or local issues in all of its voter drive 

4 activities and does not refer to any 

5 Federal candidate or any political 

6 party in any of its voter drive activi7 ties; 

8 ‘‘(III) does not have a candidate 

9 for Federal office, an individual who 

10 holds any Federal office, a national 

11 political party, or an agent of any of 

12 the foregoing, control or materially 

13 participate in the direction of the or14 ganization, solicit contributions to the 

15 organization (other than funds which 

16 are described under clauses (i) and 

17 (ii) of section 323(e)(1)(B)), or direct 

18 disbursements, in whole or in part, by 

19 the organization; and 

20 ‘‘(IV) makes no contributions to 

21 Federal candidates. 

22 ‘‘(E) CERTAIN REFERENCES TO FEDERAL

23 CANDIDATES NOT TAKEN INTO ACCOUNT.—For 

24 purposes of subparagraphs (B)(iii) and 

25 (D)(ii)(II), a voter drive activity shall not be 


cprice-sewell on PROD1PC66 with BILLS
7 

•S 2511 IS

1 treated as referring to a clearly identified Fed2 eral candidate if the only reference to the can3 didate in the activity is— 

4 ‘‘(i) a reference in connection with an 

5 election for a non-Federal office in which 

6 such Federal candidate is also a candidate 

7 for such non-Federal office; or 

8 ‘‘(ii) a reference to the fact that the 

9 candidate has endorsed a non-Federal can10 didate or has taken a position on an appli11 cable State or local issue, including a ref12 erence that constitutes the endorsement or 

13 position itself. 

14 ‘‘(F) CERTAIN REFERENCES TO POLITICAL

15 PARTIES NOT TAKEN INTO ACCOUNT.—For pur16 poses of subparagraphs (B)(iii) and (D)(ii)(II), 

17 a voter drive activity shall not be treated as re18 ferring to a political party if the only reference 

19 to the party in the activity is— 

20 ‘‘(i) a reference for the purpose of 

21 identifying a non-Federal candidate; 

22 ‘‘(ii) a reference for the purpose of 

23 identifying the entity making the public 

24 communication or carrying out the voter 

25 drive activity; or 


cprice-sewell on PROD1PC66 with BILLS
8 

•S 2511 IS

1 ‘‘(iii) a reference in a manner or con2 text that does not reflect support for or op3 position to a Federal candidate or can4 didates and does reflect support for or op5 position to a State or local candidate or 

6 candidates or an applicable State or local 

7 issue. 

8 ‘‘(G) APPLICABLE STATE OR LOCAL

9 ISSUE.—For purposes of this paragraph, the 

10 term ‘applicable State or local issue’ means any 

11 State or local ballot initiative, State or local ref12 erendum, State or local constitutional amend13 ment, State or local bond issue, or other State 

14 or local ballot issue.’’. 

15 (c) DEFINITION OF VOTER DRIVE ACTIVITY.—Sec16 tion 301 of such Act (2 U.S.C. 431), as amended by sub17 section (b), is further amended by adding at the end the 

18 following new paragraph: 

19 ‘‘(28) VOTER DRIVE ACTIVITY.—The term 

20 ‘voter drive activity’ means any of the following ac21 tivities conducted in connection with an election in 

22 which a candidate for Federal office appears on the 

23 ballot (regardless of whether a candidate for State 

24 or local office also appears on the ballot): 

25 ‘‘(A) Voter registration activity. 


cprice-sewell on PROD1PC66 with BILLS
9 

•S 2511 IS

1 ‘‘(B) Voter identification. 

2 ‘‘(C) Get-out-the-vote activity. 

3 ‘‘(D) Generic campaign activity. 

4 ‘‘(E) Any public communication related to 

5 activities described in subparagraphs (A) 

6 through (D). 

7 Such term shall not include any activity described in 

8 subparagraph (A) or (B) of section 316(b)(2).’’. 

9 (d) REGULATIONS.—The Federal Election Commis10 sion shall promulgate regulations to implement this sec11 tion not later than 60 days after the date of enactment 

12 of this Act. 

13 (e) EFFECTIVE DATE.—The amendments made by 

14 this section shall take effect on the date which is 60 days 

15 after the date of enactment of this Act. 

16 SEC. 3. RULES FOR ALLOCATION OF EXPENSES BETWEEN 

17 FEDERAL AND NON-FEDERAL ACTIVITIES. 

18 (a) IN GENERAL.—Title III of the Federal Election 

19 Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended 

20 by adding at the end the following: 

21 ‘‘SEC. 325. ALLOCATION AND FUNDING RULES FOR CER22 TAIN EXPENSES RELATING TO FEDERAL AND 

23 NON-FEDERAL ACTIVITIES. 

24 ‘‘(a) IN GENERAL.—In the case of any disbursements 

25 by any political committee that is a separate segregated 


cprice-sewell on PROD1PC66 with BILLS
10 

•S 2511 IS

1 fund or nonconnected committee for which allocation rules 

2 are provided under subsection (b)— 

3 ‘‘(1) the disbursements shall be allocated be4 tween Federal and non-Federal accounts in accord5 ance with this section and regulations prescribed by 

6 the Commission; and 

7 ‘‘(2) in the case of disbursements allocated to 

8 non-Federal accounts, may be paid only from a 

9 qualified non-Federal account. 

10 ‘‘(b) COSTS TO BE ALLOCATED AND ALLOCATION

11 RULES.— 

12 ‘‘(1) IN GENERAL.—Disbursements by any sep13 arate segregated fund or nonconnected committee, 

14 other than an organization described in section 

15 323(b)(1), for any of the following categories of ac16 tivity shall be allocated as follows: 

17 ‘‘(A) 100 percent of the expenses for public 

18 communications or voter drive activities that 

19 refer to one or more clearly identified Federal 

20 candidates, but do not refer to any clearly iden21 tified non-Federal candidates, shall be paid with 

22 funds from a Federal account, without regard 

23 to whether the communication refers to a polit24 ical party. 


cprice-sewell on PROD1PC66 with BILLS
11 

•S 2511 IS

1 ‘‘(B) At least 50 percent, or a greater per2 centage if the Commission so determines by 

3 regulation, of the expenses for public commu4 nications and voter drive activities that refer to 

5 one or more clearly identified candidates for 

6 Federal office and one or more clearly identified 

7 non-Federal candidates shall be paid with funds 

8 from a Federal account, without regard to 

9 whether the communication refers to a political 

10 party. 

11 ‘‘(C) At least 50 percent, or a greater per12 centage if the Commission so determines by 

13 regulation, of the expenses for public commu14 nications or voter drive activities that refer to 

15 a political party, but do not refer to any clearly 

16 identified Federal or non-Federal candidate, 

17 shall be paid with funds from a Federal ac18 count, except that this paragraph shall not 

19 apply to communications or activities that re20 late exclusively to elections where no candidate 

21 for Federal office appears on the ballot. 

22 ‘‘(D) At least 50 percent, or a greater per23 centage if the Commission so determines by 

24 regulation, of the expenses for public commu25 nications or voter drive activities that refer to 


cprice-sewell on PROD1PC66 with BILLS
12 

•S 2511 IS

1 a political party and refer to one or more clear2 ly identified non-Federal candidates, but do not 

3 refer to any clearly identified Federal can4 didates, shall be paid with funds from a Federal 

5 account, except that this paragraph shall not 

6 apply to communications or activities that re7 late exclusively to elections where no candidate 

8 for Federal office appears on the ballot. 

9 ‘‘(E) Unless otherwise determined by the 

10 Commission in its regulations, at least 50 per11 cent of any administrative expenses, including 

12 rent, utilities, office supplies, and salaries not 

13 attributable to a clearly identified candidate, 

14 shall be paid with funds from a Federal ac15 count, except that for a separate segregated 

16 fund such expenses may be paid instead by its 

17 connected organization. 

18 ‘‘(F) At least 50 percent, or a greater per19 centage if the Commission so determines by 

20 regulation, of the direct costs of a fundraising 

21 program or event, including disbursements for 

22 solicitation of funds and for planning and ad23 ministration of actual fundraising events, where 

24 Federal and non-Federal funds are collected 

25 through such program or event shall be paid 


cprice-sewell on PROD1PC66 with BILLS
13 

•S 2511 IS

1 with funds from a Federal account, except that 

2 for a separate segregated fund such costs may 

3 be paid instead by its connected organization. 

4 This paragraph shall not apply to any fund5 raising solicitations or any other activity that 

6 constitutes a public communication. 

7 ‘‘(2) CERTAIN REFERENCES TO FEDERAL CAN8 DIDATES NOT TAKEN INTO ACCOUNT.—For purposes 

9 of paragraph (1), a public communication or voter 

10 drive activity shall not be treated as referring to a 

11 clearly identified Federal candidate if the only ref12 erence to the candidate in the communication or ac13 tivity is— 

14 ‘‘(A) a reference in connection with an 

15 election for a non-Federal office in which such 

16 Federal candidate is also a candidate for such 

17 non-Federal office; or 

18 ‘‘(B) a reference to the fact that the can19 didate has endorsed a non-Federal candidate or 

20 has taken a position on an applicable State or 

21 local issue (as defined in section 301(27)(G)), 

22 including a reference that constitutes the en23 dorsement or position itself. 

24 ‘‘(3) CERTAIN REFERENCES TO POLITICAL PAR25 TIES NOT TAKEN INTO ACCOUNT.—For purposes of 


cprice-sewell on PROD1PC66 with BILLS
14 

•S 2511 IS

1 paragraph (1), a public communication or voter 

2 drive activity shall not be treated as referring to a 

3 political party if the only reference to the party in 

4 the communication or activity is— 

5 ‘‘(A) a reference for the purpose of identi6 fying a non-Federal candidate; 

7 ‘‘(B) a reference for the purpose of identi8 fying the entity making the public communica9 tion or carrying out the voter drive activity; or 

10 ‘‘(C) a reference in a manner or context 

11 that does not reflect support for or opposition 

12 to a Federal candidate or candidates and does 

13 reflect support for or opposition to a State or 

14 local candidate or candidates or an applicable 

15 State or local issue. 

16 ‘‘(c) QUALIFIED NON-FEDERAL ACCOUNT.— 

17 ‘‘(1) IN GENERAL.—For purposes of this sec18 tion, the term ‘qualified non-Federal account’ means 

19 an account which consists solely of amounts— 

20 ‘‘(A) that, subject to the limitations of 

21 paragraphs (2) and (3), are raised by the sepa22 rate segregated fund or nonconnected com23 mittee only from individuals, and 


cprice-sewell on PROD1PC66 with BILLS
15 

•S 2511 IS

1 ‘‘(B) with respect to which all require2 ments of Federal, State, or local law (including 

3 any law relating to contribution limits) are met. 

4 ‘‘(2) LIMITATION ON INDIVIDUAL DONA5 TIONS.— 

6 ‘‘(A) IN GENERAL.—A separate segregated 

7 fund or nonconnected committee may not ac8 cept more than $25,000 in funds for its quali9 fied non-Federal account from any one indi10 vidual in any calendar year. 

11 ‘‘(B) AFFILIATION.—For purposes of this 

12 paragraph, all qualified non-Federal accounts of 

13 separate segregated funds or nonconnected 

14 committees which are directly or indirectly es15 tablished, financed, maintained, or controlled by 

16 the same person or persons shall be treated as 

17 one account. 

18 ‘‘(3) FUNDRAISING LIMITATION.— 

19 ‘‘(A) IN GENERAL.—No donation to a 

20 qualified non-Federal account may be solicited, 

21 received, directed, transferred, or spent by or in 

22 the name of any person described in subsection 

23 (a) or (e) of section 323. 

24 ‘‘(B) FUNDS NOT TREATED AS SUBJECT

25 TO ACT.—Except as provided in subsection 


cprice-sewell on PROD1PC66 with BILLS
16 

•S 2511 IS

1 (a)(2) and this subsection, any funds raised for 

2 a qualified non-Federal account in accordance 

3 with the requirements of this section shall not 

4 be considered funds subject to the limitations, 

5 prohibitions, and reporting requirements of this 

6 Act for any purpose (including for purposes of 

7 subsection (a) or (e) of section 323 or sub8 section (d)(1) of this section). 

9 ‘‘(d) DEFINITIONS.— 

10 ‘‘(1) FEDERAL ACCOUNT.—The term ‘Federal 

11 account’ means an account which consists solely of 

12 contributions subject to the limitations, prohibitions, 

13 and reporting requirements of this Act. Nothing in 

14 this section or in section 323(b)(2)(B)(iii) shall be 

15 construed to infer that a limit other than the limit 

16 under section 315(a)(1)(C) applies to contributions 

17 to the account. 

18 ‘‘(2) NONCONNECTED COMMITTEE.—The term 

19 ‘nonconnected committee’ shall not include a polit20 ical committee of a political party. 

21 ‘‘(3) VOTER DRIVE ACTIVITY.—The term ‘voter 

22 drive activity’ has the meaning given such term in 

23 section 301(28).’’. 


cprice-sewell on PROD1PC66 with BILLS
17 

•S 2511 IS

1 (b) REPORTING REQUIREMENTS.—Section 304(e) of 

2 the Federal Election Campaign Act of 1971 (2 U.S.C. 

3 434(e)) is amended— 

4 (1) by redesignating paragraphs (3) and (4) as 

5 paragraphs (4) and (5); and 

6 (2) by inserting after paragraph (2) the fol7 lowing new paragraph: 

8 ‘‘(3) RECEIPTS AND DISBURSEMENTS FROM

9 QUALIFIED NON-FEDERAL ACCOUNTS.—In addition 

10 to any other reporting requirement applicable under 

11 this Act, a political committee to which section 

12 325(a) applies shall report all receipts and disburse13 ments from a qualified non-Federal account (as de14 fined in section 325(c)).’’. 

15 (c) REGULATIONS.—The Federal Election Commis16 sion shall promulgate regulations to implement the amend17 ments made by this section not later than 180 days after 

18 the date of enactment of this Act. 

19 (d) EFFECTIVE DATE.—The amendments made by 

20 this section shall take effect on the date which is 180 days 

21 after the date of enactment of this Act. 

22 SEC. 4. CONSTRUCTION. 

23 No provision of this Act, or amendment made by this 

24 Act, shall be construed— 


cprice-sewell on PROD1PC66 with BILLS
18 

•S 2511 IS

1 (1) as approving, ratifying, or endorsing a regu2 lation promulgated by the Federal Election Commis3 sion; 

4 (2) as establishing, modifying, or otherwise af5 fecting the definition of political organization for 

6 purposes of the Internal Revenue Code of 1986; or 

7 (3) as affecting the determination of whether a 

8 group organized under section 501(c) of the Internal 

9 Revenue Code of 1986 is a political committee under 

10 section 301(4) of the Federal Election Campaign 

11 Act of 1971. 

12 SEC. 5. JUDICIAL REVIEW. 

13 (a) SPECIAL RULES FOR ACTIONS BROUGHT ON

14 CONSTITUTIONAL GROUNDS.—If any action is brought for 

15 declaratory or injunctive relief to challenge the constitu16 tionality of any provision of this Act or any amendment 

17 made by this Act, the following rules shall apply: 

18 (1) The action shall be filed in the United 

19 States District Court for the District of Columbia 

20 and shall be heard by a 3-judge court convened pur21 suant to section 2284 of title 28, United States 

22 Code. 

23 (2) A copy of the complaint shall be delivered 

24 promptly to the Clerk of the House of Representa25 tives and the Secretary of the Senate. 


cprice-sewell on PROD1PC66 with BILLS
19 

•S 2511 IS

1 (3) A final decision in the action shall be re2 viewable only by appeal directly to the Supreme 

3 Court of the United States. Such appeal shall be 

4 taken by the filing of a notice of appeal within 10 

5 days, and the filing of a jurisdictional statement 

6 within 30 days, of the entry of the final decision. 

7 (4) It shall be the duty of the United States 

8 District Court for the District of Columbia and the 

9 Supreme Court of the United States to advance on 

10 the docket and to expedite to the greatest possible 

11 extent the disposition of the action and appeal. 

12 (b) INTERVENTION BY MEMBERS OF CONGRESS.—In 

13 any action in which the constitutionality of any provision 

14 of this Act or any amendment made by this Act is raised 

15 (including but not limited to an action described in sub16 section (a)), any Member of the House of Representatives 

17 (including a Delegate or Resident Commissioner to Con18 gress) or Senate shall have the right to intervene either 

19 in support of or opposition to the position of a party to 

20 the case regarding the constitutionality of the provision 

21 or amendment. To avoid duplication of efforts and reduce 

22 the burdens placed on the parties to the action, the court 

23 in any such action may make such orders as it considers 

24 necessary, including orders to require intervenors taking 


cprice-sewell on PROD1PC66 with BILLS
20 

•S 2511 IS

1 similar positions to file joint papers or to be represented 

2 by a single attorney at oral argument. 

3 (c) CHALLENGE BY MEMBERS OF CONGRESS.—Any 

4 Member of Congress may bring an action, subject to the 

5 special rules described in subsection (a), for declaratory 

6 or injunctive relief to challenge the constitutionality of any 

7 provision of this Act or any amendment made by this Act. 

8 (d) APPLICABILITY.— 

9 (1) INITIAL CLAIMS.—With respect to any ac10 tion initially filed on or before December 31, 2008, 

11 the provisions of subsection (a) shall apply with re12 spect to each action described in such subsection. 

13 (2) SUBSEQUENT ACTIONS.—With respect to 

14 any action initially filed after December 31, 2008, 

15 the provisions of subsection (a) shall not apply to 

16 any action described in such subsection unless the 

17 person filing such action elects such provisions to 

18 apply to the action. 

19 SEC. 6. SEVERABILITY. 

20 If any provision of this Act or any amendment made 

21 by this Act, or the application of a provision or amend22 ment to any person or circumstance, is held to be uncon23 stitutional, the remainder of this Act and the amendments 

24 made by this Act, and the application of the provisions 


cprice-sewell on PROD1PC66 with BILLS
21 

•S 2511 IS

1 and amendments to any person or circumstance, shall not 

2 be affected by the holding. 

Æ 


cprice-sewell on PROD1PC66 with BILLS