The House International Relations Committee on Wednesday passed a bill that lays out a series of changes the United Nations would have to make if it wants to avoid penalties in the form of money withheld by the United States.

The bill, introduced by Committee Chairman Henry Hyde (search), R-Ill., on Tuesday, will now move to the House floor for a full vote next Wednesday, June 15. The committee vote was 25-22 in favor of the measure.

According to the legislation, if the United Nations (search) does not live up to its promises of reform, the United States will withhold half of its annual contribution to the world body — a loss of $250 million a year.

Hyde's committee debated the bill on Wednesday.

"No observer, be they passionate supporter or dismissive critic, can pretend that the current structure and operations of the U.N. represent an acceptable standard," Hyde said. "Even the U.N. itself has acknowledged the need for reform and, to its credit, has put forward a number of useful proposals for consideration. But it cannot be expected to shoulder this burden alone. And none who care about the U.N. would want it to."

Click on the video box to the right for a report by FOX News' Jonathan Hunt.

While U.S. lawmakers are supportive of the international organization's role in facilitating diplomacy, mediating disputes, monitoring peace agreements and providing aid to the hungry, "we are opposed to legendary bureaucratization, to political grandstanding, to billions of dollars spent on multitudes of programs with meager results, to the outright misappropriation of funds represented by the emerging scandal regarding the Oil-for-Food (search) program. And we rightly bristle at the gratuitous anti-Americanism that has become ingrained over decades," Hyde said.

The United Nations has come under fire from members of Congress and other observers over the past few years because of its role in Iraq's Oil-for-Food program, which independent investigators have claimed fell victim to gross mismanagement and lack of oversight. That laxity, in turn, led to the diversion of millions of dollars in aid for the Iraqi people to the pockets of various contractors and individuals, investigators said.

Meanwhile, U.N. peacekeepers in the Congo (search) and elsewhere have been accused of sexually abusing women and children and the world body has been criticized for not being able to enforce its own resolutions sufficiently. Among those is Resolution 1441 (search), which had called on former Iraqi President Saddam Hussein to disarm or else face an ousting from the international community.

The United Nations has also taken some heat for its 53-nation Human Rights Commission. The current process of selecting members has led to the commission seating nations with questionable human rights records, such as Sudan, Libya and Cuba, making it a lightning rod for criticism.

The United Nations would not comment on specific reforms, but U.N. spokesman Stephane Dujarric said Secretary-General Kofi Annan and the organization itself have been "very clear" on the issue of tying U.S. funds to U.N. reform and that "withholding as a tool for reform is not one we feel works."

Rep. Mike Pence, a Republican from Indiana and co-sponsor of the bill, said linking U.S. contributions to effective United Nations reform is necessary.

"It's important that the Congress of the United States and the American people send a deafening message to that world body — that we expect accountability, we expect transparency and we expect an institution that overcomes the scandals that have beset them throughout the Oil-for-Food incident," Pence said.

Among the reforms demanded are new accountability measures, the establishment of an independent oversight board with broad investigative authority through the Office of Internal Oversight Services and new procedures to protect whistleblowers. The OIOS, under the bill, would have the authority to initiate investigations into mismanagement and wrongdoing, establish procedures to protect U.N. employees or contractors who report allegations of misconduct and establish policies to end single-bid contracts.

"Scandals involving the Oil-for-Food program, peacekeeping operations, the World Meteorological Society, the World Intellectual Property Organization, as well as alleged wrongdoing by high-level staff have illustrated the systemic weaknesses in the U.N.'s current oversight efforts," reads a statement from Hyde's office outlining the bill's main points.

U.S. lawmakers also want new rules for financial disclosure, including forcing senior U.N. officials to declare their financial interests. They also are asking for an ethics office to be created to ensure those officials don't take advantage of their position overseeing certain measures to line their own pockets.

The reform act also insists on more stringent codes of conduct for U.N. peacekeepers (search) and stronger investigation of allegations of rape and abuse on U.N. missions. It mandates that the United Nations adopt a single, enforceable, uniform code of conduct for all personnel serving in peacekeeping missions and that peacekeepers are trained on the requirements of that code. The code also should be translated into the native language of the peacekeeping troops, the bill says.

Additionally, the Hyde bill calls for the creation of a centralized database to track cases of misconduct to make sure those individuals aren't sent on future peacekeeping missions. Alleged misconduct should be independently investigated by the Department of Peacekeeping Operations and the Office of Internal Oversight Services, according to the bill.

"These mandates are crucial in light of the revelations of sexual exploitation and abuse of civilians in the Democratic Republic of the Congo, Burundi, Haiti and Liberia," the statement from Hyde's office reads.

Democrats on the House International Relations Committee offered an alternative bill that doesn't directly tie U.N. funding to reform. One proposal by Rep. Tom Lantos, D-Calif., would give the State Department the choice of withholding up to 50 percent of dues if the United Nations doesn't carry out reforms, Lantos spokeswoman Lynne Weil told The Associated Press. But it does not require the money be held back.

"The Secretary of State needs more flexibility in determining whether and when to withhold dues," Lantos said in a statement. "We don't need more 'big stick' diplomacy. Strangely enough, in this case, the Democrats evidently trust the secretary of state more than the Republicans do."

State Department officials said Tuesday that the Bush administration believes U.N. reform is critical and wants greater accountability and management reform, but sees some of Hyde's reform conditions as not feasible. "We believe moreover that U.S. obligations for our dues should be fully funded," the official said, reported AP.

FOXNews.com's Liza Porteus contributed to this report.