II 

108TH CONGRESS 

1ST SESSION S. 1913

To amend the Internal Revenue Code of 1986 to reform the system of 

public financing for Presidential elections, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

NOVEMBER 21, 2003

Mr. MCCAIN (for himself and Mr. FEINGOLD) introduced the following bill; 

which was read twice and referred to the Committee on Finance 

A BILL

To amend the Internal Revenue Code of 1986 to reform 

the system of public financing for Presidential 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,

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Presidential Funding 

5 Act of 2003’’. 

6 SEC. 2. REVISIONS TO SYSTEM OF PRESIDENTIAL PRIMARY 

7 MATCHING PAYMENTS. 

8 (a) INCREASE IN MATCHING RATE FOR PAY9 MENTS.—Section 9034(a) of the Internal Revenue Code 

10 of 1986 is amended by striking ‘‘an amount equal to the 
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1 amount’’ and inserting ‘‘an amount equal to 400 percent 

2 of the amount’’. 

3 (b) ELIGIBILITY REQUIREMENTS.—

4 (1) AMOUNT OF AGGREGATE CONTRIBUTIONS

5 PER STATE.—Section 9033(b)(3) of such Code is 

6 amended by striking ‘‘$5,000’’ and inserting 

7 ‘‘$15,000’’. 

8 (2) PARTICIPATION IN SYSTEM FOR PAYMENTS

9 FOR GENERAL ELECTION.—Section 9033(b) of such 

10 Code is amended—

11 (A) by striking ‘‘and’’ at the end of para12 graph (3); 

13 (B) by striking the period at the end of 

14 paragraph (4) and inserting ‘‘, and’’; and 

15 (C) by adding at the end the following new 

16 paragraph: 

17 ‘‘(5) if the candidate is nominated by a political 

18 party for election to the office of President, the can19 didate will apply for and accept payments with re20 spect to the general election for such office in ac21 cordance with chapter 95, including the requirement 

22 that the candidate and the candidate’s authorized 

23 committees will not incur qualified campaign ex24 penses in excess of the aggregate payments to which 

25 they will be entitled under section 9004.’’. 
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1 (c) PERIOD OF AVAILABILITY OF PAYMENTS.—Sec2 tion 9032(6) of such Code is amended by striking ‘‘the 

3 beginning of the calendar year’’ and inserting ‘‘July 1 of 

4 the calendar year preceding the calendar year’’. 

5 (d) INCREASE IN LIMITATION ON TOTAL AMOUNT OF

6 PAYMENTS.—Section 9034(b) of such Code is amended by 

7 striking ‘‘50 percent’’ and inserting ‘‘80 percent’’. 

8 SEC. 3. REQUIRING PARTICIPATION IN PRIMARY PAYMENT 

9 SYSTEM AS CONDITION OF ELIGIBILITY FOR 

10 GENERAL ELECTION PAYMENTS. 

11 (a) MAJOR PARTY CANDIDATES.—Section 9003(b) of 

12 the Internal Revenue Code of 1986 is amended—

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

14 paragraphs (2) and (3); and 

15 (2) by inserting before paragraph (2) (as so re16 designated) the following new paragraph: 

17 ‘‘(1) the candidate received payments under 

18 chapter 96 for the campaign for nomination;’’. 

19 (b) MINOR PARTY CANDIDATES.—Section 9003(c) of 

20 such Code is amended—

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

22 paragraphs (2) and (3); and 

23 (2) by inserting before paragraph (2) (as so re24 designated) the following new paragraph: 
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1 ‘‘(1) the candidate received payments under 

2 chapter 96 for the campaign for nomination;’’. 

3 SEC. 4. REVISIONS TO CANDIDATE EXPENDITURE LIMITS. 

4 (a) INCREASE IN LIMIT ON COORDINATED PARTY

5 EXPENDITURES.—Section 315(d)(2) of the Federal Elec6 tion Campaign Act of 1971 (2 U.S.C. 441a(d)(2)) is 

7 amended by striking ‘‘2 cents’’ and inserting ‘‘4 cents’’. 

8 (b) INCREASE IN EXPENDITURE LIMITS FOR PAR9 TICIPATING CANDIDATES; ELIMINATION OF STATE-SPE10 CIFIC LIMITS.—

11 (1) IN GENERAL.—Section 315(b)(1) of such 

12 Act (2 U.S.C. 441a(b)(1)) is amended by striking 

13 ‘‘in excess of l’’ and all that follows and inserting 

14 the following: ‘‘in excess of $75,000,000 with respect 

15 to a campaign for nomination for election or in ex16 cess of $75,000,000 with respect to a campaign for 

17 election to such office.’’. 

18 (2) CONFORMING AMENDMENT RELATING TO

19 TIMING OF COST-OF-LIVING ADJUSTMENT.—Section 

20 315(c)(2)(B) of such Act (2 U.S.C. 441a(c)(2)(B)) 

21 is amended—

22 (A) in clause (i), by striking ‘‘subsections 

23 (b) and (d)’’ and inserting ‘‘subsection (d)’’; 

24 (B) in clause (i), by striking ‘‘and’’ at the 

25 end;
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1 (C) in clause (ii), by striking the period at 

2 the end and inserting ‘‘; and’’; and 

3 (D) by adding at the end the following new 

4 clause: 

5 ‘‘(iii) for purposes of subsection (b), cal6 endar year 2004.’’. 

7 (3) OTHER CONFORMING AMENDMENTS.—The 

8 Internal Revenue Code of 1986 is amended—

9 (A) in section 9004(a)(1), by striking ‘‘sec10 tion 320(b)(1)(B) of the Federal Election Cam11 paign Act of 1971’’ and inserting ‘‘section 

12 315(b)(1) of the Federal Election Campaign 

13 Act of 1971’’; and 

14 (B) by striking ‘‘section 320(b)(1)(A) of 

15 the Federal Election Campaign Act of 1971’’ 

16 each place it appears in sections 9034(b) and 

17 9035(a) and inserting ‘‘section 315(b)(1) of the 

18 Federal Election Campaign Act of 1971’’. 

19 (c) REPEAL OF EXCLUSION OF FUNDRAISING COSTS

20 FROM TREATMENT AS EXPENDITURES.—Section 

21 301(9)(B)(vi) of the Federal Election Campaign Act of 

22 1971 (2 U.S.C. 431(9)(B)(vi)) is amended by striking ‘‘in 

23 excess of an amount equal to 20 percent of the expenditure 

24 limitation applicable to such candidate under section 

25 315(b)’’ and inserting the following: ‘‘who is seeking nomi-
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1 nation for election or election to the office of President 

2 or Vice President of the United States’’. 

3 (d) INCREASE IN EXPENDITURE LIMITS FOR PRI4 MARY CANDIDATES PARTICIPATING IN PRIMARY PAY5 MENT SYSTEM WHO FACE CERTAIN NONPARTICIPATING

6 OPPONENTS.—

7 (1) IN GENERAL.—Section 315(b) of the Fed8 eral Election Campaign Act of 1971 (2 U.S.C. 

9 441a(b)) is amended—

10 (A) in paragraph (1), by striking ‘‘No can11 didate’’ and inserting ‘‘Except as provided in 

12 paragraph (3), no candidate’’; and 

13 (B) by adding at the end the following new 

14 paragraph: 

15 ‘‘(3)(A) In the case of a candidate described in para16 graph (1) in a campaign for nomination for election for 

17 the office of President who faces a nonparticipating pri18 mary candidate of the same political party who receives 

19 contributions or makes expenditures with respect to the 

20 campaign in an aggregate amount greater than 133 per21 cent of the expenditure limitation under paragraph (1), 

22 the limitation on expenditures applicable under such para23 graph shall be increased by 100 percent. 

24 ‘‘(B) Each nonparticipating primary candidate who 

25 receives contributions or makes expenditures with respect 
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1 to the campaign in an aggregate amount greater than 133 

2 percent of the expenditure limitation under paragraph (1) 

3 shall notify the Commission in writing not later than 24 

4 hours after first receiving aggregate contributions or mak5 ing aggregate expenditures in such an amount. 

6 ‘‘(C) Not later than 24 hours after receiving a written 

7 notice from a nonparticipating primary candidate under 

8 subparagraph (B), the Commission shall notify each oppo9 nent of the candidate to whom the increased limitation on 

10 expenditures applies pursuant to subparagraph (A). 

11 ‘‘(D) In this paragraph, a ‘nonparticipating primary 

12 candidate’ means a candidate for nomination for election 

13 for the office of President who is not eligible under section 

14 9033 of the Internal Revenue Code of 1986 to receive pay15 ments from the Secretary of the Treasury under chapter 

16 96 of such Code.’’. 

17 (2) NO INCREASE PERMITTED IN MATCHING

18 PAYMENTS AS A RESULT OF INCREASE IN EXPENDI19 TURE LIMIT.—Section 9034(b) of the Internal Rev20 enue Code of 1986 is amended by striking the period 

21 at the end and inserting the following: ‘‘, except that 

22 a candidate shall not receive any additional pay23 ments under subsection (a) once such candidate has 

24 received a combination of payments under subsection 

25 (a) and contributions which, in the aggregate, exceed 
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1 the expenditure limit applicable under section 

2 315(b)(1) of the Act with respect to a campaign for 

3 nomination for election to the office of the President 

4 (notwithstanding any increase in such expenditure 

5 limitation pursuant to section 315(b)(3) of such 

6 Act).’’. 

7 SEC. 5. REVISIONS TO DESIGNATION OF INCOME TAX PAY8 MENTS BY INDIVIDUAL TAXPAYERS. 

9 (a) INCREASE IN AMOUNT DESIGNATED.—Section 

10 6096(a) of the Internal Revenue Code of 1986 is amend11 ed—

12 (1) in the first sentence, by striking ‘‘$3’’ each 

13 place it appears and inserting ‘‘$6’’; and 

14 (2) in the second sentence—

15 (A) by striking ‘‘$6’’ and inserting ‘‘$12’’, 

16 and 

17 (B) by striking ‘‘$3’’ and inserting ‘‘$6’’. 

18 (b) INDEXING.—Section 6096 of such Code is amend19 ed by adding at the end the following new subsection: 

20 ‘‘(d) INDEXING OF AMOUNT DESIGNATED.—

21 ‘‘(1) IN GENERAL.—With respect to each tax22 able year after 2004, each amount referred to in 

23 subsection (a) shall be increased by the percent dif24 ference described in paragraph (2), except that if 

25 any such amount after such an increase is not a 
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1 multiple of $1, such amount shall be rounded to the 

2 nearest multiple of $1. 

3 ‘‘(2) PERCENT DIFFERENCE DESCRIBED.—The 

4 percent difference described in this paragraph with 

5 respect to a taxable year is the percent difference 

6 determined under section 315(c)(1)(A) of the Fed7 eral Election Campaign Act of 1971 with respect to 

8 the calendar year during which the taxable year be9 gins, except that the base year involved shall be 

10 2004.’’. 

11 (c) ENSURING TAX PREPARATION SOFTWARE DOES

12 NOT PROVIDE AUTOMATIC RESPONSE TO DESIGNATION

13 QUESTION.—Section 6096 of such Code, as amended by 

14 subsection (b), is amended by adding at the end the fol15 lowing new subsection: 

16 ‘‘(e) ENSURING TAX PREPARATION SOFTWARE DOES

17 NOT PROVIDE AUTOMATIC RESPONSE TO DESIGNATION

18 QUESTION.—The Secretary shall promulgate regulations 

19 to ensure that electronic software used in the preparation 

20 or filing of individual income tax returns does not auto21 matically accept or decline a designation of a payment 

22 under this section.’’. 

23 (d) PUBLIC INFORMATION PROGRAM ON DESIGNA24 TION.—Section 6096 of such Code, as amended by sub-
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1 sections (b) and (c), is amended by adding at the end the 

2 following new subsection: 

3 ‘‘(f) PUBLIC INFORMATION PROGRAM.—

4 ‘‘(1) IN GENERAL.—The Federal Election Com5 mission shall conduct a program to inform and edu6 cate the public regarding the purposes of the Presi7 dential Election Campaign Fund, the procedures for 

8 the designation of payments under this section, and 

9 the effect of such a designation on the income tax 

10 liability of taxpayers. 

11 ‘‘(2) USE OF FUNDS FOR PROGRAM.—Amounts 

12 in the Presidential Election Campaign Fund shall be 

13 made available to the Commission to carry out the 

14 program under this subsection, except that the 

15 amount made available for this purpose may not ex16 ceed $10,000,000 with respect to any Presidential 

17 election cycle. In this paragraph, a ‘Presidential elec18 tion cycle’ is the 4-year period beginning with Janu19 ary of the year following a Presidential election.’’. 

20 SEC. 6. ADDITIONAL GENERAL ELECTION PAYMENTS TO 

21 PARTICIPATING CANDIDATES FACING CER22 TAIN NONPARTICIPATING OPPONENTS. 

23 (a) IN GENERAL.—Section 9004(a)(1) of the Internal 

24 Revenue Code of 1986 is amended—
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1 (1) by striking ‘‘(1) The eligible candidates’’ 

2 and inserting ‘‘(1)(A) Except as provided in sub3 paragraph (B), the eligible candidates’’; and 

4 (2) by adding at the end the following new sub5 paragraph: 

6 ‘‘(B) In addition to the payments described in 

7 subparagraph (A), each eligible candidate of a major 

8 party in a presidential election with an opponent in 

9 the election who is not eligible to receive payments 

10 under section 9006 and who receives contributions 

11 or makes expenditures with respect to the primary 

12 and general elections in an aggregate amount great13 er than 133 percent of the combined expenditure 

14 limitations applicable to eligible candidates under 

15 section 315(b)(1) of the Federal Election Campaign 

16 Act of 1971 shall be entitled to equal payments 

17 under section 9006 in an amount equal to 100 per18 cent of the expenditure limitation applicable under 

19 such section with respect to a campaign for election 

20 to the office of President.’’. 

21 (b) SPECIAL RULE FOR MINOR PARTY CAN22 DIDATES.—Section 9004(a)(2)(A) of such Code is amend23 ed—
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1 (1) by striking ‘‘(A) The eligible candidates’’ 

2 and inserting ‘‘(A)(i) Except as provided in clause 

3 (ii), the eligible candidates’’; and 

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

5 clause: 

6 ‘‘(ii) In addition to the payments described in 

7 clause (ii), each eligible candidate of a minor party 

8 in a presidential election with an opponent in the 

9 election who is not eligible to receive payments 

10 under section 9006 and who receives contributions 

11 or makes expenditures with respect to the primary 

12 and general elections in an aggregate amount great13 er than 133 percent of the combined expenditure 

14 limitations applicable to eligible candidates under 

15 section 315(b)(1) of the Federal Election Campaign 

16 Act of 1971 shall be entitled to equal payments 

17 under section 9006 in an amount equal to 100 per18 cent of the payments to which such candidate is en19 titled under clause (i).’’. 

20 (c) PROCESS FOR DETERMINATION OF ELIGIBILITY

21 FOR ADDITIONAL PAYMENT.—

22 (1) IN GENERAL.—Section 9005 of such Code 

23 is amended—

24 (A) by redesignating subsection (b) as sub25 section (c); and 
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1 (B) by inserting after subsection (a) the 

2 following new subsection: 

3 ‘‘(b) SPECIAL RULES FOR CERTIFICATION OF ELIGI4 BILITY FOR ADDITIONAL PAYMENTS.—

5 ‘‘(1) REPORTS ON EXPENDITURES BY INELI6 GIBLE CANDIDATES.—If a candidate in a presi7 dential election who is not eligible to receive pay8 ments under section 9006 receives contributions or 

9 makes expenditures with respect to the primary and 

10 general elections in an aggregate amount greater 

11 than 133 percent of the combined expenditure limi12 tations applicable to eligible candidates under sec13 tion 315(b)(1) of the Federal Election Campaign 

14 Act of 1971, the candidate shall notify the Commis15 sion in writing that the candidate has made aggre16 gate expenditures in such an amount not later than 

17 24 hours after first receiving aggregate contributions 

18 or making aggregate expenditures in such an 

19 amount. 

20 ‘‘(2) CERTIFICATION.—Not later than 24 hours 

21 after receiving a written notice under paragraph (1), 

22 the Commission shall certify to the Secretary of the 

23 Treasury for payment to any eligible candidate who 

24 is entitled to an additional payment under section 

25 9004(a)(1)(B) or section 9004(a)(2)(A)(ii) that the 
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1 candidate is entitled to payment in full of the addi2 tional payment under such section.’’. 

3 (2) CONFORMING AMENDMENT.—Section 

4 9005(c) of such Code (as redesignated under para5 graph (1)(A)) is amended by striking ‘‘subsection 

6 (a)’’ and inserting ‘‘this section’’. 

7 (d) EXCLUSION OF ADDITIONAL PAYMENT FROM

8 DETERMINATION OF EXPENDITURE LIMITS.—Section 

9 315(b)(2) of the Federal Election Campaign Act of 1971 

10 (2 U.S.C. 441a(b)(2)) is amended—

11 (1) by striking ‘‘and’’ at the end of subpara12 graph (A); 

13 (2) by striking the period at the end of sub14 paragraph (B) and inserting ‘‘; and’’; and 

15 (3) by adding at the end the following new sub16 paragraph: 

17 ‘‘(C) the amount of expenditures made by a 

18 candidate shall be reduced by the amount of any ad19 ditional payment received by the candidate under 

20 section 9004(a)(1)(B) of the Internal Revenue Code 

21 of 1986.’’. 

22 SEC. 7. DETERMINATION OF AMOUNTS IN PRESIDENTIAL 

23 ELECTION CAMPAIGN FUND. 

24 Section 9006(c) of the Internal Revenue Code of 

25 1986 is amended by adding at the end the following new 
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1 sentence: ‘‘In making a determination of whether there are 

2 insufficient moneys in the fund for purposes of the pre3 vious sentence, the Secretary shall take into account in 

4 determining the balance of the fund for a Presidential 

5 election year the Secretary’s best estimate of the amount 

6 of moneys which will be deposited into the fund during 

7 the year, except that the amount of the estimate may not 

8 exceed the average of the annual amounts deposited in the 

9 fund during the previous 3 years.’’. 

10 SEC. 8. REPEAL OF PRIORITY IN USE OF FUNDS FOR POLIT11 ICAL CONVENTIONS. 

12 (a) IN GENERAL.—Section 9008(a) of the Internal 

13 Revenue Code of 1986 is amended by striking the period 

14 at the end of the second sentence and all that follows and 

15 inserting the following: ‘‘, except that the amount depos16 ited may not exceed the amount available after the Sec17 retary determines that amounts for payments under sec18 tion 9006 and section 9037 are available for such pay19 ments.’’. 

20 (b) CONFORMING AMENDMENT.—The second sen21 tence of section 9037(a) of such Code is amended by strik22 ing ‘‘section 9006(c) and for payments under section 

23 9008(b)(3)’’ and inserting ‘‘section 9006’’. 
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1 SEC. 9. EFFECTIVE DATE. 

2 The amendments made by this Act shall apply with 

3 respect to elections occurring after January 1, 2005.

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