[Federal Register Volume 72, Number 138 (Thursday, July 19, 2007)]
[Proposed Rules]
[Pages 39583-39584]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-13956]


=======================================================================
-----------------------------------------------------------------------

FEDERAL ELECTION COMMISSION

11 CFR Part 113

[Notice 2007-15]


Use of Campaign Funds for Donations to Non-Federal Candidates and 
Any Other Lawful Purpose Other Than Personal Use

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

-----------------------------------------------------------------------

SUMMARY: The Federal Election Commission requests comments on a 
proposed revision to its rules regarding the use of campaign funds. The 
proposed revision would add to the current list of permissible uses of 
campaign funds in Commission regulations: donations to non-Federal 
candidates; and any other lawful purpose other than personal use. This 
change would conform the provision with those in the Federal Election 
Campaign Act, as amended (``the Act''). The Commission has made no 
final decision 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 August 20, 2007.

ADDRESSES: All comments must be in writing, must be addressed to Ms. 
Amy L. Rothstein, Assistant General Counsel, and must be submitted in 
either e-mail, facsimile, or paper copy form. Commenters are strongly 
encouraged to submit comments by e-mail to ensure timely receipt and 
consideration. E-mail comments must be sent to [email protected]. If e-
mail comments include an attachment, the attachment must be in either 
Adobe Acrobat (.pdf) or Microsoft Word (.doc) format. Faxed comments 
must be sent to (202) 219-3923, with paper copy follow-up. Paper 
comments and paper copy follow-up of faxed comments must be sent to the 
Federal Election Commission, 999 E Street, NW., Washington, DC 20463. 
All comments must include the full name and postal service address of 
the commenter or they will not be considered. The Commission will post 
comments on its Web site after the comment period ends.

FOR FURTHER INFORMATION CONTACT: Ms. Amy L. Rothstein, Assistant 
General Counsel, or Ms. Stacey J. Shin, Attorney, 999 E Street, NW., 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: Section 313 of the Federal Election Campaign 
Act of 1971, as amended (``the Act''), sets forth permissible uses of 
contributions accepted by candidates and donations received by 
individuals to support their activities as Federal officeholders. (This 
section is codified at 2 U.S.C. 439a and will be referred to hereafter 
as ``Section 439a.'') Section 439a(a) provides that candidates may use 
contributions, and individuals holding Federal office may use 
donations, for: (1) Expenditures in connection with the candidate's or 
individual's campaign for Federal office; (2) ordinary and necessary 
expenses incurred in connection with duties of the individual as a 
Federal officeholder; (3) contributions to an organization described in 
section 170(c) of the Internal Revenue Code; (4) transfers, without 
limitation, to a national, State, or local committee of a political 
party; (5) donations to State and local candidates subject to the 
provisions of State law; and (6) any other lawful purpose, unless such 
purpose constitutes personal use of contributions or donations. See 2 
U.S.C. 439a(a).
    Part 113 of the Commission's regulations implements section 439a. 
Section 113.2 tracks the first four permissible uses of campaign funds 
and funds donated to a Federal officeholder as set out in the Act (to 
defray Federal campaign expenses; to pay ordinary and necessary 
expenses incurred in connection with the duties of a Federal 
officeholder; to make donations to organizations described in section 
170(c) of the Internal Revenue Code; and to transfer such funds without 
limitation to any national, State, or local political party committee). 
See 11 CFR 113.2. The Commission is initiating this rulemaking to add 
to section 113.2 the last two permissible uses regarding donations to 
non-Federal candidates, and donations for any other lawful purpose 
other than personal use.
    This difference between the Commission's regulations and the Act

[[Page 39584]]

resulted from amendments to the Act by the Bipartisan Campaign Reform 
Act of 2002 (``BCRA'') \1\ and the Consolidated Appropriations Act of 
2005.\2\ Prior to the passage of BCRA, the Act and Commission 
regulations permitted the use of campaign funds for ``any other lawful 
purpose'' other than personal use. In BCRA, Congress deleted ``any 
other lawful purpose'' from section 439a and retained only four 
permissible uses of campaign funds. The Commission amended its 
regulation accordingly.\3\
---------------------------------------------------------------------------

    \1\ Pub. L. 107-155, 116 Stat. 81 (2002).
    \2\ Pub. L. 108-447, 118 Stat. 2809 (2004). The Consolidated 
Appropriations Act of 2005 directed that section 312a(a) of the Act 
be amended, but was executed by amending section 313(a) of the Act 
``as the probable intent of Congress.'' 2 U.S.C.A. 439a (West 2004).
    \3\ Disclaimers, Fraudulent Solicitation, Civil Penalties, and 
Personal Use of Campaign Funds; Final Rule, 67 FR 76962, 76970-75 
and 76978-79 (Dec. 13, 2002).
---------------------------------------------------------------------------

    Congress later amended section 439a again, in the Consolidated 
Appropriations Act of 2005, by reinstating ``any other lawful purpose'' 
and adding donations to State and local candidates as permissible uses 
of campaign funds. These changes to the Act have prompted this 
rulemaking.

I. Donations to State and Local Candidates

    Section 439a(a)(5) of the Act expressly permits Federal candidates 
and officeholders to donate contributions accepted and other monies 
received to State and local candidates. The Commission proposes to 
amend 11 CFR 113.2 accordingly, by adding a new paragraph (d), which 
would permit Federal candidates and officeholders to donate campaign 
funds from their authorized committees to ``State and local candidates 
subject to the provisions of State law.'' The Commission seeks comment 
on this proposed revision.

II. Any Other Lawful Purpose

    The Commission also proposes to amend 11 CFR 113.2 by inserting a 
new paragraph (e), which would state that campaign funds ``may be used 
for any other lawful purpose, unless such use is personal use under 11 
CFR 113.1(g).'' New paragraph (e) would follow current section 
439a(a)(6) of the Act, which permits the use of campaign funds ``for 
any other lawful purpose,'' unless the funds are converted by any 
person to personal use. The Commission seeks comment on this proposed 
revision to the regulation. The Commission notes that this change to 
the statute has the effect of superseding the analysis in Advisory 
Opinions 2003-26 (Voinovich) and 2004-03 (Dooley).

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

    The Commission certifies that the attached proposed rule would not, 
if promulgated, have a significant economic impact on a substantial 
number of small entities. The basis for this certification is that any 
individuals and not-for-profit entities that would be affected by this 
proposed rule are not ``small entities'' under 5 U.S.C. 601. The 
definition of ``small entity'' does not include individuals, but 
classifies a not-for-profit enterprise as a ``small organization'' if 
it is independently owned and operated and not dominant in its field. 5 
U.S.C. 601(4). The proposed rule would affect authorized committees, 
which are not independently owned and operated because they are not 
financed and controlled by a small identifiable group of individuals. 
Authorized committees are financed by contributions from a large number 
of persons and controlled by the candidate and the candidate's campaign 
employees and volunteers. To the extent that any authorized committees 
might be considered ``small organizations,'' the number that would be 
affected by this proposed rule is not substantial.
    The proposed rule also would not impose any additional restrictions 
or increase the costs of compliance for authorized committees. Instead, 
the proposed rule would provide authorized committees with additional 
options for using campaign funds. The proposed rule would not impose an 
undue burden upon authorized committees because they are already 
required to report the use of campaign funds to the Commission. 
Therefore, the attached proposed rule, if promulgated, would not have a 
significant economic impact on a substantial number of small entities.

List of Subjects in 11 CFR Part 113

    Campaign funds.

PART 113--USE OF CAMPAIGN ACCOUNTS FOR NON-CAMPAIGN PURPOSES

    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:
    1. The authority citation for part 113 continues to read as 
follows:

    Authority: 2 U.S.C. 432(h), 438(a)(8), 439a, 441a.

    2. Section 113.2 is amended by:
    a. Adding paragraph (d); and
    b. Redesignating paragraphs (e) and (f) as paragraphs (f) and (g) 
and adding new paragraph (e) to read as follows:


Sec.  113.2  Permissible non-campaign use of funds (2 U.S.C. 439a).

* * * * *
    (d) May be donated to State and local candidates subject to the 
provisions of State law; or
    (e) May be used for any other lawful purpose, unless such use is 
personal use under 11 CFR 113.1(g).
* * * * *

    Dated: July 12, 2007.
Robert D. Lenhard,
Chairman, Federal Election Commission.
[FR Doc. E7-13956 Filed 7-18-07; 8:45 am]
BILLING CODE 6715-01-P