[Federal Register Volume 74, Number 248 (Tuesday, December 29, 2009)]
[Proposed Rules]
[Pages 68720-68722]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-30768]


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FEDERAL ELECTION COMMISSION

11 CFR Parts 100 and 106

[Notice 2009-31]


Funds Received in Response to Solicitations; Allocation of 
Expenses by Separate Segregated Funds and Nonconnected Committees

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Election Commission (``Commission'') proposes 
removing its rules regarding funds received in response to 
solicitations. The Commission also proposes removing two additional 
rules regarding the allocation of certain expenses by separate 
segregated funds and nonconnected committees. The United States 
District Court for the District of Columbia ordered that these rules 
are vacated, in accordance with a Court of Appeals decision. Further 
information is provided in the supplementary information that follows.

DATES: Comments must be received on or before January 28, 2010.

ADDRESSES: All comments must be in writing, must be addressed to Mr. 
Robert M. Knop, 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 all comments on its Web site after the comment 
period ends.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General 
Counsel, or Mr. Neven F. Stipanovic, Attorney, 999 E Street, NW., 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: On September 18, 2009, the United States 
Court of Appeals for the D.C. Circuit (``D.C. Circuit Court'') ruled 
that 11 CFR 100.57, 106.6(c), and 106.6(f) violated the First Amendment 
of the United States Constitution. See EMILY's List v. FEC, 581 F.3d 1 
(D.C. Cir. 2009). The court also ruled that 11 CFR 100.57 and 106.6(f), 
as well as one provision of 106.6(c), exceeded the Commission's 
authority under the Federal Election Campaign Act (``Act''). See id. At 
the direction of the D.C. Circuit Court, the United States District 
Court for the District of Columbia ordered that these rules are 
vacated. See Final Order, EMILY's List v. FEC, No. 05-0049 (D.D.C. Nov. 
30, 2009). The Commission now proposes to remove these rules from its 
regulations.

I. Proposed Deletion of 11 CFR 100.57--Funds Received in Response to 
Solicitations

    The Commission regulation at 11 CFR 100.57 went into effect on 
January 1, 2005. See Political Committee Status, Definition of 
Contribution, and Allocation for Separate Segregated Funds and 
Nonconnected Committees, 69 FR 68056 (Nov. 23, 2004). Under paragraph 
(a) of section 100.57, funds provided in response to a communication 
are treated as contributions if the communication indicates that any 
portion of the funds received would be used to support or oppose the 
election of a clearly identified Federal candidate. Paragraph (b)(1) of 
section 100.57 provides that all funds received in response to a 
solicitation described in section 100.57(a) that refers to both a 
clearly identified Federal candidate and a political party, but not to 
any non-Federal candidates, have to be treated as contributions. 
Paragraph (b)(2) states that if a solicitation described in section 
100.57 refers to at least one clearly identified Federal candidate and 
one or more clearly identified non-Federal candidate, then at least 
fifty percent of the funds received in response to the

[[Page 68721]]

solicitation has to be treated as contributions. Paragraph (c) of 
section 100.57 provides an exception for certain solicitations for 
joint fundraisers conducted between or among authorized committees of 
Federal candidates and the campaign organizations of non-Federal 
candidates.
    The Commission proposes removing section 100.57 from its 
regulations because the D.C. Circuit Court held that this rule is 
unconstitutional and that it exceeded the Commission's statutory 
authority under the Act. See EMILY's List v. FEC, 581 F.3d 1 (D.C. Cir. 
2009). Moreover, as explained above, the D.C. District Court has 
ordered that 11 CFR 100.57 is vacated. See Final Order, EMILY's List v. 
FEC, No. 05-0049 (D.D.C. Nov. 30, 2009).

II. Proposed Deletion of 11 CFR 106.6(c) and 106.6(f)--Allocation of 
Expenses Between Federal and Non-Federal Activities by Separate 
Segregated Funds and Nonconnected Committees

    At the same time that the Commission adopted 11 CFR 100.57, the 
Commission substantially revised its allocation rules at 11 CFR 106.6. 
See Political Committee Status, Definition of Contribution, and 
Allocation for Separate Segregated Funds and Nonconnected Committees, 
69 FR 68056 (Nov. 23, 2004). The revised rule at 11 CFR 106.6(c) 
requires nonconnected committees and separate segregated funds (SSFs) 
to use at least fifty percent Federal funds to pay for administrative 
expenses, generic voter drives, and public communications that refer to 
a political party, but not to any Federal or non-Federal candidates.\1\ 
The Commission also added a new paragraph (f) to section 106.6, which 
specifies that nonconnected committees and SSFs must pay for public 
communications and voter drives that refer to both Federal and non-
Federal candidates using a percentage of Federal funds proportionate to 
the amount of the communication that is devoted to the Federal 
candidates. Id.
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    \1\ Section 106.6(a) defines a non-connected committee as ``any 
committee which conducts activities in connection with an election 
but which is not a party committee, an authorized committee of any 
candidate for Federal election, or a separate segregated fund.'' A 
separate segregated fund is a political committee established, 
administered, or financially supported by a corporation or labor 
organization. 2 U.S.C. 441b(b)(2)(C); 11 CFR 114.1(a)(2)(iii). A 
generic voter drive includes voter identification, voter 
registration, and get-out-the-vote drives, or any other activities 
that urge the general public to register, vote or support candidates 
of a particular party or associated with a particular issue, without 
mentioning a specific candidate. 11 CFR 106.6(b)(1)(iii).
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    The Commission proposes removing paragraphs (c) and (f) from 
section 106.6 because the DC Circuit Court held that these provisions 
are unconstitutional. See EMILY's List v. FEC, 581 F.3d 1 (D.C. Cir. 
2009). Moreover, as explained above, the DC District Court ordered that 
paragraphs (c) and (f) of section 106.6 are vacated. See Final Order, 
EMILY's List v. FEC, No. 05-0049 (D.D.C. Nov. 30, 2009).
    In an abundance of caution with respect to the notice and comment 
requirements under the Administrative Procedure Act, 5 U.S.C. 552 et 
seq., the Commission seeks public comments on how best to effectuate 
the courts' opinion and order in EMILY'S List. The Commission invites 
comment on whether the DC Circuit Court's opinion is subject to a 
reading that the ruling, as well as the District Court's order that the 
rules are vacated, is limited only to non-profit, non-connected 
entities.
    Thus, the Commission invites public comment on whether the DC 
Circuit Court's decision extends to SSFs as well as to nonconnected 
committees. The section 106.6 allocation rules, including paragraphs 
(c) and (f), apply to nonconnected committees and to SSFs. EMILY's List 
is a non-profit non-connected political committee, not an SSF. The 
EMILY's List decision stated that ``this case concerns the FEC's 
regulation of non-profit entities that are not connected to a * * * 
for-profit corporation.'' (Emphasis in original). See EMILY's List, 581 
F.3d at 8. Moreover, in footnote 7 of the decision, the court stated: 
``In referring to non-profit entities, we mean non-connected non-profit 
corporations * * * as well as unincorporated non-profit groups. `Non-
connected' means that the non-profit is not a * * * committee 
established by a corporation or labor union.'' Id., n.7. Does the 
EMILY's List analysis provide any basis for treating SSFs differently 
from the non-connected committee at issue in the EMILY's List case?
    Alternatively, the Commission seeks comment on whether the DC 
Circuit Court's statutory analysis should be read as not depending on 
the type of entity involved, but rather on the nature of the expenses 
that the entity incurs. See e.g., EMILY's List, 581 F.3d at 21-22. 
Moreover, even under the constitutional analysis, could the DC Circuit 
Court's rationale reasonably be read to apply to SSFs as well as 
nonconnected committees? For example, the DC Circuit Court's opinion 
seems to rely more on the distinction between parties and other 
entities than the corporate status of those other entities.
    The Commission invites comments on the merits of these two 
alternative readings. In short, the Commission seeks comment as to 
whether the allocation provisions in paragraphs (c) and (f) of section 
106.6 should be removed in their entirety, or revised so as not to 
apply to nonconnected committees but to continue to apply to SSFs. 
Alternatively, is the court's order vacating 11 CFR 106.6(c) and (f) so 
clear that the Commission has no discretion to do anything but repeal 
those provisions in their entirety?
    Please note that the Commission intends to initiate a separate 
rulemaking regarding other potential changes to its regulations, such 
as conforming changes to the remaining portions of 11 CFR 106.6 and 
other changes to 11 CFR 102.5. The Commission invites comment regarding 
what other changes to its regulations it should consider implementing 
in order to conform to the DC Circuit Court's ruling.

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

    The Commission certifies that the attached proposed rule, 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 this 
rulemaking. The Commission is proposing to remove regulations that a 
Federal court ordered vacated. Accordingly, removing these regulations 
would not have a significant impact on a substantial number of small 
entities.

List of Subjects

11 CFR Part 100

    Elections.

11 CFR Part 106

    Campaign Funds, Political committees and parties, Reporting and 
recordkeeping requirements.
    For the reasons set out in the preamble, subchapter A of chapter I 
of title 11 of the Code of Federal Regulations is proposed to be 
amended as follows:

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

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

    Authority:  2 U.S.C. 431, 434, 438(a)(8), and 439a(c).


Sec.  100.57  [Removed and Reserved]

    2. Section 100.57 is removed and reserved.

[[Page 68722]]

PART 106--ALLOCATIONS OF CANDIDATE AND COMMITTEE ACTIVITIES

    3. The authority citation for part 106 continues to read as 
follows:

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


Sec.  106.6  [Amended]

    4. In Sec.  106.6, paragraphs (c) and (f) are removed and reserved.

    Dated: December 21, 2009.

    On behalf of the Commission,
Steven T. Walther,
Chairman, Federal Election Commission.
[FR Doc. E9-30768 Filed 12-28-09; 8:45 am]
BILLING CODE 6715-01-P