109th CONGRESS
2d Session
H. R. 513
AN ACT
To amend the Federal Election Campaign Act of 1971 to clarify when
organizations described in section 527 of the Internal Revenue Code of 1986
must register as political committees, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United
States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the `527 Reform Act of 2006'.
SEC. 2. TREATMENT OF SECTION 527 ORGANIZATIONS.
(a) Definition of Political Committee- Section 301(4) of the Federal Election
Campaign Act of 1971 (2 U.S.C. 431(4)) is amended--
(1) by striking the period at the end of subparagraph (C) and inserting
`; or'; and
(2) by adding at the end the following:
`(D) any applicable 527 organization.'.
(b) Definition of Applicable 527 Organization- Section 301 of such Act (2
U.S.C. 431) is amended by adding at the end the following new paragraph:
`(27) Applicable 527 Organization-
`(A) IN GENERAL- For purposes of paragraph (4)(D), the term `applicable
527 organization' means a committee, club, association, or group of persons
that--
`(i) has given notice to the Secretary of the Treasury under section
527(i) of the Internal Revenue Code of 1986 that it is to be treated
as an organization described in section 527 of such Code; and
`(ii) is not described in subparagraph (B).
`(B) EXCEPTED ORGANIZATIONS- A committee, club, association, or other
group of persons described in this subparagraph is--
`(i) an organization described in section 527(i)(5) of the Internal
Revenue Code of 1986;
`(ii) an organization which is a committee, club, association or other
group of persons that is organized, operated, and makes disbursements
exclusively for paying expenses described in the last sentence of section
527(e)(2) of the Internal Revenue Code of 1986 or expenses of a newsletter
fund described in section 527(g) of such Code;
`(iii) an organization which is a committee, club, association, or other
group that consists solely of candidates for State or local office,
individuals holding State or local office, or any combination of either,
but only if the organization refers only to one or more non-Federal
candidates or applicable State or local issues in all of its voter drive
activities and does not refer to a Federal candidate or a political
party in any of its voter drive activities; or
`(iv) an organization described in subparagraph (C).
`(C) APPLICABLE ORGANIZATION- For purposes of subparagraph (B)(iv), an
organization described in this subparagraph is a committee, club, association,
or other group of persons whose election or nomination activities relate
exclusively to--
`(i) elections where no candidate for Federal office appears on the
ballot; or
`(ii) one or more of the following purposes:
`(I) Influencing the selection, nomination, election, or appointment
of one or more candidates to non-Federal offices.
`(II) Influencing one or more applicable State or local issues.
`(III) Influencing the selection, appointment, nomination, or confirmation
of one or more individuals to non-elected offices.
`(D) EXCLUSIVITY TEST- A committee, club, association, or other group
of persons shall not be treated as meeting the exclusivity requirement
of subparagraph (C) if it makes disbursements aggregating more than $1,000
for any of the following:
`(i) A public communication that promotes, supports, attacks, or opposes
a clearly identified candidate for Federal office during the 1-year
period ending on the date of the general election for the office sought
by the clearly identified candidate (or, if a runoff election is held
with respect to such general election, on the date of the runoff election).
`(ii) Any voter drive activity during a calendar year, except that no
disbursements for any voter drive activity shall be taken into account
under this subparagraph if the committee, club, association, or other
group of persons during such calendar year--
`(I) makes disbursements for voter drive activities with respect to
elections in only 1 State and complies with all applicable election
laws of that State, including laws related to registration and reporting
requirements and contribution limitations;
`(II) refers to one or more non-Federal candidates or applicable State
or local issues in all of its voter drive activities and does not
refer to any Federal candidate or any political party in any of its
voter drive activities;
`(III) does not have a candidate for Federal office, an individual
who holds any Federal office, a national political party, or an agent
of any of the foregoing, control or materially participate in the
direction of the organization, solicit contributions to the organization
(other than funds which are described under clauses (i) and (ii) of
section 323(e)(1)(B)), or direct disbursements, in whole or in part,
by the organization; and
`(IV) makes no contributions to Federal candidates.
`(E) CERTAIN REFERENCES TO FEDERAL CANDIDATES NOT TAKEN INTO ACCOUNT-
For purposes of subparagraphs (B)(iii) and (D)(ii)(II), a voter drive
activity shall not be treated as referring to a clearly identified Federal
candidate if the only reference to the candidate in the activity is--
`(i) a reference in connection with an election for a non-Federal office
in which such Federal candidate is also a candidate for such non-Federal
office; or
`(ii) a reference to the fact that the candidate has endorsed a non-Federal
candidate or has taken a position on an applicable State or local issue,
including a reference that constitutes the endorsement or position itself.
`(F) CERTAIN REFERENCES TO POLITICAL PARTIES NOT TAKEN INTO ACCOUNT- For
purposes of subparagraphs (B)(iii) and (D)(ii)(II), a voter drive activity
shall not be treated as referring to a political party if the only reference
to the party in the activity is--
`(i) a reference for the purpose of identifying a non-Federal candidate;
`(ii) a reference for the purpose of identifying the entity making the
public communication or carrying out the voter drive activity; or
`(iii) a reference in a manner or context that does not reflect support
for or opposition to a Federal candidate or candidates and does reflect
support for or opposition to a State or local candidate or candidates
or an applicable State or local issue.
`(G) APPLICABLE STATE OR LOCAL ISSUE- For purposes of this paragraph,
the term `applicable State or local issue' means any State or local ballot
initiative, State or local referendum, State or local constitutional amendment,
State or local bond issue, or other State or local ballot issue.'.
(c) Definition of Voter Drive Activity- Section 301 of such Act (2 U.S.C.
431), as amended by subsection (b), is further amended by adding at the
end the following new paragraph:
`(28) Voter Drive Activity- The term `voter drive activity' means any of
the following activities conducted in connection with an election in which
a candidate for Federal office appears on the ballot (regardless of whether
a candidate for State or local office also appears on the ballot):
`(A) Voter registration activity.
`(B) Voter identification.
`(C) Get-out-the-vote activity.
`(D) Generic campaign activity.
`(E) Any public communication related to activities described in subparagraphs
(A) through (D).
Such term shall not include any activity described in subparagraph (A) or
(B) of section 316(b)(2).'.
SEC. 3. RULES FOR ALLOCATION OF EXPENSES BETWEEN FEDERAL AND NON-FEDERAL
ACTIVITIES.
(a) In General- 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:
`SEC. 325. ALLOCATION AND FUNDING RULES FOR CERTAIN EXPENSES RELATING
TO FEDERAL AND NON-FEDERAL ACTIVITIES.
`(a) In General- In the case of any disbursements by any political committee
that is a separate segregated fund or nonconnected committee for which allocation
rules are provided under subsection (b)--
`(1) the disbursements shall be allocated between Federal and non-Federal
accounts in accordance with this section and regulations prescribed by
the Commission; and
`(2) in the case of disbursements allocated to non-Federal accounts, may
be paid only from a qualified non-Federal account.
`(b) Costs to Be Allocated and Allocation Rules-
`(1) IN GENERAL- Disbursements by any separate segregated fund or nonconnected
committee, other than an organization described in section 323(b)(1),
for any of the following categories of activity shall be allocated as
follows:
`(A) 100 percent of the expenses for public communications or voter
drive activities that refer to one or more clearly identified Federal
candidates, but do not refer to any clearly identified non-Federal candidates,
shall be paid with funds from a Federal account, without regard to whether
the communication refers to a political party.
`(B) At least 50 percent, or a greater percentage if the Commission
so determines by regulation, of the expenses for public communications
and voter drive activities that refer to one or more clearly identified
candidates for Federal office and one or more clearly identified non-Federal
candidates shall be paid with funds from a Federal account, without
regard to whether the communication refers to a political party.
`(C) At least 50 percent, or a greater percentage if the Commission
so determines by regulation, of the expenses for public communications
or voter drive activities that refer to a political party, but do not
refer to any clearly identified Federal or non-Federal candidate, shall
be paid with funds from a Federal account, except that this paragraph
shall not apply to communications or activities that relate exclusively
to elections where no candidate for Federal office appears on the ballot.
`(D) At least 50 percent, or a greater percentage if the Commission
so determines by regulation, of the expenses for public communications
or voter drive activities that refer to a political party and refer
to one or more clearly identified non-Federal candidates, but do not
refer to any clearly identified Federal candidates, shall be paid with
funds from a Federal account, except that this paragraph shall not apply
to communications or activities that relate exclusively to elections
where no candidate for Federal office appears on the ballot.
`(E) Unless otherwise determined by the Commission in its regulations,
at least 50 percent of any administrative expenses, including rent,
utilities, office supplies, and salaries not attributable to a clearly
identified candidate, shall be paid with funds from a Federal account,
except that for a separate segregated fund such expenses may be paid
instead by its connected organization.
`(F) At least 50 percent, or a greater percentage if the Commission
so determines by regulation, of the direct costs of a fundraising program
or event, including disbursements for solicitation of funds and for
planning and administration of actual fundraising events, where Federal
and non-Federal funds are collected through such program or event shall
be paid with funds from a Federal account, except that for a separate
segregated fund such costs may be paid instead by its connected organization.
This paragraph shall not apply to any fundraising solicitations or any
other activity that constitutes a public communication.
`(2) CERTAIN REFERENCES TO FEDERAL CANDIDATES NOT TAKEN INTO ACCOUNT-
For purposes of paragraph (1), a public communication or voter drive activity
shall not be treated as referring to a clearly identified Federal candidate
if the only reference to the candidate in the communication or activity
is--
`(A) a reference in connection with an election for a non-Federal office
in which such Federal candidate is also a candidate for such non-Federal
office; or
`(B) a reference to the fact that the candidate has endorsed a non-Federal
candidate or has taken a position on an applicable State or local issue
(as defined in section 301(27)(G)), including a reference that constitutes
the endorsement or position itself.
`(3) CERTAIN REFERENCES TO POLITICAL PARTIES NOT TAKEN INTO ACCOUNT- For
purposes of paragraph (1), a public communication or voter drive activity
shall not be treated as referring to a political party if the only reference
to the party in the communication or activity is--
`(A) a reference for the purpose of identifying a non-Federal candidate;
`(B) a reference for the purpose of identifying the entity making the
public communication or carrying out the voter drive activity; or
`(C) a reference in a manner or context that does not reflect support
for or opposition to a Federal candidate or candidates and does reflect
support for or opposition to a State or local candidate or candidates
or an applicable State or local issue.
`(c) Qualified Non-Federal Account-
`(1) IN GENERAL- For purposes of this section, the term `qualified non-Federal
account' means an account which consists solely of amounts--
`(A) that, subject to the limitations of paragraphs (2) and (3), are
raised by the separate segregated fund or nonconnected committee only
from individuals, and
`(B) with respect to which all requirements of Federal, State, or local
law (including any law relating to contribution limits) are met.
`(2) LIMITATION ON INDIVIDUAL DONATIONS-
`(A) IN GENERAL- A separate segregated fund or nonconnected committee
may not accept more than $25,000 in funds for its qualified non-Federal
account from any one individual in any calendar year.
`(B) AFFILIATION- For purposes of this paragraph, all qualified non-Federal
accounts of separate segregated funds or nonconnected committees which
are directly or indirectly established, financed, maintained, or controlled
by the same person or persons shall be treated as one account.
`(3) FUNDRAISING LIMITATION-
`(A) IN GENERAL- No donation to a qualified non-Federal account may
be solicited, received, directed, transferred, or spent by or in the
name of any person described in subsection (a) or (e) of section 323.
`(B) FUNDS NOT TREATED AS SUBJECT TO ACT- Except as provided in subsection
(a)(2) and this subsection, any funds raised for a qualified non-Federal
account in accordance with the requirements of this section shall not
be considered funds subject to the limitations, prohibitions, and reporting
requirements of this Act for any purpose (including for purposes of
subsection (a) or (e) of section 323 or subsection (d)(1) of this section).
`(1) FEDERAL ACCOUNT- The term `Federal account' means an account which
consists solely of contributions subject to the limitations, prohibitions,
and reporting requirements of this Act. Nothing in this section or in
section 323(b)(2)(B)(iii) shall be construed to infer that a limit other
than the limit under section 315(a)(1)(C) applies to contributions to
the account.
`(2) NONCONNECTED COMMITTEE- The term `nonconnected committee' shall not
include a political committee of a political party.
`(3) VOTER DRIVE ACTIVITY- The term `voter drive activity' has the meaning
given such term in section 301(28).'.
(b) Reporting Requirements- Section 304(e) of the Federal Election Campaign
Act of 1971 (2 U.S.C. 434(e)) is amended--
(1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5);
and
(2) by inserting after paragraph (2) the following new paragraph:
`(3) RECEIPTS AND DISBURSEMENTS FROM QUALIFIED NON-FEDERAL ACCOUNTS- In
addition to any other reporting requirement applicable under this Act,
a political committee to which section 325(a) applies shall report all
receipts and disbursements from a qualified non-Federal account (as defined
in section 325(c)).'.
SEC. 4. 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--
(A) by striking `(1) Notwithstanding any other provision of law with
respect to limitations on expenditures or limitations on contributions,
the national committee' and inserting `Notwithstanding any other provision
of law with respect to limitations on amounts of expenditures or contributions,
a national committee',
(B) by striking `the general' and inserting `any', 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)(iii)--
(i) by adding `and' at the end of subclause (I),
(ii) in subclause (II), by striking `; and' and inserting a period,
and
(iii) by striking subclause (III);
(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--
(i) by adding `and' at the end of subparagraph (A),
(ii) in subparagraph (B), by striking `; and' and inserting a period,
and
(iii) by striking subparagraph (C);
(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. 5. CONSTRUCTION.
No provision of this Act, or amendment made by this Act, shall be construed--
(1) as approving, ratifying, or endorsing a regulation promulgated by
the Federal Election Commission;
(2) as establishing, modifying, or otherwise affecting the definition
of political organization for purposes of the Internal Revenue Code of
1986; or
(3) as affecting the determination of whether a group organized under
section 501(c) of the Internal Revenue Code of 1986 is a political committee
under section 301(4) of the Federal Election Campaign Act of 1971.
SEC. 6. JUDICIAL REVIEW.
(a) Special Rules for Actions Brought on Constitutional Grounds- If any
action is brought for declaratory or injunctive relief to challenge the
constitutionality of any provision of this Act or any amendment made by
this Act, the following rules shall apply:
(1) The action shall be filed in the United States District Court for
the District of Columbia and shall be heard by a 3-judge court convened
pursuant to section 2284 of title 28, United States Code.
(2) A copy of the complaint shall be delivered promptly to the Clerk of
the House of Representatives and the Secretary of the Senate.
(3) A final decision in the action shall be reviewable only by appeal
directly to the Supreme Court of the United States. Such appeal shall
be taken by the filing of a notice of appeal within 10 days, and the filing
of a jurisdictional statement within 30 days, of the entry of the final
decision.
(4) It shall be the duty of the United States District Court for the District
of Columbia and the Supreme Court of the United States to advance on the
docket and to expedite to the greatest possible extent the disposition
of the action and appeal.
(b) Intervention by Members of Congress- In any action in which the constitutionality
of any provision of this Act or any amendment made by this Act is raised
(including but not limited to an action described in subsection (a)), any
Member of the House of Representatives (including a Delegate or Resident
Commissioner to Congress) or Senate shall have the right to intervene either
in support of or opposition to the position of a party to the case regarding
the constitutionality of the provision or amendment. To avoid duplication
of efforts and reduce the burdens placed on the parties to the action, the
court in any such action may make such orders as it considers necessary,
including orders to require intervenors taking similar positions to file
joint papers or to be represented by a single attorney at oral argument.
(c) Challenge by Members of Congress- Any Member of Congress may bring an
action, subject to the special rules described in subsection (a), for declaratory
or injunctive relief to challenge the constitutionality of any provision
of this Act or any amendment made by this Act.
(1) INITIAL CLAIMS- With respect to any action initially filed on or before
December 31, 2008, the provisions of subsection (a) shall apply with respect
to each action described in such subsection.
(2) SUBSEQUENT ACTIONS- With respect to any action initially filed after
December 31, 2008, the provisions of subsection (a) shall not apply to
any action described in such subsection unless the person filing such
action elects such provisions to apply to the action.
SEC. 7. EFFECTIVE DATE.
The amendments made by this Act shall take effect on the date of the enactment
of this Act.
Passed the House of Representatives April 5, 2006.
Attest:
Clerk.
109th CONGRESS
2d Session
H. R. 513
AN ACT
To amend the Federal Election Campaign Act of 1971 to clarify when organizations
described in section 527 of the Internal Revenue Code of 1986 must register
as political committees, and for other purposes.
END
