[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3516 Introduced in House (IH)]







105th CONGRESS
  2d Session
                                H. R. 3516

   To amend the Federal Election Campaign Act of 1971 to reform the 
 financing of campaigns for election for Federal office, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             March 19, 1998

 Mr. English of Pennsylvania introduced the following bill; which was 
 referred to the Committee on House Oversight, and in addition to the 
   Committees on Ways and Means, Commerce, and Government Reform and 
 Oversight, 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 reform the 
 financing of campaigns for election for Federal office, 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 ``Fair and Open Elections Act of 
1998''.

SEC. 2. LIMITATIONS ON CONTRIBUTIONS.

    (a) Requiring Majority of Candidate Funds To Come From Individuals 
Residing in State Involved.--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) A candidate for the office of Senator or Representative in, 
or Delegate or Resident Commissioner to, the Congress may not accept 
contributions with respect to an election cycle from persons other than 
individuals who reside in the State involved in excess of the total of 
contributions accepted from individuals who reside in the State 
involved (as determined on the basis of the most recent information 
included in reports pursuant to section 304(d)).''.
    (b) Revision of Limits on Amount That May Be Contributed by 
Individuals.--
            (1) Limit on contributions to candidates and political 
        parties.--Section 315(a)(1) of such Act (2 U.S.C. 441a(a)(1)) 
        is amended--
                    (A) in subparagraph (A), by striking ``$1,000'' and 
                inserting ``$2,500''; and
                    (B) in subparagraph (B), by striking ``$20,000'' 
                and inserting ``$25,000''.
            (2) Annual aggregate limit.--Section 315(a)(3) of such Act 
        (2 U.S.C. 441a(a)(3)) is amended by striking ``$25,000 in any 
        calendar year'' and inserting the following: ``$50,000, of 
        which not more than $25,000 may consist of contributions to 
        political committees of political parties''.
    (c) Indexing of Amounts.--Section 315(c) of such Act (2 U.S.C. 
441a(c)) is amended by adding at the end the following new paragraph:
    ``(3)(A) The amount of each limitation established under subsection 
(a) shall be adjusted as follows:
            ``(i) For calendar year 1999, each such amount shall be 
        equal to the amount described in such subsection, increased (in 
        a compounded manner) by the percentage increase in the price 
        index (as defined in paragraph (2)) for 1997 and 1998.
            ``(ii) For calendar year 2001 and each second subsequent 
        year, each such amount shall be equal to the amount for the 
        second previous year (as adjusted under this subparagraph), 
        increased (in a compounded manner) by the percentage increase 
        in the price index for the previous year and the second 
        previous year.
    ``(B) In the case of any amount adjusted under this subparagraph 
which is not a multiple of $500, the amount shall be rounded to the 
nearest multiple of $500.''.
    (d) Prohibiting Bundling of Contributions.--Section 315(a)(8) of 
such Act (2 U.S.C. 441a(a)(8)) is amended to read as follows:
    ``(8) No person may make a contribution through an intermediary or 
conduit, except that a person may facilitate a contribution by 
providing--
            ``(A) advice to another person as to how the other person 
        may make a contribution; and
            ``(B) addressed mailing material or similar items to 
        another person for use by the other person in making a 
        contribution.''.
    (e) Prohibiting Contributions by Individuals Not Eligible To Vote 
in Federal Elections.--Title III of such Act (2 U.S.C. 431 et seq.) is 
amended by adding at the end the following new section:

  ``prohibiting contributions by individuals not eligible to vote in 
                           federal elections

    ``Sec. 323. (a) In General.--An individual who is not eligible to 
vote in any election for Federal office may not make any contribution 
to any candidate for election for Federal office or to any political 
committee.
    ``(b) Treatment of Individuals Not Registered To Vote.--This 
section shall not apply with respect to an individual who would be 
eligible to vote in an election for Federal office but for the failure 
of the individual to register to vote.''.

SEC. 3. TREATMENT OF FUNDS OF POLITICAL PARTIES.

    (a) Ban on Soft Money of National Political Parties.--Title III of 
the Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.), as 
amended by section 2(e), is further amended by adding at the end the 
following new section:

  ``prohibiting use of non-federal funds by national political parties

    ``Sec. 324. Notwithstanding any other provision of this title or 
any other provision of law, a political committee of a national 
political party may not solicit, expend, or transfer any funds in 
support of its activities which are not subject to the limitations, 
prohibitions, and reporting requirements of this title.''.
    (b) Repeal of Limitations on Amount of Coordinated Expenditures by 
Political Parties.--
            (1) In general.--Section 315(d) of such Act (2 U.S.C. 
        441a(d)) is amended by striking paragraphs (2) and (3).
            (2) Conforming amendments.--Section 315(d)(1) of such Act 
        (2 U.S.C. 441a(d)(1)) is amended--
                    (A) by striking ``(d)(1)'' and inserting ``(d)''; 
                and
                    (B) by striking ``, subject to the limitations 
                contained in paragraphs (2) and (3) of this 
                subsection''.
    (c) Requiring Disclosure of Transfers of Funds From National Party 
to State and Local Parties.--Section 304 of such Act (2 U.S.C. 434) is 
amended by adding at the end the following new subsection:
    ``(d)(1) In addition to any other information required to be 
reported to the Commission under this Act, each political committee of 
a national political party shall file a statement with the Commission 
of any transfer of funds made by the committee to a political committee 
of a State or local political party.
    ``(2) A statement required under this subsection of a transfer of 
funds by a political committee shall contain such information, and 
shall be filed at such time and under such conditions, as would be 
required if the transfer of funds were otherwise treated as an 
expenditure made by the committee under this Act.''.

SEC. 4. INCOME TAX CREDIT FOR CONTRIBUTIONS TO FEDERAL CAMPAIGNS.

    (a) General Rule.--Subpart A of part IV of subchapter A of chapter 
1 of the Internal Revenue Code of 1986 (relating to nonrefundable 
personal credits) is amended by inserting after section 25A the 
following new section:

``SEC. 25B. CONTRIBUTIONS TO FEDERAL CAMPAIGNS.

    ``(a) General Rule.--In the case of an individual, there shall be 
allowed as a credit against the tax imposed by this chapter for the 
taxable year an amount equal to all Federal campaign contributions paid 
or incurred by the individual during such taxable year.
    ``(b) Limitations.--
            ``(1) Amount of credit.--The credit allowed by subsection 
        (a) for a taxable year shall not exceed $100 ($200 in the case 
        of a joint return).
            ``(2) Verification.--The credit allowed by subsection (a) 
        shall be allowed, with respect to any Federal campaign 
        contribution, only if such contribution is verified in such 
        manner as the Secretary shall prescribe by regulation.
    ``(c) Definitions.--For purposes of this section--
            ``(1) Candidate.--The term `candidate' means an individual 
        who--
                    ``(A) publicly announces before the close of the 
                calendar year following the calendar year in which the 
                contribution or gift is paid or incurred that he is a 
                candidate for nomination or election to any Federal 
                elective public office, and
                    ``(B) meets the qualifications prescribed by law to 
                hold such office.
            ``(2) Federal campaign contribution.--The term `Federal 
        campaign contribution' means a contribution or gift of money, 
        or the fair market value of a contribution or gift of property, 
        to--
                    ``(A) an individual who is a candidate for 
                nomination or election to any Federal elective public 
                office in any primary, general, or special election, 
                for use by such individual to further the candidacy of 
                the individual for nomination or election to such 
                office,
                    ``(B) any committee, association, or organization 
                (whether or not incorporated) organized and operated 
                exclusively for the purposes of influencing, or 
                attempting to influence, the nomination or election of 
                one or more individuals who are candidates for 
                nomination or election to any Federal elective public 
                office, for use by such committee, association, or 
                organization to further the candidacy of such 
                individual or individuals for nomination or election to 
                such office, or
                    ``(C) the national committee of a national 
                political party, the State committee of a national 
                political party as designated by the national committee 
                of such party, or a local committee of a national 
                political party as designated by the State committee of 
                such party designated under this subparagraph, for use 
by such committee to further the candidacy of such individual or 
individuals for nomination or election to such office.
    ``(d) Cross References.--

                                ``For transfer of appreciated property 
to a political organization, see section 84.
                                ``For certain indirect contributions to 
political parties, see section 276.''.
    (b) Clerical Amendment.--The table of sections for subpart A of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 25A the following new 
item:

                              ``Sec. 25B. Contributions to Federal 
                                        campaigns.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to contributions paid or incurred after the date of the enactment 
of this Act, in taxable years ending after such date.

SEC. 5. REPORTING REQUIREMENTS FOR PERSONS MAKING CERTAIN PUBLIC 
              COMMUNICATIONS REGARDING CANDIDATES AND PARTIES.

    (a) Reports to Federal Election Commission.--Section 304 of the 
Federal Election Campaign Act of 1971 (2 U.S.C. 434), as amended by 
section 3(c), is further amended by adding at the end the following new 
subsection:
    ``(e)(1) In addition to any other information required to be 
reported under this Act, any person who makes payments described in 
paragraph (2) during the 60-day period which ends on the date of a 
general election for Federal office (not including any days during such 
period which occur prior to any primary election in which the candidate 
involved appears on the ballot) shall report such payments and the 
source of the funds used to make such payments to the Commission in the 
same manner and under the same terms and conditions as a principal 
campaign committee of a candidate reporting expenditures and 
contributions to the Commission under this section.
    ``(2) A payment described in this paragraph is a payment for a 
communication to the general public which mentions a political party or 
a clearly identified candidate for election for Federal office by name, 
image, or likeness, other than a payment which would be described in 
section 301(9)(B)(i) if the payment were an expenditure under such 
section.''.
    (b) Requiring Broadcasters To Make Information Available to 
Public.--Section 317 of the Communications Act of 1934 (47 U.S.C. 317) 
is amended--
            (1) by redesignating subsections (d) and (e) as subsections 
        (e) and (f); and
            (2) by inserting after subsection (c) the following new 
        subsection:
    ``(d) Notwithstanding subsection (e), any other provision of this 
Act, or any rule or order of the Commission, any broadcasting station 
that broadcasts a communication described in section 304(e)(2) of the 
Federal Election Campaign Act of 1971 during the 60-day period which 
ends on the date of a general election for Federal office for which any 
money, service, or other valuable consideration is directly or 
indirectly paid or promised to, or charged or accepted by such station, 
shall--
            ``(1) announce, at the time the communication is 
        broadcast--
                    ``(A) that the communication is sponsored, paid 
                for, or furnished, either in whole or in part; and
                    ``(B) by whom such consideration was supplied; and
            ``(2) maintain and make available a record regarding such 
        broadcast, consideration, and person supplying the 
        consideration in the same manner and to the same extent that 
        the station is required to maintain and make available records 
        regarding paid advertisements for specific political 
        candidates.''.

SEC. 6. BENEFITS FOR CANDIDATES VOLUNTARILY LIMITING EXPENDITURES.

    (a) Requirements for Eligible Candidates.--The Federal Election 
Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at the 
end the following new title:

     ``TITLE V--VOLUNTARY LIMITATIONS ON EXPENDITURES IN HOUSE OF 
                       REPRESENTATIVES ELECTIONS

``SEC. 501. AVAILABILITY OF REDUCED POSTAGE RATES FOR ELIGIBLE HOUSE OF 
              REPRESENTATIVES CANDIDATE.

    ``An eligible House of Representatives candidate shall be entitled 
to reduced postage rates in accordance with section 3626(e)(2) of title 
39, United States Code.

``SEC. 502. LIMITATION ON EXPENDITURES BY ELIGIBLE HOUSE OF 
              REPRESENTATIVES CANDIDATE.

    ``(a) In General.--An eligible House of Representatives candidate 
may not, with respect to an election, make expenditures totaling more 
than $700,000.
    ``(b) Increase in Limit for Candidates Against Whom Independent 
Expenditures Are Made.--In the case of an eligible House of 
Representatives candidate against whom independent expenditures are 
made in an election, the reference in subsection (a) to `$700,000' 
shall be deemed to be a reference to `$1,400,000'.
    ``(c) Indexing.--Each of the amounts specified in subsections (a) 
and (b) shall be adjusted in the same manner as provided in section 
315(c), except that the base period shall be calendar year 1998.

``SEC. 503. DEFINITIONS.

    ``As used in this title, the term `eligible House of 
Representatives candidate' means a candidate for the office of 
Representative in, or Delegate or Resident Commissioner to, the 
Congress, who, as determined by the Commission, complies with section 
502.''.
    (b) Reduced Postage Rates for Eligible Candidates.--Section 
3626(e)(2) of title 39, United States Code, is amended--
            (1) in subparagraph (A), by striking ``and the National 
        Republican Congressional Committee'' and inserting ``the 
        National Republican Congressional Committee, and the principal 
        campaign committee of an eligible House of Representatives 
        candidate'';
            (2) in subparagraph (B), by striking ``and'' after the 
        semicolon;
            (3) in subparagraph (C), by striking the period and 
        inserting a semicolon; and
            (4) by adding after subparagraph (C) the following new 
        subparagraphs:
            ``(D) the term `principal campaign committee' has the 
        meaning given such term in section 301 of the Federal Election 
        Campaign Act of 1971; and
            ``(E) the term `eligible House of Representatives 
        candidate' has the meaning given such term in section 503 of 
        the Federal Election Campaign Act of 1971.''.

SEC. 7. PROMOTING EFFICIENCY IN FEC ENFORCEMENT.

    (a) Requiring Electronic Filing.--Section 304(a)(11)(A) of the 
Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(11)(A)) is 
amended by striking ``The Commission shall permit reports required by 
this Act to be filed'' and inserting ``Reports required by this Act 
shall be filed''.
    (b) Prohibiting Reductions in Annual Appropriation for 
Commission.--Section 314 of such Act (2 U.S.C. 439c) is amended--
            (1) by striking ``There are authorized'' and inserting 
        ``(a) In General.--There are authorized''; and
            (2) by adding at the end the following new subsection:
    ``(b) Prohibiting Reduction in Annual Appropriation.--
Notwithstanding any other provision of law, the amount appropriated to 
the Commission under subsection (a) with respect to any fiscal year 
(beginning with fiscal year 1999) may not be less than the amount 
appropriated to the Commission under such subsection with respect to 
the previous fiscal year.''.
    (c) Shortening Deadline for Right To Bring Private Action.--Section 
309(a)(8)(A) of such Act (2 U.S.C. 437g(a)(8)(A)) is amended by 
striking ``120-day'' and inserting ``90-day''.
    (d) Requiring Contributions To Be Held in Escrow Pending Provision 
of Required Information to Commission.--Section 302 of such Act (2 
U.S.C. 432) is amended by adding at the end the following new 
subsection:
    ``(j) Notwithstanding any other provision of this title, upon 
receipt of a contribution an authorized committee of a candidate shall 
hold the contribution in an escrow account until the committee submits 
to the Commission all information required to be reported to the 
Commission with respect to the contribution under this Act.
    (e) Establishment of 10-Year Term for Commissioners.--
            (1) In general.--Section 306(a)(2)(A) of such Act (2 U.S.C. 
        437c(a)(2)(A)), as amended by section 512(a) of the Treasury 
        and General Government Appropriations Act, 1998, is amended by 
        striking ``6 years'' and inserting ``10 years''.
            (2) Effective date.--The amendment made by paragraph (1) 
        shall apply with respect to terms beginning after the date of 
        the enactment of this Act.

SEC. 8. RAISING THRESHOLD FOR REPORTING INFORMATION ON PERSONS MAKING 
              CONTRIBUTIONS.

    Section 302 of the Federal Election Campaign Act of 1971 (2 U.S.C. 
431) is amended by striking ``$250'' each place it appears in 
subsections (b)(1), (b)(2), and (c) and inserting ``$50''.

SEC. 9. DISCLOSURE OF INFORMATION BY PERSONS CONDUCTING POLLS DURING 
              FEDERAL ELECTION CAMPAIGNS.

    Title III of the Federal Election Campaign Act of 1971 (2 U.S.C. 
431 et seq.), as amended by section 2(e) and section 3(a), is further 
amended by adding at the end the following new section:

  ``disclosure of information by persons conducting polls by telephone

    ``Sec. 325. (a) In General.--Any person who conducts a poll by 
telephone or electronic means to interview individuals on opinions 
relating to any election for Federal office (other than an election for 
President or Vice President) in which the number of households surveyed 
is equal to or greater than the applicable threshold described in 
subsection (b) shall disclose to each respondent to the poll the 
identity of the person sponsoring the poll or paying the expenses 
associated with the poll.
    ``(b) Applicable Threshold of Households Surveyed.--For purposes of 
subsection (a), the `applicable threshold' with respect to a poll is--
            ``(1) 2,500 households, in the case of a poll relating to 
        an election for the office of Senator or of Representative from 
        a State which is entitled to only one Representative; or
            ``(2) 1,000 households, in the case of a poll relating to 
        an election for the office of Representative in, or Delegate or 
        Resident Commissioner to, the Congress from any other State.''.

SEC. 10. EFFECTIVE DATE.

    Except as otherwise provided, the amendments made by this Act shall 
apply with respect to elections occurring after January 1999.
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