[Federal Register: July 21, 2005 (Volume 70, Number 139)]
[Rules and Regulations]
[Page 41939-41944]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr21jy05-2]
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FEDERAL ELECTION COMMISSION
11 CFR Part 114
[Notice 2005-18]
Payroll Deductions by Member Corporations for Contributions to a
Trade Association's Separate Segregated Fund
AGENCY: Federal Election Commission.
ACTION: Final rules and transmittal of rules to Congress.
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SUMMARY: The Federal Election Commission is amending its rules
regarding contributions to the separate segregated fund (``SSF'') of a
trade association by employee-stockholders and executive and
administrative personnel of corporations that are members of the trade
association (collectively, ``solicitable class employees''). The
revised rules will no longer prohibit corporate members of a trade
association from using a payroll deduction or check-off system for
employee contributions to the trade association's SSF. Instead, these
final rules will allow a corporate member of a trade association to
provide incidental services to collect and forward contributions from
its solicitable class employees to the SSF of the trade association,
including use of a payroll deduction or check-off system, upon written
request of the trade association. These final rules will also require
any member corporation that provides incidental services for
contributions to a trade association's SSF, as well as the
corporation's subsidiaries, divisions, branches and affiliates, to
provide the same services for contributions to the SSF of any labor
organization that represents members working for the corporation, or
the corporation's subsidiaries, divisions, branches or affiliates, upon
written request of the labor organization and at a cost not to exceed
actual expenses incurred. Additional information appears in the
Supplementary Information that follows.
DATES: These rules are effective August 22, 2005.
FOR FURTHER INFORMATION CONTACT: Mr. Brad C. Deutsch, Assistant General
Counsel, or Ms. Amy L. Rothstein, Attorney, 999 E Street, NW.,
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: The Commission is promulgating final rules
at 11 CFR 114.2 and 114.8 as the last step in a rulemaking process that
began in 2003, when the Commission received a petition for rulemaking
(the ``Petition'') from America's Community Bankers and its SSF, the
America's Community Bankers Community Campaign Committee (collectively,
``Petitioners''). Petitioners asked the Commission to change its rules
to allow a corporate member of a trade association to make payroll
deductions and check-off systems available to the corporation's
restricted class employees for their voluntary contributions to the
trade association's SSF.
The Commission issued a Notice of Availability stating that the
Petition was available for public review and comment. See Notice of
Availability, 68 FR 60887 (October 24, 2003). The comment period closed
on November 24, 2003. The Commission received 30 comments in response
to the Notice of Availability. All of the comments supported the
Petition.
After considering the comments on the Petition, the Commission
issued a Notice of Proposed Rulemaking (``NPRM''). See 69 FR 76628
(Dec. 22, 2004). The NPRM proposed to change the Commission's rules at
11 CFR 114.2 and 114.8 to allow a corporate member of a trade
association to provide incidental services to collect and forward
voluntary contributions from its
[[Page 41940]]
solicitable class employees to the trade association's SSF, including
use of a payroll deduction or check-off system, upon written request of
the trade association. Under the proposed rules, any corporate member
of a trade association that provided incidental services for
contributions to the trade association's SSF also would have had to
provide the same services for contributions to the SSF of any labor
organization that represented members working for the corporation, upon
written request of the labor organization and at a cost not to exceed
actual expenses incurred.
The Commission received 34 comments in response to the NPRM. None
of the comments opposed the proposed changes to the Commission's rules,
including a letter from the Internal Revenue Service stating that it
had ``no comments at this time.'' The comments are discussed further in
the Explanation & Justification, below.
The Commission held a public hearing on May 17, 2005, on this
rulemaking.\1\ At the hearing, representatives of Petitioner and two
other commenters testified. For purposes of this document, the terms
``comment'' and ``commenter'' apply to both written comments and oral
testimony at the public hearing. The written comments and the
transcripts of the hearing are available at http://www.fec.gov/law/law_rulemakings.shtml
.
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\1\ See Notice of Public Hearing, Candidate Solicitation at
State, District and Local Party Fundraising Events; Definition of
``Agent'' for BCRA Regulations; Payroll Deductions By Member
Corporations for Contributions to a Trade Association's Separate
Segregated Fund, 70 FR 21,163 (April 25, 2005).
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Under the Administrative Procedure Act, 5 U.S.C. 553(d), and the
Congressional Review of Agency Rulemaking Act, 5 U.S.C. 801(a)(1),
agencies must submit final rules to the Speaker of the House of
Representatives and the President of the Senate, and publish them in
the Federal Register at least 30 calendar days before they take effect.
The final rules that follow were transmitted to Congress on July 15,
2005.
Explanation and Justification
The Federal Election Campaign Act of 1971, as amended (the
``Act''), and the Commission's regulations permit any trade association
to solicit contributions to the trade association's SSF from the
stockholders and executive and administrative personnel, and their
families, of the trade association's member corporations, so long as
these member corporations separately and specifically approved the
solicitation and have not approved a solicitation by any other trade
association for the same calendar year. See 2 U.S.C. 441b(b)(4)(D); 11
CFR 114.8(c). Once these conditions are met, ``[t]here is no limitation
on the method of soliciting voluntary contributions or the method of
facilitating the making of voluntary contributions which a trade
association may use.'' 11 CFR 114.8(e)(3).
Although the regulations do not limit the methods that a trade
association may use to solicit and facilitate the making of voluntary
contributions to its SSF from the solicitable class employees of
consenting member corporations, before this rulemaking the regulations
did limit the methods that a consenting member corporation may use to
collect and forward those contributions. Specifically, prior to this
rulemaking, 11 CFR 114.8(e)(3) stated that a ``member corporation may
not use a payroll deduction or check-off system for executive or
administrative personnel contributing to the separate segregated fund
of the trade association.'' The Commission has interpreted this
prohibition to extend to all employees of the corporation who may be
solicited by the trade association (i.e., solicitable class employees),
including the member corporation's employee-stockholders. See Advisory
Opinion (``AO'') 1989-3.
In recent years, the Commission has recognized that corporations
have some latitude in collecting and forwarding contributions to a
trade association's SSF, so long as the collection does not involve
employee payroll deductions. For example, in AO 2003-22, the Commission
interpreted the regulations to permit a corporate member of a trade
association to collect voluntary contributions in the form of paper
checks from its executive and administrative personnel, and to forward
the contributions to the trade association's SSF. In that advisory
opinion, the Commission also interpreted the regulations to permit
corporate executives who were collecting employee contribution checks
to use the member corporation's inter-office mail system to help
collect the checks, and to provide envelopes and postage in which
contributors could send their contributions to the trade association's
SSF. See also AO 2000-4 (incorporated credit union members of a trade
association permitted to deduct and transfer contributions to the trade
association's SSF from the share accounts of the credit unions'
individual members).
These final rules are substantively identical to the rules proposed
by the Commission in the NPRM, except for one change, discussed below.
The rules:
Remove the prohibition on corporate use of a payroll
deduction or check-off system for solicitable class employee
contributions to the SSF of a trade association of which the
corporation is a member (11 CFR 114.8(e)(3));
Specifically authorize a member corporation to provide
incidental services to collect and forward contributions from its
solicitable class employees to a trade association's SSF, including a
payroll deduction or check-off system, upon written request of the
trade association (new 11 CFR 114.8(e)(4));
Require any corporation that provides these incidental
services, and the corporation's subsidiaries, divisions, branches and
affiliates, also to make the same services available to a labor
organization representing members who work for the corporation, or the
corporation's subsidiaries, divisions, branches or affiliates, for
contributions to the labor organization's SSF by members of the labor
organization, upon written request by the labor organization and at a
cost not to exceed any actual expenses incurred (new 11 CFR
114.8(e)(4)); and
Clarify that the provision of incidental services pursuant
to new 11 CFR 114.8(e)(4) is not prohibited corporate facilitation (new
11 CFR 114.2(f)(5)).
1. 11 CFR 114.8--Trade Associations
Generally, 11 CFR 114.8 sets out the circumstances under which an
incorporated trade association may solicit contributions to its SSF. It
defines the group of persons that may be solicited, e.g., stockholders
and the executive and administrative personnel of member corporations
that give a yearly prior approval to the trade association to solicit
such personnel, and the methods that may be used for such solicitation.
Section 114.8(e) more particularly addresses the timing and methods of
such solicitation.
A. 11 CFR 114.8(e)(3)
The Commission is deleting the second sentence of former 11 CFR
114.8(e)(3) in its entirety. This second sentence prohibited a
corporation from using a payroll deduction or check-off system for
contributions by the corporation's solicitable class employees to the
SSF of a trade association of which the corporation is a member. The
Commission is making this change to conform paragraph 114.8(e)(3) with
new paragraph 114.8(e)(4), discussed below.
[[Page 41941]]
B. 11 CFR 114.8(e)(4)
The Commission is adding a new paragraph 114.8(e)(4) to allow, but
not require, a corporation to provide incidental services to collect
and forward contributions from its solicitable class employees to the
SSF of a trade association of which the corporation is a member, upon
written request of the trade association. The new rule expressly
provides that incidental services may include a payroll deduction or
check-off system.
(i) Incidental Services
The Commission is changing the rules to allow a corporate member of
a trade association to provide incidental services to collect and
forward voluntary contributions from solicitable class employees to the
trade association's SSF, because of the special relationship that
exists between a trade association and its member corporations. This
special relationship is firmly rooted in the Act. Although the Act
generally prohibits a corporation and its SSF from soliciting
contributions from anyone other than the corporation's own
stockholders, executive and administrative personnel, and their
families, the Act specifically allows a trade association, including an
incorporated trade association and its SSF, to solicit contributions
from the stockholders, executive and administrative personnel, and
their families, of the trade association's member corporations, to the
extent specifically approved by the member corporations. See 2 U.S.C.
441b(b)(4)(A)(i); 2 U.S.C. 441b(b)(4)(D).\2\
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\2\ A member corporation may not approve solicitations by more
than one trade association in any calendar year. 2 U.S.C.
441b(b)(4)(D); 11 CFR 114.8(c)(2).
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The Commission has recognized this special relationship before. For
example, the Commission specifically rejected an interpretation of the
Act that would have required a trade association to reimburse its
member corporations for incidental costs related to assistance with
fundraising by the trade association for its SSF. As the Commission
stated, ``to require a trade association to reimburse the corporation
for incidental services, such as the distribution of the association's
[SSF fundraising] material via the corporation's internal mailing
system, seemed tenuous since the trade association will be paying for
the substantial costs of the solicitation with the membership fees from
corporations. Consequently, the Commission has not required the trade
association to reimburse the corporation for such incidental
expenditures.'' \3\ See also AO 1978-13 (``Just as a corporation is not
precluded from giving incidental aid, which entails incidental
expenditures, to solicitations made by a trade association, a corporate
member of a trade association is not precluded from making incidental
expenditures regarding administration of the trade association's
[SSF].'') (citation omitted); and AO 1979-8 (``Since [the trade
association] is permitted to spend dues monies from its corporate
members for the establishment, administration, and solicitation of
contributions to the PAC, it may also have the benefit of incidental
services * * * provided by executive and administrative personnel of
its member corporations who conduct those same activities.'').
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\3\ Explanation and Justification, Federal Election Regulations,
House Document No. 95-44, 95th Cong., 1st Session at 114 (1977).
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(ii) Payroll Deductions
Nearly all the commenters observed that it no longer makes sense to
distinguish between payroll deductions and other forms of permissible
incidental services. The Commission agrees that technological and
societal changes over the past 29 years support a change in the
treatment of payroll deductions, when used by a corporate member of a
trade association.
The availability and use of electronic payments in general have
changed considerably since 1976, when the Commission first prohibited
corporate use of payroll deduction and check-off systems for employee
contributions to a trade association's SSF. Although ``it has taken
years of investments in electronic infrastructure at homes and
businesses to support the use of electronic payments as a convenient
and relatively low-cost alternative to checks,'' \4\ electronic payment
systems are now widely used by Federal agencies, such as the Internal
Revenue Service and the Social Security Administration, and by the
private sector. In fact, there were almost 10 billion more electronic
payments in this country than payments by paper check in 2003.\5\
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\4\ Remarks by Alan Greenspan at the Federal Reserve Payments
System Development Committee 2003 Conference, Oct. 29, 2003.
\5\ Federal Reserve Board Press Release: Federal Reserve Studies
Confirm Electronic Payments Exceed Check payments for the First Time
(Dec. 6, 2004), available at http://www.federalreserve.gov/boarddocs/press/other/2004/20041206/default.htm
(viewed June 2,
2005).
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Payroll deductions, in particular, are increasingly prevalent in
the workplace. A large number of employees use them to pay for a
variety of goods and services, such as health and life insurance
premiums, flexible spending accounts, retirement savings plans,
charitable contributions, loan and mortgage payments, gym memberships
and club dues. Several commenters observed that payroll deductions are
widely available, reliable, simple to administer, convenient, and
impose minimal or no cost on the corporations that offer them. The
Commission now believes that a member corporation's collection and
forwarding of voluntary contributions from solicitable class employees
to a trade association's SSF via payroll deduction under these
circumstances is a permissible ``incidental service.''
Several commenters pointed out the important public policy
objectives that will be furthered by allowing solicitable class
employees to contribute voluntarily through payroll deductions or
check-off systems to the SSF of a trade association of which their
corporation is a member. By permitting solicitable class employees to
sign up for automatic payroll deductions, rather than requiring them to
write a contribution check, these employees may spread out their
contributions over time, thereby potentially enhancing their
participation in the political process. Moreover, the ability to
participate in the process by contributing to a trade association's SSF
is particularly important for employees of the many small companies
that rely exclusively on their trade associations' SSFs to serve as
their political voice. This position was reiterated by two of the
commenters at the Commission's May 17, 2005 hearing.
As the Supreme Court noted in Buckley v. Valeo, ``[e]ncouraging
citizen participation in political campaigns while continuing to guard
against the corrupting potential of large financial contributions to
candidates' is an important goal of the Act. Buckley v. Valeo, 424 U.S.
1, 36 (1976). The Commission believes that permitting a corporation's
solicitable class employees to make voluntary contributions to the SSF
of the corporation's trade association through payroll deduction will
help to achieve this objective.
In addition, a number of commenters indicated that the use of
payroll deductions for voluntary contributions from solicitable class
employees to a trade association's SSF will make it easier for the SSF
to track and report such contributions. The disclosure requirements of
the Act serve three important government interests: (1) Providing the
electorate with information; (2) deterring actual corruption and
avoiding the appearance
[[Page 41942]]
of corruption; and (3) gathering data necessary for enforcement of the
Act. See McConnell v. Federal Election Commission, 540 U.S. 93, 196
(2003). The Commission believes that this final rule will help to
further these important interests by enhancing the ability of a trade
association's SSF to track and report individual employee
contributions.
Removing the regulatory prohibition on the use of payroll deduction
and check-off systems could also help to reduce some perceived
disadvantages in the fundraising abilities of trade association SSFs.
Some commenters indicated that the current prohibition in 11 CFR
114.8(e)(3) disadvantages SSFs sponsored by smaller trade associations
that try to compete in the political arena against SSFs sponsored by
larger trade associations, because SSFs sponsored by smaller trade
associations have fewer resources to devote to fundraising. Other
commenters complained that the prohibition further disadvantages SSFs
sponsored by trade associations that try to compete with larger
corporate and labor organization SSFs, because corporate and labor
organization SSFs are allowed to offer payroll deductions for
contributions to their own SSFs and are not required to obtain approval
before soliciting restricted class or member employees. Removing the
prohibition on member corporations' use of payroll deductions to
collect solicitable class employee contributions to a trade
association's SSF will help to reduce these perceived disadvantages.
The Commission cautions, however, that the provision of incidental
services by a member corporation to a trade association remains subject
to certain requirements under the Act and Commission regulations. For
example, the member corporation must first ``separately and
specifically approve'' the solicitation of its solicitable class
employees by a trade association, and it cannot authorize more than one
trade association to solicit these employees in any calendar year. See
2 U.S.C. 441b(b)(4)(D); 11 CFR 114.8(c), (d).
Moreover, contributions made via payroll deduction or check-off
system trigger special recordkeeping obligations for the recipient SSF.
Each contributor must affirmatively authorize the deduction in writing,
in advance, and the authorization must manifest the contributor's
``specific and voluntary donative intent.'' See Federal Election
Commission v. National Education Association, 457 F.Supp. 1102 (D.D.C.
1978); AOs 2001-4 and 1997-25. The SSF must maintain the authorization
for audit or inspection purposes for at least three years after the
filing date of each report that discloses a contribution made pursuant
to the authorization. See 11 CFR 104.14(b)(2), 102.9(c); AO 2000-4,
n.3.
(iii) Equal Access for Labor Organizations
Under the rule proposed in the NPRM, any member corporation that
provided incidental services to collect and forward contributions by
certain persons to a trade association's SSF also would have had to
make these incidental services available to a labor organization
representing members working for the corporation, upon written request
of the labor organization and at a cost that does not exceed any actual
expenses incurred. As stated in the NPRM, the Commission considers this
requirement to be necessary to prevent circumvention of provisions in
the Act and Commission regulations that seek to prevent corporate SSFs
from gaining an unfair fundraising advantage over labor organization
SSFs. See 69 FR 76631.
One commenter asserted that the Act requires the Commission to
change the proposed rule by extending the equal access requirement to a
member corporation's subsidiaries, divisions, branches and affiliates,
in addition to the corporation itself. The commenter argued that, if a
corporate member of a trade association uses a payroll deduction or
check-off system to collect and forward employee contributions from
solicitable class employees to the trade association's SSF, then a
labor organization representing any members that work for the
corporation or for any of the corporation's subsidiaries, divisions,
branches or affiliates would be entitled to require the corporation and
the corporation's subsidiaries, divisions, branches or affiliates to
provide a payroll deduction or check-off system to collect and forward
contributions to the labor organization's SSF.
The commenter stated that this change to the proposed rule is
mandated by 2 U.S.C. 441b(b)(6). Section 441b(b)(6) provides that
``[a]ny corporation, including its subsidiaries, branches, divisions,
and affiliates,'' that uses a method of soliciting voluntary
contributions or of facilitating the making of voluntary contributions,
must make that method available to a labor organization ``representing
any members working for such corporation, its subsidiaries, branches,
divisions, and affiliates,'' upon written request of the labor
organization and at a cost sufficient only to reimburse the corporation
for its expenses. 2 U.S.C. 441b(b)(6).
In support of the rule proposed in the NPRM, however, the
Petitioner asserted that 2 U.S.C. 441b(b)(6) must be read together with
2 U.S.C. 441b(b)(4)(D), the statutory provision enabling the
solicitation of executive and administrative employees of member
corporations for contributions to a trade association's SSF. While
acknowledging that the Act and regulations strike a careful balance
between corporations and labor organizations, the Petitioner argued
that 2 U.S.C. 441b(b)(4)(D) specifically limits the scope of trade
association solicitations of solicitable employees of the member
corporation, and does not extend the scope of permissible solicitations
to other employees of non-member subsidiaries or affiliates.
The Commission believes that 2 U.S.C. 441b(b)(6) and its
implementing regulation, 11 CFR 114.5(k)(1), require the proposed rule
to be changed as requested by the commenter. Although, as noted by the
Petitioner, a trade association's ability to seek solicitation rights
from member corporations is governed by 2 U.S.C. 441b(b)(4)(D), the
member corporations themselves are separately subject to the broad
equal access provisions of 2 U.S.C. 441b(b)(6) and 11 CFR 114.5(k)(1).
Moreover, these equal access provisions do not distinguish between
corporate methods of facilitating the making of contributions to a
corporation's own SSF and corporate methods of facilitating the making
of contributions to the SSF of a trade association of which the
corporation is a member. Rather, the provisions apply broadly to
``[a]ny corporation * * * that utilizes a method of * * * facilitating
the making of voluntary contributions.'' 2 U.S.C. 441b(b)(6); 11 CFR
114.5(k). Methods of facilitating the making of contributions include
payroll deduction and check-off systems. See 114.1(f).
Thus, under this new rule, any corporate member of a trade
association that chooses to provide incidental services to collect and
forward voluntary contributions from its solicitable class employees to
the trade association's SSF must provide the same services upon request
to the SSF of a labor organization representing any members working for
the corporation or the corporation's subsidiaries, divisions, branches,
or affiliates. In addition, the subsidiaries, divisions, branches, and
affiliates of the corporate member must also provide the same
incidental services upon request to the SSF of a labor organization
representing any members working for the corporation or the
corporation's subsidiaries, divisions, branches, or affiliates.
[[Page 41943]]
This result is also consistent with the Commission's application of
the equal access provisions of 2 U.S.C. 441b(b)(6) to twice yearly
solicitations. See 2 U.S.C. 441b(b)(4)(B); 11 CFR 114.6. In the context
of twice yearly solicitations, if any corporate unit within a corporate
family uses a method of facilitating the making of contributions to the
corporation's SSF, then all units within that family must make the
method available to a labor organization. See, e.g., AO 1990-25 (a
parent corporation that uses a method of facilitation for only certain
subsidiaries must nonetheless ensure that the method is available to a
labor organization, even at subsidiaries that do not themselves use the
method of facilitation).
In addition to being compelled by the Act, there are strong policy
reasons for making this change. The Petitioners and other commenters
acknowledged that corporations that do not have their own SSF may rely
exclusively on their trade associations' SSFs to serve as their proxy
SSFs in representing their corporate interests in the political arena.
In such circumstances, the Commission concludes that labor
organizations should have the same rights that they would enjoy if the
corporations had established their own SSFs.
Moreover, under the rule proposed in the NPRM, corporate families
that employ most of their administrative and management personnel in
one corporation, and most of their members of labor organizations in
another corporation, could have effectively undermined the equal access
rights of labor organizations, by providing incidental services to
collect and forward solicitable class employee contributions to a trade
association's SSF only within the corporation employing executive and
administrative personnel and not in the corporation employing labor
organization members. This outcome would be inconsistent with the
careful balance struck by Congress and the Commission between corporate
SSFs and labor organization SSFs. See, e.g., 122 Cong. Rec. 3782 (daily
ed. May 3, 1976) (Statement of Rep. Brademas, reprinted in Legislative
History of the Federal Election Campaign Act Amendments of 1976 at
1082).
The Commission is also mindful that virtually all commenters
indicated that payroll deductions are both easy to administer and
common, and that this new rule requires any labor organization
requesting access to such a method of facilitating contributions to
reimburse the corporation for the expenses incurred.
(iv) Reimbursement by Labor Organizations
This final rule distinguishes between providing incidental services
to collect and forward solicitable class employee contributions to a
trade association's SSF on the one hand, and providing incidental
services to collect and forward employee-member contributions to a
labor organization's SSF on the other hand, with regard to the
requirement for reimbursement by the recipient SSF. As noted above,
``incidental services by corporate members would not require
reimbursement by the trade association since, in any event,
reimbursement if required would come from membership dues paid to the
trade association by its corporate members.'' AO 1979-8 (citation
omitted); see also AO 1978-13. A labor organization or its SSF that
receives incidental services from a corporate employer of members of
the labor organization, by contrast, is required to reimburse the
corporation for the cost of providing those services. See AOs 1981-39
and 1979-21. The Commission has previously concluded that a prohibited
corporate contribution would result from a failure by a labor
organization to reimburse a corporation for actual expenses incurred by
the corporation in providing a payroll deduction or check-off system
for contributions to the labor organization's SSF. Id.
2. 11 CFR 114.2--Prohibitions on Contributions and Expenditures
The Commission is making a conforming change to 11 CFR 114.2(f),
which prohibits a corporation from facilitating the making of
contributions to political committees, other than to the corporation's
own SSF. The term ``facilitation'' means ``using corporate or labor
organization resources or facilities to engage in fundraising
activities in connection with any federal election.'' 11 CFR
114.2(f)(1). Facilitation does not include, however, enrollment by a
corporation or labor organization of members of the corporation's or
labor organization's restricted class in a payroll deduction plan or
check-off system to make contributions to the corporation's or labor
organization's SSF. See 11 CFR 114.2(f)(4)(i).
The Commission is adding a new paragraph (5) to 11 CFR 114.2(f), to
specify that facilitation also does not include the provision of
incidental services by a corporation to collect and forward voluntary
contributions from its solicitable class employees to the SSF of a
trade association of which the corporation is a member, pursuant to 11
CFR 114.8(e)(4), as revised. New 11 CFR 114.2(f)(5) expressly permits a
corporation to collect these contributions through a payroll deduction
or check-off system. The Commission did not receive any comments on
this change, which was proposed in the NPRM.
Additionally, the Commission is revising the second sentence of
paragraph (a) of 11 CFR 114.2 to correct two typographical errors. In
the phrase that currently reads, `` * * * form making expenditures as
defined in 11 FR 114.1(a) * * *,'' the Commission is changing the word
``form'' to ``from'' and is correcting the citation to ``11 CFR
114.1(a).'' Because these corrections are technical, they are not a
substantive rule requiring notice and comment under the Administrative
Procedure Act, 5 U.S.C. 553.
3. Other Issues
In response to the NPRM, one commenter asked the Commission also to
change 11 CFR 114.7, to allow a corporation to provide incidental
services to collect and forward contributions to a membership
organization's SSF from employees who are members of the membership
organization. The Commission has determined, however, that this
proposal falls outside of the scope of this rulemaking.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
The Commission certifies that the attached final rules would not
have a significant economic impact on a substantial number of small
entities. The basis for this certification is that the attached rules
permit, but do not require, a corporation to provide incidental
services to collect and forward contributions from its solicitable
class employees to the separate segregated fund of a trade association
of which the corporation is a member, including the use of a payroll
deduction or check-off system. A corporation is currently permitted to
collect and transmit contributions by other means to the SSF of a trade
association of which the corporation is a member. The attached rules
enable those corporations that wish to transmit employee contributions
to trade association SSFs to do so more efficiently and use fewer
resources.
List of Subjects in 11 CFR Part 114
Business and industry, Elections, Labor.
0
For the reasons set out in the preamble, subchapter A of chapter 1 of
title 11 of
[[Page 41944]]
the Code of Federal Regulations is amended as follows:
PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY
0
1. The authority citation for part 114 continues to read as follows:
Authority: 2 U.S.C. 431(8)(B), 431(9)(B), 432, 434, 437d(a)(8),
438(a)(8), 441b.
0
2. Section 114.2 is amended by revising the second sentence of
paragraph (a) and by adding new paragraph (f)(5), to read as follows:
Sec. 114.2 Prohibitions on contributions and expenditures.
(a) * * *
National banks and corporations organized by authority of any law
of Congress are prohibited from making expenditures as defined in 11
CFR 114.1(a) for communications to those outside the restricted class
expressly advocating the election or defeat of one or more clearly
identified candidate(s) or the candidates of a clearly identified
political party, with respect to an election to any political office,
including any local, State, or Federal office.
* * * * *
(f) * * *
(5) Facilitating the making of contributions also does not include
the provision of incidental services by a corporation to collect and
forward contributions from its employee stockholders and executive and
administrative personnel to the separate segregated fund of a trade
association of which the corporation is a member, including collection
through a payroll deduction or check-off system, pursuant to 11 CFR
114.8(e)(4).
0
3. In Sec. 114.8, paragraph (e)(3) is revised, paragraph (e)(4) is
redesignated as new paragraph (e)(5), and new paragraph (e)(4) is added
to read as follows:
Sec. 114.8 Trade associations.
* * * * *
(e) * * *
(3) There is no limitation on the method of soliciting voluntary
contributions or the method of facilitating the making of voluntary
contributions which a trade association may use.
(4) A corporation may provide incidental services to collect and
forward contributions from its employee stockholders and executive and
administrative personnel to the separate segregated fund of a trade
association of which the corporation is a member, including a payroll
deduction or check-off system, upon written request of the trade
association. Any corporation that provides such incidental services,
and the corporation's subsidiaries, branches, divisions, and
affiliates, shall make those incidental services available to a labor
organization representing any members working for the corporation or
the corporation's subsidiaries, branches, divisions, or affiliates,
upon written request of the labor organization and at a cost sufficient
only to reimburse the corporation or the corporation's subsidiaries,
branches, divisions, and affiliates, for the expenses incurred thereby.
* * * * *
Dated: July 14, 2005.
Scott E. Thomas,
Chairman, Federal Election Commission.
[FR Doc. 05-14318 Filed 7-20-05; 8:45 am]
BILLING CODE 6715-01-P