II 

Calendar No. 392 

109TH CONGRESS 

2D SESSION H. R. 513 

IN THE SENATE OF THE UNITED STATES 

APRIL 6, 2006 

Received; read twice and placed on the calendar 

AN ACT 

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, 


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1 SECTION 1. SHORT TITLE. 

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

3 2006’’. 

4 SEC. 2. TREATMENT OF SECTION 527 ORGANIZATIONS. 

5 (a) DEFINITION OF POLITICAL COMMITTEE.—Sec6 tion 301(4) of the Federal Election Campaign Act of 1971 

7 (2 U.S.C. 431(4)) is amended— 

8 (1) by striking the period at the end of sub9 paragraph (C) and inserting ‘‘; or’’; and 

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

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

12 (b) DEFINITION OF APPLICABLE 527 ORGANIZA13 TION.—Section 301 of such Act (2 U.S.C. 431) is amend14 ed by adding at the end the following new paragraph: 

15 ‘‘(27) APPLICABLE 527 ORGANIZATION.— 

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

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

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

19 that— 

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

21 the Treasury under section 527(i) of the Inter22 nal Revenue Code of 1986 that it is to be treat23 ed as an organization described in section 527 

24 of such Code; and 

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


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1 ‘‘(B) EXCEPTED ORGANIZATIONS.—A com2 mittee, club, association, or other group of persons 

3 described in this subparagraph is— 

4 ‘‘(i) an organization described in section 

5 527(i)(5) of the Internal Revenue Code of 

6 1986; 

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

8 club, association or other group of persons that 

9 is organized, operated, and makes disburse10 ments exclusively for paying expenses described 

11 in the last sentence of section 527(e)(2) of the 

12 Internal Revenue Code of 1986 or expenses of 

13 a newsletter fund described in section 527(g) of 

14 such Code; 

15 ‘‘(iii) an organization which is a com16 mittee, club, association, or other group that 

17 consists solely of candidates for State or local 

18 office, individuals holding State or local office, 

19 or any combination of either, but only if the or20 ganization refers only to one or more non-Fed21 eral candidates or applicable State or local 

22 issues in all of its voter drive activities and does 

23 not refer to a Federal candidate or a political 

24 party in any of its voter drive activities; or 


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1 ‘‘(iv) an organization described in subpara2 graph (C). 

3 ‘‘(C) APPLICABLE ORGANIZATION.—For pur4 poses of subparagraph (B)(iv), an organization de5 scribed in this subparagraph is a committee, club, 

6 association, or other group of persons whose election 

7 or nomination 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, 

21 association, or other group of persons shall not be 

22 treated as meeting the exclusivity requirement of 

23 subparagraph (C) if it makes disbursements aggre24 gating more than $1,000 for any of the following: 


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1 ‘‘(i) A public communication that pro2 motes, supports, attacks, or opposes a clearly 

3 identified candidate for Federal office during 

4 the 1-year period ending on the date of the gen5 eral election for the office sought by the clearly 

6 identified candidate (or, if a runoff election is 

7 held with respect to such general election, on 

8 the date of the runoff election). 

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

11 any voter drive activity shall be taken into ac12 count under this subparagraph if the com13 mittee, club, association, or other group of per14 sons during 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-Fed22 eral 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 

9 the organization (other than funds which 

10 are described under clauses (i) and (ii) of 

11 section 323(e)(1)(B)), or direct disburse12 ments, in whole or in part, by the organi13 zation; and 

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

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

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

19 drive activity shall not be treated as referring to a 

20 clearly identified Federal candidate if the only ref21 erence to 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 con5 stitutes the endorsement or position itself. 

6 ‘‘(F) CERTAIN REFERENCES TO POLITICAL

7 PARTIES NOT TAKEN INTO ACCOUNT.—For purposes 

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

9 drive activity shall not be treated as referring to a 

10 political party if the only reference to the party in 

11 the activity 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 

19 to a Federal candidate or candidates and does 

20 reflect support for or opposition to a State or 

21 local candidate or candidates or an applicable 

22 State or local issue. 

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

24 For purposes of this paragraph, the term ‘applicable 

25 State or local issue’ means any State or local ballot 


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1 initiative, State or local referendum, State or local 

2 constitutional amendment, State or local bond issue, 

3 or other State or local ballot issue.’’. 

4 (c) DEFINITION OF VOTER DRIVE ACTIVITY.—Sec5 tion 301 of such Act (2 U.S.C. 431), as amended by sub6 section (b), is further amended by adding at the end the 

7 following new paragraph: 

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

9 drive activity’ means any of the following activities con10 ducted in connection with an election in which a candidate 

11 for Federal office appears on the ballot (regardless of 

12 whether a candidate for State or local office also appears 

13 on the ballot): 

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).’’. 


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1 SEC. 3. RULES FOR ALLOCATION OF EXPENSES BETWEEN 

2 FEDERAL AND NON-FEDERAL ACTIVITIES. 

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

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

5 by adding at the end the following: 

6 ‘‘SEC. 325. ALLOCATION AND FUNDING RULES FOR CER7 TAIN EXPENSES RELATING TO FEDERAL AND 

8 NON-FEDERAL ACTIVITIES. 

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

10 by any political committee that is a separate segregated 

11 fund or nonconnected committee for which allocation rules 

12 are provided under subsection (b)— 

13 ‘‘(1) the disbursements shall be allocated be14 tween Federal and non-Federal accounts in accord15 ance with this section and regulations prescribed by 

16 the Commission; and 

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

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

19 qualified non-Federal account. 

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

21 RULES.— 

22 ‘‘(1) IN GENERAL.—Disbursements by any sep23 arate segregated fund or nonconnected committee, 

24 other than an organization described in section 

25 323(b)(1), for any of the following categories of ac26 tivity shall be allocated as follows: 


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

2 communications or voter drive activities that 

3 refer to one or more clearly identified Federal 

4 candidates, but do not refer to any clearly iden5 tified non-Federal candidates, shall be paid with 

6 funds from a Federal account, without regard 

7 to whether the communication refers to a polit8 ical party. 

9 ‘‘(B) At least 50 percent, or a greater per10 centage if the Commission so determines by 

11 regulation, of the expenses for public commu12 nications and voter drive activities that refer to 

13 one or more clearly identified candidates for 

14 Federal office and one or more clearly identified 

15 non-Federal candidates shall be paid with funds 

16 from a Federal account, without regard to 

17 whether the communication refers to a political 

18 party. 

19 ‘‘(C) At least 50 percent, or a greater per20 centage if the Commission so determines by 

21 regulation, of the expenses for public commu22 nications or voter drive activities that refer to 

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

24 identified Federal or non-Federal candidate, 

25 shall be paid with funds from a Federal acVerDate Aug 31 2005 07:04 Apr 07, 2006 Jkt 049200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H513.PCS H513

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1 count, except that this paragraph shall not 

2 apply to communications or activities that re3 late exclusively to elections where no candidate 

4 for Federal office appears on the ballot. 

5 ‘‘(D) At least 50 percent, or a greater per6 centage if the Commission so determines by 

7 regulation, of the expenses for public commu8 nications or voter drive activities that refer to 

9 a political party and refer to one or more clear10 ly identified non-Federal candidates, but do not 

11 refer to any clearly identified Federal can12 didates, shall be paid with funds from a Federal 

13 account, except that this paragraph shall not 

14 apply to communications or activities that re15 late exclusively to elections where no candidate 

16 for Federal office appears on the ballot. 

17 ‘‘(E) Unless otherwise determined by the 

18 Commission in its regulations, at least 50 per19 cent of any administrative expenses, including 

20 rent, utilities, office supplies, and salaries not 

21 attributable to a clearly identified candidate, 

22 shall be paid with funds from a Federal ac23 count, except that for a separate segregated 

24 fund such expenses may be paid instead by its 

25 connected organization. 


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

3 regulation, of the direct costs of a fundraising 

4 program or event, including disbursements for 

5 solicitation of funds and for planning and ad6 ministration of actual fundraising events, where 

7 Federal and non-Federal funds are collected 

8 through such program or event shall be paid 

9 with funds from a Federal account, except that 

10 for a separate segregated fund such costs may 

11 be paid instead by its connected organization. 

12 This paragraph shall not apply to any fund13 raising solicitations or any other activity that 

14 constitutes a public communication. 

15 ‘‘(2) CERTAIN REFERENCES TO FEDERAL CAN16 DIDATES NOT TAKEN INTO ACCOUNT.—For purposes 

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

18 drive activity shall not be treated as referring to a 

19 clearly identified Federal candidate if the only ref20 erence to the candidate in the communication or ac21 tivity is— 

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

23 election for a non-Federal office in which such 

24 Federal candidate is also a candidate for such 

25 non-Federal office; or 


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1 ‘‘(B) 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 (as defined in section 301(27)(G)), 

5 including a reference that constitutes the en6 dorsement or position itself. 

7 ‘‘(3) CERTAIN REFERENCES TO POLITICAL PAR8 TIES NOT TAKEN INTO ACCOUNT.—For purposes of 

9 paragraph (1), a public communication or voter 

10 drive activity shall not be treated as referring to a 

11 political party if the only reference to the party in 

12 the communication or activity is— 

13 ‘‘(A) a reference for the purpose of identi14 fying a non-Federal candidate; 

15 ‘‘(B) a reference for the purpose of identi16 fying the entity making the public communica17 tion or carrying out the voter drive activity; or 

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

19 that does not reflect support for or opposition 

20 to a Federal candidate or candidates and does 

21 reflect support for or opposition to a State or 

22 local candidate or candidates or an applicable 

23 State or local issue. 

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


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1 ‘‘(1) IN GENERAL.—For purposes of this sec2 tion, the term ‘qualified non-Federal account’ means 

3 an account which consists solely of amounts— 

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

5 paragraphs (2) and (3), are raised by the sepa6 rate segregated fund or nonconnected com7 mittee only from individuals, and 

8 ‘‘(B) with respect to which all require9 ments of Federal, State, or local law (including 

10 any law relating to contribution limits) are met. 

11 ‘‘(2) LIMITATION ON INDIVIDUAL DONA12 TIONS.— 

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

14 fund or nonconnected committee may not ac15 cept more than $25,000 in funds for its quali16 fied non-Federal account from any one indi17 vidual in any calendar year. 

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

19 paragraph, all qualified non-Federal accounts of 

20 separate segregated funds or nonconnected 

21 committees which are directly or indirectly es22 tablished, financed, maintained, or controlled by 

23 the same person or persons shall be treated as 

24 one account. 

25 ‘‘(3) FUNDRAISING LIMITATION.— 


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1 ‘‘(A) IN GENERAL.—No donation to a 

2 qualified non-Federal account may be solicited, 

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

4 the name of any person described in subsection 

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

6 ‘‘(B) FUNDS NOT TREATED AS SUBJECT

7 TO ACT.—Except as provided in subsection 

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

9 a qualified non-Federal account in accordance 

10 with the requirements of this section shall not 

11 be considered funds subject to the limitations, 

12 prohibitions, and reporting requirements of this 

13 Act for any purpose (including for purposes of 

14 subsection (a) or (e) of section 323 or sub15 section (d)(1) of this section). 

16 ‘‘(d) DEFINITIONS.— 

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

18 account’ means an account which consists solely of 

19 contributions subject to the limitations, prohibitions, 

20 and reporting requirements of this Act. Nothing in 

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

22 construed to infer that a limit other than the limit 

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

24 to the account. 


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

2 ‘nonconnected committee’ shall not include a polit3 ical committee of a political party. 

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

5 drive activity’ has the meaning given such term in 

6 section 301(28).’’. 

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

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

9 434(e)) is amended— 

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

11 paragraphs (4) and (5); and 

12 (2) by inserting after paragraph (2) the fol13 lowing new paragraph: 

14 ‘‘(3) RECEIPTS AND DISBURSEMENTS FROM

15 QUALIFIED NON-FEDERAL ACCOUNTS.—In addition 

16 to any other reporting requirement applicable under 

17 this Act, a political committee to which section 

18 325(a) applies shall report all receipts and disburse19 ments from a qualified non-Federal account (as de20 fined in section 325(c)).’’. 


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1 SEC. 4. REPEAL OF LIMIT ON AMOUNT OF PARTY EXPENDI2 TURES ON BEHALF OF CANDIDATES IN GEN3 ERAL ELECTIONS. 

4 (a) REPEAL OF LIMIT.—Section 315(d) of the Fed5 eral Election Campaign Act of 1971 (2 U.S.C. 441a(d)) 

6 is amended— 

7 (1) in paragraph (1)— 

8 (A) by striking ‘‘(1) Notwithstanding any 

9 other provision of law with respect to limita10 tions on expenditures or limitations on con11 tributions, the national committee’’ and insert12 ing ‘‘Notwithstanding any other provision of 

13 law with respect to limitations on amounts of 

14 expenditures or contributions, a national com15 mittee’’, 

16 (B) by striking ‘‘the general’’ and inserting 

17 ‘‘any’’, and 

18 (C) by striking ‘‘Federal office, subject to 

19 the limitations contained in paragraphs (2), (3), 

20 and (4) of this subsection’’ and inserting ‘‘Fed21 eral office in any amount’’; and 

22 (2) by striking paragraphs (2), (3), and (4). 

23 (b) CONFORMING AMENDMENTS.— 

24 (1) INDEXING.—Section 315(c) of such Act (2 

25 U.S.C. 441a(c)) is amended— 


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1 (A) in paragraph (1)(B)(i), by striking 

2 ‘‘(d),’’; and 

3 (B) in paragraph (2)(B)(i), by striking 

4 ‘‘subsections (b) and (d)’’ and inserting ‘‘sub5 section (b)’’. 

6 (2) INCREASE IN LIMITS FOR SENATE CAN7 DIDATES FACING WEALTHY OPPONENTS.—Section 

8 315(i) of such Act (2 U.S.C. 441a(i)(1)) is amend9 ed— 

10 (A) in paragraph (1)(C)(iii)— 

11 (i) by adding ‘‘and’’ at the end of sub12 clause (I), 

13 (ii) in subclause (II), by striking ‘‘; 

14 and’’ and inserting a period, and 

15 (iii) by striking subclause (III); 

16 (B) in paragraph (2)(A) in the matter pre17 ceding clause (i), by striking ‘‘, and a party 

18 committee shall not make any expenditure,’’; 

19 (C) in paragraph (2)(A)(ii), by striking 

20 ‘‘and party expenditures previously made’’; and 

21 (D) in paragraph (2)(B), by striking ‘‘and 

22 a party shall not make any expenditure’’. 

23 (3) INCREASE IN LIMITS FOR HOUSE CAN24 DIDATES FACING WEALTHY OPPONENTS.—Section 


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1 315A(a) of such Act (2 U.S.C. 441a–1(a)) is amend2 ed— 

3 (A) in paragraph (1)— 

4 (i) by adding ‘‘and’’ at the end of sub5 paragraph (A), 

6 (ii) in subparagraph (B), by striking 

7 ‘‘; and’’ and inserting a period, and 

8 (iii) by striking subparagraph (C); 

9 (B) in paragraph (3)(A) in the matter pre10 ceding clause (i), by striking ‘‘, and a party 

11 committee shall not make any expenditure,’’; 

12 (C) in paragraph (3)(A)(ii), by striking 

13 ‘‘and party expenditures previously made’’; and 

14 (D) in paragraph (3)(B), by striking ‘‘and 

15 a party shall not make any expenditure’’. 

16 SEC. 5. CONSTRUCTION. 

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

18 Act, shall be construed— 

19 (1) as approving, ratifying, or endorsing a regu20 lation promulgated by the Federal Election Commis21 sion; 

22 (2) as establishing, modifying, or otherwise af23 fecting the definition of political organization for 

24 purposes of the Internal Revenue Code of 1986; or 


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1 (3) as affecting the determination of whether a 

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

3 Revenue Code of 1986 is a political committee under 

4 section 301(4) of the Federal Election Campaign 

5 Act of 1971. 

6 SEC. 6. JUDICIAL REVIEW. 

7 (a) SPECIAL RULES FOR ACTIONS BROUGHT ON

8 CONSTITUTIONAL GROUNDS.—If any action is brought for 

9 declaratory or injunctive relief to challenge the constitu10 tionality of any provision of this Act or any amendment 

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

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

13 States District Court for the District of Columbia 

14 and shall be heard by a 3-judge court convened pur15 suant to section 2284 of title 28, United States 

16 Code. 

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

18 promptly to the Clerk of the House of Representa19 tives and the Secretary of the Senate. 

20 (3) A final decision in the action shall be re21 viewable only by appeal directly to the Supreme 

22 Court of the United States. Such appeal shall be 

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

24 days, and the filing of a jurisdictional statement 

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


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

2 District Court for the District of Columbia and the 

3 Supreme Court of the United States to advance on 

4 the docket and to expedite to the greatest possible 

5 extent the disposition of the action and appeal. 

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

7 any action in which the constitutionality of any provision 

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

9 (including but not limited to an action described in sub10 section (a)), any Member of the House of Representatives 

11 (including a Delegate or Resident Commissioner to Con12 gress) or Senate shall have the right to intervene either 

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

14 the case regarding the constitutionality of the provision 

15 or amendment. To avoid duplication of efforts and reduce 

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

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

18 necessary, including orders to require intervenors taking 

19 similar positions to file joint papers or to be represented 

20 by a single attorney at oral argument. 

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

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

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

24 or injunctive relief to challenge the constitutionality of any 

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


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1 (d) APPLICABILITY.— 

2 (1) INITIAL CLAIMS.—With respect to any ac3 tion initially filed on or before December 31, 2008, 

4 the provisions of subsection (a) shall apply with re5 spect to each action described in such subsection. 

6 (2) SUBSEQUENT ACTIONS.—With respect to 

7 any action initially filed after December 31, 2008, 

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

9 any action described in such subsection unless the 

10 person filing such action elects such provisions to 

11 apply to the action. 

12 SEC. 7. EFFECTIVE DATE. 

13 The amendments made by this Act shall take effect 

14 on the date of the enactment of this Act. 

Passed the House of Representatives April 5, 2006. 

Attest: KAREN L. HAAS, 

Clerk. 


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Calendar No. 392 

109TH CONGRESS 

2D SESSION H. R. 513 

AN ACT 

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 

APRIL 6, 2006 

Received; read twice and placed on the calendar 


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