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US House passes bill to limit campaign fundraising by 527 groups

[JURIST] The US House of Representatives [official website] on Wednesday passed the 527 Reform Act of 2006 [HR 513 text, PDF; bill summary], legislation that would require non-profit political groups, called "527s" for the tax code section under which they are organized, to register as political committees and follow campaign finance rules [FEC materials]. 527 groups [OpenSecret.org backgrounder] currently are not subject to the same soft-money contribution restrictions as traditional political action committees, which allowed them to donate vast amounts of unregulated money to campaigns during the 2004 election cycle. In the 218-209 vote [roll call], the House narrowly approved restricting donations to 527s to $25,000 a year per donor for partisan voter mobilization efforts and $5,000 a year per donor for direct expenditures on federal elections. The bill now goes to the US Senate for consideration, where strong Democratic opposition to the proposal makes its passage questionable, but the White House has expressed strong support [statement, PDF] for the bill.

The House vote comes a week after a federal judge ordered [PDF text; JURIST report] the Federal Election Commission [official website] to present a "reasoned explanation" for failing to more fully regulate 527s, and told the FEC to institute new rules "if necessary." The ruling came in a challenge by US Reps. Christopher Shays (R-CT) and Martin Meehan (D-MA) against the FEC. The two congressmen had argued that the FEC's failure to issue a rule governing when 527s must register as political committees was arbitrary and capricious and in violation of the Administrative Procedure Act [text]. AP has more.

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