[Federal Register Volume 69, Number 125 (Wednesday, June 30, 2004)]
[Proposed Rules]
[Pages 39373-39375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-14817]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 69, No. 125 / Wednesday, June 30, 2004 / 
Proposed Rules  

[[Page 39373]]



FEDERAL ELECTION COMMISSION

11 CFR Parts 102, 106, and 109

[Notice 2004-11]


Coordinated and Independent Expenditures by Party Committees

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Election Commission requests comments on the 
proposed deletion of its current rules that restrict the ability of 
political party committees to make both independent expenditures and 
coordinated party expenditures with respect to the same candidate in 
connection with a general election for Federal office. The current 
rules also prohibit a political party committee that makes coordinated 
expenditures with respect to a candidate from transferring funds to, or 
assigning authority to make coordinated expenditures to, or receive a 
transfer of funds from, a political party committee that has made or 
intends to make an independent expenditure with respect to that 
candidate. These rules were promulgated in order to implement section 
213 of the Bipartisan Campaign Reform Act of 2002. However, in 
McConnell v. FEC, the U.S. Supreme Court held that section 213 is 
unconstitutional. Therefore, the Commission proposes to remove the 
rules implementing section 213. 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 July 30, 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 Mr. Brad C. Deutsch, 
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 a hearing is necessary, the hearing will be held in 
the Commission's ninth floor meeting room, 999 E Street NW., 
Washington, DC.

FOR FURTHER INFORMATION CONTACT: Mr. Brad C. Deutsch, Assistant General 
Counsel, or Mr. Ron B. Katwan, Attorney, 999 E Street, NW., Washington, 
DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: Under the Federal Election Campaign Act of 
1971 (``FECA'' or the ``Act''), as amended, 2 U.S.C. 431 et seq., a 
national committee, State committee, or a subordinate committee of a 
State committee of a political party may make expenditures in 
coordination with a Federal candidate for that candidate's general 
election campaign up to prescribed limits without these expenditures 
counting against the party committee's contribution limits. 2 U.S.C. 
441a(d)(1)-(3). While the Act limits coordinated expenditures, 
political party committees may make unlimited ``independent 
expenditures,'' which are not coordinated with a candidate's campaign. 
See Colorado Republican Federal Campaign Committee v. FEC, 518 U.S. 604 
(1996) (``Colorado I'').\1\
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    \1\ The holding of Colorado I is limited to independent 
expenditures in connection with congressional campaigns. The opinion 
in Colorado I did not address the issue of whether regulation of 
independent expenditures is constitutionally permissible in 
connection with Presidential campaigns. (``Since this case involves 
only the provision concerning congressional races, we do not address 
issues that might grow out of the public funding of Presidential 
campaigns.'') 518 U.S. at 612. Thus, the opinion in Colorado I did 
not reach the issue of whether former 11 CFR 110.7(a)(5) which 
prohibited independent expenditures by the national committee of a 
political party in connection with a presidential campaign was 
constitutional. Subsequently, however, BCRA effectively repealed 
section 110.7(a)(5) and the Commission replaced the section with 11 
CFR 109.36, which prohibits independent expenditures by the national 
committee of a political party in connection with a presidential 
campaign only in certain circumstances in which the national 
committee of a political party serves as the principal campaign 
committee or authorized committee of its Presidential candidate. See 
Coordinated and Independent Expenditures; Final Rules, 68 FR 421, 
447-48 (January 3, 2003).
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    Section 213 of the Bipartisan Campaign Reform Act of 2002 (Pub. L. 
107-155 (Mar. 27, 2002)) (``BCRA'') amended 2 U.S.C. 441a(d), by 
prohibiting political party committees, under certain conditions, from 
making both coordinated party expenditures and independent expenditures 
with respect to the same candidate, and from making transfers and 
assignments to other political party committees. 2 U.S.C. 441a(d)(4).
    In 2002, the Commission promulgated rules at 11 CFR 109.35 to 
implement section 213. Coordinated and Independent Expenditures; Final 
Rules, 68 FR 421, 422 (January 3, 2003).
    Subsequently, in McConnell v. FEC, 540 U.S.----; 124 S.Ct. 619, 
700-704 (2003), the Supreme Court found section 213 unconstitutional. 
The Court held that by requiring political parties to choose between 
coordinated and independent expenditures during the post-nomination, 
pre-election period, section 213 placed an unconstitutional burden on 
the parties' right to make unlimited independent expenditures. 124 
S.Ct. at 700-704. Accordingly, the Commission now proposes to remove 
its regulations at 11 CFR 109.35 implementing BCRA section 213 and to 
delete from other regulations cross-references to the rules that would 
be removed.

I. Proposed 11 CFR 102.6--Transfer of Funds; Collecting Agents

    The Commission proposes to revise section 102.6 by deleting the 
cross-reference to current section 109.35, which the Commission 
proposes to remove.

[[Page 39374]]

II. Proposed 11 CFR 106.8--Allocation of Expenses for Political Party 
Committee Phone Banks That Refer to Clearly Identified Federal 
Candidate

    The Commission proposes to revise section 106.8 by deleting the 
cross-reference to current section 109.35, which the Commission 
proposes to remove.

III. Proposed 11 CFR 109.30--How Are Political Party Committees Treated 
for Purposes of Coordinated and Independent Expenditures?

    The Commission proposes to revise section 109.30 by deleting the 
cross-references to current section 109.35, which the Commission 
proposes to remove.

IV. Proposed 11 CFR 109.33--May a Political Party Committee Assign Its 
Coordinated Party Expenditure Authority to Another Political Party 
Committee?

    The Commission proposes to revise section 109.33 by deleting the 
cross-reference to current section 109.35, which the Commission 
proposes to remove.

V. Proposed 11 CFR 109.35--What Are the Restrictions on a Political 
Party Committee Making Both Independent Expenditures and Coordinated 
Party Expenditures in Connection With the General Election of a 
Candidate?

    The Commission proposes to remove and reserve current section 
109.35, because, as explained above, the statutory foundation for this 
section, 2 U.S.C. 441a(d)(4), has been invalidated by the Supreme 
Court.

VI. Proposed 11 CFR 109.36--Are There Additional Circumstances Under 
Which a Political Party Committee Is Prohibited From Making Independent 
Expenditures?

    The Commission proposes to revise section 109.36 by deleting the 
word ``additional'' in the heading of section 109.36, because, if 
section 109.35 is removed, the circumstances described in section 
109.36 will be the only circumstances under which a political party 
committee is prohibited from making independent expenditures.

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 of this certification is that the national, State, and local 
party committees of the two major political parties are not small 
entities under 5 U.S.C. 601 because they are not small businesses, 
small organizations, or small governmental jurisdictions.
    To the extent that political party committees may fall within the 
definition of ``small entities,'' their number is not substantial. In 
addition, the proposed rules would remove, not add, restrictions 
applicable to political party committees.

List of Subjects

11 CFR Part 102

    Political committees and parties, reporting and recordkeeping 
requirements.

11 CFR Part 106

    Political candidates, campaign funds, political committees and 
parties.

11 CFR Part 109

    Coordinated expenditures, independent expenditures, political 
committees and parties.

    For the reasons set out in the preamble, the Federal Election 
Commission proposes to amend Subchapter A of Chapter I 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 102.6 would be amended by revising paragraph (a)(1)(ii) 
to read as follows:


Sec.  102.6  Transfers of funds; collecting agents.

    (a) * * *
    (1) * * *
    (ii) Subject to the restrictions set forth at 11 CFR 300.10(a), 
300.31 and 300.34(a) and (b), transfers of funds may be made without 
limit on amount between or among a national party committee, a State 
party committee and/or any subordinate party committee whether or not 
they are political committees under 11 CFR 100.5 and whether or not 
such committees are affiliated.
* * * * *

PART 106--ALLOCATIONS OF CANDIDATE AND COMMITTEE ACTIVITIES

    3. The authority citation for Part 106 would continue to read as 
follows:

    Authority: 2 U.S.C. 438(a)(8), 441a(b), 441a(g).

    4. Section 106.8 would be amended by revising paragraph (b)(2)(ii) 
to read as follows:


Sec.  106.8  Allocation of expenses for political party committee phone 
banks that refer to a clearly identified Federal candidate.

* * * * *
    (b) * * *
    (2) * * *
    (ii) A coordinated expenditure or an independent expenditure, 
subject to the limitations, restrictions, and requirements of 11 CFR 
109.10, 109.32, and 109.33; or
* * * * *

PART 109--COORDINATED AND INDEPENDENT EXPENDITURES (2 U.S.C. 
431(17), 441a(a) and (d), AND PUB. L. 107-155 SEC. 214(c))

    5. The authority citation for Part 109 would continue to read as 
follows:

    Authority: 2 U.S.C. 431(17), 434(c), 438(a)(8), 441a, 441d; Sec. 
214(c) of Pub. L. 107-155, 116 Stat. 81.

    6. Section 109.30 would be revised to read as follows:


Sec.  109.30  How are political party committees treated for purposes 
of coordinated and independent expenditures?

    Political party committees may make independent expenditures 
subject to the provisions in this subpart. See 11 CFR 109.36. Political 
party committees may also make coordinated party expenditures in 
connection with the general election campaign of a candidate, subject 
to the limits and other provisions in this subpart. See 11 CFR 109.32 
through 11 CFR 109.34.
    7. Section 109.33 would be amended by revising paragraph (a) to 
read as follows:


Sec.  109.33  May a political party committee assign its coordinated 
party expenditure authority to another political party committee?

    (a) Assignment. The national committee of a political party and a 
State committee of a political party, including any subordinate 
committee of a State committee, may assign its authority to make 
coordinated party expenditures authorized by 11 CFR 109.32 to another 
political party committee. Such an assignment must be made in writing, 
must state the amount

[[Page 39375]]

of the authority assigned, and must be received by the assignee 
committee before any coordinated party expenditure is made pursuant to 
the assignment.
* * * * *


Sec.  109.35  [Removed and Reserved]

    8. Section 109.35 would be removed and reserved.
    9. Section 109.36 would be amended by revising the heading to read 
as follows:


Sec.  109.36  Are there circumstances under which a political party 
committee is prohibited from making independent expenditures?

* * * * *

    Dated: June 24, 2004.
Ellen L. Weintraub,
Vice Chair, Federal Election Commission.
[FR Doc. 04-14817 Filed 6-29-04; 8:45 am]
BILLING CODE 6715-01-P