I 113th CONGRESS 2d Session H. R. 5011 IN THE HOUSE OF REPRESENTATIVES June 26, 2014 Ms. Speier introduced the following bill; which was referred to the Committee on House Administration , and in addition to the Committee on the Judiciary , 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 committee concerned A BILL To amend the Federal Election Campaign Act of 1971 to prohibit authorized committees of candidates for election for Federal office and leadership PACs from employing immediate family members of the candidates, to amend such Act to limit the rate of interest an authorized committee of a candidate may pay on loans made to the committee by the candidate, to amend such Act to apply the prohibition against the conversion of contributions to personal use to contributions to political committees, to amend the Lobbying Disclosure Act of 1995 to require registered lobbyists to identify relatives who are covered officials and disclose lobbying contacts with relatives, and for other purposes.

1. Short title This Act may be cited as the Making Every Representative’s Integrity Transparent Act of 2014 or the MERIT Act . 2. Prohibiting campaign committees from employing relatives of candidates (a) 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) Restrictions on Dealings With Relatives of Candidates (1) Prohibiting employment (A) Authorized committees An authorized committee of a candidate may not employ in a paid position any individual who is a relative of the candidate. (B) Leadership PACs A leadership PAC (as defined in section 304(i)(8)(B)) may not employ in a paid position any individual who is a relative of the candidate or individual holding Federal office who establishes, finances, maintains, or controls the leadership PAC. (2) Relative defined In this subsection, the term relative means, with respect to a candidate or individual holding Federal office, an aunt, brother, brother-in-law, daughter, daughter-in-law, father, father-in-law, first cousin, grandson, granddaughter, half-brother, half-sister, husband, mother, mother-in-law, nephew, niece, sister, sister-in-law, son, son-in-law, stepbrother, stepdaughter, stepfather, stepmother, stepsister, stepson, uncle, or wife. . (b) Effective date The amendment made by subsection (a) shall take effect upon the expiration of the 90-day period which begins on the date of the enactment of this Act. 3. Limit on interest rate paid by campaign committees on loans made by candidates (a) Limit on Interest Rate Section 302 of the Federal Election Campaign Act of 1971 ( 2 U.S.C. 432 ), as amended by section 2, is further amended by adding at the end the following new subsection: (k) Limit on Interest Rate Paid on Loans Made by Candidates (1) Limit If an authorized committee of a candidate accepts a loan from the candidate, the committee may not pay interest on the loan at an annual rate higher than the prime rate as of the date the loan is agreed to plus 2 percentage points. (2) Prime rate defined In this subsection, the term prime rate means the bank prime loan rate published in the Federal Reserve Statistical Release on selected interest rates (daily or weekly), and commonly referred to as the H.15 release (or any successor publication). . (b) Effective Date The amendment made by subsection (a) shall apply with respect to loans made on or after the date of the enactment of this Act. 4. Enhanced disclosure of certain information by campaign committees (a) Loans Made by Candidates Section 304(b)(3)(E) of the Federal Election Campaign Act of 1971 ( 2 U.S.C. 434(b)(3)(E) ) is amended by striking and the date and amount or value of such loan; and inserting the following: the date and amount or value of such loan, and in the case of a loan made to an authorized committee which is made by or guaranteed by the candidate, the terms and conditions of the loan, including the aggregate amount of the loan, the annualized interest rate (and, if the interest rate is variable, a description of how the rate may vary), the terms and conditions (if any) under which the interest rate may be changed from fixed to variable or from variable to fixed, the repayment schedule, the duration of the loan, any fees and penalties which may be assessed on the borrower, and the requirements (if any) for loan forgiveness or deferment; . (b) Payments to Relatives of Candidates (1) Payments for operating expenses Section 304(b)(5)(A) of such Act ( 2 U.S.C. 434(b)(5)(A) ) is amended by striking the semicolon at the end and inserting the following: , and, if the person to whom the expenditure is made is a relative of the candidate (as defined in section 302(j)(2)) or is a business organization with respect to which a relative of the candidate (as so defined) serves as an officer or director, the name and address of the relative and the type of relative involved; . (2) Other disbursements Section 304(b)(6)(A) of such Act ( 2 U.S.C. 434(b)(6)(A) ) is amended by striking the semicolon at the end and inserting the following: , and, if the person who received the disbursement is a relative of the candidate (as defined in section 302(j)(2)) or is a business organization with respect to which a relative of the candidate (as so defined) serves as an officer or director, the name and address of the relative and the type of relative involved; . (c) Effective Date The amendments made by this section shall apply with respect to reports filed under section 304 of the Federal Election Campaign Act of 1971 after the date of the enactment of this Act. 5. Clarification of rules applicable to uses of contributions accepted by political committees (a) Prohibiting Conversion to Personal Use Section 313(b)(2) of the Federal Election Campaign Act of 1971 ( 2 U.S.C. 439a(b)(2) ) is amended by striking the candidate’s election campaign or individual’s duties as a holder of Federal office, and inserting the following: the candidate’s election campaign, the individual’s duties as a holder of Federal office, or the political committee’s political activities (as the case may be), . (b) Clarification that Contributions May be Used for Authorized Expenditures in Connection With Political Activities and for Other Lawful Purposes (1) In general Section 313(a) of such Act ( 2 U.S.C. 439a(a) ) is amended— (A) in the matter preceding paragraph (1), by striking accepted by a candidate and inserting accepted by a candidate or a political committee ; (B) in the matter preceding paragraph (1), by striking used by the candidate or individual and inserting used by the candidate, individual, or political committee ; and (C) in paragraph (1), by striking the semicolon at the end and inserting the following: , or, in the case of a political committee, in connection with the committee’s political activities; . (2) Conforming amendments Section 313(a) of such Act ( 2 U.S.C. 439a(a) ) is amended— (A) in paragraph (2), by striking for ordinary and necessary expenses and inserting in the case of a candidate or individual, for ordinary and necessary expenses ; (B) in paragraph (3), by striking for contributions and inserting in the case of a candidate or individual, for contributions ; (C) in paragraph (4), by striking for transfers and inserting in the case of a candidate or individual, for transfers ; and (D) in paragraph (5), by striking for donations and inserting in the case of a candidate or individual, for donations . (c) Effective Date The amendments made by this section shall apply with respect to elections occurring after December 2014. 6. Requiring lobbyists to identify relatives who are covered officials and disclose lobbying contacts with relatives (a) Identification of Relatives Who Are Covered Officials in Registration Statements (1) In general Section 4(b)(6) of the Lobbying Disclosure Act of 1995 ( 2 U.S.C. 1603(b)(6) ) is amended to read as follows: (6) for each employee of the registrant who has acted or whom the registrant expects to act as a lobbyist on behalf of the client— (A) the name of the employee; (B) the position in which the employee served if such employee has served as a covered executive branch official or a covered legislative branch official in the 20 years before the date on which the employee first acted as a lobbyist on behalf of the client; and (C) the name of each relative of the employee who serves currently or who served previously as a covered executive branch official or a covered legislative branch official and, in the case of an official who is or was a Member of Congress, the Congressional Bioguide Identifier assigned to the Member by the Clerk of the House of Representatives or the Secretary of the Senate, as the case may be. . (2) Updates to registration for lobbyists who become relatives of covered officials after registration Section 4 of such Act ( 2 U.S.C. 1603 ) is amended by adding at the end the following new subsection: (e) Updates to registration for employees who become relatives of covered officials If, after a registrant registers under this section, an employee of the registrant who is identified in the registration under subsection (b)(6) becomes the relative of a covered legislative branch official or a covered executive branch official, the registrant shall update the registration to include the information described in subparagraph (B) of such subsection with respect to the employee and the official not later than 90 days after the employee becomes the relative of the official. . (3) Effective date; transition rule for current registrants (A) Effective date The amendments made by this subsection shall apply with respect to registrations made under section 4 of the Lobbying Disclosure Act of 1995 after the date of the enactment of this Act. (B) Transition rule A registrant who registered under section 4 of the Lobbying Disclosure Act of 1995 prior to the date of the enactment of this Act shall include the information described in section 4(b)(6)(C) of such Act (as added by paragraph (1)) in the next quarterly report on lobbying activities which the registrant files under section 5(a) of such Act after the date of the enactment of this Act. (b) Inclusion of Lobbying Contacts With Relatives in Quarterly Reports on Lobbying Activities (1) In general Section 5(b)(2) of such Act ( 2 U.S.C. 1604(b)(2) ) is amended— (A) by striking and at the end of subparagraph (C); (B) by striking the semicolon at the end of subparagraph (D) and inserting ; and ; and (C) by adding at the end the following new subparagraph: (E) if, on behalf of the client, any lobbyist employed by the registrant contacted a relative who is a covered legislative branch official or covered executive branch official, a statement identifying the lobbyist, the official (and, if the official is a Member of Congress, the Congressional Bioguide Identifier assigned to the Member by the Clerk of the House of Representatives or the Secretary of the Senate, as the case may be), the subject matter of the contact, and the type of relative involved; . (2) Effective date The amendment made by paragraph (1) shall apply with respect to reports filed under section 5 of the Lobbying Disclosure Act of 1995 with respect to quarterly periods which begin on or after the date of the enactment of this Act. (c) Relative Defined Section 3 of such Act ( 2 U.S.C. 1602 ) is amended— (1) by redesignating paragraph (16) as paragraph (17); and (2) by inserting after paragraph (15) the following new paragraph: (16) Relative The term relative means, with respect to a lobbyist or employee of a registrant, an aunt, brother, brother-in-law, daughter, daughter-in-law, father, father-in-law, first cousin, grandson, granddaughter, half-brother, half-sister, husband, mother, mother-in-law, nephew, niece, sister, sister-in-law, son, son-in-law, stepbrother, stepdaughter, stepfather, stepmother, stepsister, stepson, uncle, or wife. .