[Federal Register Volume 87, Number 173 (Thursday, September 8, 2022)]
[Rules and Regulations]
[Pages 54862-54863]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2022-19344]


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

FEDERAL ELECTION COMMISSION

11 CFR Parts 110 and 116

[Notice 2022-17]


Repayment of Candidate Loans

AGENCY: Federal Election Commission.

ACTION: Interim final rule.

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

SUMMARY: The Federal Election Commission (``Commission'') is removing 
regulatory restrictions on authorized committees' repayment of 
candidate personal loans. The Commission is taking this action in light 
of the Supreme Court's recent decision in Federal Election Commission 
v. Ted Cruz for Senate, which held that the statutory provision 
implemented by those regulations is unconstitutional. The Commission is 
accepting comments on these revisions to its regulations.

DATES: The effective date is November 30, 2022. Comments must be 
received on or before October 11, 2022.

ADDRESSES: All comments must be in writing. Commenters are encouraged 
to submit comments electronically via the Commission's website at 
https://sers.fec.gov/fosers/, reference REG 2022-01. Alternatively, 
commenters may submit comments in paper form, addressed to the Federal 
Election Commission, Attn.: Mr. Robert M. Knop, Assistant General 
Counsel, 1050 First Street NE, Washington, DC 20463.
    Each commenter must provide, at a minimum, his or her first name, 
last name, city, and state. All properly submitted comments, including 
attachments, will become part of the public record, and the Commission 
will make comments available for public viewing on the Commission's 
website and in the Commission's Public Records Office. Accordingly, 
commenters should not provide in their comments any information that 
they do not wish to make public, such as a home street address, 
personal email address, date of birth, phone number, social security 
number, or driver's license number, or any information that is 
restricted from disclosure, such as trade secrets or commercial or 
financial information that is privileged or confidential.

FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General 
Counsel, or Mr. Joseph P. Wenzinger, Attorney, 1050 First Street NE, 
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION:

Background

    On May 16, 2022, the Supreme Court of the United States ruled in 
Federal Election Commission v. Ted Cruz for Senate that section 304 of 
the Bipartisan Campaign Reform Act of 2002 (``BCRA'') violates the Free 
Speech Clause of the First Amendment of the United States Constitution. 
142 S.Ct. 1638 (2022). The Supreme Court's ruling affirmed the same 
holding of the U.S. District Court for the District of Columbia. Ted 
Cruz for Senate v. Federal Election Commission, 542 F. Supp. 3d 1 
(D.D.C. 2021). The Commission is now removing the regulations 
implementing this unconstitutional statute.
    The Commission is taking this action without advance notice and 
comment because it falls under the ``good cause'' exception of the 
Administrative Procedure Act (``APA''), 5 U.S.C. 553(b)(B). The 
revisions set forth herein are necessary to conform the Commission's 
regulations to the Supreme Court's holding that the statutory 
restrictions on authorized committees' repayment of candidate personal 
loans are unconstitutional. Ted Cruz for Senate, 142 S.Ct. at 1656. 
Because this action does not involve any Commission discretion or 
policy judgments, notice and comment are unnecessary. 5 U.S.C. 
553(b)(B), (d)(3). A pre-publication notice and comment period would 
also be contrary to the public interest because the 2022 election 
campaigns for Federal office are ongoing, and so the delay that would 
result in such a notice and comment period might cause confusion among 
Federal candidates and the public as to the enforceability of the 
regulations addressed below. Id.
    Moreover, because this interim final rule is exempt from the APA's 
notice and comment procedure under 5 U.S.C. 553(b), the Commission is 
not required to conduct a regulatory flexibility analysis under 5 
U.S.C. 603 or 604. See 5 U.S.C. 601(a), 604(a).

Transmission of Final Rules to Congress

    Before final promulgation of any rules or regulations to carry out 
the provisions of the Federal Election Campaign Act (``the Act''), the 
Commission transmits the rules or regulations to the Speaker of the 
House of Representatives and the President of the Senate for a thirty-
legislative-day review period. 52 U.S.C. 30111(d). The effective date 
of this final rule is November 30, 2022.

Explanation and Justification

    The Act provides two methods for the funding of Federal campaigns. 
First, funding may come from individual contributions to the campaign, 
which are subject to a per-election limits. See 52 U.S.C. 
30116(a)(1)(A) (placing limits on contributions from individuals to 
candidates and their authorized political committees). Second, 
candidates may self-finance their campaigns, with no limits on the 
amount a candidate may contribute to his or her campaign committee. 11 
CFR 110.10; see also Buckley v. Valeo, 424 U.S. 1, 51-54 (1976) 
(holding that restriction on candidate's personal expenditures is 
unconstitutional).
    At the same time, however, section 304 of BCRA places limits on 
candidates' ability to finance their campaigns through personal loans. 
Under that statutory provision, a candidate's authorized committee may 
repay all of a candidate's personal loans with contributions made 
before or on the date of the election, but may repay only up to 
$250,000 of a candidate's pre-election loans with post-election

[[Page 54863]]

contributions. 52 U.S.C. 30116(j). Under the Commission's implementing 
regulations, for personal loan amounts that in the aggregate exceed 
$250,000, a campaign ``[m]ay repay the entire amount of the personal 
loans using contributions'' made before or on the date of the election, 
11 CFR 116.1(b)(2), but ``it must do so within 20 days of the 
election,'' 11 CFR 116.11(b)(1); (c)(1). If using post-election 
contributions, a campaign may repay only up to $250,000 of the personal 
loans. 11 CFR 116.11(b)(2); 11 CFR 116.12.
    On May 16, 2022, the Supreme Court of the United States ruled that 
section 304 of BCRA violates the Free Speech Clause of the First 
Amendment of the United States Constitution. The Supreme Court's ruling 
affirmed the same holding of the U.S. District Court for the District 
of Columbia. Ted Cruz for Senate v. Federal Election Commission, 542 F. 
Supp. 3d 1 (D.D.C. 2021). Accordingly, the Commission is removing the 
regulations implementing this unconstitutional statutory provision.

I. Deletion of 11 CFR 110.1(b)(3)(ii)(C)--Contributions by Persons 
Other Than Multicandidate Political Committees (52 U.S.C. 30116(a)(1))

    Section 110.1(b)(3)(i) provides that contributions to a campaign 
for a particular election after the election has taken place may be 
made only to the extent that the contribution does not exceed a 
committee's net debts outstanding from such election. 11 CFR 
110.1(b)(3)(i). The following paragraph (ii) further provides how net 
debts outstanding shall be determined, and it states that an authorized 
committee must reduce its calculated net debts by any outstanding 
candidate personal loan amounts more than $250,000. 11 CFR 
110.1(b)(3)(ii)(C). The regulation that reduces the calculation of net 
debts based on candidate personal loans exceeding $250,000 was issued 
as a conforming edit to the regulations, 11 CFR 116.11 and 116.12 (see 
below), that implemented the statutory limitation on an authorized 
committee's repayment of candidate personal loans exceeding that 
amount. Increased Contribution and Coordinated Party Expenditure Limits 
for Candidates Opposing Self-Financed Candidates, 68 FR 3970, 3973 
(Jan. 27, 2003). The Commission is removing 11 CFR 110.1(b)(3)(ii)(C) 
and making technical edits to 11 CFR 110.1(b)(3)(ii)(A) and (B).

II. Deletion of 11 CFR 116.11--Restriction on an Authorized Committee's 
Repayment of Personal Loans Exceeding $250,000 Made by the Candidate to 
the Authorized Committee

    Section 116.11 implements section 304 of BCRA and provides for 
relevant limitations on the repayment of candidate personal loans 
aggregating in excess of $250,000 by an authorized committee. 11 CFR 
116.11. The Commission is removing Sec.  116.11 in its entirety.

III. Deletion of 11 CFR 116.12--Repayment of Candidate Loans of 
$250,000 or Less

    Section 116.12 provides that a campaign committee is authorized to 
repay a candidate's personal loans less than $250,000 with 
contributions made before, on, or after the date of the election. 11 
CFR 116.2. The Commission is removing Sec.  116.12 in its entirety.

List of Subjects

11 CFR Part 110

    Contribution and expenditure limitations and prohibitions.

11 CFR Part 116

    Debts owed by candidates and political committees.

    For the reasons set out in the preamble, the Federal Election 
Commission amends 11 CFR chapter I as follows:

PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS

0
1. The authority citation for part 110 continues to read as follows:

    Authority:  52 U.S.C. 30101(8), 30101(9), 30102(c)(2) and (g), 
30104(i)(3), 30111(a)(8), 30116, 30118, 30120, 30121, 30122, 30123, 
30124, 36 U.S.C. 510.


Sec.  110.1  [Amended]

0
2. Amend Sec.  110.1:
0
a. In paragraph (b)(3)(ii)(A), by adding ``and'' after the semicolon at 
the end of the paragraph;
0
b. In paragraph (b)(3)(ii)(B), by removing ``; and'' and adding a 
period in its place; and
0
c. By removing paragraph (b)(3)(ii)(C).

PART 116--DEBTS OWED BY CANDIDATES AND POLITICAL COMMITTEES

0
3. The authority citation for part 116 continues to read as follows:

    Authority: 52 U.S.C. 30103(d), 30104(b)(8), 30111(a)(8), 30116, 
30118, 30141.


Sec.  Sec.  116.11  and 116.12 [Removed]

0
4. Remove Sec. Sec.  116.11 and 116.12.

    Dated: August 31, 2022.

    On behalf of the Commission
Allen J. Dickerson,
Chairman, Federal Election Commission.
[FR Doc. 2022-19344 Filed 9-7-22; 8:45 am]
BILLING CODE 6715-01-P