To amend the Federal Election Campaign Act of 1971 to repeal the limit on the aggregate amount of campaign contributions that may be made by individuals during an election cycle, to repeal the limit on the amount of expenditures political parties may make on behalf of their candidates in general elections for Federal office, to allow State and local parties to make certain expenditures using nonfederal funds, to restore certain rights to exempt organizations under the Internal Revenue Code of 1986, and for other purposes.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``527 Fairness Act of 2005''.

SEC. 2. REPEAL OF AGGREGATE LIMIT ON CONTRIBUTIONS BY INDIVIDUALS.

    (a) Repeal of Limit.--Section 315(a) of the Federal Election 
Campaign Act of 1971 (2 U.S.C. 441a(a)) is amended by striking 
paragraph (3).
    (b) Conforming Amendments.--
            (1) Indexing.--Section 315(c) of such Act (2 U.S.C. 
        441a(c)) is amended by striking ``(a)(3),'' each place it 
        appears in paragraphs (1)(B)(i), (1)(C), and (2)(B)(ii).
            (2) Increase in limits for senate candidates facing wealthy 
        opponents.--Section 315(i)(1)(C) of such Act (2 U.S.C. 
        441a(i)(1)(C)) is amended--
                    (A) by amending clause (i) to read as follows:
                            ``(i) 2 times the threshold amount, but not 
                        over 4 times that amount, the increased limit 
                        shall be 3 times the applicable limit;'';
                    (B) by amending clause (ii) to read as follows:
                            ``(ii) 4 times the threshold amount, but 
                        not over 10 times that amount, the increased 
                        limit shall be 6 times the applicable limit; 
                        and''; and
                    (C) in clause (iii)--
                            (i) by adding ``and'' at the end of 
                        subclause (I),
                            (ii) by striking subclause (II), and
                            (iii) by redesignating subclause (III) as 
                        subclause (II).
            (3) Increase in limits for house candidates facing wealthy 
        opponents.--Section 315A(a)(1) of such Act (2 U.S.C. 441a-
        1(a)(1)) is amended--
                    (A) by adding ``and'' at the end of subparagraph 
                (A);
                    (B) by striking subparagraph (B); and
                    (C) by redesignating subparagraph (C) as 
                subparagraph (B).

SEC. 3. REPEAL OF LIMIT ON AMOUNT OF PARTY EXPENDITURES ON BEHALF OF 
              CANDIDATES IN GENERAL ELECTIONS.

    (a) Repeal of Limit.--Section 315(d) of the Federal Election 
Campaign Act of 1971 (2 U.S.C. 441a(d)) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``(1) Notwithstanding'' and 
                inserting ``Notwithstanding'',
                    (B) by striking ``expenditures or limitations on'' 
                and inserting ``amounts of expenditures or'', and
                    (C) by striking ``Federal office, subject to the 
                limitations contained in paragraphs (2), (3), and (4) 
                of this subsection'' and inserting ``Federal office in 
                any amount''; and
            (2) by striking paragraphs (2), (3), and (4).
    (b) Conforming Amendments.--
            (1) Indexing.--Section 315(c) of such Act (2 U.S.C. 
        441a(c)) is amended--
                    (A) in paragraph (1)(B)(i), by striking ``(d),''; 
                and
                    (B) in paragraph (2)(B)(i), by striking 
                ``subsections (b) and (d)'' and inserting ``subsection 
                (b)''.
            (2) Increase in limits for senate candidates facing wealthy 
        opponents.--Section 315(i) of such Act (2 U.S.C. 441a(i)(1)) is 
        amended--
                    (A) in paragraph (1)(C), as amended by section 
                2(b)(2)(C), by amending clause (iii) to read as 
                follows:
                            ``(iii) 10 times the threshold amount, the 
                        increased limit shall be 6 times the applicable 
                        limit.'';
                    (B) in paragraph (2)(A) in the matter preceding 
                clause (i), by striking ``, and a party committee shall 
                not make any expenditure,'';
                    (C) in paragraph (2)(A)(ii), by striking ``and 
                party expenditures previously made''; and
                    (D) in paragraph (2)(B), by striking ``and a party 
                shall not make any expenditure''.
            (3) Increase in limits for house candidates facing wealthy 
        opponents.--Section 315A(a) of such Act (2 U.S.C. 441a--1(a)) 
        is amended--
                    (A) in paragraph (1), as amended by section 
                2(b)(3), by striking ``exceeds $350,000--'' and all 
                that follows and inserting the following: ``exceeds 
                $350,000, the limit under subsection (a)(1)(A) with 
                respect to the candidate shall be tripled.'';
                    (B) in paragraph (3)(A) in the matter preceding 
                clause (i), by striking ``, and a party committee shall 
                not make any expenditure,'';
                    (C) in paragraph (3)(A)(ii), by striking ``and 
                party expenditures previously made''; and
                    (D) in paragraph (3)(B), by striking ``and a party 
                shall not make any expenditure''.

SEC. 4. INCREASE IN CONTRIBUTION LIMITS FOR POLITICAL COMMITTEES.

    (a) Contributions to Political Committees.--Section 315(a)(1)(C) of 
the Federal Election Campaign Act of 1971 (2 U.S.C. 441a(a)(1)(C)) is 
amended by striking ``$5,000'' and inserting ``$7,500''.
    (b) Contributions Made by Multicandidate Committees.--Section 
315(a)(2) of such Act (2 U.S.C. 441a(a)(2)) is amended--
            (1) in subparagraph (A), by striking ``$5,000'' and 
        inserting ``$7,500'';
            (2) in subparagraph (B), by striking ``$15,000'' and 
        inserting ``$25,000''; and
            (3) in subparagraph (C), by striking ``$5,000'' and 
        inserting ``$7,500''.

SEC. 5. INDEXING OF ALL CONTRIBUTION LIMITS.

    (a) In General.--Section 315(c)(1)(B) of the Federal Election 
Campaign Act of 1971 (2 U.S.C. 441a(c)(1)(B)) is amended to read as 
follows:
    ``(B) Except as provided in subparagraph (C)--
            ``(i) in any calendar year after 2002--
                    ``(I) a limitation established by subsection 
                (a)(1)(A), (a)(1)(B), (b), or (h) shall be increased by 
                the percent difference under subparagraph (A),
                    ``(II) each amount so increased shall remain in 
                effect for the calendar year, and
                    ``(III) if any amount after the adjustment made 
                under subclause (I) is not a multiple of $100, such 
                amount shall be rounded to the nearest multiple of 
                $100; and
            ``(ii) in any calendar year after 2006--
                    ``(I) a limitation established by subsection 
                (a)(1)(C), (a)(1)(D), or (a)(2) shall be increased by 
                the percent difference under subparagraph (A),
                    ``(II) each amount so increased shall remain in 
                effect for the calendar year, and
                    ``(III) if any amount after the adjustment made 
                under subclause (I) is not a multiple of $100, such 
                amount shall be rounded to the nearest multiple of 
                $100.''.
    (b) Period of Increase.--Section 315(c)(1)(C) of such Act (2 U.S.C. 
441a(c)(1)(C)), as amended by section 2(b)(1), is amended by striking 
``subsections (a)(1)(A), (a)(1)(B), and (h)'' and inserting 
``subsections (a) and (h)''.
    (c) Determination of Base Year.--Section 315(c)(2)(B) of such Act 
(2 U.S.C. 441a(c)(2)(B)) is amended--
            (1) by striking ``and'' at the end of clause (i);
            (2) by striking the period at the end of clause (ii) and 
        inserting ``; and''; and
            (3) by adding at the end the following new clause:
                    ``(iii) for purposes of subsections (a)(1)(C), 
                (a)(1)(D), and (a)(2), calendar year 2005.''.

SEC. 6. PERMITTING TRANSFERS BETWEEN LEADERSHIP COMMITTEES AND NATIONAL 
              PARTY COMMITTEES.

    Section 315(a)(4) of the Federal Election Campaign Act of 1971 (2 
U.S.C. 441a(a)(4)) is amended--
            (1) by striking ``(4)'' and inserting ``(4)(A)''; and
            (2) by adding at the end the following new subparagraph:
    ``(B) The limitations on contributions contained in paragraphs (1) 
and (2) do not apply to transfers between a leadership committee of an 
individual holding Federal office and political committees established 
and maintained by a national political party. For purposes of the 
previous sentence, the term `leadership committee' means, with respect 
to an individual holding Federal office, an unauthorized political 
committee which is associated with such individual but which is not 
affiliated with any authorized committee of such individual.''.

SEC. 7. INCREASE IN THRESHOLD OF CONTRIBUTIONS AND EXPENDITURES 
              REQUIRED FOR DETERMINING TREATMENT AS POLITICAL 
              COMMITTEE.

    (a) In General.--Section 301(4)(A) of the Federal Election Campaign 
Act of 1971 (2 U.S.C. 431(4)(A)) is amended by striking ``$1,000'' each 
place it appears and inserting ``$10,000''.
    (b) Local Political Party Committees.--
            (1) Contributions received.--Section 301(4)(C) of such Act 
        (2 U.S.C. 431(4)(C)) is amended by striking ``$5,000'' each 
        place it appears and inserting ``$10,000''.
            (2) Contributions or expenditures made.--Section 301(4)(C) 
        of such Act (2 U.S.C. 431(4)(C)) is amended by striking 
        ``$1,000'' each place it appears and inserting ``$10,000''.

SEC. 8. PROHIBITING CONTRIBUTIONS AND DONATIONS TO SECTION 527 
              ORGANIZATIONS BY FOREIGN NATIONALS.

    (a) In General.--Section 319(a)(1) of the Federal Election Campaign 
Act of 1971 (2 U.S.C. 441e(a)(1)) is amended--
            (1) by striking ``or'' at the end of subparagraph (B);
            (2) by redesignating subparagraph (C) as subparagraph (D); 
        and
            (3) by inserting after subparagraph (B) the following new 
        subparagraph:
                    ``(C) a contribution or donation to an organization 
                described in section 527 of the Internal Revenue Code 
                of 1986; or''.
    (b) Conforming Amendment Regarding Solicitation of Funds.--Section 
319(a)(2) of such Act (2 U.S.C. 441e(a)(2)) is amended by striking 
``(A) or (B)'' and inserting ``(A), (B), or (C)''.

SEC. 9. REQUIRING SECTION 527 ORGANIZATIONS TO SUBMIT REPORTS UNDER 
              FEDERAL ELECTION CAMPAIGN ACT OF 1971.

    Section 304(a) of the Federal Election Campaign Act of 1971 (2 
U.S.C. 434(a)) is amended by adding at the end the following new 
paragraph:
    ``(13)(A) Except as provided in subparagraph (B), each organization 
described in section 527 of the Internal Revenue Code of 1986 shall 
submit a report under this section in the same manner, under the same 
terms and conditions, and at the same times applicable to a political 
committee which is not an authorized committee of a candidate or a 
national committee of a political party.
    ``(B) Subparagraph (A) does not apply to an organization described 
in section 527(j)(5)(B) of the Internal Revenue Code of 1986 (relating 
to a State or local committee of a political party or political 
committee of a State or local candidate).''.

SEC. 10. PERMITTING EXPENDITURES FOR ELECTIONEERING COMMUNICATIONS BY 
              CERTAIN ORGANIZATIONS.

    (a) Permitting Organizations to Make Expenditures for Certain 
Targeted Electioneering Communications.--Section 316(c) of the Federal 
Election Campaign Act of 1971 (2 U.S.C. 441b(c)) is amended by striking 
paragraph (6).
    (b) Expanding Types of Organizations Eligible to Make 
Expenditures.--
            (1) In general.--Section 316(c) of such Act (2 U.S.C. 
        441b(c)) is amended by striking ``section 501(c)(4) 
        organization'' each place it appears in paragraphs (2), (3)(B), 
        and (4)(A) (in the matter preceding clause (i)) and inserting 
        ``section 501(c)(4), (5), or (6) organization''.
            (2) Definition.--Section 316(c)(4)(A)(i) of such Act (2 
        U.S.C. 441b(c)(4)(A)(i)) is amended by striking ``section 
        501(c)(4) of the Internal Revenue Code of 1986'' and inserting 
        ``paragraph (4), (5), or (6) of section 501(c) of the Internal 
        Revenue Code of 1986''.
    (c) Clarification of Effect on Tax Treatment of Expenditures.--
Section 316(c)(5) of such Act (2 U.S.C. 441b(c)(5)) is amended by 
striking the period at the end and inserting the following: ``, or to 
affect the treatment under such Code of any expenditures described in 
section 527(e) of such Code which are made by a section 501(c)(4), (5), 
or (6) organization.''.

SEC. 11. EXPANDING ABILITY OF CORPORATIONS AND LABOR ORGANIZATIONS TO 
              COMMUNICATE WITH MEMBERS.

    (a) Types of Communications Permitted.--Section 316(b)(4)(B) of the 
Federal Election Campaign Act of 1971 (2 U.S.C. 441b(b)(4)(B)) is 
amended by striking ``only by mail addressed'' and inserting ``only by 
communications addressed or otherwise delivered''.
    (b) Solicitations by Trade Associations.--Section 316(b)(4)(D) of 
such Act (2 U.S.C. 441b(b)(4)(D)) is amended by striking ``to the 
extent that'' and all that follows and inserting a period.

SEC. 12. PERMITTING STATE AND LOCAL POLITICAL PARTIES TO USE NONFEDERAL 
              FUNDS FOR VOTER REGISTRATION AND SAMPLE BALLOTS.

    (a) In General.--Section 301(20) of the Federal Election Campaign 
Act of 1971 (2 U.S.C. 431(20)) is amended--
            (1) in subparagraph (A), by striking clause (i) and 
        redesignating clauses (ii) through (iv) as clauses (i) through 
        (iii); and
            (2) in subparagraph (B)--
                    (A) in clause (i), by striking ``subparagraph 
                (A)(i) or (ii)'' and inserting ``subparagraph (A)(i)'';
                    (B) by striking ``and'' at the end of clause (iii);
                    (C) by striking the period at the end of clause 
                (iv) and inserting a semicolon; and
                    (D) by adding at the end the following new clauses:
                            ``(v) voter registration activities; and
                            ``(vi) the costs incurred with the 
                        preparation of a sample ballot for an election 
                        in which a candidate for Federal office and a 
                        candidate for State or local office appears on 
                        the ballot.''.
    (b) Conforming Amendments.--(1) Section 304(f)(3)(B)(iv) of such 
Act (2 U.S.C. 434(f)(3)(B)(iv)) is amended by striking ``section 
301(20)(A)(iii)'' and inserting ``section 301(20)(A)(ii)''.
    (2) Section 323 of such Act (2 U.S.C. 441i) is amended--
            (A) in subsection (b)(2)(A), by striking ``clause (i) or 
        (ii)'' and inserting ``clause (i)'';
            (B) in subsection (e)(4), by striking ``clauses (i) and 
        (ii)'' each place it appears in subparagraphs (A) and (B) and 
        inserting ``clause (i)''; and
            (C) in subsection (f)(1), by striking ``section 
        301(20)(A)(iii)'' and inserting ``section 301(20)(A)(ii)''.

SEC. 13. CLARIFICATION OF AUTHORIZATION OF FEDERAL CANDIDATES AND 
              OFFICEHOLDERS TO ATTEND FUNDRAISING EVENTS FOR STATE OR 
              LOCAL POLITICAL PARTIES.

    Section 323(e)(3) of the Federal Election Campaign Act of 1971 (2 
U.S.C. 441i(e)(3)) is amended by striking ``speak,'' and inserting 
``speak without restriction or regulation,''.

SEC. 14. MODIFICATION OF DEFINITION OF PUBLIC COMMUNICATION.

    (a) In General.--Section 301(22) of the Federal Election Campaign 
Act of 1971 (2 U.S.C. 431(22)) is amended by adding at the end the 
following new sentence: ``Such term shall not include communications 
over the Internet.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect on the date of the enactment of this Act.

SEC. 15. TREATMENT OF CANDIDATE COMMUNICATIONS CONTAINING ENDORSEMENT 
              BY FEDERAL CANDIDATE OR OFFICEHOLDER.

    (a) In General.--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) For purposes of paragraph (7)(C), a disbursement for an 
electioneering communication which refers to a candidate for Federal 
office shall not be treated as a disbursement which is coordinated with 
such candidate solely on the ground that the communication contains a 
State or local endorsement or (in the case of a communication 
containing a State or local endorsement) that the candidate reviewed, 
approved, or otherwise participated in the preparation and 
dissemination of the communication.
    ``(B) In subparagraph (A), the term `State or local endorsement' 
means, with respect to a candidate for Federal office--
            ``(i) an endorsement by such candidate of a candidate for 
        State or local office or of another candidate for Federal 
        office; or
            ``(ii) a statement of the position of such candidate on a 
        State or local ballot initiative or referendum.''.
    (b) Conforming Amendment.--Section 315(a)(7)(C)(ii) of such Act (2 
U.S.C. 441a(a)(7)(C)(ii)) is amended by striking ``such disbursement'' 
and inserting ``subject to paragraph (9), such disbursement''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to elections occurring on or after the date of the 
enactment of this Act.

SEC. 16. SEVERABILITY.

    If any provision of this Act or any amendment made by this Act, or 
the application of a provision or amendment to any person or 
circumstance, is held to be unconstitutional, the remainder of this Act 
and the amendments made by this Act, and the application of the 
provisions and amendments to any person or circumstance, shall not be 
affected by the holding.

SEC. 17. EFFECTIVE DATE.

    Except as otherwise provided, the amendments made by this Act shall 
take effect January 1, 2006.

Summary: 527 Fairness Act of 2005 - (Sec. 2) Amends the Federal Election Campaign Act of 1971 to repeal the aggregate limit on contributions by individuals.

Revises the rules for increased contributions limits regarding House and Senate candidates facing wealthy opponents, to apply to such contributions certain additional limits on the time period for accepting them, and their total amount, which are currently waived when such contributions are made under increased limits.

(Sec. 3) Repeals the limit on the amount of coordinated party expenditures on behalf of candidates in general elections.

(Sec. 4) Increases from $5,000 to $7,500 the limits on contributions to or by multicandiate political committees (PACs). Increases from $15,000 to $25,000 the limits on PAC contributions to national party committees.

(Sec. 5) Indexes for inflation all contribution limits for PACs and for state party committees.

(Sec. 6) Exempts from specified contribution limits (thus permitting) transfers to national party committees from leadership committees (leadership PACS, or political committees supporting but not authorized by an individual holding federal office).

(Sec. 7) Increases from $1,000 to $10,000 the threshold minimum per year of contributions and expenditures determining whether a political organization is required to register with and report to the Federal Election Commission (FEC) as a political committee.

(Sec. 8) Prohibits foreign nationals from making contributions and donations to "section 527 organizations." (A 527 organization, as defined by section 527 of the Internal Revenue Code, is an organization, not controlled by or involving a particular candidate for office, whose function is to influence or attempt to influence the selection, nomination, election, or appointment of any individual to any federal, state, or local public office or office in a political organization.)

(Sec. 9) Requires such organizations to submit reports to the FEC under such Act under the same terms and conditions, and at the same times, as federal political committees.

(Sec. 10) Repeals the prohibition (known as the Wellstone Amendment) against (thus permitting) expenditures for targeted electioneering communications by certain civic organizations, trade associations, and labor organizations.

 (Sec. 11) Allows corporate and labor union PACs to solicit political contributions from members by communications of any sort (including fax machines or email; currently, only by mail). Repeals the requirement of prior written approval for solicitations of a restricted class by trade association PACs, and repeals the limitation of such solicitations to one trade association only.

(Sec. 12) Allows State and local political parties to use nonfederal funds for voter registration and sample ballots.

(Sec. 13) Modifies the authorization of federal candidates and officeholders attending fundraising events for state or local political parties to speak at such events. Allows such candidates and officeholders to speak without restriction.

(Sec. 14) Modifies the definition of public communication to exclude communications over the Internet from regulation under federal campaign finance laws.

(Sec. 15) Provides that a disbursement for an electioneering communication which refers to a candidate for federal office shall not be treated as a disbursement coordinated with such candidate (thus requiring payment with federal "hard" dollars) soley on the grounds that it contains a state or local endorsement, including endorsement of a position on a ballot initiative or referendum, or (in the case of a communication containing such an endorsement) that the candidate reviewed, approved, or otherwise participated in the preparation and dissemination of the communication.