[Federal Register Volume 64, Number 150 (Thursday, August 5, 1999)]
[Rules and Regulations]
[Pages 42584-42585]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-20181]


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FEDERAL ELECTION COMMISSION

11 CFR Part 9036

[NOTICE 1999-15]


Matching Credit Card and Debit Card Contributions in Presidential 
Campaigns

AGENCY: Federal Election Commission.

ACTION: Final rules and transmittal of regulations to Congress.

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SUMMARY: On June 10, 1999, the Commission approved new regulations that 
allow contributions made by credit or debit card, including 
contributions made over the Internet, to be matched under the 
Presidential Primary Matching Payment Account Act. ``Matchable 
contributions'' are those which, when received by candidates who 
qualify for payments under the Matching Payment Act, are matched by the 
Federal Government. The rules published today provide general guidance 
on the documentation that must be provided before credit and debit card 
contributions will be matched, and state that more detailed guidance 
will be found in the Commission's Guideline for Presentation in Good 
Order.

DATES: Further action, including the publication of a document in the 
Federal Register announcing an effective date, will be taken after 
these regulations have been before Congress for 30 legislative days 
pursuant to 26 U.S.C. 9039(c).

FOR FURTHER INFORMATION CONTACT: Rosemary C. Smith, Acting Assistant 
General Counsel, or Rita A. Reimer, Attorney, 999 E Street, NW, 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530 (toll free).

SUPPLEMENTARY INFORMATION: On June 17, 1999, the Commission published 
revisions to its regulations at 11 CFR 9034.2 and 9034.3 to permit the 
matching of credit card and debit card contributions, including 
contributions received over the Internet, under the Presidential 
Primary Matching Payment Account Act, 26 U.S.C. 9031 et seq. 
(``Matching Payment Act''). 64 FR 32394. In that document the 
Commission announced that further documentation requirements for these 
contributions would be addressed in the Commission's upcoming rules 
concerning the public financing of presidential primary and general 
election campaigns. Id. The Commission is publishing this separate 
document for this purpose in order to give the regulated community the 
earliest possible guidance in this area.
    Under the Matching Payment Act, if a candidate for the presidential 
nomination of his or her party agrees to certain conditions and raises 
in excess of $5,000 in contributions of $250 or less from residents of 
each of at least 20 States, the first $250 of each eligible 
contribution is matched by the Federal Government. 26 U.S.C. 9033, 
9034. In the past, the Commission declined to match credit card 
contributions, although it has permitted campaign committees to accept 
them. The Commission has always held contributions submitted for 
matching to a higher documentation standard because the matching fund 
program involves the disbursement of millions of dollars in taxpayer 
funds. However, the Commission decided earlier this year such 
contributions should be matched, if appropriate safeguards and 
procedures were in place to guard against the receipt of excessive and 
prohibited contributions.
    On December 16, 1998, the Commission published a Notice of Proposed 
Rulemaking (``NPRM'') in which it sought comments on a wide range of 
issues involved in the public financing of presidential primary and 
general election campaigns. 63 F.R. 69524 (Dec. 16, 1998). Several of 
those who commented on the NPRM and several witnesses who testified at 
the Commission's March 24, 1999 public hearing on the NPRM urged the 
Commission to match qualified contributions made by credit or debit 
card over the Internet. After considering the comments, testimony and 
other relevant material, the Commission decided to authorize the 
matching of such contributions as long as safeguards were present to 
limit the possibility of fraudulent, illegal or excessive 
contributions. See Explanation and Justification to the Federal 
Election Commission's Rules Addressing Matching Credit Card and Debit 
Card Contributions in Presidential Campaigns, 64 F.R. 32394 (June 17, 
1999). The new rules are codified at 11 CFR 9034.2(b) and (c), and 11 
CFR 9034.3(c). The Commission also approved an Advisory Opinion, AO 
1999-9, that authorized the matching of Internet contributions, but 
made its approval contingent on the expiration of the Congressional 
review period discussed below.
    Section 9039(c) of Title 26, United States Code, requires that any 
rules or regulations prescribed by the Commission to carry out the 
provisions of the Matching Payment Act be transmitted to the Speaker of 
the House of Representatives and the President of the Senate 30 
legislative days before they are finally promulgated.
    The regulations at 11 CFR 9034.2 and 9034.3 on matching credit card 
and debit card contributions were sent to Congress on June 11, 1999. 
The legislative review period for those rules has not yet expired. 
However, if those rules are disapproved, then the new rules at 11 CFR 
9036.1 and 9036.2 would not take effect, because they are a corollary 
to the earlier rules. The revisions to 9036.1 and 9036.2 are also 
subject to their own legislative review period, which began when they 
were transmitted to Congress on Aug. 2, 1999.
    The Commission announced in the June 17, 1999 document that, unless 
Congress and the President enact legislation disapproving the 
amendments to 11 CFR 9034.2 and 9034.3, these changes will apply 
retroactively to contributions made on January 1, 1999 and thereafter. 
The same is true of these further regulations.

Explanation and Justification

Section 9036.1  Threshold Submission

    This section sets forth the requirements a candidate must meet in 
making the threshold submission to the Commission, that is, the 
submission in which the candidate demonstrates that the requirements of 
26 U.S.C. 9033 and 9034 have been met. The Commission is adding a new 
paragraph (b)(7) to this section, dealing with credit and debit card 
contributions, and renumbering paragraphs (b)(7) and (b)(8) as 
paragraphs (b)(8) and (b)(9), respectively.
    The Commission has issued several Advisory Opinions dealing with 
the Internet, see, e.g., AO's 1995-9, 1995-35, 1997-16, 1999-7, 1998-
22, and 1999-9. It has also initiated a project to determine the 
potential impact of the Internet on various aspects of political 
committees' operations. It has become clear to the Commission that even 
cutting-edge advancements in computer technology may quickly become 
obsolete. Consequently, the Commission has decided to include the 
technical requirements for making these submissions in its Guideline 
for Presentation in Good Order, commonly known as ``PIGO.'' Therefore, 
paragraph (b)(7) states without further elaboration that, in the case 
of a contribution made by a credit or debit card, including one

[[Page 42585]]

made over the Internet, the candidate shall provide sufficient 
documentation to the Commission to insure that each such contribution 
was made by a lawful contributor who manifested an intention to make 
the contribution to the campaign committee that submits it for matching 
fund payments. It further states that additional information on the 
documentation required to accompany such contributions will be found in 
PIGO. This approach will enable the Commission to update the technical 
requirements much more rapidly than would be possible if these 
requirements were to be included in the text of the rules.
    The Commission notes, however, that PIGO has been incorporated by 
reference into the rules, and therefore is binding on candidates and 
their campaigns. 11 CFR 9036.1(b)(7), 9036.2(b). A candidate seeking 
matching funds for his or her presidential campaign must first sign a 
candidate agreement that provides, inter alia, that the candidate and 
the candidate's authorized committee(s) will prepare matching fund 
submissions in accordance with PIGO requirements. 11 CFR 9033.1(a)(9). 
Contributions submitted for matching will therefore not be matched 
unless these procedures are followed.

Section 9036.2  Additional Submissions for Matching Fund Payments

    This section contains information on how subsequent submissions for 
matching fund payments, i.e., those made after the threshold 
submission, should be made. For the most part these requirements are 
identical to those for threshold submissions, except that additional 
submissions need not break down contributions by State, as is required 
of threshold submissions.
    New paragraph (b)(1)(vii) of this section is identical to new 
paragraph 11 CFR 9036.1(b)(7), discussed supra. The new paragraph 
reinforces the requirement found in the introductory language of 
paragraph (b) of this section, which states that all additional 
submissions for matching fund payments shall be made in accordance with 
PIGO.

Certification of No Effect Pursuant to 5 U.S.C. Sec. 605(b) 
(Regulatory Flexibility Act)

    The attached final rules will not, if promulgated, have a 
significant economic impact on a substantial number of small entities. 
The basis for this certification is that these regulations do not 
affect a substantial number of entities, and most of the covered 
entities are not ``small entities'' for purposes of the Regulatory 
Flexibility Act. Therefore the rules would not have a significant 
economic effect on a substantial number of small entities.

List of Subjects

11 CFR Part 9036

    Administrative practice and procedure, Campaign funds, 
Recordkeeping and reporting requirements.

    For the reasons set forth in the preamble, Subchapter F, Chapter I 
of Title 11 of the Code of Federal Regulations is amended to read as 
follows:

PART 9036--REVIEW OF SUBMISSION AND CERTIFICATION OF PAYMENTS BY 
COMMISSION

    1. The authority citation for Part 9036 continues to read as 
follows:

    Authority: 26 U.S.C. 9036 and 9039(b).

    2. Section 9036.1 is amended by redesignating paragraphs (b)(7) and 
(b)(8) as paragraphs (b)(8) and (b)(9), respectively, and by adding new 
paragraph (b)(7) to read as follows:


Sec. 9036.1  Threshold submission.

* * * * *
    (b) * * *
    (7) In the case of a contribution made by a credit or debit card, 
including one made over the Internet, the candidate shall provide 
sufficient documentation to the Commission to insure that each such 
contribution was made by a lawful contributor who manifested an 
intention to make the contribution to the candidate or authorized 
committee that submits it for matching fund payments. Additional 
information on the documentation required to accompany such 
contributions is found in the Commission's Guideline for Presentation 
in Good Order. See 11 CFR 9033.1(b)(9).
* * * * *
    3. Section 9036.2 is amended by adding new paragraph (b)(1)(vii), 
to read as follows:


Sec. 9036.2  Additional submissions for matching fund payments.

* * * * *
    (b) * * *
    (1) * * *
    (vii) In the case of a contribution made by a credit or debit card, 
including one made over the Internet, the candidate shall provide 
sufficient documentation to the Commission to insure that each such 
contribution was made by a lawful contributor who manifested an 
intention to make the contribution to the candidate or authorized 
committee that submits it for matching fund payments. Additional 
information on the documentation required to accompany such 
contributions is found in the Commission's Guideline for Presentation 
in Good Order. See 11 CFR 9033.1(b)(9).
* * * * *
    Dated: August 2, 1999.
Scott E. Thomas,
Chairman, Federal Election Commission.
[FR Doc. 99-20181 Filed 8-4-99; 8:45 am]
BILLING CODE 6715-01-P