I

103D CONGRESS

1ST SESSION H. R. 2198

To amend the Federal Election Campaign Act of 1971 and the Internal

Revenue Code of 1986 to clarify such provisions with respect to Federal

elections, to reduce costs in House of Representatives elections, and

for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 20, 1993

Mr. HUGHES introduced the following bill; which was referred jointly to the

Committees on House Administration and Ways and Means

A BILL

To amend the Federal Election Campaign Act of 1971 and

the Internal Revenue Code of 1986 to clarify such provisions with respect to Federal elections, to reduce costs

in House of Representatives 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 ‘‘Campaign Cost Reduc5 tion and Reform Act of 1993’’.
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1 SEC. 2. DEFINITION OF QUALIFYING HOUSE OF REP2 RESENTATIVES CANDIDATE.

3 Section 301(19) of the Federal Election Campaign

4 Act of 1971 (2 U.S.C. 431(19)) is amended to read as

5 follows:

6 ‘‘(19) The term ‘qualifying House of Representatives

7 candidate’ means a candidate for the office of Representa8 tive in, or Delegate or Resident Commissioner to, the Con9 gress, whose principal campaign committee includes in its

10 statement of organization a declaration of intention under

11 section 303(b)(7) and, by reason of such declaration, is

12 subject to the expenditure limitations specified in section

13 315(i) or section 315(j).’’.

14 SEC. 3. AMENDMENTS TO DEFINITION OF CONTRIBUTION

15 RELATING TO VALUATION FORMULA AND EN16 COURAGEMENT CONTRIBUTIONS.

17 Section 301(8)(A) of the Federal Election Campaign

18 Act of 1971 (2 U.S.C. 431(8)(A)) is amended—

19 (1) in clause (i)—

20 (A) by inserting after ‘‘anything of value’’

21 the following: (such value to be determined by

22 the highest of: cost to the person making the

23 contribution, fair market value on the date of

24 acquisition by the person making the contribu25 tion, or fair market value on the date of the

26 contribution); and
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1 (B) by striking out ‘‘or’’ after the semi2 colon;

3 (2) in clause (ii), by striking out the period and

4 inserting in lieu thereof ‘‘; and’’; and

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

6 clause:

7 ‘‘(iii) any gift, subscription, loan, advance, or

8 deposit of money or anything of value (such value to

9 be determined in the manner described in clause (i))

10 made by any person for the purpose of encouraging

11 any specific individual who is not a candidate to be12 come a candidate.’’.

13 SEC. 4. AMENDMENTS TO DEFINITION OF EXPENDITURE

14 RELATING TO VALUATION FORMULA AND EN15 COURAGEMENT EXPENDITURES.

16 Section 301(9)(A) of the Federal Election Campaign

17 Act of 1971 (2 U.S.C. 431(9)(A)) is amended—

18 (1) in clause (i)—

19 (A) by inserting after ‘‘anything of value’’

20 the following: ‘‘(such value to be determined by

21 the highest of: cost to the person making the

22 expenditure, fair market value on the date of

23 acquisition by the person making the expendi24 ture, or fair market value on the date of the ex25 penditure); and
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1 (B) by striking out ‘‘and’’ after the semi2 colon;

3 (2) in clause (ii), by striking out the period and

4 inserting in lieu thereof ‘‘; and’’; and

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

6 clause:

7 ‘‘(iii) any purchase, payment, distribution, loan,

8 advance, deposit, or gift of money or anything of

9 value (such value to be determined in the manner

10 described in clause (i)) made by any person for the

11 purpose of encouraging any specific individual who is

12 not a candidate to become a candidate.’’.

13 SEC. 5. REGISTRATION AS QUALIFYING HOUSE OF REP14 RESENTATIVES CANDIDATE.

15 (a) IN GENERAL.—Section 303(b) of the Federal

16 Election Campaign Act of 1971 (2 U.S.C. 433(b)) is

17 amended—

18 (1) in paragraph (5), by striking out ‘‘and’’

19 after the semicolon at the end;

20 (2) in paragraph (6), by striking out the period

21 at the end and inserting in lieu thereof the following:

22 ‘‘and’’; and

23 (3) by adding at the end the following:

24 ‘‘(7) in the case of a principal campaign com25 mittee of a candidate for the office of Representative
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1 in, or Delegate or Resident Commissioner to, the

2 Congress, who desires to be a qualifying House of

3 Representatives candidate, a declaration of intention

4 of the candidate to comply voluntarily with all con5 tribution limitations and expenditure limitations

6 under this Act.’’.

7 (b) AMENDMENT TO STATEMENT OF ORGANIZA8 TION.—Section 303 of the Federal Election Campaign Act

9 of 1971 (2 U.S.C. 433) is amended by adding at the end

10 the following new subsection:

11 ‘‘(e)(1) In the case of a political committee referred

12 to in paragraph (7) of subsection (b), if the statement of

13 organization does not include a declaration referred to in

14 that paragraph, the committee may amend the statement

15 to include such declaration, if such amendment is filed

16 under section 302(g) not later than the day the candidate

17 becomes a candidate for purposes of State law.

18 ‘‘(2) A declaration of intention that is included in a

19 statement of organization under paragraph (7) of sub20 section (b), whether in the original filing or by amend21 ment, may not be revoked.’’.

22 SEC. 6. AMENDMENT TO DEFINITION OF INDEPENDENT EX23 PENDITURE.

24 Section 301(17) of the Federal Election Campaign

25 Act of 1971 (2 U.S.C. 431(17)) is amended by adding
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1 at the end the following: ‘‘An expenditure is not an inde2 pendent expenditure if—

3 ‘‘(A) there is any arrangement, coordination, or

4 direction with respect to the expenditure between the

5 candidate and the person making the expenditure;

6 ‘‘(B) with respect to the election, the person

7 making the expenditure—

8 ‘‘(i) is authorized to solicit contributions or

9 make expenditures on behalf of the candidate or

10 an authorized committee of the candidate;

11 ‘‘(ii) is an officer of an authorized commit12 tee of the candidate; or

13 ‘‘(iii) receives any compensation or reim14 bursement from the candidate, or an authorized

15 committee of the candidate;

16 ‘‘(C) the expenditure is clearly intended to en17 courage voters to support or oppose a specific can18 didate for the office of Representative in, or Dele19 gate or Resident Commissioner to, the Congress.’’.

20 SEC. 7. LIMITATIONS ON EXPENDITURES BY QUALIFYING

21 HOUSE OF REPRESENTATIVES CANDIDATES.

22 Section 315 of the Federal Election Campaign Act

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

24 end the following new subsections:
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1 ‘‘(i) A qualifying House of Representatives candidate

2 shall not make expenditures derived from personal funds

3 of such candidate in excess of $75,000 with respect to an

4 election for the Office of Representative in, or Delegate

5 or Resident Commissioner to, the Congress.

6 ‘‘(j) A qualifying House of Representatives candidate

7 shall not make expenditures in excess of $600,000 with

8 respect to an election cycle.’’.

9 SEC. 8. LIMITATIONS WITH RESPECT TO QUALIFYING

10 HOUSE OF REPRESENTATIVES CANDIDATES.

11 Section 315 of the Federal Election Campaign Act

12 of 1971 (2 U.S.C. 441a), as amended by section 7 of this

13 Act, is further amended by adding at the end the following

14 new subsection:

15 ‘‘(k)(1) A qualifying House of Representatives can16 didate may not accept, in an election cycle—

17 ‘‘(A) more than $300,000 in contributions from

18 persons other than individuals;

19 ‘‘(B) more than $5,000 from a single

20 multicandidate political committee;

21 ‘‘(C) more than $75,000 from political party

22 committees; or

23 ‘‘(D) more than $100,000 from individuals who

24 reside outside the congressional district involved.
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1 ‘‘(2) No person may make independent expenditures

2 in an election cycle of more than $10,000 advocating the

3 election of a qualifying House of Representatives can4 didate or advocating the defeat of the opponent of such

5 candidate.

6 ‘‘(3) An individual may not make contributions of

7 more than $2,000 to a qualifying House of Representa8 tives candidate in an election cycle.

9 ‘‘(4) As used in this section, the term ‘election cycle’

10 means—

11 ‘‘(A) in the case of a candidate or the author12 ized committees of a candidate, the term beginning

13 on the day after the date of the most recent general

14 election for the specific office or seat which such

15 candidate seeks and ending on the date of the next

16 general election for such office or seat; or

17 ‘‘(B) for all other persons, the term beginning

18 on the first day following the date of the last general

19 election and ending on the date of the next general

20 election.

21 ‘‘(5)(A) Any person who exceeds a limitation under

22 this subsection by 5 percent or less shall pay to the Com23 mission an amount equal to the amount of the excess.

24 ‘‘(B) Any person who exceeds a limitation under this

25 subsection by more than 5 percent but not more than 10
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1 percent shall pay to the Commission an amount equal to

2 three times the amount of the excess.

3 ‘‘(C) Any person who exceeds a limitation under this

4 subsection by more than 10 percent shall pay to the Com5 mission an amount equal to three times the amount of

6 the excess plus a civil penalty in an amount determined

7 by the Commission.’’.

8 SEC. 9. AMENDMENTS TO THE INTERNAL REVENUE CODE

9 OF 1986 RELATING TO THE CREDIT FOR CON10 TRIBUTIONS TO CERTAIN QUALIFYING

11 HOUSE OF REPRESENTATIVES CANDIDATES.

12 (a) GENERAL RULE.—Subpart A of part IV of sub13 chapter A of chapter 1 of the Internal Revenue Code of

14 1986 (relating to nonrefundable personal credits) is

15 amended by inserting after section 23 the following new

16 section:

17 ‘‘SEC. 24. CONTRIBUTIONS TO CERTAIN QUALIFYING

18 HOUSE OF REPRESENTATIVES CANDIDATES.

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

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

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

22 the total of contributions to qualifying House of Rep23 resentatives candidates which are made by the taxpayer

24 during the taxable year, with respect to elections in the

25 congressional district of which the taxpayer is a resident.
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1 ‘‘(b) LIMITATIONS.—

2 ‘‘(1) MAXIMUM CREDIT.—The credit allowed by

3 subsection (a) for a taxable year shall not exceed

4 $100 ($200 in the case of a joint return under sec5 tion 6013).

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

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

8 qualified political contribution, only if such contribu9 tion is verified in such manner as the Secretary shall

10 prescribe by regulations.

11 ‘‘(c) DEFINITIONS.—For purposes of this section, the

12 terms ‘contribution’ and ‘qualifying House of Representa13 tives candidate’ have the meanings given those terms in

14 section 301 of the Federal Election Campaign Act of

15 1971.’’.

16 (b) CONFORMING AMENDMENTS.—

17 (1) Section 642 of such Code (relating to spe18 cial rules for credits and deductions of estates or

19 trusts) is amended by adding at the end the follow20 ing new subsection:

21 ‘‘(j) CREDIT FOR POLITICAL CONTRIBUTIONS NOT

22 ALLOWED.—An estate or trust shall not be allowed the

23 credit against tax provided by section 24.’’.

24 (2) The table of sections for subpart A of part

25 IV of subchapter A of chapter 1 of such Code is
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1 amended by inserting after the item relating to sec2 tion 23 the following new item:

‘‘Sec. 24. Contributions to certain qualifying House of Representatives candidates.’’.

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

4 this section shall apply to taxable years beginning after

5 December 31, 1993.

6 SEC. 10. EFFECTIVE DATE.

7 Except as otherwise provided in this Act, the amend8 ments made by this Act shall apply with respect to elec9 tions for Federal office beginning with the general election

10 of November 8, 1994 (and any primary election relating

11 to such general election).

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