[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3543 Introduced in House (IH)]







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 
 referred to the Committee on House Oversight, and in addition to the 
Committees 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 
                          committee concerned

_______________________________________________________________________

                                 A BILL


 
To provide for congressional election campaign accountability, 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 ``Fairness, Accountability, Integrity, 
and Reform (FAIR) Elections Act of 1996''.

 TITLE I--PROMOTING FAIR COMPETITION BETWEEN INCUMBENTS 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 primary 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 LIMITATIONS 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 Commission, 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 INFLUENCE 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), either 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 defined in 
        subsection (a)(4)); or
            ``(ii) a person who is required to register or to report 
        its lobbying activities, or a lobbyist whose activities 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 Federal law requiring a person who is a lobbyist or 
        foreign agent to register or a person to report its lobbying 
        activities.
    ``(C) For purposes of this paragraph:
            ``(i) The term `conduit or intermediary' means a person who 
        transmits a contribution to a candidate or candidate's 
        committee or representative from another person, except that--
                    ``(I) a candidate or representative of a candidate 
                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 individual who is 
        expressly authorized by the candidate to engage in fundraising, 
        and who occupies a significant position within the candidate's 
        campaign organization, 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 CONTRIBUTIONS TO 
              CANDIDATES FOR FEDERAL OFFICE BY MULTICANDIDATE POLITICAL 
              COMMITTEES TO THE SAME AMOUNT APPLICABLE TO CONTRIBUTIONS 
              BY OTHER PERSONS.

    (a) In General.--Section 315(a)(2)(A) of the Federal 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 Election Campaign Act 
of 1971 (2 U.S.C. 441a(a)), as amended 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 period 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 CANDIDATE EXPENDITURE OF PERSONAL WEALTH

SEC. 301. PAYMENT OF CAMPAIGN DEBT BY HOUSE OF REPRESENTATIVES 
              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 subsection:
    ``(j) Not later than the 90th day after a general, special, 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 
credit 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 Congress, 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 candidate 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 `immediate family' 
means a candidate's spouse, and any child, stepchild, parent, 
grandparent, brother, half-brother, sister 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 candidate's spouse, and any spouse of any such person.
    ``(3) The amount under the first sentence of paragraph (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 period shall be calendar year 1996.''.

    TITLE IV--ENCOURAGING PARTICIPATION IN POLITICAL CAMPAIGNS AND 
                    STRENGTHENING POLITICAL PARTIES

SEC. 401. DEDUCTION FOR CONTRIBUTIONS TO CANDIDATES FOR PUBLIC OFFICE.

    (a) In General.--Part VII of subchapter B of chapter 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 political contribution payment of 
which is made by the individual within the taxable year.
    ``(b) Limitations.--
            ``(1) Amount.--The deduction under subsection (a) shall not 
        exceed $100 ($200 in the case of a joint return).
            ``(2) Verification.--The deduction under subsection (a) 
        shall be allowed, with respect to any political contribution, 
        only if the contribution is verified in the manner prescribed 
        by the Secretary in regulations.
            ``(3) Indexing.--The amounts under paragraph (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, general, or 
                special election, for use by the individual to further 
                the candidacy of the individual for nomination or 
                election to the office,
                    ``(B) any committee, association, or organization 
                (whether or not incorporated) organized and operated 
                exclusively for the purpose of influencing, or 
                attempting to influence, the nomination 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 organization 
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 political 
                party as designated by the national committee of the 
                party, or
                    ``(E) a local committee of a national political 
                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 election 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 election 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 preceding election of a President and 
                Vice President.
            ``(4) State and local.--The term `State' means the various 
        States and the District of Columbia. 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 
governments as political subdivisions of States), see section 7871.''
    (b) Conforming Amendments.--
            (1) Section 642 of such Code (relating to special 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 (relating 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 redesignating subparagraphs (B) and (C) 
        as subparagraphs (C) and (D), respectively, and by inserting 
        after subparagraph (A) the following new subparagraph:
                    ``(B) section 218(c)(4) (relating to contributions 
                to candidates for public office),''.
            (3) The table of sections for part VII of subchapter 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 inserting 
        ``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 political 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 OPERATION OF THE FEDERAL ELECTION COMMISSION

SEC. 501. CHANGE IN CERTAIN REPORTING FROM A CALENDAR 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 Commission''; and
            (2) by adding at the end the following:
    ``(2)(A) Notwithstanding paragraph (1), the Commission 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 impartiality 
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 preliminary 
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 investigation. If, on that date, the investigation has not been 
completed, the investigation shall be terminated and the complaint, if 
any, shall be dismissed, unless, by vote of at least 4 members, the 
Commission determines that the investigation should continue.''.

 TITLE VI--ACTIVITIES OF LABOR ORGANIZATIONS, CORPORATIONS, AND OTHER 
                                ENTITIES

SEC. 601. LIMITATION ON CONTRIBUTIONS AND EXPENDITURES BY LABOR 
              ORGANIZATIONS.

    (a) Contributions to All Political Committees 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 committee,'' 
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 paragraph (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 annually, to all employees 
within the labor organization's bargaining 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 
employee--
            ``(i) that an employee cannot be obligated to pay, through 
        union dues or any other mandatory payment to a labor 
        organization, for the political activities of the labor 
        organization, including, but not limited to, the maintenance 
        and operation of, or solicitation of contributions to, a 
        political committee, political communications to members, and 
        voter registration and get-out-the-vote campaigns;
            ``(ii) that no employee may be required actually to join 
        any labor organization, but if a collective bargaining 
        agreement covering an employee purports to require membership 
        or payment of dues or other fees to a labor organization as a 
        condition of employment, 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 administration, and grievance adjustment;
            ``(iv) that an employee who elects to be a full member of 
        the labor organization and pay membership 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 exclusive 
        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 assessments for the 
        current year; the amount of the reduced membership dues, 
        subtracting the employee's pro rata share of the organization's 
        spending for political 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 employees 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 conducted 
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 determine the costs 
        that may properly be charged to agency fee payors as costs of 
        exclusive representation, and explains such procedures in the 
        written notification required under subparagraph (B); and
            ``(ii) if any person challenges the costs which may be 
        properly charged as costs of exclusive representation--
                    ``(I) provides a mutually selected impartial 
                decisionmaker to hear and decide such challenge 
                pursuant to rules of discovery and evidence and subject 
                to de novo review by the National Labor Relations Board 
                or an applicable court; and
                    ``(II) places in escrow amounts reasonably in 
                dispute pending the outcome of the challenge.
    ``(E)(i) A labor organization that does not satisfy the 
requirements of subparagraphs (B), (C), and (D) shall finance any 
expenditures specified in subparagraphs (A) or (B) of paragraph (2) 
only with funds legally collected under this Act for its separate 
segregated fund.
    ``(ii) For purposes of this paragraph, subparagraph (A) of 
paragraph (2) shall apply only with respect to communications expressly 
advocating the election or defeat of any clearly identified candidate 
for elective public office.''.

SEC. 602. DISCLOSURE OF ELECTION-RELATED ACTIVITY BY CORPORATIONS, 
              LABOR ORGANIZATIONS AND NONPROFIT ORGANIZATIONS.

    Section 304 of the Federal Election Campaign Act of 1971 (2 U.S.C. 
434) is amended by adding at the end the following new subsection:
    ``(d) Any corporation, labor organization, or nonprofit 
organization that makes a payment for a communication or other activity 
that--
            ``(1) relates to any election for Federal office; and
            ``(2) in the case of a corporation or labor organization, 
        by reason of subparagraph (A), (B), or (C) of paragraph (2) of 
        section 316(b), is not a contribution or expenditure;
shall report such payment to the Commission in the same manner as a 
contribution or expenditure, as the case may be, is reported by a 
principal campaign committee of a candidate for the House of 
Representatives or the Senate under this section.''.

                       TITLE VII--EFFECTIVE DATE

SEC. 701. EFFECTIVE DATE.

    Except as otherwise provided in this Act, the amendments made by, 
and the provisions of, this Act shall take effect on the date of the 
enactment of this Act, but shall not apply with respect to activities 
in connection with any election occurring before January 1, 1996.
                                 <all>