IB 

Union Calendar No. 113 

109TH CONGRESS 

1ST SESSION H. R. 513 

[Report No. 109–181] 

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 HOUSE OF REPRESENTATIVES 

FEBRUARY 2, 2005 

Mr. SHAYS (for himself and Mr. MEEHAN) introduced the following bill; which 

was referred to the Committee on House Administration 

JULY 22, 2005 

Additional sponsors: Mr. CASTLE, Mr. BASS, Mr. BOYD, Mr. LEWIS of 

Georgia, Mr. SIMMONS, and Mr. OBERSTAR

Deleted sponsors: Mr. BISHOP of New York (added February 17, 2005; deleted April 13, 2005), Mr. MCNULTY (added April 6, 2005; deleted May 

3, 2005), Mr. BECERRA (added April 6, 2005; deleted April 28, 2005), 

and Ms. LEE (added April 27, 2005; deleted May 5, 2005) 

JULY 22, 2005 

Reported with an amendment, committed to the Committee of the Whole 

House on the State of the Union, and ordered to be printed 

[Strike out all after the enacting clause and insert the part printed in italic] 

[For text of introduced bill, see copy of bill as introduced on February 2, 2005] 

A BILL 

To amend the Federal Election Campaign Act of 1971 to 

clarify when organizations described in section 527 of 
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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 2005’’. 

6 SEC. 2. TREATMENT OF SECTION 527 ORGANIZATIONS. 

7 (a) DEFINITION OF POLITICAL COMMITTEE.—Section 

8 301(4) of the Federal Election Campaign Act of 1971 (2 

9 U.S.C. 431(4)) is amended— 

10 (1) by striking the period at the end of subpara11 graph (C) and inserting ‘‘; or’’; and 

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

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

14 (b) DEFINITION OF APPLICABLE 527 ORGANIZA15 TION.—Section 301 of such Act (2 U.S.C. 431) is amended 

16 by adding at the end the following new paragraph: 

17 ‘‘(27) APPLICABLE 527 ORGANIZATION.— 

18 ‘‘(A) IN GENERAL.—For purposes of paragraph 

19 (4)(D), the term ‘applicable 527 organization’ means 

20 a committee, club, association, or group of persons 

21 that— 

22 ‘‘(i) has given notice to the Secretary of the 

23 Treasury under section 527(i) of the Internal 

24 Revenue Code of 1986 that it is to be treated as 
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1 an organization described in section 527 of such 

2 Code; and 

3 ‘‘(ii) is not described in subparagraph (B). 

4 ‘‘(B) EXCEPTED ORGANIZATIONS.—A committee, 

5 club, association, or other group of persons described 

6 in this subparagraph is—

7 ‘‘(i) an organization described in section 

8 527(i)(5) of the Internal Revenue Code of 1986; 

9 ‘‘(ii) an organization which is a committee, 

10 club, association or other group of persons that 

11 is organized, operated, and makes disbursements 

12 exclusively for paying expenses described in the 

13 last sentence of section 527(e)(2) of the Internal 

14 Revenue Code of 1986 or expenses of a newsletter 

15 fund described in section 527(g) of such Code; 

16 ‘‘(iii) an organization which is a com17 mittee, club, association, or other group that con18 sists solely of candidates for State or local office, 

19 individuals holding State or local office, or any 

20 combination of either, but only if the organiza21 tion refers only to one or more non-Federal can22 didates or applicable State or local issues in all 

23 of its voter drive activities and does not refer to 

24 a Federal candidate or a political party in any 

25 of its voter drive activities; or 
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1 ‘‘(iv) an organization described in subpara2 graph (C). 

3 ‘‘(C) APPLICABLE ORGANIZATION.—For purposes 

4 of subparagraph (B)(iv), an organization described in 

5 this subparagraph is a committee, club, association, 

6 or other group of persons whose election or nomina7 tion activities relate exclusively to—

8 ‘‘(i) elections where no candidate for Fed9 eral office appears on the ballot; or 

10 ‘‘(ii) one or more of the following purposes: 

11 ‘‘(I) Influencing the selection, nomina12 tion, election, or appointment of one or 

13 more candidates to non-Federal offices. 

14 ‘‘(II) Influencing one or more applica15 ble State or local issues. 

16 ‘‘(III) Influencing the selection, ap17 pointment, nomination, or confirmation of 

18 one or more individuals to non-elected of19 fices. 

20 ‘‘(D) EXCLUSIVITY TEST.—A committee, club, as21 sociation, or other group of persons shall not be treat22 ed as meeting the exclusivity requirement of subpara23 graph (C) if it makes disbursements aggregating more 

24 than $1,000 for any of the following: 
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1 ‘‘(i) A public communication that promotes, 

2 supports, attacks, or opposes a clearly identified 

3 candidate for Federal office during the 1-year 

4 period ending on the date of the general election 

5 for the office sought by the clearly identified can6 didate (or, if a runoff election is held with re7 spect to such general election, on the date of the 

8 runoff election). 

9 ‘‘(ii) Any voter drive activity during a cal10 endar year, except that no disbursements for any 

11 voter drive activity shall be taken into account 

12 under this subparagraph if the committee, club, 

13 association, or other group of persons during 

14 such calendar year—

15 ‘‘(I) makes disbursements for voter 

16 drive activities with respect to elections in 

17 only 1 State and complies with all applica18 ble election laws of that State, including 

19 laws related to registration and reporting 

20 requirements and contribution limitations; 

21 ‘‘(II) refers to one or more non-Federal 

22 candidates or applicable State or local 

23 issues in all of its voter drive activities and 

24 does not refer to any Federal candidate or 
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1 any political party in any of its voter drive 

2 activities; 

3 ‘‘(III) does not have a candidate for 

4 Federal office, an individual who holds any 

5 Federal office, a national political party, or 

6 an agent of any of the foregoing, control or 

7 materially participate in the direction of 

8 the organization, solicit contributions to the 

9 organization (other than funds which are 

10 described under clauses (i) and (ii) of sec11 tion 323(e)(1)(B)), or direct disbursements, 

12 in whole or in part, by the organization; 

13 and 

14 ‘‘(IV) makes no contributions to Fed15 eral candidates. 

16 ‘‘(E) CERTAIN REFERENCES TO FEDERAL CAN17 DIDATES NOT TAKEN INTO ACCOUNT.—For purposes of 

18 subparagraphs (B)(iii) and (D)(ii)(II), a voter drive 

19 activity shall not be treated as referring to a clearly 

20 identified Federal candidate if the only reference to 

21 the candidate in the activity is—

22 ‘‘(i) a reference in connection with an elec23 tion for a non-Federal office in which such Fed24 eral candidate is also a candidate for such non25 Federal office; or 
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1 ‘‘(ii) a reference to the fact that the can2 didate has endorsed a non-Federal candidate or 

3 has taken a position on an applicable State or 

4 local issue, including a reference that constitutes 

5 the endorsement or position itself. 

6 ‘‘(F) CERTAIN REFERENCES TO POLITICAL PAR7 TIES NOT TAKEN INTO ACCOUNT.—For purposes of 

8 subparagraphs (B)(iii) and (D)(ii)(II), a voter drive 

9 activity shall not be treated as referring to a political 

10 party if the only reference to the party in the activity 

11 is—

12 ‘‘(i) a reference for the purpose of identi13 fying a non-Federal candidate; 

14 ‘‘(ii) a reference for the purpose of identi15 fying the entity making the public communica16 tion or carrying out the voter drive activity; or 

17 ‘‘(iii) a reference in a manner or context 

18 that does not reflect support for or opposition to 

19 a Federal candidate or candidates and does re20 flect support for or opposition to a State or local 

21 candidate or candidates or an applicable State 

22 or local issue. 

23 ‘‘(G) APPLICABLE STATE OR LOCAL ISSUE.—For 

24 purposes of this paragraph, the term ‘applicable State 

25 or local issue’ means any State or local ballot initia-
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1 tive, State or local referendum, State or local con2 stitutional amendment, State or local bond issue, or 

3 other State or local ballot issue.’’. 

4 (c) DEFINITION OF VOTER DRIVE ACTIVITY.—Section 

5 301 of such Act (2 U.S.C. 431), as amended by subsection 

6 (b), is further amended by adding at the end the following 

7 new paragraph: 

8 ‘‘(28) VOTER DRIVE ACTIVITY.—The term ‘voter drive 

9 activity’ means any of the following activities conducted in 

10 connection with an election in which a candidate for Fed11 eral office appears on the ballot (regardless of whether a 

12 candidate for State or local office also appears on the bal13 lot): 

14 ‘‘(A) Voter registration activity. 

15 ‘‘(B) Voter identification. 

16 ‘‘(C) Get-out-the-vote activity. 

17 ‘‘(D) Generic campaign activity. 

18 ‘‘(E) Any public communication related to ac19 tivities described in subparagraphs (A) through (D). 

20 Such term shall not include any activity described in sub21 paragraph (A) or (B) of section 316(b)(2).’’. 

22 (d) REGULATIONS.—The Federal Election Commission 

23 shall promulgate regulations to implement this section not 

24 later than 60 days after the date of enactment of this Act. 
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1 (e) EFFECTIVE DATE.—The amendments made by this 

2 section shall take effect on the date which is 60 days after 

3 the date of enactment of this Act. 

4 SEC. 3. RULES FOR ALLOCATION OF EXPENSES BETWEEN 

5 FEDERAL AND NON-FEDERAL ACTIVITIES. 

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

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

8 by adding at the end the following: 

9 ‘‘SEC. 325. ALLOCATION AND FUNDING RULES FOR CERTAIN 

10 EXPENSES RELATING TO FEDERAL AND NON11 FEDERAL ACTIVITIES. 

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

13 by any political committee that is a separate segregated 

14 fund or nonconnected committee for which allocation rules 

15 are provided under subsection (b)—

16 ‘‘(1) the disbursements shall be allocated between 

17 Federal and non-Federal accounts in accordance with 

18 this section and regulations prescribed by the Com19 mission; and 

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

21 non-Federal accounts, may be paid only from a quali22 fied non-Federal account. 

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

24 RULES.—
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1 ‘‘(1) IN GENERAL.—Disbursements by any sepa2 rate segregated fund or nonconnected committee, other 

3 than an organization described in section 323(b)(1), 

4 for any of the following categories of activity shall be 

5 allocated as follows: 

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

7 communications or voter drive activities that 

8 refer to one or more clearly identified Federal 

9 candidates, but do not refer to any clearly iden10 tified non-Federal candidates, shall be paid with 

11 funds from a Federal account, without regard to 

12 whether the communication refers to a political 

13 party. 

14 ‘‘(B) At least 50 percent, or a greater per15 centage if the Commission so determines by regu16 lation, of the expenses for public communications 

17 and voter drive activities that refer to one or 

18 more clearly identified candidates for Federal of19 fice and one or more clearly identified non-Fed20 eral candidates shall be paid with funds from a 

21 Federal account, without regard to whether the 

22 communication refers to a political party. 

23 ‘‘(C) At least 50 percent, or a greater per24 centage if the Commission so determines by regu25 lation, of the expenses for public communications 
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1 or voter drive activities that refer to a political 

2 party, but do not refer to any clearly identified 

3 Federal or non-Federal candidate, shall be paid 

4 with funds from a Federal account, except that 

5 this paragraph shall not apply to communica6 tions or activities that relate exclusively to elec7 tions where no candidate for Federal office ap8 pears on the ballot. 

9 ‘‘(D) At least 50 percent, or a greater per10 centage if the Commission so determines by regu11 lation, of the expenses for public communications 

12 or voter drive activities that refer to a political 

13 party and refer to one or more clearly identified 

14 non-Federal candidates, but do not refer to any 

15 clearly identified Federal candidates, shall be 

16 paid with funds from a Federal account, except 

17 that this paragraph shall not apply to commu18 nications or activities that relate exclusively to 

19 elections where no candidate for Federal office 

20 appears on the ballot. 

21 ‘‘(E) Unless otherwise determined by the 

22 Commission in its regulations, at least 50 per23 cent of any administrative expenses, including 

24 rent, utilities, office supplies, and salaries not 

25 attributable to a clearly identified candidate, 
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1 shall be paid with funds from a Federal account, 

2 except that for a separate segregated fund such 

3 expenses may be paid instead by its connected 

4 organization. 

5 ‘‘(F) At least 50 percent, or a greater per6 centage if the Commission so determines by regu7 lation, of the direct costs of a fundraising pro8 gram or event, including disbursements for solic9 itation of funds and for planning and adminis10 tration of actual fundraising events, where Fed11 eral and non-Federal funds are collected through 

12 such program or event shall be paid with funds 

13 from a Federal account, except that for a sepa14 rate segregated fund such costs may be paid in15 stead by its connected organization. This para16 graph shall not apply to any fundraising solici17 tations or any other activity that constitutes a 

18 public communication. 

19 ‘‘(2) CERTAIN REFERENCES TO FEDERAL CAN20 DIDATES NOT TAKEN INTO ACCOUNT.—For purposes of 

21 paragraph (1), a public communication or voter drive 

22 activity shall not be treated as referring to a clearly 

23 identified Federal candidate if the only reference to 

24 the candidate in the communication or activity is—
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1 ‘‘(A) a reference in connection with an elec2 tion for a non-Federal office in which such Fed3 eral candidate is also a candidate for such non4 Federal office; or 

5 ‘‘(B) a reference to the fact that the can6 didate has endorsed a non-Federal candidate or 

7 has taken a position on an applicable State or 

8 local issue (as defined in section 301(27)(G)), in9 cluding a reference that constitutes the endorse10 ment or position itself. 

11 ‘‘(3) CERTAIN REFERENCES TO POLITICAL PAR12 TIES NOT TAKEN INTO ACCOUNT.—For purposes of 

13 paragraph (1), a public communication or voter drive 

14 activity shall not be treated as referring to a political 

15 party if the only reference to the party in the commu16 nication or activity is—

17 ‘‘(A) a reference for the purpose of identi18 fying a non-Federal candidate; 

19 ‘‘(B) a reference for the purpose of identi20 fying the entity making the public communica21 tion or carrying out the voter drive activity; or 

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

23 that does not reflect support for or opposition to 

24 a Federal candidate or candidates and does re25 flect support for or opposition to a State or local 
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1 candidate or candidates or an applicable State 

2 or local issue. 

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

4 ‘‘(1) IN GENERAL.—For purposes of this section, 

5 the term ‘qualified non-Federal account’ means an ac6 count which consists solely of amounts—

7 ‘‘(A) that, subject to the limitations of para8 graphs (2) and (3), are raised by the separate 

9 segregated fund or nonconnected committee only 

10 from individuals, and 

11 ‘‘(B) with respect to which all requirements 

12 of Federal, State, or local law (including any 

13 law relating to contribution limits) are met. 

14 ‘‘(2) LIMITATION ON INDIVIDUAL DONATIONS.—

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

16 fund or nonconnected committee may not accept 

17 more than $25,000 in funds for its qualified 

18 non-Federal account from any one individual in 

19 any calendar year. 

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

21 paragraph, all qualified non-Federal accounts of 

22 separate segregated funds or nonconnected com23 mittees which are directly or indirectly estab24 lished, financed, maintained, or controlled by the 
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1 same person or persons shall be treated as one 

2 account. 

3 ‘‘(3) FUNDRAISING LIMITATION.—

4 ‘‘(A) IN GENERAL.—No donation to a quali5 fied non-Federal account may be solicited, re6 ceived, directed, transferred, or spent by or in the 

7 name of any person described in subsection (a) 

8 or (e) of section 323. 

9 ‘‘(B) FUNDS NOT TREATED AS SUBJECT TO

10 ACT.—Except as provided in subsection (a)(2) 

11 and this subsection, any funds raised for a 

12 qualified non-Federal account in accordance 

13 with the requirements of this section shall not be 

14 considered funds subject to the limitations, pro15 hibitions, and reporting requirements of this Act 

16 for any purpose (including for purposes of sub17 section (a) or (e) of section 323 or subsection 

18 (d)(1) of this section). 

19 ‘‘(d) DEFINITIONS.—

20 ‘‘(1) FEDERAL ACCOUNT.—The term ‘Federal ac21 count’ means an account which consists solely of con22 tributions subject to the limitations, prohibitions, and 

23 reporting requirements of this Act. Nothing in this 

24 section or in section 323(b)(2)(B)(iii) shall be con25 strued to infer that a limit other than the limit under 
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1 section 315(a)(1)(C) applies to contributions to the 

2 account. 

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

4 ‘nonconnected committee’ shall not include a political 

5 committee of a political party. 

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

7 drive activity’ has the meaning given such term in 

8 section 301(28).’’. 

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

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

11 434(e)) is amended—

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

13 paragraphs (4) and (5); and 

14 (2) by inserting after paragraph (2) the fol15 lowing new paragraph: 

16 ‘‘(3) RECEIPTS AND DISBURSEMENTS FROM

17 QUALIFIED NON-FEDERAL ACCOUNTS.—In addition to 

18 any other reporting requirement applicable under this 

19 Act, a political committee to which section 325(a) ap20 plies shall report all receipts and disbursements from 

21 a qualified non-Federal account (as defined in section 

22 325(c)).’’. 

23 (c) REGULATIONS.—The Federal Election Commission 

24 shall promulgate regulations to implement the amendments 
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1 made by this section not later than 180 days after the date 

2 of enactment of this Act. 

3 (d) EFFECTIVE DATE.—The amendments made by this 

4 section shall take effect on the date which is 180 days after 

5 the date of enactment of this Act. 

6 SEC. 4. CONSTRUCTION. 

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

8 Act, shall be construed—

9 (1) as approving, ratifying, or endorsing a regu10 lation promulgated by the Federal Election Commis11 sion; 

12 (2) as establishing, modifying, or otherwise af13 fecting the definition of political organization for 

14 purposes of the Internal Revenue Code of 1986; or 

15 (3) as affecting the determination of whether a 

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

17 Revenue Code of 1986 is a political committee under 

18 section 301(4) of the Federal Election Campaign Act 

19 of 1971. 

20 SEC. 5. JUDICIAL REVIEW. 

21 (a) SPECIAL RULES FOR ACTIONS BROUGHT ON CON22 STITUTIONAL GROUNDS.—If any action is brought for de23 claratory or injunctive relief to challenge the constitu24 tionality of any provision of this Act or any amendment 

25 made by this Act, the following rules shall apply: 
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1 (1) The action shall be filed in the United States 

2 District Court for the District of Columbia and shall 

3 be heard by a 3-judge court convened pursuant to sec4 tion 2284 of title 28, United States Code. 

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

6 promptly to the Clerk of the House of Representatives 

7 and the Secretary of the Senate. 

8 (3) A final decision in the action shall be review9 able only by appeal directly to the Supreme Court of 

10 the United States. Such appeal shall be taken by the 

11 filing of a notice of appeal within 10 days, and the 

12 filing of a jurisdictional statement within 30 days, of 

13 the entry of the final decision. 

14 (4) It shall be the duty of the United States Dis15 trict Court for the District of Columbia and the Su16 preme Court of the United States to advance on the 

17 docket and to expedite to the greatest possible extent 

18 the disposition of the action and appeal. 

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

20 any action in which the constitutionality of any provision 

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

22 (including but not limited to an action described in sub23 section (a)), any Member of the House of Representatives 

24 (including a Delegate or Resident Commissioner to Con25 gress) or Senate shall have the right to intervene either in 
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1 support of or opposition to the position of a party to the 

2 case regarding the constitutionality of the provision or 

3 amendment. To avoid duplication of efforts and reduce the 

4 burdens placed on the parties to the action, the court in 

5 any such action may make such orders as it considers nec6 essary, including orders to require intervenors taking simi7 lar positions to file joint papers or to be represented by a 

8 single attorney at oral argument. 

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

10 Member of Congress may bring an action, subject to the spe11 cial rules described in subsection (a), for declaratory or in12 junctive relief to challenge the constitutionality of any pro13 vision of this Act or any amendment made by this Act. 

14 (d) APPLICABILITY.—

15 (1) INITIAL CLAIMS.—With respect to any action 

16 initially filed on or before December 31, 2008, the 

17 provisions of subsection (a) shall apply with respect 

18 to each action described in such subsection. 

19 (2) SUBSEQUENT ACTIONS.—With respect to any 

20 action initially filed after December 31, 2008, the 

21 provisions of subsection (a) shall not apply to any ac22 tion described in such subsection unless the person fil23 ing such action elects such provisions to apply to the 

24 action. 
Union Calendar No. 113

109TH CONGRESS 

1ST SESSION H. R. 513

[Report No. 109–181] 

A BILL

To amend the Federal Election Campaign Act of 

for other purposes. 1986 must register as political committees, and section 527 of the Internal Revenue Code of 1971 to clarify when organizations described in 

JULY 22, 2005

Reported with an amendment, committed to the Comand ordered to be printed mittee of the Whole House on the State of the Union,