[Federal Register Volume 68, Number 162 (Thursday, August 21, 2003)]
[Proposed Rules]
[Pages 50488-50491]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-21462]


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FEDERAL ELECTION COMMISSION

11 CFR Parts 102 and 110

[Notice 2003-13]


Multicandidate Committees and Biennial Contribution Limits

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Election Commission requests comments on proposed 
changes to its rules covering three areas: (1) Multicandidate political 
committee status, (2) annual contributions by persons other than 
multicandidate committees to national party committees, and (3) 
biennial contribution limits for individuals. The proposed changes 
would clarify the qualifications for multicandidate political committee 
status and require a political committee to notify the Commission when 
it has qualified as a multicandidate committee. The proposed changes 
would also update the limit on contributions from persons other than 
multicandidate committees to national party committees. In addition, 
the proposed changes would adjust the attribution of contributions to 
candidates from individuals under the biennial limits. No final 
decisions have been made by the Commission on any of the proposed 
revisions in this Notice. Further information is provided in the 
supplementary information that follows.

Dates: Comments must be received on or before September 19, 2003. If 
the Commission receives sufficient requests

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to testify, it will hold a hearing on these proposed rules on October 
1, 2003, at 9:30 a.m. Commenters wishing to testify at the hearing must 
so indicate in their written or electronic comments.

ADDRESSES: All comments should be addressed to Ms. Mai T. Dinh, Acting 
Assistant 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. If the 
electronic mail comments include an attachment, the attachment must be 
in the Adobe Acrobat (.pdf) or Microsoft Word (.doc) format. 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. The Commission will make every effort to post public 
comments on its Web site within ten business days of the close of the 
comment period. The hearing will be held in the Commission's ninth 
floor meeting room, 999 E Street, NW., Washington, DC.

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

SUPPLEMENTARY INFORMATION: The Commission is considering changes to 
several separate rules to address three different issues. First, the 
Commission proposes changes to its rules regarding the certification 
requirements and contribution limits of a political committee that 
qualifies as a multicandidate committee. Second, the Commission 
proposes updating the annual limit on contributions from person other 
than multicandidate committees to national party committees in order to 
conform to the change made by Congress in the Bipartisan Campaign 
Reform Act of 2002 (``BCRA''). Finally, the Commission proposes 
corrections to its rules on the annual limit on aggregate individual 
contributions in light of BCRA. These proposed rules would implement 
the provisions of the Federal Election Campaign Act of 1971, as amended 
(``FECA'' or the ``Act''), 2 U.S.C. 431 et seq.

I. Proposed Changes to 11 CFR 102.2, 110.2 Multicandidate Committee 
Status

A. Proposed 11 CFR 110.2--Contributions by Multicandidate Political 
Committees

    Section 110.2 sets forth contribution limits for multicandidate 
political committees in accordance with the limits established by 2 
U.S.C. 441a(a)(2). Section 441a(a)(4) of the FECA provides that, ``the 
term `multicandidate committee' means a political committee which has 
been registered with [the Commission or Secretary of the Senate] for a 
period of not less than six months, which has received contributions 
from more than 50 persons, and except for any State political party 
organization, has made contributions to 5 or more candidates for 
Federal office.'' 2 U.S.C. 441a(a)(4). On the basis of this statutory 
provision, the Commission's rules at 11 CFR 1005.(e)(3) define a 
``multicandidate committee'' as a political committee meeting these 
three requirements.
    FECA, prior to BCRA, provided significantly higher limits on 
contributions to candidates for political committees with 
multicandidate status than for those without that status ($5,000 per 
election versus $1,000). BCRA raised and indexed for inflation the 
contribution limit for non-multicandidate committees (to $2,000 per 
election), and due to the inflation adjustment such limit may 
eventually become higher than the limit imposed on multicandidate 
committees. See 2 U.S.C. 441a(c). Thus, this contribution limit itself 
one day may create a substantial disincentive for attaining 
multicandidate political committee status.
    In addition, the limit on contributions to national party 
committees from multicandidate committees is $15,000 per year (as it 
was prior to BCRA), yet BCRA increased the limit on contributions to 
the same national party committees from non-multicandidate committees 
to $25,000 per year. 2 U.S.C. 441a(a)(2)(B) and (1)(B). Furthermore, 
the contribution limit for multicandidate committees is not indexed for 
inflation, which means that over time the current $10,000 difference in 
the contribution limit to national party committees will increase. 2 
U.S.C. 441a(c).
    These statutory changes have raised the issue of whether political 
committees may opt out of multicandidate committee status. The 
Commission preliminarily concludes that the definition of 
``multicandidate committee'' in 2 U.S.C. 441a(a)(4) means that a 
political committee becomes a multicandidate committee by operation of 
law, not committee choice. Consequently the Commission proposes the 
addition of a sentence to 11 CFR 110.2(a) to state that a political 
committee automatically becomes a multicandidate committee at the time 
it satisfies the six-month waiting period, receives contributions from 
fifty or more contributors, and makes contributions to five or more 
candidates.
    In the alternative, the Commission seeks comments on whether 
multicandidate political committee status may be considered optional. 
Commenters addressing this alternative are requested to provide the 
legal basis that would support this interpretation of 2 U.S.C. 
441a(a)(4). Please note that the wording of the proposed rule in 11 CFR 
110.2(a) does not implement this alternative.

B. Proposed 11 CFR 102.2(a)(3)--Certification of Multicandidate Status

    To monitor compliance with the contribution limits, the Commission 
has required multicandidate political committees to file FEC Form 1M 
with the Commission to certify that they satisfied the criteria 
described above for becoming multicandidate political committees. 
Specifically, current 11 CFR 102.2(a)(3) requires that this 
certification be filed before a political committee may avail itself of 
the multicandidate committee contribution limits.
    The Commission proposes to amend 11 CFR 102.2(a)(3) to eliminate 
the requirements that a political committee file Form 1M with the 
Commission before making any contributions under the increased 
contribution limits with respect to candidates in 11 CFR 110.2(b). 
Instead, Sec.  102.2(a)(3) would specify that a political committee 
must certify its status as a multicandidate committee within ten days 
of satisfying the requirements of 11 CFR 1005.(e)(3). This 
certification provides clear notice of the political committee's status 
to the Commission and to recipients of contributions from the 
committee. The ten-day period corresponds to the usual time allotted 
for a political committee to report any changes to its Statement of 
Organization. See 11 CFR 102.2(a)(2). Thus, failure to file the form 
within the requisite time period would be a violation of the reporting 
requirements of 2 U.S.C. The Commission seeks comments on how it should 
address a failure to file the certification of multicandidate status. 
Specifically, how

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should the Commission address a situation where a political committee 
qualifies for multicandidate status, does not certify its status within 
ten days, but makes a contribution over $2,000 to a candidate for 
Federal office? The Commission also seeks comments on what 
certification process, if any, should be used if the Commission adopts 
an alternative approach and allows multicandidate status to be optional 
at the choice of the committee.

II. 11 CFR 110.1 Conforming Change to Contributions by Persons Other 
Than Multicandidate Political Committees

    In section 307(a)(2) of BCRA, Congress raised the annual aggregate 
limit on contributions by persons other than multicandidate committees 
to national political party committees from $20,000 to $25,000. 2 
U.S.C. 441a(a)(1)(B). The Commission proposes to revise the 
corresponding regulation in 11 CFR 110.1 to reflect this statutory 
change.

III. 11 CFR 110.5 Aggregate Biennial Contribution Limitation for 
Individuals

    BCRA amended the provisions in the Act that limit the total amount 
of contributions that may be made by individuals. Section 441a(a)(3) of 
the FECA previously permitted individuals to make no more than $25,000 
in aggregate contributions per calendar year. This provision was 
revised by BCRA to establish new biennial aggregate limits that permit 
individuals to make up to $95,000 in contributions, including up to 
$37,500 in contributions to candidates and their authorized committees, 
and up to $57,500 in contributions to any other political committees. 2 
U.S.C. 441a(a)(3)(A) and (B). The $57,500 aggregate contribution limit 
contains a further restriction in that no more than $37,500 of this 
amount may be given to committees that are not the political committees 
of national political parties. 2 U.S.C. 441a(a)(3)(B). Regulations 
implementing these changes were issued as part of the rulemaking 
entitled ``Contribution Limitations and Prohibitions.'' See 
Contribution Limitations and Prohibitions; Final Rules, 67 FR 69928 
(November 19, 2002). Previously, 2 U.S.C. 441a(a)(3) also provided 
that, for the purposes of the annual limitation, any contribution made 
to a candidate ``in a year other than the calendar year in which the 
election is held with respect to which such contribution is made, is 
considered to be made during the calendar year in which such election 
is held.'' BCRA deleted this language from the Act. However, the 
Commission retained 11 CFR 110.5(c), which specifically addressed 
contributions made in a non-election year. The proposed rules would 
amend Sec.  110.5(c) to delete the current language and to replace it 
with language affirmatively stating that for the purposes of the 
biennial contribution limits in 11 CFR 110.5 (which are set forth in 
paragraph (b)), a contribution to a candidate will be attributed to the 
two-year period in which the contribution is actually made, regardless 
of when the election will be held. For example, for the purposes of the 
biennial limit, a contribution made in 2004 to a candidate in a 2006 
Senate race would be attributed to the individual's limit for the 2003-
2004 period. Similarly, a contribution made in 2005 to a candidate in 
the 2008 presidential race would be attributed to the individual's 
limit for the 2005-2006 period. In addition, a contribution made during 
2007 to retire debt from a 2006 House election would be attributed to 
the individual's two-year limit for the 2007-2008 period, not for the 
2005-2006 period.
    The Commission seeks comments on whether the proposed revisions are 
consistent with BCRA. If the Commission revises its regulations in this 
manner, the Commission seeks comment on when such revisions should 
become effective.

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

[Regulatory Flexibility Act]
    The attached proposed rules, if promulgated, would not have a 
significant economic impact on a substantial number of small entities. 
The basis for this certification is that few, if any, small entities 
would be affected by these proposals. These rules propose no sweeping 
changes, and are largely intended to simplify the process of 
determining the status of political committees and the aggregate 
biennial amounts that individuals may contribute to candidates for 
Federal office. Several of the proposed changes are purely technical, 
and those few proposals that might increase the cost of compliance by 
small entities would not do so in such an amount as to cause a 
significant economic impact.

List of Subjects

11 CFR Part 102

    Political committees and parties, reporting and recordkeeping 
requirements.

11 CFR Part 110

    Campaign funds, political committees and parties.

    For the reasons set out in the preamble, the Federal Election 
Commission proposes to amend subchapter A of chapter 1 of title 11 of 
the Code of Federal Regulations as follows:

PART 102--REGISTRATION, ORGANIZATION, AND RECORDKEEPING BY 
POLITICAL COMMITTEES (2 U.S.C. 433)

    1. The authority citation for part 102 would continue to read as 
follows:

    Authority: 2 U.S.C. 432, 433, 434(a)(11), 438(a)(8), 441d.

    2. Section 102.2 would be amended by revising paragraph (a)(3) to 
read as follows:


Sec.  102.2  Statement of organization: Forms and committee 
identification number (2 U.S.C. 433(b), (c)).

    (a) * * *
    (3) A committee shall certify to the Commission that it has 
satisfied the criteria for becoming a multicandidate committee set 
forth at 11 CFR 100.5(e)(3) by filing FEC Form 1M no later than ten 
(10) calendar days after qualifying for multicandidate committee 
status.
* * * * *

PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS

    3. The authority citation for part 110 would continue to read as 
follows:

    Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 437d, 438(a)(8), 
441a, 441b, 441d, 441, 441f, 441g, 441h, and 441k.
    4. Section 110.1 would be amended by revising paragraph (c)(3) to 
read as follows:


Sec.  110.1  Contributions by persons other than multicandidate 
political committees (2 U.S.C. 441a(a)(1)).

* * * * *
    (c) * * *
    (3) Each recipient committee referred to in 11 CFR 110.1(c)(2) may 
receive up to the $25,000 limitation from a contributor, but the limits 
of 11 CFR 110.5 shall also apply to contributions made by an 
individual.
* * * * *
    5. Section 110.2 would be amended by revising paragraph (a)(1) to 
read as follows:


Sec.  110.2  Contributions by multicandidate political committees (2 
U.S.C. 441a(a)(2)).

    (a)(1) Scope. This section applies to all contributions made by any 
multicandidate political committee as defined in 11 CFR 100.5(e)(3). 
See 11 CFR 102.2(a)(3) for multicandidate

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political committee certification requirements. A political committee 
becomes a multicandidate committee whether or not the political 
committee has certified its status as a multicandidate committee with 
the Commission in accordance with 11 CFR 102.2(a)(3)
* * * * *
    6. Section 110.5 would be amended by revising paragraph (c) to read 
as follows:


Sec.  110.5  Aggregate bi-annual contribution limitation for 
individuals (2 U.S.C. 441a(a)(3)).

* * * * *
    (c) Contributions made in a nonelection year. For purposes of the 
biennial limitation on contributions, any contribution to a candidate 
or his or her authorized committee with respect to a particular 
election shall be considered to be made during the two-year period 
described in paragraph (b)(1) of this section in which the contribution 
is actually made, regardless of the year in which the particular 
election is held. See 11 CFR 110.1(b)(6). This paragraph (c) also 
applies to earmarked contributions and contributions to a single 
candidate committee that has supported or anticipates supporting the 
candidate.
* * * * *

    Dated: August 18, 2003.
Michael E. Toner,
Commissioner, Federal Election Commission.
[FR Doc. 03-21462 Filed 8-20-03; 8:45 am]
BILLING CODE 6715-01-U