[Federal Register Volume 75, Number 53 (Friday, March 19, 2010)]
[Rules and Regulations]
[Pages 13223-13224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6002]
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FEDERAL ELECTION COMMISSION
11 CFR Parts 100 and 106
[Notice 2010-08]
Funds Received in Response to Solicitations; Allocation of
Expenses by Separate Segregated Funds and Nonconnected Committees
AGENCY: Federal Election Commission.
ACTION: Final rules.
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SUMMARY: The Federal Election Commission (``Commission'') is removing
its rule regarding funds received in response to solicitations. The
Commission is also removing two additional rules regarding the
allocation of certain expenses by separate segregated funds and
nonconnected committees. The United States District Court for the
District of Columbia ordered that these rules are vacated, in
accordance with a Court of Appeals decision. Further information is
provided in the supplementary information that follows.
DATES: Effective: April 19, 2010.
FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General
Counsel, or Mr. Neven F. Stipanovic, Attorney, 999 E Street, NW.,
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: The Commission is revising its regulations
to conform to the decision of the United States Court of Appeals for
the District of Columbia Circuit in EMILY's List v. FEC, 581 F.3d 1 (DC
Cir. 2009). On September 18, 2009, the court ruled that 11 CFR 100.57,
106.6(c), and 106.6(f) violated the First Amendment of the United
States Constitution. See EMILY's List v. FEC, 581 F.3d 1 (DC Cir.
2009). The court also ruled that 11 CFR 100.57 and 106.6(f), as well as
one provision of 106.6(c), exceeded the Commission's authority under
the Federal Election Campaign Act (``Act''). See id. At the direction
of the Court of Appeals, the United States District Court for the
District of Columbia ordered that these rules are vacated. See Final
Order, EMILY's List v. FEC, No. 05-0049 (D.D.C. Nov. 30, 2009).
The Commission published a Notice of Proposed Rulemaking (``NPRM'')
on December 29, 2009, in which it sought public comment on the proposed
removal of rules at 11 CFR 100.57, 106.6(c), and 106.6(f). See Notice
of Proposed Rulemaking on Funds Received in Response to Solicitations;
Allocation of Expenses by Separate Segregated Funds and Nonconnected
Committees, 74 FR 68720 (Dec. 29, 2009) (``NPRM''). The comment period
closed on January 28, 2010. The Commission received two comments on the
proposed rules, one of which was a comment from the Internal Revenue
Service (``IRS'') stating that the proposed rules did not conflict with
Internal Revenue Code or IRS regulations. The comments are available on
the Commission's website at http://www.fec.gov/law/law_rulemakings.shtml#emilyslistrepeal.
For the reasons explained below, the Commission has decided to
delete the rules at 11 CFR 100.57, 106.6(c), and 106.6(f). The
Commission's final rules are identical to the proposed rules in the
NPRM.
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 March 15, 2010.
Explanation and Justification
I. Deletion of 11 CFR 100.57--Funds Received in Response to
Solicitations
The Commission promulgated 11 CFR 100.57 to specify when funds
received in response to solicitations are considered to be
contributions for purposes of the Act. Under paragraph (a) of section
100.57, funds provided in response to a communication were treated as
contributions if the communication indicated that any portion of the
funds received would be used to support or oppose the election of a
clearly identified Federal candidate. Paragraph (b)(1) of section
100.57 provided that all funds received in response to a solicitation
described in section 100.57(a) that referred to both a clearly
identified Federal candidate and a political party, but not to any non-
Federal candidates, had to be treated as contributions. Paragraph
(b)(2) stated that if a solicitation described in section 100.57
referred to at least one clearly identified Federal candidate and one
or more clearly identified non-Federal candidate, then at least fifty
percent of the funds received in response to the solicitation had to be
treated as contributions. Paragraph (c) of section 100.57 provided an
exception for certain solicitations for joint fundraisers conducted
between or among authorized committees of Federal candidates and the
campaign organizations of non-Federal candidates.
The Commission is removing section 100.57 in its entirety from its
regulations because the Court of Appeals held that section 100.57 is
unconstitutional and that it exceeded the Commission's statutory
authority under the Act. See EMILY's List v. FEC, 581 F.3d 1 (D.C. Cir.
2009). Accordingly, the District Court ordered that 11 CFR 100.57 is
vacated. See Final Order, EMILY's List v. FEC, No. 05-0049 (D.D.C. Nov.
30, 2009).
The Commission received one comment on the proposal to remove
section 100.57. That commenter agreed with the Commission that 11 CFR
100.57 should be removed in its entirety.
II. Deletion of 11 CFR 106.6(c) and 106.6(f)--Allocation of Expenses
Between Federal and Non-Federal Activities by Separate Segregated Funds
and Nonconnected Committees
The Commission promulgated 11 CFR 106.6 to provide separate
segregated funds (SSFs) and nonconnected committees making
disbursements in connection with both Federal and non-Federal elections
with instructions as to how to allocate their administrative
[[Page 13224]]
expenses and costs for combined Federal and non-Federal activities. The
rule at 11 CFR 106.6(c) required nonconnected committees and SSFs to
use at least fifty percent Federal funds to pay for administrative
expenses, generic voter drives, and public communications that referred
to a political party, but not to any Federal or non-Federal
candidates.\1\ Paragraph (f) of section 106.6 specified that
nonconnected committees and SSFs had to pay for public communications
and voter drives that referred to both Federal and non-Federal
candidates using a percentage of Federal funds proportionate to the
amount of the communication that was devoted to the Federal candidates.
See id.
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\1\ Section 106.6(a) defines a non-connected committee as ``any
committee which conducts activities in connection with an election
but which is not a party committee, an authorized committee of any
candidate for Federal election, or a separate segregated fund.'' A
separate segregated fund is a political committee established,
administered, or financially supported by a corporation or labor
organization. 2 U.S.C. 441b(b)(2)(C); 11 CFR 114.1(a)(2)(iii). A
generic voter drive includes voter identification, voter
registration, and get-out-the-vote drives, or any other activities
that urge the general public to register, vote or support candidates
of a particular party or associated with a particular issue, without
mentioning a specific candidate. 11 CFR 106.6(b)(1)(iii).
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The Commission is now removing paragraphs (c) and (f) from section
106.6 because the Court of Appeals held that these provisions are
unconstitutional. See EMILY's List v. FEC, 581 F.3d 1 (DC Cir. 2009).
Accordingly, the District Court ordered that paragraphs (c) and (f) of
section 106.6 are vacated. See Final Order, EMILY's List v. FEC, No.
05-0049 (D.DC Nov. 30, 2009).
The Commission sought public comment on whether the Court of
Appeals' decision extends to SSFs as well as to nonconnected
committees. See EMILY's List NPRM at 68721. The Commission noted that
section 106.6's allocation rules, including paragraphs (c) and (f),
apply to nonconnected committees and to SSFs. See id. EMILY's List is a
non-profit non-connected political committee, not an SSF. The EMILY's
List decision stated that ``this case concerns the FEC's regulation of
non-profit entities that are not connected to a * * * for-profit
corporation.'' See EMILY's List, 581 F.3d at 8. Moreover, in footnote 7
of the decision, the court stated: ``In referring to non-profit
entities, we mean non-connected non-profit corporations * * * as well
as unincorporated non-profit groups. `Non-connected' means that the
non-profit is not a * * * committee established by a corporation or
labor union.'' See id. n.7. The Commission asked whether these aspects
of the opinion provided any basis for treating SSFs differently from
the non-connected committee at issue in the EMILY's List case. See
EMILY's List NPRM at 68721. Alternatively, the Commission asked whether
the court's order vacating 11 CFR 106.6(c) and (f) is so clear that the
Commission has no discretion to do anything but repeal those provisions
in their entirety. Id.
The Commission received one comment on this issue. That commenter
agreed with the Commission's proposal to remove paragraphs (c) and (f)
from section 106.6. The commenter argued that the EMILY's List decision
applies to SSFs as well as to nonconnected committees. According to the
commenter, the Court of Appeals ruled that the regulations were invalid
in their entirety and the court did not provide any exception for SSFs.
The commenter further noted that paragraphs (c) and (f) of section
106.6 applied to both SSFs and to nonconnected committees, and that
these regulations were challenged on their face. Accordingly, the
court's reasoning applies with equal force to SSFs as to nonconnected
committees. As to the court's statement in footnote 7, the commenter
argued that this statement was simply a description of how the term
``non-profit entities'' was to be used in the opinion because the term
``non-profit entities'' does not appear in the Act. However, the
explanation of the court's terminology did not limit the reach of the
decision.
The Commission agrees with the commenter that the court's holding
applies to SSFs as well as to nonconnected committees. Although the
court defined the term non-profit entities as not including SSFs, the
court explicitly ordered the District Court to ``vacate the challenged
regulations,'' referring to section 106.6(c) and section 106.6(f) in
their entirety. The court's order provides no exception for SSFs.
Accordingly, the Commission is removing paragraphs (c) and (f) in their
entirety.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
The Commission certifies that the attached final rules will not
have a significant economic impact on a substantial number of small
entities. Few, if any, small entities will be affected by these final
rules, which apply to Federal candidates and their campaign committees,
political committees of political parties, nonconnected committees, and
separate segregated funds. Candidates, party committees, separate
segregated funds, and nonconnected committees are not ``small
entities'' under 5 U.S.C. 601. They are not independently owned and
operated because they are not financed and controlled by a small
identifiable group of individuals; rather, they rely on contributions
from a variety of persons to fund committee activities. However, to the
extent that any committees might be considered ``small entities,'' it
is also the case that the final rules do not add any new substantive
provisions to the current regulations, but instead remove existing
regulations pursuant to a Federal court order that they be vacated.
Accordingly, removing these regulations will not have a significant
impact on a substantial number of small entities.
List of Subjects
11 CFR Part 100
Elections.
11 CFR Part 106
Campaign funds, Political committees and parties, Reporting and
recordkeeping requirements.
0
For the reasons set out in the preamble, subchapter A of chapter I of
title 11 of the Code of Federal Regulations is amended as follows:
PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)
0
1. The authority citation for part 100 continues to read as follows:
Authority: 2 U.S.C. 431, 434, 438(a)(8), and 439a(c).
Sec. 100.57 [Removed and Reserved]
0
2. Section 100.57 is removed and reserved.
PART 106--ALLOCATIONS OF CANDIDATE AND COMMITTEE ACTIVITIES
0
3. The authority citation for part 106 continues to read as follows:
Authority: 2 U.S.C. 438(a)(8), 441a(b), 441a(g).
Sec. 106.6 Allocation of expenses between Federal and non-Federal
activities by separate segregated funds and nonconnected committees.
0
4. In Sec. 106.6, paragraphs (c) and (f) are removed and reserved.
Dated: March 15, 2010.
On behalf of the Commission.
Matthew S. Petersen,
Chairman, Federal Election Commission.
[FR Doc. 2010-6002 Filed 3-18-10; 8:45 am]
BILLING CODE 6715-01-P