[Federal Register Volume 65, Number 56 (Wednesday, March 22, 2000)]
[Rules and Regulations]
[Pages 15221-15224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-7109]


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FEDERAL ELECTION COMMISSION

11 CFR Part 108

[Notice 2000-4]


Filing Copies of Campaign Finance Reports and Statements With 
State Officers

AGENCY: Federal Election Commission.

ACTION: Final rules; transmittal of regulations to Congress.

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SUMMARY: The Federal Election Commission is revising its regulations 
that govern filing of campaign finance reports with State officers and 
the duties of State officers concerning the reports. The revisions 
implement amendments to the Federal Election Campaign Act that exempt 
States meeting certain criteria from these requirements.

DATES: Further action, including the announcement of an effective date, 
will be taken after these regulations have been before Congress for 30 
legislative days pursuant to 2 U.S.C. 438(d). A document announcing the 
effective date will be published in the Federal Register.

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

SUPPLEMENTARY INFORMATION: The Federal Election Campaign Act (``FECA'' 
or the ``Act''), 2 U.S.C. 431 et seq., at 2 U.S.C. 439(a) requires all 
persons who file campaign finance reports and statements under the Act 
to file copies of these documents with the Secretary of State, or the 
officer charged by state law with maintaining state election campaign 
reports, in each State where contributions were received or 
expenditures made on behalf of a Federal candidate or candidates 
appearing on that State's ballot. Under 2 U.S.C. 439(b), these officers 
must receive and maintain the documents for two years after their date 
of receipt, and must make them available for public inspection and 
copying during regular business hours.
    In 1995, Congress enacted 2 U.S.C. 439(c), which exempts from these 
receipt and maintenance requirements any State that the Commission 
determines to have in place a system that permits electronic access to 
and duplication of reports and statements that are filed with the 
Commission. Pub. L. 104-79, 109 Stat. 791, section 2. If the Commission 
does not make this determination, the State remains obligated to 
maintain copies of the statements and disclosure reports that have been 
filed with it. These new rules revise the Commission's regulations at 
11 CFR Part 108 to reflect this statutory change.
    In September 1997, the Commission published a Notice of Proposed 
Rulemaking (``NPRM'') that proposed a number of revisions to the 
Commission's recordkeeping and reporting requirements, including those 
addressed in this document, and corresponding changes to the relevant 
disclosure forms. 62 FR 50708 (Sept. 26, 1997). The Commission received 
three written comments in response to the NPRM, two of which addressed 
the state filing issues: one from the Secretary of State of South 
Dakota, and one from David S. Addington, Esq. In addition, the Internal 
Revenue Service submitted a comment in which it said that the proposed 
rules were not inconsistent with their regulations or the Internal 
Revenue Code. On February 11, 1998, the Commission held a public 
hearing on the NPRM at which one witness testified but did not discuss 
waivers of state filing requirements. One further comment was submitted 
in response to the announcement of the hearing.
    The Commission has decided to proceed separately with this portion 
of the rulemaking, both because these issues are more straightforward 
than those addressed in other parts of the NPRM, and because the 
Commission is in the process of granting waivers pursuant to section 
439(c) to States that meet certain requirements.

[[Page 15222]]

    Section 438(d) of Title 2, United States Code, requires that any 
rules or regulations prescribed by the Commission to carry out the 
provisions of Title 2 of the United States Code be transmitted to the 
Speaker of the House of Representatives and the President of the Senate 
30 legislative days before they are finally promulgated. These 
regulations were transmitted to Congress on March 17, 2000.

Explanation and Justification

Part 108--Filing Copies of Reports and Statements with State Officers

Section 108.1  Filing Requirements
    Section 11 CFR 108.1, which sets out the general filing 
requirements for statements and reports, is being divided into two 
paragraphs. Paragraph (a) generally follows the previous rule setting 
out the requirement for filing with the appropriate State offices, and 
references the new statutory exception. New paragraph (b) tracks the 
language of 2 U.S.C. 439(c), stating that the filing requirements and 
duties of State officers under 11 CFR part 108 shall not apply to a 
State if the Commission has determined that the State maintains a 
system that can electronically receive and duplicate reports and 
statements that are filed with the Commission. In addition, the 
Commission is exempting from these requirements reports and statements 
that are not filed with the Commission, but which can nevertheless be 
accessed electronically from the Commission's site on the World Wide 
Web, www.fec.gov.
    On October 14, 1999, the Commission approved a State filing waiver 
program to implement this provision of the Act. In order to qualify for 
the waiver, a State must certify that it has a system in place that 
ensures public Internet access to the FEC's web site, where visitors 
can view and copy reports and statements. The system must include at 
least one computer terminal that can electronically access the 
Commission's web page, with at least one printer, connected either 
directly or through a network. The State must also certify that it 
will, to the greatest extent possible, allow anyone requesting Federal 
campaign finance data to use the computer terminal at any time during 
regular business hours.
    Each State that wishes to obtain a waiver of the section 439 
receipt and maintenance requirements must submit a written 
certification to the Commission that describes its system for 
electronically receiving and duplicating reports from the Commission, 
and the extent to which that system is available to the public. If the 
system satisfies the above criteria, the Commission will so notify the 
State. It will also publish this information in the FEC Record, and 
place it on the Commission's web site. If a State fails to submit a 
such a certification, the Commission will be unable to make the 
requisite determination, and the State will remain subject to the 
section 439(a) and (b) receipt and maintenance requirements. A number 
of States have already obtained waivers through this process, and 
further requests are pending.
    Both commenters who addressed this issue objected to this portion 
of the proposed rule. They specifically questioned the NPRM's proposal 
to continue the obligation of a State to maintain duplicate reports if 
the Commission does not make the determination described above and, 
thus, the State does not meet the statutory requirements to be released 
from these duties. These commenters asserted that the provision is 
unconstitutional because the Federal Government cannot impose duties on 
State officers to execute Federal laws. Printz v. United States, 117 S. 
Ct. 2365, 2384 (1997) (invalidating the Brady Handgun Violence 
Prevention Act's requirement at 18 U.S.C. 922(s)(2) that the States' 
chief law enforcement officers conduct background checks on prospective 
handgun purchasers as an unconstitutional obligation on State officers 
to execute Federal laws); see also United States v. New York, 505 U.S. 
144 (1992) (invalidating provisions of the Low-Level Radioactive Waste 
Policy Act that required States to accept ownership of waste or to 
regulate it according to congressional instructions). They suggested 
that the Commission change the proposed rule to request, but not 
require, State offices to discharge the filing and maintenance duties 
set out in the statute and in the NPRM.
    While the Supreme Court has invalidated a number of Federal 
statutes imposing burdens on the States, the Commission believes that 2 
U.S.C. 439 would pass constitutional muster under Congress' authority 
to regulate the time, place and manner of holding Federal elections. 
U.S. Const., Art. I, sec. 4, cl. 1. See Foster v. Love, 118 S.Ct. 464 
(1997) (holding Louisiana's open primary system to violate 2 U.S.C. 1, 
7 (which imposes a uniform national election day), which was enacted 
pursuant to the Elections Clause); Smiley v. Holm, 285 U.S. 335, 366-67 
(1932) (Elections Clause encompasses congressional power to prevent 
``corrupt practices''); Ex Parte Siebold, 100 U.S. 371, 392 (1879) 
(``(T)he (Elections Clause) contemplates such co-operation (between the 
States and the Federal government) whenever Congress deems it expedient 
to alter or add to existing regulations of the State'' (emphasis 
added)); Condon v. Reno, 913 F.Supp. 946 (D. S.C. 1995) (holding as 
valid under the Elections Clause imposition upon States of National 
Voter Registration Act).
    As explained above, the Commission is not planning to force 
unwilling States to seek exemptions from the records receipt and 
maintenance requirements. Rather, the Commission is granting waivers 
from these requirements only to those States that request them. 
Moreover, the Commission has actively worked with the States to insure 
that the procedures to obtain a waiver are reasonable and not unduly 
burdensome.
    The Commission also considered whether the new regulations would 
trigger the requirements of the Unfunded Mandates Reform Act of 1995, 
Pub. L. 104-4, 109 Stat. 48. See 2 U.S.C. 658(1). That Act prohibits 
federal agencies from imposing costly new burdens on State governments 
unless certain procedures are followed. These include consulting State 
and local governments that would be affected by the new rules, and 
checking to determine whether Federal funds might be available to help 
with the cost of their implementation.
    The Commission believes the new rules do not trigger that Act, 
since the cost of implementation should fall far short of the 
$100,000,000 figure cited as the threshold for coverage. See 2 U.S.C. 
1532(a). Also, as part of the waiver program, the Commission is 
offering to provide participating offices with free computer equipment 
and free Internet access for the remainder of the 2000 election cycle, 
provided that the State agrees to provide the access effective March 1, 
2001, at its own expense. The Commission is also providing staff 
training and assistance with state efforts to publicize this program, 
to those States that request this.
    The final rules at part 108 are also consistent with Executive 
Order (``E.O.'') 13132, ``Federalism,'' which was issued on August 4, 
1999 and took effect on November 2, 1999. 64 FR 43255 (Aug. 10, 1999). 
The Commission is not subject to this Executive Order, which at section 
1(c) incorporates the definition of agency found in the Paperwork 
Reduction Act at 44 U.S.C. 3502(1). That definition specifically 
excludes the Commission, at 44 U.S.C. 3502(1)(B). However, the 
procedures the Commission has adopted to implement the waiver program 
are consistent with the Executive Order's emphasis on cooperation 
between the States and the

[[Page 15223]]

Federal Government in addressing matters of mutual concern.
    Please note that certain candidates and political committees do not 
file their reports directly with the Commission. Candidates for 
nomination for election or election to the office of United States 
Senator; authorized committees supporting such candidates; other 
political committees that support only Senate candidates; and the 
National Republican Senatorial Committee (``NRSC'') and the Democratic 
Senatorial Campaign Committees (``DSCC'') file their reports with the 
Secretary of the Senate, who in turn provides copies to the Commission. 
2 U.S.C. 432(g)(1); 11 CFR 105.2.
    At its current level of technology, the Secretary of the Senate is 
unable to provide to the Commission copies of reports from Senate 
candidates and most unauthorized committees supporting Senate 
candidates in a form that can be reproduced on the Internet. Thus, 
these reports cannot currently be accessed electronically by State 
offices. Therefore, for the time being, copies of these reports must 
continue to be filed with the appropriate State office(s), and those 
offices must continue to maintain them and make them available to the 
public.
    However, the Commission now receives copies of reports filed by the 
NRSC and the DSCC in a format that can be reproduced over the Internet, 
so these reports are available on the Commission's web site. The 
Commission anticipates that, over time, reports filed by Senate 
candidates and other committees that support them will also become 
available on the web site. As this occurs, and as more States are 
certified to be eligible for a waiver, the responsibility of State 
offices to receive and maintain paper copies of these reports will 
diminish.
Section 108.2  Filing Copies of Reports and Statements in Connection 
with the Campaign of any Candidate Seeking Nomination for Election to 
the Office of President or Vice-President
    The Commission is adding a cross reference to new 11 CFR 108.1(b), 
the records receipt and maintenance exception, to the first sentence of 
this section.
Section 108.3  Filing Copies of Reports and Statements in Connection 
With the Campaign of any Congressional Candidate
    This section has been restructured to reflect the potential 
exemption. New paragraph (a) addresses Senate candidates, their 
authorized committees, committees that support only Senate candidates, 
and the NRSC and the DSCC, who must continue to file duplicate copies 
of reports with State officers, unless such reports are available on 
the Commission's web site, and the State has received a waiver pursuant 
to these rules. Paragraph (b) notes that other candidates and 
committees need not file duplicate reports in those States that have 
obtained a waiver pursuant to 2 U.S.C. 439(c). New paragraph (c) 
retains the language in the current rule stating that, for committees 
other than authorized committees, where reports cover activity in more 
than one State, the committees need file, and State offices retain, 
only those portions of reports that are applicable to candidates 
seeking election in that State. Please note that this applies only to 
States that have not obtained a waiver.
Section 108.4 Filing Copies of Reports by Committees Other Than 
Principal Campaign Committees
    The Commission has added a cross reference to new paragraph 11 CFR 
108.1(b) to this section, which requires unauthorized committees that 
file reports and statements in connection with Presidential elections 
to file copies with the State officer(s) of the State(s) in which both 
the recipient and the contributing committees have their headquarters. 
The Commission has also slightly reworded this section for clarity.
Section 108.6 Duties of State Officers
    The Commission has added a cross reference to new paragraph 11 CFR 
108.1(b) to this section, which provides guidance to State officers on 
how to organize, preserve and make available for public copying and 
inspection the reports and statements filed with those offices. It is 
also revising paragraph (b) to provide that paper or microfilm copies 
of documents that are available electronically from the Commission need 
not be kept for two years. This is consistent with the language at 2 
U.S.C. 439(b)(2), which states that covered documents must be kept for 
two years ``either in original filed form or in facsimile copy by 
microfilm or otherwise'' (emphasis added). The Commission interprets 
this to cover reports that it makes available through its web site, and 
its practice is to make electronic copies available for more than two 
years.
    The Commission is also adding a new paragraph (e) to this section, 
which allows States that obtain waivers to charge reasonable fees to 
those who access and copy campaign finance documents electronically. 
The new paragraph is consistent with paragraph (c) of this section, 
which allows States to charge reasonable fees to those making copies of 
paper or microfilm documents.
    The Commission is also correcting the reference in the introductory 
material to read ``108.6(a) through (e)''.

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

    The attached rules will not have a significant economic impact on a 
substantial number of small entities. The new rules conform to 
statutory amendments, and also reduce the reporting burden of affected 
entities. Therefore, these rules will not have a significant economic 
effect on a substantial number of small entities.

List of Subjects in 11 CFR Part 108

    Elections, Reporting and recordkeeping requirements.

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

PART 108--FILING COPIES OF REPORTS AND STATEMENTS WITH STATE 
OFFICERS (2 U.S.C. 439)

    1. The authority citation for Part 108 continues to read as 
follows:

    Authority: 2 U.S.C. 434(a)(2), 438(a)(8), 439, 453.

    2. Section 108.1 is amended by redesignating the text as paragraph 
(a), revising the first sentence of newly redesignated paragraph (a), 
and adding new paragraph (b) to read as follows:


Sec. 108.1  Filing Requirements (2 U.S.C. 439(a)(1)).

    (a) Except as provided in paragraph (b) of this section, a copy of 
each report and statement required to be filed by any person under the 
Act shall be filed either with the Secretary of State of the 
appropriate State or with the State officer who is charged by State law 
with maintaining state election campaign reports. * * *
    (b) The filing requirements and duties of State officers under this 
part 108 shall not apply to a State if the Commission has determined 
that the State maintains a system that can electronically receive and 
duplicate reports and statements filed with the Commission. Once a 
State has obtained a waiver pursuant to this paragraph, the waiver 
shall apply to all reports that can be electronically accessed and 
duplicated from the Commission, regardless of whether the

[[Page 15224]]

report or statement was originally filed with the Commission.

    3. Section 108.2 is amended by revising the first sentence to read 
as follows:


Sec. 108.2  Filing copies of reports and statements in connection with 
the campaign of any candidate seeking nomination for election to the 
Office of President or Vice-President (2 U.S.C. 439(a)(2)).

    Except as provided in Sec. 108.1(b), a copy of each report and 
statement required to be filed under the Act (including 11 CFR part 
104) by a Presidential or Vice Presidential candidate's principal 
campaign committee, or under 11 CFR 104.4 or part 109 by any other 
person making independent expenditures, in connection with a candidate 
seeking nomination for election to the office of President or Vice-
President, shall be filed with the State officer of each State in which 
an expenditure is made in connection with the campaign of a candidate 
seeking nomination for election to the office of President or Vice-
President. * * *

    4. Section 108.3 is revised to read as follows:


Sec. 108.3  Filing copies of reports and statements in connection with 
the campaign of any congressional candidate (2 U.S.C. 439(a)(2)).

    (a) Except as provided in Sec. 108.1(b), a copy of each report and 
statement required to be filed under 11 CFR part 104 by candidates, and 
the authorized committees of candidates, for nomination for election or 
election to the office of Senator; by other committees that support 
only such candidates; and by the National Republican Senatorial 
Committee and the Democratic Senatorial Campaign Committees shall be 
filed with the appropriate State officer of that State in which an 
expenditure is made in connection with the campaign.
    (b) Except as provided in Sec. 108.1(b), a copy of each report and 
statement required to be filed under 11 CFR part 104 by candidates, and 
authorized committees of candidates, for nomination for election or 
election to the office of Representative in, Delegate or Resident 
Commissioner to the Congress, or by unauthorized committees, or by any 
other person under 11 CFR part 109, in connection with these campaigns 
shall be filed with the appropriate State officer of that State in 
which an expenditure is made in connection with the campaign.
    (c) Unauthorized committees that file reports pursuant to paragraph 
(b) of this section are required to file, and the Secretary of State is 
required to retain, only that portion of the report applicable to 
candidates seeking election in that State.

    5. Section 108.4 is revised to read as follows:


Sec. 108.4  Filing copies of reports by committees other than principal 
campaign committees (2 U.S.C. 439(a)(2)).

    Except as provided in Sec. 108.1(b), any unauthorized committee 
that makes contributions in connection with a Presidential election and 
that is required to file a report(s) and statement(s) under the Act 
shall file a copy of such report(s) and statement(s) with the State 
officer of the State in which both the recipient and contributing 
committees have their headquarters.

    6. Section 108.6 is amended by revising the introductory text and 
paragraph (b), by removing the period and adding ``; and'' at the end 
of paragraph (d), and by adding new paragraph (e), to read as follows:


Sec. 108.6  Duties of State officers (2 U.S.C. 439(b)).

    Except as provided in Sec. 108.1(b), the Secretary of State, or the 
equivalent State officer, shall carry out the duties set forth in 
paragraphs (a) through (e) of this section:
* * * * *
    (b) Preserve such reports and statements (either in original form 
or in facsimile copy by microfilm or otherwise) filed under the Act for 
a period of 2 years from the date of receipt, except that reports and 
statements that can be accessed and duplicated electronically from the 
Commission need not be so preserved;
* * * * *
    (d) * * * ; and
    (e) If the State has received a waiver of these filing requirements 
pursuant to Sec. 108.1(b), allow access to and duplication of reports 
and statements covered by that waiver, except that such access and 
duplication shall be at the expense of the person making the request 
and at a reasonable fee.

    Dated: March 17, 2000.
Darryl R. Wold,
Chairman, Federal Election Commission.
[FR Doc. 00-7109 Filed 3-21-00; 8:45 am]
BILLING CODE 6715-01-P