[Federal Register: October 3, 2007 (Volume 72, Number 191)]
[Rules and Regulations]
[Page 56245-56247]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03oc07-3]
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FEDERAL ELECTION COMMISSION
11 CFR Part 113
[Notice 2007-18]
Use of Campaign Funds for Donations to Non-Federal Candidates and
Any Other Lawful Purpose Other Than Personal Use
AGENCY: Federal Election Commission.
ACTION: Final rule.
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SUMMARY: The Federal Election Commission is revising its rules
regarding the use of campaign funds by candidates and other
individuals. The revision adds to the current list of permissible uses
of campaign funds in Commission regulations: donations to non-Federal
candidates; and any other lawful purpose other than personal use. This
change conforms the provision with those in the Federal Election
Campaign Act, as amended (``the Act''). Further information is provided
in the supplementary information that follows.
EFFECTIVE DATE: November 2, 2007.
FOR FURTHER INFORMATION CONTACT: Ms. Amy L. Rothstein, Assistant
General Counsel, or Ms. Stacey J. Shin, Attorney, 999 E Street, NW.,
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: Section 313 of the Federal Election Campaign
Act of 1971, as amended (``the Act''), sets forth permissible uses of
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contributions \1\ accepted by candidates and donations \2\ received by
individuals to support their activities as Federal officeholders.
Section 313 is codified at 2 U.S.C. 439a and is referred to hereafter
as ``Section 439a.'' Section 439a(a) provides that candidates may use
contributions, and individuals holding Federal office may use
donations, for: (1) Expenditures in connection with the candidate's or
individual's campaign for Federal office; (2) ordinary and necessary
expenses incurred in connection with duties of the individual as a
Federal officeholder; (3) contributions to an organization described in
section 170(c) of the Internal Revenue Code; (4) transfers, without
limitation, to a national, State, or local committee of a political
party; (5) donations to State and local candidates subject to the
provisions of State law; and (6) any other lawful purpose, unless such
purpose constitutes personal use of contributions or donations. See 2
U.S.C. 439a(a).
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\1\ A ``contribution'' is a payment, service or anything of
value given to a person for the purpose of influencing a Federal
election. See 11 CFR 100.52(a). ``Contributions'' are subject to the
limits and prohibitions of the Act.
\2\ A ``donation'' is a payment, service or anything of value
given to a person other than a ``contribution.'' See 11 CFR
300.2(e).
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Section 113.2 of the Commission's regulations implements Section
439a by tracking the permissible uses of campaign funds and funds
donated to a Federal officeholder. The Commission initiated this
rulemaking to add to section 113.2 the two recently enacted permissible
uses regarding donations to non-Federal candidates, and donations for
any other lawful purpose other than personal use. See the Consolidated
Appropriations Act of 2005.\3\ The Commission notes that before 2002,
the Act and Commission regulations had permitted the use of campaign
funds for ``any other lawful purpose'' other than personal use. The
Bipartisan Campaign Reform Act of 2002 (``BCRA''),\4\ deleted ``any
other lawful purpose'' from Section 439a and set forth four permissible
uses of campaign funds.
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\3\ Pub. L. 108-447, 118 Stat. 2809 (2004). The Consolidated
Appropriations Act of 2005 directed that section 312a(a) of the Act
be amended, but was executed by amending section 313(a) of the Act
``as the probable intent of Congress.'' 2 U.S.C.A. 439a (West 2004).
\4\ Pub. L. 107-155, 116 Stat. 81 (2002).
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As noted above, however, the ``any other lawful purpose'' provision
was restored to Section 439a through the Consolidated Appropriations
Act of 2005. At that time, Congress also added donations to State and
local candidates as permissible uses of campaign funds. These changes
to the Act prompted this rulemaking.
The Commission published a Notice of Proposed Rulemaking (``NPRM'')
on July 19, 2007, in which it sought comment on proposed revisions to
11 CFR 113.2. See Notice of Proposed Rulemaking for Use of Campaign
Funds for Donations to Non-Federal Candidates and Any Other Lawful
Purpose Other Than Personal Use, 72 FR 39583 (July 19, 2007).\5\ The
comment period closed on August 20, 2007. The Commission received one
written comment from the Internal Revenue Service, which stated that
``the proposed rules do not pose a conflict with the Internal Revenue
Code or the regulations thereunder.''
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\5\ Available at http://www.fec.gov/pdf/nprm/useoffunds/notice_2007-15.pdf
.
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Accordingly, the Commission has decided to revise its rules
governing the use of campaign funds to add to the current list of
permissible uses of campaign funds in Commission regulations: (1)
Donations to non-Federal candidates; and (2) any other lawful purpose
other than personal use. These changes are identical to those proposed
in the NPRM.
Transmission of Final Rules to Congress
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 September 25,
2007.
Explanation and Justification
1. 11 CFR 113.2(d)--Donations to State and local candidates
Section 439a(a)(5) of the Act expressly permits Federal candidates
and officeholders to donate their campaign funds to State and local
candidates. The Commission is amending 11 CFR 113.2 accordingly, by
adding a new paragraph (d), which permits Federal candidates and
officeholders to donate campaign funds from their authorized committees
to ``State and local candidates subject to the provisions of State
law.''
2. 11 CFR 113.2(e)--Any other lawful purpose
The Commission is amending 11 CFR 113.2 by inserting a new
paragraph (e), which states that campaign funds ``may be used for any
other lawful purpose, unless such use is personal use under 11 CFR
113.1(g).'' New paragraph (e) follows section 439a(a)(6) of the Act,
which permits the use of campaign funds ``for any other lawful
purpose,'' unless the funds are converted by any person to personal
use. The Commission notes that this change to the Act had the effect of
superseding the analysis in Advisory Opinion 2003-26 (Voinovich), in
which the Commission concluded that after BCRA deleted the ``any other
lawful purpose'' provision from Section 439a, campaign funds could be
used only for those non-campaign purposes that were specifically
enumerated in Section 439a. The change also had the effect of
superseding, in part, Advisory Opinion 2004-03 (Dooley), to the extent
that Advisory Opinion 2004-03 placed certain limits on an authorized
committee that had converted into a multicandidate committee and its
use, for any lawful purpose, of funds that had been received when the
committee was an authorized committee.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
The Commission certifies that the attached final rule does not have
a significant economic impact on a substantial number of small
entities. The basis for this certification is that any individuals and
not-for-profit entities affected by this rule are not ``small
entities'' under 5 U.S.C. 601. The definition of ``small entity'' does
not include individuals, but classifies a not-for-profit enterprise as
a ``small organization'' if it is independently owned and operated and
not dominant in its field. 5 U.S.C. 601(4). The final rule affects
authorized committees, which are not independently owned and operated
because they are not financed and controlled by a small identifiable
group of individuals. Authorized committees are financed by
contributions from a large number of persons and controlled by the
candidate and the candidate's campaign employees and volunteers. To the
extent that any authorized committees might be considered ``small
organizations,'' the number that are affected by this final rule is not
substantial.
The final rule also does not impose any additional restrictions or
increase the costs of compliance for authorized committees. Instead,
the final rule provides authorized committees with additional options
for using campaign funds, which track the recent changes to 2 U.S.C.
439a(a). The final rule does not impose an undue burden upon authorized
committees because they are already required to report the use of
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campaign funds to the Commission. Therefore, the attached final rule
does not have a significant economic impact on a substantial number of
small entities.
List of Subjects in 11 CFR Part 113
Campaign funds.
PART 113--USE OF CAMPAIGN ACCOUNTS FOR NON-CAMPAIGN PURPOSES
0
For the reasons set out in the preamble, the Federal Election
Commission is amending Subchapter A of Chapter I of Title 11 of the
Code of Federal Regulations as follows:
0
1. The authority citation for Part 113 continues to read as follows:
Authority: 2 U.S.C. 432(h), 438(a)(8), 439a, 441a.
0
2. Section 113.2 is amended by:
0
a. Adding paragraph (d);
0
b. Redesignating paragraphs (e) and (f) as paragraphs (f) and (g);
0
c. Adding new paragraph (e) ;
0
d. Amending newly redesignated paragraph (f)(1) introductory text by
removing the reference ``paragraph (e)(5)'' and inserting in its place,
the reference ``paragraph (f)(5)'';
0
e. Amending newly redesignated paragraph (f)(1) introductory text by
removing the reference ``paragraph (e)(1)(i)'' and inserting in its
place, the reference ``paragraph (f)(1)(i)''; and
0
f. Amending newly redesignated paragraph (f)(1)(ii)(A) by removing the
reference ``paragraph (e)(1)(i)'' and inserting in its place, the
reference ``paragraph (f)(1)(i)''.
Sec. 113.2 Permissible non-campaign use of funds (2 U.S.C. 439a).
* * * * *
(d) May be donated to State and local candidates subject to the
provisions of State law; or
(e) May be used for any other lawful purpose, unless such use is
personal use under 11 CFR 113.1(g).
* * * * *
Dated: September 24, 2007.
Robert D. Lenhard,
Chairman, Federal Election Commission.
[FR Doc. E7-19260 Filed 10-2-07; 8:45 am]
BILLING CODE 6715-01-P