I

103D CONGRESS

1ST SESSION H. R. 3470

To amend the Federal Election Campaign Act of 1971 to ban activities

of political action committees in Federal elections, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

NOVEMBER 8, 1993

Mr. MICHEL (for himself, Mr. GINGRICH, Mr. THOMAS of California, Mr. LIVINGSTON, Mr. BAKER of California, Mr. BALLENGER, Mr. BARRETT of

Nebraska, Mr. BEREUTER, Mr. BLUTE, Mr. CALVERT, Mr. CASTLE, Mr.

COLLINS of Georgia, Mr. COX, Mr. DICKEY, Mr. DOOLITTLE, Mr.

EWING, Mr. FRANKS of New Jersey, Mr. GALLEGLY, Mr. GEKAS, Mr.

GOODLING, Mr. GOSS, Mr. GREENWOOD, Mr. HASTERT, Mr. HOKE, Mr.

HORN, Mr. HOUGHTON, Mr. HUTCHINSON, Mr. INGLIS of South Carolina, Mr. KOLBE, Mr. MCCRERY, Mr. MCKEON, Mr. MILLER of Florida,

Mr. MOORHEAD, Mr. OXLEY, Mr. PACKARD, Mr. PORTMAN, Mr. QUINN,

Mr. RAMSTAD, Mr. ROTH, Mr. SAXTON, Mr. SCHIFF, Mr. SHAYS, Mr.

SMITH of Texas, Mr. SMITH of Michigan, Mr. UPTON, and Mr. WALSH)

introduced the following bill; which was referred to the Committee on

House Administration

A BILL

To amend the Federal Election Campaign Act of 1971 to

ban activities of political action committees in Federal

elections, 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,
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1 SECTION 1. BAN ON ACTIVITIES OF POLITICAL ACTION

2 COMMITTEES IN FEDERAL ELECTIONS.

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

4 Campaign Act of 1971 (2 U.S.C. 301 et seq.) is amended

5 by adding at the end the following new section:

6 ‘‘BAN ON FEDERAL ELECTION ACTIVITIES BY POLITICAL

7 ACTION COMMITTEES

8 ‘‘SEC. 323. Notwithstanding any other provision of

9 this Act, no person other than an individual or a political

10 committee may make contributions, solicit or receive con11 tributions, or make expenditures for the purpose of influ12 encing an election for Federal office.’’.

13 (b) DEFINITION OF POLITICAL COMMITTEE.—(1)

14 Section 301(4) of the Federal Election Campaign Act of

15 1971 (2 U.S.C. 431(4)) is amended to read as follows:

16 ‘‘(4) The term ‘political committee’ means—

17 ‘‘(A) the principal campaign committee of a

18 candidate;

19 ‘‘(B) any national, State, or district committee

20 of a political party, including any subordinate com21 mittee thereof; and

22 ‘‘(C) any local committee of a political party

23 which—

24 ‘‘(i) receives contributions aggregating in

25 excess of $5,000 during a calendar year;
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1 ‘‘(ii) makes payments exempted from the

2 definition of contribution or expenditure under

3 paragraph (8) or (9) aggregating in excess of

4 $5,000 during a calendar year; or

5 ‘‘(iii) makes contributions or expenditures

6 aggregating in excess of $1,000 during a cal7 endar year.’’.

8 (2) Section 316(b)(2) of the Federal Election Cam9 paign Act of 1971 (2 U.S.C. 441b(b)(2)) is amended by

10 striking out subparagraph (C).

11 (c) CANDIDATE’S COMMITTEES.—(1) Section 315(a)

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

13 441a(a)) is amended by adding at the end the following

14 new paragraph:

15 ‘‘(9) For the purposes of the limitations provided by

16 paragraphs (1) and (2), any political committee which is

17 established or financed or maintained or controlled by any

18 candidate or Federal officeholder shall be deemed to be

19 an authorized committee of such candidate or office20 holder.’’.

21 (2) Section 302(e)(3) of the Federal Election Cam22 paign Act of 1971 (2 U.S.C. 432(e)(3)) is amended to

23 read as follows:

24 ‘‘(3) No political committee that supports or has sup25 ported more than one candidate may be designated as an
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1 authorized committee, except that a candidate for the of2 fice of President nominated by a political party may des3 ignate the national committee of such political party as

4 the candidate’s principal campaign committee, but only if

5 that national committee maintains separate books of ac6 count with respect to its functions as a principal campaign

7 committee.’’.

8 (d) RULES APPLICABLE WHEN BAN NOT IN EF9 FECT.—For purposes of the Federal Election Campaign

10 Act of 1971, during any period in which the limitation

11 under section 324 of that Act (as added by subsection (a))

12 is not in effect—

13 (1) the amendments made by subsections (a)

14 and (b) shall not be in effect; and

15 (2) it shall be unlawful—

16 (A) for any person that is treated as a po17 litical committee by reason of paragraph (1)

18 and is directly or indirectly established, admin19 istered, or supported by a connected organiza20 tion which is a corporation, labor organization,

21 or trade association to make contributions to

22 any candidate or the candidate’s authorized

23 committee; and

24 (B) for any person that is treated as a po25 litical committee by reason of paragraph (1)
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1 and is not directly or indirectly established, ad2 ministered, or supported by a connected organi3 zation which is a corporation, labor organiza4 tion, or trade association to make contributions

5 to any candidate or the candidate’s authorized

6 committee for any election aggregating in ex7 cess of $1,000.

8 SEC. 2. HOUSE OF REPRESENTATIVES ELECTION LIMITA9 TION ON CONTRIBUTIONS FROM PERSONS

10 OTHER THAN LOCAL INDIVIDUAL RESIDENTS.

11 Section 315 of the Federal Election Campaign Act

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

13 end the following new subsection:

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

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

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

17 accept contributions from persons other than local individ18 ual residents totaling in excess of the total of contributions

19 accepted from local individual residents.

20 ‘‘(2) As used in this subsection, the term ‘local indi21 vidual resident’ means an individual who resides in the

22 congressional district involved.

23 ‘‘(3)(A) Any candidate who accepts contributions that

24 exceed the limitation under this subsection with respect

25 to the pre-election report period or the post-election report
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1 period shall pay to the Commission, for deposit in the

2 Treasury, an amount equal to 5 times the amount of the

3 excess contributions plus a civil penalty in an amount de4 termined by the Commission.

5 ‘‘(B) Any candidate who accepts contributions that

6 exceed the limitation under this subsection with respect

7 to a period other than a period referred to in subpara8 graph (A) shall pay to the Commission, for deposit in the

9 Treasury, an amount equal to 3 times the amount of the

10 excess contributions.

11 ‘‘(C) Each report under section 304(a)(6) shall in12 clude a certification by the treasurer of the committee that

13 the contributions reported do not exceed the limitation

14 under this subsection.’’.

15 SEC. 3. BAN ON SOFT MONEY.

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

17 Campaign Act of 1971 (2 U.S.C. 431 et seq.), as amended

18 by section 1, is further amended by adding at the end the

19 following new section:

20 ‘‘LIMITATIONS AND REPORTING REQUIREMENTS FOR

21 AMOUNTS PAID FOR MIXED POLITICAL ACTIVITIES

22 ‘‘SEC. 324. (a) Any payment by the national commit23 tee of a political party or a State committee of a political

24 party for a mixed political activity—
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1 ‘‘(1) shall be subject to limitation and reporting

2 under this Act as if such payment were an expendi3 ture; and

4 ‘‘(2) may be paid only from an account that is

5 subject to the requirements of this Act.

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

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

8 committee of a political party or a State committee of a

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

10 program, a get-out-the-vote drive, or general political ad11 vertising, that is both (1) for the purpose of influencing

12 an election for Federal office, and (2) for any purpose un13 related to influencing an election for Federal office.’’.

14 (b) REPEAL OF BUILDING FUND EXCEPTION TO THE

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

16 301(8)(B) of the Federal Election Campaign Act of 1971

17 (2 U.S.C. 431(8)(B)) is amended—

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

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

20 as clauses (viii) through (xiii), respectively.
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1 SEC. 4. ADDITIONAL POLITICAL PARTY CONTRIBUTIONS TO

2 CHALLENGERS WHOSE INCUMBENT OPPO3 NENTS USE FUNDS CARRIED FORWARD FROM

4 EARLIER ELECTIONS.

5 Section 315 of the Federal Election Campaign Act

6 of 1971 (2 U.S.C. 441a), as amended by section 2, is fur7 ther amended by adding at the end the following new sub8 section:

9 ‘‘(j)(1) Subject to paragraph (2), if, in a general elec10 tion for Federal office, a candidate who is the incumbent

11 uses campaign funds carried forward from an earlier elec12 tion cycle, any political committee of a political party may

13 make contributions to a nonincumbent candidate of that

14 political party to match the funds so carried forward by

15 the incumbent. For purposes of this paragraph, funds

16 shall be considered to have been carried forward if the

17 funds represent cash on hand as of December 31 of the

18 year of the election, less legitimate outstanding debts re19 lating to the previous election up to the amount of the

20 December 31 balance, plus any amount expended on or

21 before that December 31 for a later election.

22 ‘‘(2) The political party contributions under para23 graph (1) may be made without regard to any limitation

24 amount otherwise applicable to such contributions under

25 this section, but a nonincumbent candidate may not accept
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1 such contributions in excess of the total of funds carried

2 forward by the incumbent candidate.’’.

3 SEC. 5. ELIMINATION OF LIMITATIONS ON CONTRIBUTIONS

4 TO CANDIDATES WHOSE OPPONENTS USE

5 LARGE AMOUNTS OF PERSONAL FUNDS.

6 (a) IN GENERAL.—Section 315 of the Federal Elec7 tion Campaign Act of 1971 (2 U.S.C. 441a), as amended

8 by sections 2 and 4, is further amended by adding at the

9 end the following new subsection:

10 ‘‘(k) Each candidate in an election for the office of

11 Senator or Representative in, or Delegate or Resident

12 Commissioner to, the Congress may declare, in the first

13 report that the candidate files with the Commission after

14 becoming a candidate, that the candidate will not make

15 expenditures of more than $250,000 from the personal

16 funds of the candidate. If a candidate does not so declare

17 and makes expenditures of more than $100,000 from per18 sonal funds—

19 ‘‘(1) the limitations under subsections (a)(1)(A)

20 and (i) shall not apply to any opponent of the can21 didate who so uses personal funds; and

22 ‘‘(2) the limitations under subsection (a)(2)(A)

23 (insofar as such subsection applies to political party

24 multicandidate political committees) shall not apply

25 to contributions to any opponent of the candidate
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1 who so uses personal funds, up to the amount of

2 personal funds expended by the noncomplying can3 didate.’’.

4 (b) NOTIFICATION.—Section 304(a)(6) of the Fed5 eral Election Campaign Act of 1971 (2 U.S.C. 434(a)(6))

6 is amended by adding at the end the following new para7 graph:

8 ‘‘(C) The principal campaign committee of a can9 didate shall notify the Commission in writing by telegram,

10 facsimile, or other electronic means of any incremental ex11 penditure of personal funds totaling $50,000 or more.

12 This notification shall be made not later than 24 hours

13 after the expenditure.’’.

14 SEC. 6. LIMITATION ON CONTRIBUTIONS AND EXPENDI15 TURES BY LABOR ORGANIZATIONS.

16 (a) CONTRIBUTIONS TO ALL POLITICAL COMMIT17 TEES INCLUDED.—Paragraph (2) of section 316(b) of the

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

19 441b(b)(2)) is amended by inserting ‘‘political commit20 tee,’’ after ‘‘campaign committee,’’.

21 (b) APPLICABILITY OF REQUIREMENTS TO LABOR

22 ORGANIZATIONS.—Section 316(b) of the Federal Election

23 Campaign Act of 1971 (2 U.S.C. 441b(b)) is amended by

24 adding at the end the following new paragraph:
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1 ‘‘(8)(A) Subparagraphs (A), (B), and (C) of para2 graph (2) shall not apply to a labor organization unless

3 the organization meets the requirements of subparagraphs

4 (B), (C), and (D).

5 ‘‘(B) The requirements of this subparagraph are met

6 only if the labor organization provides, at least once annu7 ally, to all employees within the labor organization’s bar8 gaining unit or units (and to new employees within 30

9 days after commencement of their employment) written

10 notification presented in a manner to inform any such em11 ployee—

12 ‘‘(i) that an employee cannot be obligated to

13 pay, through union dues or any other mandatory

14 payment to a labor organization, for the political ac15 tivities of the labor organization, including, but not

16 limited to, the maintenance and operation of, or so17 licitation of contributions to, a political committee,

18 political communications to members, and voter reg19 istration and get-out-the-vote campaigns;

20 ‘‘(ii) that no employee may be required actually

21 to join any labor organization, but if a collective bar22 gaining agreement covering an employee purports to

23 require membership or payment of dues or other

24 fees to a labor organization as a condition of em-
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1 ployment, the employee may elect instead to pay an

2 agency fee to the labor organization;

3 ‘‘(iii) that the amount of the agency fee shall be

4 limited to the employee’s pro rata share of the cost

5 of the labor organization’s exclusive representation

6 services to the employee’s collective bargaining unit,

7 including collective bargaining, contract administra8 tion, and grievance adjustment;

9 ‘‘(iv) that an employee who elects to be a full

10 member of the labor organization and pay member11 ship dues is entitled to a reduction of those dues by

12 the employee’s pro rata share of the total spending

13 by the labor organization for political activities;

14 ‘‘(v) that the cost of the labor organization’s ex15 clusive representation services, and the amount of

16 spending by such organization for political activities,

17 shall be computed on the basis of such cost and

18 spending for the immediately preceding fiscal year of

19 such organization; and

20 ‘‘(vi) of the amount of the labor organization’s

21 full membership dues, initiation fees, and assess22 ments for the current year; the amount of the re23 duced membership dues, subtracting the employee’s

24 pro rata share of the organization’s spending for po-
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1 litical activities, for the current year; and the

2 amount of the agency fee for the current year.

3 ‘‘(C) The requirements of this subparagraph are met

4 only if the labor organization provides all represented em5 ployees an annual examination by an independent certified

6 public accountant of financial statements supplied by such

7 organization which attests that the expenditures which the

8 union claimed it made for certain expenses were actually

9 made for those expenses. Such examination shall be con10 ducted in accordance with generally accepted auditing

11 standards.

12 ‘‘(D) The requirements of this subparagraph are met

13 only if the labor organization—

14 ‘‘(i) maintains procedures to promptly deter15 mine the costs that may properly be charged to

16 agency fee payors as costs of exclusive representa17 tion, and explains such procedures in the written no18 tification required under subparagraph (B); and

19 ‘‘(ii) if any person challenges the costs which

20 may be properly charged as costs of exclusive rep21 resentation—

22 ‘‘(I) provides a mutually selected impartial

23 decisionmaker to hear and decide such chal24 lenge pursuant to rules of discovery and evi25 dence and subject to de novo review by the Na-
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1 tional Labor Relations Board or an applicable

2 court; and

3 ‘‘(II) places in escrow amounts reasonably

4 in dispute pending the outcome of the chal5 lenge.

6 ‘‘(E)(i) A labor organization that does not satisfy the

7 requirements of subparagraphs (B), (C), and (D) shall fi8 nance any expenditures specified in subparagraphs (A),

9 (B), or (C) of paragraph (2) only with funds legally col10 lected under this Act for its separate segregated fund.

11 ‘‘(ii) For purposes of this paragraph, subparagraph

12 (A) of paragraph (2) shall apply only with respect to com13 munications expressly advocating the election or defeat of

14 any clearly identified candidate for elective public office.’’.

15 (c) EFFECTIVE DATE.—The amendments made by

16 subsections (a) and (b) shall apply to contributions and

17 expenditures made after the date of the enactment of this

18 Act.

19 SEC. 7. INCREASED LIMITATION AMOUNT FOR CERTAIN

20 CONTRIBUTIONS TO POLITICAL COMMITTEES

21 OF STATE POLITICAL PARTIES.

22 Section 315(a)(1)(B) of the Federal Election Cam23 paign Act of 1971 (2 U.S.C. 441a(a)(1)(B)) is amended

24 by inserting after ‘‘national’’ the following: ‘‘or State’’.
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1 SEC. 8. TRANSITION RULE RELATING TO EXCESS FUNDS OF

2 CANDIDATES FOR THE HOUSE OF REP3 RESENTATIVES.

4 The limitations under section 315(i) of the Federal

5 Election Campaign Act of 1971 (as added by section 2)

6 shall be applied to the funds of a candidate carried over

7 from previous elections and shall take effect on the day

8 after the date of the 1994 primary election. A candidate

9 for the office of Representative in, or Delegate or Resident

10 Commissioner to, the Congress, who, on the day after the

11 date of the 1994 primary election, has campaign accounts

12 containing amounts in excess of the contribution limit

13 under section 315(i) of the Federal Election Campaign

14 Act of 1971 shall deposit such excess in a separate ac15 count subject to section 304 of the Federal Election Cam16 paign Act of 1971. The amount so deposited shall be re17 turned to contributors or available for any lawful purpose

18 other than use, with respect to the individual for an elec19 tion for the office of Representative, in, or Delegate or

20 Resident Commissioner to, the Congress. For purposes of

21 this section, excess funds are those funds which exceed

22 twice the amount of funds raised from local individual

23 residents after December 31, 1992. From the day after

24 the date of the 1994 primary election until the date of

25 the 1994 general election, a candidate may transfer excess

26 funds from the separate account to the campaign account
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1 so long as a majority of the total funds contributed or

2 transferred to the campaign account were raised from

3 local individual residents after December 31, 1992. No

4 funds may be transferred from a separate account of a

5 candidate to a campaign account of the candidate after

6 the date of the 1994 general election.

7 SEC. 9. DISCLOSURE OF ELECTION-RELATED ACTIVITY BY

8 CORPORATIONS, LABOR ORGANIZATIONS

9 AND NONPROFIT ORGANIZATIONS.

10 Section 304 of the Federal Election Campaign Act

11 of 1971 (2 U.S.C. 434) is amended by adding at the end

12 the following new subsection:

13 ‘‘(d) Any corporation, labor organization, or non14 profit organization that makes a payment for a commu15 nication or other activity that—

16 ‘‘(1) relates to any election for Federal office;

17 and

18 ‘‘(2) in the case of a corporation or labor orga19 nization, by reason of subparagraph (A) or (B) of

20 paragraph (2) of section 316(b), is not a contribu21 tion or expenditure;

22 shall report such payment to the Commission in the same

23 manner as a contribution or expenditure, as the case may

24 be, is reported by a principal campaign committee of a
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1 candidate for the House of Representatives or the Senate

2 under this section.’’.

3 SEC. 10. PROHIBITION OF BUNDLING OF CONTRIBUTIONS

4 TO CANDIDATES BY POLITICAL ACTION COM5 MITTEES AND LOBBYISTS.

6 Section 316 of the Federal Election Campaign Act

7 of 1971 (2 U.S.C. 441b) is amended by adding at the end

8 the following new subsection:

9 ‘‘(c) No nonparty multicandidate political committee

10 or person required to register under the Federal Regula11 tion of Lobbying Act (2 U.S.C. 261 et seq.) may act as

12 an intermediary or conduit with respect to a contribution

13 to a candidate for Federal office.’’.

14 SEC. 11. PROHIBITION OF TRANSFERS AMONG NONCAN15 DIDATE, NONPARTY POLITICAL COMMITTEES.

16 Section 315 of the Federal Election Campaign Act

17 of 1971 (2 U.S.C. 441a), as amended by sections 2, 4,

18 and 5, is further amended by adding at the end the follow19 ing new subsection:

20 ‘‘(l) A noncandidate, nonparty political committee

21 may not make contributions, or otherwise transfer funds,

22 to any other noncandidate, nonparty political committee.

23 As used in this subsection, the term ‘noncandidate,

24 nonparty political committee’ means a political committee

25 that is not an authorized committee of a candidate for
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1 Federal office and is not a political committee of a political

2 party.’’.

3 SEC. 12. PROHIBITION OF LEADERSHIP COMMITTEES; RE4 STRICTION ON CONTRIBUTIONS BETWEEN

5 PRINCIPAL CAMPAIGN COMMITTEES.

6 (a) LEADERSHIP COMMITTEE PROHIBITION.—Sec7 tion 302 of the Federal Election Campaign Act of 1971

8 (2 U.S.C. 432) is amended by adding at the end the fol9 lowing new subsection:

10 ‘‘(j) A candidate for Federal office may not establish,

11 maintain, finance, or control a political committee, other

12 than the principal campaign committee of the candidate.’’.

13 (b) PRINCIPAL CAMPAIGN COMMITTEE RESTRIC14 TION.—Section 315 of the Federal Election Campaign Act

15 of 1971 (2 U.S.C. 441a), as amended by sections 2, 4,

16 5, and 11, is further amended by adding at the end the

17 following new subsection:

18 ‘‘(m) A principal campaign committee of a candidate

19 for Federal office may not make any contribution to any

20 other principal campaign committee (other than the prin21 cipal campaign committee of the same individual as a can22 didate for another Federal office).’’.

23 SEC. 13. EFFECTIVE DATE.

24 The amendments made by this Act shall take effect

25 on the date of the enactment of this Act.
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