[Federal Register Volume 67, Number 115 (Friday, June 14, 2002)]
[Proposed Rules]
[Pages 40881-40894]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-14902]


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FEDERAL ELECTION COMMISSION

11 CFR Part 100

[Notice 2002-9]


Reorganization of Regulations on ``Contribution'' and 
``Expenditure''

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The recently enacted Bipartisan Campaign Reform Act (``BCRA'') 
substantially amended the Federal Election Campaign Act (``FECA''). 
Among its amendments is the deletion of the office facility exception 
in the definition of ``contribution'' in section 431(8)(B) of the FECA. 
The Federal Election Commission (``Commission'') is proposing to amend 
the regulations to reflect this statutory change. As part of this 
effort, the Commission is also proposing to reorganize the sections 
defining ``contribution'' and ``expenditure'' in its regulations. The 
Commission is issuing this notice of proposed rulemaking (``NPRM'') to 
solicit comments on its proposal to redefine ``contribution'' and 
``expenditure'' and to reorganize the regulations. Please note that the 
draft rules that follow do not represent a final decision by the 
Commission on the issues presented by this rulemaking. Further 
information is provided in the supplementary information that follows.

DATES: Comments must be received on or before July 12, 2002.

ADDRESSES: All comments should be addressed to Ms. Rosemary C. Smith, 
Acting Associate General Counsel, and must be submitted in either 
electronic or written form. Electronic mail comments should be sent to 
[email protected] and must include the full name, electronic mail 
address and postal service address of the commenter. Electronic mail 
comments that do not contain the full name, electronic mail address and 
postal service address of the commenter will not be considered. Faxed 
comments should be sent to (202) 219-3923, with printed copy follow-up 
to ensure legibility. Written comments and printed copies of faxed 
comments should be sent to the Federal Election Commission, 999 E 
Street, NW., Washington, DC 20463. Commenters are strongly encouraged 
to submit comments electronically to ensure timely receipt and 
consideration.

FOR FURTHER INFORMATION CONTACT: Ms. Rosemary C. Smith, Acting 
Associate General Counsel, or Ms. Mai T. Dinh, Attorney, 999 E Street, 
NW., Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Bipartisan Campaign Reform Act, Pub. L. 
107-155, 116 Stat. 81 (March 27, 2000), significantly amends the 
Federal Election Campaign Act, 2 U.S.C. 431 et seq., and directs the 
Commission to promulgate regulations implementing Title I of the BCRA 
within 90 days of enactment and to promulgate regulations implementing 
the other titles of BCRA that are under the Commission's jurisdiction 
within 270 days of enactment. See BCRA, section 402(c). The amendment 
to the definition of ``contribution'' is in Title I, section 103(b)(1). 
Section 103(b)(1) deletes current 2 U.S.C. 431(8)(B)(viii), thus 
eliminating the office facility exception for national party committees 
from the definition of ``contribution.'' The Commission's proposal to 
amend the definitions of ``contribution'' and ``expenditure'' to comply 
with this amendment is contained in this notice of proposed rulemaking 
(``NPRM''). The Commission has published a separate NPRM to address the 
impact of this

[[Page 40882]]

statutory change on State and local party committees. See ``Prohibited 
and Excessive Contributions: Non-Federal Funds or Soft Money'' (``Soft 
Money NPRM''). 67 FR 35654 (May 20, 2002). The Soft Money NPRM also 
addresses the other sections of Title I of BCRA.

Proposed Rules

Reorganization of Current 11 CFR 100.7 and 100.8

    As part of this NPRM, the Commission is also proposing to 
reorganize current 11 CFR 100.7 and 100.8. This reorganization would 
make it easier to locate and read the definitions of ``contribution'' 
and ``expenditure'' and the detailed exceptions to those definitions. 
The proposed rules would create four new subparts, B through E, within 
11 CFR part 100. The definitions of ``contribution'' and 
``expenditure'' would be moved into these new subparts. Subpart B would 
describe items that are contributions; subpart C would describe items 
that are not contributions; subpart D would describe items that are 
expenditures; and subpart E would describe items that are not 
expenditures.

Inclusion of ``Brokerage Loans and Lines of Credit''

    The proposed rule would incorporate another recent change to the 
FECA--the inclusion of a loan of money derived from an advance on a 
candidate's brokerage account, credit card, home equity line of credit, 
or other line of credit available to the candidate as an item that is 
not a contribution. The Commission published the final rules, entitled 
``Brokerage Loans and Lines of Credit,'' to amend current 11 CFR 
100.7(b) and 100.8(b) to include these types of loans. See 67 FR 38353 
(June 4, 2002). The language in this NPRM at proposed 11 CFR 100.73 and 
100.114 reflects the language in the ``Brokerage Loans and Lines of 
Credit'' final rules.

Proposed Amendments to the Office Facility Exception

    Current 11 CFR 100.7(b)(12) and 100.8(b)(13), designate that the 
construction or purchase of an office facility is an exception to the 
definition of contribution and expenditure. The proposed rules would 
make clear that this exception no longer applies to national party 
committees by adding a new section, proposed 11 CFR 100.56, that would 
state that contributions to national party committees for the purchase 
of an office building or facility is a contribution. In addition, 
proposed 11 CFR 100.84 would state that donations, made to a non-
Federal account of a State, local, or district party committee or 
organization to purchase or construct an office building, are not 
contribution. The expenditure subparts would include similar proposed 
sections pertaining to expenditures for the purchase or construction of 
an office building or facility. See proposed 11 CFR 100.114 for 
national party committees and proposed 11 CFR 100.144 for State, local, 
or district party committees or organizations.

Proposal To Amend ``Allocation'' to ``Attribution''

    Other than deleting the office facility section, this NPRM would 
not amend any other provisions in a substantive manner. The Commission 
is considering making a clarifying amendment in several proposed 
sections that is not reflected in the proposed rules. In sections that 
describe the ``exempt activities,'' the current regulations require 
that certain contributions or expenditures be allocated to Federal 
activities. In these sections, however, the contributions or 
expenditures are not being allocated to Federal candidates in the sense 
that contributions and expenditures are being allocated under current 
11 CFR part 106. Rather, these contributions and expenditures are being 
attributed to the Federal candidates. Changing the words in the 
proposed sections may eliminate any confusion that these contributions 
and expenditures would need to be allocated in a manner similar to the 
allocations that are required under current 11 CFR part 106. The 
Commission seeks comment on whether the word ``allocation'' or any of 
its derivatives should be changed to ``attribution'' or one of its 
derivatives in the following proposed sections:

Proposed section 100.80  Slate cards and sample ballots.
Proposed section 100.87  Volunteer activity for party committees.
Proposed section 100.88  Volunteer activity for candidates.
Proposed section 100.89  Voter registration and get-out-the-vote 
activities for Presidential candidates (``coattails'' exception).
Proposed section 100.140  Slate cards and sample ballots.
Proposed section 100.147  Volunteer activity for party committees.
Proposed section 100.148  Volunteer activity for candidates.
Proposed section 100.149  Voter registration and get-out-the-vote 
activities for Presidential candidates (``coattails'' exception).

Potential Impact of Soft Money NPRM

    In addition to the deletion of current 11 CFR 100.7(b)(12) and 
100.8(b)(13), the Soft Money NPRM may affect the substance in the 
definitions of ``contribution'' and ``expenditure''. The Soft Money 
NPRM identified several issues and alternative approaches on which the 
Commission sought comment. The issues concerning ``exempt activity'' by 
State and local parties and the definition of ``Federal election 
activity'' may directly impact on the definitions of ``contribution'' 
and ``expenditure''.\1\
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    \1\ For discussion of these issues, see Soft Money NPRM at 
35655-35657, and 35662-35672.
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    The resolution of these issues will occur in the final rules 
arising from the Soft Money NPRM. If these decisions, however, require 
substantively amending the current definitions of ``contribution'' or 
``expenditure'', the amendment to the text of the regulations will be 
incorporated in the final rules arising from this reorganization 
rulemaking. This is ensure that there is no confusion, duplication, or 
inconsistency between this rulemaking that the Soft Money rulemaking. 
Although the Commission does not anticipate that any of proposed 
sections in this NPRM would be affected by the Soft Money NPRM, it is 
possible that any of the following proposed sections would need to be 
amended in the final rules as a result of the final rules arising from 
the Soft Money NPRM:

Proposed section 100.80  Slate cards and sample ballots.
Proposed section 100.87  Volunteer activity for party committees.
Proposed section 100.88  Volunteer activity for candidates.
Proposed section 100.89  Voter registration and get-out-the-vote 
activities for Presidential candidates (``coattails'' exception).
Proposed section 100.140  Slate cards and sample ballots.
Proposed section 100.147  Volunteer activity for party committees.
Proposed section 100.148  Volunteer activity for candidates.
Proposed section 100.149  Voter registration and get-out-the-vote 
activities for Presidential Candidates (``coattails'' exception).

Grammatical and Technical Revisions

    In addition to non-substantive grammatical corrections, minor 
technical revisions would be made to reflect the reorganized structure. 
Other than changes resulting from the Soft Money NPRM, any substantive 
changes to other provisions or definitions would

[[Page 40883]]

be addressed in separate rulemaking projects. The Commission seeks 
comments on this proposed implementation of section 103(b)(1) of BCRA 
and the structural reorganization of current 11 CFR 100.7 and 100.8. If 
the Commission decides to reorganize these sections, the final rules 
will include a distribution table and a derivative table to cross-
reference the current sections to the new sections.

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

    The attached proposed rules will not, if promulgated, have a 
significant economic impact on a substantial number of small entities. 
The proposed rules would not substantively change the current 
regulations other than to amend the office facility provision to 
reflect the amendment to 2 U.S.C. 431(8)(B) as mandated by BCRA and to 
make minor clarifying changes to current definitions. Therefore, the 
attached proposed rules, if promulgated, will not have a significant 
economic impact on a substantial number of small entities.

List of Subjects in 11 CFR Part 100

    Elections.
    For the reasons set out in the preamble, it is proposed to amend 
Chapter I of title 11 of the Code of Federal Regulations as follows:

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

    1. The authority citation for part 100 would continue to read as 
follows:


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

    2. Section 100.7 would be removed and reserved.
    3. Section 100.8 would be removed and reserved.
    4. Part 100 would be amended by adding new subparts B, C, D, and E 
to read as follows:
Subpart B--Definition of Contribution (2 U.S.C. 431(8))
Sec.
100.51   Scope.
100.52   Gift, subscription, loan, advance or deposit of money.
100.53   Attendance at a fundraiser or political event.
100.54   Compensation for personal services.
100.55   Extension of credit.
100.56   Office building or facility for national party committees.
Subpart C--Exceptions to Contributions
Sec.
100.71   Scope.
100.72   Testing the waters.
100.73   News story, commentary, or editorial by the media.
100.74   Uncompensated services by volunteers.
100.75   Use of a volunteer's real or personal property.
100.76   Use of church or community room.
100.77   Invitations, food, and beverages.
100.78   Sale of food or beverages by vendor.
100.79   Unreimbursed payment for transportation and subsistence 
expenses.
100.80   Slate cards and sample ballots.
100.81   Payment by corporations and labor organizations.
100.82   Bank loans.
100.83   Brokerage loans and lines of credit to candidates.
100.84   Office building for State, local, or district party 
committees or organizations.
100.85   Legal or accounting services to political party committees.
100.86   Legal or accounting services to other political committees.
100.87   Volunteer activity for party committees.
100.88   Volunteer activity for candidates.
100.89   Voter registration and get-out-the-vote activities for 
Presidential candidates (``coattails'' exception).
100.90   Ballot access fees.
100.91   Recounts.
100.92   Candidate debates.
Subpart D--Definition of Expenditure (2 U.S.C. 431(9))
Sec.
100.110   Scope.
100.111   Gift, subscription, loan, advance or deposit of money.
100.112   Contracts, promises, and agreements to make expenditures.
100.113   Independent expenditures.
100.114   Office building or facility for national party committees.
Subpart E--Exceptions to Expenditures
Sec.
100.130   Scope.
100.131   Testing the waters.
100.132   News story, commentary, or editorial by the media.
100.133   Voter registration and get-out-the-vote activities.
100.134   Internal communication by corporations, labor 
organizations, and membership organizations.
100.135   Use of a volunteer's real or personal property.
100.136   Use of church or community room.
100.137   Invitations, food, and beverages.
100.138   Sale of food or beverages by vendor.
100.139   Unreimbursed payment for transportation and subsistence 
expenses.
100.140   Slate cards and sample ballots.
100.141   Payment by corporations and labor organizations.
100.142   Bank loans.
100.143   Brokerage loans and lines of credit to candidates.
100.144   Office building for State, local, or district party 
committees or organizations.
100.145   Legal or accounting services to political party 
committees.
100.146   Legal or accounting services to other political 
committees.
100.147   Volunteer activity for party committees.
100.148   Volunteer activity for candidate.
100.149   Voter registration and get-out-the-vote activities for 
Presidential candidates (``coattails'' exception).
100.150   Ballot access fees.
100.151   Recounts.
100.152   Fundraising costs for Presidential candidates.
100.153   Routine living expenses.
100.154   Candidate debates.

Subpart B--Definition of Contribution (2 U.S.C. 431(8))


Sec. 100.51  Scope.

    (a) The term contribution includes the payments, services, or other 
things of value described in this subpart.
    (b) For the purpose of this subpart, a contribution or payment made 
by an individual shall not be attributed to any other individual, 
unless otherwise specified by that other individual in accordance with 
11 CFR 110.1(k).


Sec. 100.52  Gift, subscription, loan, advance or deposit of money.

    (a) A gift, subscription, loan (except for a loan made in 
accordance with 11 CFR 100.72 and 100.73), advance, or deposit of money 
or anything of value made by any person for the purpose of influencing 
any election for Federal office is a contribution.
    (b) For purposes of this section, the term loan includes a 
guarantee, endorsement, and any other form of security.
    (1) A loan that exceeds the contribution limitations of 2 U.S.C. 
441a and 11 CFR part 110 shall be unlawful whether or not it is repaid.
    (2) A loan is a contribution at the time it is made and is a 
contribution to the extent that it remains unpaid. The aggregate amount 
loaned to a candidate or committee by a contributor, when added to 
other contributions from that individual to that candidate or 
committee, shall not exceed the contribution limitations set forth at 
11 CFR part 110. A loan, to the extent it is repaid, is no longer a 
contribution.
    (3) Except as provided in paragraph (b)(4) of this section, a loan 
is a contribution by each endorser or guarantor. Each endorser or 
guarantor shall be deemed to have contributed that portion of the total 
amount of the loan for which he or she agreed to be liable in a written 
agreement. Any reduction in the unpaid balance of the loan shall reduce 
proportionately the amount endorsed or guaranteed by each endorser or 
guarantor in such written agreement. In the event that such agreement 
does not stipulate the portion

[[Page 40884]]

of the loan for which each endorser or guarantor is liable, the loan 
shall be considered a loan by each endorser or guarantor in the same 
proportion to the unpaid balance that each endorser or guarantor bears 
to the total number of endorsers or guarantors.
    (4) A candidate may obtain a loan on which his or her spouse's 
signature is required when jointly owned assets are used as collateral 
or security for the loan. The spouse shall not be considered a 
contributor to the candidate's campaign if the value of the candidate's 
share of the property used as collateral equals or exceeds the amount 
of the loan that is used for the candidate's campaign.
    (5) If a political committee makes a loan to any person, such loan 
shall be subject to the limitations of 11 CFR part 110. Repayment of 
the principal amount of such loan to such political committee shall not 
be a contribution by the debtor to the lender committee. Such repayment 
shall be made with funds that are subject to the prohibitions of 11 CFR 
110.4(a) and part 114. The payment of interest to such committee by the 
debtor shall be a contribution only to the extent that the interest 
paid exceeds a commercially reasonable rate prevailing at the time the 
loan is made. All payments of interest shall be made from funds subject 
to the prohibitions of 11 CFR 110.4(a) and part 114.
    (c) For purposes of this section, the term money includes currency 
of the United States or of any foreign nation, checks, money orders, or 
any other negotiable instruments payable on demand.
    (d)(1) For purposes of this section, the term anything of value 
includes all in-kind contributions. Unless specifically exempted under 
11 CFR part 100, subpart C, the provision of any goods or services 
without charge or at a charge that is less than the usual and normal 
charge for such goods or services is a contribution. Examples of such 
goods or services include, but are not limited to: Securities, 
facilities, equipment, supplies, personnel, advertising services, 
membership lists, and mailing lists. If goods or services are provided 
at less than the usual and normal charge, the amount of the in-kind 
contribution is the difference between the usual and normal charge for 
the goods or services at the time of the contribution and the amount 
charged the political committee.
    (2) For purposes of paragraph (d)(1) of this section, usual and 
normal charge for goods means the price of those goods in the market 
from which they ordinarily would have been purchased at the time of the 
contribution; and usual and normal charge for any services, other than 
those provided by an unpaid volunteer, means the hourly or piecework 
charge for the services at a commercially reasonable rate prevailing at 
the time the services were rendered.


Sec. 100.53  Attendance at a fundraiser or political event.

    The entire amount paid to attend a fundraiser or other political 
event and the entire amount paid as the purchase price for a 
fundraising item sold by a political committee is a contribution.


Sec. 100.54  Compensation for personal services.

    The payment by any person of compensation for the personal services 
of another person if those services are rendered without charge to a 
political committee for any purpose, except for legal and accounting 
services provided under 11 CFR 100.74 and 100.75, is a contribution. No 
compensation is considered paid to any employee under any of the 
following conditions:
    (a) Paid on an hourly or salaried basis. If an employee is paid on 
an hourly or salaried basis and is expected to work a particular number 
of hours per period, no contribution results if the employee engages in 
political activity during what would otherwise be a regular work 
period, provided that the taken or released time is made up or 
completed by the employee within a reasonable time.
    (b) Paid on commission or piecework basis. No contribution results 
where an employee engages in political activity during what would 
otherwise be normal working hours if the employee is paid on a 
commission or piecework basis, or is paid only for work actually 
performed and the employee's time is considered his or her own to use 
as he or she sees fit.
    (c) Vacation or earned leave time. No contribution results where 
the time used by the employee to engage in political activity is bona 
fide, although compensable, vacation time or other earned leave time.


Sec. 100.55  Extension of credit.

    The extension of credit by any person is a contribution unless the 
credit is extended in the ordinary course of the person's business and 
the terms are substantially similar to extensions of credit to 
nonpolitical debtors that are of similar risk and size of obligation. 
If a creditor fails to make a commercially reasonable attempt to 
collect the debt, a contribution will result. (See 11 CFR 116.3 and 
116.4.) If a debt owed by a political committee is forgiven or settled 
for less than the amount owed, a contribution results unless such debt 
is settled in accordance with the standards set forth at 11 CFR 116.3 
and 116.4.


Sec. 100.56  Office building or facility for national party committees.

    A gift, subscription, loan, advance, or deposit of money or 
anything of value to a national party committee for the purchase or 
construction of an office building or facility is a contribution.

Subpart C--Exceptions to Contributions


Sec. 100.71  Scope.

    (a) The term contribution does not include payments, services or 
other things of value described in this subpart.
    (b) For the purpose of this subpart, a contribution or payment made 
by an individual shall not be attributed to any other individual, 
unless otherwise specified by that other individual in accordance with 
11 CFR 110.1(k).


Sec. 100.72  Testing the waters.

    (a) General exemption. Funds received solely for the purpose of 
determining whether an individual should become a candidate are not 
contributions. Examples of activities permissible under this exemption 
if they are conducted to determine whether an individual should become 
a candidate include, but are not limited to, conducting a poll, 
telephone calls, and travel. Only funds permissible under the Act may 
be used for such activities. The individual shall keep records of all 
such funds received. See 11 CFR 101.3. If the individual subsequently 
becomes a candidate, the funds received are contributions subject to 
the reporting requirements of the Act. Such contributions must be 
reported with the first report filed by the principal campaign 
committee of the candidate, regardless of the date the funds were 
received.
    (b) Exemption not applicable to individuals who have decided to 
become candidates. This exemption does not apply to funds received for 
activities indicating that an individual has decided to become a 
candidate for a particular office or for activities relevant to 
conducting a campaign. Examples of activities that indicate that an 
individual has decided to become a candidate include, but are not 
limited to:
    (1) The individual uses general public political advertising to 
publicize his or her intention to campaign for Federal office.
    (2) The individual raises funds in excess of what could reasonably 
be expected to be used for exploratory

[[Page 40885]]

activities or undertakes activities designed to amass campaign funds 
that would be spent after he or she becomes a candidate.
    (3) The individual makes or authorizes written or oral statements 
that refer to him or her as a candidate for a particular office.
    (4) The individual conducts activities in close proximity to the 
election or over a protracted period of time.
    (5) The individual has taken action to qualify for the ballot under 
State law.


Sec. 100.73  News story, commentary, or editorial by the media.

    Any cost incurred in covering or carrying a news story, commentary, 
or editorial by any broadcasting station (including a cable television 
operator, programmer or producer), newspaper, magazine, or other 
periodical publication is not a contribution unless the facility is 
owned or controlled by any political party, political committee, or 
candidate, in which case the costs for a news story:
    (a) That represents a bona fide news account communicated in a 
publication of general circulation or on a licensed broadcasting 
facility; and
    (b) That is part of a general pattern of campaign-related news 
accounts that give reasonably equal coverage to all opposing candidates 
in the circulation or listening area, is not a contribution.


Sec. 100.74  Uncompensated services by volunteers.

    The value of services provided without compensation by any 
individual who volunteers on behalf of a candidate or political 
committee is not a contribution.


Sec. 100.75  Use of a volunteer's real or personal property.

    No contribution results where an individual, in the course of 
volunteering personal services on his or her residential premises to 
any candidate or to any political committee of a political party, 
provides the use of his or her real or personal property to such 
candidate for candidate-related activity or to such political committee 
of a political party for party-related activity. For the purposes of 
this section, an individual's residential premises, shall include a 
recreation room in a residential complex where the individual 
volunteering services resides, provided that the room is available for 
use without regard to political affiliation. A nominal fee paid by such 
individual for the use of such room is not a contribution.


Sec. 100.76  Use of church or community room.

    No contribution results where an individual, in the course of 
volunteering personal services to any candidate or political committee 
of a political party, obtains the use of a church or community room and 
provides such room to any candidate for candidate-related activity or 
to any political committee of a political party for party-related 
activity, provided that the room is used on a regular basis by members 
of the community for noncommercial purposes and the room is available 
for use by members of the community without regard to political 
affiliation. A nominal fee paid by such individual for the use of such 
room is not a contribution.


Sec. 100.77  Invitations, food, and beverages.

    The cost of invitations, food and beverages is not a contribution 
where such items are voluntarily provided by an individual volunteering 
personal services on the individual's residential premises or in a 
church or community room as specified at 11 CFR 100.65 and 100.66 to a 
candidate for candidate-related activity or to any political committee 
of a political party for party-related activity, to the extent that: 
The aggregate value of such invitations, food and beverages provided by 
the individual on behalf of the candidate does not exceed $1,000 with 
respect to any single election; and on behalf of all political 
committees of each political party does not exceed $2,000 in any 
calendar year.


Sec. 100.78  Sale of food or beverages by vendor.

    The sale of any food or beverage by a vendor (whether incorporated 
or not) for use in a candidate's campaign, or for use by a political 
committee of a political party, at a charge less than the normal or 
comparable commercial rate, is not a contribution, provided that the 
charge is at least equal to the cost of such food or beverage to the 
vendor, to the extent that: The aggregate value of such discount given 
by the vendor on behalf of any single candidate does not exceed $1,000 
with respect to any single election; and on behalf of all political 
committees of each political party does not exceed $2,000 in a calendar 
year.


Sec. 100.79  Unreimbursed payment for transportation and subsistence 
expenses.

    (a) Transportation expenses. Any unreimbursed payment for 
transportation expenses incurred by any individual on behalf of any 
candidate or any political committee of a political party is not a 
contribution to the extent that:
    (1) The aggregate value of the payments made by such individual on 
behalf of a candidate does not exceed $1,000 with respect to a single 
election; and
    (2) The aggregate value of the payments made by such individual on 
behalf of all political committees of each political party does not 
exceed $2,000 in a calendar year.
    (b) Subsistence expenses. Any unreimbursed payment from a 
volunteer's personal funds for usual and normal subsistence expenses 
incidental to volunteer activity is not a contribution.


Sec. 100.80  Slate cards and sample ballots.

    The payment by a State or local committee of a political party of 
the costs of preparation, display, or mailing or other distribution 
incurred by such committee with respect to a printed slate card, sample 
ballot, palm card, or other printed listing(s) of three or more 
candidates for any public office for which an election is held in the 
State in which the committee is organized is not a contribution. The 
payment of the portion of such costs allocable to Federal candidates 
must be made from funds subject to the limitations and prohibitions of 
the Act. If made by a political committee, such payments shall be 
reported by that committee as disbursements, but need not be allocated 
in committee reports to specific candidates. This exemption shall not 
apply to costs incurred by such a committee with respect to the 
preparation and display of listings made on broadcasting stations, or 
in newspapers, magazines, and similar types of general public political 
advertising such as billboards.


Sec. 100.81  Payments by corporations and labor organizations.

    Any payment made or obligation incurred by a corporation or a labor 
organization is not a contribution, if under the provisions of 11 CFR 
part 114 such payment or obligation would not constitute an expenditure 
by the corporation or labor organization.


Sec. 100.82  Bank loans.

    (a) General provisions. A loan of money to a political committee or 
a candidate by a State bank, a federally chartered depository 
institution (including a national bank) or a depository institution 
whose deposits and accounts are insured by the Federal Deposit 
Insurance Corporation or the National Credit Union Administration is 
not a contribution by the lending

[[Page 40886]]

institution if such loan is made in accordance with applicable banking 
laws and regulations and is made in the ordinary course of business. A 
loan will be deemed to be made in the ordinary course of business if 
it:
    (1) Bears the usual and customary interest rate of the lending 
institution for the category of loan involved;
    (2) Is made on a basis that assures repayment;
    (3) Is evidenced by a written instrument; and
    (4) Is subject to a due date or amortization schedule.
    (b) Reporting. Such loans shall be reported by the political 
committee in accordance with 11 CFR 104.3(a) and (d).
    (c) Endorsers and guarantors. Each endorser or guarantor shall be 
deemed to have contributed that portion of the total amount of the loan 
for which he or she agreed to be liable in a written agreement, except 
that, in the event of a signature by the candidate's spouse, the 
provisions of 11 CFR 100.52(b)(4) shall apply. Any reduction in the 
unpaid balance of the loan shall reduce proportionately the amount 
endorsed or guaranteed by each endorser or guarantor in such written 
agreement. In the event that such agreement does not stipulate the 
portion of the loan for which each endorser or guarantor is liable, the 
loan shall be considered a contribution by each endorser or guarantor 
in the same proportion to the unpaid balance that each endorser or 
guarantor bears to the total number of endorsers or guarantors.
    (d) Overdrafts. For purposes of this section, an overdraft made on 
a checking or savings account of a political committee shall be 
considered a contribution by the bank or institution unless:
    (1)The overdraft is made on an account that is subject to automatic 
overdraft protection;
    (2)The overdraft is subject to a definite interest rate that is 
usual and customary; and
    (3)There is a definite repayment schedule.
    (e) Made on a basis that assures repayment. A loan, including a 
line of credit, shall be considered made on a basis that assures 
repayment if it is obtained using either of the sources of repayment 
described in paragraphs (e)(1) or (2) of this section, or a combination 
of paragraphs (e)(1) and (2) of this section:
    (1)(i) The lending institution making the loan has perfected a 
security interest in collateral owned by the candidate or political 
committee receiving the loan, the fair market value of the collateral 
is equal to or greater than the loan amount and any senior liens as 
determined on the date of the loan, and the candidate or political 
committee provides documentation to show that the lending institution 
has a perfected security interest in the collateral. Sources of 
collateral include, but are not limited to, ownership in real estate, 
personal property, goods, negotiable instruments, certificates of 
deposit, chattel papers, stocks, accounts receivable and cash on 
deposit.
    (ii) Amounts guaranteed by secondary sources of repayment, such as 
guarantors and cosigners, shall not exceed the contribution limits of 
11 CFR part 110 or contravene the prohibitions of 11 CFR 110.4, part 
114 and part 115; or
    (2) The lending institution making the loan has obtained a written 
agreement whereby the candidate or political committee receiving the 
loan has pledged future receipts, such as public financing payments 
under 11 CFR part 9001 through part 9012 or part 9031 through part 9039 
contributions, or interest income, provided that:
    (i) The amount of the loan or loans obtained on the basis of such 
funds does not exceed the amount of pledged funds;
    (ii) Loan amounts are based on a reasonable expectation of the 
receipt of pledged funds. To that end, the candidate or political 
committee must furnish the lending institution documentation, i.e., 
cash flow charts or other financial plans, that reasonably establish 
that such future funds will be available;
    (iii) A separate depository account is established at the lending 
institution or the lender obtains an assignment from the candidate or 
political committee to access funds in a committee account at another 
depository institution that meets the requirements of 11 CFR 103.2, and 
the committee has notified the other institution of this assignment;
    (iv) The loan agreement requires the deposit of the public 
financing payments, contributions and interest income pledged as 
collateral into the separate depository account for the purpose of 
retiring the debt according to the repayment requirements of the loan 
agreement; and
    (v) In the case of public financing payments, the borrower 
authorizes the Secretary of the Treasury to directly deposit the 
payments into the depository account for the purpose of retiring the 
debt.
    (3) If the requirements set forth in this paragraph are not met, 
the Commission will consider the totality of the circumstances on a 
case-by-case basis in determining whether a loan was made on a basis 
that assures repayment.
    (f) This section shall not apply to loans described in 11 CFR 
100.73.


Sec. 100.83  Brokerage loans and lines of credit to candidates.

    (a) General provisions. Any loan of money derived from an advance 
on a candidate's brokerage account, credit card, home equity line of 
credit, or other line of credit available to the candidate, including 
an overdraft made on a personal checking or savings account of a 
candidate, provided that:
    (1) Such loan is made in accordance with applicable law and under 
commercially reasonable terms; and
    (2) The person making such loan makes loans derived from an advance 
on a candidate's brokerage account, credit card, home equity line of 
credit, or other line of credit in the normal course of the person's 
business.
    (b) Endorsers and guarantors. Each endorser, guarantor, or co-
signer shall be deemed to have contributed that portion of the total 
amount of the loan derived from an advance on a candidate's brokerage 
account, credit card, home equity line of credit, or other line of 
credit available to the candidate, for which he or she agreed to be 
liable in a written agreement, including a loan used for the 
candidate's routine living expenses. Any reduction in the unpaid 
balance of the loan, advance, or line of credit shall reduce 
proportionately the amount endorsed or guaranteed by each endorser or 
guarantor in such written agreement. In the event that such agreement 
does not stipulate the portion of the loan, advance, or line of credit 
for which each endorser, guarantor, or co-signer is liable, the loan 
shall be considered a contribution by each endorser or guarantor in the 
same proportion to the unpaid balance that each endorser, guarantor, or 
co-signer bears to the total number of endorsers or guarantors. 
However, if the spouse of the candidate is the endorser, guarantor, or 
co-signer, the spouse shall not be deemed to make a contribution if:
    (1) For a secured loan, the value of the candidate's share of the 
property used as collateral equals or exceeds the amount of the loan 
that is used for the candidate's campaign; or
    (2) For an unsecured loan, the amount of the loan used for in 
connection with the candidate's campaign does not exceed one-half of 
the available credit extended by the unsecured loan.
    (c) Routine living expenses. (1) A loan derived from an advance on 
a candidate's brokerage account, credit card, home equity line of 
credit, or other line of credit available to the candidate,

[[Page 40887]]

that is used by the candidate solely for routine living expenses, as 
described in 11 CFR 100.153, does not need to be reported under 11 CFR 
part 104 provided that the loan, advance, or line of credit is repaid 
exclusively from the personal funds of the candidate or payments that 
would have been made irrespective of the candidacy pursuant to 11 CFR 
113.1(g)(6).
    (2) Any repayment, in part or in whole, of the loan, advance, or 
line of credit described in paragraph (c)(1) of this section by the 
candidate's authorized committee constitutes the personal use of 
campaign funds and is prohibited by 11 CFR 113.2.
    (3) Any repayment or forgiveness, in part or in whole, of the loan, 
advance, or line of credit described in paragraph (c)(1) of this 
section by a third party (other than a third party whose payments are 
permissible under 11 CFR 113.1(g)(6)) or the lending institution is a 
contribution, subject to the limitations and prohibitions of 11 CFR 
parts 110 and 114, and shall be reported under 11 CFR part 104.
    (4) Notwithstanding paragraph (c)(1) of this section, the portion 
of any loan or advance from a candidate's brokerage account, credit 
card account, home equity line of credit, or other line of credit that 
is used for the purpose of influencing the candidate's election for 
Federal office shall be reported under 11 CFR part 104.
    (d) Repayment. The candidate's authorized committee may repay a 
loan from the candidate that is derived from an advance on a 
candidate's brokerage account, credit card, home equity line of credit, 
or other line of credit available to the candidate, directly to the 
candidate or the original lender. The amount of the repayment shall not 
exceed the amount of the principal used for the purpose of influencing 
the candidate's election for Federal office and interest that has 
accrued on that principal.
    (e) Reporting. Loans derived from an advance on a candidate's 
brokerage account, credit card, home equity line of credit, or other 
line of credit available to the candidate shall be reported by the 
candidate's principal campaign committee in accordance with 11 CFR part 
104.


Sec. 100.84  Office building for State, local, or district party 
committees or organizations.

    A donation made to a non-Federal account of a State, local, or 
district party committee or organization in accordance with 11 CFR 
300.35 for the purchase or construction of an office building is not a 
contribution. A donation includes a gift, subscription, loan, advance, 
or deposit of money or anything of value.


Sec. 100.85  Legal or accounting services to political party 
committees.

    Legal or accounting services rendered to or on behalf of any 
political committee of a political party are not contributions if the 
person paying for such services is the regular employer of the 
individual rendering the services and such services are not 
attributable to activities that directly further the election of any 
designated candidate for Federal office. For purposes of this section, 
a partnership shall be deemed to be the regular employer of a partner. 
Amounts paid by the regular employer for such services shall be 
reported by the committee receiving such services in accordance with 11 
CFR 104.3(h).


Sec. 100.86  Legal or accounting services to other political 
committees.

    Legal or accounting services rendered to or on behalf of an 
authorized committee of a candidate or any other political committee 
are not contributions if the person paying for such services is the 
regular employer of the individual rendering the services and if such 
services are solely to ensure compliance with the Act or 26 U.S.C. 9001 
et seq. and 9031 et seq. For purposes of this section, a partnership 
shall be deemed to be the regular employer of a partner. Amounts paid 
by the regular employer for these services shall be reported by the 
committee receiving such services in accordance with 11 CFR 104.3(h).


Sec. 100.87  Volunteer activity for party committees.

    The payment by a state or local committee of a political party of 
the costs of campaign materials (such as pins, bumper stickers, 
handbills, brochures, posters, party tabloids or newsletters, and yard 
signs) used by such committee in connection with volunteer activities 
on behalf of any nominee(s) of such party is not a contribution, 
provided that the following conditions are met:
    (a) Exemption not applicable to general public communication or 
political advertising. Such payment is not for cost incurred in 
connection with any broadcasting, newspaper, magazine, bill board, 
direct mail, or similar type of general public communication or 
political advertising. For purposes of this paragraph, the term direct 
mail means any mailing(s) by a commercial vendor or any mailing(s) made 
from commercial lists.
    (b) Allocation. The portion of the cost of such materials allocable 
to Federal candidates must be paid from contributions subject to the 
limitations and prohibitions of the Act.
    (c) Contributions designated for particular Federal candidates. 
Such payment is not made from contributions designated by the donor to 
be spent on behalf of a particular candidate or candidates for Federal 
office. For purposes of this paragraph, a contribution shall not be 
considered a designated contribution if the party committee disbursing 
the funds makes the final decision regarding which candidate(s) shall 
receive the benefit of such disbursement.
    (d) Distribution of materials by volunteers. Such materials are 
distributed by volunteers and not by commercial or for-profit 
operations. For the purposes of this paragraph, payments by the party 
organization for travel and subsistence or customary token payments to 
volunteers do not remove such individuals from the volunteer category.
    (e) Reporting. If made by a political committee such payments shall 
be reported by the political committee as disbursements in accordance 
with 11 CFR 104.3 but need not be allocated to specific candidates in 
committee reports.
    (f) State candidates and their campaign committees. Payments by a 
State candidate or his or her campaign committee to a State or local 
political party committee for the State candidate's share of expenses 
for such campaign materials are not contributions, provided the amount 
paid by the State candidate or his or her committee does not exceed his 
or her proportionate share of the expenses.
    (g) Exemption not applicable to campaign materials purchased by 
national party committees. Campaign materials purchased by the national 
committee of a political party and delivered to a State or local party 
committee, or materials purchased with funds donated by the national 
committee to such State or local committee for the purchase of such 
materials, shall not qualify under this exemption. Rather, the cost of 
such materials shall be subject to the limitations of 2 U.S.C. 441a(d) 
and 11 CFR 110.7.


Sec. 100.88  Volunteer activity for candidates.

    (a) The payment by a candidate for any public office (including 
State or local office), or by such candidate's authorized committee, of 
the costs of that candidate's campaign materials that include 
information on or any reference to a candidate for Federal office and 
that are used in connection with volunteer activities (such as pins, 
bumper stickers,

[[Page 40888]]

handbills, brochures, posters, and yard signs) is not a contribution to 
such candidate for Federal office, provided that the payment is not for 
the use of broadcasting, newspapers, magazines, billboards, direct mail 
or similar types of general public communication or political 
advertising.
    (b) The payment of the portion of the cost of such materials 
allocable to Federal candidates shall be made from contributions 
subject to the limitations and prohibitions of the Act. For purposes of 
this section, the term direct mail means any mailing(s) by commercial 
vendors or mailing(s) made from lists that were not developed by the 
candidate.


Sec. 100.89  Voter registration and get-out-the-vote activities for 
Presidential candidates (``coattails'' exception).

    The payment by a State or local committee of a political party of 
the costs of voter registration and get-out-the-vote activities 
conducted by such committee on behalf of the Presidential and Vice 
Presidential nominee(s) of that party, is not a contribution to such 
candidate(s) provided that the following conditions are met:
    (a) Exemption not applicable to general public communication or 
political advertising. Such payment is not for the costs incurred in 
connection with any broadcasting, newspaper, magazine, billboard, 
direct mail, or similar type of general public communication or 
political advertising. For purposes of this paragraph, the term direct 
mail means any mailing(s) by a commercial vendor or any mailing(s) made 
from commercial lists.
    (b) Allocation. The portion of the costs of such activities 
allocable to Federal candidates is paid from contributions subject to 
the limitations and prohibitions of the Act.
    (c) Contributions designated for particular Federal candidates. 
Such payment is not made from contributions designated to be spent on 
behalf of a particular candidate or candidates for Federal office. For 
purposes of this paragraph, a contribution shall not be considered a 
designated contribution if the party committee disbursing the funds 
makes the final decision regarding which candidate(s) shall receive the 
benefit of such disbursement.
    (d) References to House or Senate candidates. For purposes of this 
section, if such activities include references to any candidate(s) for 
the House or Senate, the costs of such activities that are allocable to 
that candidate(s) shall be a contribution to such candidate(s) unless 
the mention of such candidate(s) is merely incidental to the overall 
activity.
    (e) Phone banks. For purposes of this section, payment of the costs 
incurred in the use of phone banks in connection with voter 
registration and get-out-the-vote activities is not a contribution when 
such phone banks are operated by volunteer workers. The use of paid 
professionals to design the phone bank system, develop calling 
instructions and train supervisors is permissible. The payment of the 
costs of such professional services is not an expenditure but shall be 
reported as a disbursement in accordance with 11 CFR 104.3 if made by a 
political committee.
    (f) Reporting of payments for voter registration and get-out-the-
vote activities. If made by a political committee, such payments for 
voter registration and get-out-the-vote activities shall be reported by 
that committee as disbursements in accordance with 11 CFR 104.3, but 
such payments need not be allocated to specific candidates in committee 
reports except as provided in 11 CFR 100.78(d).
    (g) Exemption not applicable to donations by a national committee 
of a political party to a State or local party committee for voter 
registration and get-out-the-vote activities. Payments made from funds 
donated by a national committee of a political party to a State or 
local party committee for voter registration and get-out-the-vote 
activities shall not qualify under this exemption. Rather, such funds 
shall be subject to the limitations of 2 U.S.C. 441a(d) and 11 CFR 
110.7.


Sec. 100.90  Ballot access fees.

    Payments made to any party committee by a candidate or the 
authorized committee of a candidate as a condition of ballot access are 
not contributions.


Sec. 100.91  Recounts.

    A gift, subscription, loan, advance, or deposit of money or 
anything of value made with respect to a recount of the results of a 
Federal election, or an election contest concerning a Federal election, 
is not a contribution except that the prohibitions of 11 CFR 110.4(a) 
and part 114 apply.


Sec. 100.92  Candidate debates.

    Funds provided to defray costs incurred in staging candidate 
debates in accordance with the provisions of 11 CFR 110.13 and 114.4(f) 
are not contributions.

Subpart D--Definition of Expenditure (2 U.S.C. 431(9))


Sec. 100.110  Scope.

    (a) The term expenditure includes payments, gifts or other things 
of value described in this subpart.
    (b) For the purpose of this subpart, a payment made by an 
individual shall not be attributed to any other individual, unless 
otherwise specified by that other individual. To the extent that a 
payment made by an individual qualifies as a contribution, the 
provisions of 11 CFR 110.1(k) shall apply.


Sec. 100.111  Gift, subscription, loan, advance or deposit of money.

    (a) A purchase, payment, distribution, loan (except for a loan made 
in accordance with 11 CFR 100.113 and 100.114), advance, deposit, or 
gift of money or anything of value, made by any person for the purpose 
of influencing any election for Federal office is an expenditure.
    (b) For purposes of this section, the term payment includes payment 
of any interest on an obligation and any guarantee or endorsement of a 
loan by a candidate or a political committee.
    (c) For purposes of this section, the term payment does not include 
the repayment by a political committee of the principal of an 
outstanding obligation that is owed by such committee, except that the 
repayment shall be reported as disbursements in accordance with 11 CFR 
104.3(b).
    (d) For purposes of this section, the term money includes currency 
of the United States or of any foreign nation, checks, money orders, or 
any other negotiable instrument payable on demand.
    (e)(1) For purposes of this section, the term anything of value 
includes all in-kind contributions. Unless specifically exempted under 
11 CFR part 100, subpart E, the provision of any goods or services 
without charge or at a charge that is less than the usual and normal 
charge for the goods or services is an expenditure. Examples of such 
goods or services include, but are not limited to: Securities, 
facilities, equipment, supplies, personnel, advertising services, 
membership lists, and mailing lists. If goods or services are provided 
at less than the usual and normal charge, the amount of the expenditure 
is the difference between the usual and normal charge for the goods or 
services at the time of the expenditure and the amount charged the 
candidate or political committee.
    (2) For the purposes of paragraph (e)(1) of this section, usual and 
normal

[[Page 40889]]

charge for goods means the price of those goods in the market from 
which they ordinarily would have been purchased at the time of the 
expenditure; and usual and normal charge for services, other than those 
provided by an unpaid volunteer, means the hourly or piecework charge 
for the services at a commercially reasonable rate prevailing at the 
time the services were rendered.


Sec. 100.112  Contracts, promises, and agreements to make expenditures.

    A written contract, including a media contract, promise, or 
agreement to make an expenditure is an expenditure as of the date such 
contract, promise or obligation is made.


Sec. 100.113  Independent expenditures.

    An independent expenditure that meets the requirements of 11 CFR 
104.4 or part 109 is an expenditure, and such independent expenditure 
is to be reported by the person making the expenditure in accordance 
with 11 CFR 104.4 and part 109.


Sec. 100.114  Office building or facility for national party 
committees.

    A payment, distribution, loan, advance, or deposit of money or 
anything of value made by, or on behalf of, a national party committee 
for the purchase or construction of an office building or facility is 
an expenditure.

Subpart E--Exceptions to Expenditures


Sec. 100.130  Scope

    (a) The term expenditure does not include payments, gifts, or other 
things of value described in this subpart.
    (b) For the purpose of this subpart, a payment made by an 
individual shall not be attributed to any other individual, unless 
otherwise specified by that other individual. To the extent that a 
payment made by an individual qualifies as a contribution, the 
provisions of 11 CFR 110.1(k) shall apply.


Sec. 100.131  Testing the waters.

    (a) General exemption. Payments made solely for the purpose of 
determining whether an individual should become a candidate are not 
expenditures. Examples of activities permissible under this exemption 
if they are conducted to determine whether an individual should become 
a candidate include, but are not limited to, conducting a poll, 
telephone calls, and travel. Only funds permissible under the Act may 
be used for such activities. The individual shall keep records of all 
such payments. See 11 CFR 101.3. If the individual subsequently becomes 
a candidate, the payments made are subject to the reporting 
requirements of the Act. Such expenditures must be reported with the 
first report filed by the principal campaign committee of the 
candidate, regardless of the date the payments were made.
    (b) Exemption not applicable to individuals who have decided to 
become candidates. This exemption does not apply to payments made for 
activities indicating that an individual has decided to become a 
candidate for a particular office or for activities relevant to 
conducting a campaign. Examples of activities that indicate that an 
individual has decided to become a candidate include, but are not 
limited to:
    (1) The individual uses general public political advertising to 
publicize his or her intention to campaign for Federal office.
    (2) The individual raises funds in excess of what could reasonably 
be expected to be used for exploratory activities or undertakes 
activities designed to amass campaign funds that would be spent after 
he or she becomes a candidate.
    (3) The individual makes or authorizes written or oral statements 
that refer to him or her as a candidate for a particular office.
    (4) The individual conducts activities in close proximity to the 
election or over a protracted period of time.
    (5) The individual has taken action to qualify for the ballot under 
State law.


Sec. 100.132  Newsstory, commentary, or editorial by the media.

    Any cost incurred in covering or carrying a new story, commentary, 
or editorial by any broadcasting station (including a cable television 
operator, programmer or producer), newspaper, magazine, or other 
periodical publication is not an expenditure unless the facility is 
owned or controlled by any political party, political committee, or 
candidate, in which case the costs for a news story:
    (a) That represents a bona fide news account communicated in a 
publication of general circulation or on a licensed broadcasting 
facility; and
    (b) That is part of a general pattern of campaign-related news 
account that give reasonably equal coverage to all opposing candidates 
in the circulation or listening area, is not an expenditure.


Sec. 100.133  Voter registration and get-out-the-vote activities.

    Any cost incurred for activity designed to encourage individuals to 
register to vote or to vote is not an expenditure if no effort is or 
has been made to determine the party or candidate preference of 
individuals before encouraging them to register to vote or to vote, 
except that corporations and labor organizations shall engage in such 
activity in accordance with 11 CFR 114.4 (c) and (d). See also 11 CFR 
114.3(c)(4).


Sec. 100.134  Internal communications by corporations, labor 
organizations, and membership organizations.

    (a) General provision. Any cost incurred for any communication by a 
membership organization, including a labor organization, to its 
members, or any cost incurred for any communication by a corporation to 
its stockholders or executive or administrative personnel, is not an 
expenditure, except that the costs directly attributable to such a 
communication that expressly advocates the election or defeat of a 
clearly identified candidate (other than a communication primarily 
devoted to subjects other than the express advocacy of the election or 
defeat of a clearly identified candidate) shall, if those costs exceed 
$2,000 per election, be reported to the Commission on FEC Form 7 in 
accordance with 11 CFR 104.6.
    (b) Definition of labor organization. For purposes of this section, 
labor organization means an organization of any kind (any local, 
national, or international union, or any local or State central body of 
a federation of unions is each considered a separate labor organization 
for purposes of this section) or any agency or employee representative 
committee or plan, in which employees participate and that exists for 
the purpose, in whole or in part, of dealing with employers concerning 
grievances, labor disputes, wages, rates of pay, hours of employment, 
or conditions of work.
    (c) Definition of stockholder. For purposes of this section, 
stockholder means a person who has a vested beneficial interest in 
stock, has the power to direct how that stock shall be voted, if it is 
voting stock, and has the right to receive dividends.
    (d) Definition of executive or administrative personnel. For 
purposes of this section, executive or administrative personnel means 
individuals employed by a corporation who are paid on a salary rather 
than hourly basis and who have policymaking, managerial, professional, 
or supervisory responsibilities.
    (1) This definition includes--
    (i) Individuals who run the corporation's business, such as 
officers,

[[Page 40890]]

other executives, and plant, division, and section managers; and
    (ii) Individuals following the recognized professions, such as 
lawyers and engineers.
    (2) This definition does not include--
    (i) Professionals who are represented by a labor organization;
    (ii) Salaried foremen and other salaried lower level supervisors 
having direct supervision over hourly employees;
    (iii) Former or retired personnel who are not stockholders; or
    (iv) Individuals who may be paid by the corporation, such as 
consultants, but who are not employees, within the meaning of 26 CFR 
31.3401(c)-(1), of the corporation for the purpose of the collection 
of, and liability for, employee tax under 26 CFR 1.3402(a)-(1).
    (3) Individuals on commission may be considered executive or 
administrative personnel if they have policymaking, managerial, 
professional, or supervisory responsibility and if the individuals are 
employees, within the meaning of 26 CFR 31.3401(c)-(1), of the 
corporation for the purpose of the collection of, and liability for, 
employee tax under 26 CFR 31.3402(a)-(1).
    (4) The Fair Labor Standards Act, 29 U.S.C. 201, et seq. and the 
regulations issued pursuant to such Act, 29 CFR part 541, may serve as 
a guideline in determining whether individuals have policymaking, 
managerial, professional, or supervisory responsibilities.
    (e) Definition of membership organization. For purposes of this 
section membership organization means an unincorporated association, 
trade association, cooperative, corporation without capital stock, or a 
local, national, or international labor organization that:
    (1) Is composed of members, some or all of whom are vested with the 
power and authority to operate or administer the organization, pursuant 
to the organization's articles, bylaws, constitution or other formal 
organizational documents;
    (2) Expressly states the qualifications and requirements for 
membership in its articles, bylaws, constitution or other formal 
organizational documents;
    (3) Makes its articles, bylaws, constitution or other formal 
organizational documents available to its members;
    (4) Expressly solicits persons to become members;
    (5) Expressly acknowledges the acceptance of membership, such as by 
sending a membership card or including the member's name on a 
membership newsletter list; and
    (6) Is not organized primarily for the purpose of influencing the 
nomination for election, or election, of any individual for Federal 
office.
    (f) Definition of members. For purposes of this section, the term 
members includes all persons who are currently satisfying the 
requirements for membership in a membership organization, affirmatively 
accept the membership organization's invitation to become a member, and 
either:
    (1) Have some significant financial attachment to the membership 
organization, such as a significant investment or ownership stake; or
    (2) Pay membership dues at least annually, of a specific amount 
predetermined by the organization; or
    (3) Have a significant organizational attachment to the membership 
organization that includes: Affirmation of membership on at least an 
annual basis and direct participatory rights in the governance of the 
organization. For example, such rights could include the right to vote 
directly or indirectly for at least one individual on the membership 
organization's highest governing board; the right to vote on policy 
questions where the highest governing body of the membership 
organization is obligated to abide by the results; the right to approve 
the organization's annual budget; or the right to participate directly 
in similar aspects of the organization's governance.
    (g) Additional considerations in determining membership. 
Notwithstanding the requirements of paragraph (f) of this section, the 
Commission may determine, on a case-by-case basis, that persons who do 
not precisely meet the requirements of the general rule, but have a 
relatively enduring and independently significant financial or 
organizational attachment to the organization, may be considered 
members for purposes of this section. For example, student members who 
pay a lower amount of dues while in school, long term dues paying 
members who qualify for lifetime membership status with little or no 
dues obligation, and retired members may be considered members of the 
organization.
    (h) Members of local unions. Notwithstanding the requirements of 
paragraph (f) of this section, members of a local union are considered 
to be members of any national or international union of which the local 
union is a part and of any federation with which the local, national, 
or international union is affiliated.
    (i) National federation structures. In the case of a membership 
organization that has a national federation structure or has several 
levels, including, for example, national, state, regional and/or local 
affiliates, a person who qualifies as a member of any entity within the 
federation or of any affiliate by meeting the requirements of 
paragraphs (f)(1), (2), or (3) of this section shall also qualify as a 
member of all affiliates for purposes of paragraphs (d) through (h) of 
this section. The factors set forth at 11 CFR 100.5(g)(2), (3) and (4) 
shall be used to determine whether entities are affiliated for purposes 
of this paragraph.
    (j) Non-applicability of state law in determining status of 
membership organizations. The status of a membership organization, and 
of members, for purposes of this section, shall be determined pursuant 
to paragraphs (d) through (i) of this section and not by provisions of 
state law governing unincorporated associations, trade associations, 
cooperatives, corporations without capital stock, or labor 
organizations.
    (k) Definition of election. For purposes of this section, election 
means two separate processes in a calendar year, to each of which the 
$2,000 threshold described above applies separately. The first process 
is comprised of all primary elections for Federal office, whenever and 
wherever held; the second process is comprised of all general elections 
for Federal office, whenever and wherever held. The term election shall 
also include each special election held to fill a vacancy in a Federal 
office (11 CFR 100.2(f)) or each runoff election (11 CFR 100.2(d)).
    (l) Definition of corporation. For purposes of this section, 
corporation means any separately incorporated entity, whether or not 
affiliated.
    (m) Reporting. When the aggregate costs under this section exceed 
$2,000 per election, all costs of the communication(s) shall be 
reported on the filing dates specified in 11 CFR 104.6, and shall 
include the total amount expended for each candidate supported.


Sec. 100.135  Use of a volunteer's real or personal property.

    No expenditure results where an individual, in the course of 
volunteering personal services on his or her residential premises to 
any candidate or political committee of a political party, provides the 
use of his or her real or personal property to such candidate for 
candidate-related activity or to such political committee of a 
political party for party-related activity. For the purposes of this 
section, an individual's residential premises shall include a 
recreation room in a residential complex where the individual 
volunteering services resides, provided that the room

[[Page 40891]]

is available for use without regard to political affiliation. A nominal 
fee paid by such individual for the use of such room is not an 
expenditure.


Sec. 100.136  Use of a church or a community room.

    No expenditure results where an individual, in the course of 
volunteering personal services to any candidate or political committee 
of a political party, obtains the use of a church or community room and 
provides such room to any candidate for candidate-related activity or 
to any political committee of a political party for party-related 
activity, provided that the room is used on a regular basis by members 
of the community for noncommercial purposes and the room is available 
for use by members of the community without regard to political 
affiliation. A nominal fee paid by such individual for the use of such 
room is not an expenditure.


Sec. 100.137  Invitations, food, and beverages.

    The cost of invitations, food, and beverages is not an expenditure 
where such items are voluntarily provided by an individual in rendering 
voluntary personal services on the individual's residential premises or 
in a church or community room as specified at 11 CFR 100.106 and 
100.107 to a candidate for candidate-related activity or to a political 
committee of a political party for party-related activity, to the 
extent that: The aggregate value of such invitations, food and 
beverages provided by the individual on behalf of the candidate does 
not exceed $1,000 with respect to any single election; and on behalf of 
all political committees of each political party does not exceed $2,000 
in any calendar year.


Sec. 100.138  Sale of food and beverages by vendor.

    The sale of any food or beverage by a vendor (whether incorporated 
or not) for use in a candidate's campaign, or for use by a political 
committee of a political party, at a charge less than the normal or 
comparable commercial charge, is not an expenditure, provided that the 
charge is at least equal to the cost of such food or beverage to the 
vendor, to the extent that: The aggregate value of such discount given 
by the vendor on behalf of any single candidate does not exceed $1,000 
with respect to any single election; and on behalf of all political 
committees of each political party does not exceed $2,000 in a calendar 
year.


Sec. 100.139  Unreimbursed payment for transportation and subsistence 
expenses.

    (a) Transportation expenses. Any unreimbursed payment for 
transportation expenses incurred by any individual on behalf of any 
candidate or political committee of a political party is not an 
expenditure to the extent that:
    (1) The aggregate value of the payments made by such individual on 
behalf of a candidate does not exceed $1,000 with respect to a single 
election; and
    (2) On behalf of all political committees of each political party 
does not exceed $2,000 in a calendar year.
    (b) Subsistence expenses. Any unreimbursed payment from a 
volunteer's personal funds for usual and normal subsistence expenses 
incident to volunteer activity is not an expenditure.


Sec. 100.140  Slate cards and sample ballots.

    The payment by a State or local committee of a political party of 
the costs of preparation, display, or mailing or other distribution 
incurred by such committee with respect to a printed slate card, sample 
ballot, palm card, or other printed listing(s) of three or more 
candidates for any public office for which an election is held in the 
State in which the committee is organized is not an expenditure. The 
payment of the portion of such costs allocable to Federal candidates 
must be made from funds subject to the limitations and prohibitions of 
the Act. If made by a political party committee, such payments shall be 
reported by that committee as disbursements, but need not be allocated 
in committee reports to specific candidates. This exemption shall not 
apply to costs incurred by such a committee with respect to the 
preparation and display of listings made on broadcasting stations, or 
in newspapers, magazines, and similar types of general public political 
advertising such as billboards.


Sec. 100.141  Payment by corporations and labor organizations.

    Any payment made or obligation incurred by a corporation or labor 
organization is not an expenditure if under the provisions of 11 CFR 
part 114 such payment or obligation would not constitute an expenditure 
by the corporation or labor organization.


Sec. 100.142  Bank loans.

    (a) General provisions. Repayment of a loan of money to a candidate 
or a political committee by a State bank, a federally chartered 
depository institution (including a national bank) or a depository 
institution whose deposits and accounts are insured by the Federal 
Deposit Insurance Corporation or the National Credit Union 
Administration is not an expenditure by the lending institution if such 
loan is made in accordance with applicable banking laws and regulations 
and is made in the ordinary course of business. A loan will be deemed 
to be made in the ordinary course of business if it:
    (1) Bears the usual and customary interest rate of the lending 
institution for the category of loan involved;
    (2) Is made on a basis that assures repayment;
    (3) Is evidenced by a written instrument; and
    (4) Is subject to a due date or amortization schedule.
    (b) Reporting. Such loans shall be reported by the political 
committee in accordance with 11 CFR 104.3(a) and (d).
    (c) Endorsers and guarantors. Each endorser or guarantor shall be 
deemed to have contributed that portion of the total amount of the loan 
for which he or she agreed to be liable in a written agreement, except 
that, in the event of a signature by the candidate's spouse, the 
provisions of 11 CFR 100.52(b)(4) shall apply. Any reduction in the 
unpaid balance of the loan shall reduce proportionately the amount 
endorsed or guaranteed by each endorser or guarantor in such written 
agreement. In the event that the loan agreement does not stipulate the 
portion of the loan for which each endorser or guarantor is liable, the 
loan shall be considered an expenditure by each endorser or guarantor 
in the same proportion to the unpaid balance that each endorser or 
guarantor bears to the total number of endorsers or guarantors.
    (d) Overdrafts. For the purpose of this section, repayment of an 
overdraft made on a checking or savings account of a political 
committee shall be considered an expenditure unless:
    (1) The overdraft is made on an account that is subject to 
automatic overdraft protection; and
    (2) The overdraft is subject to a definite interest rate and a 
definite repayment schedule.
    (e) Made on a basis that assures repayment. A loan, including a 
line of credit, shall be considered made on a basis that assures 
repayment if it is obtained using either of the sources of repayment 
described in paragraphs (e)(1) or (2) of this section, or a combination 
of paragraphs (e)(1) or (2) of this section:
    (1)(i) The lending institution making the loan has perfected a 
security interest in collateral owned by the candidate or political 
committee receiving the loan;

[[Page 40892]]

the fair market value of the collateral is equal to or greater than the 
loan amount and any senior liens as determined on the date of the loan; 
and the candidate or political committee provides documentation to show 
that the lending institution has a perfected security interest in the 
collateral. Sources of collateral include, but are not limited to, 
ownership in real estate, personal property, goods, negotiable 
instruments, certificates of deposit, chattel papers, stocks, accounts 
receivable and cash on deposit.
    (ii) Amounts guaranteed by secondary sources of repayment, such as 
guarantors and cosigners, shall not exceed the contribution limits of 
11 CFR part 110 or contravene the prohibitions of 11 CFR 110.4, part 
114 and part 115; or
    (2) The lending institution making the loan has obtained a written 
agreement whereby the candidate or political committee receiving the 
loan has pledged future receipts, such as public financing payments 
under 11 CFR part 9001 through part 9012 or part 9031 through part 
9039, contributions, or interest income, provided that:
    (i) The amount of the loan(s) obtained the basis of such funds does 
not exceed the amount of pledged funds;
    (ii) Loan amounts are based on a reasonable expectation of the 
receipt of pledged funds. To that end, the candidate or political 
committee must furnish the lending institution documentation, i.e., 
cash flow charts or other financial plans, that reasonably establish 
that such future funds will be available;
    (iii) A separate depository account is established at the lending 
institution or the lender obtains an assignment from the candidate or 
political committee to access funds in a committee account at another 
depository institution that meets the requirements of 11 CFR 103.2, and 
the committee has notified the other institution of this assignment;
    (iv) The loan agreement requires the deposit of the public 
financing payments, contributions, interest or other income pledged as 
collateral into the separate depository account for the purpose of 
retiring the debt according to the repayment requirements of the loan; 
and
    (v) In the case of public financing payments, the borrower 
authorizes the Secretary of the Treasury to directly deposit the 
payments into the depository account for the purpose of retiring the 
debt.
    (3) If the requirements set forth in paragraph (e) of this section 
are not met, the Commission will consider the totality of circumstances 
on a case-by-case basis in determining whether a loan was made on a 
basis that assures repayment.
    (f) This section shall not apply to loans described in 11 CFR 
100.73 and 100.114.


Sec. 100.143  Brokerage loans and lines of credit to candidates.

    Repayment of a loan of money derived from an advance on a 
candidate's brokerage account, credit card, home equity line of credit, 
or other line of credit available to the candidate, as described in 11 
CFR 100.73, is not an expenditure.


Sec. 100.144  Office building for State, local, or district party 
committees or organizations.

    A payment, distribution, loan, advance, or deposit of money or 
anything of value, made by, or on behalf of, a State, local, or 
district party committee or organization for the purchase or 
construction of an office building in accordance with 11 CFR 300.35 is 
not an expenditure.


Sec. 100.145  Legal or accounting services to political party 
committees.

    Legal or accounting services rendered to or on behalf of any 
political committee of a political party are not expenditures if the 
person paying for such services is the regular employer of the 
individual rendering the services and such services are not 
attributable to activities that directly further the election of any 
designated candidate for Federal office. For purposes of this section, 
a partnership shall be deemed to be the regular employer of a partner. 
Amounts paid by the regular employer for such services shall be 
reported by the committee receiving such services in accordance with 11 
CFR 104.3(h).


Sec. 100.146  Legal or accounting services to other political 
committees.

    Legal or accounting services rendered to or on behalf of an 
authorized committee of a candidate or any other political committee 
are not expenditures if the person paying for such services is the 
regular employer of the individual rendering such services and if the 
services are solely to ensure compliance with the Act or 26 U.S.C. 9001 
et seq. and 9032 et seq. For purposes of this section, a partnership 
shall be deemed to be the regular employer of a partner. Amounts paid 
by the regular employer for these services shall be reported by the 
committee receiving such services in accordance with 11 CFR 104.3(h). 
Expenditures for these services by a candidate certified to receive 
Primary Matching Funds under 11 CFR part 9034 do not count against such 
candidate's expenditure limitations under 11 CFR part 9035 or 11 CFR 
110.8. Unless paid for with federal funds received pursuant to 11 CFR 
part 9005, disbursements for these services by a candidate who is 
certified to receive payments from the Presidential Election Campaign 
Fund under 11 CFR part 9005 do not count against that candidate's 
expenditure limitations under 11 CFR 110.8.


Sec. 100.147  Volunteer activity for party committees.

    The payment by a state or local committee of a political party of 
the costs of campaign materials (such as pins, bumper stickers, 
handbills, brochures, posters, party tabloids or newsletters, and yard 
signs) used by such committee in connection with volunteer activities 
on behalf of any nominee(s) of such party is not an expenditure, 
provided that the following conditions are met:
    (a) Exemption does not apply to general public communications or 
political advertising. Such payment is not for costs incurred in 
connection with any broadcasting, newspaper, magazine, billboard, 
direct mail, or similar type of general public communication or 
political advertising. For the purposes of this paragraph, the term 
direct mail means any mailing(s) by a commercial vendor or any 
mailing(s) made from commercial lists.
    (b) Allocation. The portion of the cost of such materials allocable 
to Federal candidates is paid from contributions subject to the 
limitations and prohibitions of the Act.
    (c) Contributions designated for Federal candidates. Such payment 
is not made from contributions designated by the donor to be spent on 
behalf of a particular candidate or candidates for Federal office. For 
purposes of this paragraph, a contribution shall not be considered a 
designated contribution if the party committee disbursing the funds 
makes the final decision regarding which candidate(s) shall receive the 
benefit of such disbursement.
    (d) Distribution of materials by volunteers. Such materials are 
distributed by volunteers and not by commercial or for-profit 
operations. For the purposes of this paragraph, payments by the party 
organization for travel and subsistence or customary token payments to 
volunteers do not remove such individuals from the volunteer category.
    (e) Reporting. If made by a political party committee, such 
payments shall be reported by that committee as disbursements, in 
accordance with 11 CFR 104.3, but need not be allocated to

[[Page 40893]]

specific candidates in committee reports.
    (f) State candidates and their campaign committees. Payments by a 
State candidate or his or her campaign committee to a State or local 
political party committee for the State candidate's share of expenses 
for such campaign materials are not expenditures, provided the amount 
paid by the State candidate or his or her committee does not exceed his 
or her proportionate share of the expenses.
    (g) Exemption not applicable to campaign materials purchased by 
national party committees. Campaign materials purchased by the national 
committee of a political party and delivered to a State or local party 
committee, or materials purchased with funds donated by the national 
committee to such State or local committee for the purchase of such 
materials, shall not qualify under this exemption. Rather, the cost of 
such materials shall be subject to the limitations of 2 U.S.C. 441a(d) 
and 11 CFR 110.7.


Sec. 100.148  Volunteer activity for candidate.

    The payment by a candidate for any public office (including State 
or local office), or by such candidate's authorized committee, of the 
costs of that candidate's campaign materials that include information 
on or any reference to a candidate for Federal office and that are used 
in connection with volunteer activities (such as pins, bumper stickers, 
handbills, brochures, posters, and yard signs) is not an expenditure on 
behalf of such candidate for Federal office, provided that the payment 
is not for the use of broadcasting, newspapers, magazines, billboards, 
direct mail or similar types of general public communication or 
political advertising. The payment of the portion of the cost of such 
materials allocable to Federal candidates shall be made from 
contributions subject to the limitations and prohibitions of the Act. 
For purposes of this section, the term direct mail means mailings by 
commercial vendors or mailings made from lists that were not developed 
by the candidate.


Sec. 100.149  Voter registration and get-out-the-vote activities for 
Presidential candidates (``coattails'' exception).

    The payment by a State or local committee of a political party of 
the costs of voter registration and get-out-the-vote activities 
conducted by such committee on behalf of the Presidential and Vice 
Presidential nominee(s) of that party is not an expenditure for the 
purpose of influencing the election of such candidates provided that 
the following conditions are met:
    (a) Exemption not applicable to general public communication or 
political advertising. Such payment is not for the costs incurred in 
connection with any broadcasting, newspaper, magazine, billboard, 
direct mail, or similar type of general public communication or 
political advertising. For purposes of this paragraph, the term direct 
mail means any mailing(s) by a commercial vendor or any mailing(s) made 
from commercial lists.
    (b) Allocation. The portion of the costs of such activities 
allocable to Federal candidates is paid from contributions subject to 
the limitations and prohibitions of the Act.
    (c) Contributions designated for Federal candidates. Such payment 
is not made from contributions designated to be spent on behalf of a 
particular candidate or candidates for Federal office. For the purposes 
of this paragraph, a contribution shall not be considered a designated 
contribution if the party committee disbursing the funds makes the 
final decision regarding which candidate(s) shall receive the benefit 
of such disbursement.
    (d) References to House or Senate candidates. For purposes of this 
section, if such activities include references to any candidate(s) for 
the House or Senate, the costs of such activities that are allocable to 
that candidate(s) shall be an expenditure on behalf of such 
candidate(s) unless the mention of such candidate(s) is merely 
incidental to the overall activity.
    (e) Phone banks. For purposes of this section, payment of the costs 
incurred in the use of phone banks in connection with voter 
registration and get-out-the-vote activities is not an expenditure when 
such phone banks are operated by volunteer workers. The use of paid 
professionals to design the phone bank system, develop calling 
instructions and train supervisors is permissible. The payment of the 
costs of such professional services is not an expenditure but shall be 
reported as a disbursement in accordance with 11 CFR 104.3 if made by a 
political committee.
    (f) Reporting of payments for voter registration and get-out-the-
vote activities. If made by a political committee, such payments for 
voter registration and get-out-the-vote activities shall be reported by 
that committee as disbursements, in accordance with 11 CFR 104.3 but 
such payments need not be allocated to specific candidates in committee 
reports except as provided in paragraph (d) of this section.
    (g) Exemption not applicable to donations by a national committee 
of a political party to a State or local party committee for voter 
registration and get-out-the-vote activities. Payments made from funds 
donated by a national committee of a political party to a State or 
local party committee for voter registration and get-out-the-vote 
activities shall not qualify under this exemption. Rather, such funds 
shall be subject to the limitations of 2 U.S.C. 441a(d) and 11 CFR 
110.7.


Sec. 100.150  Ballot access fees.

    Amounts transferred by a party committee to another party committee 
or payments made to the appropriate State official of fees collected 
from candidates or their authorized committees as a condition of ballot 
access are not expenditures.


Sec. 100.151  Recounts.

    A purchase, payment, distribution, loan, advance, or deposit of 
money or anything of value made with respect to a recount of the 
results of a Federal election, or an election contest concerning a 
Federal election, is not an expenditure except that the prohibitions of 
11 CFR 110.4(a) and part 114 apply.


Sec. 100.152  Fundraising costs for Presidential candidates.

    (a) Costs incurred in connection with the solicitation of 
contributions. Any costs incurred by a candidate or his or her 
authorized committee(s) in connection with the solicitation of 
contributions are not expenditures if incurred by a candidate who has 
been certified to receive Presidential Primary Matching Fund Payments, 
or by a candidate who has been certified to receive general election 
public financing under 26 U.S.C. 9004 and who is soliciting 
contributions in accordance with 26 U.S.C. 9003(b)(2) or 9003(c)(2) to 
the extent that the aggregate of such costs does not exceed 20 percent 
of the expenditure limitation applicable to the candidate. These costs 
shall, however, be reported as disbursements pursuant to 11 CFR part 
104.
    (b) Definition of in connection with the solicitation of 
contributions. For a candidate who has been certified to receive 
general election public financing under 26 U.S.C. 9004 and who is 
soliciting contributions in accordance with 26 U.S.C. 9003(b)(2) or 
9003(c)(2), in connection with the solicitation of contributions means 
any cost reasonably related to fundraising activity, including the 
costs of printing and postage, the production of and space or air time 
for, advertisements used for fundraising, and the costs of meals, 
beverages, and

[[Page 40894]]

other costs associated with a fundraising reception or dinner.
    (c) Limitation on costs that may be exempted. For a candidate who 
has been certified to receive Presidential Primary Matching Fund 
Payments, the costs that may be exempted as fundraising expenses under 
this section shall not exceed 20% of the overall expenditure limitation 
under 11 CFR 9035.1, and shall equal the total of:
    (1) All amounts excluded from the state expenditure limitations for 
exempt fundraising activities under 11 CFR 110.8(c)(2), plus
    (2) An amount of costs that would otherwise be chargeable to the 
overall expenditure limitation but that are not chargeable to any state 
expenditure limitation, such as salary and travel expenses. See 11 CFR 
106.2.


Sec. 100.153  Routine living expenses.

    Payments by a candidate from his or her personal funds, as defined 
at 11 CFR 110.10(b), for the candidate's routine living expenses that 
would have been incurred without candidacy, including the cost of food 
and residence, are not expenditures. Payments for such expenses by a 
member of the candidate's family as defined in 11 CFR 113.1(g)(7), are 
not expenditures if the payments are made from an account jointly held 
with the candidate, or if the expenses were paid by the family member 
before the candidate became a candidate.


Sec. 100.154  Candidate debates.

    Funds used to defray costs incurred in staging candidate debates in 
accordance with the provisions of 11 CFR 110.13 and 114.4(f) are not 
expenditures.

    Dated: June 10, 2002.
David M. Mason,
Chairman, Federal Election Commission.
[FR Doc. 02-14902 Filed 6-13-02; 8:45 am]
BILLING CODE 6715-01-P