[Federal Register Volume 67, Number 54 (Wednesday, March 20, 2002)]
[Rules and Regulations]
[Pages 12834-12840]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6719]


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FEDERAL ELECTION COMMISSION

11 CFR Parts 100, 104, and 109

[Notice 2002-3]


Independent Expenditure Reporting

AGENCY: Federal Election Commission.

ACTION: Final rules and transmittal of regulations to Congress.

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SUMMARY: The Federal Election Commission is revising its regulations to 
implement statutory changes to the deadlines for filing certain reports 
of independent expenditures. Under the new law, reports of last minute 
independent expenditures (``24-hour reports'') must be actually 
received by the Commission or the Secretary of the Senate's office 
within 24 hours of the time the independent expenditure was made. To 
assist those who must meet this new reporting deadline, the revised 
rules allow reports of last minute independent expenditures to be filed 
by facsimile machine or electronic mail, unless the filer participates 
in the Commission's electronic filing program. Electronic filers must 
continue to file all reports of independent expenditures (24-hour 
reports as well as regularly scheduled reports) using the Commission's 
electronic filing system. Further information is provided in the 
supplementary information that follows.

DATES: Further action, including the announcement of an effective date, 
will be taken after these regulations have been before Congress for 30 
legislative days. 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. Cheryl Fowle, Attorney, 999 E Street, NW., 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Commission is issuing revised 
regulations at 11 CFR 100.19, 104.4, 104.5, 104.14, 104.18, 109.1 and 
109.2. These revised rules implement Public Law 106-346 (Department of 
Transportation and Related Agencies Appropriations Act, 2001, 114 Stat. 
1356 (2000)), which amended the Federal Election Campaign Act of 1971, 
2 U.S.C. 431 et seq., (``the Act'' or ``FECA''). Paragraphs (b) and (c) 
of 2 U.S.C. 434 require political committees and other persons making 
independent expenditures to file reports or statements if their 
independent expenditures exceed $250. In addition, if independent 
expenditures of $1,000 or more are made less than twenty (20) days but 
more than twenty-four (24) hours before the day of an election, an 
additional statement must be filed within 24 hours. Public Law 106-346 
required, inter alia, the Commission to issue rules requiring that 
reports of independent expenditures made less than twenty (20) days but 
more than twenty-four (24) hours before an election (``24-hour 
reports'') be received by the Commission or the Secretary of the 
Senate, as appropriate,\1\ within 24 hours of the time the independent 
expenditure was made. The statutory change permits those who must file 
24-hour reports to do so using facsimile machines or electronic mail, 
except for those required to file electronically (see 11 CFR 104.18). 
In addition to their 24-hour reports, persons other than political 
committees may file by fax or e-mail other reports of independent 
expenditures in accordance with the regular filing schedule (see 11 CFR 
104.5). Public Law 106-346 also requires the Commission to provide 
methods of verification of documents (other than requiring a signature 
on the document) for all purposes, including submission under penalty 
of perjury. These new filing methods are intended

[[Page 12835]]

to speed up disclosure and to provide political committees and other 
filers with more flexibility in choosing methods of compliance with 
reporting requirements. The new law requires these methods to be in 
place for elections occurring after January 1, 2001, subject to 
regulations to be promulgated by the Commission.
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    \1\ The Secretary of the United States Senate Office of Public 
Records is the proper recipient of reports of independent 
expenditures that either support or oppose only candidates for the 
United States Senate. 11 CFR 104.4(c)(2).
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    In addition to the amendments regarding independent expenditures, 
the new law also requires the Commission to amend its regulations to 
exclude from the definition of ``contribution'' loans that candidates 
receive from brokerage accounts, lines of credit, or other credit 
instruments as long as the loans were made under commercially 
reasonable terms and were from a source that provides such loans in the 
normal course of business. That topic is being addressed in a separate 
rulemaking. See Notice of Proposed Rulemaking, 65 Federal Register 
38576 (Wednesday, July 25, 2001).
    Before final promulgation of any rules or regulations to carry out 
the provisions of Title 2 of the United States Code, the Commission 
transmits the rules or regulations to the Speaker of the House of 
Representatives and the President of the Senate for a thirty 
legislative day review period. 2 U.S.C. 438(d). These rules on 
independent expenditure reporting were transmitted to Congress on March 
15, 2002.

Explanation and Justification

    The Commission published a Notice of Proposed Rulemaking (``NPRM'') 
in the Federal Register on May 9, 2001, 65 FR 23628 (May 9, 2001). The 
NPRM contained proposed rules at 11 CFR 100.19, 104.4, 104.5, 104.15, 
109.1 and 109.2 regarding, inter alia, when 24-hour reports are 
considered filed, the filing of 24-hour reports by facsimile machine or 
electronic mail, and a definition of when an independent expenditure is 
made. Additionally, the NPRM explicitly recognized that authorized 
committees may file reports of last-minute contributions (48-hour 
notices) using facsimile machines or the Commission's web site.
    The comment period ended on June 8, 2001. The Commission received 
one written comment from the James Madison Center for Free Speech 
(``Madison Center'').

Section 100.19  File, filed or filing (2 U.S.C. 434(a))

    The Commission's regulations at 11 CFR 100.19 define file, filed, 
and filing. The introductory text of this section states that a 
document is considered filed if it is: (a) Delivered to the appropriate 
filing office of the appropriate office, (b) sent by registered or 
certified mail and postmarked by midnight of the prescribed filing 
date--except for pre-election reports, or (c) electronically filed, and 
received and validated by the Commission's electronic filing system on 
or before 11:59 p.m. eastern time on the prescribed filing date. For 
clarification, the Commission has added a definition of ``document'' 
which mirrors the definition in the electronic filing regulations (11 
CFR 104.18). A document is any report, statement, notice or designation 
required by the Act to be filed with the Commission or the Secretary of 
the Senate.
    Paragraph (a) of this section states that a document is timely 
filed upon delivery to the Commission or Secretary of the Senate, as 
appropriate, by the close of the prescribed filing date. As explained 
below, revised paragraph (a) clarifies that the definition of ``timely 
filed'' is different for paper filers and electronic filers.
    Under paragraph (b) of section 100.19 of the previous regulations, 
24-hour reports were considered timely filed if they were deposited at 
a Post Office and were postmarked for certified or registered mail 
within 24 hours of the time the independent expenditure was made. Under 
Public Law 106-346 and the revised regulations at paragraph (b), 24-
hour reports will only be considered timely filed if they are received 
by the Commission or Secretary of the Senate within 24 hours of the 
time the expenditure was made. Thus, sending 24-hour reports by mail 
will no longer be a viable option because it is unlikely that these 
reports will be received by the Commission within 24 hours of the 
making of the expenditure.
    New paragraph (d) of section 100.19 defines ``timely filed'' with 
regard to 24-hour reports of independent expenditures. The new 
paragraph states that such reports are timely filed when they are 
received by the Commission or the Secretary of the Senate after a 
disbursement is made, or a debt reportable under 11 CFR 104.11(b) is 
incurred, for the independent expenditure, but no later than 24 hours 
from the time the independent expenditure is made. The new paragraph 
also states that such 24-hour reports may be filed by facsimile machine 
or electronic mail, in addition to other permissible means of filing 
(e.g., hand delivery or overnight courier).
    New paragraph (e) expressly incorporates the Commission's practice 
of allowing authorized committees to file their reports of 
contributions of $1,000 or more made less than twenty (20) days but 
more than forty-eight (48) hours before the day of an election (48-hour 
reports) using a fax machine or the Commission's web site. This change 
does not stem from Pub. L. 106-346. Rather, the Commission has for some 
time allowed authorized committees (if they are not electronic filers) 
to file these reports by facsimile machine in addition to other 
permissible filing methods. See Advisory Opinion (``AO'') 1988-32. In 
the fall of 2000, the Commission began allowing all authorized 
committees who file with the Commission (including electronic filers) 
to file 48-hour reports on-line through the Commission's web site. Note 
that 48-hour reports filed with the Secretary of the Senate cannot be 
filed using the on-line program at the Commission's web site. They can, 
however be filed by fax to the Secretary of the Senate. New paragraph 
(e) of 11 CFR 100.19 specifically incorporates those filing methods in 
the regulations. The Commission received no comments on this section.
    Note that the final rules differ from the rule proposed in the NPRM 
with regard to the web based filing of 48-hour reports. The proposed 
rule stated that only those who do not file electronically could use 
the Web based filing system implemented in the autumn of 2000. The 
Commission currently allows electronic filers to file 48 hour reports 
using either the electronic filing program or on the Commission's web 
site. Thus the final rules allow all authorized committees (including 
those who participate in the electronic filing program) to file their 
48-hour notices using the Commission's web site.

Section 104.4  Independent Expenditures by Political Committees (2 
U.S.C. 434(c))

    The Commission's regulations at 11 CFR 104.4 set forth the 
requirements for political committees reporting independent 
expenditures. Paragraph (b) of this section is being revised in three 
respects. First, this paragraph is being revised to state that 24-hour 
reports must be received by the appropriate officers (the Commission or 
Secretary of the Senate) within 24 hours of the time the independent 
expenditure is made. Such reports were previously timely if they were 
postmarked as certified or registered mail within 24 hours of the 
making of the independent expenditure.
    Second, to enable filers to meet the new deadline, amended 
paragraph (b) of section 104.4 permits political committees to file 24-
hour reports by facsimile machine or electronic mail, as

[[Page 12836]]

long as the filer is not part of the electronic filing program under 11 
CFR 104.18.
    Third, section 104.4(b) is being modified to make it easier for 
political committees to certify the independence of the expenditures 
falling under this paragraph. Schedule E contains a notarized 
certification under penalty of perjury as to whether the committee's 
expenditures were ``coordinated'' with any candidate, authorized 
committee or agent thereof, and, if the independent expenditures were 
made by a corporation, that the maker is a qualified nonprofit 
corporation (see 11 CFR 114.10). No other campaign finance reports 
filed with the Commission or the Secretary of the Senate need to be 
notarized.
    Public Law 106-346 at Sec. 502(a) requires the Commission to create 
methods, other than by requiring a signature on the document, of 
verifying the independent expenditure certification on 24-hour reports 
for all purposes, including penalties of perjury. Consequently, the 
revised regulations allow the 24-hour report filer to verify the report 
using self-verification. This means that Schedule E no longer needs to 
be notarized. Instead, the political committee must self-verify the 
document using either a handwritten signature of the treasurer on a 
paper document or by typing the treasurer's name on e-mailed documents. 
The Commission intends to make the appropriate conforming amendments to 
Schedule E after the promulgation of these rules. This will extend 
self-verification to all reports of independent expenditures, including 
those made before the 20th day before the election and those that 
exceed $250 but are under $1000.
    New paragraphs (b) (1) and (2) of 11 CFR 104.4 set forth two 
methods for verifying 24-hour reports of independent expenditures. 
Paper reports (e.g., filed by hand delivery or fax machine), must be 
verified by the filer's signature under the certification of 
independence. Reports filed by electronic mail must be verified by the 
filer typing his or her name under the certification.
    As an alternative to self-verification, the NPRM sought comments on 
retaining the notarization requirement for faxed reports and requiring 
electronic notarizations for e-mailed reports. Additionally, the 
Commission sought comments on using digital signatures verified by a 
``Trusted Third Party'' for e-mailed reports. Digital signatures 
utilize a Public Key Infrastructure. That structure uses Public and 
Private Keys to encode a message and to provide a method of positively 
identifying the sender. The Commission received no comments addressing 
this topic or offering other possible methods of verification.
    The revised regulations remove the notarization requirement for 
several reasons. First, the statute simply requires verification, not 
notarization. Second, no other reports filed with the Commission 
require notarization. Third, the statement that the filer must sign 
carries the penalty for perjury if falsely made.
    The Commission decided not to institute electronic notarization or 
digital signatures because they, as relatively new technologies, are 
not widespread enough to ensure access to everyone who might make an 
independent expenditure. For example, only a handful of states have 
electronic notarization statutes, effectively leaving citizens of other 
states without means of verification. Digital signatures must be 
purchased and, generally, require the purchaser to have a computer on 
which the private key (a computer generated string of digits) resides. 
The Commission is concerned that such a requirement would unduly burden 
the making or reporting of independent expenditures by those who do not 
have access to these means of verification.

Section 104.5  Filing Dates (2 U.S.C. 434(a)(2))

    Section 104.5 sets forth the required filing dates for each type of 
political committee and other individuals. The Commission is revising 
paragraph (f) of this section to follow new paragraph (e) of 11 CFR 
100.19 discussed above.
    Revised paragraph (g) of 11 CFR 104.5 states that 24-hour reports 
of independent expenditures must be received by the appropriate 
officers within 24 hours of the making of the independent expenditure. 
Previously, 24-hour reports were considered timely filed when they were 
postmarked to be sent by registered or certified mail. This change 
conforms to the amendments to 11 CFR 100.19 and 104.4(b) discussed 
above.
    The Commission received no comments on the amendments to this 
section.

Section 104.14  Formal Requirements Regarding Reports and Statements

    Under 11 CFR 104.14, reports and statements must be signed. Two 
conforming amendments are being made to paragraph (a) of this section. 
First, new paragraph (a)(1) provides that reports or statements of 
independent expenditures filed by facsimile machine or electronic mail 
under 11 CFR 104.4(b) or 11 CFR 109.2 must be verified in accordance 
with those sections. Secondly, new paragraph (a)(2) states that 
reports, designations or statements filed electronically under 11 CFR 
104.18 must follow the signature requirements of 11 CFR 104.18(g). The 
Commission received no comments on this section.

Section 104.18  Electronic Filing of Reports (2 U.S.C. 432(d) and 
434(a)(11))

    Under the previous regulations at 11 CFR 104.18(h), those 
participating in the Commission's electronic filing program (either 
mandatory or voluntary) were required to file FEC Form 5 or Schedule E 
electronically accompanied by a paper copy in order to file a notarized 
document.
    Public Law 106-346 does not allow electronic filers to use fax 
machines or electronic mail to file their independent expenditures 
reports. In order to afford all electronic filers the ability to comply 
with the new requirement that 24-hour reports be received by the 
appropriate office within 24 hours, the Commission is removing Schedule 
E and FEC Form 5 from the list in paragraph (h) of reports that require 
a paper follow-up. Instead, the revised rules require those in the 
electronic filing program to verify all reports of independent 
expenditures using the same process they use in filing any other 
report. Paragraph (h) is being reorganized to clarify which paper 
documents must accompany electronically filed reports, and when those 
paper copies must be filed.
    The Commission's electronic filing software, FECFile, currently 
creates Schedule E for electronic filing by political committees. The 
Commission's electronic filing system accepts FEC Form 5 if created by 
another entity using the Commission's specifications (available on the 
FEC web site, www.fec.gov), but FECFile does not currently create Form 
5. The Commission intends to make FEC Form 5 available in the FECFile 
software package. Note that this software is available for free from 
the Commission.
    Further, the Commission is adding to the list of electronic filings 
that require paper follow-up Schedule C-P-1, used by Presidential 
candidates to report loans and lines of credit from lending 
institutions. Like Schedule C-1 (used by non-Presidential committees), 
Schedule C-P-1 requires the lending institution agent's signature.
    On July 25, 2001, the Commission published in the Federal Register 
a Notice of Proposed Rulemaking on Brokerage Loans and Lines of Credit 
(65 FR 38576 (July 25, 2001)) which sought comments on further 
revisions to 11

[[Page 12837]]

CFR 104.18(h). Thus, additional changes to this section may be 
promulgated at a later time as part of that separate rulemaking.

Section 109.1  Definitions (2 U.S.C. 432(17))

    Section 109.1 of the Commission's regulations contains definitions 
relevant to independent expenditures. Public Law 106-346 and the 
revised regulations at 11 CFR 100.19(d), 104.4(b), 104.5(g), and 
109.2(b) require 24-hour reports to be received by the Commission or 
the Secretary of the Senate within 24 hours of the time the independent 
expenditure is made.
    The NPRM sought comments on a three-pronged definition of when an 
independent expenditure is made that would apply to all independent 
expenditures, not just those reported on a 24-hour basis. That 
definition was taken from the statutory and regulatory definitions of 
``independent expenditure'' (2 U.S.C. 431(17) and 11 CFR 100.8(a)(2)) 
and ``expenditure'' (2 U.S.C. 431(9)(A) and 11 CFR 109.1). Proposed new 
paragraph (f) of 11 CFR 109.1 stated that an independent expenditure is 
made at the earliest of three possible times: (1) The date on which a 
written contract, including a media contract, promise or agreement to 
make an independent expenditure is executed; (2) the first date on 
which the communication is printed, broadcast, or otherwise publicly 
disseminated; or (3) the date on which the person making the 
independent expenditure pays for it.
    The sole commenter on this rulemaking objects to proposed paragraph 
(f) for several reasons. First, the commenter argues that the 
definition is a substantive change to the current provisions of the 
FECA and is, therefore, outside the Commission's regulatory authority. 
The commenter also asserts that the definition is illogical and that an 
independent expenditure is not made until the communication is 
disseminated to the public. Thus, the commenter argues, prong number 
one of the definition is incorrect.
    The Commission believes that a legal basis arguably would exist for 
the first prong of its definition of ``made''. Language in the FECA 
states that an ``independent expenditure is an expenditure'' (2 U.S.C. 
431(17)). An expenditure includes a ``written contract, promise, or 
agreement to make an expenditure'' (2 U.S.C. Sec. 431(9)(A)(ii)). Thus, 
independent expenditures necessarily include written contracts, 
promises or agreements to make an expenditure for a communication. 
Nonetheless, here the Commission is called upon to define when an 
independent expenditure should be considered ``made'' for purposes of 
reporting. Some practical and policy considerations come into play.
    The Commission is dropping from the final rules the first prong of 
the test (the date on which a written contract, including a media 
contract, promise or agreement to make an independent expenditure, is 
executed). This will simplify the reporting rules, address the 
practical problem of reporting such transactions as independent 
expenditures and ensure that the relatively detailed rules on reporting 
debts at 11 CFR 104.11 apply only to political committees. Those latter 
rules require a debt (which includes a written contract debt) to be 
reported only if it exceeds $500 or is for any amount that has been 
outstanding for more than 60 days.
    The commenter also objects to the second prong of the proposed rule 
at 11 CFR 109.1(f)(2), which stated that an independent expenditure 
would be made ``on the first date on which the communication is 
printed, broadcast or otherwise publicly disseminated.'' The commenter 
objects to the word ``printed'' on the grounds that fliers could be 
printed and sit in a garage for months, and thus not being publicly 
disseminated. The Commission is changing the word ``printed'' to 
``published'' in the final rules to remove any confusion as to when a 
communication for an independent expenditure is made.
    The commenter further objects to what it believes to be a 
consequence of the revised regulation which would, in some instances, 
require disclosure before publication of the communication. The 
commenter expresses concern that this could lead to mischievous 
interference with communications from opposing campaigns. The commenter 
argues that such disclosure would allow incumbents the advantage of 
knowing when independent expenditures have been made on behalf of their 
opponents, thus giving them the opportunity to convince broadcasters 
not to run the advertisements in question.
    While the Commission does not necessarily agree with the 
commenter's legal analysis, the Commission is dropping the third prong 
of the proposed definition. New paragraph (f) of the final regulations 
states that an independent expenditure is made on the first date on 
which the communication is published, broadcast or otherwise publicly 
disseminated. New language in 11 CFR 104.4(b), 104.5(g) and 109.2(b) 
would, however, allow persons to report an independent expenditure 
before the underlying communication is publicly disseminated, 
notwithstanding other regulations (11 CFR 104.11(b) or 104.3(b)) that 
could fairly be read to require earlier disclosure. The statutory 
change for 24-hour reports reflects Congressional intent to emphasize 
and ensure timely disclosure of independent expenditures. Consequently, 
the final rules will enhance timely disclosure by requiring that 
independent expenditures be reported after a disbursement is made, or a 
debt reportable under 11 CFR 104.11(b) is incurred, for an independent 
expenditure but no later than 24 hours after the time they are first 
publicly disseminated. Note that independent expenditures that are 
mailed to their intended audiences are publicly disseminated at the 
time that they are relinquished to the U.S. Post Office.
Examples for Political Committees
    In some situations, a political committee will not make payment or 
incur a reportable debt before the communication underlying the 
independent expenditure is publicly disseminated. If the communication 
is both publicly disseminated and paid for in the same reporting 
period, then the committee reports the independent expenditure on 
Schedule E for that reporting period. If the communication is aired in 
one reporting period (e.g., during the 24-hour reporting period) and 
payment is made in a later reporting period (e.g., during the post-
general election period), then the committee reports the independent 
expenditure as a memo entry on Schedule E during the reporting period 
in which the communication is publicly disseminated and reports it 
again as a positive entry on Schedule E in the reporting period in 
which payment is made.
    In other situations, however, a political committee may pay the 
production and distributions costs associated with an independent 
expenditure in one reporting period, but not publicly disseminate it 
until a later reporting period. In this case, the committee reports the 
payment as a disbursement on Schedule B for operating expenditures. 
When, in a subsequent reporting period, the communication is publicly 
disseminated, the committee files a Schedule E for the independent 
expenditure referencing the earlier Schedule B transaction. The 
committee also reports the disbursement for the independent expenditure 
as a negative entry on Schedule B so the total

[[Page 12838]]

disbursements are not inflated. Alternatively, if the committee wishes 
to disclose the independent expenditure before the communication is 
publicly disseminated, it could report the independent expenditure on 
Schedule E for the reporting period in which the payment is made, with 
no further reporting obligation at the time the communication is 
disseminated.
    Obligations incurred but not yet paid (that are reportable debts), 
must be reported on Schedule D. When, in a subsequent reporting period, 
the communication is publicly disseminated, the committee must file a 
Schedule E referencing the debt on Schedule D. The committee must 
continue to report the debt on Schedule D (and any payment on it on 
Schedule E), until the debt is extinguished.

    Example 1: Committee A makes a $10,000 payment on October 5 for 
a newspaper ad urging the defeat of Candidate X, where the ad will 
run on the 10th day before the November general election (i.e., 
during the 24 hour reporting period). The committee reports the 
payment on Schedule B for Operating Expenditures for its pre-general 
election report. The committee must file a 24-hour report on 
Schedule E no later than 24 hours after the ad was first published. 
Further, on its post-general election report, the committee must 
report the independent expenditure on Schedule E and report the 
disbursement for the independent expenditure as a negative entry on 
Schedule B for Operating Expenditures. Alternatively, the committee 
could report the independent expenditure on Schedule E for its pre-
general election report with no further reporting obligation during 
the 24-hour and post-general reporting periods.

    Example 2: In September, Committee B, a quarterly filer, enters 
a contract, but does not pay, for a mailing containing an 
independent expenditure supporting candidate X. The cost of the 
mailing is $450. Because the debt is less than $500, and has been 
outstanding for less than 60 days, it is not reportable on Schedule 
D of the committee's third quarter report. The mailing is delivered 
to a U.S. Post Office on October 5 (during the pre-general reporting 
period). Committee B reports the independent expenditure on a 12-day 
pre-general election report as a Memo Schedule E, using October 5 as 
the date. Payment is made on November 1. No 24-hour report is 
needed, because the independent expenditure was distributed before 
the 20 day before the general election. On the post-general election 
report, Committee B reports the payment as a positive entry on 
Schedule E and includes a cross-reference to the Memo Schedule E 
entry on the 12-day pre-general report.

    Example 3: Committee C, a monthly filer, contracts in August for 
airtime to begin on October 31, five days before the November 5 
general election. The costs of producing the ads and the airtime 
will exceed $500, but no payment is actually made during the August, 
September, or pre-general reporting periods. These amounts are 
reportable as debts on Schedule D. The ads run from October 31 
through November 2. Payment is made on November 1. Committee C files 
a 24-hour report of independent expenditures on Memo Schedule E to 
be received by the Commission or the Secretary of the Senate, as 
appropriate, within 24 hours of the first time the ad ran on October 
31. This Memo Schedule E uses October 31 as the date of the 
independent expenditure and includes the committee's best estimate 
of the total cost as the amount. (In this case, the exact amount 
would be known as of November 1.) The committee, on its post-general 
election report, shows the November 1 payment to extinguish the debt 
on Schedule D and also reports the independent expenditure payment 
as a positive disbursement on Schedule E so the line totals on the 
Detailed Summary Page will be accurate.
Examples for Persons Other Than Political Committees
    Persons other than political committees simply report their 
independent expenditures on FEC Form 5 or by letter (if they are not 
required to file electronically). If the independent expenditure is 
first distributed during the 24-hour reporting period (less than 20 
days but more than 24 hours before an election), it must be reported no 
later than 24 hours after the first time the ad is distributed. If the 
independent expenditure is first publicly disseminated outside the 24-
hour reporting period, it must be reported no later than by the end of 
the regular reporting period during which the ad is first distributed.

    Example 4: Mr. Jones takes out a newspaper ad supporting 
Candidate X. The ad runs October 4th through October 7th in an 
election year. Mr. Jones must report the independent expenditure no 
later than 24 hours after the time the ad first runs on October 4th.

Section 109.2  Reporting of Independent Expenditures by Persons Other 
Than a Political Committee (2 U.S.C. 434(c)).

    Section 109.2 of the Commission's regulations requires persons 
other than political committees to report their independent 
expenditures on either FEC Form 5 or in a signed statement containing 
certain information about the person who made the independent 
expenditure and about the nature of the expenditure itself. Under the 
previous regulations, regardless of whether the filer reported the 
independent expenditure on Form 5 or in a signed statement, the report 
had to be notarized. As discussed in the Explanation and Justification 
for 11 CFR 104.4 above, the revised regulations no longer require 
notarization of reports of independent expenditures, but do require 
filers to self-verify their reports. Accordingly, the introductory text 
of paragraphs (a) and (a)(1) of section 109.2 is being revised to 
change the signature requirement on reports of independent expenditures 
to the verification of reports of independent expenditures. To 
implement the self-verification, the amendments to 11 CFR 
109.2(a)(1)(v) require that persons other than political committees 
continue to include a prescribed statement of certification as to the 
independence of the expenditure. The Commission intends to make 
conforming amendments to FEC Form 5 at a later point.
    The NPRM proposed adding new paragraph (a)(1)(vi) to section 109.2 
(and renumbering paragraph (a)(1)(vi) as (a)(1)(vii)). Proposed 
paragraph (a)(1)(vi) would have required those who file a statement 
instead of FEC Form 5 to certify that the expenditure was not made to 
finance, disseminate, distribute or republish campaign materials 
prepared by a candidate or a candidate's agent or authorized committee. 
This statement is in addition to the statement of independence required 
in 11 CFR 109.2(a)(1)(v), discussed above. While this ``republication 
statement'' has long been included in the certification on FEC Form 5 
(and on Schedule E, filed by political committees), it has not been 
required of those who file by letter. The NPRM further noted, that, on 
the other hand, the statutory certifications required by 2 U.S.C. 
434(b)(6)(B)(iii) and (c)(2)(A) do not address distribution of 
candidate-prepared materials. Consequently, comments were requested on 
not adding the certification statement to paragraph (a)(1)(vi) and 
removing that part of the certification from FEC Form 5 and Schedule E. 
The commenter did not address this issue.
    The Commission has decided to remove the ``republication 
statement'' from FEC Form 5 and Schedule E, and to not include it in 
revised 11 CFR 109.2. A statement regarding republication of candidate 
materials is not specifically mentioned in 2 U.S C. 434(b)(6)(B)(iii) 
or (c)(2). Corresponding changes will be made to FEC Form 5 and 
Schedule E.
    Conforming changes are being made to paragraph (b) of section 109.2 
to indicate that 24-hour reports must be received after a disbursement 
is made for an independent expenditure, but no later than 24 hours from 
the time the independent expenditure is made.
    New paragraph (c) of 11 CFR 109.2 sets forth the acceptable methods 
of verification for both e-mailed and paper reports. Note that faxed 
reports are considered to be filed on paper and must contain the 
certification statement

[[Page 12839]]

required by 11 CFR 109.2(a)(i) and new paragraph (a)(vi) followed by 
the signature of the filer. Electronically mailed reports must contain 
the certification statements and information required by 11 CFR 
109.2(a)(i) through (a)(vii) followed by the typewritten name of the 
filer. The Commission received no comments on these amendments.

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

    The Commission certifies that these final rules will not have a 
significant economic impact on a substantial number of small entities. 
The basis of this certification is that the Commission is providing 
most filers with less than $50,000 of activity with additional means of 
complying with the law, thereby increasing the filers' flexibility by 
allowing them to choose the most convenient and cost effective filing 
method. These additional filing methods will likely reduce costs for 
small entities.

List of Subjects

11 CFR Part 100

    Elections.

11 CFR Part 104

    Campaign funds, Political committees and parties, Reporting and 
recordkeeping requirements.

11 CFR Part 109

    Elections, Reporting and recordkeeping requirements.

    For the reasons set out in the preamble, subchapter A of chapter I 
of title 11 of the Code of Federal Regulations is amended to read as 
follows:

PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)

    1. The authority citation for part 100 is revised to read as 
follows:

    Authority: 2 U.S.C. 431, 434(a)(11), 434(c) and 438(a)(8).

    2. Section 100.19 is revised to read as follows:

Sec. 100.19  File, filed or filing (2 U.S.C. 434(a)).

    With respect to documents required to be filed under 11 CFR parts 
101, 102 104, 105, 107, 108 and 109, and any modifications or 
amendments thereto, the terms file, filed, and filing mean one of the 
actions set forth in paragraphs (a) through (e) of this section. For 
purposes of this section, document means any report, statement, notice 
or designation required by the Act to be filed with the Commission or 
the Secretary of the Senate.
    (a) Except for documents electronically filed under paragraph (c) 
of this section, a document is timely filed upon delivery to the 
Federal Election Commission, 999 E Street, NW., Washington, DC 20463; 
or the Secretary of the United States Senate, Office of Public Records, 
119 D Street NE., Washington, DC 20510 as required by 11 CFR part 105, 
by the close of business on the prescribed filing date.
    (b) A document other than a 24-hour report of an independent 
expenditure under 11 CFR 104.4(b) or 109.2(c) is timely filed upon 
deposit as registered or certified mail in an established U.S. Post 
Office and postmarked no later than midnight of the day of the filing 
date, except that pre-election reports so mailed must be postmarked no 
later than midnight of the fifteenth day before the date of the 
election. Documents sent by first class mail must be received by the 
close of business on the prescribed filing date to be timely filed.
    (c) For electronic filing purposes, a document is timely filed when 
it is received and validated by the Federal Election Commission at or 
before 11:59 p.m., Eastern Standard/Daylight Time, on the filing date.
    (d) A 24-hour report of independent expenditures under 11 CFR 
104.4(b) or 109.2(c) is timely filed when it is received by the 
appropriate filing officer as listed in 11 CFR 104.4(c) after a 
disbursement is made, or, in the case of a political committee, a debt 
reportable under 11 CFR 104.11(b) is incurred, for an independent 
expenditure, but no later than 24 hours from the time the independent 
expenditure was made. In addition to other permissible means of filing, 
a 24-hour report may be filed using a facsimile machine or by 
electronic mail if the filer is not required to file electronically in 
accordance with 11 CFR 104.18.
    (e) In addition to other permissible means of filing, authorized 
committees that are not required to file electronically may file 48-
hour notifications of contributions using facsimile machines. All 
authorized committees that file with the Commission, including 
electronic filers, may use the Commission's web site's on-line program 
to file 48-hour notifications of contributions. See 11 CFR 104.5(f).

PART 104--REPORTS BY POLITICAL COMMITTEES (2 U.S.C. 434)

    3. The authority citation for part 104 continues to read as 
follows:

    Authority: 2 U.S.C. 431(1), 431(8), 431(9), 432(i), 434, 
438(a)(8) and (b) and 439a.

    4. Section 104.4 is amended by revising paragraph (b) to read as 
follows:

Sec. 104.4  Independent expenditures by political committees (2 U.S.C. 
434(c)).

* * * * *
    (b) 24-hour reports. Reports of any independent expenditures 
aggregating $1,000 or more made after the 20th day, but more than 24 
hours, before 12:01 a.m. of the day of the election, shall be received 
by the appropriate officers listed in paragraph (c) of this section 
after a disbursement is made, or a debt reportable under 11 CFR 
104.11(b) is incurred, for an independent expenditure, but no later 
than 24 hours after such independent expenditure is made. Such report 
shall contain the information required by 11 CFR 104.3(b)(3)(vii) 
indicating whether the independent expenditure is made in support of, 
or in opposition to, the candidate involved. In addition to other 
permissible means of filing, a 24-hour report may be filed using a 
facsimile machine or electronic mail if the filer is not required to 
file electronically in accordance with 11 CFR 104.18. Such report shall 
be verified by one of the methods stated in paragraph (b)(1) or (b)(2) 
of this section. Any report verified under either of these methods 
shall be treated for all purposes (including penalties for perjury) in 
the same manner as a document verified by signature.
    (1) For reports filed on paper (e.g., by hand delivery, U.S. Mail 
or facsimile machine), the certification required by 11 CFR 
104.3(b)(3)(vii) shall be immediately followed by the handwritten 
signature of the treasurer of the political committee that made the 
independent expenditure and who certifies, under penalty of perjury, 
its independence.
    (2) For reports filed by electronic mail, the certification 
required by 11 CFR 104.3(b)(3)(vii) shall be immediately followed by 
the typewritten name of the treasurer of the political committee that 
made the independent expenditure and who certifies, under penalty of 
perjury, its independence.
* * * * *


    5. Section 104.5 is amended by revising paragraphs (f) and (g) to 
read as follows:


Sec. 104.5  Filing Dates (2 U.S.C. 434(a)(2)).

* * * * *
    (f) 48-hour notification of contributions. If any contribution of 
$1,000 or more is received by any

[[Page 12840]]

authorized committee of a candidate after the 20th day, but more than 
48 hours, before 12:01 a.m. of the day of the election, the principal 
campaign committee of that candidate shall notify the Commission, the 
Secretary of the Senate and the Secretary of State, as appropriate, 
within 48 hours of receipt of the contribution. The notification shall 
be in writing and shall include the name of the candidate and office 
sought by the candidate, the identification of the contributor, and the 
date of receipt and amount of the contribution. The notification shall 
be filed in accordance with 11 CFR 100.19. The notification shall be in 
addition to the reporting of these contributions on the post-election 
report.
    (g) 24-hour report of independent expenditures. Statements 
disclosing any independent expenditures aggregating $1,000 or more made 
after the 20th day, but more than 24 hours, before 12:01 a.m. of the 
day of the election, must be received by the appropriate officers 
listed in 11 CFR 104.4(c) after a disbursement is made, or in the case 
of a political committee, a debt reportable under 11 CFR 104.11(b) is 
incurred, but no later than 24 hours after such independent expenditure 
is made. Such statement shall contain the information required by 11 
CFR 104.3(b)(3)(vii) indicating whether the independent expenditure is 
made in support of, or in opposition to, the candidate involved.
* * * * *


    6. Section 104.14 is amended by revising paragraph (a) to read as 
follows:


Sec. 104.14  Formal Requirements Regarding Reports and Statements.

    (a) Each individual having the responsibility to file a 
designation, report or statement required under this subchapter shall 
sign the original designation, report or statement except that:
    (1) Reports or statements of independent expenditures filed by 
facsimile machine or electronic mail under 11 CFR 104.4(b) or 11 CFR 
109.2 must be verified in accordance with those sections; and
    (2) Reports, designations, or statements filed electronically under 
11 CFR 104.18 must follow the signature requirements of 11 CFR 
104.18(g).
* * * * *
    7. Section 104.18 is amended by revising paragraph (h) to read as 
follows:


Sec. 104.18  Electronic Filing of Reports (2 U.S.C. 432(d) and 
434(a)(11)).

* * * * *
    (h) Schedules and forms with special requirements.
    (1) The following are schedules and forms that require the filing 
of additional documents and that have special signature requirements:
    (i) Schedules C-1 and C-P-1, Loans and Lines of Credit From Lending 
Institutions (see 11 CFR 104.3(d)); and
    (ii) Form 8, Debt Settlement Plan (see 11 CFR 116.7(e)).
    (2) If a person files a report electronically by submitting a 
diskette to the Commission and is required to file any of the schedules 
or forms listed in paragraph (h)(1) of this section, the person shall 
file a paper copy of the required schedule or form with the electronic 
submission, or a digitized version as a separate file in the electronic 
submission, by the close of business on the prescribed filing date.
    (3) If a person files a report electronically by uploading the data 
to the Commission's electronic filing system and is required to file 
any schedules or forms listed in paragraph (h)(1) of this section, the 
person shall file a paper copy or a digitized version of the required 
schedule or form by the close of business on the prescribed filing 
date.
* * * * *

PART 109--INDEPENDENT EXPENDITURES (2 U.S.C. 431(17), 434(c))

    8. The authority for part 109 continues to read as follows:

    Authority: 2 U.S.C. 431(17), 434(a)(11) and (c), 438(a)(8), and 
441d.

    9. Section 109.1 is amended by adding new paragraph (f) to read as 
follows:


Sec. 109.1  Definitions (2 U.S.C. 431(17)).

* * * * *
    (f) Notwithstanding 11 CFR 100.8(a)(2) and 104.11(b), an 
independent expenditure is made on the first date on which the 
communication is published, broadcast or otherwise publicly 
disseminated. For purposes of this section, a communication that is 
mailed to its intended audience is publicly disseminated when it is 
relinquished to the U.S. Postal Service.

    10. Section 109.2 is amended by revising the introductory text in 
paragraphs (a) and (a)(1), by revising paragraphs (a)(1)(v), (a)(2), 
and (b), and adding new paragraph (c) to read as follows:


Sec. 109.2  Reporting of independent expenditures by persons other than 
a political committee (2 U.S.C. 434(c)).

    (a) Every person other than a political committee, who makes 
independent expenditures aggregating in excess of $250 in a calendar 
year shall file a verified statement or report on FEC Form 5 with the 
Commission or Secretary of the Senate in accordance with 11 CFR 
104.4(c).
    (1) If a verified statement is submitted, the statement shall 
include:
* * * * *
    (v) A verified certification under penalty of perjury as to whether 
such expenditure was made in cooperation, consultation or concert with, 
or at the request or suggestion of any candidate or any authorized 
committee or agent thereof; and
* * * * *
    (2) Reports or statements filed under this section shall be filed 
at the end of the reporting period (quarterly, pre-election, post-
election, semi-annual or annual) (See 11 CFR 104.5)) during which any 
independent expenditure which aggregates in excess of $250 is made and 
in any reporting period thereafter in which additional independent 
expenditures are made.
    (b) Reports of independent expenditures aggregating $1,000 or more 
made by any person after the twentieth day, but more than 24 hours 
before 12:01 a.m. of the day of an election must be received by the 
appropriate officers as listed in paragraph (c) of this section after a 
disbursement is made for an independent expenditure, but no later than 
24 hours after such independent expenditure is made. Such report or 
statement shall contain the information required by paragraph (a) of 
this section indicating whether the independent expenditure is made in 
support of, or in opposition to, a particular candidate.
    (c) Verification of independent expenditure statements and reports: 
For reports filed on paper (e.g., by hand delivery, U.S. Mail or 
facsimile machine), the certification required by paragraph (a)(1)(v) 
of this section must be immediately followed by the handwritten 
signature of the person who made the independent expenditure and who 
certifies, under penalty of perjury, its independence. For reports 
filed by electronic mail, the certification required by paragraph 
(a)(1)(v) of this section must be immediately followed by the 
typewritten name of the person who made the independent expenditure and 
who certifies, under penalty of perjury, its independence.

    Dated: March 15, 2002.
David. M. Mason,
Chairman, Federal Election Commission.
[FR Doc. 02-6719 Filed 3-19-02; 8:45 am]
BILLING CODE 6715-01-P