To amend the Federal Election Campaign Act of 1971 to establish a program under which Congressional candidates may receive public funding for carrying out campaigns for election for Federal office, to amend the Internal Revenue Code of 1986 to establish an income tax checkoff to provide funding for such program and to provide a refundable tax credit for individuals who make contributions to such candidates, and for other purposes.

August 2, 2001

Ms. MCCOLLUM introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on House Administration, 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

To amend the Federal Election Campaign Act of 1971 to establish a program under which Congressional candidates may receive public funding for carrying out campaigns for election for Federal office, to amend the Internal Revenue Code of 1986 to establish an income tax checkoff to provide funding for such program and to provide a refundable tax credit for individuals who make contributions to such candidates, 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. TABLE OF CONTENTS.

The table of contents of this Act is as follows:

Sec. 1. Table of contents.

TITLE I--PUBLIC FUNDING PROGRAM FOR CONGRESSIONAL CANDIDATES

Sec. 101. Establishment of public funding program for Congressional candidates.

`TITLE V--PUBLIC FUNDING PROGRAM FOR CONGRESSIONAL CANDIDATES

`Subtitle A--Program Requirements

`Subtitle B--General Election Payments for Certified Public Subsidy Candidates

`Subtitle C--Spending Limits and Fundraising Requirements for Certified Candidates

`Subtitle D--Tax Rebate Certificates for Individual Contributors

`Subtitle E--Enforcement

Sec. 102. Effective date.

TITLE II--INCOME TAX CHECKOFF FOR FUNDING FOR CERTIFIED PUBLIC SUBSIDY CANDIDATES

Sec. 201. Designation of income tax payments for fund for certified public subsidy candidates.

TITLE III--TAX CREDIT FOR CONTRIBUTIONS TO PARTICIPATING CANDIDATES

Sec. 301. Refundable credit for contributions to certified public subsidy candidates.

TITLE I--PUBLIC FUNDING PROGRAM FOR CONGRESSIONAL CANDIDATES

SEC. 101. ESTABLISHMENT OF PUBLIC FUNDING PROGRAM FOR CONGRESSIONAL CANDIDATES.

The Federal Election Campaign Act of 1971 is amended by adding at the end the following new title:

`TITLE V--PUBLIC FUNDING PROGRAM FOR CONGRESSIONAL CANDIDATES

`Subtitle A--Program Requirements

`SEC. 501. ESTABLISHMENT OF PROGRAM.

`There is established a program under which the Commission shall certify candidates for election for Federal office as certified public subsidy candidates in accordance with this subtitle and make payments to such candidates in accordance with subtitle B.

`SEC. 502. REQUIREMENTS FOR ELIGIBILITY OF CERTIFIED PUBLIC SUBSIDY CANDIDATES.

`(a) IN GENERAL- In this title, a `certified public subsidy candidate' is a candidate for election for the office of Senator or Representative in, or Delegate or Resident Commissioner to, the Congress, who is certified by the Commission as meeting the requirements of this title with respect to the election.

`(b) PROCEDURE FOR CERTIFICATION- The Commission shall certify that a candidate meets the requirements for a certified public subsidy candidate under this title if the candidate submits an application to the Commission which contains the following information and assurances:

`(1) A certification that the candidate has met the requirements of section 503 regarding contributions from in-State individual residents.

`(2) Assurances that the candidate will meet the applicable spending limits and fundraising requirements of subtitle B.

`(3) Assurances that the candidate will meet the requirements of subtitle C regarding the furnishing of rebate certificates to individuals making contributions to the principal campaign committee of the candidate.

`(4) Assurances that the candidate will provide the Commission with ongoing information (at such times and in such form as the Commission may require) to enable the Commission to determine whether the candidate is in compliance with the applicable requirements of this title.

`(5) Such other information and assurances as the Commission may require.

`(c) DEADLINE FOR APPLICATION-

`(1) IN GENERAL- A candidate who seeks to be certified as a certified public subsidy candidate shall submit the application described in subsection (b) to the Commission at the same time that the principal campaign committee of the candidate files its statement of organization with the Commission under section 303.

`(2) SPECIAL RULE FOR GENERAL ELECTIONS- If a candidate who is a certified public subsidy candidate with respect to a primary election (or convention or caucus of a political party which has authority to nominate a candidate) wins the election or is otherwise nominated to serve as the candidate of the party in the general election, the candidate shall be deemed to have submitted the application described in subsection (b) with respect to the succeeding general election.

`SEC. 503. REQUIRING CANDIDATES TO RAISE MINIMUM AMOUNT OF FUNDS FROM IN-STATE INDIVIDUAL CONTRIBUTORS.

`(a) IN GENERAL- A candidate may not be certified as a certified public subsidy candidate under this title until the candidate has received contributions from in-State individual residents in an aggregate amount equal to or greater than 2.5 percent of the maximum amount of expenditures the candidate may make with respect to the election, as determined under section 521.

`(b) LIMIT ON MAXIMUM AMOUNT TAKEN INTO ACCOUNT- In determining whether a candidate has received the minimum amount of contributions required under subsection (a), there shall not be taken into account any amounts provided in excess of $100 by the same individual.

`(c) IN-STATE INDIVIDUAL RESIDENT DEFINED- In this section, an `in-State individual resident' is an individual who resides in the State the candidate seeks to represent (in the case of a candidate for election for the office of Senator) or the State in which the Congressional district the candidate seeks to represent is located (in the case of a candidate for election for the office of Representative in, or Delegate or Resident Commissioner to, the Congress).

`Subtitle B--General Election Payments for Certified Public Subsidy Candidates

`SEC. 511. OPTION TO RECEIVE PUBLIC SUBSIDY PAYMENTS.

`The Commission shall make payments in accordance with this subtitle with respect to a general election to each certified public subsidy candidate who notifies the Commission that the candidate seeks such payments with respect to the election.

`SEC. 512. AMOUNT OF PAYMENT; TIMING.

`Not later than 10 days after receiving notice under section 511, the Commission shall make a payment to the candidate in an amount equal to one-third of the maximum amount of expenditures the candidate may make with respect to the election, as determined under section 521.

`SEC. 513. TREATMENT OF MINOR PARTIES.

`Notwithstanding any other provision of this title, a candidate is not eligible to receive a payment under section 512 with respect to an election unless the candidate of the candidate's political party received 5 percent or more of the total number of votes received by all candidates for the office involved in the preceding general election.

`Subtitle C--Spending Limits and Fundraising Requirements for Certified Candidates

`SEC. 521. LIMIT ON EXPENDITURES BY CERTIFIED CANDIDATES.

`(a) GENERAL ELECTION- The amount of expenditures made with respect to a general election by the principal campaign committee of a certified public subsidy candidate may not exceed an amount equal to the product of $1 and--

`(1) in the case of a candidate for the office of Representative in, or Delegate or Resident Commissioner to, the Congress, the population of the district the candidate seeks to represent; or

`(2) in the case of a candidate for the office of Senator, the population of the State the candidate seeks to represent.

`(b) PRIMARY ELECTION- The amount of expenditures made with respect to an election other than a general election by the principal campaign committee of a certified public subsidy candidate may not exceed 50 percent of the limit established under subsection (a) for expenditures with respect to a general election.

`(c) INCREASE IN LIMIT FOR CANDIDATES FACING NONPARTICIPATING OPPONENTS-

`(1) IN GENERAL- The amount of the limit established under subsection (a) or subsection (b) with respect to a candidate in an election shall be increased by an amount equal to the product of--

`(A) the limit established under such subsection; and

`(B) the number of candidates seeking the same office in the election who are not certified public subsidy candidates under this title with respect to the election.

`(2) TREATMENT OF CANDIDATES OF MINOR PARTIES- In determining the number of candidates under paragraph (1)(B), there shall not be taken into account any candidate who is ineligible to receive a payment under this title pursuant to section 513.

`SEC. 522. SOURCE OF FUNDS USED FOR EXPENDITURES.

`(a) IN GENERAL- The funds used by the principal campaign committee of a certified public subsidy candidate for making expenditures with respect to an election shall be derived as follows:

`(1) Not more than one-third of the funds shall be derived from contributions made to the committee by other political committees, except that not more than 10 percent of the funds may be derived from contributions made by political committees of political parties.

`(2) Except as provided in subsection (b), the remainder of the funds shall be derived from contributions made to the committee by individuals.

`(b) TREATMENT OF CANDIDATES RECEIVING PUBLIC SUBSIDY PAYMENTS FOR GENERAL ELECTION- In the case of the principal campaign committee of a certified public subsidy candidate receiving public subsidy payments for a general election under subtitle B, one-third of the funds used for such election by the committee shall be provided by the Commission as a payment under section 512.

`Subtitle D--Tax Rebate Certificates for Individual Contributors

`SEC. 531. TAX REBATE CERTIFICATES FOR INDIVIDUALS MAKING CONTRIBUTIONS TO CANDIDATE.

`Each certified public subsidy candidate shall provide a tax rebate certificate to each individual who makes a contribution to the candidate's principal campaign committee after the candidate is certified under section 502, for purposes of enabling the individual to receive the refundable credit provided under section 35 of the Internal Revenue Code of 1986.

`SEC. 532. COORDINATION WITH SECRETARY OF THE TREASURY.

`In issuing regulations to carry out this subtitle, the Commission shall consult with the Secretary of the Treasury.

`Subtitle E--Enforcement

`SEC. 541. WITHDRAWAL OF CERTIFICATION.

`If the Commission determines that a certified public subsidy candidate has made expenditures in excess of the applicable limits under section 521, has failed to meet any other requirement of this title, or otherwise no longer meets the requirements for certification under subtitle A, the Commission shall revoke the candidate's certification.

`SEC. 542. PENALTIES FOR SPENDING IN EXCESS OF LIMITS.

`(a) NOTIFICATION OF EXCESS EXPENDITURES- If the Commission determines that a certified public subsidy candidate with respect to an election has made expenditures for the election in excess of the applicable limit under section 521, the Commission shall notify the candidate.

`(b) ASSESSMENT OF PENALTY- Any certified public subsidy candidate with respect to an election who makes expenditures for the election in excess of the applicable limit under section 521 shall pay a civil money penalty to the Commission in an amount determined as follows:

`(1) In the case of a candidate who makes expenditures which exceed the limit by 2.5 percent or less, an amount equal to the amount of the excess expenditures.

`(2) In the case of a candidate who makes expenditures which exceed the limit by more than 2.5 percent and less than 5 percent, an amount equal to three times the amount of the excess expenditures.

`(3) In the case of a candidate who makes expenditures which exceed the limit by more than 5 percent, an amount equal to three times the amount of the excess expenditures plus (if the Commission determines that the candidate knowingly and willfully made such excess expenditures) an additional civil money penalty in an amount determined by the Commission.'.

SEC. 102. EFFECTIVE DATE.

The amendments made by section 101 shall apply with respect to elections occurring after December 2002.

TITLE II--INCOME TAX CHECKOFF FOR FUNDING FOR CERTIFIED PUBLIC SUBSIDY CANDIDATES

SEC. 201. DESIGNATION OF INCOME TAX PAYMENTS FOR FUND FOR CERTIFIED PUBLIC SUBSIDY CANDIDATES.

(a) IN GENERAL- Subchapter A of chapter 61 of the Internal Revenue Code of 1986 (relating to information and returns) is amended by adding at the end the following new part:

`PART IX--DESIGNATION OF INCOME TAX PAYMENTS TO CERTIFIED PUBLIC SUBSIDY CANDIDATE FUND

`Sec. 6098. Designation to Certified Public Subsidy Candidate Fund.

`SEC. 6098. DESIGNATION TO CERTIFIED PUBLIC SUBSIDY CANDIDATE FUND.

`(a) IN GENERAL- Every individual (other than a nonresident alien) whose adjusted income tax liability for the taxable year is $1 or more may designate that $1 shall be paid over to the Certified Public Subsidy Candidate Fund in accordance with the provisions of section 9511. In the case of a joint return of husband and wife having an adjusted income tax liability of $2 or more, each spouse may designate that $1 shall be paid to the fund.

`(b) ADJUSTED INCOME TAX LIABILITY- For purposes of subsection (a), the term `adjusted income tax liability' means, for any individual for any taxable year, the excess (if any) of--

`(1) the income tax liability (as defined in section 6096(b)) of the individual for the taxable year, over

`(2) any amount designated by the individual (and, in the case of a joint return, any amount designated by the individual's spouse) under section 6096(a) for such taxable year.

`(c) MANNER AND TIME OF DESIGNATION- A designation under subsection (a) may be made with respect to any taxable year--

`(1) at the time of filing the return of the tax imposed by chapter 1 for such taxable year, or

`(2) at any other time (after the time of filing the return of the tax imposed by chapter 1 for such taxable year) specified in regulations prescribed by the Secretary.

Such designation shall be made in such manner as the Secretary prescribes by regulations except that, if such designation is made at the time of filing the return of the tax imposed by chapter 1 for such taxable year, such designation shall be made either on the first page of the return or on the page bearing the taxpayer's signature.'

(b) CERTIFIED PUBLIC SUBSIDY CANDIDATE FUND- Subchapter A of chapter 98 of such Code (relating to establishment of trust funds) is amended by adding at the end the following new section:

`SEC. 9511. CERTIFIED PUBLIC SUBSIDY CANDIDATE FUND.

`(a) CREATION OF TRUST FUND- There is established in the Treasury of the United States a trust fund to be known as the `Certified Public Subsidy Candidate Fund', consisting of such amounts as may be appropriated or credited to such fund as provided in this section or section 9602(b).

`(b) TRANSFERS TO TRUST FUND- There are hereby appropriated to the Certified Public Subsidy Candidate Fund amounts equivalent to the amounts designated under section 6098.

`(c) EXPENDITURES- Amounts in the Certified Public Subsidy Candidate Fund shall be available, as provided in appropriation Acts, for purposes of making payments to certified public subsidy candidates under title V of the Federal Election Campaign Act of 1971, to the extent that such amounts exceed the aggregate of all Federal administrative costs attributable to the implementation of section 6098, subsections (a) and (b) of this section, and (with respect to such fund) section 9602.'

(c) CLERICAL AMENDMENTS-

(1) The table of parts for subchapter A of chapter 61 of such Code is amended by adding at the end the following new item:

`Part IX. Designation of income tax payments to Certified Public Subsidy Candidate Fund.'

(2) The table of sections for subchapter A of chapter 98 of such Code is amended by adding at the end the following new item:

`Sec. 9511. Certified Public Subsidy Candidate Fund.'

(d) EFFECTIVE DATE- The amendments made by this section shall apply to taxable years beginning after December 31, 2001.

TITLE III--TAX CREDIT FOR CONTRIBUTIONS TO PARTICIPATING CANDIDATES

SEC. 301. REFUNDABLE CREDIT FOR CONTRIBUTIONS TO CERTIFIED PUBLIC SUBSIDY CANDIDATES.

(a) IN GENERAL- Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section:

`SEC. 35. CREDIT FOR CONTRIBUTIONS TO CERTIFIED PUBLIC SUBSIDY CANDIDATES.

`(a) ALLOWANCE OF CREDIT- In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to the aggregate amount of contributions to certified public subsidy candidates made by such individual during such taxable year.

`(b) LIMITATION- The amount of the credit allowed under subsection (a) for a taxable year shall not exceed $100.

`(c) CONTRIBUTIONS TO CERTIFIED PUBLIC SUBSIDY CANDIDATES- For purposes of subsection (a), the term `contributions to certified public subsidy candidates' means the amount of a contribution for which a tax rebate certificate is issued under section 531 of the Federal Election Campaign Act of 1971.'.

(b) TECHNICAL AMENDMENTS-

(1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting `or from section 35 of such Code' before the period at the end.

(2) The table of sections for such subpart C of the Internal Revenue Code of 1986 is amended by striking the item relating to section 35 and inserting the following new items:

`Sec. 35. Credit for contributions to certified public subsidy candidates.

`Sec. 36. Overpayment of taxes.'.

(c) EFFECTIVE DATE- The amendments made by this section shall apply to contributions made with respect to elections occurring after December 31, 2002, in taxable years beginning after such date.

END