[Federal Register Volume 63, Number 241 (Wednesday, December 16, 1998)]
[Proposed Rules]
[Pages 69524-69537]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-33316]
[[Page 69523]]
_______________________________________________________________________
Part VI
Federal Election Commission
_______________________________________________________________________
11 CFR Part 9003 et al.
Public Financing of Presidential Primary and General Election
Candidates; Proposed Rule
Federal Register / Vol. 63, No. 241 / Wednesday, December 16, 1998 /
Proposed Rules
[[Page 69524]]
FEDERAL ELECTION COMMISSION
11 CFR Parts 9003, 9004, 9007, 9008, 9032, 9033, 9034, 9035, 9036
and 9038
[Notice 1998-18]
Public Financing of Presidential Primary and General Election
Candidates
AGENCY: Federal Election Commission.
ACTION: Notice of proposed rulemaking.
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SUMMARY: The Federal Election Commission requests comments on proposed
changes to its rules governing publicly financed Presidential primary
and general election candidates. These regulations implement the
provisions of the Presidential Election Campaign Fund Act (``Fund
Act'') and the Presidential Primary Matching Payment Account Act
(``Matching Payment Act''), which establish eligibility requirements
for Presidential candidates seeking public financing, and indicate how
funds received under the public financing system may be spent. They
also require the Commission to audit publicly financed campaigns and
seek repayment where appropriate. The proposed rules reflect the
Commission's experience in administering this program during the 1996
election cycle and also seek to anticipate some questions that may
arise during the 2000 Presidential election cycle. 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 which follows.
DATES: Comments must be received on or before February 1, 1999.
ADDRESSES: All comments should be addressed to Ms. Susan E. Propper,
Assistant General Counsel, and must be submitted in either written or
electronic form. Written comments should be sent to the Federal
Election Commission, 999 E Street, N.W., Washington, D.C. 20463. Faxed
comments should be sent to (202) 219-3923, with printed copy follow up.
Electronic mail comments should be sent to [email protected].
Commenters sending comments by electronic mail should include their
full name and postal service address within the text of their comments.
Electronic comments that do not contain the full name, electronic mail
address and postal service address of the commenter will not be
considered.
FOR FURTHER INFORMATION CONTACT: Ms. Susan E. Propper, Assistant
General Counsel, or Ms. Rosemary C. Smith, Senior Attorney, at (202)
694-1650 or toll free (800) 424-9530.
SUPPLEMENTARY INFORMATION: The Commission is considering revising parts
of its regulations governing the public financing of Presidential
campaigns, 11 CFR parts 9001 through 9039, to more effectively
administer the public financing program during the year 2000 election
cycle. These rules implement 26 U.S.C. 9001 et seq. and 26 U.S.C. 9031
et seq. The Commission is publishing this Notice of Proposed Rulemaking
to invite comments on the amendments proposed.
Please note that some revisions would affect only primary elections
or only general elections, while other changes would affect both. The
discussion of these proposals which follows is arranged by topic.
However, the draft rules, themselves, are set out in numerical order.
A. Coordination Between Publicly Funded Presidential Candidates and
Their Political Parties
The 1996 election cycle gave rise to a number of instances in which
national party committees conducted advertising campaigns and other
activities focused on the party's presumptive Presidential nominee. The
acceleration of the primary schedule makes it quite likely that parties
will again face a situation in 2000 in which the likely nominees are
known well in advance of the nominating conventions, and in which those
likely nominees may have reached or nearly reached their pre-nomination
spending limits under 2 U.S.C. 441a(b)(1)(A). In 1996, the national
committees of the two major political parties are alleged to have made
impermissible contributions to their Presidential candidates by
coordinating extensive advertising campaigns, sharing polling data, and
bearing expenses for advertising, staff, consultants, travel, polling
and other services intended to benefit their presumptive nominees.
Section 441a(d) of the FECA limits the amount party committees may
spend on the general election campaigns of their Presidential nominees
regardless of whether those nominees accept federal funds for either
their primary or general election campaigns. In the past, the
Commission has permitted coordinated expenditures to be made before the
date of the primary election. While not prejudging decisions related to
those 1996 allegations, the Commission wishes to solicit comments on
rules to provide clearer guidance on political party activities
coordinated with or related to their presumptive presidential nominees,
and on proposals to provide some relief to presidential candidates who
may have both secured the nomination and reached their spending limit
for the primary well in advance of the party convention. Please note,
however, that specific proposals are not reflected in the attached
rules which follow. The effect of party committee coordinated
activities on their publicly funded candidates' repayment obligations
is discussed in part E, below.
On May 5, 1997, the Commission issued a Notice of Proposed
Rulemaking to address a wide variety of issues involving coordinated
expenditures and independent expenditures, including those made on
behalf of Congressional candidates. See Notice of Proposed Rulemaking,
62 F.R. 24367 (May 5, 1997). That rulemaking, which was initiated in
response to a petition for rulemaking, is still pending.
1. Relief for Presumptive Nominees Who Have Reached Their Spending
Limits
The Commission is without authority to relax or expand pre-
nomination spending limits applicable to Presidential candidates
receiving primary or general election funding. The Commission does,
however, offer for comment a proposal to permit national committees of
political parties to raise and spend funds on behalf of a presumptive
nominee when, in the party's determination, the identity of the nominee
is clear. However, any such expenditures would count against the
party's general election coordinated spending limit, and funds would
have to be raised and spent in compliance with rules otherwise
applicable to such coordinated party spending. E.g. 2 U.S.C. 441a(d)
and 11 CFR 110.7. Even in the event that a party nominates a person
other than a presumptive nominee in whose behalf coordinated
expenditures were made, any pre-convention party spending in behalf of
any presidential candidate will be counted against that party's
coordinated expenditure limit for the general election.
2. Standards for Allocating Spending by Political Parties Related to
the Party's Publicly-Funded Presidential Candidates
In Colorado Republican Federal Campaign Committee v. Federal
Election Commission, 518 U.S. 604 (1996), the Supreme Court ruled that
party expenditures which are not coordinated with candidates cannot be
construed to be contributions to a candidate. The plurality opinion
noted explicitly, however, ``Since this case involves only the
provision [limiting party expenditures] concerning congressional races,
we do not address
[[Page 69525]]
issues that might grow out of the public funding of Presidential
campaigns.'' Id. at 612. Furthermore, the most significant
controversies over 1996 party activities involve activities which were
alleged to be coordinated with Presidential candidates or campaigns,
but which, the political parties argue, may be exempt from the
definition of expenditure under section 431(9) of the FECA.
The public funding provisions of Title 26, United States Code, were
intended to limit spending by publicly funded Presidential candidates,
and by their party committees. Those provisions also provide for, and
indeed presuppose coordination between parties and their nominees. As a
result, the Commission wishes to obtain comment on the proposals
described below, which are intended to clarify what activities of
political parties will be considered expenditures on behalf of
Presidential nominees or candidates for nomination.
3. Advertising Which Clearly Identifies a Presidential Candidate
Under the proposal, expenses by a political party for ``general
public political advertising'' (see 11 CFR 110.11) which clearly
identifies a Presidential candidate who has accepted public funding
pursuant to 11 CFR Part 9004 or Part 9034 will be considered to be
expenditures in behalf of that candidate unless the following three
conditions are met: (1) The advertisement is focused on a legislative
or public policy issue; (2) The advertisement is addressed to an
audience that would normally be affected by the legislation or proposal
(e.g. ads on proposals in a particular state would not normally be
addressed to residents of a different state); and (3) Mention of a
candidate in the advertisement is incidental and related to the
candidate's role as sponsor, proponent, or leading opponent to the
proposal (e.g. ``the President's plan'' or ``the Smith bill''). Costs
for advertisements which identify multiple candidates would continue to
be allocated pursuant to 11 CFR 106.1.
Costs for general public political advertising by a political party
which clearly identify a Presidential candidate of another party
(except under the incidental mention/legislative or public policy
exemption above) would be considered to be expenditures in behalf of
the sponsoring party's nominee or eventual nominee, whether or not such
nominee accepts public funds for either the primary or the general
election or both.
The Commission also solicits comments on whether a standard other
than ``clearly identified candidate,'' such as express advocacy or
electioneering message, should be applied to determine when advertising
by a political party should be treated as an expenditure in behalf of a
publicly funded Presidential candidate.
4. Polling, Media Production and Consulting Services
Comments are also sought as to whether the Commission should issue
new regulations to provide that spending by a political party for
polling, media production or consulting services shall be considered to
be coordinated expenditures in behalf of a publicly funded Presidential
candidate under either of the following two conditions: (1) Such
activities are carried on jointly and/or costs are shared between the
party and a candidate under a single contract or arrangement; or (2)
Polling, scripts or other contract deliverables relate to a clearly
identified candidate, and either: (a) The results of the polling or
other services are provided to the Presidential campaign, its employees
or agents (except for polling in which questions about a Presidential
candidate(s) are only one of numerous issues and for which the
Presidential candidate is not the principal focus); or,
(b) The candidate, campaign, employees or agents are consulted in
advance about the contract or services, including polling questions,
scripts or other deliverables.
5. Transfer or Sharing of Employees
In addition, the Commission requests comments on whether to
promulgate rules providing that spending by a political party for
salary, travel and expenses of employees who, during the same election
cycle have been employees of a publicly funded Presidential campaign,
shall be considered to be expenditures in behalf of the Presidential
candidate. However, any such rules would contain two exceptions to
cover situations where either the Presidential candidate is no longer
an active candidate under 11 CFR 9033.5 or the employee's duties are
substantially different than those performed for the Presidential
candidate.
B. Qualified Campaign Expenses
1. ``Bright Line'' Distinction Between Primary and General Election
Expenses
The Fund Act, the Matching Payment Act, and the Commission's
regulations require that publicly financed Presidential candidates use
primary election funds only for expenses incurred in connection with
primary elections, and that they use general election funds only for
general election expenses. 26 U.S.C. 9002(11), 9032(9); 11 C.F.R.
9002.11 and 9032.9. These requirements are necessary to effectuate the
spending limits for both the primary and the general election, as set
forth at 2 U.S.C. 441a(b) and 26 U.S.C. 9035(a). See also 11 CFR
110.8(a) and 9035.1(a)(1).
In 1995, the Commission promulgated 11 CFR 9034.4(e) to provide
more specific guidance as to which expenses should be attributed to a
candidate's primary campaign and which ones should be considered
general election expenses. This provision specifies that the costs of
goods or services used exclusively for the primary must be attributed
to the primary. Similarly, any expenditures for goods or services used
exclusively for the general election must be attributed to the general
election. The revisions to the regulations also established a number of
specific attribution rules for expenses such as polling, travel, media
production and distribution costs, etc., which are largely based on the
timing of the expenditure. One of the primary purposes of these rules
was to eliminate much of the time-and labor-intensive work of examining
thousands of individual expenditures, thereby helping to streamline the
audit process. While there may be situations in which the bright line
approach may not accurately reflect the relative impact of specific
expenditures, these differences should balance themselves out over the
course of a lengthy campaign. During the last Presidential election
cycle, several questions were raised regarding the application of these
``bright line'' rules. Accordingly, the Commission seeks comments on
the following proposed modifications to and clarifications of these
provisions.
First, a sentence would be added to paragraph (e)(1) of section
9034.4 to clarify which provisions apply to expenditures for goods and
services that are used in both a candidate's primary and general
election campaigns. With some exceptions, expenditures for goods or
services that may benefit both the primary and the general election
campaigns must be attributed on the basis of whether they were used
before or after the candidate received the nomination.
Second, paragraph (e)(3) of section 9034.4 would be modified to
resolve questions that have come up regarding the cost of the use of
campaign offices prior to the candidate's nomination. Currently, such
expenses must be attributed to the primary election unless the office
is used by persons working exclusively on general election
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preparations. ``Exclusive use'' is not defined in the rules, and
questions have been raised as to whether the term means several hours,
or days, or weeks. The draft rules which follow would change this
exception so that it would apply to periods when the campaign office is
used only by persons working ``full time'' on general election campaign
preparation. In the alternative, comments are sought on dropping this
exclusive use exception with regard to overhead and salary expenses.
The general rule regarding overhead and payroll expenses would also be
reworded for purposes of clarification.
Please note that other issues involving the transfer or sale of
assets from a federally financed candidate's primary election committee
to the general election committee are discussed below.
2. Winding Down Costs
The regulations at 11 CFR 9034.4(a)(3) permit candidates to receive
contributions and matching funds, and to make disbursements, for the
purpose of defraying winding down costs over an extended period after
the candidate's date of ineligibility (``DOI''). However, after the
implementation of the ``bright line'' rules in 1995, questions have
arisen as to whether all salary and overhead incurred after the date of
the candidate's nomination must be attributed to the general election,
including those associated with winding down the primary campaign. See
11 CFR 9034.4(d)(3). Accordingly, the Commission seeks comments on
revising section 9034.4(a)(3)(i) and (iii) to clarify that for
candidates who win their parties' nominations, no salary and overhead
expenses may be treated as winding down costs until after the end of
the expenditure report period, which is thirty days after the general
election takes place. This clarification would recognize that under the
``bright line rules,'' the costs incurred for winding down the primary
campaign during the general election period will be offset by pre-
convention general election expenses.
C. Compliance and Fundraising Costs
1. Legal and Accounting Costs for the Primary Election
The rules at 11 CFR 9035.1(c)(1) currently set forth an exemption
from the overall spending limit for legal and accounting compliance
costs incurred by federally financed Presidential primary committees.
To claim this exemption, campaign committees must keep detailed records
of salary and overhead expenses, including records indicating which
duties are considered compliance and the percentage of time each person
spends on such activities. The Commission is considering amending this
regulation to provide a simpler and easier method of calculating the
compliance exemption. Proposed paragraph (c)(1) of section 9035.1 would
state that an amount equal to 10% of all operating expenditures for
each report period may be treated as compliance expenses not subject to
the candidate's spending limit. This ``standard deduction'' could be
readily derived from line 23, Operating Expenses, on the committee's
reports. Note that the proposed rule would not permit committees to
demonstrate that they have actually incurred a higher amount. The
change in the regulations is intended to decrease the time it takes for
the Commission to verify compliance costs during the audit process. It
should also reduce the resources campaign committees must devote to
tracking compliance costs.
Please note that the Commission is also proposing to modify the
title of section 9035.1 and to add subheadings for each paragraph to
assist readers in locating the material in this section more easily.
2. Pre-nomination Formation of a General Election Legal and Accounting
Compliance Fund (GELAC)
Currently, section 9003.3 contemplates that a nominee of a major
political party who accepts public financing may establish a privately
funded General Election Legal and Accounting Compliance Fund
(``GELAC'') for certain limited purposes. A GELAC may be set up before
the candidate is actually nominated for the office of President or Vice
President. The Commission is seeking comments on several changes to
this section to address problems that have arisen when primary
candidates have formed GELACs relatively early in the primary campaign
but subsequently failed to win their party's nomination. One difficulty
is that candidates who do not receive their party's nomination must
return all private contributions received by the GELAC. However, if
some of those funds have been used to defray overhead expenses or to
solicit additional contributions for the GELAC, a total refund has
presented difficulties. Another difficulty is that the GELAC could be
improperly used to make primary election expenditures. This problem may
also affect candidates who win their parties' nominations, particularly
when those candidates have almost exhausted their spending limits for
the primary.
To avoid a recurrence of these situations, the Commission is
considering several alternatives. Please note, however, that these
proposals are not reflected in the attached rules which follow. One
alternative is to amend paragraph (a)(1)(i) of section 9003.3 to
specify that contributions shall not be solicited for a GELAC prior to
the candidate's nomination at the party's national nominating
convention. Under this approach, a committee could establish a GELAC
before the date of nomination, but only for the limited purpose of
receiving correctly redesignated contributions that would otherwise
have to be refunded as excessive primary contributions. The Commission
anticipates that overhead and reporting expenses incurred by the GELAC
could be defrayed from interest received on the account.
A second alternative is to bar GELAC fundraising before a specified
date, such as April 15 of the Presidential election year. Under this
alternative, starting on April 15 of the Presidential election year,
candidates could begin soliciting contributions for the GELAC. However,
if the candidate does not become the nominee, all contributions
accepted for the GELAC, including redesignated contributions, would
have to be refunded within sixty (60) days of the candidate's date of
ineligibility. Such refunds would be consistent with the Commission's
decision in the last Presidential election cycle to require refunds
within 60 days of the date on which the political party of the
unsuccessful primary candidate selects its nominee. These refunds would
also be consistent with the policies applicable to non-publicly funded
Congressional candidates who accept designated general election
contributions, but who thereafter lose their parties' primaries. See 11
CFR 102.9(e)(2), and Advisory Opinions 1992-15 and 1986-17.
The third alternative under consideration is to allow GELAC
fundraising beginning 90 days before each candidate's date of
nomination. This approach would mean that the nominees of the two major
parties would begin GELAC fundraising on different dates.
The fourth alternative is to bar Presidential candidates from
establishing a GELAC until the date of the last Presidential primary
before the national nominating convention. A variation on this approach
would be to allow the eventual nominee to form a GELAC at an earlier
point, but to prohibit GELAC fundraising before the last Presidential
primary.
[[Page 69527]]
The fifth alternative is to allow any Presidential primary
candidate to establish and to raise funds for a GELAC at any time.
Under this approach, those who do not win their party's nomination
would not have to return all the funds they raise. Instead, they could
offset their fundraising and administrative expenses, and would only
need to refund the amount remaining in their account as of the date
their party selects a nominee. Comments are sought as to whether all
contributors should receive a proportional refund or whether a first-
in-first-out method should be used to determine which contributions
have been spent, with refunds going to the most recent contributors.
Please note that this alternative would be a significant departure from
the treatment of general election contributions received by losing
primary candidates in Congressional races.
3. Joint Primary/GELAC Solicitations
Paragraph (e)(6)(i) of section 9034.4 addresses situations where a
candidate's GELAC and his or her primary committee issue joint
solicitations for contributions. Currently, the costs of such
solicitations are divided equally between the two committees,
regardless of how much money is actually raised for each. One
difficulty with the current approach is that in some situations it
enables the GELAC to absorb a relatively high portion of fundraising
costs while receiving a relatively low proportion of the funds raised.
Thus, this provision is at odds with the joint fundraising rules
applicable to other types of joint fundraising conducted by publicly
funded Presidential primary committees under 9034.8. In effect, section
9034.4(e)(6)(i) could permit the GELAC to subsidize fundraising
expenses that would otherwise be paid by the primary committee and
subject to spending limits. Another difficulty is that under the
current rules, questions have been raised as to whether the cost of a
solicitation, or the cost of a fundraiser, should include staff
salaries, consulting fees, catering, facilities rental, and the
candidate's travel to the event site.
Consequently, the Commission is considering several alternatives to
paragraph (e)(6)(i). One possibility is to state that the allocation of
solicitation expenses and the distribution of net proceeds from the
fundraiser would be made in the same manner as described in 11 CFR
9034.8(c)(8)(i) and (iii). These are the provisions that apply to
unaffiliated committees. When these committees conduct a joint
fundraiser, they apportion their costs using the percentage of
contributions each committee receives from the event. Given the unique
relationship between the primary campaign and the GELAC, and the fact
that the candidate's primary committee receives public financing in
exchange for voluntary compliance with spending limits, it is important
to ensure that costs are correctly apportioned and net proceeds are
properly distributed. Under this alternative, for example, if the GELAC
receives 25% of the net proceeds, it may only pay 25% of the
fundraising expenses, and no more than that amount.
The second approach would be to prohibit joint fundraising between
the primary and the GELAC. If each committee performed its own
fundraising, the difficulties inherent in apportioning expenses would
not arise. This approach would also recognize that there may be some
situations in which the recipient committees do not know which of
several solicitation letters or fundraising events generated a given
contribution.
The third alternative is to treat all expenses incurred by the
GELAC prior to the candidate's date of ineligibility or date of
nomination as qualified campaign expenses for the primary election.
This approach would avoid GELAC subsidization of the primary campaign.
It may also be easier for campaigns and for the Commission to work with
than the current system.
The fourth alternative would be to provide greater specificity in
section 9003.3(a)(2)(i)(E) as to what types of costs may be paid for by
the GELAC when it solicits GELAC contributions. Comments are sought as
to whether the list of solicitation expenses should be relatively
narrow to avoid funding campaign events. Under this approach,
solicitation costs would cover printing invitations and solicitations,
as well as mailing, postage and telemarketing expenses. However,
solicitation costs would not include items such as catering, facilities
rental, fundraising consultants, employee salaries, and travel to the
event site.
Please note that the draft rules which follow do not incorporate
any of the alternative approaches to the fundraising rules discussed
above.
4. Transfers from the Primary to the GELAC
The regulations at 9003.3(a)(1)(i) through (v) place certain
restrictions on transferring funds from a Presidential candidate's
primary committee to a GELAC. These limitations have been promulgated
to ensure that the GELAC is not used as a way to increase a candidate's
entitlement to matching funds or to decrease a candidate's repayment
obligations. The Commission is seeking suggestions as to how these
provisions could be strengthened, and whether it is advisable to do so.
D. Modifying the Audit and Repayment Processes
In 1995, the Commission revised sections 9007.2 and 9038.2 to
reduce the amount of time it takes to audit publicly funded
Presidential committees, to make repayment determinations and to
complete the enforcement process for these committees. These steps were
taken to ensure adherence to the three year time period specified in 26
U.S.C. 9007(c) and 9038(c) for notifying publicly funded committees of
repayment determinations. Having operated under the streamlined
procedures during the 1996 election cycle, the Commission is examining
further changes to ensure these processes are completed as fairly and
expeditiously as possible.
1. Audit Procedures
The Commission is considering two alternatives to the current audit
procedures. Please note that neither of these is reflected in the draft
rules which follow. One alternative would be to return to the audit
procedures used for the 1992 Presidential candidates who received
primary or general election funding. Under the previous system, the
Commission's Audit Division conducted an exit conference at the close
of audit fieldwork to discuss its preliminary findings and
recommendations. However, no written exit conference memorandum was
prepared or presented to the committee during the exit conference.
Instead, an interim audit report containing a preliminary calculation
of future repayment obligations was subsequently prepared for approval
by the Commission. After that, the committee had an opportunity to
submit materials disputing or commenting on matters contained in the
initial audit report. Next, the Audit Division prepared a final audit
report containing initial repayment determinations. The final audit
report was considered by the Commission in an open session. Twenty four
hours before the final audit report was released to the public, copies
were provided to the candidate and the committee.
The previous system had the advantage of enabling committees to see
what matters were of concern to the Commission before responding to the
interim audit report prepared by the Commission's staff. It also
enabled committees to resolve these disputes
[[Page 69528]]
early in the process before they became public. However, one
disadvantage of the previous procedure was that campaign committees did
not have an opportunity to rebut the interim audit report until after
the Commission approved the report. Another problem was that sometimes
it could be difficult for the Commission to meet the statutory
requirement that any notification of a repayment be made no later than
three years after the end of the matching payment period or after the
date of the general election. 26 U.S.C. 9007(c) and 9038(c). In Dukakis
v. Federal Election Commission, 53 F.3d 361 (D.C. Cir. 1995) and Simon
v. Federal Election Commission, 53 F.3d 356 (D.C. Cir. 1995), the court
determined that the preliminary calculation contained in the interim
audit report did not constitute sufficient notification of repayment
obligations. Thus, the court concluded that the Commission's previous
regulation at 11 CFR 9038.2(a)(2), which stated that the interim audit
report constitutes notification, was inconsistent with the statute.
Simon at 360.
The second alternative would be to retain many of the current audit
procedures, with the exception that the exit conference memorandum
would incorporate a legal analysis and would be approved by a majority
vote of four Commissioners in executive session before it is presented
to the candidate's committee during the exit conference. This approach
would have the advantage of enabling committees to see what matters are
of concern to the Commission before responding to the exit conference
memorandum prepared by the Commission's staff. However, the
disadvantage is that the Commission would not have the benefit of
considering the committee's views on the factual and legal issues at
hand before approving the exit conference memorandum. Moreover, this
approach may slow the audit process down, thereby jeopardizing the
Commission's ability to notify candidates and their committees of
repayment obligations within the three year period mandated by the law.
In addition to these alternatives, the Commission seeks comments on
retaining its current audit procedures. One advantage of the present
system is that, in comparison to the above alternatives, the current
rules may result in faster resolution of the audits, as well as more
efficient use of Commission and committee resources. Thus, it is not as
difficult to meet the statutory deadline for notifying candidates of
repayment determinations as it was under the prior rules. However, one
disadvantage of the current procedures is that committees do not have
an opportunity to address all issues raised in the audit report until
after the Commission has made its determination and released the report
to the public. Another difficulty is that by publicly releasing the
audit report before the Commission's consideration of it, the public
and the press may mistakenly conclude that the report represents the
views of a majority of the members of the Commission. It may be
possible to correct this misperception through public education and by
including in each audit report a statement that the report is a staff
document and does not necessarily reflect the Commission's views or
determinations before it is approved by majority vote.
2. Repayment Determination Procedures
The current regulations in paragraphs (c) and (d) of sections
9007.2 and 9038.2 contemplate a two step repayment process. First, the
Commission provides the candidate with a written notice of the
repayment determination, which has been approved by an affirmative vote
of four of its members, and which is included in the audit report. The
candidate has the option of making the repayment or requesting an
administrative review. In the latter case, the candidate must submit
legal and factual materials supporting no repayment or a lesser
repayment. The candidate may also request an oral hearing. At the
conclusion of the administrative review, the current rules in
paragraphs (c)(3) of these sections indicate that the Commission may
decide whether to revise the repayment determination.
The question has arisen regarding the consequences of a failure to
approve a repayment determination after the administrative review. The
current rule could be interpreted to mean that the prior repayment
determination remains in effect. However, that result would undermine
the candidate's opportunity for a meaningful review of any new facts or
arguments raised. The Commission is obligated to issue a written
statement of reasons to justify its repayment determination. One
purpose of the statement of reasons is to respond to the significant
points raised by the candidate during the administrative review. If the
Commission's repayment determination is challenged in court, the
statement of reasons is also needed to provide a reasoned basis for the
Commission's actions. See, Robertson v. FEC, 45 F.3d 486, 493 (D.C.
Cir. 1995). Consequently, the Commission has recently concluded that no
post-administrative review repayment determination may be issued absent
an affirmative vote of four of its members following the consideration
of the candidate's written materials and oral presentation. See Agenda
Document #97-84-C (March 27, 1998).
Consistent with this practice, the attached rules would amend
paragraphs (c)(3) and (d)(2) of sections 9007.2 and 9038.2 to clearly
indicate that post-administrative review repayment determinations must
be approved by an affirmative vote of four members of the Commission.
In addition, draft paragraphs (c)(3) of these sections would be changed
to indicate that the Commission is not voting on whether to revise a
repayment determination, but rather is deciding whether to issue a
repayment determination.
Also, please note that in paragraph (c)(2)(ii) of both sections,
the references to paragraph (c)(2)(ii) would be changed to paragraph
(c)(2)(i) to clarify the subject matter of oral hearings.
E. Bases for Repayment Determinations
The Commission is considering whether to delete paragraph
(b)(2)(ii)(A) of section 9038.2 from its regulations. This is the
provision which permits the Commission to order a repayment of primary
matching funds based on a determination that the candidate or
authorized committee has made expenditures in excess of the primary
spending limits. The argument has been raised that this provision is
without statutory basis, and that the reading implied in the current
regulation is effectively prohibited by the statute. This argument is
discussed below, as well as several countervailing considerations. As
noted above in part A, this issue has arisen in the context of whether
certain coordinated expenditures made by party committees should be
treated as in-kind contributions to the party's presumptive nominee,
and thus count against that publicly funded primary candidate's
spending limits.
Section 9038 of the Matching Payment Act (26 U.S.C. 9038) provides
three bases for determining repayments of primary matching funds: (1)
Payments in excess of entitlement; (2) payments used for other than
qualified campaign expenses; and (3) excess funds remaining six months
after the end of the matching payment period. In contrast, section 9007
of the Fund Act (26 U.S.C 9007) provides four bases for determining
repayments of general election funds: (1) Payments in excess of
entitlement; (2) an amount equal to any excess qualified campaign
expenses; (3) an amount equal to any contributions
[[Page 69529]]
accepted; and (4) payments used for other than qualified campaign
expenses.
The provisions on ``payments in excess of entitlement'' and ``other
than qualified campaign expenses'' are nearly identical between the two
chapters. Inasmuch as Congress specified ``excess expenses'' as a
repayment basis separate from ``other than qualified campaign
expenditures'' in the general election statute, an argument exists that
the nearly identical provision on ``other than qualified campaign
expenses'' in the primary statute cannot reasonably be read to include
excess expenses.
The argument against treating ``excess'' campaign expenditures as
``non qualified'' is buttressed by the text of the ``Qualified campaign
expense limitation'' (Sec. 9035) itself, which prohibits candidates
from ``knowingly incur[ing] qualified campaign expenses in excess of
the expenditure limitation applicable under section 441a(b)(1)(A) of
title 2.'' First, one can argue that it is impossible to read this
section other than as treating ``excess'' spending as ``qualified.''
Second, this provision states clearly that violation of the primary
spending limits is a Title 2 violation, which would be addressed in the
FEC's enforcement process, rather than a Title 26 violation, which
could be addressed in the audit/repayment process.
Alternatively, it can be argued that there is statutory support for
11 CFR 9038.2(b)(2)(ii)(A) and that this provision should not be
deleted. While section 9007(b)(2) of the Fund Act clearly states that
repayments can be sought from general election candidates who incur
expenses in excess of the aggregate payments to which they are
entitled, the Matching Payment Act can be interpreted to set forth
repayment requirements for primary candidates that are the equivalent
of that general election provision.
A qualified campaign expense of a primary election committee is an
expense where ``neither the incurring nor payment * * * constitutes a
violation of any law of the United States * * *.'' 26 U.S.C. 9032(9). A
Presidential primary candidate who exceeds the expenditure limitations
violates two laws, 26 U.S.C. 9035 and 2 U.S.C. 441a(b)(1)(A). Section
9035 of the Matching Payment Act states that ``no candidate shall
knowingly incur qualified campaign expenses in excess of the
expenditure limitations applicable under section 441a(b)(1)(A) of title
2 * * *.'' Section 441a(b)(1) of the FECA states that ``no candidate
for the Office of President who is eligible'' to receive public funds
may make expenditures in excess of the statutorily prescribed
limitations. 2 U.S.C. 441a(b)(1). Thus, one reading of this language is
that expenses in excess of expenditure limitations for publicly funded
primary candidates are non-qualified because they violate the law.
Consequently, it can be argued that they are repayable under 26 U.S.C.
9038(b)(2). On the other hand, the counter-argument is that this
interpretation of 26 U.S.C. 9035 must be incorrect because the language
of this provision specifically contemplates that amounts spent in
excess of the expenditure limitations can constitute qualified campaign
expenses. However, in attempting to read the two statutes together,
section 9035 may mean that candidates shall not incur expenses that
would otherwise be qualified except for the fact that they exceed the
section 441a expenditure limitations.
Additionally, it can be argued that the Fund Act and the Matching
Payment Act mandate identical results--namely, the repayment of
expenditures exceeding the spending limits--albeit in slightly
different ways. Arguably, there is no provision in the general election
Fund Act corresponding to section 9035 of the Matching Payment Act.
Consequently, it can be argued that this may be the reason why 26
U.S.C. 9007(b)(2) specifically mandates repayments from general
election committees for spending amounts that exceed their
entitlements. Under this interpretation, language corresponding to
section 9007(b)(2) is not needed in the Matching Payment Act because
repayments are already required when primary election committees make
non-qualified campaign expenses by violating the law, which they do
whenever they exceed the spending limits set forth in 2 U.S.C.
441a(b)(1) and 26 U.S.C. 9035.
This argument is supported by the court decision in John Glenn
Presidential Committee v. FEC, 822 F.2d 1097 (D.C. Cir. 1987)
(upholding the Commission's repayment determination against a publicly
funded primary election candidate for exceeding the state-by-state
expenditure limitations in the face of a constitutional challenge). The
Glenn opinion stated that ``campaign expenses are not ``qualified'' if
they exceed the limits Congress set, including the limits on spending
in each state. 26 U.S.C. 9035(a).'' Id. at 1099. See also, Kennedy for
President Committee v. FEC, 734 F.2d 1558, 1560 n. 1 (D.C. Cir. 1984)
(holding that ``[u]nder 26 U.S.C. 9035, campaign expenditures are not
``qualified'' if they exceed certain spending limits, including
limitations on spending in each state during the presidential
primaries''). The state-by-state spending limits at issue in these two
cases are in section 441a(b)(1)(A) and (g) of the FECA. As discussed
below, these court decisions arguably require the Commission to order
repayments of matching funds used for unqualified purposes. Glenn at
1099, Kennedy at 1561.
The counter-argument is that the Glenn and Kennedy cases are not
dispositive because they did not involve alleged in-kind contributions
by third parties such as political party committees, and that such
contributions are not necessarily in the same pool of funds from which
a publicly funded campaign makes expenditures. The Glenn court
indicated that it was not ruling on a repayment determination involving
private funds. Glenn at 1098. However, on the other hand, in-kind
contributions to candidates are simultaneously treated as expenditures
by those candidates under section 431(8)(A)(i) and (9)(A)(i) of the
FECA, and must be reported as both contributions and expenditures under
11 CFR 104.13. In the past, the Commission has considered in-kind
contributions to be commingled with a publicly financed candidate's
other expenditures and subject to the candidate's expenditure
limitations.
F. Net Outstanding Campaign Obligations--Capital Assets
In determining a Presidential primary committee's net outstanding
campaign obligations (``NOCO''), section 9034.5(c)(1) permits
candidates to deduct 40% of the original cost of capital assets for
depreciation. Similarly, section 9004.9(d)(1) provides for a straight
40% depreciation figure for capital assets purchased by general
election campaign committees for purposes of the general election
committee's statement of net outstanding qualified campaign expenses
(``NOQCE''). At one time, the Commission had permitted all Presidential
candidates to demonstrate that a higher depreciation was appropriate
for capital assets. In 1995, as part of an effort to streamline the
audit process and to establish ``bright lines'' between primary
expenses and general election expenses, the Commission adopted the
straight 40% depreciation figure for all assets purchased after the
change in the regulations took effect. It was believed that situations
where the 40% figure was too low would be counterbalanced by situations
where the figure was too high. Experience during the 1996 Presidential
audits has shown that the 40% depreciation figure is
[[Page 69530]]
unrealistically low for capital assets such as vehicles, computer
systems, telephone systems, and other equipment that is heavily used
during a Presidential primary campaign.
Accordingly, the Commission seeks comments on the attached changes
to section 9034.5(c)(1), which would allow primary candidates to
demonstrate a higher depreciation figure through documentation of the
fair market value. However, the proposed amendment to this rule would
not permit a fair market value below 60% of the purchase price to be
claimed by the primary committee of a candidate that transfers or sells
capital assets to his or her publicly financed general-election
committee. This proposal recognizes that capital assets such as
computer systems or telecommunications systems are customized or
configured specifically to meet the needs of that particular campaign
organization. It also takes into account the added value to the
campaign staff of continuing to work with familiar equipment, and
avoiding the disruption that would occur if new equipment were
obtained, instead.
Under a parallel change proposed for 11 CFR 9004.9(d), when the
general election campaign is over, the general election committee may
demonstrate that its capital assets have depreciated by more than 40%
of the original cost. However, in the case of assets transferred or
sold to it by the candidate's primary committee, the proposed rules
indicate that the purchase price must be 60% of the original cost of
such assets to the candidate's primary committee. Once the campaign is
over, the draft regulations would indicate that the fair market value
listed on the NOQCE statement must be 20% of the original cost to the
primary committee. Under this approach, campaigns would not have the
option of demonstrating that an amount less than 20% is appropriate.
Based on past experience, the Commission believes that a 20% residual
value is a realistic figure for equipment that has been used throughout
both the primary and general election campaigns.
The second change included in these sections is a clarification of
the term ``capital asset.'' A new sentence would be added to sections
9004.9(d) and 9034.5(c)(1) to indicate that when the components of a
system such as a computer system or a telecommunications system are
used together and the total cost of the components exceeds $2000, the
entire system will be considered a capital asset. This proposal
conforms with the Commission's previous interpretation of its rules.
See Explanation and Justification for 11 CFR 9034.5, 60 F.R. 31868
(June 16, 1995). In addition, comments are sought on whether computer
software should be treated as a capital asset. In this regard, a
primary committee may lawfully transfer its computer programs to its
general election counterpart, but software licensing agreements may
restrict the resale of the software to third parties.
G. Transportation and Services Provided to the Media
Sections 9004.6 and 9034.6 contain provisions governing
expenditures by federally financed committees for transportation and
other services provided to representatives of the news media covering
the Presidential primary and general election campaigns. These rules
indicate that expenditures for these purposes will, in most cases, be
treated as qualified campaign expenses subject to the overall spending
limitations of sections 9003.2 and 9035.1.
However, sections 9004.6 and 9034.6 also allow committees to accept
limited reimbursement for these expenses from the media, and to deduct
any reimbursements received from the amount of expenditures subject to
the overall expenditure limitation. These rules set limits on the
amount of reimbursement that a committee can accept, and require
committees to repay a portion of any reimbursement that exceeds those
limits to the U.S. Treasury. Paragraphs (b) of these sections limit the
reimbursements to 110% of the media representative's pro rata share of
the actual cost of the transportation and services made available. The
regulations specify that the pro rata share is calculated by dividing
the total actual cost of the transportation and services provided by
the total number of individuals to whom such transportation and
services are made available. Under these provisions, the total number
of individuals includes committee staff, media personnel, Secret
Service and others.
During the last Presidential election cycle, questions arose
regarding both the types of ground services that could be charged to
the press and the reasonableness of the amounts billed to them.
Consequently, comments are sought as to whether these rules should be
revised to include lists of allowable and nonallowable expenses for
ground costs. Disputed items have included security services for the
press, sound and lighting equipment, press risers and camera platforms,
carpeting, bunting, skirts, railings, flags, and electrical service for
the press platforms. Also, comments are sought as to whether further
clarifications are needed to convey that Presidential campaign
committees may only charge a media representative for his or her own
pro rata share for meals, chairs on the press platform, seats on buses
and vans, and telephone lines in filing centers, and that media
representatives must not be expected to pay for services made available
to other members of the press or to campaign staff, volunteers, local
elected officials or others. The Commission recognizes that it may not
be as easy for campaigns to charge members of the press who do not
travel on the press plane because a local reporter, or other media
representative who is not traveling with the campaign, would not have
provided the campaign committee with a credit card number for billing
purposes. Please note that specific changes are not included in the
proposed rules which follow.
H. Documentation of Disbursements
Sections 9003.5(b)(1) and 9033.11(b)(1) set forth the documentation
publicly financed committees must provide for disbursements in excess
of $200. The documentation includes a canceled check that has been
negotiated by the payee. However, paragraphs (b)(1)(iv) of these
sections refer back to this canceled check without specifically
restating that it must be negotiated by the payee. To avoid possible
confusion, the attached rules which follow would change sections
9003.5(b)(1)(iv) and 9033.11(b)(1)(iv) by adding the words ``negotiated
by the payee.'' This change is consistent with the recent judicial
decision in Fulani v. Federal Election Commission, 147 F.3d 924 (D.C.
Cir. 1998).
Comments are also sought on revising sections 9003.5(b)(3)(ii) and
9033.11(b)(3(ii) to include a cross reference to the reporting
provisions that list examples of acceptable and unacceptable
descriptions of ``purpose.'' See 11 CFR 104.3(b)(3)(i)(B).
I. Matching Fund Documentation
During the 1996 Presidential election cycle, the Commission
instituted a new program whereby primary campaign committees may submit
contributions for matching fund payments through the use of digital
imaging technology such as computer CD ROMs, instead of submitting
paper photocopies of checks and deposit slips. The Commission is
considering expanding this program in several respects. First, new
language would be added to section 9036.1(b)(3) permitting the use of
digital imaging for committees' threshold submissions.
[[Page 69531]]
Second, proposed changes to section 9036.2(b)(1)(vi) would enable
primary committees to submit digital images of contributor
redesignations, reattributions and supporting statements and materials
to establish the matchability of contributions.
A corresponding change to 11 CFR 9038.1(b)(1) would add a
requirement that the primary committees maintain the original
documentation for possible Commission inspection during either the
matching fund stage or the subsequent audit. Campaign committees should
already have this documentation on hand. Consequently, maintaining and
producing this documentation upon request should not be burdensome.
J. Pre-Nomination Vice Presidential Committees
The Commission is seeking comments on a possible new rule to
clarify the status of expenditures made by political committees formed
by Vice Presidential candidates prior to their official nomination at
their parties' conventions. It has been the Commission's policy in the
past to permit such committees to make expenditures for the purpose of
defraying the travel, lodging and subsistence expenses of the eventual
Vice Presidential nominee and his or her entourage during the
nominating convention. However, in the most recent Presidential
election cycle, concerns have been raised that such committees have
raised substantially more money than what is needed for those purposes.
The Commission is concerned that Vice Presidential committees could be
used prior to the date of their nomination to supplement the limited
amounts that publicly funded Presidential candidates may spend on their
primary campaigns. Another concern is that some of those who have made
the maximum contribution permitted by the FECA to a Presidential
primary candidate may seek to evade these statutory limits by making
additional contributions to the campaign committee of the person chosen
to be that candidate's Vice Presidential running mate.
For this reason, the Commission is proposing to add new section
9035.3 to specify when the expenditures of Vice Presidential committees
should be treated as expenditures by the primary campaign of their
party's eventual nominee. Paragraph (a) of this new section would
provide that the payment of expenses incurred in connection with
seeking the nomination of a political party for the office of Vice
President of the United States shall be considered expenditures by the
candidate who obtains that political party's nomination for the office
of President of the United States. This new rule would apply only to
the campaign expenditures made by a candidate who becomes the Vice
Presidential nominee of his or her party, and not to others who lose
the Vice Presidential nomination. Comments are sought as to whether the
proposed regulation should be further restricted only to those
situations where the Vice Presidential candidate or that candidate's
campaign committee has acted in concert with the eventual Presidential
nominee or the Presidential nominee's primary committee.
Paragraph (b) of the new section would contain an exception to
permit a Vice Presidential candidate and his or her family and staff to
attend their party's nominating convention without having the cost of
their transportation, lodging, and subsistence attributed to the
party's Presidential candidate. The costs of raising funds for these
limited travel and subsistence expenses would also be excluded from the
definition of expenditure. Please note, if a Vice Presidential
committee has excess funds after the nomination, 11 CFR 113.2 would
govern the use of these funds.
Comments on alternative approaches are also sought. The Commission
notes that 2 U.S.C. 441a(b)(2) treats expenditures made on behalf of
Vice Presidential candidates as expenditures on behalf of their party's
Presidential nominee. See, also 11 CFR 110.8(f). However, this
provision is not applicable prior to the nomination of the Vice
Presidential candidate. At the time the FECA was enacted, Congress may
not have anticipated that both the Presidential candidates and their
running mates may be known well before the actual date of nomination.
In recent years the primaries in many states have been moved to earlier
dates in the election year. This means that Presidential candidates may
reach their primary spending limits earlier in the election year, which
may encourage the creation of Vice Presidential campaign committees at
an earlier stage of the process.
K. Nominating Conventions and Host Committees
1. Lost or Misplaced Items
Comments are sought on adding new paragraph (c) to section 9008.7
to address situations where equipment in the possession of convention
committees is lost or damaged. The proposed rule indicates that as a
general matter, the cost of lost or misplaced items may not be defrayed
with public funds. However, the Commission recognizes that there are
varying degrees of responsibility in this area. Accordingly, the
proposed rules would also provide that certain factors should be
considered, such as whether the committee demonstrates that it made
conscientious efforts to safeguard the missing equipment; whether the
committee sought or obtained insurance on the items; whether the
committee filed a police report; the type of equipment involved; and
the number and value of items that were lost. This approach is
consistent with the Commission's treatment of items lost or misplaced
by publicly funded candidates. See 11 CFR 9004.4(b)(8) and
9034.4(b)(8). Consequently, these provisions applicable to candidate
committees for the primary and general elections also contain similar
language to take into consideration whether a police report was filed.
2. Donations to Host Committees, Government Agencies, and
Municipalities
The Commission seeks comments on parallel amendments to section
9008.52(c)(1), which addresses the receipt of donations by host
committees, and section 9008.53(b)(1), which addresses the receipt of
donations by government agencies and municipal corporations. One change
would be to specifically allow local banks to donate funds and make in-
kind donations for the limited purposes described in these rules. These
amendments would supersede, in part, Advisory Opinions 1995-31 and
1995-32.
The second set of parallel changes to sections 9008.52(c)(1) and
9008.53(b)(1) would be to add the word ``local'' prior to
``individual,'' to clarify that only those who reside in the
metropolitan area of the convention city may donate funds or make in-
kind donations to host committees, government agencies and municipal
corporations. Please note that the new language is consistent with AO
1995-32 with respect to donations by individuals.
3. Permissible Host Committee Expenses
During the audits of the 1996 convention and host committees,
questions have been raised as to the scope of expenses that may be paid
by a host committee instead of a convention committee. Section
9008.52(c)(1) enumerates the types of expenses that host committees may
defray with donated funds. Section 9008.7(a) lists the types of
convention expenses that may be paid for using public funds. These two
sections of the regulations are not mutually exclusive. Nor do they
cover every conceivable type of expense that may arise.
[[Page 69532]]
Consequently, comments are sought as to whether one or both of these
provisions should be revised to provide greater specificity as to
allowable or nonallowable expenses for convention or host committees.
Disputed items have included: (1) Badges, passes or other types of
credentials used to gain entry to the convention hall or specific
locations within the hall; (2) electronic vote tabulation systems; and
(3) lighting and rigging costs, including paying stagehands, riggers,
projectionists, electricians, and producers. With respect to lighting
and rigging expenses, in particular, it can be difficult to distinguish
between the costs associated with improving the infrastructure of the
convention hall and the costs of producing and broadcasting the
convention proceedings to the general public or to those within the
convention hall.
The Commission is aware that the major political parties are
currently in the process of selecting the locations for their next
presidential nominating conventions, and that the party committees are
expected to enter into contractual agreements with the sites selected
before this rulemaking is completed. Thus, comments are sought as to
whether it would be preferable to defer consideration of this topic
until after the 2000 Presidential elections. Please note that specific
changes are not included in the proposed rules which follow.
L. Technical and Conforming Amendments
Three technical changes are also proposed. First, the definition of
``State'' in section 9032.11 would be updated by deleting the Canal
Zone and by adding American Samoa, which holds Presidential primaries
consisting of caucuses. Please note there is no corresponding provision
in the general election rules.
In section 9008.14, the term ``final repayment determinations''
would be replaced by ``repayment determinations.'' In paragraph (f)(3)
of section 9038.1, the phrase ``publicly released audit report'' would
be used instead of ``final audit report.'' These amendments would
conform with the changes in terminology made when the rules setting out
audit and repayment procedures were last revised in 1995.
Please note that the Commission has also initiated a rulemaking to
revise and reorganize the recordkeeping and reporting rules currently
located in 11 CFR 102.9, 104.3, and part 108. See Notice of Proposed
Rulemaking, 62 F.R. 50708 (Sept. 27, 1997). Accordingly, it may be
necessary to amend the citations found throughout the public funding
rules in subchapters E and F of Title 11, Code of Federal Regulations,
that refer back to these recordkeeping and reporting regulations.
In addition, the Commission has published separately final rules
modifying the candidate agreement provisions so that federally-financed
Presidential committees must electronically file their reports. See
Explanation and Justification, 63 F.R. 45679 (August 27, 1998). The
effective date for those regulations is November 13, 1998.
The Commission welcomes comments on the foregoing proposed
amendments to the public financing regulations, the issues raised in
this notice, and other aspects of the public financing process that
could be addressed in these regulations. No final decision has been
made by the Commission concerning any of the proposals contained in
this notice.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
These proposed rules will not, if promulgated, have a significant
economic impact on a substantial number of small entities. The basis
for this certification is that very few small entities will be affected
by these proposed rules, and the cost is not expected to be
significant. Further, any small entities affected have voluntarily
chosen to receive public funding and to comply with the requirements of
the Presidential Election Campaign Fund Act or the Presidential Primary
Matching Payment Account Act in these areas.
List of Subjects
11 CFR part 9003
Campaign funds, Reporting and recordkeeping requirements.
11 CFR part 9004
Campaign funds.
11 CFR part 9007
Administrative practice and procedure, Campaign funds.
11 CFR part 9008
Campaign funds, Political committees and parties, Reporting and
recordkeeping requirements.
11 CFR part 9032
Campaign funds.
11 CFR parts 9033, 9034 and 9035
Campaign funds, Reporting and recordkeeping requirements.
11 CFR part 9036
Administrative practice and procedure, Campaign funds, Reporting
and recordkeeping requirements.
11 CFR part 9038
Administrative practice and procedure, Campaign funds.
For the reasons set out in the preamble, it is proposed to amend
Subchapters E and F of Chapter I of Title 11 of the Code of Federal
Regulations as follows:
PART 9003--ELIGIBILITY FOR PAYMENTS
1. The authority citation for Part 9003 would continue to read as
follows:
Authority: 26 U.S.C. 9003 and 9009(b).
2. In Sec. 9003.5, paragraphs (b)(1)(iv) and (b)(3)(ii) would be
revised to read as follows:
Sec. 9003.5 Documentation of disbursements.
* * * * *
* * *
(1) * * *
(iv) If the purpose of the disbursement is not stated in the
accompanying documentation, it must be indicated on the canceled check
negotiated by the payee.
* * * * *
(3) * * *
(ii) Purpose means the full name and mailing address of the payee,
the date and amount of the disbursement, and a brief description of the
goods or services purchased. Examples of acceptable and unacceptable
descriptions of goods and services purchased are listed at 11 CFR
104.3(b)(3)(i)(B).
* * * * *
PART 9004-- ENTITLEMENT OF ELIGIBLE CANDIDATES TO PAYMENTS; USE OF
PAYMENTS
3. The authority citation for Part 9004 would continue to read as
follows:
Authority: 26 U.S.C. 9004 and 9009(b).
4. In Sec. 9004.4, paragraph (b)(8) would be revised to read as
follows:
Sec. 9004.4 Use of payments.
* * * * *
(b) * * *
(8) Lost or misplaced items. The cost of lost or misplaced items
may be considered a nonqualified campaign expense. Factors considered
by the Commission in making this determination shall include, but not
be limited to, whether the committee demonstrates that it made
conscientious efforts to safeguard the missing equipment; whether the
committee
[[Page 69533]]
sought or obtained insurance on the items; whether the committee filed
a police report; the type of equipment involved; and the number and
value of items that were lost.
5. In Sec. 9004.9, paragraph (d)(1) would be revised to read as
follows:
Sec. 9004.9 Net outstanding qualified campaign expenses.
* * * * *
(d)(1) Capital assets.
(i) For purposes of this section, the term capital asset means any
property used in the operation of the campaign whose purchase price
exceeded $2000 when acquired by the committee. Property that must be
valued as capital assets under this section includes, but is not
limited to, office equipment, furniture, vehicles and fixtures acquired
for use in the operation of the candidate's campaign, but does not
include property defined as ``other assets'' under paragraph (d)(2) of
this section. Capital assets include items such as computer systems and
telecommunications systems, if the equipment is used together and if
the total cost of all components that are used together exceeds $2000.
A list of all capital assets shall be maintained by the committee in
accordance with 11 CFR 9003.5(d)(1). The fair market value of capital
assets shall be considered to be 60% of the total original cost of such
items when acquired, except that items received after the date of
ineligibility must be valued at their fair market value on the date
acquired. A candidate may claim a lower fair market value for a capital
asset by listing that capital asset on the statement separately and
demonstrating, through documentation, the lower fair market value.
(ii) If capital assets are obtained from the candidate's primary
election committee, the purchase price shall be 60% of the original
cost of such assets to the candidate's primary election committee. For
purposes of the statement of net outstanding campaign expenses filed
after the end of the expenditure report period, the fair market value
of capital assets obtained from the candidate's primary election
committee shall be considered to be 20% of the original cost of such
assets to the candidate's primary election committee.
* * * * *
PART 9007--EXAMINATIONS AND AUDITS; REPAYMENTS
6. The authority citation for Part 9007 would continue to read as
follows:
Authority: 26 U.S.C. 9007 and 9009(b).
7. In Sec. 9007.2, the introductory material to paragraph (c), and
paragraphs (c)(1), (c)(2), (c)(2)(i), (d)(1) and (d)(3) would be
republished, and paragraphs (c)(2)(ii), (c)(3) and (d)(2) would be
revised to read as follows:
Sec. 9007.2 Repayments.
* * * * *
(c) Repayment determination procedures. The Commission's repayment
determination will be made in accordance with the procedures set forth
at paragraphs (c)(1) through (c)(4) of this section.
(1) Repayment determination. The Commission will provide the
candidate with a written notice of its repayment determination(s). This
notice will be included in the Commission's audit report prepared
pursuant to 11 CFR 9007.1(d) and will set forth the legal and factual
reasons for such determination(s), as well as the evidence upon which
any such determination is based. The candidate shall repay to the
United States Treasury in accordance with paragraph (d) of this
section, the amount which the Commission has determined to be
repayable.
(2) Administrative review of repayment determination. If a
candidate disputes the Commission's repayment determination(s), he or
she may request an administrative review of the determination(s) as set
forth in paragraph (c)(2)(i) of this section.
(i) Submission of written materials. A candidate who disputes the
Commission's repayment determination(s) shall submit in writing, within
60 calendar days after service of the Commission's notice, legal and
factual materials demonstrating that no repayment, or a lesser
repayment, is required. Such materials may be submitted by counsel if
the candidate so desires. The candidate's failure to timely raise an
issue in written materials presented pursuant to this paragraph will be
deemed a waiver of the candidate's right to raise the issue at any
future stage of proceedings including any petition for review filed
under 26 U.S.C. 9011(a).
(ii) Oral hearing. A candidate who submits written materials
pursuant to paragraph (c)(2)(i) of this section may at the same time
request in writing that the Commission provide such candidate with an
opportunity to address the Commission in open session to demonstrate
that no repayment, or a lesser repayment, is required. The candidate
should identify in this request the repayment issues he or she wants to
address at the oral hearing. If the Commission decides by an
affirmative vote of four (4) of its members to grant the candidate's
request, it will inform the candidate of the date and time set for the
oral hearing. At the date and time set by the Commission, the candidate
or candidate's designated representative will be allotted an amount of
time in which to make an oral presentation to the Commission based upon
the legal and factual materials submitted under paragraph (c)(2)(i) of
this section. The candidate or representative will also have the
opportunity to answer any questions from individual members of the
Commission.
(3) Repayment determination upon review. Before voting on whether
to issue any repayment determination(s) following an administrative
review pursuant to paragraph (c)(2) of this section, the Commission
will consider any submission made under paragraph (c)(2)(i) of this
section and any oral hearing conducted under paragraph (c)(2)(ii) of
this section, and may also consider any new or additional information
from other sources. A determination following an administrative review
that a candidate must repay a certain amount must be approved by an
affirmative vote of four (4) members of the Commission. The
determination will be accompanied by a written statement of reasons
supporting the Commission's determination(s). This statement will
explain the legal and factual reasons underlying the Commission's
determination(s) and will summarize the results of any investigation(s)
upon which the determination(s) are based.
(d) Repayment period. (1) Within 90 calendar days of service of the
notice of the Commission's repayment determination(s), the candidate
shall repay to the United States Treasury the amounts which the
Commission has determined to be repayable. Upon application by the
candidate, the Commission may grant an extension of up to 90 calendar
days in which to make repayment.
(2) If the candidate requests an administrative review of the
Commission's repayment determination(s) under paragraph (c)(2) of this
section, the time for repayment will be suspended until the Commission
has concluded its administrative review of the repayment
determination(s) and has approved by an affirmative vote of four (4) of
its members a post-administrative review repayment determination.
Within 30 calendar days after service of the notice of the Commission's
post-administrative review repayment determination(s), the candidate
shall repay to the United
[[Page 69534]]
States Treasury the amounts which the Commission has determined to be
repayable. Upon application by the candidate, the Commission may grant
an extension of up to 90 calendar days in which to make repayment.
(3) Interest shall be assessed on all repayments made after the
initial 90-day repayment period established at paragraph (d)(1) of this
section or the 30-day repayment period established at paragraph (d)(2)
of this section. The amount of interest due shall be the greater of:
(i) An amount calculated in accordance with 28 U.S.C. 1961(a) and
(b); or
(ii) The amount actually earned on the funds set aside or to be
repaid under this section.
* * * * *
PART 9008--FEDERAL FINANCING OF PRESIDENTIAL NOMINATING CONVENTIONS
8. The authority citation for Part 9008 would continue to read as
follows:
Authority: 2 U.S.C. 437, 438(a)(8); 26 U.S.C. 9008 and 9009(b).
9. In Sec. 9008.7, new paragraph (c) would be added, to read as
follows:
Sec. 9008.7 Use of funds.
* * * * *
(c) Lost or misplaced items. The cost of lost or misplaced items
may not be defrayed with public funds under certain circumstances.
Factors considered by the Commission in making this determination shall
include, but not be limited to, whether the committee demonstrates that
it made conscientious efforts to safeguard the missing equipment;
whether the committee sought or obtained insurance on the items;
whether the committee filed a police report; the type of equipment
involved; and the number and value of items that were lost.
10. Section 9008.14 would be revised to read as follows:
Sec. 9008.14 Petitions for rehearing; stays of repayment
determinations.
Petitions for rehearing following the Commission's repayment
determination and requests for stays of repayment determinations will
be governed by the procedures set forth at 11 CFR 9007.5 and 9038.5.
The Commission will afford convention committees the same rights as are
provided to publicly funded candidates under 11 CFR 9007.5 and 9038.5.
11. In Sec. 9008.52, the heading of paragraph (c) would be
republished and the introductory language of paragraph (c)(1) would be
revised to read as follows:
Sec. 9008.52 Receipts and disbursements of host committees.
* * * * *
(c) Receipt of donations from local businesses and organizations.
(1) Local businesses (including banks), local labor organizations,
and other local organizations or local individuals may donate funds or
make in-kind donations to a host committee to be used for the following
purposes:
* * * * *
12. In Sec. 9008.53, the heading of paragraph (b) would be
republished and the introductory language of paragraph (b)(1) would be
revised to read as follows:
Sec. 9008.53 Receipts and disbursements of government agencies and
municipal corporations.
* * * * *
(b) Receipt of donations to a separate fund or account.
(1) Local businesses (including banks), local labor organizations,
and other local organizations or local individuals may donate funds or
make in-kind donations to a separate fund or account of a government
agency or municipality to pay for expenses listed in 11 CFR 9008.52(c),
provided that:
* * * * *
PART 9032--DEFINITIONS
13. The authority citation for Part 9032 would continue to read as
follows:
Authority: 26 U.S.C. 9032 and 9039(b).
14. Section 9032.11 would be revised to read as follows:
Sec. 9032.11 State.
State means each State of the United States, Puerto Rico, American
Samoa, the Virgin Islands, the District of Columbia, and Guam.
PART 9033--ELIGIBILITY FOR PAYMENTS
15. The authority citation for Part 9033 would continue to read as
follows:
Authority: 26 U.S.C. 9003(e), 9033 and 9039(b).
16. In Sec. 9033.11, paragraphs (b)(1)(iv) and (b)(3)(ii) would be
revised to read as follows:
Sec. 9033.11 Documentation of disbursements.
* * * * *
(b) * * *
(1) * * *
(iv) If the purpose of the disbursement is not stated in the
accompanying documentation, it must be indicated on the canceled check
negotiated by the payee.
* * * * *
(3) * * *
(ii) Purpose means the full name and mailing address of the payee,
the date and amount of the disbursement, and a brief description of the
goods or services purchased. Examples of acceptable and unacceptable
descriptions of goods and services purchased are listed at 11 CFR
104.3(b)(3)(i)(B).
* * * * *
PART 9034--ENTITLEMENTS
17. The authority citation for Part 9034 would continue to read as
follows:
Authority: 26 U.S.C. 9034 and 9039(b).
18. In Sec. 9034.4, paragraphs (a)(3)(i), (a)(3)(iii), (b)(8),
(e)(1), and (e)(3) would be revised to read as follows:
Sec. 9034.4 Use of contributions and matching payments.
(a) * * *
(3) * * *
(i) Costs associated with the termination of political activity,
such as the costs of complying with the post election requirements of
the Act and other necessary administrative costs associated with
winding down the campaign, including office space rental, staff
salaries, and office supplies, shall be considered qualified campaign
expenses. A candidate may receive and use matching funds for these
purposes either after he or she has notified the Commission in writing
of his or her withdrawal from the campaign for nomination, or after the
date of the party's nominating convention, if he or she has not
withdrawn before the convention, or after the end of the expenditure
report period, if the candidate wins the nomination, whichever is
later.
* * * * *
(iii) For purposes of the expenditure limitations set forth in 11
CFR 9035.1, 100% of salary, overhead and computer expenses incurred
after a candidate's date of ineligibility, or after the end of the
expenditure report period, if the candidate wins the nomination,
whichever is later, may be treated as exempt legal and accounting
compliance expenses beginning with the first full reporting period
after the candidate's date of ineligibility or after the end of the
expenditure report period, whichever is later. For candidates who
continue to campaign or re-establish eligibility, this paragraph shall
not apply to expenses incurred during the period between the date of
[[Page 69535]]
ineligibility and the date on which the candidate either re-establishes
eligibility or ceases to continue to campaign.
* * * * *
(b) * * *
(8) Lost or misplaced items. The cost of lost or misplaced items
may be considered a nonqualified campaign expense. Factors considered
by the Commission in making this determination shall include, but not
be limited to, whether the committee demonstrates that it made
conscientious efforts to safeguard the missing equipment; whether the
committee sought or obtained insurance on the items; whether the
committee filed a police report; the type of equipment involved; and
the number and value of items that were lost.
* * * * *
(e) * * *
(1) General rule. Any expenditure for goods or services that are
used exclusively for the primary election campaign shall be attributed
to the limits set forth at 11 CFR 9035.1. Any expenditure for goods or
services that are used exclusively for the general election campaign
shall be attributed to the limits set forth at 11 CFR 110.8(a)(2), as
adjusted under 11 CFR 110.9(c). All expenditures for goods and services
that are used for both the primary and the general election campaigns
shall be attributed in accordance with paragraphs (e)(2) through (e)(7)
of this section.
* * * * *
(3) State or national campaign offices. Overhead expenditures
incurred in connection with state or national campaign offices shall be
attributed according to when the usage of the office occurs. Payroll
costs shall be attributed according to when the work is performed. For
purposes of this section, overhead expenditures shall have the same
meaning as set forth in 11 CFR 106.2(b)(2)(iii)(D). Expenses for usage
of offices or work performed on or before the date of the candidate's
nomination shall be attributed to the primary election, except for
periods when the office is used only by persons working full time on
general election campaign preparations.
* * * * *
19. In Sec. 9034.5, paragraph (c)(1) would be revised to read as
follows:
Sec. 9034.5 Net outstanding campaign obligations.
* * * * *
(c)(1) Capital assets. For purposes of this section, the term
capital asset means any property used in the operation of the campaign
whose purchase price exceeded $2000 when received by the committee.
Property that must be valued as capital assets under this section
includes, but is not limited to, office equipment, furniture, vehicles
and fixtures acquired for use in the operation of the candidate's
campaign, but does not include property defined as ``other assets''
under paragraph (c)(2) of this section. Capital assets include items
such as computer systems and telecommunications systems, if the
equipment is used together and if the total cost of all components that
are used together exceeds $2000. A list of all capital assets shall be
maintained by the committee in accordance with 11 CFR 9033.11(d). The
fair market value of capital assets shall be considered to be 60% of
the total original cost of such items when acquired, except that items
received after the date of ineligibility must be valued at their fair
market value on the date received. A candidate may claim a lower fair
market value for a capital asset by listing that capital asset on the
statement separately and demonstrating, through documentation, the
lower fair market value. If the candidate receives public funding for
the general election, a lower fair market value shall not be claimed
under this section for any capital assets transferred or sold to the
candidate's general election committee.
* * * * *
PART 9035--EXPENDITURE LIMITATIONS
20. The authority citation for Part 9035 would continue to read as
follows:
Authority: 26 U.S.C. 9035 and 9039(b).
21. Section 9035.1, is revised to read as follows:
Sec. 9035.1 Campaign expenditure limitation; compliance and
fundraising exemptions.
(a) Spending limit. (1) No candidate or his or her authorized
committee(s) shall knowingly incur expenditures in connection with the
candidate's campaign for nomination, which expenditures, in the
aggregate, exceed $10,000,000 (as adjusted under 2 U.S.C. 441a(c)),
except that the aggregate expenditures by a candidate in any one State
shall not exceed the greater of: 16 cents (as adjusted under 2 U.S.C.
441a(c)) multiplied by the voting age population of the State (as
certified under 2 U.S.C. 441a(e)); or $200,000 (as adjusted under 2
U.S.C. 441a(c)).
(2) The Commission will calculate the amount of expenditures
attributable to the overall expenditure limit or to a particular state
using the full amounts originally charged for goods and services
rendered to the committee and not the amounts for which such
obligations were settled and paid, unless the committee can demonstrate
that the lower amount paid reflects a reasonable settlement of a bona
fide dispute with the creditor.
(b) Allocation. Each candidate receiving or expecting to receive
matching funds under this subchapter shall also allocate his or her
expenditures in accordance with the provisions of 11 CFR 106.2.
(c) Compliance and fundraising exemptions. (1) A candidate may
exclude from the overall expenditure limitation of this section an
amount equal to 10% of all operating-expenditures for each report
period as an exempt legal and accounting compliance cost under 11 CFR
100.8(b)(15).
(2) A candidate may exclude from the overall expenditure limitation
of this section the amount of exempt fundraising costs specified in 11
CFR 100.8(b)(21)(iii).
(d) Candidates not receiving matching funds. The expenditure
limitations of this section shall not apply to a candidate who does not
receive matching funds at any time during the matching payment period.
22. Section 9035.3 would be added to read as follows:
Sec. 9035.3 Expenditures by Vice Presidential candidates.
(a) In the case of a candidate who obtains a political party's
nomination for the office of Vice President of the United States, any
expenditures made in connection with seeking that Vice Presidential
nomination shall be considered expenditures by the publicly funded
candidate who obtains that political party's nomination for the office
of President of the United States, except as provided in paragraph (b)
of this section.
(b) The payment of expenses incurred by a Vice Presidential
candidate, the candidate's family, and the candidate's authorized
committee's staff to attend a political party's national nominating
convention, including the cost of transportation, lodging, and
subsistence, and the costs of raising funds for these expenses, will
not be considered an expenditure by the candidate who obtains that
political party's nomination for the office of President of the United
States.
23. The title of part 9036 would be revised to read as follows:
[[Page 69536]]
PART 9036--REVIEW OF MATCHING FUND SUBMISSIONS AND CERTIFICATION OF
PAYMENTS BY COMMISSION
24. The authority citation for Part 9036 would continue to read as
follows:
Authority: 26 U.S.C. 9036 and 9039(b).
25. In Sec. 9036.1, paragraph (b)(3) would be revised to read as
follows:
Sec. 9036.1 Threshold submission.
* * * * *
(b) * * *
(3) The candidate shall submit a full-size photocopy of each check
or written instrument and of supporting documentation in accordance
with 11 CFR 9034.2 for each contribution that the candidate submits to
establish eligibility for matching funds. For purposes of the threshold
submission, the photocopies shall be segregated alphabetically by
contributor within each State, and shall be accompanied by and
referenced to copies of the relevant deposit slips. In lieu of
submitting photocopies, the candidate may submit digital images of
checks and other materials in accordance with the procedures specified
in 11 CFR 9036.2(b)(1)(vi). Digital images of contributions do not need
to be segregated alphabetically by contributor within each State.
* * * * *
26. In Sec. 9036.2, paragraph (b)(1)(vi) would be revised to read
as follows:
Sec. 9036.2 Additional submissions for matching fund payments.
* * * * *
(b) * * *
(1) * * *
(vi) The photocopies of each check or written instrument and of
supporting documentation shall either be alphabetized and referenced to
copies of the relevant deposit slip, but not segregated by State as
required in the threshold submission; or such photocopies may be
batched in deposits of 50 contributions or less and cross-referenced by
deposit number and sequence number within each deposit on the
contributor list. In lieu of submitting photocopies, the candidate may
submit digital images of checks, written instruments and deposit slips
as specified in the Computerized Magnetic Media Requirements. The
candidate may also submit digital images of contributor redesignations,
reattributions and supporting statements and materials needed to verify
the matchability of contributions. The candidate shall provide the
computer equipment and software needed to retrieve and read the digital
images, if necessary, at no cost to the Commission, and shall include
digital images of every contribution received and imaged on or after
the date of the previous matching fund request. Contributions and other
documentation not imaged shall be submitted in photocopy form. The
candidate shall maintain the originals of all contributor
redesignations, reattributions and supporting statements and materials
that are submitted for matching as digital images.
* * * * *
PART 9038--EXAMINATIONS AND AUDITS
27. The authority citation for Part 9038 would continue to read as
follows:
Authority: 26 U.S.C. 9038 and 9039(b).
28. In Sec. 9038.1, a new sentence would be added to the end of
paragraph (b)(1) introductory text, and paragraph (f)(3) would be
revised, to read as follows:
Sec. 9038.1 Audit.
* * * * *
(b) * * *
(1) * * * Upon request, the committee shall produce the originals
of all contributor redesignations, reattributions and supporting
statements and materials that were submitted for matching as digital
images under 11 CFR 9036.2(b), in addition to the materials required
under 11 CFR 110.1(l).
* * * * *
(f) * * *
(3) Within 30 days of service of the publicly released Audit
Report, the committee shall submit a check to the United States
Treasury for the total amount of any excessive or prohibited
contributions not refunded, reattributed or redesignated in a timely
manner in accordance with 11 CFR 103.3(b)(1), (2) or (3); or take any
other action required by the Commission with respect to sample-based
findings.
29. In Sec. 9038.2, the introductory material to paragraph (c), and
paragraphs (c)(1), (c)(2), (c)(2)(i), (d)(1), and (d)(3) would be
republished, and paragraphs (c)(2)(ii), (c)(3) and (d)(2) would be
revised, to read as follows:
Sec. 9038.2 Repayments.
* * * * *
(c) Repayment determination procedures. The Commission's repayment
determination will be made in accordance with the procedures set forth
at paragraphs (c)(1) through (c)(3) of this section.
(1) Repayment determination. The Commission will provide the
candidate with a written notice of its repayment determination(s). This
notice will be included in the Commission's audit report prepared
pursuant to 11 CFR 9038.1(d), or inquiry report pursuant to 11 CFR
9039.3, and will set forth the legal and factual reasons for such
determination(s), as well as the evidence upon which any such
determination is based. The candidate shall repay to the United States
Treasury in accordance with paragraph (d) of this section, the amount
which the Commission has determined to be repayable.
(2) Administrative review of repayment determination. If a
candidate disputes the Commission's repayment determination(s), he or
she may request an administrative review of the determination(s) as set
forth in paragraph (c)(2)(i) of this section.
(i) Submission of written materials. A candidate who disputes the
Commission's repayment determination(s) shall submit in writing, within
60 calendar days after service of the Commission's notice, legal and
factual materials demonstrating that no repayment, or a lesser
repayment, is required. Such materials may be submitted by counsel if
the candidate so desires. The candidate's failure to timely raise an
issue in written materials presented pursuant to this paragraph will be
deemed a waiver of the candidate's right to raise the issue at any
future stage of proceedings including any petition for review filed
under 26 U.S.C. 9041(a).
(ii) Oral hearing. A candidate who submits written materials
pursuant to paragraph (c)(2)(i) of this section may at the same time
request in writing that the Commission provide such candidate with an
opportunity to address the Commission in open session to demonstrate
that no repayment, or a lesser repayment, is required. The candidate
should identify in this request the repayment issues he or she wants to
address at the oral hearing. If the Commission decides by an
affirmative vote of four (4) of its members to grant the candidate's
request, it will inform the candidate of the date and time set for the
oral hearing. At the date and time set by the Commission, the candidate
or candidate's designated representative will be allotted an amount of
time in which to make an oral presentation to the Commission based upon
the legal and factual materials submitted under paragraph (c)(2)(i) of
this section. The candidate or representative will also have the
opportunity to answer any questions from individual members of the
Commission.
(3) Repayment determination upon review. Before voting on whether
to
[[Page 69537]]
issue any repayment determination(s) following an administrative review
pursuant to paragraph (c)(2) of this section, the Commission will
consider any submission made under paragraph (c)(2)(i) of this section
and any oral hearing conducted under paragraph (c)(2)(ii), and may also
consider any new or additional information from other sources. A
determination following an administrative review that a candidate must
repay a certain amount must be approved by an affirmative vote of four
(4) members of the Commission. The determination will be accompanied by
a written statement of reasons supporting the Commission's
determination(s). This statement will explain the legal and factual
reasons underlying the Commission's determination(s) and will summarize
the results of any investigation(s) upon which the determination(s) are
based.
(d) Repayment period. (1) Within 90 calendar days of service of the
notice of the Commission's repayment determination(s), the candidate
shall repay to the United States Treasury the amounts which the
Commission has determined to be repayable. Upon application by the
candidate, the Commission may grant an extension of up to 90 calendar
days in which to make repayment.
(2) If the candidate requests an administrative review of the
Commission's repayment determination(s) under paragraph (c)(2) of this
section, the time for repayment will be suspended until the Commission
has concluded its administrative review of the repayment
determination(s) and has approved by an affirmative vote of four (4) of
its members a post-administrative review repayment determination.
Within 30 calendar days after service of the notice of the Commission's
post-administrative review repayment determination(s), the candidate
shall repay to the United States Treasury the amounts which the
Commission has determined to be repayable. Upon application by the
candidate, the Commission may grant an extension of up to 90 calendar
days in which to make repayment.
(3) Interest shall be assessed on all repayments made after the
initial 90-day repayment period established at paragraph (d)(1) of this
section or the 30-day repayment period established at paragraph (d)(2)
of this section. The amount of interest due shall be the greater of:
(i) An amount calculated in accordance with 28 U.S.C. 1961(a) and
(b); or
(ii) The amount actually earned on the funds set aside under this
section.
* * * * *
Dated: December 11, 1998.
Scott E. Thomas,
Acting Chairman, Federal Election Commission.
[FR Doc. 98-33316 Filed 12-15-98; 8:45 am]
BILLING CODE 6715-01-P