A substitute bill sponsored by Reps. Shays and Meehan passed the House of Representatives at 2:40 a.m. this morning by a vote of 240- 189. 198 Democrats and 41 Republicans voted for the bill. During the debate the sponsors entered colloquy language into the record that clarifies the FEC's role in defining exceptions to issue advocacy restictions for broadcasts that are "wholly unrelated to an election." The FEC will need to act within 90 days of the effective date of the law. (The colloquy language is not yet on the GPO website, but the text is included at the end of this alert). The following amendments were made to the bill Shays and Meehan filed last summer:

1. New effective date: November 6, 2002 (the day after Election Day).
2. National parties can spend soft money through the end of 2002 to pay outstanding debts.
3. Contribution limit for House races increased from $1000 to $2000.
4. Provisions regarding lowest unit rates for broadcast advertising by candidates were deleted.
5. Contribution and spending limits raised for House candidates with self-financed opponents.
6. Parties will not be able to use soft money for building or office construction.

The next step will be the fight over whether or not a conference committee is held. Reformers need 60 votes in the Senate to avoid the conference. It remains unclear whether the President will sign the bill. To see how members of Congress voted click here. For a detailed summary see the Campaign Finance Institute's website. Colloquy Language For Shays-Meehan Bill Scope of Exception (iv) Definition of Electioneering Communication Q: Exceptions to the definition of “ electioneering communications” are set out in Section 201(8)(B), and include news distributed by broadcast stations that are not owned or controlled by a candidate, independent expenditures, candidate debates and forums and “any other communication exempted under such regulations as the Commission may promulgate…to ensure appropriate implementation of this paragraph.” What is the purpose of the fourth exception? A: The definition of “electioneering communication” is a bright line test covering all broadcast, satellite and cable communications that refer to a clearly identified federal candidate and that are made within the immediate pre-election period of 60 days before a general election or 30 days before a primary. But it is possible that there could be some communications that will fall within this definition even though they are plainly and unquestionable not related to the election. Section 201(b)(iv) was added to the bill to provide the Commission with some limited discretion in administering the statute so that it can issue regulations to exempt such communications from the definition of “electioneering communications” because they are wholly unrelated to an election. For instance, if a church that regularly broadcasts its religious services does so in the pre-election period and mentions in passing and as part of its service the name of an elected official who is also a candidate, and the Commission can reasonably conclude that the routine and incidental mention of the official does not promote his candidacy, the Commission could promulgate a rule to exempt that type of communication from the definition of “electioneering communications.” There could be other examples where the Commission could conclude that the broadcast communication in the immediate pre-election period does not in any way promote or support any candidate, or oppose his opponent. Charities exempt from taxation under Section 501(c)(3) of the Internal Revenue Code are prohibited by existing tax law from supporting or opposing candidates for elective office. Notwithstanding this prohibition, some such charities have run ads in the guise of so-called “issue advocacy” that clearly have had the effect of promoting or opposing federal candidates. Because of these cases, we do not intend that Section 201(3)(B)(iv) be used by the FEC to create any per se exemption from the definition of “electioneering communications” for speech by Section 501(c)(3) charities. Nor do we intend that Section 201(3)(B)(iv) apply only to communications by section 501(c)(3) charities. But we do urge the FEC to take cognizance of the standards that have been developed by the IRS in administering the law governing Section 501(c)(3) charities, and to determine the standards, if any, that can be applied to exempt specific categories of speech where it is clear that such communications are made in a manner that is neutral in nature, wholly unrelated to an election, and cannot be used to promote or attack a federal candidate. We urge the Commission to exercise this rulemaking power within 90 days of the effective date of the bill. We also expect the Commission to use its Advisory Opinion process to address these situations both before and after the issuance of regulations.