H.R. 6426 (112th): Grassroots Democracy Act of 2012

112th Congress, 2011–2013. Text as of Sep 14, 2012 (Introduced).

Status & Summary | PDF | Source: GPO

I

112th CONGRESS

2d Session

H. R. 6426

IN THE HOUSE OF REPRESENTATIVES

September 14, 2012

(for himself, Mr. Boswell, Mr. Brady of Pennsylvania, Mr. Capuano, Mr. Conyers, Mr. Deutch, Mr. Dingell, Mr. Doggett, Ms. Edwards, Mr. Ellison, Mr. Engel, Mr. Holt, Mr. Lewis of Georgia, Mr. McGovern, Mr. George Miller of California, Mr. Grijalva, Mr. Nadler, Ms. Pingree of Maine, Mr. Polis, Mr. Price of North Carolina, Ms. Linda T. Sánchez of California, Ms. Schakowsky, Mr. Scott of Virginia, Mr. Sires, Mr. Tonko, Mr. Van Hollen, Mr. Welch, Mr. Yarmuth, Ms. Bonamici, Ms. DeLauro, Mr. Larson of Connecticut, and Mr. Courtney) introduced the following bill; which was referred to the Committee on House Administration, and in addition to the Committees on Ways and Means and Energy and Commerce, 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 reform the financing of Congressional elections by encouraging grassroots participation in the funding of campaigns, and for other purposes.

1.

Short title; table of contents

(a)

Short Title

This Act may be cited as the Grassroots Democracy Act of 2012.

(b)

Table of contents

The table of contents of this Act is as follows:

Sec. 1. Short title; table of contents.

Title I—Grassroots Participation in Funding of Elections

Subtitle A—Grassroots Democracy Dollars

Sec. 101. Refundable credit for grassroots contributions to Federal congressional candidates.

Subtitle B—Grassroots Democracy Coupon Pilot Program

Sec. 111. Establishment of pilot program.

Sec. 112. Reports to Congress.

Title II—Grassroots financing of congressional election campaigns

Sec. 201. Benefits and eligibility requirements for candidates.

Title V—Grassroots financing of congressional election campaigns

Subtitle A—Benefits

Sec. 501. Benefits for participating candidates.

Sec. 502. Procedures for making payments.

Sec. 503. Use of funds.

Sec. 504. Qualified grassroots contributions described.

Subtitle B—Eligibility and certification

Sec. 511. Eligibility.

Sec. 512. Qualifying requirements.

Sec. 513. Certification.

Subtitle C—Requirements for Candidates Certified as Participating Candidates

Sec. 521. Contribution and expenditure requirements.

Sec. 522. Administration of campaign.

Sec. 523. Preventing unnecessary spending of public funds.

Sec. 524. Remitting unspent funds after election.

Subtitle D—Supplemental Grassroots Democracy People’s Fund Payments

Sec. 531. Eligibility of participating candidates for payments.

Sec. 532. Amount of payment; use of funds.

Sec. 533. Severability.

Subtitle E—Administrative provisions

Sec. 541. Grassroots Democracy Fund.

Sec. 542. Grassroots Democracy Advisory Commission.

Sec. 543. Administration by Commission.

Sec. 544. Violations and penalties.

Sec. 545. Election cycle defined.

Sec. 202. Prohibiting use of contributions by participating candidates for purposes other than campaign for election.

Title III—Other administrative reforms

Sec. 301. Expanding requirement to disclose bundlers who are registered lobbyists to all bundlers.

Sec. 302. Expansion of period for treatment of communications as electioneering communications.

Sec. 303. User fees for committees and bundlers.

Sec. 304. Petition for certiorari.

Sec. 305. Filing by all candidates with Commission.

Sec. 306. Electronic filing of FEC reports.

Sec. 307. Effective date.

Title IV—Offsets

Sec. 401. Reform of tax rules related to political organizations.

Sec. 402. Voluntary contributions to the Grassroots Democracy Fund.

Title V—Expanding Candidate Access to Advertising

Sec. 501. Broadcasts by or on behalf of candidates.

I

Grassroots Participation in Funding of Elections

A

Grassroots Democracy Dollars

101.

Refundable credit for grassroots contributions to Federal congressional 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 inserting after section 36B the following new section:

36C.

Credit for grassroots contributions to Federal congressional candidates

(a)

In general

In the case of an individual, there shall be allowed as a credit against the tax imposed by this subtitle an amount equal to the qualified grassroots Federal congressional campaign contributions paid or incurred by the taxpayer during the taxable year.

(b)

Limitations

(1)

Dollar limitation

The credit allowed under subsection (a) to any taxpayer with respect to any taxable year shall not exceed $25 (twice such amount in the case of a joint return).

(2)

Limitation on contributions to Federal congressional candidates

No credit shall be allowed under this section to any taxpayer for any taxable year if such taxpayer made aggregate contributions in excess of $200 (twice such amount in the case of a joint return) during the taxable year to—

(A)

any single Federal congressional candidate, or

(B)

any political committee established and maintained by a national political party.

(3)

Ineligibility of individuals using Grassroots Democracy Coupons

No credit shall be allowed under this section with respect to any individual for any taxable year during which such individual submitted a Grassroots Democracy Coupon under subtitle B of title I of the Grassroots Democracy Act of 2012 to a candidate for election for Federal office. In the case of a joint return with respect to which this paragraph applies to one of the spouses, such return shall not be treated as a joint return for purposes of determining the dollar limitation under paragraph (1).

(c)

Qualified grassroots Federal congressional campaign contributions

For purposes of this section, the term qualified grassroots Federal congressional campaign contribution means any contribution of cash by an individual to a Federal congressional candidate or to a political committee established and maintained by a national political party if such contribution is not prohibited under the Federal Election Campaign Act of 1971.

(d)

Federal congressional candidate

For purposes of this section—

(1)

In general

The term Federal congressional candidate means any candidate for election to the office of Senator or Representative in, or Delegate or Resident Commissioner to, the Congress.

(2)

Treatment of authorized committees

Any contribution made to an authorized committee of a Federal congressional candidate shall be treated as made to such candidate.

(e)

Inflation adjustment

(1)

In general

In the case of a taxable year beginning after 2013, the $25 amount under subsection (b)(1) shall be increased by an amount equal to—

(A)

such dollar amount, multiplied by

(B)

the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2012 for calendar year 1992 in subparagraph (B) thereof.

(2)

Rounding

If any amount as adjusted under subparagraph (A) is not a multiple of $5, such amount shall be rounded to the nearest multiple of $5.

.

(b)

Conforming amendments

(1)

Section 6211(b)(4)(A) of such Code is amended by inserting 36C, after 36B,.

(2)

Section 1324(b)(2) of title 31, United States Code, is amended by inserting 36C, after 36B,.

(3)

The table of sections for subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 36C the following new item:

Sec. 36C. Credit for grassroots contributions to Federal congressional candidates.

.

(c)

Forms

The Secretary of the Treasury, or his designee, shall ensure that the credit for grassroots contributions to Federal congressional candidates allowed under section 36C of the Internal Revenue Code of 1986, as added by this section, may be claimed on Forms 1040EZ and 1040A.

(d)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

B

Grassroots Democracy Coupon Pilot Program

111.

Establishment of pilot program

(a)

Establishment

The Grassroots Democracy Advisory Commission established under section 542 of the Federal Election Campaign Act of 1971 (as added by section 201) (hereafter in this subtitle referred to as the Commission) shall establish a pilot program under which—

(1)

a qualified individual who resides in a State selected for participation in the program shall be provided with a voucher to be known as a Grassroots Democracy Coupon during the election cycle which will be assigned a routing number and which at the option of the individual will be provided in either paper or electronic form;

(2)

using the routing number assigned to the Coupon, the individual may submit the Grassroots Democracy Coupon in either electronic or paper form to qualified candidates for election for Federal office and allocate such portion of the value of the voucher in increments of $5 (in an amount not to exceed $50 for any single candidate) as the individual may select to any such candidate; and

(3)

if the candidate transmits such Grassroots Democracy Coupon to the Commission, the Commission shall pay the candidate the portion of the value of the voucher that the individual allocated to the candidate, which shall be considered a contribution by the individual to the candidate for purposes of the Federal Election Campaign Act of 1971.

(b)

Selection of States

(1)

In general

A State that seeks to participate in the pilot program under this title shall submit to the Commission (at such time and in such form as the Commission may require) an application containing such information and assurances as the Commission may require.

(2)

Criteria

In selecting among States that seek to participate in the program, the Commission shall ensure a balance among various geographic regions, population sizes, and other demographic characteristics.

(c)

Standards for qualification of individuals

The Commission shall establish standards for the qualification of individuals to whom Grassroots Democracy Coupons will be provided, so that only individuals who are registered to vote in elections for Federal office may qualify and such individuals would be able to claim the Coupons immediately upon registering to vote.

(d)

Other administrative specifications

In carrying out the pilot program under this subtitle, the Commission shall—

(1)

create the necessary routing numbers for the Grassroots Democracy Coupons, which will be matched with State-issued voter registration cards;

(2)

provide incentives for candidates for election for Federal office and interested organizations to develop online platforms through which individuals may select among eligible candidates for the submission and acceptance of Grassroots Democracy Coupons in electronic or paper form; and

(3)

establish fraud prevention mechanisms so that an individual may revoke a Grassroots Democracy Coupon not later than 2 days after submitting the Coupon to a candidate.

112.

Reports to Congress

(a)

Reports

Not later than 6 months after each election cycle during which the pilot program under this subtitle is in effect, the Commission and the Government Accountability Office shall each submit a report to Congress analyzing the operation and effectiveness of the program during the cycle, and shall include in each such report such recommendations as the Commission and the Government Accountability Office (as the case may be) consider appropriate regarding the expansion of the pilot program to all States and territories, along with such other recommendations as the Commission and Government Accountability Office consider appropriate.

(b)

Definition

In subsection (a), the term election cycle means the period beginning on the day after the date of the most recent regularly scheduled general election for Federal office and ending on the date of the next regularly scheduled general election for Federal office.

II

Grassroots financing of congressional election campaigns

201.

Benefits and eligibility requirements for candidates

The Federal Election Campaign Act of 1971 (2 U.S.C. 431 et seq.) is amended by adding at the end the following:

V

Grassroots financing of congressional election campaigns

A

Benefits

501.

Benefits for participating candidates

(a)

In general

If a candidate for election to the office of Senator or Representative in, or Delegate or Resident Commissioner to, the Congress is certified as a participating candidate under this title with respect to an election for such office, the candidate shall be entitled to payments as provided under this title.

(b)

Amount of payment

(1)

Tier 1 candidates

In the case of a participating candidate who is a Tier 1 candidate, the amount of a payment made under this title shall be equal to 500 percent of the amount of qualified grassroots contributions received by the candidate since the most recent payment made to the candidate under this title during the election cycle which are attributable to residents of the State in which the candidate seeks election.

(2)

Tier 2 candidates

In the case of a participating candidate who is a Tier 2 candidate, the amount of the payment made under this title shall be equal to 1,000 percent of the amount of qualified grassroots contributions received by the candidate since the most recent payment made to the candidate under this title during the election cycle.

(c)

Limit on aggregate amount of payments

(1)

Tier 1 candidates

In the case of a participating candidate who is a Tier 1 candidate, the aggregate amount of payments made under this title may not exceed 50% of the average of the 10 greatest amounts of disbursements made by the authorized committees of any winning candidate for the office of Representative in, or Delegate or Resident Commissioner to, the Congress during the most recent election cycle (in the case of a participating candidate for such office) or any winning candidate for the office of Senator during the most recent election cycle (in the case of a participating candidate for such office).

(2)

Tier 2 candidates

In the case of a participating candidate who is a Tier 2 candidate, the aggregate amount of payments made under this title may not exceed 100% of the average of the 10 greatest amounts of disbursements made by the authorized committees of any winning candidate for the office of Representative in, or Delegate or Resident Commissioner to, the Congress during the most recent election cycle (in the case of a participating candidate for such office) or any winning candidate for the office of Senator during the most recent election cycle (in the case of a participating candidate for such office).

502.

Procedures for making payments

(a)

In general

The Commission make a payment under section 501 to a candidate who is certified as a participating candidate upon receipt from the candidate of a request for a payment which includes—

(1)

a statement of the number of qualified grassroots contributions received by the candidate since the most recent payment made to the candidate under this title during the election cycle;

(2)

a statement of the amount of the payment the candidate anticipates receiving with respect to the request; and

(3)

such other information and assurances as the Commission may require.

(b)

Restrictions on submission of requests

A candidate may not submit a request under subsection (a) unless each of the following applies:

(1)

The number of individuals in the statement referred to in subsection (a)(1) is equal to or greater than 100, unless the request is submitted during the 30-day period which ends on the date of a general election.

(2)

Of the number of individuals in the statement referred to in subsection (a)(1), at least 50 percent are residents of the Congressional district involved (in the case of a candidate for election for the office of Representative in, or Delegate or Resident Commissioner to, the Congress) or the State involved (in the case of a candidate for election for the office of Senator).

(3)

The candidate did not receive a payment under this title during the 7-day period which ends on the date the candidate submits the request.

(c)

Time of payment

The Commission shall make payments under this section not later than 2 business days after the receipt of a request submitted under subsection (a).

(d)

Declaration of tier 1 or tier 2 status

A candidate shall include in the first request for payment submitted under subsection (a) a statement specifying whether the candidate is a Tier 1 candidate or a Tier 2 candidate under this title.

(e)

Appeals

The Commission shall provide a written explanation with respect to any denial of a request for payment which is submitted under this section and shall provide for the opportunity for review and reconsideration within 5 business days of such denial.

503.

Use of funds

(a)

In general

A candidate shall use payments made under this title only for making direct payments for the receipt of goods and services which constitute authorized expenditures in connection with the election cycle involved.

(b)

Limit on amount of payment made on commission basis to individuals collecting qualified grassroots contributions

If a candidate who is certified as a participating candidate under this title pays any person a commission on a per contribution basis for collecting qualified grassroots contributions, the amount paid by the candidate and the authorized committees of the candidate may not exceed 20% of the value of the qualified grassroots contributions the person collected.

504.

Qualified grassroots contributions described

(a)

In general

In this title, the term qualified grassroots contribution means, with respect to a candidate and the authorized committees of a candidate, a contribution that meets the following requirements:

(1)

The contribution is in an amount that is—

(A)

not less than the greater of $5 or the amount determined by the Commission under section 542(c)(2); and

(B)

not more than the greater of $100 or the amount determined by the Commission under section 542(c)(2).

(2)

The contribution is made by an individual who is not otherwise prohibited from making a contribution under this Act.

(3)

The individual who makes the contribution has not made any contribution to the candidate or the authorized committees of the candidate during the election cycle involved that is not a qualified grassroots contribution.

(b)

Treatment of grassroots refundable credits and grassroots democracy vouchers

Any payment received by a candidate and the authorized committees of a candidate which is treated as a qualified grassroots Federal congressional campaign contribution under section 36B of the Internal Revenue Code of 1986 or which consists of a Grassroots Democracy Coupon under subtitle B of title I of the Grassroots Democracy Act of 2012 shall be considered a qualified grassroots contribution for purposes of this title, so long as the individual making the payment meets the requirements of paragraphs (2) and (3) of subsection (a).

(c)

Exception for contributions by individuals opting out of grassroots systems

(1)

In general

A contribution by an individual shall not be treated as a qualified grassroots contribution for purposes of this title if, at the time the individual makes the contribution, the individual notifies the recipient that the contribution is not to be treated as a qualified grassroots contribution.

(2)

Contributions deemed qualified

Any contribution which meets the requirements set forth in subsection (a) shall be deemed a qualified grassroots contribution without regard to whether the individual making the contribution designates the contribution as a qualified grassroots contribution for purposes of this title.

(d)

Restriction on subsequent contributions

(1)

In general

An individual who makes a qualified grassroots contribution to a candidate or the authorized committees of a candidate during an election cycle may not make any contribution to such candidate or the authorized committees of such candidate during the cycle which is not a qualified grassroots contribution.

(2)

No effect on ability to make multiple contributions

Nothing in this section may be construed to prohibit an individual from making multiple qualified grassroots contributions to any candidate or any number of candidates, so long as each contribution meets the requirements of this section.

(e)

Notification requirements for candidates

(1)

Notification

Each authorized committee of a candidate who seeks to be a participating candidate under this title shall provide the following information in any materials for the solicitation of contributions, including any Internet site through which individuals may make contributions to the committee:

(A)

A statement that if the candidate is certified as a participating candidate under this title, the candidate will receive matching payments in an amount which is based on the total amount of qualified grassroots contributions received.

(B)

A statement that a contribution which meets the requirements set forth in subsection (a) shall be treated as a qualified grassroots contribution under this title unless the contributor notifies the committee that the contribution is not to be so treated.

(C)

A statement that if a contribution is treated as qualified grassroots contribution under this title, the individual who makes the contribution may not make any contribution to the candidate or the authorized committees of the candidate during the election cycle which is not a qualified grassroots contribution.

(2)

Expansion of other disclosure statements

An authorized committee may meet the requirements of paragraph (1) by modifying the information it provides to persons making contributions which is otherwise required under title III (including information it provides through the Internet).

B

Eligibility and certification

511.

Eligibility

(a)

In general

A candidate for the office of Senator or Representative in, or Delegate or Resident Commissioner to, the Congress is eligible to be certified as a participating candidate under this title with respect to an election if the candidate meets the following requirements:

(1)

During the election cycle for the office involved, the candidate files with the Commission a statement of intent to seek certification as a participating candidate, and specifies in the statement whether the candidate intends to seek certification as a Tier 1 candidate or a Tier 2 candidate.

(2)

Each authorized committee of the candidate provides the information required under section 503(d).

(3)

The candidate meets the qualifying requirements of section 512.

(4)

Not later than the last day of the Grassroots Democracy qualifying period, the candidate files with the Commission an affidavit signed by the candidate and the treasurer of the candidate's principal campaign committee declaring that the candidate—

(A)

has complied and, if certified, will comply with the contribution and expenditure requirements of section 521;

(B)

if certified, will run only as a participating candidate for all elections for the office that such candidate is seeking during that election cycle; and

(C)

has either qualified or will take steps to qualify under State law to be on the ballot.

(b)

General election

Notwithstanding subsection (a), a candidate shall not be eligible to be certified as a participating candidate under this title for a general election or a general runoff election unless the candidate’s party nominated the candidate to be placed on the ballot for the general election or the candidate is otherwise qualified to be on the ballot under State law.

(c)

Grassroots Democracy qualifying period Defined

The term Grassroots Democracy qualifying period means, with respect to any candidate for an office, the 240-day period (during the election cycle for such office) which begins on the date on which the candidate files a statement of intent under section 511(a)(1), except that such period may not continue after the date that is 30 days before—

(1)

the date of the primary election; or

(2)

in the case of a State that does not hold a primary election, the date prescribed by State law as the last day to qualify for a position on the general election ballot.

512.

Qualifying requirements

(a)

Receipt of qualified grassroots contributions

A candidate for the office of Senator or Representative in, or Delegate or Resident Commissioner to, the Congress meets the requirement of this section if, during the Grassroots Democracy qualifying period described in section 511(c), the candidate obtains the following:

(1)

A single qualified grassroots contribution from not fewer than—

(A)

in the case of a candidate for the office of Representative in, or Delegate or Resident Commissioner to, the Congress, 2,000 individuals, of whom not fewer than 50 percent shall be residents of the Congressional district the candidate seeks to represent; or

(B)

in the case of a candidate for the office of Senator, a number of individuals equal to the sum of 2,000 plus an amount equal to the product of 500 and the number of Congressional districts in the State involved, of whom not fewer than 50 percent shall be residents of the State in which the candidate seeks election.

(2)

A total dollar amount of qualified grassroots contributions equal to or greater than—

(A)

in the case of a candidate for the office of Representative in, or Delegate or Resident Commissioner to, the Congress, $50,000; or

(B)

in the case of a candidate for the office of Senator, the sum of $200,000 plus an amount equal to the product of $25,000 and the number of Congressional districts in the State involved.

(b)

Requirements relating to receipt of qualified grassroots contribution

Each qualified grassroots contribution—

(1)

may be made by means of a personal check, money order, debit card, credit card, electronic payment account, or text message;

(2)

shall be accompanied by a signed statement (or, in the case of a contribution made online or through other electronic means, an electronic equivalent) containing—

(A)

the contributor’s name and the contributor's address in the State in which the primary residence of the contributor is located, and

(B)

an oath declaring that the contributor—

(i)

understands that the purpose of the contribution is to show support for the candidate so that the candidate may qualify for Grassroots Democracy financing,

(ii)

is making the contribution in his or her own name and from his or her own funds,

(iii)

has made the contribution willingly, and

(iv)

has not received any thing of value in return for the contribution; and

(3)

shall be acknowledged by a receipt that is sent to the contributor with a copy (in paper or electronic form) kept by the candidate for the Commission and a copy (in paper or electronic form) kept by the candidate for the election authorities in the State with respect to which the candidate is seeking election.

(c)

Verification of qualified grassroots contributions

The Commission shall establish procedures for the auditing and verification of qualified grassroots contributions to ensure that such contributions meet the requirements of this section.

(d)

Prohibiting payment on commission basis of individuals collecting qualified grassroots contributions

No person may be paid a commission on a per contribution basis for collecting qualified grassroots contributions.

513.

Certification

(a)

Deadline and Notification

(1)

In general

Not later than 5 days after a candidate files an affidavit under section 511(a)(3), the Commission shall—

(A)

determine whether or not the candidate meets the requirements for certification as a participating candidate;

(B)

if the Commission determines that the candidate meets such requirements, certify the candidate as a participating Tier 1 candidate or a participating Tier 2 candidate; and

(C)

notify the candidate of the Commission's determination.

(2)

Deemed certification for all elections in election cycle

If the Commission certifies a candidate as a participating Tier 1 candidate or a participating Tier 2 candidate with respect to the first election of the election cycle involved, the Commissioner shall be deemed to have certified the candidate as such a participating candidate with respect to all subsequent elections of the election cycle.

(b)

Revocation of certification

(1)

In general

The Commission may revoke a certification under subsection (a) if—

(A)

a candidate fails to qualify to appear on the ballot at any time after the date of certification (other than a candidate certified as a participating candidate with respect to a primary election who fails to qualify to appear on the ballot for a subsequent election in that election cycle); or

(B)

a candidate otherwise fails to comply with the requirements of this title, including any regulatory requirements prescribed by the Commission.

(2)

Effect of revocation

If a candidate’s certification is revoked under paragraph (1)—

(A)

the candidate shall repay to the Grassroots Democracy Fund established under section 541 an amount equal to the payments received under this title with respect to the election cycle involved plus interest (at a rate determined by the Commission) on any such amount received;

(B)

the candidate may not receive payments under this title during the remainder of the election cycle involved; and

(C)

the candidate may not be certified as a participating candidate under this title with respect to the next election cycle.

(3)

Prohibiting participation in future elections for candidates with multiple revocations

If the Commission revokes the certification of an individual as a participating candidate under this title 3 times, the individual may not be certified as a participating candidate under this title with respect to any subsequent election.

(c)

Participating Candidate defined

In this title, a participating candidate means a candidate for the office of Senator or Representative in, or Delegate or Resident Commissioner to, the Congress who is certified under this section as eligible to receive benefits under this title.

C

Requirements for Candidates Certified as Participating Candidates

521.

Contribution and expenditure requirements

(a)

Permitted sources of contributions and expenditures

(1)

Tier 1 candidates

Except as provided in subsection (c), a participating candidate who is certified as a Tier 1 candidate with respect to an election shall, with respect to all elections occurring during the election cycle for the office involved, accept no contributions from any source and make no expenditures from any amounts, other than the following:

(A)

Qualified grassroots contributions.

(B)

Payments under this title.

(C)

Contributions from political committees established and maintained by a national or State political party.

(D)

Subject to subsection (b), personal funds of the candidate or of any immediate family member of the candidate (other than funds received through qualified grassroots contributions).

(E)

Subject to subsection (e), contributions from individuals who are otherwise permitted to make contributions under this Act.

(2)

Tier 2 candidates

Except as provided in subsection (c), a participating candidate who is certified as a Tier 2 candidate with respect to an election shall, with respect to all elections occurring during the election cycle for the office involved, accept no contributions from any source and make no expenditures from any amounts, other than the following:

(A)

Qualified grassroots contributions.

(B)

Payments under this title.

(C)

Contributions from political committees established and maintained by a national or State political party.

(D)

Subject to subsection (b), personal funds of the candidate or of any immediate family member of the candidate (other than funds received through qualified grassroots contributions).

(b)

Special rules for personal funds

(1)

Limit on amount

A candidate who is certified as a participating candidate may use personal funds (including personal funds of any immediate family member of the candidate) so long as—

(A)

the amount used with respect to the election cycle does not exceed $50,000; and

(B)

the funds are used only for making direct payments for the receipt of goods and services which constitute authorized expenditures in connection with the election cycle involved.

(2)

Immediate family member defined

In this subsection, the term immediate family means, with respect to a candidate—

(A)

the candidate’s spouse;

(B)

a child, stepchild, parent, grandparent, brother, half-brother, sister, or half-sister of the candidate or the candidate’s spouse; and

(C)

the spouse of any person described in subparagraph (B).

(c)

Exceptions

(1)

Exception for contributions received prior to filing of statement of intent

A candidate who has accepted contributions that are not described in paragraph (1) of subsection (a) (in the case of a Tier 1 candidate) or in paragraph (2) of subsection (a) (in the case of a Tier 2 candidate) prior to the date the candidate files a statement of intent under section 511(a)(1) is not in violation of subsection (a), but only if all such contributions are—

(A)

returned to the contributor;

(B)

submitted to the Commission for deposit in the Grassroots Democracy Fund established under section 541; or

(C)

spent in accordance with paragraph (2).

(2)

Exception for expenditures made prior to filing of statement of intent

If a candidate has made expenditures prior to the date the candidate files a statement of intent under section 511(a)(1) that the candidate is prohibited from making under subsection (a) or subsection (b), the candidate is not in violation of such subsection if the aggregate amount of the prohibited expenditures is less than the amount referred to in section 512(a)(2) (relating to the total dollar amount of qualified grassroots contributions which the candidate is required to obtain) which is applicable to the candidate.

(3)

Exception for campaign surpluses from a previous election

Notwithstanding paragraph (1), unexpended contributions received by the candidate or the an authorized committee of the candidate with respect to a previous election may be retained, but only if the candidate places the funds in escrow and refrains from raising additional funds for or spending funds from that account during the election cycle in which a candidate is a participating candidate.

(4)

Exception for contributions received before the effective date of this title

Contributions received and expenditures made by the candidate or an authorized committee of the candidate prior to the effective date of this title shall not constitute a violation of subsection (a) or (b). Unexpended contributions shall be treated the same as campaign surpluses under paragraph (3), and expenditures made shall count against the limit in paragraph (2).

(d)

Special Rule for Coordinated Party Expenditures

For purposes of this section, a payment made by a political party in coordination with a participating candidate shall not be treated as a contribution to or as an expenditure made by the participating candidate.

(e)

Phase-Out of amount of private contributions that may be accepted by Tier 1 candidates

With respect to an election cycle occurring after the first 3 election cycles for which this title is in effect, the amount of a contribution that may be accepted from an individual by a participating candidate who is certified as a Tier 1 candidate may not exceed the following:

(1)

For the fourth election cycle for which this title is in effect, an amount equal to 60% of the limitation on the amount of a contribution which a candidate may accept from an individual for such cycle under section 315(a)(1).

(2)

For the fifth election cycle for which this title is in effect, an amount equal to 40% of the limitation on the amount of a contribution which a candidate may accept from an individual for such cycle under section 315(a)(1).

(3)

For the sixth election cycle for which this title is in effect and any subsequent election cycle, an amount equal to 20% of the limitation on the amount of a contribution which a candidate may accept from an individual for such cycle under section 315(a)(1).

(f)

Prohibition on joint fundraising committees

(1)

Prohibition

An authorized committee of a candidate who is certified as a participating candidate under this title with respect to an election may not establish a joint fundraising committee with a political committee other than another authorized committee of the candidate.

(2)

Status of existing committees for prior elections

If a candidate established a joint fundraising committee described in paragraph (1) with respect to a prior election for which the candidate was not certified as a participating candidate under this title and the candidate does not terminate the committee, the candidate shall not be considered to be in violation of paragraph (1) so long as that joint fundraising committee does not receive any contributions or make any disbursements during the election cycle for which the candidate is certified as a participating candidate under this title.

522.

Administration of campaign

(a)

Use of separate accounts for various permitted contributions

Each authorized committee of a candidate certified as a participating candidate under this title—

(1)

shall establish a separate account for each type of contribution described in paragraph (1) of section 521(a) (in the case of a Tier 1 candidate) or paragraph (2) of section 521(a) (in the case of a Tier 2 candidate) which is received by the committee, and shall deposit each contribution in the account established for that type of contribution; and

(2)

shall establish a separate account for the payments received under this title, and shall deposit each such payment in that account.

(b)

Enhanced reporting of disbursements

In addition to any reports required under section 304, not later than 3 months after the end of the election cycle involved, each authorized committee of a candidate certified as a participating candidate under this title shall submit a report to the Commission on all disbursements made from each separate account established under subsection (a) (in the same manner as the report required under section 304(b)(4)).

(c)

Enhanced internet disclosure of information on donors

Each authorized committee of a candidate shall ensure that all information reported to the Commission under this Act with respect to contributions and expenditures of the committee is available to the public on the Internet (whether through a site established for purposes of this subsection, a hyperlink on another public site of the committee, or a hyperlink on a report filed electronically with the Commission) in a searchable, sortable, and downloadable manner.

523.

Preventing unnecessary spending of public funds

(a)

Mandatory spending of available private funds

An authorized committee of a candidate certified as a participating candidate under this title may not make any expenditure of any payments received under this title in any amount unless the committee has made an expenditure in an equivalent amount of funds received by the committee which are described in—

(1)

subparagraphs (C), (D), and (E) of paragraph (1) of section 521(a), in the case of a Tier 1 candidate; or

(2)

subparagraphs (C) and (D) of paragraph (2) of section 521(a), in the case of a Tier 2 candidate.

(b)

Limitation

Subsection (a) applies to an authorized committee only to the extent that the funds referred to in paragraph (1) of such subsection (in the case of a Tier 1 candidate) or in paragraph (2) of such subsection (in the case of a Tier 2 candidate) are available to the committee at the time the committee makes an expenditure of a payment received under this title.

524.

Remitting unspent funds after election

(a)

Remittance required

(1)

In general

Not later than the date that is 60 days after the last election for which a candidate certified as a participating candidate qualifies to be on the ballot during the election cycle involved, such participating candidate shall remit to the Commission for deposit in the Grassroots Democracy Fund established under section 541 an amount equal to the balance of the accounts established by the authorized committees of the candidate under section 522 for the payments received under this title.

(2)

Exception for tier 2 candidates participating in next cycle

Notwithstanding paragraph (1), a Tier 2 candidate may withhold not more than $50,000 from the amount required to be remitted under paragraph (1) if the candidate files a signed affidavit with the Commission that the candidate will seek certification as a Tier 2 candidate with respect to the next election cycle. If the candidate fails to seek certification as a Tier 2 candidate prior to the last day of the Grassroots Democracy qualifying period for the next election cycle (as described in section 511), or if the Commission notifies the candidate of the Commission’s determination does not meet the requirements for certification as a Tier 2 candidate with respect to such cycle, the candidate shall immediately remit to the Commission the amount withheld.

(b)

Exception for expenditures incurred but not paid as of date of remittance

(1)

In general

A candidate may withhold from the amount required to be remitted under subsection (a) the amount of any authorized expenditures which were incurred in connection with the candidate’s campaign but which remain unpaid as of the deadline applicable to the candidate under such subsection, except that any amount withheld pursuant to this paragraph shall be remitted to the Commission not later than 120 days after the date of the election to which such subsection applies.

(2)

Documentation required

A candidate may withhold an amount of an expenditure pursuant to paragraph (1) only if the candidate submits documentation of the expenditure and the amount to the Commission not later than the deadline applicable to the candidate under subsection (a).

D

Supplemental Grassroots Democracy People’s Fund Payments

531.

Eligibility of participating candidates for payments

(a)

Payments to candidates

In addition to the payments made under subtitle A, a candidate certified as a participating candidate under this title with respect to an election shall be entitled to a supplemental Grassroots Democracy People’s Fund payment from the Grassroots Democracy Fund each time during the election cycle that the Commission issues a determination under subsection (b) that the outside speech threshold with respect to the election has been reached.

(b)

Outside speech threshold

(1)

Determinations by commission

(A)

In general

For purposes of this section, the Commission shall issue a determination that the outside speech threshold with respect to an election is reached each time during the election cycle that the Commission determines that the amount disbursed for political activity with respect to the election exceeds—

(i)

the House threshold, in the case of an election for the office of Representative in, or Delegate or Resident Commissioner to, the Congress; or

(ii)

the Senate threshold, in the case of an election for the office of Senator.

(B)

Exclusion of certain disbursements

For purposes of subparagraph (A), in determining the amount disbursed for political activity with respect to an election, there shall be excluded—

(i)

disbursements made by any authorized committee of a candidate; and

(ii)

disbursements made by a political committee of a national political party.

(C)

Inclusion of amounts spent on non-candidate-specific advertisements

In determining the amount disbursed for political activity with respect to an election under subparagraph (A), there shall be included any amount disbursed for a political advertisement described in subsection (c)(3).

(2)

Subsequent determinations after threshold is first reached

After the first time during the election cycle that the Commission issues a determination under paragraph (1) that the outside speech threshold with respect to an election has been reached, any subsequent determination as to whether the threshold has been reached shall be made only on the basis of disbursements made after the most recent such determination issued by the Commission.

(3)

House threshold

(A)

In general

For purposes of paragraph (1)(A), the House threshold with respect to an election is an amount equal to the product of the adjusted baseline amount under subparagraph (B) and the number of candidates in the election.

(B)

Adjusted baseline amount

For purposes of subparagraph (A), the adjusted baseline amount with respect to an election is an amount equal to the product of $250,000 and an adjustment factor applied by the Commission to take into account the relative media-related costs of political activity in the Congressional district involved as compared to the average of such costs among all Congressional districts.

(C)

Exclusion of certain candidates

For purposes of subparagraph (A), in determining the number of candidates in an election, there shall be excluded any candidate who is determined by the Commission to be a minor candidate, in accordance with such criteria as the Commission shall by regulation establish, taking into account the amount of funds raised and expended by the candidate, the candidate’s ability to qualify for the ballot, and such other factors as the Commission considers appropriate.

(4)

Senate threshold

(A)

In general

For purposes of paragraph (1)(A), the Senate threshold with respect to an election is an amount equal to the product of the adjusted baseline amount under subparagraph (B) and the number of candidates in the election.

(B)

Adjusted baseline amount

For purposes of subparagraph (A), the adjusted baseline amount with respect to an election is an amount equal to the product of—

(i)

the sum of $250,000 plus the product of $100,000 and the number of Congressional districts in the State involved; and

(ii)

an adjustment factor applied by the Commission to take into account the relative media-related costs of political activity in the State involved as compared to the average of such costs among all States.

(C)

Exclusion of certain candidates

For purposes of subparagraph (A), in determining the number of candidates in an election, there shall be excluded any candidate who is determined by the Commission to be a minor candidate, in accordance with such criteria as the Commission shall by regulation establish, taking into account the amount of funds raised and expended by the candidate, the candidate’s ability to qualify for the ballot, and such other factors as the Commission considers appropriate.

(c)

Political activity defined

In this section, political activity means, with respect to an election, any of the following:

(1)

A publicly disseminated communication consisting of an independent expenditure (as defined in section 301(17)) which advocates the election or defeat of a candidate in the election.

(2)

A publicly disseminated communication consisting of an electioneering communication (as defined in section 304(f)) which refers to a candidate in the election.

(3)

A publicly disseminated communication consisting of a communication which refers to the political party of a candidate in the election and which would be treated as an electioneering communication (as defined in section 304(f)) if it referred to a clearly identified candidate for Federal office.

(4)

Voter registration, voter identification, get-out-the-vote, and other related activity carried out in connection with the election.

532.

Amount of payment; use of funds

(a)

Amount

The amount of the supplemental Grassroots Democracy People’s Fund payment made to a candidate under this subtitle shall be equal to 100 percent of the aggregate amount of qualified grassroots donations received by the candidate, as reported in the most recent request for a payment under this title which has been submitted by the candidate under section 502 at the time the Commission issues a determination under section 541(b).

(b)

Use of funds

A candidate shall use the supplemental payment under this subtitle only for authorized expenditures in connection with the election cycle involved.

533.

Severability

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

E

Administrative provisions

541.

Grassroots Democracy Fund

(a)

Establishment

There is established in the Treasury a fund to be known as the Grassroots Democracy Fund.

(b)

Amounts held by Fund

The Fund shall consist of the following amounts:

(1)

Appropriated amounts

Amounts appropriated to the Fund, including trust fund amounts appropriated pursuant to applicable provisions of the Internal Revenue Code of 1986.

(2)

Voluntary contributions

Voluntary contributions to the Fund.

(3)

Other deposits

Amounts deposited into the Fund under—

(A)

section 6098 of the Internal Revenue Code of 1986 (relating to contributions to Grassroots Democracy Fund);

(B)

section 521(c) (relating to exceptions to contribution requirements);

(C)

section 523 (relating to remittance of unused payments from the Fund);

(D)

section 544 (relating to violations); and

(E)

any other section of this Act.

(4)

Investment returns

Interest on, and the proceeds from, the sale or redemption of, any obligations held by the Fund under subsection (c).

(c)

Investment

The Commission shall invest portions of the Fund in obligations of the United States in the same manner as provided under section 9602(b) of the Internal Revenue Code of 1986.

(d)

Use of Fund

(1)

In general

The sums in the Fund shall be used to make payments to participating candidates as provided in this title.

(2)

Insufficient amounts

Under regulations established by the Commission, rules similar to the rules of section 9006(c) of the Internal Revenue Code of 1986 shall apply.

542.

Grassroots Democracy Advisory Commission

(a)

Establishment

There is established within the Federal Election Commission an entity to be known as the Grassroots Democracy Advisory Commission (in this title referred to as the Advisory Commission).

(b)

Structure and membership

(1)

In general

The Advisory Commission shall be composed of 5 members appointed by the President with the advice and consent of the Senate, of whom—

(A)

2 shall be appointed after consultation with the Majority Leader of the House of Representatives;

(B)

2 shall be appointed after consultation with the Minority Leader of the House of Representatives; and

(C)

1 shall be appointed upon the recommendation of the members appointed under subparagraphs (A) and (B).

(2)

Qualifications

(A)

In general

The members shall be individuals who by reason of their education, experience, and attainments, are exceptionally qualified to perform the duties of members of the Advisory Commission.

(B)

Prohibition

No member of the Advisory Commission may be—

(i)

an employee of the Federal government;

(ii)

a registered lobbyist or an individual who was a registered lobbyist at any time during the 2-year period preceding appointment to the Advisory Commission; or

(iii)

an officer or employee of a political party or political campaign.

(3)

Date

Members of the Advisory Commission shall be appointed not later than 60 days after the date of the enactment of this Act.

(4)

Terms

A member of the Advisory Commission shall be appointed for a term of 5 years.

(5)

Vacancies

A vacancy on the Advisory Commission shall be filled not later than 30 calendar days after the date on which the Advisory Commission is given notice of the vacancy, in the same manner as the original appointment. The individual appointed to fill the vacancy shall serve only for the unexpired portion of the term for which the individual’s predecessor was appointed.

(6)

Chairperson

The Advisory Commission shall designate a Chairperson from among the members of the Board.

(c)

Duties and powers

(1)

Administration

The Advisory Commission shall have such duties and powers as the Commission may prescribe, including the power to administer the provisions of this title.

(2)

Review of Grassroots Democracy financing

(A)

In general

After each regularly scheduled general election for Federal office, the Advisory Commission shall conduct a comprehensive review of the Grassroots Democracy financing program under this title, including—

(i)

the maximum and minimum dollar amounts of qualified grassroots contributions under section 504;

(ii)

the number and value of qualified grassroots contributions a candidate is required to obtain under section 512(a) to be eligible for certification as a participating candidate;

(iii)

the maximum amount of payments a candidate may receive under this title;

(iv)

the overall satisfaction of participating candidates and the American public with the program; and

(v)

such other matters relating to financing of campaigns as the Advisory Commission determines are appropriate.

(B)

Criteria for review

In conducting the review under subparagraph (A), the Advisory Commission shall consider the following:

(i)

Qualified grassroots contributions

The Advisory Commission shall consider whether the number and dollar amounts of qualified grassroots contributions required strikes a balance regarding the importance of voter involvement, the need to assure adequate incentives for participating, and fiscal responsibility, taking into consideration the number of primary and general election participating candidates, the electoral performance of those candidates, program cost, and any other information the Advisory Commission determines is appropriate.

(ii)

Review of payment levels

The Advisory Commission shall consider whether the totality of the amount of funds allowed to be raised by participating candidates (including through qualified grassroots contributions) and payments under this title are sufficient for voters in each State to learn about the candidates to cast an informed vote, taking into account the historic amount of spending by winning candidates, media costs, primary election dates, and any other information the Advisory Commission determines is appropriate.

(C)

Adjustment of amounts

(i)

In general

Based on the review conducted under subparagraph (A), the Advisory Commission shall provide for the adjustments of the following amounts:

(I)

The maximum and minimum dollar amounts of qualified grassroots contributions under section 504.

(II)

The number and value of qualified grassroots contributions a candidate is required to obtain under section 512(a) to be eligible for certification as a participating candidate.

(III)

The maximum amount of payments may receive under this title.

(ii)

Regulations

The Commission shall promulgate regulations providing for the adjustments made by the Advisory Commission under clause (i).

(D)

Review of Grassroots Democracy People’s Fund Program

After each regularly scheduled general election for Federal office, the Advisory Commission shall conduct a comprehensive review of the program for making supplemental Grassroots Democracy People’s Fund payments under subtitle D, and shall include in the review the following:

(i)

A review of the outside speech threshold established under section 531(b), including the amounts used to determine the House threshold under paragraph (3) of such section and the Senate threshold under paragraph (4) of such section.

(ii)

The effectiveness of the adjustment factors applied by the Commission under section 531(b) to take into account the relative media-related costs of political activity in Congressional districts and States.

(iii)

The overall satisfaction of participating candidates and the American public with the Program.

(iv)

Such other matters relating to the making of payments under such subtitle as the Advisory Commission determines are appropriate.

(E)

Report

Not later than each June 1 which follows a regularly scheduled general election for Federal office for which payments were made under this title, the Advisory Commission shall submit a report to Congress on the review conducted under this paragraph. Such report shall contain a detailed statement of the findings, conclusions, and recommendations of the Advisory Commission based on such review.

(d)

Meetings and hearings

(1)

Meetings

The Advisory Commission may hold such hearings, sit and act at such times and places, take such testimony, and receive such evidence as the Advisory Commission considers advisable to carry out the purposes of this Act.

(2)

Quorum

Three members of the Advisory Commission shall constitute a quorum for purposes of voting, but a quorum is not required for members to meet and hold hearings.

(e)

Reports

Not later than each June 1 which follows a regularly scheduled general election for Federal office for which payments were made under this title, the Advisory Commission shall submit to the Committee on House Administration of the House of Representatives a report documenting, evaluating, and making recommendations relating to the administrative implementation and enforcement of the provisions of this title.

(f)

Administration

(1)

Compensation of members

(A)

In general

Each member, other than the Chairperson, shall be paid at a rate equal to the daily equivalent of the minimum annual rate of basic pay prescribed for level IV of the Executive Schedule under section 5315 of title 5, United States Code.

(B)

Chairperson

The Chairperson shall be paid at a rate equal to the daily equivalent of the minimum annual rate of basic pay prescribed for level III of the Executive Schedule under section 5314 of title 5, United States Code.

(2)

Personnel

(A)

Director

The Advisory Commission shall have a staff headed by an Executive Director. The Executive Director shall be paid at a rate equivalent to a rate established for the Senior Executive Service under section 5382 of title 5, United States Code.

(B)

Staff appointment

With the approval of the Chairperson, the Executive Director may appoint such personnel as the Executive Director and the Advisory Commission determines to be appropriate.

(C)

Experts and consultants

With the approval of the Chairperson, the Executive Director may procure temporary and intermittent services under section 3109(b) of title 5, United States Code.

(D)

Detail of government employees

Upon the request of the Chairperson, the head of any Federal agency may detail, without reimbursement, any of the personnel of such agency to the Advisory Commission to assist in carrying out the duties of the Advisory Commission. Any such detail shall not interrupt or otherwise affect the civil service status or privileges of the Federal employee.

(E)

Other resources

The Advisory Commission shall have reasonable access to materials, resources, statistical data, and other information from the Library of Congress and other agencies of the executive and legislative branches of the Federal Government. The Chairperson of the Advisory Commission shall make requests for such access in writing when necessary.

(g)

Authorization of appropriations

There are authorized to be appropriated such sums as are necessary to carry out the purposes of this subtitle.

543.

Administration by Commission

The Commission shall prescribe regulations to carry out the purposes of this title, including regulations—

(1)

to establish procedures for—

(A)

verifying the amount of qualified grassroots contributions with respect to a candidate,

(B)

effectively and efficiently monitoring and enforcing the limits on the raising of qualified grassroots contributions,

(C)

effectively and efficiently monitoring and enforcing the limits on the use of personal funds by participating candidates, and

(D)

monitoring the use of allocations from the Grassroots Democracy Fund established under section 541 and matching contributions under this title through audits of not fewer than 1/10 (or, in the case of the first 3 election cycles during which the program under this title is in effect, not fewer than 1/3) of all participating candidates or other mechanisms; and

(2)

regarding the conduct of debates in a manner consistent with the best practices of States that provide public financing for elections.

544.

Violations and penalties

(a)

Civil penalty for violation of contribution and expenditure requirements

If a candidate who has been certified as a participating candidate accepts a contribution or makes an expenditure that is prohibited under section 521, the Commission shall assess a civil penalty against the candidate in an amount that is not more than 3 times the amount of the contribution or expenditure. Any amounts collected under this subsection shall be deposited into the Grassroots Democracy Fund established under section 541.

(b)

Repayment for improper use of Grassroots Democracy Fund

(1)

In general

If the Commission determines that any payment made to a participating candidate was not used as provided for in this title or that a participating candidate has violated any of the dates for remission of funds contained in this title, the Commission shall so notify the candidate and the candidate shall pay to the Fund an amount equal to—

(A)

the amount of payments so used or not remitted, as appropriate; and

(B)

interest on any such amounts (at a rate determined by the Commission).

(2)

Other action not precluded

Any action by the Commission in accordance with this subsection shall not preclude enforcement proceedings by the Commission in accordance with section 309(a), including a referral by the Commission to the Attorney General in the case of an apparent knowing and willful violation of this title.

545.

Election cycle defined

In this title, the term election cycle means, with respect to an election for an office, the period beginning on the day after the date of the most recent general election for that office (or, if the general election resulted in a runoff election, the date of the runoff election) and ending on the date of the next general election for that office (or, if the general election resulted in a runoff election, the date of the runoff election).

.

202.

Prohibiting use of contributions by participating candidates for purposes other than campaign for election

Section 313 of the Federal Election Campaign Act of 1971 (2 U.S.C. 439a) is amended by adding at the end the following new subsection:

(d)

Restrictions on Permitted Uses of Funds by Candidates Receiving Grassroots Democracy Financing

Notwithstanding paragraphs (2), (3), or (4) of subsection (a), if a candidate for election for the office of Representative in, or Delegate or Resident Commissioner to, the Congress is certified as a participating candidate under title V with respect to the election, any contribution which the candidate is permitted to accept under such title may be used only for authorized expenditures in connection with the candidate’s campaign for such office.

.

III

Other administrative reforms

301.

Expanding requirement to disclose bundlers who are registered lobbyists to all bundlers

(a)

Expanding bundler disclosure requirements to all bundlers

Section 304(i)(1) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(i)(1)) is amended by striking reasonably known by the committee to be a person described in paragraph (7).

(b)

Conforming amendments

Section 304(i) of such Act (2 U.S.C. 434(i)) is amended—

(1)

in paragraph (2)(C), by striking described in paragraph (7);

(2)

in paragraph (3)(A), by striking a person described in paragraph (7) and inserting any person;

(3)

in paragraph (5)—

(A)

by striking subparagraph (B) and redesignating subparagraphs (C) and (D) as subparagraphs (B) and (C),

(B)

in subparagraph (B) (as so redesignated), by striking described in paragraph (7), and

(C)

in subparagraph (C) (as so redesignated), by striking by persons described in paragraph (7);

(4)

by striking paragraph (7) and redesignating paragraph (8) as paragraph (7); and

(5)

in paragraph (7)(A) (as so redesignated), by striking a person described in paragraph (7), and inserting a person,.

302.

Expansion of period for treatment of communications as electioneering communications

(a)

Expansion of period covering general election

Section 304(f)(3)(A)(I)(II)(aa) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(f)(3)(A)(I)(II)(aa)) is amended by striking 60 days and inserting 120 days.

(b)

Effective date; transition for communications made prior to enactment

The amendment made by subsection (a) shall apply with respect to communications made on or after the date of the enactment of this Act, without regard to whether or not the Federal Election Commission has promulgated regulations to carry out such amendments, except that no communication which is made prior to the date of the enactment of this Act shall be treated as an electioneering communication under section 304(f)(3)(A)(I)(II) of the Federal Election Campaign Act of 1971 (as amended by subsection (a)) unless the communication would be treated as an electioneering communication under such section if the amendment made by subsection (a) did not apply.

303.

User fees for committees and bundlers

(a)

Political committees

Section 303 of the Federal Election Campaign Act of 1971 (2 U.S.C. 433) is amended by adding at the end the following new subsection:

(e)

User fee

(1)

Payment

At the time a political committee files the statement of organization required under subsection (a), and annually thereafter until the termination of the committee, the committee shall pay a user fee to the Commission in an amount equal to $100.

(2)

Exception for candidate committees

Paragraph (1) does not apply in the case of a political committee which is an authorized committee of a candidate.

(3)

Use of funds

The amounts received by the Commission under this subsection shall be used to support the administration of the Grassroots Democracy Advisory Commission under section 542.

.

(b)

Bundlers

Title III of such Act (2 U.S.C. 431 et seq.) is amended by inserting after section 303 the following new section:

303A.

user fees for bundlers of contributions

(a)

User fee required

A person may not provide a bundled contribution to a political committee during a year unless the person has paid a user fee to the Commission during the year in an amount equal to $100.

(b)

Use of funds

The amounts received by the Commission under this subsection shall be used to support the administration of the Grassroots Democracy Advisory Commission under section 542.

(c)

Bundled contribution defined

In this section, the term bundled contribution has the meaning given such term in section 304(i)(7).

.

304.

Petition for certiorari

Section 307(a)(6) of the Federal Election Campaign Act of 1971 (2 U.S.C. 437d(a)(6)) is amended by inserting (including a proceeding before the Supreme Court on certiorari) after appeal.

305.

Filing by all candidates with Commission

Section 302(g) of the Federal Election Campaign Act of 1971 (2 U.S.C. 432(g)) is amended to read as follows:

(g)

Filing with the commission

All designations, statements, and reports required to be filed under this Act shall be filed with the Commission.

.

306.

Electronic filing of FEC reports

Section 304(a)(11) of the Federal Election Campaign Act of 1971 (2 U.S.C. 434(a)(11)) is amended—

(1)

in subparagraph (A), by striking under this Act— and all that follows and inserting under this Act shall be required to maintain and file such designation, statement, or report in electronic form accessible by computers.;

(2)

in subparagraph (B), by striking 48 hours and all that follows through filed electronically) and inserting 24 hours; and

(3)

by striking subparagraph (D).

307.

Effective date

Except as provided in section 302(b), the amendments made by this title shall apply with respect to reports filed on or after the date of the enactment of this Act.

IV

Offsets

401.

Reform of tax rules related to political organizations

(a)

Decoupling of rate of tax on political organizations from corporate tax rate

Subsection (b) of section 527 of the Internal Revenue Code of 1986 is amended—

(1)

by striking all that precedes A tax is hereby imposed and inserting the following:

(b)

Tax imposed

,

(2)

by striking paragraph (2), and

(3)

by striking the highest rate of tax specified in section 11(b) and inserting 35 percent.

(b)

Repeal of exemptions for proceeds from merchandise and entertainment events

Paragraph (3) of section 527(c) of such Code is amended—

(1)

by adding or at the end of subparagraph (A),

(2)

by striking the comma at the end of subparagraph (B) and inserting a period, and

(3)

by striking subparagraphs (C) and (D).

(c)

Modification of limitation on tax paid by charitable organizations engaged in exempt functions

Paragraph (1) of section 527(f) of such Code is amended by striking equal to the lesser of— and all that follows and inserting equal to the aggregate amount so expended during the taxable year for such an exempt function. If such aggregate amount does not exceed $500,000, the amount included in gross income under the preceding sentence shall not exceed the net investment income of such organization for the taxable year..

(d)

Repeal of graduated rates for principal campaign committees

Section 527 of such Code is amended by striking subsection (h).

(e)

Effective date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

402.

Voluntary contributions to the Grassroots Democracy Fund

(a)

In general

Subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by adding at the end the following new part:

IX

Contributions to Grassroots Democracy Fund

Sec. 6098. Contributions to Grassroots Democracy Fund.

6098.

Contributions to Grassroots Democracy Fund

(a)

In general

Every individual, with respect to the taxpayer’s return for the taxable year of the tax imposed by chapter 1, may designate that a specified portion (not less than $1) of any overpayment of tax shall be contributed to the Grassroots Democracy Fund established under section 541 of the Federal Election Campaign Act of 1971.

(b)

Manner and Time of Designation

(1)

Time of designation

A designation under subsection (a) may be made with respect to any taxable year—

(A)

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

(B)

at any other time (after such time of filing) specified in regulations prescribed by the Secretary.

(2)

Manner of designation

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.

(c)

Overpayments treated as refunded

For purposes of this title, any portion of an overpayment of tax designated under subsection (a) shall be treated as—

(1)

being refunded to the taxpayer as of the last date prescribed for filing the return of tax imposed by chapter 1 (determined without regard to extensions) or, if later, the date the return is filed, and

(2)

a contribution made by such taxpayer on such date to the United States.

(d)

Online contributions

The Secretary shall establish and maintain a website through which persons may make contributions to the Grassroots Democracy Fund. Any such contribution shall not be treated as an overpayment of tax but shall be treated as a contribution made by such person to the United States.

.

(b)

Clerical amendment

The table of parts for subchapter A of chapter 61 of the Internal Revenue Code of 1986 is amended by adding at the end the following new item:

IX

Contributions to Grassroots Democracy Fund

.

(c)

Effective Date

The amendments made by this section shall apply to taxable years beginning after the date of the enactment of this Act.

V

Expanding Candidate Access to Advertising

501.

Broadcasts by or on behalf of candidates

(a)

Use of broadcasting station at lowest unit charge

Section 315(b) of the Communications Act of 1934 (47 U.S.C. 315(b)) is amended—

(1)

in paragraph (1)—

(A)

in the matter preceding subparagraph (A), by inserting , or by a national committee of a political party in connection with such a campaign of such a candidate who is affiliated with the party, after to such office;

(B)

in subparagraph (A), by inserting for preemptible use thereof after station; and

(C)

by moving subparagraphs (A) and (B) 2 ems to the right; and

(2)

in paragraph (2)—

(A)

in subparagraph (A)—

(i)

by striking In general.— and inserting Certification.—;

(ii)

by striking the broadcast station and inserting such station;

(iii)

by striking In the case of and inserting the following:

(i)

By candidates

In the case of

; and

(iv)

by adding at the end the following:

(ii)

By party national committees

In the case of the use of any broadcasting station by a national committee of a political party in connection with the campaign of a candidate for Federal office who is affiliated with the party, such committee shall not be entitled to receive the rate under paragraph (1)(A) for such use unless such committee provides written certification to such station that such committee shall not make any direct reference to another candidate for the same office, in any broadcast using the rights and conditions of access under this Act, unless such reference meets the requirements of subparagraph (C) or (D).

;

(B)

in subparagraph (B)—

(i)

by striking subparagraph (A) and inserting subparagraph (A)(i);

(ii)

by striking If a candidate and inserting the following:

(i)

For candidates

If a candidate

; and

(iii)

by adding at the end the following:

(ii)

For party national committees

If the national committee of a political party makes a reference described in subparagraph (A)(ii) in any broadcast that does not meet the requirements of subparagraph (C) or (D), such national committee shall not be entitled to receive the rate under paragraph (1)(A) for such broadcast or any other broadcast in connection with the campaign of the candidate during any portion of the 45-day and 60-day periods described in paragraph (1)(A), that occur on or after the date of such broadcast.

;

(C)

in subparagraph (C)—

(i)

by striking A candidate and inserting A television broadcast;

(ii)

by striking , in the case of a television broadcast,; and

(iii)

in clause (ii), by inserting or the national committee of a political party after authorized committee;

(D)

in subparagraph (D)—

(i)

by striking A candidate and inserting A radio broadcast; and

(ii)

by striking , in the case of a radio broadcast,; and

(E)

in subparagraph (E), by inserting or national committee after candidate).

(b)

Preemption; audits

Section 315 of the Communications Act of 1934 (47 U.S.C. 315) is amended—

(1)

by redesignating subsection (c) as subsection (g);

(2)

by redesignating subsection (d) as subsection (f); and

(3)

by inserting after subsection (b) the following:

(c)

Preemption

(1)

In general

Except as provided in paragraph (2) and notwithstanding the requirements of subsection (b)(1)(A), a licensee may not preempt the use of a broadcasting station by a legally qualified candidate or national committee of a political party that has purchased and paid for such use under circumstances entitling such candidate or committee to receive the rate under such subsection for such use.

(2)

Circumstances beyond control of licensee

If a program to be broadcast by a broadcasting station is preempted because of circumstances beyond the control of the licensee, an advertisement that is scheduled to be broadcast during such program and the broadcast of which constitutes use of the broadcasting station described in paragraph (1) shall be treated in the same fashion as a comparable commercial advertisement.

(d)

Audits

During the 45-day period preceding the date of a primary or primary runoff election and during the 60-day period preceding the date of a general election or special election, the Commission shall conduct such audits as it considers necessary to ensure that the licensee of each broadcasting station is allocating use of the station in accordance with this section and in a manner that does not warrant revocation of the station license under section 312(a)(7).

.

(c)

Revocation of license for failure To permit access by Federal candidates

Section 312 of the Communications Act of 1934 (47 U.S.C. 312) is amended—

(1)

in subsection (a)(7)—

(A)

by inserting in accordance with subsection (h), before for willful;

(B)

by striking or repeated;

(C)

by inserting or a cable system after non-commercial educational broadcast station,; and

(D)

by striking his candidacy and inserting the candidacy of the candidate, or by a national committee of a political party in connection with the campaign of a legally qualified candidate for Federal elective office who is affiliated with the party, under the same terms, conditions, and business practices as apply to the most-favored advertiser of the broadcasting station or cable system; and

(2)

by adding at the end the following:

(h)

Conditions for revocation for failure To allow access by Federal candidates

(1)

Three-strikes rule

The Commission may revoke a station license or construction permit under subsection (a)(7) only if the Commission finds that the licensee or permittee has engaged in at least 3 failures described in such subsection with respect to the broadcasting station or cable system to which the license or permit relates.

(2)

Duration

In the case of a person whose station license or construction permit with respect to a broadcasting station or cable system has been revoked under subsection (a)(7)—

(A)

the Commission may not grant a station license or construction permit to such person with respect to such broadcasting station or cable system during the 5-year period following the revocation; and

(B)

if the Commission grants such a station license or construction permit to such person after such 5-year period, the number of failures described in subsection (a)(7) shall be calculated for purposes of paragraph (1) without regard to any such failures that occurred while a previous license or permit was in effect.

.

(d)

Conforming amendments

Section 315 of the Communications Act of 1934, as amended by subsection (b), is further amended—

(1)

in subsection (a), by striking If any licensee and inserting Equal opportunities for candidates for same office.—If any licensee;

(2)

in subsection (f), as redesignated, by striking The Commission and inserting Regulations.—The Commission; and

(3)

in subsection (g), as redesignated, by striking For purposes and inserting Definitions.—For purposes.