[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 1666 Introduced in Senate (IS)]







105th CONGRESS
  2d Session
                                S. 1666

 To amend Federal election laws to better define the requirements for 
   Presidential candidates and political parties that accept public 
funding, to better define the limits on the election-related activities 
          of tax exempt organizations, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 23, 1998

 Mr. Lieberman introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
 To amend Federal election laws to better define the requirements for 
   Presidential candidates and political parties that accept public 
funding, to better define the limits on the election-related activities 
          of tax exempt organizations, 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. REQUIREMENTS FOR PRESIDENTIAL CANDIDATES ACCEPTING PUBLIC 
              FUNDING.

    (a) Restrictions on Fundraising by Candidates.--
            (1) Definition of fundraising.--Section 9002 of the 
        Internal Revenue Code of 1986 (relating to definitions in the 
        Presidential Election Campaign Fund Act) is amended by adding 
        at the end the following:
    ``(13) Fundraising activity.--
            ``(A) In general.--The term `fundraising activity' means--
                    ``(i) an activity or event the purpose or effect of 
                which is the direct or indirect solicitation, 
                acceptance, or direction of a contribution (as defined 
                in section 271(b)(2)) for--
                            ``(I) any candidate for public office,
                            ``(II) a political committee (including a 
                        national, State, or local committee of a 
                        political party),
                            ``(III) an organization that--
                                    ``(aa) is described in section 
                                501(c) and exempt from taxation under 
                                section 501(a) (or has submitted an 
                                application to the Secretary of the 
                                Treasury for determination of tax-
                                exemption under such section), and
                                    ``(bb) engages in any election-
                                related activity, including, but not 
                                limited to, voter registration, get-
                                out-the-vote activity, publication or 
                                distribution of a voter guide, or 
                                making communications that are widely 
                                disseminated through a broadcasting 
                                station, newspaper, magazine, outdoor 
                                advertising facility, direct mailing, 
                                or any other type of general public 
                                political advertising and that clearly 
                                identify a candidate (as defined in 
                                section 301 of the Federal Election 
                                Campaign Act of 1971 (2 U.S.C. 431)) or 
                                a political party,
                            ``(IV) a political organization (as defined 
                        in section 527), or
                            ``(V) an organization that engages in any 
                        electioneering advertising (as defined in 
                        section 324 of the Federal Election Campaign 
                        Act of 1971), or
                    ``(ii) the authorization of use of a candidate's 
                name in connection with an activity or event described 
                in clause (i).
            ``(B) Exception.--The term `fundraising activity' does not 
        include an activity or event the sole purpose or effect of 
        which is to solicit or accept a contribution (as defined in 
        section 301(8) of the Federal Election Campaign Act of 1971 (2 
        U.S.C. 431(8)) for the candidate participating in the activity 
        or event that is specifically solicited for, and deposited in, 
        the candidate's legal and accounting compliance fund or that is 
        necessary to cover any deficiency in payments received from the 
        Presidential Election Campaign Fund, to the extent otherwise 
        permissible by law.''.
            (2) General election.--Section 9003 of the Internal Revenue 
        Code of 1986 (relating to condition for eligibility for 
        payments) is amended--
                    (A) in subsection (b)--
                            (i) in paragraph (1), by striking ``and'' 
                        at the end;
                            (ii) in paragraph (2), by striking the 
                        period at the end and inserting ``, and''; and
                            (iii) by inserting after paragraph (2) the 
                        following:
            ``(3) such candidate, a member of the candidate's immediate 
        family (as defined in section 9004(e)), and the candidate's 
        authorized committee or agents or officials of the committee 
        shall not participate in any fundraising activity during the 
        expenditure report period.''; and
                    (B) in subsection (c)--
                            (i) in paragraph (1), by striking ``and'' 
                        at the end;
                            (ii) in paragraph (2), by striking the 
                        period at the end and inserting ``, and''; and
                            (iii) by inserting after paragraph (2) the 
                        following:
            ``(3) subject to paragraph (2), such candidate, a member of 
        the candidate's immediate family (as defined in section 
        9004(e)), and the candidate's authorized committee or agents or 
        officials of such committee shall not participate in a 
        fundraising activity during the expenditure report period.''.
            (3) Primary election.--Subsection (b) of section 9033 of 
        the Internal Revenue Code of 1986 (relating to eligibility for 
        payments) is amended--
                    (A) in paragraph (3), by striking ``and'' at the 
                end;
                    (B) in paragraph (4), by striking the period at the 
                end and inserting ``, and''; and
                    (C) by adding at the end the following:
            ``(5) the candidate, a member of the candidate's immediate 
        family (as defined in section 9004(e)), and the candidate's 
        authorized committee or agents or officials of such committee 
        shall not participate in a fundraising activity during the 
        matching payment period unless such activity has as its sole 
        purpose and effect the solicitation or acceptance of 
        contributions (as defined in section 301(8) of the Federal 
        Election Campaign Act of 1971 (2 U.S.C. 431(8))).''.
    (b) Restriction on Coordinated Disbursement.--
            (1) Definition of coordinated disbursement.--Section 9002 
        of the Internal Revenue Code of 1986 (as amended by subsection 
        (a)) is amended by adding at the end the following:
            ``(14) Coordinated Disbursement.--
                    ``(A) In general.--The term `coordinated 
                disbursement' means a purchase, payment, distribution, 
                loan, advance, deposit, or gift of money or anything of 
                value, made in connection with any broadcasting, 
                newspaper, magazine, billboard, direct mail, phone 
                bank, widely distributed electronic mail, or similar 
                type of general public communication or advertising by 
                a person (who is not a candidate or a candidate's 
                authorized committee) in cooperation, consultation, or 
                concert with, or at the request or suggestion of, a 
                candidate, a member of the candidate's immediate family 
                (as defined in section 9004(e)), the candidate's 
                authorized committees, or a committee of a political 
                party.
                    ``(B) Special rule.--In the case of a candidate who 
                designates a committee of a political party as the 
                candidate's authorized committee, the term `coordinated 
                disbursement' shall include disbursements made by the 
                committee in cooperation, consultation, or concert 
                with, or at the request or suggestion of, a candidate 
                or a member of the candidate's immediate family (as 
                defined in section 9004(e)) in excess of an amount 
                equal to the aggregate of the limit under section 
                315(d) of the Federal Election Campaign Act of 1971 (2 
                U.S.C. 441a(d)) and the appropriate limit under section 
                315(b)(1) of such Act (2 U.S.C. 441a(b)(1)).
                    ``(C) Exceptions.--The term `coordinated 
                disbursement' does not include--
                            ``(i) a disbursement that is an expenditure 
                        subject to the limits under section 315(d) of 
                        the Federal Election Campaign Act of 1971 (2 
                        U.S.C. 441a(d)); or
                            ``(ii) a disbursement for a bona fide 
                        newscast, news interview, news documentary (if 
                        the appearance of the candidate is incidental 
                        to the presentation of the subject or subjects 
                        covered by the news documentary), editorial, or 
                        on-the-spot coverage of bona fide news 
                        events.''.
            (2) General election.--Subsection (a) of section 9003 of 
        the Internal Revenue Code of 1986 (relating to condition for 
        eligibility for payments) is amended--
                    (A) in paragraph (2), by striking ``and'' at the 
                end;
                    (B) in paragraph (3), by striking the period at the 
                end and inserting ``, and''; and
                    (C) by adding at the end the following:
            ``(4) agree not to participate in a coordinated 
        disbursement during the election report period.''.
            (3) Primary election.--Section 9033(b) (as amended by 
        subsection (a)(3)) is amended--
                    (A) in paragraph (4), by striking ``and'' at the 
                end;
                    (B) in paragraph (5), by striking the period at the 
                end and inserting ``, and''; and
                    (C) by adding at the end the following:
            ``(6) the candidate and the candidate's authorized 
        committees shall not participate in a coordinated disbursement 
        (as defined in section 9002(14)) during the matching payment 
        period except to the extent that the disbursement is a 
        contribution subject to the contribution limits of section 315 
        of the Federal Election Campaign Act of 1971 (2 U.S.C. 
        441a).''.

SEC. 2. REQUIREMENTS FOR POLITICAL PARTIES ACCEPTING PUBLIC FINANCING 
              FOR PRESIDENTIAL NOMINATING CONVENTIONS.

    (a) Requirements.--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. 324. REQUIREMENTS FOR POLITICAL PARTIES ACCEPTING PUBLIC 
              FINANCING FOR PRESIDENTIAL NOMINATING CONVENTIONS.

    ``(a) Definitions.--In this section--
            ``(1) Committee.--The term `committee' shall include a 
        national, State, district, or local committee of a political 
        party, an entity that is directly or indirectly established, 
        financed, maintained, or controlled by any such party committee 
        or its agent, an agent acting on behalf of any such party 
        committee, and an officer or agent acting on behalf of any such 
        party committee or entity.
            ``(2) Electioneering advertising.--
                    ``(A) In general.--The term `electioneering 
                advertising' means a communication--
                            ``(i) containing a phrase such as `vote 
                        for', `re-elect', `support', `cast your ballot 
                        for', `(name of individual) for President', 
                        `(name of individual) in (calendar year)', 
                        `vote against', `defeat', `reject', or a 
                        campaign slogan or words that in context can 
                        have no reasonable meaning other than to 
                        recommend the election or defeat of 1 or more 
                        clearly identified candidates such as `(name of 
                        candidate)'s the One' or `(name of candidate'); 
                        or
                            ``(ii) referring to 1 or more clearly 
                        identified candidates in a communication that 
                        is widely disseminated to the electorate for 
                        the election in which the identified candidates 
                        are seeking office through a broadcasting 
                        station, newspaper, magazine, outdoor 
                        advertising facility, direct mailing, or any 
                        other type of general public communication.
                    ``(B) Voting record and voting guide exception.--
                The term `electioneering advertising' does not include 
                a printed communication that--
                            ``(i) presents information in an 
                        educational manner solely about the voting 
                        record or position on a campaign issue of 2 or 
                        more individuals;
                            ``(ii) is not made in coordination with an 
                        individual, political party, or agent of the 
                        individual or party;
                            ``(iii) in the case of a voter guide based 
                        on a questionnaire, provides each individual 
                        seeking a particular seat or office an equal 
                        opportunity to respond to the questionnaire and 
                        have the individual's responses incorporated 
                        into the voter guide;
                            ``(iv) does not present an individual with 
                        greater prominence than any other individual; 
                        and
                            ``(v) does not contain a phrase such as 
                        `vote for', `re-elect', `support', `cast your 
                        ballot for', `(name of individual) for 
                        President', `(name of individual) in 1997', 
                        `vote against', `defeat', or `reject', or a 
                        campaign slogan or words that in context can 
                        have no reasonable meaning other than to urge 
                        the election or defeat of 1 or more clearly 
                        identified individuals.
            ``(3) Eligible political committee.--The term `eligible 
        political committee' means a national committee of a political 
        party entitled to receive payments under section 9008 of the 
        Internal Revenue Code of 1986 for a presidential nominating 
        convention.''.
    ``(b) Limits on Electioneering Advertising.--During the matching 
payment period (as defined in section 9032(6) of the Internal Revenue 
Code of 1986) and the expenditure report period (as defined in section 
9002(12) of such Code), an eligible political committee shall not--
            ``(1) make disbursements for electioneering advertising in 
        connection with an individual seeking nomination for election, 
        or election, to the office of President or Vice President 
        except from funds that are subject to the limitations, 
        prohibitions, and reporting requirements of this Act; or
            ``(2) transfer of funds that are not subject to the 
        limitations, prohibitions, and reporting requirements of this 
        Act to a State, district, or local committee of a political 
        party that will be used to make disbursements for 
        electioneering advertising in connection with an individual 
        seeking nomination for election, or election, to the office of 
        President or Vice President.
    ``(c) Limitation of Coordinated and Independent Expenditures.--In 
the case of an eligible political committee, the limitation under 
section 315(d)(2) (relating to coordinated expenditures by committees 
of a political party) shall apply to the aggregate of expenditures, 
disbursements for electioneering advertising, and independent 
expenditures made by the national committee in connection with a 
candidate for President of the United States.
    ``(d) Prohibition of Coordinated Disbursements.--During the 
matching payment period (as defined in section 9032(6) of the Internal 
Revenue Code of 1986) and the expenditure report period (as defined in 
section 9002(12) of such Code), an eligible political committee shall 
not participate in a coordinated disbursement (as defined in section 
9002(14) of the Internal Revenue Code of 1986) with respect to an 
individual seeking nomination for election, or election, to the office 
of President or Vice President.
    ``(e) Prohibition of Certain Donations.--An eligible political 
committee and any officer or agent acting on behalf of such committee 
shall not solicit any funds for, or make or direct any donation to, an 
organization that--
            ``(1) is described in section 501(c) and exempt from 
        taxation under section 501(a) (or has submitted an application 
        to the Secretary of the Treasury for determination of tax-
        exemption under such section), and
            ``(2) engages in any election-related activity, including, 
        but not limited to, voter registration, get-out-the-vote 
        activity, publication or distribution of a voter guide, or 
        making communications that are widely disseminated through a 
        broadcasting station, newspaper, magazine, outdoor advertising 
        facility, direct mailing, or any other type of general public 
        political advertising that clearly identify a candidate (as 
        defined in section 301 of the Federal Election Campaign Act of 
        1971 (2 U.S.C. 431)) or a political party.
    ``(f) Prohibition of Soft Money.--
            ``(1) National committees.--
                    ``(A) In general.--An eligible political committee 
                (including a national congressional campaign committee 
                of a political party) and any officers or agents of 
                such committees, shall not solicit, receive, or direct 
                to another person a contribution, donation, or transfer 
                of funds, or spend any funds, that are not subject to 
                the limitations, prohibitions, and reporting 
                requirements of this Act.
                    ``(B) Applicability.--This subsection shall apply 
                to an entity that is directly or indirectly 
                established, financed, maintained, or controlled by an 
                eligible committee (including a national congressional 
                campaign committee of a political party), or an entity 
                acting on behalf of a national committee, and an 
                officer or agent acting on behalf of any such committee 
                or entity.
            ``(2) State, district, and local committees.--
                    ``(A) In general.--An amount that is expended or 
                disbursed by a State, district, or local committee of a 
                political party that has an eligible political 
                committee (including an entity that is directly or 
                indirectly established, financed, maintained, or 
                controlled by a State, district, or local committee of 
                a political party and an officer or agent acting on 
                behalf of such committee or entity) for Federal 
                election activity shall be made from funds subject to 
                the limitations, prohibitions, and reporting 
                requirements of this Act.
                    ``(B) Federal election activity.--
                            ``(i) In general.--The term `Federal 
                        election activity' means--
                                    ``(I) voter registration activity 
                                during the period that begins on the 
                                date that is 120 days before the date a 
                                regularly scheduled Federal election is 
                                held and ends on the date of the 
                                election;
                                    ``(II) voter identification, get-
                                out-the-vote activity, or generic 
                                campaign activity 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); and
                                    ``(III) a communication that refers 
                                to a clearly identified candidate for 
                                Federal office (regardless of whether a 
                                candidate for State or local office is 
                                also mentioned or identified) and is 
                                made for the purpose of influencing a 
                                Federal election (regardless of whether 
                                the communication is express advocacy).
                            ``(ii) Excluded activity.--The term 
                        `Federal election activity' does not include an 
                        amount expended or disbursed by a State, 
                        district, or local committee of a political 
                        party for--
                                    ``(I) campaign activity conducted 
                                solely on behalf of a clearly 
                                identified candidate for State or local 
                                office if the campaign activity is not 
                                a Federal election activity described 
                                in clause (i);
                                    ``(II) a contribution to a 
                                candidate for State or local office if 
                                the contribution is not designated or 
                                used to pay for a Federal election 
                                activity described in clause (i);
                                    ``(III) the costs of a State, 
                                district, or local political 
                                convention;
                                    ``(IV) the costs of grassroots 
                                campaign materials, including buttons, 
                                bumper stickers, and yard signs, that 
                                name or depict only a candidate for 
                                State or local office;
                                    ``(V) the non-Federal share of a 
                                State, district, or local party 
                                committee's administrative and overhead 
                                expenses (but not including the 
                                compensation in any month of an 
                                individual who spends more than 20 
                                percent of the individual's time on 
                                Federal election activity) as 
                                determined by a regulation promulgated 
                                by the Commission to determine the non-
                                Federal share of a State, district, or 
                                local party committee's administrative 
                                and overhead expenses; and
                                    ``(VI) the cost of constructing or 
                                purchasing an office facility or 
                                equipment for a State, district, or 
                                local committee.
                    ``(3) Fundraising costs.--An amount spent by a 
                national, State, district, or local committee of a 
                political party (that has an eligible political 
                committee) to raise funds that are used, in whole or in 
                part, to pay the costs of a Federal election activity 
                shall be made from funds subject to the limitations, 
                prohibitions, and reporting requirements of this 
                Act.''.
    (b) Increased Contribution Limit.--Section 315(a)(1) of the Federal 
Election Campaign Act of 1971 (2 U.S.C. 441a(a)(1)) is amended--
            (1) in subparagraph (B), by striking ``or'' at the end;
            (2) in subparagraph (C)--
                    (A) by inserting ``(other than a committee 
                described in subparagraph (D))'' after ``committee''; 
                and
                    (B) by striking the period at the end and inserting 
                ``; or''; and
            (3) by adding at the end the following:
            ``(D) to a political committee established and maintained 
        by a State committee of a political party that is entitled to 
        receive payments under section 9008 of the Internal Revenue 
        Code of 1986 for a Presidential nominating convention in any 
        calendar year that, in the aggregate, exceed $10,000.''.
    (c) Conforming Amendments.--
            (1) Federal election campaign act of 1971.--Section 
        315(d)(2) of the Federal Election Campaign Act of 1971 (2 
        U.S.C. 441a(d)(2)) is amended by striking ``The national 
        committee'' and inserting ``Subject to section 324(b), the 
        national committee''.
            (2) Internal revenue code of 1986.--Subsection (b) of 
        section 9008 of the Internal Revenue Code of 1986 (relating to 
        payments for presidential nominating conventions) is amended--
                    (A) in paragraph (1), by inserting ``and section 
                324 of the Federal Election Campaign Act of 1971'' 
                after ``section''; and
                    (B) in paragraph (2), by inserting ``and section 
                324 of the Federal Election Campaign Act of 1971'' 
                after ``section''.

SEC. 3. REQUIRED DISCLAIMER FOR PRESIDENTIAL CANDIDATES.

    Section 318 of the Federal Election Campaign Act of 1971 (2 U.S.C. 
441d) is amended by adding at the end the following:
    ``(c) Required Disclaimer for Presidential Candidates.--In the case 
of an expenditure by a candidate for President or Vice President 
eligible under section 9003 of the Internal Revenue Code of 1986 or 
under section 9033 of the Internal Revenue Code of 1986 to receive 
payments from the Secretary of the Treasury for an advertisement that 
is broadcast by a radio broadcast station or a television broadcast 
station or communicated by direct mail, such advertisement shall 
contain the following statement: `Federal law establishes voluntary 
spending limits for candidates for President. This candidate ____ 
agreed to abide by the limits.' (with the blank filled in with `has' or 
`has not' as appropriate).''.

SEC. 4. LIMITATIONS ON POLITICAL ACTIVITY BY TAX-EXEMPT ORGANIZATIONS.

    Subsection (c) of section 501 of the Internal Revenue Code of 1986 
(relating to exemption from tax on corporations, certain trusts, etc.) 
is amended--
            (1) by redesignating subsection (o) as subsection (p); and
            (2) by inserting after subsection (n) the following new 
        subsection:
    ``(o) Special Rules for Organizations Exempt Under Paragraph (3) or 
(4) of Subsection (c).--An organization described in paragraph (3) or 
(4) of subsection (c) shall be denied exemption from taxation under 
subsection (a) if such organization--
            ``(1) solicits or accepts a contribution (as defined in 
        section 271(b)(2)) from a committee of a political party or an 
authorized committee of a candidate (as defined in section 301 of the 
Federal Election Campaign Act of 1971 (2 U.S.C. 431)),
            ``(2) makes or directs a contribution to a committee of a 
        political party or an authorized committee of a candidate,
            ``(3) makes a disbursement for electioneering advertising 
        (as defined in section 324 of the Federal Election Campaign Act 
        of 1971), except to the extent that--
                    ``(A) the disbursement constitutes an independent 
                expenditure (as defined in section 301(17) of the 
                Federal Election Campaign Act of 1971 (2 U.S.C. 
                431(17)), or
                    ``(B) the advertising is--
                            ``(i) described in section 324(a)(2)(A)(ii) 
                        of the Federal Election Campaign Act of 1971,
                            ``(ii) otherwise permitted by law, and
                            ``(iii) made more than--
                                    ``(I) 60 days before the date of a 
                                general, special, or runoff election in 
                                which the identified candidates are 
                                seeking office, or
                                    ``(II) 30 days before the date of a 
                                primary or preference election or a 
                                convention or caucus of a political 
                                party that has authority to nominate a 
                                candidate for the office for which the 
                                identified candidates are seeking 
                                election, or
            ``(4) participates in a coordinated disbursement (as 
        defined in section 9002(14)).''.

SEC. 5. DEFINITIONS OF POLITICAL COMMITTEE AND POLITICAL ORGANIZATION.

    (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) in subparagraph (B), by striking ``or'' at the end;
            (2) in subparagraph (C), by striking the period at the end 
        and inserting ``; or''; and
            (3) by adding at the end the following:
            ``(D) a political organization (as defined in section 
        527(e)(1) of the Internal Revenue Code of 1986 and subject to 
        section 527 of such Code) unless the activities of the 
        organization are for the exclusive purpose of influencing or 
        attempting to influence the selection, nomination, election, or 
        appointment of any individual or individuals to any State or 
        local public office or office in a State or local political 
        organization.''.
    (b) Definition of Political Organization.--Paragraph (e)(1) of 
section 527 of the Internal Revenue Code of 1986 (relating to political 
organizations) is amended by striking ``incorporated) organized and 
operated'' and all that follows through the period and inserting 
``incorporated)--
                    ``(A) organized and operated primarily for the 
                purpose of directly or indirectly accepting 
                contributions or making expenditures, or both, for an 
                exempt function, and
                    ``(B) that is a political committee described in 
                section 301(4) of the Federal Election Campaign Act of 
                1971 (2 U.S.C. 431(4)) except to the extent that the 
                activities of the organization are for the exclusive 
                purpose of influencing or attempting to influence the 
                selection, nomination, election, or appointment of any 
                individual or individuals to any State or local public 
                office or office in a State or local political 
                organization.''.

SEC. 6. SEVERABILITY.

    If any provision of this Act or amendment made by this Act, or the 
application of a provision or amendment to any person or circumstance, 
is held to be unconstitutional, the remainder of this Act and 
amendments made by this Act, and the application of the provisions and 
amendment to any person or circumstance, shall not be affected by the 
holding.

SEC. 7. EFFECTIVE DATE.

    Except as otherwise provided in this Act, this Act and the 
amendments made by this Act take effect on the date that is 30 days 
after the date of enactment of this Act.

SEC. 8. REGULATIONS.

    The Federal Election Commission and the Commissioner of the 
Internal Revenue Code of 1986 shall--
            (1) promulgate regulations as necessary to enforce this 
        Act; and
            (2) in the promulgation of regulations under paragraph (1), 
        provide an exception to any provision that the Commission or 
        Commissioner determines necessary to serve the public interest.
                                 <all>