[Federal Register Volume 75, Number 53 (Friday, March 19, 2010)]
[Rules and Regulations]
[Pages 13223-13224]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2010-6002]


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FEDERAL ELECTION COMMISSION

11 CFR Parts 100 and 106

[Notice 2010-08]


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

AGENCY: Federal Election Commission.

ACTION: Final rules.

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SUMMARY: The Federal Election Commission (``Commission'') is removing 
its rule regarding funds received in response to solicitations. The 
Commission is also 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: Effective: April 19, 2010.

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: The Commission is revising its regulations 
to conform to the decision of the United States Court of Appeals for 
the District of Columbia Circuit in EMILY's List v. FEC, 581 F.3d 1 (DC 
Cir. 2009). On September 18, 2009, the 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 (DC 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 Court of Appeals, 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 published a Notice of Proposed Rulemaking (``NPRM'') 
on December 29, 2009, in which it sought public comment on the proposed 
removal of rules at 11 CFR 100.57, 106.6(c), and 106.6(f). See Notice 
of Proposed Rulemaking on Funds Received in Response to Solicitations; 
Allocation of Expenses by Separate Segregated Funds and Nonconnected 
Committees, 74 FR 68720 (Dec. 29, 2009) (``NPRM''). The comment period 
closed on January 28, 2010. The Commission received two comments on the 
proposed rules, one of which was a comment from the Internal Revenue 
Service (``IRS'') stating that the proposed rules did not conflict with 
Internal Revenue Code or IRS regulations. The comments are available on 
the Commission's website at http://www.fec.gov/law/law_rulemakings.shtml#emilyslistrepeal.
    For the reasons explained below, the Commission has decided to 
delete the rules at 11 CFR 100.57, 106.6(c), and 106.6(f). The 
Commission's final rules are identical to the proposed rules in the 
NPRM.
    Under the Administrative Procedure Act, 5 U.S.C. 553(d) and the 
Congressional Review of Agency Rulemaking Act, 5 U.S.C. 801(a)(1), 
agencies must submit final rules to the Speaker of the House of 
Representatives and the President of the Senate and publish them in the 
Federal Register at least 30 calendar days before they take effect. The 
final rules that follow were transmitted to Congress on March 15, 2010.

Explanation and Justification

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

    The Commission promulgated 11 CFR 100.57 to specify when funds 
received in response to solicitations are considered to be 
contributions for purposes of the Act. Under paragraph (a) of section 
100.57, funds provided in response to a communication were treated as 
contributions if the communication indicated 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 provided that all funds received in response to a solicitation 
described in section 100.57(a) that referred to both a clearly 
identified Federal candidate and a political party, but not to any non-
Federal candidates, had to be treated as contributions. Paragraph 
(b)(2) stated that if a solicitation described in section 100.57 
referred 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 solicitation had to be 
treated as contributions. Paragraph (c) of section 100.57 provided 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 is removing section 100.57 in its entirety from its 
regulations because the Court of Appeals held that section 100.57 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). Accordingly, the District Court 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).
    The Commission received one comment on the proposal to remove 
section 100.57. That commenter agreed with the Commission that 11 CFR 
100.57 should be removed in its entirety.

II. 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

    The Commission promulgated 11 CFR 106.6 to provide separate 
segregated funds (SSFs) and nonconnected committees making 
disbursements in connection with both Federal and non-Federal elections 
with instructions as to how to allocate their administrative

[[Page 13224]]

expenses and costs for combined Federal and non-Federal activities. The 
rule at 11 CFR 106.6(c) required nonconnected committees and SSFs to 
use at least fifty percent Federal funds to pay for administrative 
expenses, generic voter drives, and public communications that referred 
to a political party, but not to any Federal or non-Federal 
candidates.\1\ Paragraph (f) of section 106.6 specified that 
nonconnected committees and SSFs had to pay for public communications 
and voter drives that referred to both Federal and non-Federal 
candidates using a percentage of Federal funds proportionate to the 
amount of the communication that was devoted to the Federal candidates. 
See 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 is now removing paragraphs (c) and (f) from section 
106.6 because the Court of Appeals held that these provisions are 
unconstitutional. See EMILY's List v. FEC, 581 F.3d 1 (DC Cir. 2009). 
Accordingly, the 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.DC Nov. 30, 2009).
    The Commission sought public comment on whether the Court of 
Appeals' decision extends to SSFs as well as to nonconnected 
committees. See EMILY's List NPRM at 68721. The Commission noted that 
section 106.6's allocation rules, including paragraphs (c) and (f), 
apply to nonconnected committees and to SSFs. See id. 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.'' 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.'' See id. n.7. The Commission asked whether these aspects 
of the opinion provided any basis for treating SSFs differently from 
the non-connected committee at issue in the EMILY's List case. See 
EMILY's List NPRM at 68721. Alternatively, the Commission asked whether 
the court's order vacating 11 CFR 106.6(c) and (f) is so clear that the 
Commission has no discretion to do anything but repeal those provisions 
in their entirety. Id.
    The Commission received one comment on this issue. That commenter 
agreed with the Commission's proposal to remove paragraphs (c) and (f) 
from section 106.6. The commenter argued that the EMILY's List decision 
applies to SSFs as well as to nonconnected committees. According to the 
commenter, the Court of Appeals ruled that the regulations were invalid 
in their entirety and the court did not provide any exception for SSFs. 
The commenter further noted that paragraphs (c) and (f) of section 
106.6 applied to both SSFs and to nonconnected committees, and that 
these regulations were challenged on their face. Accordingly, the 
court's reasoning applies with equal force to SSFs as to nonconnected 
committees. As to the court's statement in footnote 7, the commenter 
argued that this statement was simply a description of how the term 
``non-profit entities'' was to be used in the opinion because the term 
``non-profit entities'' does not appear in the Act. However, the 
explanation of the court's terminology did not limit the reach of the 
decision.
    The Commission agrees with the commenter that the court's holding 
applies to SSFs as well as to nonconnected committees. Although the 
court defined the term non-profit entities as not including SSFs, the 
court explicitly ordered the District Court to ``vacate the challenged 
regulations,'' referring to section 106.6(c) and section 106.6(f) in 
their entirety. The court's order provides no exception for SSFs. 
Accordingly, the Commission is removing paragraphs (c) and (f) in their 
entirety.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory 
Flexibility Act)
    The Commission certifies that the attached final rules will not 
have a significant economic impact on a substantial number of small 
entities. Few, if any, small entities will be affected by these final 
rules, which apply to Federal candidates and their campaign committees, 
political committees of political parties, nonconnected committees, and 
separate segregated funds. Candidates, party committees, separate 
segregated funds, and nonconnected committees are not ``small 
entities'' under 5 U.S.C. 601. They are not independently owned and 
operated because they are not financed and controlled by a small 
identifiable group of individuals; rather, they rely on contributions 
from a variety of persons to fund committee activities. However, to the 
extent that any committees might be considered ``small entities,'' it 
is also the case that the final rules do not add any new substantive 
provisions to the current regulations, but instead remove existing 
regulations pursuant to a Federal court order that they be vacated. 
Accordingly, removing these regulations will 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.


0
For the reasons set out in the preamble, subchapter A of chapter I of 
title 11 of the Code of Federal Regulations is amended as follows:

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

0
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]

0
2. Section 100.57 is removed and reserved.

PART 106--ALLOCATIONS OF CANDIDATE AND COMMITTEE ACTIVITIES

0
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  Allocation of expenses between Federal and non-Federal 
activities by separate segregated funds and nonconnected committees.


0
4. In Sec.  106.6, paragraphs (c) and (f) are removed and reserved.

    Dated: March 15, 2010.

    On behalf of the Commission.
Matthew S. Petersen,
Chairman, Federal Election Commission.
[FR Doc. 2010-6002 Filed 3-18-10; 8:45 am]
BILLING CODE 6715-01-P