I

104TH CONGRESS

1ST SESSION H. R. 2830

To amend the Federal Election Campaign Act of 1971 to provide for a

House of Representatives election limitation on contributions from persons other than in-State individual residents, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

DECEMBER 22, 1995

Mr. ENGLISH of Pennsylvania (for himself and Mr. HORN) introduced the following bill; which was referred to the Committee on House Oversight, and

in addition to the Committees on Ways and Means, Commerce, and Government Reform and Oversight, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions

as fall within the jurisdiction of the committee concerned

A BILL

To amend the Federal Election Campaign Act of 1971 to

provide for a House of Representatives election limitation

on contributions from persons other than in-State individual residents, 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 ‘‘Campaign Finance Re5 form, Fairness, and Citizens Involvement Act’’.
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1 SEC. 2. HOUSE OF REPRESENTATIVES ELECTION LIMITA2 TION ON CONTRIBUTIONS FROM PERSONS

3 OTHER THAN IN-STATE INDIVIDUAL RESI4 DENTS.

5 Section 315 of the Federal Election Campaign Act

6 of 1971 (2 U.S.C. 441a), is amended by adding at the

7 end the following new subsection:

8 ‘‘(i)(1) A candidate for the office of Representative

9 in, or Delegate or Resident Commissioner to, the Congress

10 may not, with respect to a reporting period for an election,

11 accept contributions from persons other than in-State in12 dividual residents in excess of 50 percent of the total of

13 contributions accepted.

14 ‘‘(2) As used in this subsection, the term ‘in-State

15 individual resident’ means an individual who is a resident

16 of the State in which the congressional district involved

17 is located.’’.

18 SEC. 3. ANTI-BUNDLING PROVISION.

19 Section 315 of the Federal Election Campaign Act

20 of 1971 (2 U.S.C. 441a), as amended by section 2, is fur21 ther amended by adding at the end the following new sub22 section:

23 ‘‘(j) No person may act as an intermediary or conduit

24 for any contribution from another person in the form of

25 a check or other negotiable instrument that is made pay-
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1 able to a candidate for Federal office or a campaign com2 mittee of a candidate for Federal office.’’.

3 SEC. 4. INCOME TAX CREDIT FOR CONTRIBUTIONS TO FED4 ERAL CAMPAIGNS.

5 (a) GENERAL RULE.—Subpart A of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of

7 1986 (relating to nonrefundable personal credits) is

8 amended by inserting after section 22 the following new

9 section:

10 ‘‘SEC. 23. CONTRIBUTIONS TO FEDERAL CAMPAIGNS.

11 ‘‘(a) GENERAL RULE.—In the case of an individual,

12 there shall be allowed as a credit against the tax imposed

13 by this chapter for the taxable year an amount equal to

14 all Federal campaign contributions paid or incurred by the

15 individual during such taxable year.

16 ‘‘(b) LIMITATIONS.—

17 ‘‘(1) AMOUNT OF CREDIT.—The credit allowed

18 by subsection (a) for a taxable year shall not exceed

19 $100 ($200 in the case of a joint return).

20 ‘‘(2) VERIFICATION.—The credit allowed by

21 subsection (a) shall be allowed, with respect to any

22 Federal campaign contribution, only if such con23 tribution is verified in such manner as the Secretary

24 shall prescribe by regulation.

25 ‘‘(c) DEFINITIONS.—For purposes of this section—
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1 ‘‘(1) CANDIDATE.—The term ‘candidate’ means

2 an individual who—

3 ‘‘(A) publicly announces before the close of

4 the calendar year following the calendar year in

5 which the contribution or gift is paid or in6 curred that he is a candidate for nomination or

7 election to any Federal elective public office,

8 and

9 ‘‘(B) meets the qualifications prescribed by

10 law to hold such office.

11 ‘‘(2) FEDERAL CAMPAIGN CONTRIBUTION.—The

12 term ‘Federal campaign contribution’ means a con13 tribution or gift of money, or the fair market value

14 of a contribution or gift of property, to—

15 ‘‘(A) an individual who is a candidate for

16 nomination or election to any Federal elective

17 public office in any primary, general, or special

18 election, for use by such individual to further

19 the candidacy of the individual for nomination

20 or election to such office,

21 ‘‘(B) any committee, association, or organi22 zation (whether or not incorporated) organized

23 and operated exclusively for the purposes of in24 fluencing, or attempting to influence, the nomi25 nation or election of one or more individuals
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1 who are candidates for nomination or election

2 to any Federal elective public office, for use by

3 such committee, association, or organization to

4 further the candidacy of such individual or indi5 viduals for nomination or election to such office,

6 or

7 ‘‘(C) the national committee of a national

8 political party, the State committee of a na9 tional political party as designated by the na10 tional committee of such party, or a local com11 mittee of a national political party as des12 ignated by the State committee of such party

13 designated under this subparagraph, for use by

14 such committee to further the candidacy of

15 such individual or individuals for nomination or

16 election to such office.

17 ‘‘(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.’’

18 (b) CLERICAL AMENDMENT.—The table of sections

19 for subpart A of part IV of subchapter A of chapter 1

20 of such Code is amended by inserting after the item relat21 ing to section 22 the following new item:

‘‘Sec. 23. Contributions to Federal campaigns.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to contributions paid or incurred

3 after the date of the enactment of this Act, in taxable

4 years ending after such date.

5 SEC. 5. IMPOSITION OF SECTION 501(h) LOBBYING RE6 STRICTIONS ON TAX-EXEMPT LABOR, AGRI7 CULTURAL, AND HORTICULTURAL ORGANI8 ZATIONS.

9 (a) IN GENERAL.—Paragraph (5) of section 501(c)

10 of the Internal Revenue Code of 1986 (relating to exemp11 tion from tax on corporations, certain trusts, etc.) is

12 amended to read as follows:

13 ‘‘(5) Labor, agricultural, or horticultural orga14 nizations with respect to which exemption from tax15 ation under subsection (a) is not required to be de16 nied under subsection (h) and which do not partici17 pate in, or intervene in (including the publishing or

18 distributing of statements), any political campaign

19 on behalf of (or in opposition to) any candidate for

20 public office.’’

21 (b) CONFORMING AMENDMENTS.—

22 (1) DENIAL OF TAX EXEMPTION BY REASON OF

23 EXPENDITURES TO INFLUENCE LEGISLATION.—

24 Paragraph (3) of section 501(h) of such Code is

25 amended to read as follows:
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1 ‘‘(3) ORGANIZATIONS TO WHICH THIS SUB2 SECTION APPLIES.—This subsection shall apply to—

3 ‘‘(A) any labor, agricultural, or horti4 cultural organization, and

5 ‘‘(B) any other organization which has

6 elected (in such manner and at such time as the

7 Secretary may prescribe) to have the provisions

8 of this subsection apply to such organization

9 and which, for the taxable year which includes

10 the date the election is made, is described in

11 subsection (c)(3) and—

12 ‘‘(i) is described in paragraph (4), and

13 ‘‘(ii) is not a disqualified organization

14 under paragraph (5).’’

15 (2) PROHIBITION ON TREATMENT AS 501(c)(4)

16 ORGANIZATION AFTER CEASING TO QUALIFY FOR

17 501(c)(5) EXEMPTION BECAUSE OF SUBSTANTIAL

18 LOBBYING OR POLITICAL ACTIVITIES.—Subsection

19 (a) of section 504 of such Code is amended by in20 serting ‘‘or section 501(c)(5)’’ after ‘‘section

21 501(c)(3)’’ each place it appears.

22 (3) TAX ON EXCESS EXPENDITURES TO INFLU23 ENCE LEGISLATION.—

24 (A) APPLICABILITY TO SECTION 501(c)(5)

25 ORGANIZATIONS.—Section 4911 of such Code is
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1 amended by adding at the end the following

2 new subsection:

3 ‘‘(g) APPLICABILITY TO SECTION 501(c)(5) ORGANI4 ZATIONS.—For purposes of this section—

5 ‘‘(1) IN GENERAL.—Any organization which is

6 a 501(c)(5) organization for a taxable year shall be

7 treated as if an election under section 501(h) were

8 in effect for such organization for such taxable year.

9 ‘‘(2) SECTION 501(c)(5) ORGANIZATION.—The

10 term ‘501(c)(5) organization’ has the meaning given

11 such term by section 4955(f).’’

12 (B) EXEMPT PURPOSE EXPENDITURES.—

13 Subparagraph (A) of section 4911(e)(1) of such

14 Code is amended by striking the period and in15 serting the following: ‘‘and includes, in the case

16 of a 501(c)(5) organization, purposes described

17 in section 501(c)(5) with respect to such orga18 nization.’’

19 (C) AFFILIATED ORGANIZATIONS.—Para20 graph (1) of section 4911(f) of such Code is

21 amended by inserting ‘‘or section 501(c)(5)’’

22 after ‘‘section 501(c)(3)’’ each place it appears.

23 (4) TAX ON POLITICAL EXPENDITURES.—

24 (A) IN GENERAL.—
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1 (i) INITIAL TAXES.—Paragraph (1) of

2 section 4955(a) of such Code is amended

3 by inserting ‘‘or section 501(c)(5) organi4 zation’’ after ‘‘section 501(c)(3) organiza5 tion’’.

6 (ii) POLITICAL EXPENDITURE.—Para7 graph (1) of section 4955(d) of such Code

8 is amended by inserting ‘‘or section

9 501(c)(5) organization’’ after ‘‘section

10 501(c)(3) organization’’.

11 (B) DEFINITION.—Subsection (f) of sec12 tion 4955 of such Code is amended by adding

13 at the end the following new paragraph:

14 ‘‘(5) SECTION 501(c)(5) ORGANIZATION.—The

15 term ‘section 501(c)(5) organization’ means any or16 ganization which (without regard to any political ex17 penditure) would be described in section 501(c)(5)

18 and exempt from taxation under section 501(a).’’

19 (5) TERMINATION ASSESSMENTS IN CASE OF

20 FLAGRANT POLITICAL EXPENDITURES.—

21 (A) IN GENERAL.—Subparagraph (A) of

22 section 6852(a)(1) of such Code is amended by

23 inserting ‘‘or section 501(c)(5) organization’’

24 after ‘‘section 501(c)(3) organization’’.
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1 (B) DEFINITION.—Paragraph (1) of sec2 tion 6852(b) of such Code is amended by in3 serting ‘‘ ‘section 501(c)(5) organization’,’’ after

4 ‘‘ ‘section 501(c)(3) organization’,’’.

5 (6) ACTION TO ENJOIN FLAGRANT POLITICAL

6 EXPENDITURES.—

7 (A) IN GENERAL.—Paragraph (1) of sec8 tion 7409(a) of such Code is amended in the

9 first sentence—

10 (i) by inserting ‘‘or section 501(c)(5)

11 organization’’ after ‘‘section 501(c)(3) or12 ganization’’, and

13 (ii) by inserting ‘‘or section 501(c)(5),

14 respectively’’ after ‘‘specified in section

15 501(c)(3)’’.

16 (B) INJUNCTIVE RELIEF.—Paragraph (2)

17 of section 7409(b) of such Code is amended by

18 inserting ‘‘or section 501(c)(5) (as the case may

19 be)’’ after ‘‘section 501(c)(3)’’.

20 (C) DEFINITION.—Subsection (c) of sec21 tion 7409 of such Code is amended by inserting

22 ‘‘, ‘section 501(c)(5) organization’,’’ after ‘‘ ‘sec23 tion 501(c)(3) organization’ ’’.

24 (7) DECLARATORY JUDGMENTS RELATING TO

25 501(c)(5) STATUS.—Subparagraph (A) of section
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1 7428(a)(1) of such Code is amended by inserting

2 ‘‘or section 501(c)(5)’’ after ‘‘section 501(c)(3)’’.

3 (c) CLERICAL AMENDMENTS.—

4 (1) The heading of subsection (h) of section

5 501 of such Code is amended to read as follows:

6 ‘‘(h) EXPENDITURES BY PUBLIC CHARITIES AND

7 LABOR, AGRICULTURAL, OR HORTICULTURAL ORGANIZA8 TIONS TO INFLUENCE LEGISLATION.—’’

9 (2) The heading of section 504 of such Code is

10 amended to read as follows:

11 ‘‘SEC. 504. STATUS AFTER ORGANIZATION CEASES TO

12 QUALIFY FOR EXEMPTION UNDER SECTION

13 501(c)(3) or 501(c)(5) BECAUSE OF SUBSTAN14 TIAL LOBBYING OR BECAUSE OF POLITICAL

15 ACTIVITIES.’’

16 (3) The table of sections for part I of sub17 chapter F of chapter 1 of such Code is amended by

18 striking the item relating to section 504 and insert19 ing the following new item:

‘‘Sec. 504. Status after organization ceases to qualify for exemption under section 501(c)(3) or 501(c)(5) because

of substantial lobbying or because of political activities.’’

20 (4) The heading of section 4955 of such Code

21 is amended to read as follows:
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1 ‘‘SEC. 4955. TAXES ON POLITICAL EXPENDITURES OF SEC2 TION 501(c)(3) AND 501(c)(5) ORGANIZATIONS.’’

3 (5) The table of sections for subchapter C of

4 chapter 42 of such Code is amended by striking the

5 item relating to section 4955 and inserting the fol6 lowing new item:

‘‘Sec. 4955. Taxes on political expenditures of section 501(c)(3)

and 501(c)(5) organizations.’’

7 (6) The heading of subchapter C of chapter 42

8 of such Code is amended to read as follows:

9 ‘‘Subchapter C—Political Expenditures of

10 Section 501(c)(3) and 501(c)(5) Organiza11 tions’’.

12 (7) The table of subchapters for chapter 42 of

13 such Code is amended by striking the item relating

14 to subchapter C and inserting the following new

15 item:

‘‘Subchapter C. Political expenditures of section 501(c)(3) and

501(c)(5) organizations.’’

16 (8) The heading of section 6852 of such Code

17 is amended to read as follows:

18 ‘‘SEC. 6852. TERMINATION ASSESSMENTS IN CASE OF FLA19 GRANT POLITICAL EXPENDITURES OF SEC20 TION 501(c)(3) OR 501(c)(5) ORGANIZATIONS.’’

21 (9) The table of sections for part I of sub22 chapter A of chapter 70 of such Code is amended by
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1 striking the item relating to section 6852 and insert2 ing the following new item:

‘‘Sec. 6852. Termination assessments in case of flagrant political

expenditures of section 501(c)(3) or 501(c)(5) organizations.’’

3 (10) The heading of section 7409 of such Code

4 is amended to read as follows:

5 ‘‘SEC. 7409. ACTION TO ENJOIN FLAGRANT POLITICAL EX6 PENDITURES OF SECTION 501(c)(3) OR

7 501(c)(5) ORGANIZATIONS.’’

8 (11) The table of sections for subchapter A of

9 chapter 76 of such Code is amended by striking the

10 item relating to section 7409 and inserting the fol11 lowing new item:

‘‘Sec. 7409. Action to enjoin flagrant political expenditures of section 501(c)(3) or 501(c)(5) organizations.’’

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

13 this section shall apply to taxable years beginning in cal14 endar years beginning after the date of the enactment of

15 this Act.

16 SEC. 6. VOLUNTARY LIMITATIONS ON EXPENDITURES IN

17 HOUSE OF REPRESENTATIVES ELECTIONS.

18 The Federal Election Campaign Act of 1971 (2

19 U.S.C. 431 et seq.) is amended by adding at the end the

20 following new title:
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1 ‘‘TITLE V—VOLUNTARY LIMITA2 TIONS ON EXPENDITURES IN

3 HOUSE OF REPRESENTA4 TIVES ELECTIONS

5 ‘‘SEC. 501. LIMITATION ON EXPENDITURES BY ELIGIBLE

6 HOUSE OF REPRESENTATIVES CANDIDATE.

7 ‘‘An eligible House of Representatives candidate may

8 not, with respect to an election, make expenditures total9 ing more than $500,000.

10 ‘‘SEC. 502. LIMITATION ON USE OF PERSONAL FUNDS BY

11 ELIGIBLE HOUSE OF REPRESENTATIVES CAN12 DIDATE.

13 ‘‘An eligible House of Representatives candidate may

14 not, with respect to an election, use more than $25,000

15 from the personal funds of the candidate.

16 ‘‘SEC. 503. LESSENING OF IMPACT OF USE OF LARGE

17 AMOUNTS OF PERSONAL FUNDS BY OPPO18 NENTS OF ELIGIBLE HOUSE OF REPRESENTA19 TIVES CANDIDATES.

20 ‘‘If any opponent of an eligible House of Representa21 tives candidate uses more than $50,000 from the personal

22 funds of such opponent with respect to an election, the

23 limitation under section 315(a)(1)(A) shall not apply to

24 contributions to the eligible House of Representatives can-
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1 didate by individuals who are residents of the State in

2 which the congressional district involved is located.

3 ‘‘SEC. 504. INDEXING.

4 ‘‘The amounts specified in sections 501 and 502 shall

5 be adjusted in the same manner as provided in section

6 315(c), except that the base period shall be calendar year

7 1995.

8 ‘‘SEC. 505. DEFINITIONS.

9 ‘‘As used in this title the term ‘eligible House of Rep10 resentatives candidate’ means a candidate for the office

11 of Representative in, or Delegate or Resident Commis12 sioner to, the Congress, who, as determined by the Com13 mission, complies with sections 501 and 502.’’.

14 SEC. 7. BAN ON SOFT MONEY.

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

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

17 by adding at the end the following new section:

18 ‘‘LIMITATIONS AND REPORTING REQUIREMENTS FOR

19 AMOUNTS PAID FOR MIXED POLITICAL ACTIVITIES

20 ‘‘SEC. 323. (a) Any payment by the national commit21 tee of a political party or a State committee of a political

22 party, or by a corporation or labor organization, for a

23 mixed political activity—

24 ‘‘(1) shall be subject to limitation and reporting

25 under this Act as if such payment were an expendi26 ture; and
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1 ‘‘(2) may be paid only from an account that is

2 subject to the requirements of this Act.

3 ‘‘(b) As used in this section, the term ‘mixed political

4 activity’ means, with respect to a payment by the national

5 committee of a political party or a State committee of a

6 political party, an activity, such as a voter registration

7 program, a get-out-the-vote drive, or general political ad8 vertising, that is both (1) for the purpose of influencing

9 an election for Federal office, and (2) for any purpose un10 related to influencing an election for Federal office.’’.

11 (b) REPEAL OF BUILDING FUND EXCEPTION TO THE

12 DEFINITION OF THE TERM ‘‘CONTRIBUTION’’.—Section

13 301(8)(B) of the Federal Election Campaign Act of 1971

14 (2 U.S.C. 431(8)(B)) is amended—

15 (1) by striking out clause (viii); and

16 (2) by redesignating clauses (ix) through (xiv)

17 as clauses (viii) through (xiii), respectively.

18 SEC. 8. BROADCAST RATES AND PREEMPTION.

19 (a) BROADCAST RATES.—Section 315(b) of the Com20 munications Act of 1934 (47 U.S.C. 315(b)) is amended—

21 (1) by striking ‘‘(b) The changes’’ and inserting

22 ‘‘(b)(1) The changes’’;

23 (2) by redesignating paragraphs (1) and (2) as

24 subparagraphs (A) and (B), respectively;

25 (3) in paragraph (1)(A), as redesignated—
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1 (A) by striking ‘‘forty-five’’ and inserting

2 ‘‘30’’; and

3 (B) by striking ‘‘lowest unit charge of the

4 station for the same class and amount of time

5 for the same period’’ and inserting ‘‘lowest

6 charge of the station for the same amount of

7 time for the same period on the same date’’;

8 and

9 (4) by adding at the end the following new

10 paragraph:

11 ‘‘(2) In the case of an eligible House of Representa12 tives candidate (as defined in section 505 of the Federal

13 Election Campaign Act of 1971), the charges for the use

14 of a broadcasting station during the 30-day period and

15 60-day period referred to in paragraph (1)(A) shall not

16 exceed 50 percent of the lowest charge described in para17 graph (1)(A).’’.

18 (b) PREEMPTION; ACCESS.—Section 315 of such Act

19 (47 U.S.C. 315), as amended by subsection (a) of this sec20 tion, is further amended—

21 (1) by redesignating subsections (d) and (e) as

22 redesignated, as subsections (e) and (f), respectively;

23 and

24 (2) by inserting immediately after subsection

25 (c) the following subsection:
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1 ‘‘(d)(1) Except as provided in paragraph (2), a li2 censee shall not preempt the use, during any period speci3 fied in subsection (b)(1)(A), of a broadcasting station by

4 an eligible House of Representatives candidate who has

5 purchased and paid for such use pursuant to subsection

6 (b)(2).

7 ‘‘(2) If a program to be broadcast by a broadcasting

8 station is preempted because of circumstances beyond the

9 control of the broadcasting station, any candidate adver10 tising spot scheduled to be broadcast during that program

11 may also be preempted.’’.

12 (c) REVOCATION OF LICENSE FOR FAILURE TO PER13 MIT ACCESS.—Section 312(a)(7) of the Communications

14 Act of 1934 (47 U.S.C. 312(a)(7)) is amended—

15 (1) by striking ‘‘or repeated’’;

16 (2) by inserting ‘‘or cable system’’ after ‘‘broad17 casting station’’; and

18 (3) by striking ‘‘his candidacy’’ and inserting

19 ‘‘the candidacy of such person, under the same

20 terms, conditions, and business practices as apply to

21 its most favored advertiser’’.

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

23 this section shall apply to the general elections occurring

24 after December 31, 1995 (and the election cycles relating

25 thereto).
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1 SEC. 9. REDUCED POSTAGE RATES.

2 (a) IN GENERAL.—Paragraph (2) of subsection (e)

3 of section 3626 of title 39, United States Code, is amend4 ed—

5 (1) in subparagraph (A)—

6 (A) by striking ‘‘and the National’’ and in7 serting ‘‘the National’’; and

8 (B) by inserting before the semicolon the

9 following: ‘‘, and, subject to paragraph (3), the

10 principal campaign committee of an eligible

11 House of Representatives candidate;’’;

12 (2) in subparagraph (B), by striking ‘‘and’’

13 after the semicolon;

14 (3) in subparagraph (C), by striking the period

15 and inserting a semicolon; and

16 (4) by adding after subparagraph (C) the fol17 lowing new subparagraphs:

18 ‘‘(D) the term ‘principal campaign committee’

19 has the meaning given such term in section 301 of

20 the Federal Election Campaign Act of 1971; and

21 ‘‘(E) the term ‘eligible House of Representa22 tives candidate’ has the meaning given such term in

23 section 505 of the Federal Election Campaign Act of

24 1971.’’.

25 (b) EFFECTIVE DATE.—The amendments made by

26 this section shall apply to the general elections occurring
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1 after December 31, 1996 (and the election cycles relating

2 thereto).

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