IB
Union Calendar No. 349
104TH CONGRESS
2D SESSION
H. R. 3760
[Report No. 104–677]
To amend the Federal Election Campaign Act of 1971 to reform the financing
of Federal election campaigns, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
JULY 9, 1996
Mr. THOMAS (for himself, Mr. GINGRICH, Mr. ARMEY, Mr. DELAY, Mr.
BOEHNER, Mr. PAXON, Mr. HOEKSTRA, Mr. WAMP, and Mr. EHLERS)
introduced the following bill; which was referred to the Committee on
House Oversight
JULY 16, 1996
Additional sponsors: Ms. GREENE of Utah, Mr. BALLENGER, Mr. RIGGS, Mr.
LIVINGSTON, Mr. FOX, Mr. KOLBE, Mr. WELDON of Pennsylvania, Mr.
WALKER, Mr. ENGLISH of Pennsylvania, and Mr. CAMP
JULY 16, 1996
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 July 9, 1996]
A BILL
To amend the Federal Election Campaign Act of 1971 to
reform the financing of Federal election campaigns, and
for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the
‘‘Campaign Finance Reform Act of 1996’’.
(b) TABLE OF CONTENTS.—The table of contents of this
Act is as follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings.
TITLE I—RESTORING CONTROL OF ELECTIONS TO INDIVIDUALS
Sec. 101. Requiring majority of House of Representatives candidate funds to come
from individuals residing in district.
Sec. 102. Reduction in allowable contribution amounts for political action com-
mittees in Federal elections to level allowed for individuals.
Sec. 103. Modification of limitations on contributions when candidates spend or
contribute large amounts of personal funds.
Sec. 104. Indexing limits on contributions.
Sec. 105. Prohibition of leadership committees.
Sec. 106. Prohibiting bundling of contributions to candidates by political action
committees and lobbyists.
Sec. 107. Definition of independent expenditures.
Sec. 108. Requirements for use of payroll deductions for contributions.
TITLE II—STRENGTHENING POLITICAL PARTIES
Sec. 201. Modification of contribution limits and requirements for political par-
ties.
Sec. 202. Allowing political parties to offset funds carried over from previous elec-
tions.
Sec. 203. Prohibiting use of non-Federal funds in Federal elections.
Sec. 204. Permitting parties to have unlimited communication with members.
Sec. 205. Promoting State and local party volunteer and grassroots activity.
TITLE III—DISCLOSURE AND ENFORCEMENT
Sec. 301. Timely reporting and increased disclosure.
Sec. 302. Streamlining procedures and rules of Federal Election Commission.
TITLE IV—GENERAL PROVISIONS
Sec. 401. Effective date.
Sec. 402. Severability.
Sec. 403. Expedited court review.
SEC. 2. FINDINGS.
Congress finds the following:
(1) Our republican form of government is
strengthened when voters choose their representatives
in elections that are free of corruption or the appear-
ance of corruption.
(2) Corruption or the appearance of corruption
in elections may evidence itself in many ways:
(A) Voters who democratically elect rep-
resentatives must believe they are fairly rep-
resented by those they elect. The current election
laws have led many to believe that the interests
of those who actually vote for their representa-
tives are less important than those who cannot
vote, but who can influence an election by their
contributions to the candidates.
(B) Failure to disclose, or timely disclose,
those who contribute and how much they contrib-
ute unnecessarily withholds information voters
need to cast ballots with complete confidence,
thereby increasing the belief of, or the appear-
ance of, corruption.
(C) The diminishing role of political par-
ties, despite parties’ long-standing role in ad-
vancing broad national agendas, in assisting the
election of party candidates, and in organizing
members, has relatively enhanced groups that
pursue narrower interests. This relative shift of
influence has been interpreted by some as cor-
rupting the election process.
(D) Complicated and obsolete election laws
and rules discourage citizens from becoming can-
didates, allow for coerced involuntary payments
for political purposes, fail to keep contribution
amounts current with inflation, and fail to pro-
vide reasonable compensating contribution limits
for candidates who run against candidates who
wish to exercise their constitutional right of
spending their own resources. The current state
of laws and rules is such that if they do not cor-
rupt, at the very least they unduly hinder fair,
honest, and competitive elections.
TITLE I—RESTORING CONTROL
OF ELECTIONS TO INDIVIDUALS
SEC. 101. REQUIRING MAJORITY OF HOUSE OF REPRESENT-
ATIVES CANDIDATE FUNDS TO COME FROM
INDIVIDUALS RESIDING IN DISTRICT.
(a) IN GENERAL.—Section 315 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441a) is amended by add-
ing at the end the following new subsection:
‘‘(i)(1) A candidate for the office of Representative in,
or Delegate or Resident Commissioner to, the Congress may
not accept contributions with respect to an election cycle
from persons other than local individual residents totaling
in excess of the total of contributions accepted from local
individual residents (as determined on the basis of the most
recent information included in reports pursuant to section
304(d).
‘‘(2) In determining the amount of contributions ac-
cepted by a candidate for purposes of this subsection, con-
tributions of the candidate’s personal funds shall be subject
to the following rules:
‘‘(A) To the extent that the amount of the con-
tribution does not exceed the limitation on contribu-
tions made by an individual under subsection
(a)(1)(A), such contribution shall be treated as any
other contribution.
‘‘(B) The portion (if any) of the contribution
which exceeds the limitation on contributions which
may be made by an individual under subsection
(a)(1)(A) shall be allocated in accordance with para-
graph (8).
‘‘(3) In determining the amount of contributions ac-
cepted by a candidate for purposes of this subsection, con-
tributions from a political party or a political party com-
mittee shall be allocated in accordance with paragraph (8).
‘‘(4) In determining the amount of contributions ac-
cepted by a candidate for purposes of this subsection, any
funds remaining in the candidate’s campaign account after
the filing of the post-general election report under section
304(a)(2)(A)(ii) for the most recent general election shall
be allocated in accordance with paragraph (8).
‘‘(5) In determining the amount of contributions ac-
cepted by a candidate for purposes of this subsection, any
contributions accepted pursuant to subsection (j) which are
from persons other than local individual residents shall be
allocated in accordance with paragraph (8).
‘‘(6)(A) Any candidate who accepts contributions that
exceed the limitation under this subsection, as determined
on the basis of information included in reports pursuant
to section 304(d), shall pay to the Commission at the time
of the filing of the report which contains the information,
for deposit in the Treasury, an amount equal to 3 times
the amount of the excess contributions (or, in the case of
a candidate described in subparagraph (C), an amount
equal to 5 times the amount of the excess contributions plus
a civil penalty in an amount determined by the Commis-
sion).
‘‘(B) Any amounts paid by a candidate under this
paragraph shall be paid from contributions subject to the
limitations and prohibitions of this title, including the lim-
itation under this subsection.
‘‘(C) A candidate described in this subparagraph is a
candidate who accepts contributions that exceed the limita-
tion under this subsection as of the last day of the period
ending on the 20th day before an election or any period
ending after such 20th day and before or on the 20th day
after such election.
‘‘(7) As used in this subsection, the term ‘local individ-
ual resident’ means an individual who resides in the con-
gressional district involved.
‘‘(8) For purposes of this subsection, any amounts allo-
cated in accordance with this paragraph shall be allocated
as follows:
‘‘(A) 50 percent of such amounts shall be deemed
to be contributions from local individual residents.
‘‘(B) 50 percent of such amounts shall be deemed
to be contributions from persons other than local indi-
vidual residents.’’.
(b) REPORTING REQUIREMENTS.—Section 304 of such
Act (2 U.S.C. 434) is amended by adding at the end the
following new subsection:
‘‘(d) Each principal campaign committee of a can-
didate for the House of Representatives shall include the
following information in reports filed under subsection
(a)(2) and subsection (a)(6)(A):
‘‘(1) With respect to each report filed under such
subsection—
‘‘(A) the total contributions received by the
committee with respect to the election cycle in-
volved from local individual residents (as defined
in section 315(i)(7)), as of the last day of the pe-
riod covered by the report;
‘‘(B) the total contributions received by the
committee with respect to the election cycle in-
volved which are not from local individual resi-
dents, as of the last day of the period covered by
the report; and
‘‘(C) a certification as to whether the con-
tributions reported comply with the limitation
under section 315(i), as of the last day of the pe-
riod covered by the report.
‘‘(2) In the case of the first report filed under
such subsection which covers the period which begins
19 days before an election and ends 20 days after the
election—
‘‘(A) the total contributions received by the
committee with respect to the election cycle in-
volved from local individual residents (as defined
in section 315(i)(7)), as of the last day of such
period;
‘‘(B) the total contributions received by the
committee with respect to the election cycle in-
volved which are not from local individual resi-
dents, as of the last day of such period; and
‘‘(C) a certification as to whether the con-
tributions reported comply with the limitation
under section 315(i), as of the last day of such
period.’’.
SEC. 102. REDUCTION IN ALLOWABLE CONTRIBUTION
AMOUNTS FOR POLITICAL ACTION COMMIT-
TEES IN FEDERAL ELECTIONS TO LEVEL AL-
LOWED FOR INDIVIDUALS.
(a) IN GENERAL.—Section 315(a) of the Federal Elec-
tion Campaign Act of 1971 (2 U.S.C. 441a(a)) is amend-
ed—
(1) in paragraph (1)—
(A) in subparagraph (A), by inserting after
‘‘Federal office’’ the following: ‘‘or to any other
political committee other than a political party
committee in any calendar year’’,
(B) in subparagraph (A), by adding ‘‘or’’ at
the end,
(C) in subparagraph (B), by striking ‘‘; or’’
and inserting a period, and
(D) by striking subparagraph (C); and
(2) by amending paragraph (2) to read as fol-
lows:
‘‘(2) No political party committee may make contribu-
tions—
‘‘(A) to any candidate or the candidate’s author-
ized political committees with respect to any election
for Federal office which, in the aggregate, exceed
$5,000; or
‘‘(B) to any other political committee other than
a political party committee in any calendar year
which, in the aggregate, exceed $5,000.’’.
(b) POLITICAL PARTY COMMITTEE DEFINED.—The
second sentence of section 315(a)(4) of such Act (2 U.S.C.
441a(a)(4)) is amended to read as follows: ‘‘For purposes
of this section, the term ‘political party committee’ means
a political committee which is a national, State, district,
or local political party committee (including any subordi-
nate committee thereof).’’.
(c) CONFORMING AMENDMENTS.—Section 311(a)(6) of
such Act (2 U.S.C. 438(a)(6)) is amended—
(1) in subparagraph (B), by striking ‘‘multi-can-
didate committees’’ the first place it appears and in-
serting ‘‘political committees which are not author-
ized committees of candidates or political party com-
mittees’’;
(2) in subparagraph (B), by striking ‘‘multi-can-
didate committees’’ the second place it appears and
inserting ‘‘such committees’’; and
(3) in subparagraph (C), by striking ‘‘multi-can-
didate committees’’ and inserting ‘‘committees de-
scribed in subparagraph (B)’’.
SEC. 103. MODIFICATION OF LIMITATIONS ON CONTRIBU-
TIONS WHEN CANDIDATES SPEND OR CON-
TRIBUTE LARGE AMOUNTS OF PERSONAL
FUNDS.
(a) IN GENERAL.—Section 315 of the Federal Election
Campaign Act of 1971 (2 U.S.C. 441a), as amended by sec-
tion 101(a), is further amended by adding at the end the
following new subsection:
‘‘(j)(1) Notwithstanding subsection (a), if in a general
election a House candidate makes expenditures of personal
funds (including contributions by the candidate to the can-
didate’s authorized campaign committee) in an amount in
excess of the amount of the limitation established under sub-
section (a)(1)(A) and less than or equal to $150,000 (as
reported under section 304(a)(2)(A)), a political party com-
mittee may make contributions to an opponent of the House
candidate without regard to any limitation otherwise ap-
plicable to such contributions under subsection (a), except
that the opponent may not accept aggregate contributions
under this paragraph in an amount greater than the great-
est amount of personal funds expended (including contribu-
tions to the candidate’s authorized campaign committee) by
any House candidate (other than such opponent) with re-
spect to the election (as reported in a notification submitted
under section 304(a)(6)(B)).
‘‘(2) If a House candidate makes expenditures of per-
sonal funds (including contributions by the candidate to the
candidate’s authorized campaign committee) with respect
to an election in an amount greater than $150,000 (as re-
ported under section 304(a)(2)(A)), the following rules shall
apply:
‘‘(A) In the case of a general election, the limita-
tions under subsections (a)(1) and (a)(2) (insofar as
such limitations apply to political party committees
and to individuals) shall not apply to contributions
to the candidate or to any opponent of the candidate,
except that neither the candidate or any opponent
may accept aggregate contributions under this sub-
paragraph and paragraph (1) in an amount greater
than the greatest amount of personal funds (including
contributions to the candidate’s authorized campaign
committee) expended by any House candidate with
respect to the election (as reported in a notification
submitted under section 304(a)(6)(B)).
‘‘(B) In the case of an election other than a gen-
eral election, the limitations under subsection (a)(1)
(insofar as such limitations apply to individuals)
shall not apply to contributions to the candidate or
to any opponent of the candidate, except that neither
the candidate or any opponent may accept aggregate
contributions under this subparagraph in an amount
greater than the greatest amount of personal funds
(including contributions to the candidate’s authorized
campaign committee) expended by any House can-
didate with respect to the election (as reported in a
notification submitted under section 304(a)(6)(B)).
‘‘(3) In this subsection, the term ‘House candidate’
means a candidate in an election for the office of Represent-
ative in, or Delegate or Resident Commissioner to, the Con-
gress.’’.
(b) NOTIFICATION OF EXPENDITURES OF PERSONAL
FUNDS.—Section 304(a)(6) of such Act (2 U.S.C.
434(a)(6)) is amended—
(1) by redesignating subparagraph (B) as sub-
paragraph (C); and
(2) by inserting after subparagraph (A) the fol-
lowing new subparagraph:
‘‘(B)(i) The principal campaign committee of a House
candidate (as defined in section 315(j)(3)) shall submit the
following notifications relating to expenditures of personal
funds by such candidate (including contributions by the
candidate to such committee):
‘‘(I) A notification of the first such expenditure
(or contribution) by which the aggregate amount of
personal funds expended (or contributed) with respect
to an election exceeds the amount of the limitation es-
tablished under section 315(a)(1)(A) for elections in
the year involved.
‘‘(II) A notification of each such expenditure (or
contribution) which, taken together with all such ex-
penditures (and contributions) in any amount not in-
cluded in the most recent report under this subpara-
graph, totals $5,000 or more.
‘‘(III) A notification of the first such expenditure
(or contribution) by which the aggregate amount of
personal funds expended with respect to the election
exceeds the level applicable under section 315(j)(2) for
elections in the year involved.
‘‘(ii) Each of the notifications submitted under clause
(i)—
‘‘(I) shall be submitted not later than 24 hours
after the expenditure or contribution which is the sub-
ject of the notification is made;
‘‘(II) shall include the name of the candidate, the
office sought by the candidate, and the date of the ex-
penditure or contribution and amount of the expendi-
ture or contribution involved; and
‘‘(III) shall include the total amount of all such
expenditures and contributions made with respect to
the same election as of the date of expenditure or con-
tribution which is the subject of the notification.’’.
SEC. 104. INDEXING LIMITS ON CONTRIBUTIONS.
(a) IN GENERAL.—Section 315(c) of the Federal Elec-
tion Campaign Act of 1971 (2 U.S.C. 441a(c)) is amended
by adding at the end the following new paragraph:
‘‘(3)(A) The amount of each limitation established
under subsection (a) shall be adjusted as follows:
‘‘(i) For calendar year 1997, each such amount
shall be equal to the amount described in such sub-
section, increased (in a compounded manner) by the
percentage increase in the price index (as defined in
subsection (c)(2)) for each year after 1976 and before
1998.
‘‘(ii) For calendar year 1999 and each second
subsequent year, each such amount shall be equal to
the amount for the second previous year (as adjusted
under 
this 
subparagraph), 
increased 
(in 
a
compounded manner) by the percentage increase in
the price index for the previous year and the second
previous year.
‘‘(B) In the case of any amount adjusted under this
subparagraph which is not a multiple of $500, the amount
shall be rounded to the nearest lowest multiple of $500.’’.
(b) APPLICATION OF INDEXING TO SUPPORT OF CAN-
DIDATE’S COMMITTEES.—Section 302(e)(3)(B) of such Act
(2 U.S.C. 432(e)(3)(B)) is amended by adding at the end
the following new sentence: ‘‘The amount described in the
previous sentence shall be adjusted (for years beginning
with 1997) in the same manner as the amounts of limita-
tions on contributions under section 315(a) are adjusted
under section 315(c)(3).’’.
(c) APPLICATION OF INDEXING TO PROVISIONS RELAT-
ING TO PERSONAL FUNDS.—
(1) IN GENERAL.—Section 315(j) of such Act (2
U.S.C. 441a(j)), as added by section 103(a), is
amended—
(A) by redesignating paragraph (3) as
paragraph (4); and
(B) by inserting after paragraph (2) the fol-
lowing new paragraph:
‘‘(3) Each of the amounts provided under paragraph
(1) or (2) shall be adjusted for each biennial period begin-
ning after the 1998 general election in the same manner
as the amounts of limitations on contributions established
under subsection (a) are adjusted under subsection (c)(3).’’.
(2) 
CONFORMING
AMENDMENT.—Section
304(a)(6)(B)(i) 
of 
such 
Act 
(2 
U.S.C.
434(a)(6)(B)(i)), as added by section 103(b), is
amended by striking ‘‘section 315(j)(3)’’ and inserting
‘‘section 315(j)(4)’’.
SEC. 105. PROHIBITION OF LEADERSHIP COMMITTEES.
(a) LEADERSHIP COMMITTEE PROHIBITION.—Section
302 of the Federal Election Campaign Act of 1971 (2 U.S.C.
432) is amended by adding at the end the following new
subsection:
‘‘(j) A candidate for Federal office or an individual
holding Federal office may not establish, maintain, finance,
or control a political committee, other than a principal
campaign committee of the candidate or the individual.’’.
(b) CONFORMING AMENDMENT RELATING TO JOINT
FUNDRAISING.—Section 302(e)(3)(A) of such Act (2 U.S.C.
432(e)(3)) is amended by striking ‘‘except that—’’ and all
that follows and inserting the following: ‘‘except that the
candidate for the office of President nominated by a politi-
cal party may designate the national committee of such po-
litical party as a principal campaign committee, but only
if that national committee maintains separate books of ac-
count with respect to its function as a principal campaign
committee.’’.
(c) EFFECTIVE DATE; TRANSITION RULE.—
(1) IN
GENERAL.—The amendments made by
this section shall apply with respect to elections oc-
curring in years beginning with 1997.
(2) TRANSITION RULE.—
(A) IN GENERAL.—Notwithstanding section
302(j) of the Federal Election Campaign Act of
1971 (as added by subsection (a)), if a political
committee established, maintained, financed, or
controlled by a candidate for Federal office or an
individual holding Federal office (other than a
principal campaign committee of the candidate
or individual) with respect to an election occur-
ring during 1996 has funds remaining unex-
pended after the 1996 general election, the com-
mittee may make contributions or expenditures
of such funds with respect to elections occurring
during 1997 or 1998.
(B) DISBANDING COMMITTEES; TREATMENT
OF REMAINING FUNDS.—Any political committee
described in subparagraph (A) shall be dis-
banded after filing any post-election reports re-
quired under section 304 of the Federal Election