[Federal Register Volume 69, Number 69 (Friday, April 9, 2004)]
[Proposed Rules]
[Pages 18841-18843]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-8064]


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FEDERAL ELECTION COMMISSION

11 CFR Part 110

[Notice 2004-8]


Contributions and Donations by Minors

AGENCY: Federal Election Commission.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Federal Election Commission requests comments on proposed 
amendments to its rules governing contributions and donations by minors 
to candidates and political committees. These proposed rules would 
conform to the Supreme Court's decision in McConnell v FEC finding 
unconstitutional section 318 of the Bipartisan Campaign Reform Act of 
2002. BCRA section 318 had forbidden contributions to candidates and 
contributions or donations to political party committees by individuals 
17 years old or younger. The Commission rules at 11 CFR 110.19 
implement BCRA section 318. No final decision has been made by the 
Commission on the issues presented in this rulemaking. Further 
information is provided in the supplementary information that follows.

DATES: Comments must be received on or before May 10, 2004. If the 
Commission receives sufficient requests to testify, it may hold a 
hearing on these proposed rules. Commenters wishing to testify at the 
hearing must so indicate in their written or electronic comments.

ADDRESSES: All comments should be addressed to John C. Vergelli, Acting 
Assistant General Counsel, and must be submitted in either electronic 
or written form. Commenters are strongly encouraged to submit comments 
electronically to ensure timely receipt and consideration. 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. 
The Commission will post public comments on its web site. If the 
Commission decides that a hearing is necessary, the hearing will be 
held in its ninth floor meeting room, 999 E. St. NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Mr. John C. Vergelli, Acting Assistant 
General Counsel, or Mr. Steve N. Hajjar, Attorney, 999 E Street, NW., 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Bipartisan Campaign Reform Act of 2002, 
Public Law 107-155, 116 Stat. 81 (Mar. 27, 2002) (``BCRA''), contained 
extensive and detailed amendments to the Federal Election Campaign Act 
of 1971 (``FECA'' or ``the Act''), as amended, 2 U.S.C. 431 et seq. One 
of those amendments, BCRA section 318, codified at 2 U.S.C. 441k, 
prohibited minors from making contributions to candidates or from 
making contributions or donations to political party committees. In 
2002, the Commission promulgated rules at 11 CFR 110.19 implementing 
section 318. 67 FR 69,928 (Nov. 19, 2002). In McConnell v. FEC, 540 
U.S.--, 124 S.Ct. 619 (2003), the Supreme Court, however, found 
unconstitutional section 318, necessitating these proposed amendments 
to 11 CFR 110.19. The cumulative effect of these proposed changes to 11 
CFR 110.19, governing contributions and donations by minors, would be 
essentially to return these rules to their state prior to BCRA.
    Former 11 CFR 110.1(i)(2) (2002) provided that individuals under 18 
years of age (``minors'') could make contributions to candidates or 
political committees in accordance with the limits of the Act so long 
as the minor knowingly and voluntarily made the decision to contribute, 
and the funds, goods, or services contributed were owned or controlled 
exclusively by the minor. Additionally, the contributions must not have 
been made from the proceeds of a gift given to the minor for the 
purpose of making a contribution or in any other way controlled by an 
individual other than the minor. The proposed rules at 11 CFR 110.19 
would return to the former regulations at 11 CFR 110.1(i)(2). The only 
difference between the pre-BCRA rules and the Commission's proposed 
rules would be to substitute ``an individual who is 17 years old or 
younger'' or ``individual'' for ``minor'' or ``child.''
    The Commission proposes to remove paragraphs (a) and (b) of current 
11 CFR 110.19, which implement the prohibitions of 2 U.S.C. 441k. 
Paragraph (a) of 11 CFR 110.19 prohibits contributions by minors to 
Federal candidates and specifies that this

[[Page 18842]]

prohibition encompasses contributions to a candidate's principal 
campaign committee, any other authorized committee of that candidate, 
and any entity directly or indirectly established, financed, 
maintained, or controlled by one or more federal candidate. Paragraph 
(b) of 11 CFR 110.19 prohibits minors from making contributions and 
donations to national, State, district, and local party committees. 
Because the Supreme Court struck down 2 U.S.C. 441k in its entirety, 
McConnell, 540 U.S. at ----, 124 S.Ct. at 711, the statutory basis for 
these paragraphs no longer exists, and the Commission proposes to 
eliminate them.
    Current paragraph (c) specifies that minors may make contributions 
to political committees not described in current paragraphs (a) and (b) 
as long as the minor voluntarily and knowingly makes the decision to 
contribute; the funds, goods or services contributed are owned or 
controlled exclusively by the minor; the contribution is not made from 
the proceeds of a gift given to the minor to make a contribution or is 
not in any way controlled by an individual other than the minor; and 
the contribution is not earmarked or otherwise directed to one or more 
Federal candidates, political committees, or organizations described in 
current paragraphs (a) and (b). 11 CFR 110.19(c)(1) through (c)(4).
    Because the Commission proposes to eliminate current paragraphs (a) 
and (b), which prohibit minors from making contributions to candidates 
or from making contributions or donations to political party 
committees, the resulting proposed Sec.  110.19 would differ from 
current 110.19(c) in two respects. First, proposed Sec.  110.19 would 
allow minors to make contributions that do not exceed the Act's 
limitations to any candidate or political committee. Second, proposed 
Sec.  110.19 would eliminate current paragraph (c)(4), which prohibits 
minors from making contributions that are earmarked or otherwise 
directed to entities described in current paragraphs (a) and (b). The 
provisions of current paragraphs (c)(1) through (c)(3) would be 
renumbered as paragraphs (a) through (c) of proposed section 110.19 and 
would apply to all contributions and donations by minors. The 
Commission seeks comment on whether the requirement in current 
paragraph (c)(2), proposed paragraph (b), that the funds, goods, and 
services contributed be owned or controlled exclusively by the minor is 
permissible in light of McConnell. Should the Commission require 
exclusive ownership or control at all considering that in many 
jurisdictions a minor may not be able, for example, to open a bank 
account without a parent's or guardian's signature or manage an 
investment account without adult direction?
    The Commission also proposes to remove paragraphs (d) and (e) of 
current Sec.  110.19. Paragraph (d) provides that minors are not 
prohibited from volunteering their services to Federal candidates, 
political party committees or other party committees, notwithstanding 
BCRA's restrictions on political giving by minors. Because the 
prohibitions at 2 U.S.C. 441k no longer exist, McConnell, 540 U.S. at 
----, 124 S.Ct. at 711, the rationale for this paragraph has also 
ceased to exist, and the Commission proposes to eliminate it.
    Current paragraph (e) defines an entity ``directly or indirectly 
established, financed, maintained, or controlled'' by a candidate for 
purposes of the prohibition on contributions by minors to candidates as 
one that meets the definition of ``directly or indirectly establish, 
finance, maintain or control'' at 11 CFR 300.2(c). Because the Supreme 
Court has struck down the prohibition on minors contributing to 
candidates, this provision is no longer necessary and the Commission 
proposes to eliminate paragraph (e).
    The Commission seeks comment regarding whether it has authority to 
establish a minimum age, lower than had been set by BCRA section 318, 
for the making of contributions. If so, should the Commission prohibit 
individuals below a certain age from making contributions, recognizing 
that those individuals lack the capacity to manage their finances and 
dispose of property and therefore could not knowingly and voluntarily 
contribute on their own behalf? What would be the appropriate minimum 
age? Should the Commission instead establish a rebuttable presumption 
that individuals below a certain age could not make contributions? If 
the Commission chooses this approach, what should the Commission 
require from that individual and his or her parents or guardian to 
rebut that presumption? Or should the Commission combine a categorical 
prohibition with a rebuttable presumption similar to the approach 
adopted by some jurisdictions with regard to the tort liability of 
children? See, e.g., Restatement (Third) of Torts Sec.  10 cmt. b 
(Tentative Draft No. 1, 2001) (``[F]or children above 14 there is a 
rebuttable presumption in favor of the child's capacity to commit 
negligence; for children between seven and 14, there is a rebuttable 
presumption against capacity; children under the age of seven are 
deemed incapable of committing negligence'').

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

    The Commission certifies that the attached proposed rules, if 
promulgated, would not have a significant economic impact on a 
substantial number of small entities. The basis of this certification 
is that these proposed rules would only apply to individuals age 17 
years old or younger. Such individuals are not small entities. 
Moreover, these rules remove existing restrictions in accordance with 
controlling Supreme Court precedent and do not impose any additional 
costs on contributors, candidates, or political committees. Therefore 
these proposed rules would impose no further economic burdens on them.

List of Subjects in 11 CFR Part 110

    Campaign funds, Political committees and parties.

    For the reasons set forth 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 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS

    1. 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, 441e, 441f, 441g, and 441h.

    2. Section 110.19 would be revised to read as follows:


Sec.  110.19  Contributions and donations by minors.

    An individual who is 17 years old or younger may make contributions 
to any candidate or political committee which in the aggregate do not 
exceed the limitations on contributions of 11 CFR 110.1 and 110.5, if--
    (a) The decision to contribute is made knowingly and voluntarily by 
that individual;
    (b) The funds, goods, or services contributed are owned or 
controlled exclusively by that individual, such as income earned by 
that individual, the proceeds of a trust for which that individual is 
the beneficiary, or a savings account opened and maintained exclusively 
in that individual's name; and
    (c) The contribution is not made from the proceeds of a gift, the 
purpose of which was to provide funds to be

[[Page 18843]]

contributed, or is not in any other way controlled by another 
individual.

    Dated: April 5, 2004.
Michael E. Toner,
Commissioner, Federal Election Commission.
[FR Doc. 04-8064 Filed 4-8-04; 8:45 am]
BILLING CODE 6715-01-P