I
104TH CONGRESS
2D SESSION
H. R. 3543
To provide for congressional election campaign accountability, and for other
purposes.
IN THE HOUSE OF REPRESENTATIVES
MAY 29, 1996
Ms. DUNN of Washington (for herself, Mr. ISTOOK, Mr. JACOBS, and Mr.
ENGLISH of Pennsylvania) introduced the following bill; which was re-
ferred to the Committee on House Oversight, and in addition to the Com-
mittees on Government Reform and Oversight, and Ways and Means, for
a period to be subsequently determined by the Speaker, in each case for
consideration of such provisions as fall within the jurisdiction of the com-
mittee concerned
A BILL
To provide for congressional election campaign
accountability, 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.
This Act may be cited as the ‘‘Fairness, Accountabil-
ity, Integrity, and Reform (FAIR) Elections Act of 1996’’.
TITLE I—PROMOTING FAIR COM-
PETITION BETWEEN INCUM-
BENTS AND CHALLENGERS
SEC. 101. LIMITATION ON FRANKED MASS MAILING PRIOR
TO GENERAL ELECTION.
Section 3210(a)(6)(A) of title 39, United States
Code, is amended—
(1) by redesignating clause (ii) as clause (iii);
(2) by amending clause (i) to read as follows:
‘‘(i) if the mass mailing is postmarked fewer
than 60 days immediately before the date of any pri-
mary election (whether regular, special, or runoff) in
which the Member is a candidate for reelection;’’;
and
(3) by inserting after clause (i) the following:
‘‘(ii) if the mass mailing is postmarked fewer
than 180 days immediately before the date of any
general election (whether regular, special, or runoff)
in which the Member is a candidate for reelection;
or’’.
SEC. 102. HOUSE OF REPRESENTATIVES ELECTION LIMITA-
TIONS ON CONTRIBUTIONS FROM PERSONS
OTHER THAN STATE AND LOCAL RESIDENTS.
Section 315 of the Federal Election Campaign Act
of 1971 (2 U.S.C. 441a) is amended by adding 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, with respect to a reporting period for an election,
accept—
‘‘(A) contributions from persons other than
local residents totaling in excess of three times the
total of contributions accepted from local residents;
or
‘‘(B) contributions from persons other than
State residents totaling in excess of one half of the
total of contributions accepted from State residents.
‘‘(2) For purposes of this subsection—
‘‘(A) the term ‘local resident’ means a person
who resides or has its principal place of business in
the congressional district from which the candidate
involved seeks election;
‘‘(B) an individual may not be considered a
resident of more than one congressional district; and
‘‘(C) the term ‘State resident’ means a person
who resides or has its principal place of business in
the State in which the congressional district involved
is located.
‘‘(3)(A) Any candidate who accepts contributions that
exceed a limitation under this subsection by 5 percent or
less shall refund the excess contributions to the persons
who made the contributions.
‘‘(B) Any candidate who accepts contributions that
exceed a limitation under this subsection by more than 5
percent and less than 10 percent shall pay to the Commis-
sion, for deposit in the Treasury, an amount equal to three
times the amount of the excess contributions.
‘‘(C) Any candidate who accepts contributions that
exceed a limitation under this subsection by 10 percent
or more shall pay to the Commission, for deposit in the
Treasury, an amount equal to three times the amount of
the excess contributions plus a civil penalty in an amount
determined by the Commission.’’.
TITLE II—REDUCING THE INFLU-
ENCE OF MULTICANDIDATE
POLITICAL 
COMMITTEES,
LOBBYISTS, 
AND 
FOREIGN
AGENTS
SEC. 201. RESTRICTIONS ON BUNDLING.
Section 315(a) of the Federal Election Campaign Act
of 1971 (2 U.S.C. 441a(a)) is amended by adding at the
end the following new paragraph:
‘‘(9)(A) No person described in subparagraph (B), ei-
ther directly or indirectly, may act as a conduit or
intermediary for any contribution to a candidate.
‘‘(B) A person referred to in subparagraph (A) is—
‘‘(i) a multicandidate political committee (as de-
fined in subsection (a)(4)); or
‘‘(ii) a person who is required to register or to
report its lobbying activities, or a lobbyist whose ac-
tivities are required to be reported, under section
308 of the Federal Regulation of Lobbying Act (2
U.S.C. 267), the Foreign Agents Registration Act of
1938 (22 U.S.C. 611 et seq.), or any successor Fed-
eral law requiring a person who is a lobbyist or for-
eign agent to register or a person to report its lobby-
ing activities.
‘‘(C) For purposes of this paragraph:
‘‘(i) The term ‘conduit or intermediary’ means
a person who transmits a contribution to a can-
didate or candidate’s committee or representative
from another person, except that—
‘‘(I) a candidate or representative of a can-
didate is not a conduit or intermediary for the
purpose of transmitting contributions to the
candidate’s principal campaign committee or
authorized committee; and
‘‘(II) an individual is not a conduit or
intermediary for the purpose of transmitting a
contribution from the individual’s spouse.
‘‘(ii) The term ‘representative’ means an indi-
vidual who is expressly authorized by the candidate
to engage in fundraising, and who occupies a signifi-
cant position within the candidate’s campaign orga-
nization, provided that the individual is not acting as
an officer, employee or agent of any other person.
‘‘(D)(i) Nothing in this paragraph shall prohibit—
‘‘(I) joint fundraising conducted in accordance
with rules prescribed by the Commission by 2 or
more candidates; or
‘‘(II) fundraising for the benefit of a candidate
that is conducted by another candidate.
‘‘(ii) No person prohibited from acting as a conduit
or intermediary under subparagraph (A) may conduct or
otherwise participate in joint fundraising activities with or
on behalf of any candidate.’’.
SEC. 202. REDUCTION IN LIMITATION AMOUNT FOR CON-
TRIBUTIONS TO CANDIDATES FOR FEDERAL
OFFICE 
BY 
MULTICANDIDATE 
POLITICAL
COMMITTEES TO THE SAME AMOUNT APPLI-
CABLE TO CONTRIBUTIONS BY OTHER PER-
SONS.
(a) IN GENERAL.—Section 315(a)(2)(A) of the Fed-
eral Election Campaign Act of 1971 (2 U.S.C.
441a(a)(2)(A)) is amended by striking out ‘‘$5,000;’’ and
inserting ‘‘the amount applicable to contributions by other
persons under paragraph (1)(A);’’.
(b) INDEXING.—Section 315(a) of the Federal Elec-
tion Campaign Act of 1971 (2 U.S.C. 441a(a)), as amend-
ed by section 201, is further amended by adding at the
end the following new paragraph:
‘‘(10) The amounts under paragraphs (1)(A) and
(2)(A) shall each be adjusted as of the beginning of each
calendar year based on the certification of the price index
difference under subsection (c), except that the base pe-
riod shall be calendar year 1996.’’.
(c) AUTOMATIC CHANGE IN CERTAIN AMOUNTS.—
Section 315(a) of the Federal Election Campaign Act of
1971 (2 U.S.C. 441a(a)), as amended by section 201 and
subsection (b), is further amended by adding at the end
the following new paragraph:
‘‘(11) If any change is made in the amount under
paragraph (1)(A) or the amount under paragraph (2)(A),
whether by law or by operation of paragraph (10), the
same change shall take effect with respect to the amount
in the other such paragraph.’’.
SEC. 203. LIMITATION ON FUNDRAISING BY MEMBERS OF
THE HOUSE OF REPRESENTATIVES IN THE
DISTRICT OF COLUMBIA.
Title III of the Federal Election Campaign Act of
1971 (2 U.S.C. 431 et seq.) is amended by adding at the
end the following new section:
‘‘LIMITATION
ON
FUNDRAISING
BY
MEMBERS
OF
THE
HOUSE OF REPRESENTATIVES IN THE DISTRICT OF
COLUMBIA
‘‘SEC. 323. A Representative in, or a Delegate or
Resident Commissioner to, the Congress may not solicit
or accept any contribution in the District of Columbia at
any time when the House of Representatives is conducting
legislative business.’’.
TITLE III—DISCOURAGING CAN-
DIDATE 
EXPENDITURE 
OF
PERSONAL WEALTH
SEC. 301. PAYMENT OF CAMPAIGN DEBT BY HOUSE OF REP-
RESENTATIVES CANDIDATES.
Section 315 of the Federal Election Campaign Act
of 1971 (2 U.S.C. 441a), as amended by section 102, is
amended by adding at the end the following new sub-
section:
‘‘(j) Not later than the 90th day after a general, spe-
cial, or runoff election for the office of Representative in,
or Delegate or Resident Commissioner to, the Congress,
any outstanding debt of, or loan or extension of credit to,
a candidate for such office or an authorized committee of
the candidate with respect to such election shall be paid
or repaid in full. Any such debt, loan, or extension of cred-
it that is not paid or repaid by such date shall be assumed
as a personal obligation by the candidate. No contribution
made to the candidate or an authorized committee of the
candidate may be used after such date to pay or repay
such debt, loan, or extension of credit.’’.
SEC. 302. CANDIDATE EXPENDITURES FROM PERSONAL
FUNDS.
Section 315 of the Federal Election Campaign Act
of 1971 (2 U.S.C. 441a), as amended by sections 102 and
301, is further amended by adding at the end the following
new subsection:
‘‘(k)(1) A candidate for the office of Representative
in, or Delegate or Resident Commissioner to, the Con-
gress, who makes an expenditure from the personal funds
of the candidate or the personal funds of a member of
the immediate family of the candidate or incurs a personal
loan in connection with the campaign for such office may
repay such expenditure or loan from contributions made
to the candidate or any authorized committee of the can-
didate with respect to the election only to the extent of
the actual amount of the loan or $25,000, whichever is
the lesser amount. Repayment of any such loan shall not
include any interest on the principal amount of such loan.
‘‘(2) For purposes of this subsection, the term ‘imme-
diate family’ means a candidate’s spouse, and any child,
stepchild, parent, grandparent, brother, half-brother, sis-
ter or half-sister of the candidate, and the spouse of any
such person and any child, stepchild, parent, grandparent,
brother, half-brother, sister or half-sister of the can-
didate’s spouse, and any spouse of any such person.
‘‘(3) The amount under the first sentence of para-
graph (1) shall be adjusted as of the beginning of each
calendar year based on the certification of the price index
difference under section 315(c), except that the base pe-
riod shall be calendar year 1996.’’.
TITLE IV—ENCOURAGING PAR-
TICIPATION 
IN 
POLITICAL
CAMPAIGNS AND STRENGTH-
ENING POLITICAL PARTIES
SEC. 401. DEDUCTION FOR CONTRIBUTIONS TO CAN-
DIDATES FOR PUBLIC OFFICE.
(a) IN GENERAL.—Part VII of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to
additional itemized deductions for individuals) is amended
by inserting after section 217 the following new section:
‘‘SEC. 218. CONTRIBUTIONS TO CANDIDATES FOR PUBLIC
OFFICE.
‘‘(a) ALLOWANCE OF DEDUCTION.—In the case of an
individual, there shall be allowed as a deduction any politi-
cal contribution payment of which is made by the individ-
ual within the taxable year.
‘‘(b) LIMITATIONS.—
‘‘(1) AMOUNT.—The deduction under sub-
section (a) shall not exceed $100 ($200 in the case
of a joint return).
‘‘(2) VERIFICATION.—The deduction under sub-
section (a) shall be allowed, with respect to any po-
litical contribution, only if the contribution is veri-
fied in the manner prescribed by the Secretary in
regulations.
‘‘(3) INDEXING.—The amounts under para-
graph (1) shall each be adjusted as of the beginning
of each calendar year based on the certification of
the price index difference under section 315(c) of
the Federal Election Campaign Act of 1971 (2
U.S.C. 441a(c)), except that the base period shall be
calendar year 1996.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) POLITICAL
CONTRIBUTION.—The term
‘political contribution’ means a contribution or gift
of money to—
‘‘(A) an individual who is a candidate for
nomination or election to any Federal, State, or
local elective public office in any primary, gen-
eral, or special election, for use by the individ-
ual to further the candidacy of the individual
for nomination or election to the office,
‘‘(B) any committee, association, or organi-
zation (whether or not incorporated) organized
and operated exclusively for the purpose of in-
fluencing, or attempting to influence, the nomi-
nation or election of 1 or more individuals who
are candidates for nomination or election to any
Federal, State, or local elective public office, for
use by the committee, association, or organiza-
tion to further the candidacy of the individual
or individuals for nomination or election to the
office,
‘‘(C) the national committee of a national
political party,
‘‘(D) the State committee of a national po-
litical party as designated by the national com-
mittee of the party, or
‘‘(E) a local committee of a national politi-
cal party as designated by the State committee
of the party designated under subparagraph
(D).
‘‘(2) 
CANDIDATE.—The 
term 
‘candidate’
means, with respect to any Federal, State, or local
elective public office, an individual who—
‘‘(A) publicly announces before the close of
the calendar year following the calendar year in
which the contribution or gift is made that the
individual is a candidate for nomination or elec-
tion to the office, and
‘‘(B) meets the qualifications prescribed by
law to hold such office.
‘‘(3) NATIONAL POLITICAL PARTY.—The term
‘national political party’ means—
‘‘(A) in the case of contributions made
during a taxable year of the taxpayer in which
the electors of President and Vice President are
chosen, a political party presenting candidates
or electors for such offices on the official elec-
tion ballot of 10 or more States, or
‘‘(B) in the case of contributions made
during any other taxable year of the taxpayer,
a political party which met the qualifications
described in subparagraph (A) in the last pre-
ceding election of a President and Vice Presi-
dent.
‘‘(4) STATE
AND
LOCAL.—The term ‘State’
means the various States and the District of Colum-
bia. The term ‘local’ means a political subdivision or
part thereof, or 2 or more political subdivisions or
parts thereof, of a State.
‘‘(d) CROSS REFERENCES.—
‘‘(1) For disallowance of deduction to estates and
trusts, see section 642(j).
‘‘(2) For treatment of Indian tribal governments as
States (and the subdivisions of Indian tribal govern-
ments as political subdivisions of States), see sec-
tion 7871.’’
(b) CONFORMING AMENDMENTS.—
(1) Section 642 of such Code (relating to spe-
cial rules for credits and deductions) is amended by
adding at the end the following new subsection:
‘‘(j) POLITICAL CONTRIBUTIONS.—An estate or trust
shall not be allowed any deduction under section 218 (re-
lating to contributions to candidates for public office).’’
(2) Paragraph (6) of section 7871(a) of such
Code (relating to Indian tribal governments treated
as States for certain purposes) is amended by redes-
ignating subparagraphs (B) and (C) as subpara-
graphs (C) and (D), respectively, and by inserting
after subparagraph (A) the following new subpara-
graph:
‘‘(B) section 218(c)(4) (relating to con-
tributions to candidates for public office),’’.
(3) The table of sections for part VII of sub-
chapter B of chapter 1 of such Code is amended by
inserting after the item relating to section 217 the
following new item:
‘‘Sec. 218. Contributions to candidates for public office.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to amounts paid after the date of
the enactment of this Act.
SEC. 402. POLITICAL PARTY CONTRIBUTIONS.
Section 315(d) of the Federal Election Campaign Act
of 1971 (2 U.S.C. 441a(d)) is amended—
(1) in paragraph (1), by striking ‘‘and (3)’’ and
inserting ‘‘, (3), and (4)’’;
(2) in paragraph (3), by striking ‘‘The’’ and in-
serting ‘‘Except as provided in paragraph (4), the’’;
and
(3) by adding at the end the following:
‘‘(4) The national, State, and local committees of a
political party each may contribute $5,000 to a candidate
for office of Representative in, or Delegate or Resident
Commissioner to, the Congress or to the authorized politi-
cal committee of the candidate. The amount under the
preceding sentence shall be adjusted as of the beginning
of each calendar year based on the certification of the
price index difference under subsection (c), except that the
base period shall be calendar year 1996.’’.
TITLE V—IMPROVING THE OPER-
ATION 
OF 
THE 
FEDERAL
ELECTION COMMISSION
SEC. 501. CHANGE IN CERTAIN REPORTING FROM A CAL-
ENDAR YEAR BASIS TO AN ELECTION CYCLE
BASIS.
Paragraphs (2) through (7) of section 304(b) of the
Federal Election Campaign Act of 1971 (2 U.S.C. 434(b)
(2)–(7)) are amended by inserting after ‘‘calendar year’’
each place it appears the following: ‘‘(election cycle, in the
case of an authorized committee of a candidate for Federal
office)’’.
SEC. 502. RANDOM AUDITS.
Section 311(b) of the Federal Election Campaign Act
of 1971 (2 U.S.C. 438(b)) is amended—
(1) by inserting ‘‘(1)’’ before ‘‘The Commis-
sion’’; and
(2) by adding at the end the following:
‘‘(2)(A) Notwithstanding paragraph (1), the Commis-
sion may from time to time conduct random audits and
investigations to ensure voluntary compliance with this
Act. The subjects of such audits and investigations shall
be selected on the basis of criteria established by vote of
at least 4 members of the Commission to ensure impartial-
ity in the selection process.’’.
SEC. 503. PRELIMINARY REPORT ON INVESTIGATION OF
ALLEGED VIOLATION.
Section 309(a)(2) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 437g(a)(2)) is amended by adding
at the end the following: ‘‘If the Commission is unable to
complete the investigation before the expiration of the 90-
day period beginning on the date that the vote is taken
under this paragraph, the Commission shall prepare a pre-
liminary report on such investigation and submit it to the
respondent not later than the date of the expiration of
such period. In the preliminary report, the Commission
shall specify a date certain for completion of the investiga-
tion. If, on that date, the investigation has not been com-
pleted, the investigation shall be terminated and the com-
plaint, if any, shall be dismissed, unless, by vote of at least
4 members, the Commission determines that the investiga-
tion should continue.’’.
TITLE VI—ACTIVITIES OF LABOR
ORGANIZATIONS, 
CORPORA-
TIONS, AND OTHER ENTITIES
SEC. 601. LIMITATION ON CONTRIBUTIONS AND EXPENDI-
TURES BY LABOR ORGANIZATIONS.
(a) CONTRIBUTIONS
TO ALL POLITICAL COMMIT-
TEES INCLUDED.—Paragraph (2) of section 316(b) of the
Federal Election Campaign Act of 1971 (2 U.S.C.
441b(b)(2)) is amended by inserting ‘‘political commit-
tee,’’ after ‘‘campaign committee,’’.
(b) APPLICABILITY OF REQUIREMENTS TO LABOR
ORGANIZATIONS.—Section 316(b) of such Act (2 U.S.C.
441b(b)) is amended by adding at the end the following
new paragraph:
‘‘(8)(A) Subparagraphs (A), (B), and (C) of para-
graph (2) shall not apply to a labor organization unless
the organization meets the requirements of subparagraphs
(B), (C), and (D).
‘‘(B) The requirements of this subparagraph are met
only if the labor organization provides, at least once annu-
ally, to all employees within the labor organization’s bar-
gaining unit or units (and to new employees within 30
days after commencement of their employment) written
notification presented in a manner to inform any such em-
ployee—
‘‘(i) that an employee cannot be obligated to
pay, through union dues or any other mandatory
payment to a labor organization, for the political ac-
tivities of the labor organization, including, but not
limited to, the maintenance and operation of, or so-
licitation of contributions to, a political committee,
political communications to members, and voter reg-
istration and get-out-the-vote campaigns;
‘‘(ii) that no employee may be required actually
to join any labor organization, but if a collective bar-
gaining agreement covering an employee purports to
require membership or payment of dues or other
fees to a labor organization as a condition of em-
ployment, the employee may elect instead to pay an
agency fee to the labor organization;
‘‘(iii) that the amount of the agency fee shall be
limited to the employee’s pro rata share of the cost
of the labor organization’s exclusive representation
services to the employee’s collective bargaining unit,
including collective bargaining, contract administra-
tion, and grievance adjustment;
‘‘(iv) that an employee who elects to be a full
member of the labor organization and pay member-
ship dues is entitled to a reduction of those dues by
the employee’s pro rata share of the total spending
by the labor organization for political activities;
‘‘(v) that the cost of the labor organization’s ex-
clusive representation services, and the amount of
spending by such organization for political activities,
shall be computed on the basis of such cost and
spending for the immediately preceding fiscal year of
such organization; and
‘‘(vi) of the amount of the labor organization’s
full membership dues, initiation fees, and assess-
ments for the current year; the amount of the re-
duced membership dues, subtracting the employee’s
pro rata share of the organization’s spending for po-
litical activities, for the current year; and the
amount of the agency fee for the current year.
‘‘(C) The requirements of this subparagraph are met
only if the labor organization provides all represented em-
ployees an annual examination by an independent certified
public accountant of financial statements supplied by such
organization which attests that the expenditures which the
union claimed it made for certain expenses were actually
made for those expenses. Such examination shall be con-
ducted in accordance with generally accepted auditing
standards.
‘‘(D) The requirements of this subparagraph are met
only if the labor organization—
‘‘(i) maintains procedures to promptly deter-
mine the costs that may properly be charged to
agency fee payors as costs of exclusive representa-
tion, and explains such procedures in the written no-
tification required under subparagraph (B); and
‘‘(ii) if any person challenges the costs which
may be properly charged as costs of exclusive rep-
resentation—
‘‘(I) provides a mutually selected impartial
decisionmaker to hear and decide such chal-
lenge pursuant to rules of discovery and evi-
dence and subject to de novo review by the Na-
tional Labor Relations Board or an applicable
court; and
‘‘(II) places in escrow amounts reasonably
in dispute pending the outcome of the chal-
lenge.