(1) by redesignating paragraphs (1) and (2) as 
paragraphs (2) and (3); and 
(2) by inserting before paragraph (2) (as so re-
designated) the following new paragraph: 
‘‘(1) the candidate received payments under 
chapter 96 for the campaign for nomination;’’. 
SEC. 4. REVISIONS TO CANDIDATE EXPENDITURE LIMITS. 
(a) INCREASE IN LIMIT ON COORDINATED PARTY 
EXPENDITURES.—Section 315(d)(2) of the Federal Elec-
tion Campaign Act of 1971 (2 U.S.C. 441a(d)(2)) is 
amended by striking ‘‘2 cents’’ and inserting ‘‘4 cents’’. 
(b) INCREASE IN EXPENDITURE LIMITS FOR PAR-
TICIPATING CANDIDATES; ELIMINATION OF STATE-SPE-
CIFIC LIMITS.—
(1) IN GENERAL.—Section 315(b)(1) of such 
Act (2 U.S.C. 441a(b)(1)) is amended by striking 
‘‘in excess of l’’ and all that follows and inserting 
the following: ‘‘in excess of $75,000,000 with respect 
to a campaign for nomination for election or in ex-
cess of $75,000,000 with respect to a campaign for 
election to such office.’’. 
(2) CONFORMING
AMENDMENT
RELATING
TO 
TIMING OF COST-OF-LIVING ADJUSTMENT.—Section 
315(c)(2)(B) of such Act (2 U.S.C. 441a(c)(2)(B) is 
amended—
(A) in clause (i), by striking ‘‘subsections 
(b) and (d)’’ and inserting ‘‘subsection (d)’’; 
(B) in clause (i), by striking ‘‘and’’ at the 
end; 
(C) in clause (ii), by striking the period at 
the end and inserting ‘‘; and’’; and 
(D) by adding at the end the following new 
clause: 
‘‘(iii) for purposes of subsection (b), cal-
endar year 2004.’’. 
(3) OTHER CONFORMING AMENDMENTS.—The 
Internal Revenue Code of 1986 is amended—
(A) in section 9004(a)(1), by striking ‘‘sec-
tion 320(b)(1)(B) of the Federal Election Cam-
paign Act of 1971’’ and inserting ‘‘section 
315(b)(1) of the Federal Election Campaign 
Act of 1971’’; and 
(B) by striking ‘‘section 320(b)(1)(A) of 
the Federal Election Campaign Act of 1971’’ 
each place it appears in sections 9034(b) and 
9035(a) and inserting ‘‘section 315(b)(1) of the 
Federal Election Campaign Act of 1971’’. 
(c) REPEAL OF EXCLUSION OF FUNDRAISING COSTS 
FROM
TREATMENT
AS
EXPENDITURES.—Section 
301(9)(B)(vi) of the Federal Election Campaign Act of
1971 (2 U.S.C. 431(9)(B)(vi)) is amended by striking ‘‘in 
excess of an amount equal to 20 percent of the expenditure 
limitation applicable to such candidate under section 
315(b)’’ and inserting the following: ‘‘who is seeking nomi-
nation for election or election to the office of President 
or Vice President of the United States’’. 
(d) INCREASE IN EXPENDITURE LIMITS FOR PRI-
MARY CANDIDATES PARTICIPATING
IN PRIMARY PAY-
MENT SYSTEM WHO FACE CERTAIN NONPARTICIPATING 
OPPONENTS.—
(1) IN GENERAL.—Section 315(b) of the Fed-
eral Election Campaign Act of 1971 (2 U.S.C. 
441a(b)) is amended—
(A) in paragraph (1), by striking ‘‘No can-
didate’’ and inserting ‘‘Except as provided in 
paragraph (3), no candidate’’; and 
(B) by adding at the end the following new 
paragraph: 
‘‘(3)(A) In the case of a candidate described in para-
graph (1) in a campaign for nomination for election for 
the office of President who faces a nonparticipating pri-
mary candidate of the same political party who receives 
contributions or makes expenditures with respect to the 
campaign in an aggregate amount greater than 133 per-
cent of the expenditure limitation under paragraph (1),
the limitation on expenditures applicable under such para-
graph shall be increased by 100 percent. 
‘‘(B) Each nonparticipating primary candidate who 
receives contributions or makes expenditures with respect 
to the campaign in an aggregate amount greater than 133 
percent of the expenditure limitation under paragraph (1) 
shall notify the Commission in writing not later than 24 
hours after first receiving aggregate contributions or mak-
ing aggregate expenditures in such an amount. 
‘‘(C) Not later than 24 hours after receiving a written 
notice from a nonparticipating primary candidate under 
subparagraph (B), the Commission shall notify each oppo-
nent of the candidate to whom the increased limitation on 
expenditures applies pursuant to subparagraph (A). 
‘‘(D) In this paragraph, a ‘nonparticipating primary 
candidate’ means a candidate for nomination for election 
for the office of President who is not eligible under section 
9033 of the Internal Revenue Code of 1986 to receive pay-
ments from the Secretary of the Treasury under chapter 
96 of such Code.’’. 
(2) NO
INCREASE
PERMITTED
IN
MATCHING 
PAYMENTS AS A RESULT OF INCREASE IN EXPENDI-
TURE LIMIT.—Section 9034(b) of the Internal Rev-
enue Code of 1986 is amended by striking the period 
at the end and inserting the following: ‘‘, except that
a candidate shall not receive any additional pay-
ments under subsection (a) once such candidate has 
received a combination of payments under subsection 
(a) and contributions which, in the aggregate, exceed 
the expenditure limit applicable under section 
315(b)(1) of the Act with respect to a campaign for 
nomination for election to the office of the President 
(notwithstanding any increase in such expenditure 
limitation pursuant to section 315(b)(3) of such 
Act).’’. 
SEC. 5. REVISIONS TO DESIGNATION OF INCOME TAX PAY-
MENTS BY INDIVIDUAL TAXPAYERS. 
(a) INCREASE IN AMOUNT DESIGNATED.—Section 
6096(a) of the Internal Revenue Code of 1986 is amend-
ed—
(1) in the first sentence, by striking ‘‘$3’’ each 
place it appears and inserting ‘‘$6’’; and 
(2) in the second sentence—
(A) by striking ‘‘$6’’ and inserting ‘‘$12’’, 
and 
(B) by striking ‘‘$3’’ and inserting ‘‘$6’’. 
(b) INDEXING.—Section 6096 of such Code is amend-
ed by adding at the end the following new subsection: 
‘‘(d) INDEXING OF AMOUNT DESIGNATED.—
‘‘(1) IN GENERAL.—With respect to each tax-
able year after 2004, each amount referred to in 
subsection (a) shall be increased by the percent dif-
ference described in paragraph (2), except that if 
any such amount after such an increase is not a 
multiple of $1, such amount shall be rounded to the 
nearest multiple of $1. 
‘‘(2) PERCENT DIFFERENCE DESCRIBED.—The 
percent difference described in this paragraph with 
respect to a taxable year is the percent difference 
determined under section 315(c)(1)(A) of the Fed-
eral Election Campaign Act of 1971 with respect to 
the calendar year during which the taxable year be-
gins, except that the base year involved shall be 
2004.’’. 
(c) ENSURING TAX PREPARATION SOFTWARE DOES 
NOT PROVIDE AUTOMATIC RESPONSE TO DESIGNATION 
QUESTION.—Section 6096 of such Code, as amended by 
subsection (b), is amended by adding at the end the fol-
lowing new subsection: 
‘‘(e) ENSURING TAX PREPARATION SOFTWARE DOES 
NOT PROVIDE AUTOMATIC RESPONSE TO DESIGNATION 
QUESTION.—The Secretary shall promulgate regulations 
to ensure that electronic software used in the preparation 
or filing of individual income tax returns does not auto-
matically accept or decline a designation of a payment 
under this section.’’. 
(d) PUBLIC INFORMATION PROGRAM ON DESIGNA-
TION.—Section 6096 of such Code, as amended by sub-
sections (b) and (c), is amended by adding at the end the 
following new subsection: 
‘‘(f) PUBLIC INFORMATION PROGRAM.—
‘‘(1) IN GENERAL.—The Federal Election Com-
mission shall conduct a program to inform and edu-
cate the public regarding the purposes of the Presi-
dential Election Campaign Fund, the procedures for 
the designation of payments under this section, and 
the effect of such a designation on the income tax 
liability of taxpayers. 
‘‘(2) USE OF FUNDS FOR PROGRAM.—Amounts 
in the Presidential Election Campaign Fund shall be 
made available to the Commission to carry out the 
program under this subsection, except that the 
amount made available for this purpose may not ex-
ceed $10,000,000 with respect to any Presidential 
election cycle. In this paragraph, a ‘Presidential elec-
tion cycle’ is the 4-year period beginning with Janu-
ary of the year following a Presidential election.’’.
SEC. 6. ADDITIONAL GENERAL ELECTION PAYMENTS TO 
PARTICIPATING CANDIDATES FACING CER-
TAIN NONPARTICIPATING OPPONENTS. 
(a) IN GENERAL.—Section 9004(a)(1) of the Internal 
Revenue Code of 1986 is amended—
(1) by striking ‘‘(1) The eligible candidates’’ 
and inserting ‘‘(1)(A) Except as provided in sub-
paragraph (B), the eligible candidates’’; and 
(2) by adding at the end the following new sub-
paragraph: 
‘‘(B) In addition to the payments described in 
subparagraph (A), each eligible candidate of a major 
party in a presidential election with an opponent in 
the election who is not eligible to receive payments 
under section 9006 and who receives contributions 
or makes expenditures with respect to the primary 
and general elections in an aggregate amount great-
er than 133 percent of the combined expenditure 
limitations applicable to eligible candidates under 
section 315(b)(1) of the Federal Election Campaign 
Act of 1971 shall be entitled to equal payments 
under section 9006 in an amount equal to 100 per-
cent of the expenditure limitation applicable under 
such section with respect to a campaign for election 
to the office of President.’’.
(b) SPECIAL
RULE
FOR
MINOR
PARTY
CAN-
DIDATES.—Section 9004(a)(2)(A) of such Code is amend-
ed—
(1) by striking ‘‘(A) The eligible candidates’’ 
and inserting ‘‘(A)(i) Except as provided in clause 
(ii), the eligible candidates’’; and 
(2) by adding at the end the following new 
clause: 
‘‘(ii) In addition to the payments described in 
clause (ii), each eligible candidate of a minor party 
in a presidential election with an opponent in the 
election who is not eligible to receive payments 
under section 9006 and who receives contributions 
or makes expenditures with respect to the primary 
and general elections in an aggregate amount great-
er than 133 percent of the combined expenditure 
limitations applicable to eligible candidates under 
section 315(b)(1) of the Federal Election Campaign 
Act of 1971 shall be entitled to equal payments 
under section 9006 in an amount equal to 100 per-
cent of the payments to which such candidate is en-
titled under clause (i).’’. 
(c) PROCESS FOR DETERMINATION OF ELIGIBILITY 
FOR ADDITIONAL PAYMENT.—
(1) IN GENERAL.—Section 9005 of such Code 
is amended—
(A) by redesignating subsection (b) as sub-
section (c); and 
(B) by inserting after subsection (a) the 
following new subsection: 
‘‘(b) SPECIAL RULES FOR CERTIFICATION OF ELIGI-
BILITY FOR ADDITIONAL PAYMENTS.—
‘‘(1) REPORTS
ON
EXPENDITURES
BY
INELI-
GIBLE
CANDIDATES.—If a candidate in a presi-
dential election who is not eligible to receive pay-
ments under section 9006 receives contributions or 
makes expenditures with respect to the primary and 
general elections in an aggregate amount greater 
than 133 percent of the combined expenditure limi-
tations applicable to eligible candidates under sec-
tion 315(b)(1) of the Federal Election Campaign 
Act of 1971, the candidate shall notify the Commis-
sion in writing that the candidate has made aggre-
gate expenditures in such an amount not later than 
24 hours after first receiving aggregate contributions 
or making aggregate expenditures in such an 
amount. 
‘‘(2) CERTIFICATION.—Not later than 24 hours 
after receiving a written notice under paragraph (1),
the Commission shall certify to the Secretary of the 
Treasury for payment to any eligible candidate who 
is entitled to an additional payment under section 
9004(a)(1)(B) or section 9004(a)(2)(A)(ii) that the 
candidate is entitled to payment in full of the addi-
tional payment under such section.’’. 
(2) 
CONFORMING
AMENDMENT.—Section 
9005(c) of such Code (as redesignated under para-
graph (1)(A)) is amended by striking ‘‘subsection 
(a)’’ and inserting ‘‘this section’’. 
(d) EXCLUSION
OF ADDITIONAL PAYMENT FROM 
DETERMINATION
OF
EXPENDITURE
LIMITS.—Section 
315(b)(2) of the Federal Election Campaign Act of 1971 
(2 U.S.C. 441a(b)(2)) is amended—
(1) by striking ‘‘and’’ at the end of subpara-
graph (A); 
(2) by striking the period at the end of sub-
paragraph (B) and inserting ‘‘; and’’; and 
(3) by adding at the end the following new sub-
paragraph: 
‘‘(C) the amount of expenditures made by a 
candidate shall be reduced by the amount of any ad-
ditional payment received by the candidate under 
section 9004(a)(1)(B) of the Internal Revenue Code 
of 1986.’’.
SEC. 7. DETERMINATION OF AMOUNTS IN PRESIDENTIAL 
ELECTION CAMPAIGN FUND. 
Section 9006(c) of the Internal Revenue Code of 
1986 is amended by adding at the end the following new 
sentence: ‘‘In making a determination of whether there are 
insufficient moneys in the fund for purposes of the pre-
vious sentence, the Secretary shall take into account in 
determining the balance of the fund for a Presidential 
election year the Secretary’s best estimate of the amount 
of moneys which will be deposited into the fund during 
the year, except that the amount of the estimate may not 
exceed the average of the annual amounts deposited in the 
fund during the previous 3 years.’’. 
SEC. 8. REPEAL OF PRIORITY IN USE OF FUNDS FOR POLIT-
ICAL CONVENTIONS. 
(a) IN GENERAL.—Section 9008(a) of the Internal 
Revenue Code of 1986 is amended by striking the period 
at the end of the second sentence and all that follows and 
inserting the following: ‘‘, except that the amount depos-
ited may not exceed the amount available after the Sec-
retary determines that amounts for payments under sec-
tion 9006 and section 9037 are available for such pay-
ments.’’. 
(b) CONFORMING AMENDMENT.—The second sen-
tence of section 9037(a) of such Code is amended by strik-
ing ‘‘section 9006(c) and for payments under section 
9008(b)(3)’’ and inserting ‘‘section 9006’’. 
SEC. 9. EFFECTIVE DATE. 
The amendments made by this Act shall apply with 
respect to elections occurring after January 1, 2005.
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