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H.R. 4054: Stand By Every Ad Act


The text of the bill below is as of Jul 25, 2019 (Introduced).


I

116th CONGRESS

1st Session

H. R. 4054

IN THE HOUSE OF REPRESENTATIVES

July 25, 2019

introduced the following bill; which was referred to the Committee on House Administration

A BILL

To amend the Federal Election Campaign Act of 1971 to require the sponsors of certain general public political advertisements to include in the advertisements information on the persons who provided the funding for such advertisements, and for other purposes.

1.

Short title

This Act may be cited as the Stand By Every Ad Act.

2.

Application of disclaimer statements to online communications

(a)

Application to online public communications

(1)

In general

Subsection (a) of section 318 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30120) is amended—

(A)

by striking financing any communication through any broadcasting station, newspaper, magazine, outdoor advertising facility, mailing, or any other type of general public political advertising and inserting financing any public communication; and

(B)

by striking solicits any contribution through any broadcasting station, newspaper, magazine, outdoor advertising facility, mailing, or any other type of general public political advertising and inserting solicits any contribution through any public communication.

(2)

Conforming amendment relating to definition of public communication

Paragraph (22) of section 301 of such Act (52 U.S.C. 30101(22)) is amended by striking or satellite communication and inserting satellite, paid internet, or paid digital communication.

(b)

Clear and conspicuous manner requirement

Subsection (a) of section 318 of such Act (52 U.S.C. 30120(a)) is amended—

(1)

by striking shall clearly state each place it appears in paragraphs (1), (2), and (3) and inserting shall state in a clear and conspicuous manner; and

(2)

by adding at the end the following flush sentence: For purposes of this section, a communication does not make a statement in a clear and conspicuous manner if it is difficult to read or hear or if the placement is easily overlooked..

(c)

Special rules for qualified Internet or digital communications

(1)

In general

Section 318 of such Act (52 U.S.C. 30120) is amended by adding at the end the following new subsection:

(e)

Special rules for qualified Internet or digital communications

(1)

Special rules with respect to statements

In the case of any qualified internet or digital communication which is disseminated through a medium in which the provision of all of the information specified in this section is not possible, the communication shall, in a clear and conspicuous manner—

(A)

state the name of the person who paid for the communication; and

(B)

provide a means for the recipient of the communication to obtain the remainder of the information required under this section with minimal effort and without receiving or viewing any additional material other than such required information.

(2)

Safe harbor for determining clear and conspicuous manner

A statement in qualified internet or digital communication shall be considered to be made in a clear and conspicuous manner as provided in subsection (a) if the communication meets the following requirements:

(A)

Text or graphic communications

In the case of a text or graphic communication, the statement—

(i)

appears in letters at least as large as the majority of the text in the communication; and

(ii)

meets the requirements of paragraphs (2) and (3) of subsection (c).

(B)

Audio communications

In the case of an audio communication, the statement is spoken in a clearly audible and intelligible manner at the beginning or end of the communication and lasts at least 3 seconds.

(C)

Video communications

In the case of a video communication which also includes audio, the statement—

(i)

is included at either the beginning or the end of the communication; and

(ii)

is made both in—

(I)

a written format that meets the requirements of subparagraph (A) and appears for at least 4 seconds; and

(II)

an audible format that meets the requirements of subparagraph (B).

(D)

Other communications

In the case of any other type of communication, the statement is at least as clear and conspicuous as the statement specified in subparagraph (A), (B), or (C).

(3)

Qualified internet or digital communication defined

(A)

In general

In this section, the term qualified internet or digital communication means any communication which is placed or promoted for a fee on an online platform.

(B)

Online platform

For purposes of this paragraph, the term online platform means any public-facing website, web application, or digital application (including a social network, ad network, or search engine) which—

(i)

sells qualified political advertisements; and

(ii)

has 50,000,000 or more unique monthly United States visitors or users for a majority of months during the preceding 12 months.

(C)

Qualified political advertisement

For purposes of this paragraph, the term qualified political advertisement means any advertisement (including search engine marketing, display advertisements, video advertisements, native advertisements, and sponsorships) that—

(i)

is made by or on behalf of a candidate; or

(ii)

communicates a message relating to any political matter of national importance, including—

(I)

a candidate;

(II)

any election to Federal office; or

(III)

a national legislative issue of public importance.

.

(2)

Nonapplication of certain exceptions

The exceptions provided in section 110.11(f)(1)(i) and (ii) of title 11, Code of Federal Regulations, or any successor to such rules, shall have no application to qualified internet or digital communications (as defined in section 318(e)(3) of the Federal Election Campaign Act of 1971, as added by paragraph (1)).

(d)

Modification of additional requirements for certain communications

Section 318(d) of such Act (52 U.S.C. 30120(d)) is amended—

(1)

in paragraph (1)(A)—

(A)

by striking which is transmitted through radio and inserting which is in an audio format; and

(B)

by striking By radio in the heading and inserting Audio format;

(2)

in paragraph (1)(B)—

(A)

by striking which is transmitted through television and inserting which is in video format; and

(B)

by striking By television in the heading and inserting Video format; and

(3)

in paragraph (2)—

(A)

by striking transmitted through radio or television and inserting made in audio or video format; and

(B)

by striking through television in the second sentence and inserting in video format.

3.

Disclaimer requirements for communications consisting of campaign-related disbursements

(a)

Disclaimer requirements for campaign-Related disbursements

Section 318(a) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30120(a)) is amended by striking for the purpose of financing communications expressly advocating the election or defeat of a clearly identified candidate and inserting for a campaign-related disbursement, as defined in subsection (f), consisting of a public communication.

(b)

Campaign-Related disbursements defined

Section 318 of such Act (52 U.S.C. 30120), as amended by section 2(c)(1), is further amended by adding at the end the following new subsection:

(f)

Campaign-Related disbursement defined

(1)

In general

In this section, the term campaign-related disbursement means a disbursement by a covered organization for any of the following (regardless of the intent of the person making the disbursement):

(A)

An independent expenditure which expressly advocates the election or defeat of a clearly identified candidate for election for Federal office, or is the functional equivalent of express advocacy because, when taken as a whole, it can be interpreted by a reasonable person only as advocating the election or defeat of a candidate for election for Federal office.

(B)

Any public communication which refers to a clearly identified candidate for election for Federal office and which promotes or supports the election of a candidate for that office, or attacks or opposes the election of a candidate for that office, without regard to whether the communication expressly advocates a vote for or against a candidate for that office.

(C)

An electioneering communication, as defined in section 304(f)(3).

(D)

A covered transfer.

(2)

Covered organization defined

In this subsection, the term covered organization means any of the following:

(A)

A corporation (other than an organization described in section 501(c)(3) of the Internal Revenue Code of 1986).

(B)

A limited liability corporation that is not otherwise treated as a corporation for purposes of this Act (other than an organization described in section 501(c)(3) of the Internal Revenue Code of 1986).

(C)

An organization described in section 501(c) of such Code and exempt from taxation under section 501(a) of such Code (other than an organization described in section 501(c)(3) of such Code).

(D)

A labor organization (as defined in section 316(b)).

(E)

Any political organization under section 527 of the Internal Revenue Code of 1986, other than a political committee under this Act (except as provided in subparagraph (F)).

(F)

A political committee with an account that accepts donations or contributions that do not comply with the contribution limits or source prohibitions under this Act, but only with respect to such accounts.

(3)

Covered transfer defined

(A)

In general

In this subsection, the term covered transfer means any transfer or payment of funds by a covered organization to another person if the covered organization—

(i)

designates, requests, or suggests that the amounts be used for—

(I)

campaign-related disbursements (other than covered transfers); or

(II)

making a transfer to another person for the purpose of making or paying for such campaign-related disbursements;

(ii)

made such transfer or payment in response to a solicitation or other request for a donation or payment for—

(I)

the making of or paying for campaign-related disbursements (other than covered transfers); or

(II)

making a transfer to another person for the purpose of making or paying for such campaign-related disbursements;

(iii)

engaged in discussions with the recipient of the transfer or payment regarding—

(I)

the making of or paying for campaign-related disbursements (other than covered transfers); or

(II)

donating or transferring any amount of such transfer or payment to another person for the purpose of making or paying for such campaign-related disbursements;

(iv)

made campaign-related disbursements (other than a covered transfer) in an aggregate amount of $50,000 or more during the 2-year period ending on the date of the transfer or payment, or knew or had reason to know that the person receiving the transfer or payment made such disbursements in such an aggregate amount during that 2-year period; or

(v)

knew or had reason to know that the person receiving the transfer or payment would make campaign-related disbursements in an aggregate amount of $50,000 or more during the 2-year period beginning on the date of the transfer or payment.

(B)

Exclusions

The term covered transfer does not include any of the following:

(i)

A disbursement made by a covered organization in a commercial transaction in the ordinary course of any trade or business conducted by the covered organization or in the form of investments made by the covered organization.

(ii)

A disbursement made by a covered organization if—

(I)

the covered organization prohibited, in writing, the use of such disbursement for campaign-related disbursements; and

(II)

the recipient of the disbursement agreed to follow the prohibition and deposited the disbursement in an account which is segregated from any account used to make campaign-related disbursements.

(C)

Special rule regarding transfers among affiliates

(i)

Special rule

A transfer of an amount by one covered organization to another covered organization which is treated as a transfer between affiliates under clause (iii) shall be considered a covered transfer by the covered organization which transfers the amount only if the aggregate amount transferred during the year by such covered organization to that same covered organization is equal to or greater than $50,000.

(ii)

Determination of amount of certain payments among affiliates

In determining the amount of a transfer between affiliates for purposes of clause (i), to the extent that the transfer consists of funds attributable to dues, fees, or assessments which are paid by individuals on a regular, periodic basis in accordance with a per-individual calculation which is made on a regular basis, the transfer shall be attributed to the individuals paying the dues, fees, or assessments and shall not be attributed to the covered organization.

(iii)

Description of transfers between affiliates

A transfer of amounts from one covered organization to another covered organization shall be treated as a transfer between affiliates if—

(I)

one of the organizations is an affiliate of the other organization; or

(II)

each of the organizations is an affiliate of the same organization,

except that the transfer shall not be treated as a transfer between affiliates if one of the organizations is established for the purpose of making campaign-related disbursements.
(iv)

Determination of affiliate status

For purposes of clause (iii), a covered organization is an affiliate of another covered organization if—

(I)

the governing instrument of the organization requires it to be bound by decisions of the other organization;

(II)

the governing board of the organization includes persons who are specifically designated representatives of the other organization or are members of the governing board, officers, or paid executive staff members of the other organization, or whose service on the governing board is contingent upon the approval of the other organization; or

(III)

the organization is chartered by the other organization.

(v)

Coverage of transfers to affiliated section 501(c)(3) organizations

This subparagraph shall apply with respect to an amount transferred by a covered organization to an organization described in paragraph (3) of section 501(c) of the Internal Revenue Code of 1986 and exempt from tax under section 501(a) of such Code in the same manner as this subparagraph applies to an amount transferred by a covered organization to another covered organization.

.

4.

Stand By Every Ad

(a)

Expanded disclaimer requirements for certain communications

Section 318 of the Federal Election Campaign Act of 1971 (52 U.S.C. 30120), as amended by section 2(c)(1) and section 3(b), is further amended by adding at the end the following new subsection:

(g)

Expanded disclaimer requirements for communications not authorized by candidates or committees

(1)

In general

Except as provided in paragraph (6), any communication described in paragraph (3) of subsection (a) which is transmitted in an audio or video format (including an Internet or digital communication), or which is an Internet or digital communication transmitted in a text or graphic format, shall include, in addition to the requirements of paragraph (3) of subsection (a), the following:

(A)

The individual disclosure statement described in paragraph (2)(A) (if the person paying for the communication is an individual) or the organizational disclosure statement described in paragraph (2)(B) (if the person paying for the communication is not an individual).

(B)

If the communication is transmitted in a video format, or is an Internet or digital communication which is transmitted in a text or graphic format, and is paid for in whole or in part with a payment which is treated as a campaign-related disbursement under subsection (f)—

(i)

the Top Five Funders list (if applicable); or

(ii)

in the case of a communication which, as determined on the basis of criteria established in regulations issued by the Commission, is of such short duration that including the Top Five Funders list in the communication would constitute a hardship to the person paying for the communication by requiring a disproportionate amount of the content of the communication to consist of the Top Five Funders list, the name of a website which contains the Top Five Funders list (if applicable) or, in the case of an Internet or digital communication, a hyperlink to such website.

(C)

If the communication is transmitted in an audio format and is paid for in whole or in part with a payment which is treated as a campaign-related disbursement under subsection (f)—

(i)

the Top Two Funders list (if applicable); or

(ii)

in the case of a communication which, as determined on the basis of criteria established in regulations issued by the Commission, is of such short duration that including the Top Two Funders list in the communication would constitute a hardship to the person paying for the communication by requiring a disproportionate amount of the content of the communication to consist of the Top Two Funders list, the name of a website which contains the Top Two Funders list (if applicable).

(2)

Disclosure statements described

(A)

Individual disclosure statements

The individual disclosure statement described in this subparagraph is the following: I am ________, and I approve this message., with the blank filled in with the name of the applicable individual.

(B)

Organizational disclosure statements

The organizational disclosure statement described in this subparagraph is the following: I am ________, the ________ of ________, and ________ approves this message., with—

(i)

the first blank to be filled in with the name of the applicable individual;

(ii)

the second blank to be filled in with the title of the applicable individual; and

(iii)

the third and fourth blank each to be filled in with the name of the organization or other person paying for the communication.

(3)

Method of conveyance of statement

(A)

Communications in text or graphic format

In the case of a communication to which this subsection applies which is transmitted in a text or graphic format, the disclosure statements required under paragraph (1) shall appear in letters at least as large as the majority of the text in the communication.

(B)

Communications transmitted in audio format

In the case of a communication to which this subsection applies which is transmitted in an audio format, the disclosure statements required under paragraph (1) shall be made by audio by the applicable individual in a clear and conspicuous manner.

(C)

Communications transmitted in video format

In the case of a communication to which this subsection applies which is transmitted in a video format, the information required under paragraph (1)—

(i)

shall appear in writing at the end of the communication or in a crawl along the bottom of the communication in a clear and conspicuous manner, with a reasonable degree of color contrast between the background and the printed statement, for a period of at least 6 seconds; and

(ii)

shall also be conveyed by an unobscured, full-screen view of the applicable individual or by the applicable individual making the statement in voice-over accompanied by a clearly identifiable photograph or similar image of the individual, except in the case of a Top Five Funders list.

(4)

Applicable individual defined

The term applicable individual means, with respect to a communication to which this subsection applies—

(A)

if the communication is paid for by an individual, the individual involved;

(B)

if the communication is paid for by a corporation, the chief executive officer of the corporation (or, if the corporation does not have a chief executive officer, the highest ranking official of the corporation);

(C)

if the communication is paid for by a labor organization, the highest ranking officer of the labor organization; and

(D)

if the communication is paid for by any other person, the highest ranking official of such person.

(5)

Top Five Funders list and Top Two Funders list defined

(A)

Top Five Funders list

The term Top Five Funders list means, with respect to a communication which is paid for in whole or in part with a campaign-related disbursement (as defined in subsection (f)), a list of the five persons who, during the 12-month period ending on the date of the disbursement, provided the largest payments of any type in an aggregate amount equal to or exceeding $10,000 to the person who is paying for the communication and the amount of the payments each such person provided. If two or more people provided the fifth largest of such payments, the person paying for the communication shall select one of those persons to be included on the Top Five Funders list.

(B)

Top Two Funders list

The term Top Two Funders list means, with respect to a communication which is paid for in whole or in part with a campaign-related disbursement (as defined in subsection (f)), a list of the persons who, during the 12-month period ending on the date of the disbursement, provided the largest and the second largest payments of any type in an aggregate amount equal to or exceeding $10,000 to the person who is paying for the communication and the amount of the payments each such person provided. If two or more persons provided the second largest of such payments, the person paying for the communication shall select one of those persons to be included on the Top Two Funders list.

(C)

Exclusion of certain payments

For purposes of subparagraphs (A) and (B), in determining the amount of payments made by a person to a person paying for a communication, there shall be excluded the following:

(i)

Any amounts provided in the ordinary course of any trade or business conducted by the person paying for the communication or in the form of investments in the person paying for the communication.

(ii)

Any payment which the person prohibited, in writing, from being used for campaign-related disbursements, but only if the person paying for the communication agreed to follow the prohibition and deposited the payment in an account which is segregated from any account used to make campaign-related disbursements.

(6)

Special rules for certain communications

(A)

Exception for communications paid for by political parties and certain political committees

This subsection does not apply to any communication to which subsection (d)(2) applies.

(B)

Treatment of video communications lasting 10 seconds or less

In the case of a communication to which this subsection applies which is transmitted in a video format, or is an Internet or digital communication which is transmitted in a text or graphic format, the communication shall meet the following requirements:

(i)

The communication shall include the individual disclosure statement described in paragraph (2)(A) (if the person paying for the communication is an individual) or the organizational disclosure statement described in paragraph (2)(B) (if the person paying for the communication is not an individual).

(ii)

The statement described in clause (i) shall appear in writing at the end of the communication, or in a crawl along the bottom of the communication, in a clear and conspicuous manner, with a reasonable degree of color contrast between the background and the printed statement, for a period of at least 4 seconds.

(iii)

The communication shall include, in a clear and conspicuous manner, a website address with a landing page which will provide all of the information described in paragraph (1) with respect to the communication. Such address shall appear for the full duration of the communication.

(iv)

To the extent that the format in which the communication is made permits the use of a hyperlink, the communication shall include a hyperlink to the website address described in clause (iii).

.

(b)

Exception for communications paid for by political parties and certain political committees

Section 318(d)(2) of such Act (52 U.S.C. 30120(d)(2)) is amended—

(1)

in the heading, by striking others and inserting certain political committees;

(2)

by striking Any communication and inserting (A) Any communication;

(3)

by inserting which (except to the extent provided in subparagraph (B)) is paid for by a political committee (including a political committee of a political party) and after subsection (a);

(4)

by striking or other person each place it appears; and

(5)

by adding at the end the following new subparagraph:

(B)
(i)

This paragraph does not apply to a communication paid for in whole or in part during a calendar year with a campaign-related disbursement, but only if the covered organization making the campaign-related disbursement made campaign-related disbursements (as defined in subsection (f)) aggregating more than $10,000 during such calendar year.

(ii)

For purposes of clause (i), in determining the amount of campaign-related disbursements made by a covered organization during a year, there shall be excluded the following:

(I)

Any amounts received by the covered organization in the ordinary course of any trade or business conducted by the covered organization or in the form of investments in the covered organization.

(II)

Any amounts received by the covered organization from a person who prohibited, in writing, the organization from using such amounts for campaign-related disbursements, but only if the covered organization agreed to follow the prohibition and deposited the amounts in an account which is segregated from any account used to make campaign-related disbursements.

.

5.

Disclaimer requirements for communications made through prerecorded telephone calls

(a)

Application of requirements

(1)

In general

Section 318(a) of the Federal Election Campaign Act of 1971 (52 U.S.C. 30120(a)), as amended by section 2(a)(1), is further amended by inserting after public communication each place it appears the following: (including a telephone call consisting in substantial part of a prerecorded audio message).

(2)

Application to communications subject to expanded disclaimer requirements

Section 318(g)(1) of such Act (52 U.S.C. 30120(e)(1)), as added by section 4(a), is amended in the matter preceding subparagraph (A) by striking which is transmitted in an audio or video format and inserting which is transmitted in an audio or video format or which consists of a telephone call consisting in substantial part of a prerecorded audio message.

(b)

Treatment as communication transmitted in audio format

(1)

Communications by candidates or authorized persons

Section 318(d) of such Act (52 U.S.C. 30120(d)) is amended by adding at the end the following new paragraph:

(3)

Prerecorded telephone calls

Any communication described in paragraph (1), (2), or (3) of subsection (a) (other than a communication which is subject to subsection (e)) which is a telephone call consisting in substantial part of a prerecorded audio message shall include, in addition to the requirements of such paragraph, the audio statement required under subparagraph (A) of paragraph (1) or the audio statement required under paragraph (2) (whichever is applicable), except that the statement shall be made at the beginning of the telephone call.

.

(2)

Communications subject to expanded disclaimer requirements

Section 318(g)(3) of such Act (52 U.S.C. 30120(e)(3)), as added by section 4(a), is amended by adding at the end the following new subparagraph:

(D)

Prerecorded telephone calls

In the case of a communication to which this subsection applies which is a telephone call consisting in substantial part of a prerecorded audio message, the communication shall be considered to be transmitted in an audio format.

.

6.

No expansion of persons subject to disclaimer requirements on internet communications

Nothing in this Act or the amendments made by this Act may be construed to require any person who is not required under section 318 of the Federal Election Campaign Act of 1971 (as provided under section 110.11 of title 11 of the Code of Federal Regulations) to include a disclaimer on communications made by the person through the internet to include any disclaimer on any such communications.

7.

Effective date

The amendments made by this Act shall apply with respect to communications made on or after January 1, 2020, and shall take effect without regard to whether or not the Federal Election Commission has promulgated regulations to carry out such amendments.