This report discusses legislation and activity in the 109 th Congress aimed at amending the nation's campaign finance laws, primarily under Titles 2 and 26 of the U.S. Code, the Federal Election Campaign Act (FECA)—the main body of law governing federal campaign finance. Highlights of 109th Congress Legislative Activity

During the 109 th Congress, 51 bills were introduced (43 in the House and 8 in the Senate) to change federal campaign finance law. Legislation relating to 527 organizations received the most prominent legislative and media attention during the 109 th Congress. 527 Issue

The 109 th Congress followed the 2004 elections, during which an estimated $435 million was spent by political organizations operating under Section 527 of the Internal Revenue Code, but outside federal election law regulation. On March 8, 2005, the Senate Rules and Administration Committee held a hearing on S. 271 (McCain-Feingold-Lott), the 527 Reform Act of 2005, to require that 527s involved in federal elections comply fully with federal election law. On May 17, the bill was reported as an original bill— S. 1053 —and placed on the Senate's legislative calendar. The Senate took no further action on the measure. It focused on two measures: H.R. 1316 sought to address the 527 issue indirectly, by loosening restrictions on funding sources within FECA. 513 and H.R. Almost a year later, on April 5, 2006, the House passed H.R. 513 was also incorporated into the House Republican leadership's lobbying and ethics reform bill— H.R. 513 as reported by the House Administration Committee. 4975 , the House substituted it for the text of S. 2349 , the Senate-passed version of the bill, to enable a conference with the Senate. The Senate-passed bill did not contain the 527 provisions, and disagreement between the two chambers on the 527 issue reportedly contributed to the 109 th Congress enacting neither lobby reform nor 527 regulation legislation. 4975 , the lobby reform bill. Major Reforms Proposed, by Category

As explained previously, campaign finance bills introduced in the 109 th Congress covered a wide range of topics. The 13 th contains proposals to change the presidential public funding system. The 14 th —" Miscellaneous"—contains all other proposals. Those few bills that addressed it in the 109 th Congress generally sought to adjust existing restrictions. 4759 (Doolittle)—regarding impact of regulation of campaign financing
H.R. These headings are the same categories used throughout this report. May 3, passed House (217-213). S. 2511 (McCain)—527 Reform Act of 2005

			Soft Money: Non-Party

Would have included in definition of "political committee" any 527 organization, unless it: (1) had annual gross receipts of less than $25,000; (2) was a political committee of a state or local party or candidate; (3) existed solely to pay certain administrative expenses or expenses of a qualified newsletter; (4) was composed solely of state or local officeholders or candidates whose voter drive activities referred only to state/local candidates and parties; or (5) was exclusively devoted to elections where no federal candidate was on ballot, to non-federal elections, ballot issues, or to selection of non-elected officials; Would have made last exemption (above) inapplicable if the 527 organization spent more than $1,000 for: (1) public communications that promoted, supported, attacked, or opposed a clearly identified federal candidate within one year of the general election in which that candidate was seeking office; or (2) for any voter drive effort conducted by a group in a calendar year, unless: (a) sponsor confined activity solely to one state; (b) non-federal candidates were referred to in all voter drive activities and no federal candidate or party was referred to in any substantive way; (c) no federal candidate or officeholder or national party official/agent was involved in organization's direction, funding, or spending; AND (d) no contributions were made by the group to federal candidates; Would have required political committees (but not candidate or party committees) that made disbursements for voter mobilization activities or public communications that affected both federal and non-federal elections to use generally at least 50% hard money from federal accounts to finance such activities (but would have required that 100% of public communications and voter drive activities that referred to only federal candidates be financed with hard money from a federal account, regardless of whether the communication referred to a political party); in effect, this would have codified the 2005 FEC regulations on this topic and made them applicable to 527s not affected by current rules; Would have allowed contributions to non-federal accounts making allocations (above) only by individuals and subject to limit of $25,000 per year; would have prohibited fundraising for such accounts by national parties and officials and federal candidates and officeholders; Stated that this act was to have no bearing on FEC regulations, on any definitions of political organizations in Internal Revenue Code, or on any determination of whether a 501(c) tax-exempt organization might be a political committee under FECA; Would have provided special expedited judicial review procedures, similar to BCRA's, for a challenge on constitutional grounds, and would have allowed any Member to bring or intervene in any such case; Declared that if any provision were deemed unconstitutional, the rest of the act would not be affected.
During the 109th Congress, 51 bills were introduced to change the nation's campaign finance laws (primarily under Titles 2 and 26 of the U.S. Code). These bills—43 in the House and 8 in the Senate—sought to change the current system, including tightening perceived loopholes. Two of those bills passed the House, but no bill passed both chambers. Therefore, no statutory changes occurred in federal campaign finance law during the 109th Congress.
Although the 109th Congress chose not to enact campaign finance legislation, Congress nonetheless considered dozens of bills addressing a wide variety of topics. In summarizing that legislation, this report identifies 14 major topics (categories) addressed in the bills. These categories are diverse, ranging from changing individual contribution limits to regulating independent expenditures. Although some bills called for increased regulation, others proposed less regulation. Hence, legislative activity during the 109th Congress reflected a long-standing debate in campaign finance policy over extending regulation of campaign finance practices versus limiting the reach of such regulation.
The most prominent legislation introduced during the 109th Congress—and that which advanced farthest through the legislative process—focused on political organizations operating under Section 527 of the Internal Revenue Code, but outside federal election law. Sponsors of the Bipartisan Campaign Reform Act of 2002 (BCRA) offered bills to require that "527s" (as these organizations are popularly known) involved in federal elections comply fully with federal election law. The Senate Rules and Administration Committee reported such a measure—S. 1053—in May 2005, but no further action occurred in the Senate. The House Administration Committee reported two 527 bills with starkly different approaches: H.R. 513—the 527 Reform Act of 2005, the counterpart to S. 1053—and H.R. 1316, which sought to address the 527 issue indirectly by loosening restrictions on funding sources permitted under federal campaign finance law. In April 2006, the House passed H.R. 513, as amended, but the Senate took no action on the bill.
Legislation proposing 527 reform later became a component of the 109th Congress debate over lobbying reform. The text of H.R. 513 was eventually incorporated into the House Republican leadership's lobbying and ethics reform bill—H.R. 4975, which passed the House in May 2006. The Senate-passed lobbying bill did not contain the 527 provisions. Disagreement between the two chambers on the 527 issue reportedly contributed to neither lobbying reform nor 527 regulation legislation being enacted during the 109th Congress.
This report will not be updated, because it reflects the complete record of 109th Congress proposals and activity in this area. It may be used to provide a basis for legislation that could be offered in the 110th Congress.