[Federal Register: August 21, 2003 (Volume 68, Number 162)]
[Proposed Rules]
[Page 50481-50488]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21au03-18]
=======================================================================
-----------------------------------------------------------------------
FEDERAL ELECTION COMMISSION
11 CFR Parts 100, 106, 114, 9004, and 9034
[Notice 2003-14]
Candidate Travel
AGENCY: Federal Election Commission.
ACTION: Notice of proposed rulemaking.
-----------------------------------------------------------------------
SUMMARY: The Federal Election Commission requests comments on proposed
changes to its rules covering the proper rates and timing for payment
of candidate travel on private means of transportation that are not
offered for commercial use, including government conveyances. The
proposed rule would provide more comprehensive guidance than the
current regulations by establishing a single, uniform valuation scheme
for campaign travel that does not depend on whether the service
provider is a corporation, labor organization, individual, partnership,
limited liability company or other entity, or on whether the
destination city is served by regularly scheduled commercial service.
The proposed rules would apply to all Federal candidates including
publicly funded presidential candidates. No final decisions have been
made by the Commission on any of the proposed revisions in this Notice.
Further information is provided in the supplementary information that
follows.
DATES: Comments must be received on or before September 19, 2003. If
the Commission receives sufficient requests to testify, it will hold a
hearing on these proposed rules on October 1, 2003, at 9:30 a.m.
Commenters wishing to testify at the hearing must so indicate in their
written or electronic comments.
ADDRESSES: All comments should be addressed to Ms. Mai T. Dinh, Acting
Assistant General Counsel, and must be submitted in either electronic
or written form. Electronic mail comments should be sent to
travel2003@fec.gov and must include the full name, electronic mail
address and postal service address of the commenter. Electronic mail
comments that do not contain the full name, electronic mail address and
postal service address of the commenter will not be considered. If the
electronic mail comments include an attachment, the attachment must be
in the Adobe Acrobat (.pdf) or Microsoft Word (.doc) format. Faxed
comments should be sent to (202) 219-3923, with printed copy follow-up
to ensure legibility. Written comments and printed copies of faxed
comments should be sent to the Federal Election Commission, 999 E
Street, NW., Washington, DC 20463. Commenters are strongly encouraged
to submit comments electronically to ensure timely receipt and
consideration. The Commission will make every effort to post public
comments on its Web site within ten business days of the close of the
comment period. The hearing will be held in the Commission's ninth
floor meeting room, 999 E Street NW., Washington, DC.
FOR FURTHER INFORMATION CONTACT: Ms. Mai T. Dinh, Acting Assistant
General Counsel, or Mr. Richard T. Ewell, Attorney, 999 E Street NW.,
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: The Commission is proposing several changes
to its rules to establish a simple, uniform payment scheme covering all
candidate travel on either government or private aircraft and other
conveyances. The current regulation at 11 CFR 114.9(e) establishes the
timing for reimbursement and the amount that a candidate must reimburse
a corporation or labor organization for the use of a private airplane
or other means of transportation, but does not address means of travel
furnished by individuals, partnerships, and other entities. The current
rules in section 114.9(e) are also not fully consistent with the
Commission's treatment of similar travel by presidential and vice-
presidential candidates using government-provided transportation under
11 CFR 9004.7 and 9034.7.
[[Page 50482]]
I. Proposed 11 CFR 100.93 Payment for Travel by Airplane and Other
Means of Transportation
A. Proposed Replacement of 11 CFR 114.9(e) With Proposed 11 CFR 100.93
The Commission proposes several changes to the candidate travel
rules currently set forth at 11 CFR 114.9(e). While 11 CFR part 114
focuses on corporate and labor organization activity, and current 11
CFR 114.9(e)(2) focuses on means of travel owned or leased by
corporations or labor organizations, the Commission seeks to broaden
the rules to include airplanes and other means of travel owned by
persons other than corporations and labor organizations. The Commission
recognizes that in most cases the means of travel used for campaign
trips is likely to be owned or leased by a corporation or labor
organization, but notes that the current section heading for 11 CFR
114.9, ``Use of corporate and labor organization facilities and means
of transportation,'' would not accurately convey the scope of the
proposed travel rules encompassing airplanes and other means of
transportation owned by individuals, partnerships, or other entities.
Therefore, the Commission proposes deleting the reference to ``means of
transportation'' from the title of 11 CFR 114.9, removing and reserving
paragraph (e) of 114.9, and relocating the substance of the travel
reimbursement rules to a new section.
To accommodate the broadened scope of the travel reimbursement
rules, the Commission proposes adding new section 100.93 to the
enumerated exceptions to the definition of ``contribution'' in 11 CFR
part 100, subpart C. This new section would describe circumstances in
which the use of a private means of transportation not owned or leased
by candidates or their authorized committees would not be
contributions, much like current Sec. 100.52 (also in subpart C),
which describes when the use of commercial transportation is or is not
a contribution. Proposed Sec. 100.93 would be based on the current 11
CFR 114.9(e), with the organizational and substantive changes described
below.
B. Proposed 11 CFR 100.93(a) Scope and Definitions
1. Proposed Paragraph (a)(1) Scope
Proposed paragraph (a)(1) would define the scope of the rules and
clarify any perceived ambiguity regarding the scope of the current 11
CFR 114.9(e)(1). The current rule focuses on the use of airplanes owned
by corporations or labor organizations that ``are not licensed to offer
commercial service for travel in connection with a Federal election.''
One district court found this wording to be ambiguous. In this case, a
presidential candidate claimed that the regulation applied to all
travel on airplanes except airplanes owned or leased by a corporation
or labor organization possessing a license for travel in connection
with a Federal election. See Federal Election Commission v. Arlen
Specter '96, 150 F. Supp. 2d 797, 804 and 808 (E.D. Pa. 2001). The
Court noted that no such license existed and ultimately deferred to the
Commission's longstanding determination that 11 CFR 114.9(e) applies to
airplanes owned by corporations or labor organizations not engaged in
the business of providing commercial air service generally, without
regard to any connection with a Federal election. Id. at 812.
In order to remove this perceived ambiguity, the Commission
proposes further clarification of the class of airplanes affected. As
noted above, proposed 11 CFR 100.93 would apply to service providers
depending on whether the airplane is or is not ``normally operated for
commercial passenger service,'' rather than whether the owner of the
airplane is ``licensed to offer commercial service for travel in
connection with a Federal election.''
The Commission notes that commercial and non-commercial air travel
is subject to the authority of the Department of Transportation (DOT)
and various certifications of the Federal Aviation Administration
(FAA). Aircraft are permitted to operate pursuant to various FAA safety
certifications based generally on passenger capacity, route frequency,
and type of service offered. Private aircraft not offering commercial
passenger service operations normally operate under certification
provided pursuant to either 14 CFR parts 91 or 125.\1\ Some airlines
receive certificates of public necessity and convenience to operate
commercial passenger service as common carriers within specified
domestic locations pursuant to 14 CFR part 135. Other common carriers,
such as commercial air taxi service and on-demand charter service, are
permitted to operate under special certification in 14 CFR part 298,
which exempts them from certain requirements that would be otherwise
required under 14 CFR part 135. Certain other aircraft are also
permitted to serve as common carriers and offer passenger service for
compensation under 14 CFR parts 121 and 129. Each of the FAA
certifications focuses mainly on the technical specifications and
safety requirements of the aircraft and crew.
---------------------------------------------------------------------------
\1\ Aircraft operating pursuant to certification under 14 CFR
parts 91 or 125 are not permitted to operate as common carriers,
meaning that they cannot hold themselves out to the public as
providing passenger service for compensation. See 14 CFR 119.1(a)
(establishing additional base requirements in excess of the 14 CFR
part 91 requirements for all air carriers and commercial operators
that serve as common carriers) and 14 CFR 125.1(a) (applies to
aircraft with a seating capacity of 20 or more persons, but only
where common carriage is not involved).
---------------------------------------------------------------------------
Aircraft operating under 14 CFR part 91 certification are not
usually permitted to accept any form of payment or reimbursement from
passengers, but a special FAA exception permits Federal candidates to
reimburse the owners of such aircraft for the use of planes pursuant to
the Commission's regulations. See 14 CFR 91.321.\2\ The Commission
therefore intends its regulations in proposed 11 CFR 100.93 to apply
only to airplanes not authorized to conduct operations in air
transportation as a common carrier (e.g., 14 CFR parts 91 or 125),
while the current regulations at 11 CFR 100.52 would apply to all
airplanes operated pursuant to other certifications that do permit
carriage of passengers for compensation. Proposed 11 CFR 100.93,
however, would focus on the normal use of the airplane, rather than the
operating certificate possessed by its owner, to avoid the need for
title and certification checks. The Commission seeks comment on whether
the type of certification with the FAA, or some other method, should be
used to determine whether an airplane is normally operated for
commercial passenger service such that a normal and usual rate for that
passenger service could be readily and accurately ascertained.
---------------------------------------------------------------------------
\2\ Aircraft operating under 14 CFR part 125 certification are
similarly prohibited from operating as common carriers, but there is
no similar general prohibition on the acceptance of payment from
passengers to warrant an identical exception.
---------------------------------------------------------------------------
As noted above, the current rule distinguishes between the use of
airplanes owned or leased by a corporation or labor organization
licensed to offer commercial services for travel, and airplanes that
are owned by other corporations or labor organizations not normally
engaged in commercial air passenger service. This distinction requires
an examination of the plane's ownership or lease structure to determine
the proper reimbursement timing and amount. The Commission is concerned
that the ownership determination may add unnecessary confusion to the
payment process and is proposing to shift the focus of the rule away
from whether the airplane's owner is a corporation or labor
organization
[[Page 50483]]
and onto the normal use of the airplane. The proposed rules would
therefore apply not only to airplanes owned by corporations or labor
organizations, but also to airplanes owned by any ``person,'' as
defined at 11 CFR 100.10, as well as airplanes owned by the Federal
government or a State or local government.
An alternative approach, which is not incorporated into the
proposed rules, would be to focus the distinction on whether the
service provider is a ``commercial vendor,'' as defined in 11 CFR
116.1(c), with respect to the transportation services. This approach
would continue to require an examination of the ownership structure of
service provider. Relying on the term ``commercial vendor'' could also
lead to a different result in certain circumstances. For example,
Commercial Airline A owns a specially configured jet that is reserved
for its corporate executives and offers the use of that jet to
Candidate B. Under the ``commercial vendor'' alternative, Commercial
Airline A would likely qualify as a ``commercial vendor'' of
transportation services, meaning that 11 CFR 100.52(d), rather than 11
CFR 100.93, would govern the reimbursement requirements for Candidate
B's travel on the jet. This result would require Candidate B to
calculate the ``usual and normal rate'' for the use of the jet under 11
CFR 100.52(d)(2), which could be difficult to ascertain because
passengers on the jet are not normally charged any fee. However, under
the proposed ``not normally operated for commercial passenger service''
approach, Candidate B's use of the jet would be governed by proposed
Sec. 100.93, not Sec. 100.52, and the proper reimbursement could be
calculated by referring to first-class or charter rates to that
destination.
The Commission seeks comments on broadening the coverage of these
travel rules from corporations and labor organizations to any
``person'' or government, as well as the proposed shift in focus from
the ownership of the airplane to the normal use of the airplane.
The scope of proposed Sec. 100.93, however, would be limited to
non-commercial means of transportation. A campaign traveler using a
commercial airline or other means of commercial transportation would
continue to be subject to the more general definition in 11 CFR 100.52,
which categorizes ``the provision of any goods or services without
charge or at a charge that is less than the usual and normal charge for
such goods or services' as an ``in-kind contribution.'' 11 CFR
100.52(d). Thus, a candidate or other campaign traveler receives an in-
kind contribution when he or she is provided commercial transportation
without charge or at a charge that is less than the usual and normal
charge for that transportation. Proposed Sec. 100.93(a) would include
a cross-reference to 11 CFR 100.52(a) and (d) to affirm the continued
application of these rules to providers of commercial transportation.
2. Proposed Paragraph (a)(2) Definitions
Proposed paragraph (a)(2) would define several terms used in new
Sec. 100.93. The term ``campaign traveler'' would be defined to
provide a succinct term covering the candidate, candidate's agent, or
other individual traveling on behalf of a candidate or a candidate's
authorized committee. ``Service provider'' would describe the person or
entity providing the transportation to the campaign traveler. Given the
complex ownership and leasing arrangements often associated with
airplanes and other means of transportation, a ``service provider'' may
be either the owner of the conveyance or a different person who is
leasing the conveyance from the owner and making it available for the
campaign traveler's use.
Under proposed paragraph (a)(2), the term ``unreimbursed value''
would be defined as the portion of the value provided to the campaign
traveler, calculated according to the rules in this section, that is
not reimbursed by the candidate's authorized committee. A late payment
would not qualify as a reimbursement under this section, which means
that the value of the service provided would be an in-kind contribution
to the candidate. By contrast, a service provider would not make an in-
kind contribution if the candidate's authorized committee provides
payment within the time specified in this proposed section. The
Commission seeks comments on each of these definitions.
C. 11 CFR 100.93(b) General Rule
Proposed Sec. 100.93(b) would set forth the general rule for when
travel by private means of transportation would not constitute a
contribution to a candidate or authorized committee, as well as when
and to what extent such travel is an in-kind contribution. Under
proposed paragraph (b)(1), a candidate's authorized committee would not
receive or accept a contribution if the authorized committee pays the
service provider the full value of the transportation within the
specified time, as determined in this proposed section. This proposed
paragraph would generally require that the candidate's authorized
committee, rather than the campaign traveler, pay the service provider
to avoid receiving or accepting a contribution. The campaign traveler
could pay the service provider directly for his or her own travel
rather than having the campaign committee do so. Such payment would
constitute an in-kind contribution by the campaign traveler to the
candidate, unless it qualifies for the transportation expense exception
set forth in 11 CFR 100.79.
In light of the fact that the current rules at 11 CFR 114.9(e) are
limited to airplanes owned by corporations or labor organizations,
payment is required because the unpaid use of the airplanes would
constitute a contribution in violation of 2 U.S.C. 441b. In contrast,
individuals, partnerships, and certain other persons are permitted to
make in-kind contributions to candidates up to the amounts set forth in
2 U.S.C. 441a. Thus, a campaign traveler may use an airplane provided
by someone permitted to make an in-kind contribution, and this use
would be an in-kind contribution. Proposed 100.93(b)(2) would recognize
this possibility by describing when a service provider would be making
an in-kind contribution. For an in-kind contribution to be permissible,
however, the candidate's authorized committee must comply with the
payment conditions in proposed 11 CFR 100.93. If these conditions are
not met, then the provision of the airplane would be prohibited if the
service provider is a corporation or labor organization, or if the
value of the service would, when added to other contributions to the
same candidate by the service provider, exceed that service provider's
contribution limit. See proposed 11 CFR 100.93(b)(2). The value of the
in-kind contribution would be determined in the same manner as the
amount of the reimbursement would normally be determined under proposed
paragraphs (c), (d) or (e) of new section 100.93.
The Commission recognizes that this approach could, in some cases,
require the same type of ownership analysis that otherwise would be
avoided by the proposed rules. This analysis, however, would no longer
be a necessary step in every circumstance because it would be employed
only where the airplane's provider elects not to seek full or partial
reimbursement from the candidate's authorized committee, or when the
committee fails to reimburse the service provider. The Commission seeks
comments on whether reimbursement should always be required, regardless
of the ownership of the airplane, or whether the possibility of an in-
kind
[[Page 50484]]
contribution from a permissible source should be addressed in some
other fashion.
D. Proposed 11 CFR 100.93(c) Travel by Airplane
When a candidate or other campaign passenger uses an airplane owned
by a person who is not in the business of providing commercial air
travel, the current rules set the rate of reimbursement at either the
first-class airfare or the normal charter rate, depending on whether a
destination city is served by regularly scheduled commercial air
service. 11 CFR 114.9(e)(1). The charter rate, which is normally higher
than first-class airfare to an airport in the same area, represents the
actual cost that a campaign would incur, but for the use of the
corporate or labor airplane, to reach a particular destination by air
when that destination is not served by commercial air service.
Nevertheless, the Commission recognizes that candidates who campaign in
major metropolitan areas that have regularly scheduled airline service
will generally be able to use a private plane and reimburse only the
equivalent of a first-class airfare, whereas the candidates who
campaign in more rural areas that have little, if any, commercial air
service would be required to reimburse the equivalent charter rate. The
Commission is concerned that the current reimbursement scheme might be
unnecessarily complex and negatively affects campaigning in rural
areas.
To address these concerns, the Commission seeks comments on three
alternative reimbursement rules in proposed 11 CFR 100.93(c), as well
as any other appropriate payment schemes. The Commission also seeks
comments on whether and how it should further simplify the rules and
address other inequities, if any, arising from the current application
of 11 CFR 114.9(e) or the changes proposed for Sec. 100.93.
In addition, the Commission notes that many charter services charge
a traveler for ``deadhead miles,'' those miles the airplane travels
empty while returning to its home base after a one-way flight. In some
cases, charter services also require compensation for positioning costs
for airplanes based many miles from the pickup and drop-off points. The
Commission therefore seeks comments on how, if at all, the three
alternative payment schemes should account for these expenses
associated with the positioning of the airplane or ``deadhead miles.''
For example, when a candidate travels one-way from California to
Virginia on a private airplane based in Nevada and that airplane
returns empty to Nevada, should that candidate's authorized committee
be required to pay the expenses associated with the Nevada-to-
California and Virginia-to-Nevada flights? If so, should each of these
positioning or ``deadhead'' flights be determined in the same manner as
described in the three alternative payment schemes below, or by using
some other method?
1. Alternative A: Payment Based on First-Class Airfare
Alternative A would set the payment rate, for each individual
traveling for campaign purposes, at the amount of the lowest non-
discounted first-class airfare to the closest airport that has such
service, regardless of whether the actual destination airport is served
by regularly scheduled commercial air service. The proposed rule would
focus on the closest destination airport, rather than the destination
city, to avoid further confusion in light of the various geographic
considerations discussed in Advisory Opinion (``AO'') 1999-13.\3\
Because airfares may vary based on the date of travel, the rate used in
calculating the payment amount would have to correspond to the date of
actual travel. The Commission seeks comments on how precisely the base
rate should correspond to the actual date of travel. For example, some
airlines or charter companies may set a base rate for tickets purchased
over a month in advance of the travel date that is different than the
price of the same ticket when purchased on the date of travel. Should a
campaign be permitted to use the normal advance ticket price when
calculating the comparable base rate as required in proposed Sec.
100.93, or should a campaign be required to calculate the comparable
rate based on purchase on a fixed date or period, such as the actual
date of travel or the lowest price within seven days of the travel
date?
---------------------------------------------------------------------------
\3\ In AO 1999-13, the Commission recognized that particular
destination cities might be serviced by several airports in the
surrounding region. In that advisory opinion, the Commission
determined that an airport need not be within the corporate limits
of a city in order for that city to be considered ``served by
regularly scheduled commercial air service.'' The Commission further
agreed that it was reasonable for the requestor to determine whether
a city is served by a particular airport through reference to
published sources such as a FAA directory or a corporate directory
regarded at the time as the charter industry's standard reference
for airports.
---------------------------------------------------------------------------
Alternative A would also allow an authorized committee to reimburse
the provider of a private airplane at the coach rate to the destination
airport where the same airport is served by regularly scheduled coach
airline service but not regularly scheduled first-class airline
service. This distinction for coach service would accommodate industry
trends and is based on the current rules governing presidential
candidates' payments for the use of government aircraft. See 11 CFR
9004.7(b)(5)(i)(B) and 9034.7(b)(5)(i)(B). Please note, however, that
if the actual destination is an airport that is not served by any
regularly scheduled commercial air service, and the closest airport is
served by regularly scheduled coach airline service but not regularly
scheduled first-class airline service, the proposed reimbursement
amount would still be the lowest non-discounted first-class airfare for
the closest airport that is served by regularly scheduled first-class
airline service and not the coach fare for the closest airport.
In addition, Alternative A would eliminate the advance payment
requirement in 11 CFR 114.9(e)(1). Currently, because payment must be
made prior to travel, the campaign must provide a check in advance to
the corporation to cover a certain number of passengers. If last minute
passengers are not paid for prior to boarding the airplane, the
campaign has failed to comply with the requirements of current 11 CFR
114.9(e)(1), regardless of how promptly the campaign subsequently makes
an after-the-fact reimbursement. However, where candidates use other
means of transportation addressed in 11 CFR 109.2(e)(2), last minute
passengers do not cause the same complications because the
reimbursement may be made ``within a commercially reasonable time,''
rather than in advance, so that the number of passengers is settled at
the time the reimbursement is made.
Alternative A would address this disparate treatment by allowing a
fixed period of seven calendar days for payment after travel has begun.
This seven-day period would be shorter than the thirty-or-sixty day
period used for other forms of transportation, see below, because under
Alternative A the campaign would have complete control over the timing
of the reimbursement as all the necessary passenger information and
costs would be fixed at the time the airplane departs. Thus, it should
be possible for the candidate's authorized committee to calculate the
proper reimbursement rate without a billing or invoice process to cause
delay.
The Commission recognizes that the removal of the advance payment
rule could be perceived as a departure from the previous approach under
which corporations are prohibited from extending credit outside the
ordinary course of their business. See 11 CFR
[[Page 50485]]
part 116. While the creation of a fixed post-travel time period for
reimbursement in these circumstances is technically an extension of
credit, the Commission nevertheless seeks comments on the potential
consequences of the proposed rule with respect to the use of an
airplane owned by a corporation or labor organization where
reimbursement does not occur in advance. The Commission also seeks
comments on whether the advance payment requirement should be retained
and what, if any, other reimbursement timetables would be appropriate.
2. Alternative B: Payment Based on a Combination of First-Class Airfare
and Charter Rate
Alternative B would provide for two different payment rates,
following closely the travel valuation rules set forth in the ethics
rules for the House of Representatives and the United States Senate.
See Select Committee on Ethics, U.S. Senate, Senate Ethics Manual, S.
Pub. No. 108-1 (2003), ``Private Air Travel'' at p. 60; Committee on
Standards of Official Conduct, U.S. House of Representatives, Rules of
the U.S House of Representatives on Gifts and Travel (2001), ``Use of
Private Aircraft for Travel'' available at <http://www.house.gov/ethics/
Gifts--and--Travel-- Chapter.htm#--Toc476623633. The
first rate, in proposed paragraph (c)(1) of Alternative B, would apply
to previously scheduled flights, as opposed to flights specifically
scheduled for a campaign traveler, between cities with regularly
scheduled air service. The payment rate for these trips would be the
normal cost of first-class airfare between the cities. Thus, travel
between airports served by regularly scheduled air service would be
treated similarly under both Alternative A and Alternative B, except
that Alternative B would not permit the first-class airfare amount
where the airplane is chartered specifically for the campaign
traveler's use. Both Alternative A and Alternative B would permit
payment at the coach rate where coach service is regularly scheduled on
the same route, but would not permit campaigns to pay the lower amount
for discounted fares such as ``supersavers,'' ``e-savers,'' or a
government rate.
Under proposed paragraph (c)(2) of Alternative B, the Commission
would require the amount of payment for other air travel, including
flights specifically scheduled for a campaign traveler or flights where
the origin or destination city is not served by regularly scheduled air
service, to be no less than the normal charter rate for a similar
airplane. The valuation of travel to airports not served by regularly
scheduled commercial airline service would therefore differ from the
valuation in proposed paragraph (c)(3) of Alternative A, which would
value such travel at the amount of the first-class rate to the nearest
airport. For the same reasons discussed above for Alternative A, the
candidate's authorized committee would be required to make the proper
payment within seven calendar days of the departure date.
3. Alternative C: Payment Based on Charter Rate
Alternative C would establish a uniform rule by requiring the
payment amount to be the normal and usual cost of chartering a plane of
sufficient size to accommodate all campaign travelers plus the news
media and security personnel where applicable. This payment rate would
depend on the rate for chartering the entire plane, rather than a per-
passenger cost, and would not vary based on whether the destination
airport is served by regularly scheduled commercial air service of any
particular class. Alternative C could provide a more accurate
reflection of the true value of the use of a private or governmental
airplane by campaign travelers. Because the campaign would be
responsible for the cost of chartering the entire plane and the
addition of last minute travelers would not increase the cost, the
payment amount would be known prior to the time of departure. Thus, the
Commission would continue to require advance payment for the use of all
airplanes not normally used for commercial passenger service. To the
extent that Alternative C would increase the cost of candidate travel
when private airplanes are used, should the Commission consider such a
factor when it evaluates appropriate reimbursement rates?
E. Proposed 11 CFR 100.93(d) Other Means of Transportation
The Commission proposes a set period of time for payment of travel
by means other than by airplane: thirty calendar days from the receipt
of the invoice, but no more than sixty calendar days following the date
the travel commenced. See proposed 11 CFR 100.93(d). This fixed
deadline would add more clarity and certainty than the current rule's
reference to a ``commercially reasonable'' period, but would retain the
flexibility necessary to account for costs that cannot be calculated
until the completion of travel or shortly thereafter. The sixty-day
cutoff would help to ensure that the invoice will be rendered to the
campaign promptly. Any extensions of credit resulting from payments not
being made within the sixty-day period would be considered in-kind
contributions to the candidate and would therefore result in a
violation of the Act and Commission regulations where such
contributions are prohibited or excessive. The payment rate would be
set at the usual and normal fare or rental readily available to the
general public at the time of travel.
F. Proposed 11 CFR 100.93(e) Government Conveyances
Paragraph (e) of proposed 11 CFR 100.93 would clarify the
appropriate payment for travel using any means of transportation,
including an airplane, that is owned or leased by the Federal
government or any State or local government. For government airplanes,
one of the three alternatives described above would be used. For other
means of travel, a campaign traveler using a government conveyance
would have to reimburse the government entity within thirty calendar
days of the receipt of an invoice, but no later than sixty calendar
days following the date on which travel commenced. The required payment
rate would be the amount of the usual fare or rental charge readily
available to the general public for the travel date.
G. Proposed 11 CFR 100.93(f) Reporting
Proposed paragraph (f)(1) of 11 CFR 100.93 would refer candidates
and their authorized committees to the existing reporting requirements
for the receipt of an in-kind contribution. Under 11 CFR 104.13, a
candidate must report the amount of unreimbursed value for travel
services as both the receipt of a contribution from the service
provider and an expenditure by the candidate committee.
In addition, a candidate's authorized committee would be required
to record the travel dates along with the report of the disbursement
for repayment of the travel service. Under proposed paragraph (f)(2) of
Sec. 100.93, the Commission would require the authorized committee to
report the actual date of travel in the ``purpose of disbursement''
field corresponding to the disbursement.
H. Proposed 11 CFR 100.93(g) Recordkeeping
Presidential and vice-presidential candidates are currently
required to maintain records documenting the rates used in calculating
their travel reimbursements. 11 CFR 9004.7(b)(5)(v) and
9034.7(b)(5)(v). Under proposed 11 CFR 100.93(g), these recordkeeping
[[Page 50486]]
requirements would apply to other candidates.
II. Proposed Revisions to 11 CFR 106.3(e) Reportable Expenditure for a
Candidate Who Uses Government Conveyance for Campaign Related Travel
Candidates who use government conveyance or accommodations for
campaign-related travel are currently required to report an expenditure
in the amount equivalent to the ``rate for comparable commercial
conveyance or accommodation.'' 11 CFR 106.3(e). To eliminate
disparities between campaign-related travel on private planes and
travel on government planes, the Commission proposes revising 11 CFR
106.3 by replacing the reference to the ``rate of comparable commercial
conveyance'' with a reference to the applicable rates for travel
reimbursement set forth in proposed 11 CFR 100.93(c) and (d). Both the
reimbursement rates and the payment due dates in proposed 11 CFR 100.93
would be applicable to travel by airplane and other means of travel,
whether owned by an individual, corporation, labor organization,
partnership, the Federal government, a State government, or any other
person. The Commission seeks comment on this approach and the proposed
revisions to 11 CFR 106.3(e).
III. Proposed Revisions to 11 CFR 9004.7(b) and 9034.7(b) Payment for
Travel on Government Conveyances by Publicly Funded Presidential
Candidates
The current regulations at 11 CFR 9004.7(b) and 9034.7(b) govern
travel on government conveyance by primary and general election
presidential and vice-presidential candidates receiving federal
funding. The two rules are virtually identical and require the
presidential or vice-presidential candidate to pay the appropriate
government entity at one of several specified rates. These rates are
established in largely the same manner as the reimbursement rates set
forth in the current 11 CFR 114.9(e). The Commission proposes revising
11 CFR 9004.7(b)(5)(i) and (8) and 9034.7(b)(5)(i) and (8) to replace
the parallel rate determinations in those rules with a reference to the
reimbursement rates that would be set forth in proposed 11 CFR 100.93.
As with the valuation of travel on government conveyances by non-
presidential or vice-presidential candidates in 11 CFR 106.3(e), the
reimbursement rates in proposed 11 CFR 100.93 would serve as the
applicable valuation of travel by presidential and vice-presidential
candidates aboard government conveyances. Minor changes would be made
to the wording in paragraphs (b)(5)(i) through (iv) in sections 9004.7
and 9034.7 to clarify that the required reimbursement rate is a floor,
not a ceiling on how much the candidate may reimburse, in order to
permit a candidate to pay at a higher rate when required by other
government agencies or branches. The Commission seeks comment on this
approach and the proposed revisions to 11 CFR 9004.7 and 9034.7.
V. Other Travel Issues
While the various approaches in the proposed rules may at times
overstate or understate the actual cost or value of the air
transportation service provided, the Commission anticipates that over
time the costs will even out so that the actual disparity, if any, will
be minor. The proposed rules are premised on the belief that an across-
the-board approach to determining air travel costs is advisable, both
for ease of compliance and for ease of administration. Nevertheless,
the Commission recognizes that situations may arise that would not be
readily addressed by the proposed rules. The Commission is therefore
seeking comments describing how, if at all, some of these situations
should be addressed in the rules.
Certification of No Effect Pursuant to 5 U.S.C. 605(b)
[Regulatory Flexibility Act]
The attached proposed rules, if promulgated, would not have a
significant economic impact on a substantial number of small entities.
The basis for this certification is that few, if any, small entities
would be affected by these proposals, which apply only to Federal
candidates and their campaign committees. Federal candidates and their
campaign committees are not small entities. To the extent that
operators of air-taxi services or on-demand air charter services are
affected, the effect would result from candidate travel choices rather
than Commission requirements. These rules propose no sweeping changes,
and are largely intended to simplify the process of determining payment
and allocation ratios and reimbursement rates. The proposed rules would
not increase the cost of compliance by small entities so as to cause a
significant economic impact.
List of Subjects
11 CFR Part 100
Elections.
11 CFR Part 106
Campaign funds, political committees and parties, political
candidates.
11 CFR Part 114
Business and industry, elections, labor.
11 CFR Part 9004
Campaign funds.
11 CFR Part 9034
Campaign funds, reporting and recordkeeping requirements.
For the reasons set out in the preamble, the Federal Election
Commission proposes to amend subchapters A, E, and F of chapter 1 of
title 11 of the Code of Federal Regulations as follows:
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
1. The authority citation for part 100 would continue to read as
follows:
Authority: 2 U.S.C. 431, 434, and 438(a)(8).
2. Section 100.93 would be added to subpart C of part 100 to read
as follows:
Sec. 100.93 Travel by airplane or other means of travel.
(a) Scope and definitions.
(1) This section applies to all campaign travelers who use an
airplane, or other means of transportation that is not normally
operated for commercial passenger service. See 11 CFR 100.52(a) and (d)
for treatment of transportation services that are normally operated for
commercial passenger service.
(2) For the purposes of this section, the following terms are
defined as follows:
Campaign traveler means a candidate, candidate's agent, or other
individual traveling on behalf of a candidate or candidate's authorized
committee.
Service provider means the owner of an airplane or other
conveyance, or a person who leases an airplane or other conveyance from
the owner, and uses the airplane or other conveyance to provide
transportation to a campaign traveler.
Unreimbursed value means the difference between the actual value of
the service provided, as set forth in this section, and the amount of
payment for that service by the campaign traveler to the service
provider within the time limits set forth in this section. A payment
that is not made within the time limits set forth in this section is
not a reimbursement for the purposes of this section.
(b) General rule.
(1) No contribution results from travel by airplane, or other means
of
[[Page 50487]]
transportation, by a campaign traveler, if the candidate's authorized
committee reimburses the service provider, within the required time,
for the full value of the transportation as provided in this section.
(2) Except as provided in 11 CFR 100.79, the unreimbursed value of
the transportation provided to a campaign traveler, as determined in
paragraphs (c) or (d) of this section, is an in-kind contribution from
the service provider to the candidate.
[Alternative A]
(c) Travel by airplane. If a campaign traveler uses an airplane
that is not normally operated for commercial passenger service, the
candidate's authorized committee must pay the service provider, no
later than seven (7) calendar days after the date the flight began, the
following amount:
(1) In the case of travel to an airport served by regularly
scheduled first-class commercial airline service, the lowest
unrestricted and non-discounted first-class air fare available for time
traveled; or
(2) In the case of an airport served by regularly scheduled coach
airline service, but not regularly scheduled first-class commercial
airline service, the lowest unrestricted and non-discounted coach
commercial air fare for the time traveled; or
(3) In the case of travel to an airport not served by regularly
scheduled commercial airline service, the lowest unrestricted first-
class airfare, for the time traveled, to the airport:
(i) With regularly scheduled first-class commercial service; and
(ii) That is closest to the airport actually used.
[Alternative B]
(c) Travel by airplane. If a campaign traveler uses an airplane
that is not normally operated for commercial passenger service, the
candidate's authorized committee must pay the service provider, no
later than seven (7) calendar days after the date the flight began, the
following amount:
(1) In the case of travel via a previously or regularly scheduled
flight by the owner or operator of the airplane, where the cities
between which the campaign traveler is flying have regularly scheduled
commercial air service (regardless of whether such service is direct),
the cost of a first-class ticket from the point of departure to the
destination. If only coach service is available between those points,
the amount is the coach rate. If more than one first-class or coach
rate is available, the amount is the lowest fare. However, no discount
fares, such as ``supersaver'' fares, will be used for valuation
purposes.
(2) In the case of a flight scheduled specifically for the use of a
campaign traveler, or when the route does not have regularly scheduled
commercial air service, the cost of chartering the same or a similar
airplane for that flight. If campaign travelers for more than one
candidate are traveling together between cities with no regularly
scheduled service, then each candidate's authorized committee must pay
its proportionate share of the cost of the charter.
[Alternative C]
(c) Travel by airplane. If a campaign traveler uses an airplane
that is not normally operated for commercial passenger service, the
candidate's authorized committee must pay the service provider, in
advance, the usual commercial charter rate for an airplane sufficient
in size to accommodate the campaign-related travelers, including the
candidate, news media, and security personnel.
(d) Other means of transportation. If a campaign traveler who uses
any other means of transportation, including an automobile, train, or
helicopter, the candidate's authorized committee must reimburse the
service provider within thirty (30) calendar days after the date of
receipt of the invoice for such travel, but not later than sixty (60)
calendar days after the date the travel began, at the normal and usual
fare or rental charge readily available to the general public for time
traveled.
(e) Government conveyances.
(1) If a campaign traveler uses an airplane that is provided by the
Federal government, or by a State or local government, the candidate's
authorized committee must pay the governmental entity in accordance
with paragraph (c) of this section.
(2) If a campaign traveler uses a conveyance, other than an
airplane, that is provided by the Federal government, or by a State or
local government, the candidate's authorized committee must reimburse
the government entity in accordance with paragraph (d) of this section.
(f) Reporting.
(1) In accordance with 11 CFR 104.13, a candidate's authorized
committee must report the receipt of an in-kind contribution and the
making of an expenditure under paragraph (b)(2) of this section.
(2) When reporting a disbursement for travel services in accordance
with this section, a candidate's authorized committee must report the
actual dates of travel for which the disbursement is made in the
``purpose of disbursement'' field.
(g) Recordkeeping.
(1) For travel by airplane, the candidate's authorized committee
shall maintain documentation of the lowest unrestricted nondiscounted
air fare for the time traveled, including the airline, flight number
and travel service providing that fare or the charter rate, as
appropriate.
(2) For travel by other conveyances, the candidate's authorized
committee shall maintain documentation of the commercial fare or rental
charge for a conveyance of sufficient size, including the service
provider and the size, model and make of the conveyance.
PART 106--ALLOCATIONS OF CANDIDATE AND COMMITTEE ACTIVITIES
3. The authority citation for part 106 would continue to read as
follows:
Authority: 2 U.S.C. 438(a)(8), 441a(b), 441a(g).
4. Section 106.3 would be amended by revising paragraph (e) to read
as follows:
Sec. 106.3 Allocation of expenses between campaign and non-campaign
related travel.
* * * * *
(e) Notwithstanding paragraphs (b) and (c) of this section, the
reportable expenditure for a candidate who uses government conveyance
for travel that is campaign-related is the applicable rate set forth in
11 CFR 100.93(c) or (d). The reportable expenditure for a candidate who
uses government accommodations for travel that is campaign-related is
the rate for comparable commercial accommodation. In the case of a
candidate authorized by law or required by national security to be
accompanied by staff and equipment, the allocable expenditures are the
costs of facilities sufficient to accommodate the party, less
authorized or required personnel and equipment. If such a trip includes
both campaign and noncampaign stops, equivalent costs are calculated in
accordance with paragraphs (b) and (c) of this section.
PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY
5. The authority citation for part 114 would continue to read as
follows:
Authority: 2 U.S.C. 431(8)(B), 431(9)(B), 432, 434, 437d(a)(8),
438(a)(8), and 441b.
6. Section 114.9 would be amended by revising the section title and
removing and reserving paragraph (e) to read as follows:
[[Page 50488]]
Sec. 114.9 Use of corporate or labor organization facilities.
* * * * *
(e) [Removed and reserved]
PART 9004--ENTITLEMENT OF ELIGIBLE CANDIDATES TO PAYMENTS; USE OF
PAYMENTS
7. The authority citation for Part 9004 would continue to read as
follows:
Authority: 26 U.S.C. 9004 and 9009(b).
8. Section 9004.7 would be amended by revising paragraphs (b)(5)
and (b)(8) to read as follows:
Sec. 9004.7 Allocation of travel expenditures.
* * * * *
(b) * * *
(5) Payment for use of government conveyances and accommodations.
(i) If any individual, including a candidate, uses a government
airplane for campaign-related travel, the candidate's authorized
committee shall pay the appropriate government entity an amount not
less than the applicable rate set forth in 11 CFR 100.93(c).
(ii) If a government airplane is flown to a campaign-related stop
where it will pick up passengers, or from a campaign-related stop where
it left off passengers, the candidate's authorized committee shall pay
the appropriate government entity an amount not less than the greater
of the amount billed or the amount required under 11 CFR 100.93(c) for
one passenger.
(iii) If any individual, including a candidate, uses a government
conveyance, other than an airplane, for campaign-related travel, the
candidate's authorized committee shall pay the appropriate government
entity an amount not less than the commercial rental rate for a
conveyance sufficient in size to accommodate the campaign-related
travelers, including the candidate, plus the news media and the Secret
Service.
(iv) If any individual, including a candidate, uses accommodations,
including lodging and meeting rooms, during campaign-related travel,
and the accommodations are paid for by a government entity, the
candidate's authorized committee shall pay the appropriate government
entity an amount not less than the usual and normal charge for the
accommodations, and shall maintain documentation supporting the amount
paid.
(v) For travel by airplane, the committee shall maintain
documentation of the lowest unrestricted nondiscounted air fare
available for the time traveled, including the airline, flight number
and travel service providing that fare or the charter rate, as
appropriate. For travel by other conveyances, the committee shall
maintain documentation of the commercial rental rate for a conveyance
of sufficient size, including the provider of the conveyance and the
size, model and make of the conveyance.
* * * * *
(8) Travel on private airplanes and other conveyances not normally
operated for commercial passenger service is governed by 11 CFR 100.93.
* * * * *
PART 9034--ENTITLEMENTS
9. The authority citation for part 9034 would continue to read as
follows:
Authority: 26 U.S.C. 9034 and 9039(b).
10. Section 9034.7 would be amended by revising paragraphs (b)(5)
and (b)(8) to read as follows:
Sec. 9034.7 Allocation of travel expenditures.
* * * * *
(b) * * *
(5) Payment for use of government conveyances and accommodations.
(i) If any individual, including a candidate, uses a government
airplane for campaign-related travel, the candidate's authorized
committee shall pay the appropriate government entity an amount not
less than the applicable rate set forth in 11 CFR 100.93(c).
(ii) If a government airplane is flown to a campaign-related stop
where it will pick up passengers, or from a campaign-related stop where
it left off passengers, the candidate's authorized committee shall pay
the appropriate government entity an amount not less than the greater
of the amount billed or the amount required under 11 CFR 100.93(c) for
one passenger.
(iii) If any individual, including a candidate, uses a government
conveyance, other than an airplane, for campaign-related travel, the
candidate's authorized committee shall pay the appropriate government
entity an amount not less than the commercial rental rate for a
conveyance sufficient in size to accommodate the campaign-related
travelers, including the candidate, plus the news media and the Secret
Service.
(iv) If any individual, including a candidate, uses accommodations,
including lodging and meeting rooms, during campaign-related travel,
and the accommodations are paid for by a government entity, the
candidate's authorized committee shall pay the appropriate government
entity an amount not less than the usual and normal charge for the
accommodations, and shall maintain documentation supporting the amount
paid.
(v) For travel by airplane, the committee shall maintain
documentation of the lowest unrestricted nondiscounted air fare
available for the time traveled, including the airline, flight number
and travel service providing that fare or the charter rate, as
appropriate. For travel by other conveyances, the committee shall
maintain documentation of the commercial rental rate for a conveyance
of sufficient size, including the provider of the conveyance and the
size, model and make of the conveyance.
* * * * *
(8) Travel on private airplanes and other conveyances not normally
operated for commercial passenger service is governed by 11 CFR 100.93.
Dated: August 18, 2003.
Michael E. Toner,
Commissioner, Federal Election Commission.
[FR Doc. 03-21463 Filed 8-20-03; 8:45 am]
BILLING CODE 6715-01-P