Federal election commission

**11 CFR Parts 100, 102, 104, 105, 109, 110, and 114**

**\[Notice 2002 - 16\]**

**Coordinated and Independent Expenditures**

**AGENCY:** Federal Election Commission.

**ACTION:** Notice of Proposed Rulemaking.

**SUMMARY:** The Federal Election Commission seeks comments on proposed
changes to its rules relating to payments for communications that are
coordinated with a candidate, a candidate's authorized committee, or a
political party committee. The proposed rules would also address
independent expenditures and expenditures by political party committees
that are made either in coordination with, or independently from,
candidates. These regulations would implement several requirements in
the Bipartisan Campaign Reform Act of 2002 ("BCRA") that significantly
amend the Federal Election Campaign Act of 1971, as amended ("FECA" or
the "Act"). Further information is contained in the Supplementary
Information that follows. Please note that the Commission has not made a
final decision on any of these proposals.

**DATES:** Comments must be received on or before October 11, 2002. The
Commission will hold a hearing on these proposed rules on October 23 and
24, 2002, at 9:30 a.m. Commenters wishing to testify at the hearing must
submit written or electronic comments no later than October 11, 2002,
and must so-indicate in their comments.

**ADDRESSES:** All comments should be addressed to Mr. John Vergelli,
Acting Assistant General Counsel, and must be submitted in either
electronic or written form. Electronic mail comments should be sent to
BCRAcoord@fec.gov 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. 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, N.W., Washington, D.C., 20463. Commenters are strongly
encouraged to submit comments electronically to ensure timely receipt
and consideration. The Commission will make every effort to post public
comments on its website within ten (10) business days of the close of
the comment period. The hearing will be held in the Commission's ninth
floor meeting room, 999 E St. N.W., Washington, D.C.

**for further**

**information**

**contact**: Mr. John Vergelli, Acting Assistant General Counsel, or
Attorneys Mark Allen (coordinated party expenditures), Richard Ewell
(coordinated communications paid for by other political committees and
other persons), Tony Buckley (electioneering communications), or Cheryl
Fowle (reporting requirements), 999 E Street N.W., Washington, D.C.,
20463, (202) 694-1650 or (800) 424-9530.

**Supplementary**

**INFORMATION:** The Bipartisan Campaign Reform Act of 2002 ("BCRA"),
Pub. L. 107-155, 116 Stat. 81 (March 27, 2002), contains extensive and
detailed amendments to the Federal Election Campaign Act of 1971, as
amended ("FECA" or the "Act"), 2 U.S.C. 431 [et]{.underline}
[seq]{.underline}. This is one of a series of Notices of Proposed
Rulemakings ("NPRM") the Commission is publishing over the next several
months in order to meet the rulemaking deadlines set out in BCRA. The
deadline for the promulgation of these rules is 270 days after the date
of enactment of BCRA, or December 22, 2002.

This NPRM primarily addresses communications that are made independently
from, or in coordination with, a candidate, an authorized committee of a
candidate, or a political party committee. The proposed regulations
would set forth the meaning of "coordination." They would also set forth
statutory requirements for political party committees with respect to
the permitted timing of independent and coordinated expenditures, and
transfers and assignments.

## Introduction

## [I.\_\_\_\_\_Statutory Overview]{.underline} 

FECA limits the amount of contributions to Federal candidates, their
authorized committees, and other political committees. 2 U.S.C. 441a(a).
Under FECA and the Commission's regulations, these contributions may
take the form of money or "anything of value" (the latter would be an
"in-kind contribution" provided to a candidate or political committee.
[See]{.underline} 11 CFR 100.52(d)(1). Candidates must disclose all
contributions they receive. 2 U.S.C. 434(b)(2). Since the recipient does
not actually receive a cash payment from an in-kind contribution, the
recipient must report the value of an in-kind contribution as both a
contribution received and an expenditure made so that the receipt of the
contribution will be reported without overstating the cash-on-hand in
the committee's treasury. [See]{.underline} 11 CFR 104.13.

# II. Overview of BCRA Changes to FECA and Commission Regulations

## In BCRA, Congress revised FECA's definition of "independent expenditure." 

## 2 U.S.C. 431(17). The revision added a reference to political party committees and their agents and reworked other aspects of the former language. Corresponding revisions would be made to the regulations in 11 CFR 100.16. 

Congress repealed the Commission's pre-BCRA regulations regarding
"coordinated general public political communications" (at pre-BCRA 11
CFR 100.23) and directed the Commission to adopt new regulations on
"coordinated communications" in their place. Pub. L. 107-155, sec.
214(b), (c) (March 27, 2002). The Commission proposes a new section 11
CFR 109.21 to implement the Congressional mandate.

In addition, the proposed rules would implement several new restrictions
found in BCRA on the timing of independent and coordinated expenditures
made by committees of political parties. 2 U.S.C. 441a(d)(4). Those
regulations would be in new 11 CFR part 109, subpart D. Similarly,
Congress established new restrictions on transfers between committees of
a political party. 2 U.S.C. 441a(d)(4). Those changes, as well as
amendments to the rules on the assignment of coordinated party
expenditure authority in pre-BCRA 11 CFR 110.7, would also be reflected
in new 11 CFR part 109, subpart D.

Finally, Congress established new reporting obligations for independent
expenditures. 2 U.S.C. 434(a)(5) and (g). [See]{.underline} proposed 11
CFR 100.19, 104.4, 104.5, 105.2, and 109.10.

# **Definition of Independent Expenditure**

The Commission proposes several changes to the definition of
"independent expenditure" in 11 CFR 100.16 in light of several
Congressional changes to the statutory definition of the same term at 2
U.S.C. 431(17). Most significantly, the statutory definition of
"independent expenditure" was modified to exclude coordination with a
political party committee or its agents (in addition to the pre-BCRA
exclusion of coordination with candidates). [Ibid]{.underline}.

Proposed section 100.16 would contain two paragraphs. Proposed paragraph
(a) would include the revised pre-BCRA section 100.16. The first
sentence of proposed paragraph (a) would be changed by adding a
reference to political party committees and their agents, tracking
BCRA's changes in 2 U.S.C. 431(17).

In BCRA, Congress deleted the term "consultation" from the list of
activities that compromise the independence of expenditures.
[See]{.underline} 2 U.S.C. 431(17)(B). Proposed paragraph (a), however,
would retain the term because it remains, post-BCRA, in other related
provisions of the Act. Expenditures that are made in "cooperation,
[consultation]{.underline}, or concert with, or at the request or
suggestion of" candidates, political committees, and agents thereof are
contributions. [See]{.underline} 2 U.S.C. 441a(a)(7)(B)(i) (emphasis
added). Most importantly, the term "consultation" is used in a closely
related provision added by BCRA itself. [See]{.underline} 2 U.S.C.
441a(7)(B)(ii) as amended by Pub. L. 107-155, sec. 214(a) (expenditures
made in "cooperation, consultation, or concert, with, or at the request
or suggestion of, a national, State, or local committee of a political
party"). Thus, the proposed rules would retain the term "consultation"
as an element in the regulatory definition of "independent expenditure."

Similarly, the Commission notes that while Congress referred to
expenditures "not made in concert or cooperation with . . . a political
party committee [or its agents]{.underline}" in 2 U.S.C. 431(17)
(emphasis added), it did not refer to agents of a party committee in

2 U.S.C. 441a(7)(B)(ii) when describing coordination with a party
committee. The Commission would include agents of political party
committees as persons who might take actions that would cause a
communication to be coordinated with that party committee.

In BCRA, Congress repealed the pre-BCRA regulatory definition of
"coordinated general public political communication." [See]{.underline}
11 CFR 100.23, repealed by Pub. L. 107-155, section 214(b) (March 27,
2002). Therefore, proposed paragraph (a) of section 100.16 would delete
the term "coordinated general public political communication," and
replace it with references to "coordinated communications" from proposed
section 109.21 and "party coordinated communications" from proposed
section 109.37.

The Commission would move to proposed paragraph (b) of section 100.16,
without other changes, the rule that expenditures made by a candidate's
authorized committee on behalf of that candidate would never qualify as
an independent expenditure. This rule, which is found at pre-BCRA 11 CFR
109.1(e), clarifies the basic definition of "independent expenditure."

Proposed Reorganization of 11 CFR Part 109

The Commission proposes to reorganize 11 CFR part 109 into four
subparts. Subpart A would explain the scope of part 109 and define a key
term. Subpart B would address reporting of independent expenditures.
Subpart C would address coordination between a candidate or a political
party and a person making a communication. Subpart D would set forth
provisions applicable only to political party committees, including some
pertaining to independent expenditures and support of candidates through
coordinated party expenditures. [See]{.underline} 2 U.S.C. 441a(d). The
special authority for coordinated expenditures by political party
committees, previously set forth in pre-BCRA 11 CFR 110.7, would be
relocated to proposed 11 CFR 109.32 and other sections in subpart D.

## Proposed Subpart A of Part 109: Scope and Definitions.

Proposed new section 109.1 would introduce the scope of part 109. A
definition found in pre-BCRA section 109.1 would be revised and moved to
proposed section 109.3. The Commission would move the reporting
requirements of pre-BCRA

11 CFR 109.2 to proposed 11 CFR 109.10, reserving section 109.2 to avoid
potential confusion regarding this move.

Proposed 11 CFR 109.3 would define the term "agent" for use throughout
part 109. This definition of "agent" would be based on the same concept
that the Commission used in framing the definition of "agent" in the
non-Federal funds or "Soft Money" rulemaking completed earlier this
year. Final Rules and Explanation and Justification, "Prohibited and
Excessive Contributions: Non-Federal Funds or Soft Money," 67 [Fed.
Register]{.underline} 49,081 (July 29, 2002). The definition identifies
the principal and enumerates particular activities in which the agent
may engage on behalf of the principal. In order to preclude confusion
with other regulatory definitions of "agent" (e.g., 11 CFR 300.2(b)),
this definition would be explicitly limited to 11 CFR part 109. The
definition would differ in several respects from its pre-BCRA form in 11
CFR 109.1(b)(5). The proposed definition would encompass political party
committees because the Act, as amended by BCRA, specifically covers, in
the context of coordination, payments made by a person on behalf of
political party committees. [See]{.underline} 2 U.S.C.
441a(a)(7)(B)(ii).

The proposed revised definition of "agent" would focus on whether a
purported agent has "actual authority, either express or implied," to
engage in one or more specified activities on behalf of specified
principals. The specified activities would vary slightly depending on
whether the agent engages in those activities on behalf of a national,
State, district, or local committee of a party committee, or on behalf
of a Federal candidate or officeholder. [See]{.underline} proposed 11
CFR 109.3(a) and (b), respectively. The activities specified in the
proposed rule would closely parallel activities associated with
coordinated communications, as described in proposed 11 CFR 109.21(b),
and would include requesting or suggesting that a communication be
created, produced, or distributed, making or authorizing certain
campaign-related communications, and material involvement in decisions
regarding specific aspects of communications. [See]{.underline} proposed
11 CFR 109.3(a)(1) through (5) and (b)(1) through (5). Thus, a person
would be an agent when (1) expressly authorized by a specific principal
to engage in specific activities; (2) engages in those activities on
behalf of that specific principal; and (3) those activities would result
in a coordinated communication if done directly by the candidate or a
political party official.

The Commission seeks comments on whether the scope of the definition of
"agent" should explicitly state that a person must be "acting within the
scope of his or her authority as an agent" while engaged in the action
in question (e.g., making a request, participating in a substantial
discussion) before he or she is considered an agent. Should the person
be required to convey information that was only available to that person
because of his or her role as an agent for the candidate or political
party committee? Should a person be considered an agent if he or she
bases his or her recommendations to a third party on information that
was gained only due to that person's role as an agent for the campaign?
The Commission also seeks comments on whether, and if so, under what
circumstances, a person who is authorized by a candidate or political
party committee to solicit or receive contributions or other transfers
of funds, and who holds a formal or honorary position or title with the
candidate's campaign or a political party committee, should be
considered [per se]{.underline} to be an agent of that candidate, an
authorized committee of that candidate, or political party committee.

The Commission's pre-BCRA regulations include a special definition of
"person" for part 109. 11 CFR 109.1(b)(1). The Commission has not
included this separate definition of the term "person" in this Notice of
Proposed Rulemaking because the term is already defined in pre-BCRA 11
CFR 100.10. Furthermore, the Commission is concerned that a separate
definition of "person" in part 109 might be confusing or misinterpreted
to permit labor organizations, corporations not qualified under 11 CFR
114.10(c), or other entities or individuals to pay for coordinated
communications or to make independent expenditures where these entities
and individuals are otherwise prohibited from making contributions or
expenditures under the Act and Commission regulations.
[See]{.underline}, [e.g.]{.underline}, 11 CFR 110.4 and 114.2. While the
Commission would propose to specifically address these prohibitions in
proposed 11 CFR 109.22, below, the Commission seeks comment on whether,
and if so, how, the term "person" should be defined separately for the
purposes of part 109.

# **Proposed Subpart B of Part 109: Independent Expenditures; Other Reporting Rules; Disclaimers.**

Under the Act, independent expenditures must be reported as follows:
Political committees must report all independent expenditures on their
regularly scheduled reports. In contrast, persons other than political
committees must report independent expenditures that aggregate in excess
of \$250 in a calendar year. 2 U.S.C. 434(b)(4)(H)(iii), (c), (d), and
(g). Political committees and other persons must file additional reports
of independent expenditures ("24-hour reports") when independent
expenditures totaling \$1,000 or more are made less than 20 days but
more than 24 hours before an election (i.e., primary, general, special,
or runoff; [see]{.underline} 11 CFR 100.2). BCRA moved the 24-hour
reporting provisions from 2 U.S.C. 434(c)(2)(C) to 2 U.S.C. 434(g)(1).
These reports must be received within 24 hours of the time the
independent expenditures aggregate \$1,000 or more. 2 U.S.C. 434(g)(1).

BCRA also adds a third type of report for certain independent
expenditures. New "48-hour reports" are required when independent
expenditures made at any time during the campaign, up to and including
the 20^th^ day before an election, aggregate \$10,000 or more. 2 U.S.C.
434(g)(2). To implement BCRA's new reporting requirements for
independent expenditures, the Commission is proposing changes to
pre-BCRA 11 CFR 100.19, 104.4, 104.5, 105.2, and 109.2, which are
discussed below.

[I. When Must Reports of Independent Expenditures be Filed?]{.underline}

[A. 11 CFR 100.19 File, Filed, or Filing (2 U.S.C. 434(a))]{.underline}

The Commission's regulations at 11 CFR 100.19 define [file]{.underline},
[filed,]{.underline} and [filing]{.underline}. Paragraph (a) of section
100.19 would be unaffected by this rulemaking. Proposed paragraph (b) of
section 100.19 would retain the pre-BCRA general rule that a document is
considered timely filed if it is: (1) delivered to the appropriate
filing office (either the Commission or the Secretary of the Senate), or
(2) sent by registered or certified mail and postmarked by 11:59 p.m.
Eastern Standard/Daylight Time of the prescribed filing date -- except
for pre-election reports. The proposed revisions to paragraph (b) of
section 100.19 would clarify that paragraph (b) is the general rule, but
does not apply to reports addressed by paragraph (c) through proposed
new paragraph (f). In pre-BCRA paragraph (b), the Commission notes that
this general rule does not apply to 24-hour reports of independent
expenditures, although the other exceptions are not mentioned.

Those exceptions would be as follows: Paragraph (c) for electronic
filing -- "filed" means received by the Commission at or before 11:59
p.m. Eastern Standard/Daylight Time on the filing date; paragraph (d)
for 24-hour and 48-hour reports of independent expenditures -- "filed"
means received by the Commission no later than 11:59 p.m. Eastern
Standard/Daylight Time of the day following (24-hour reports) or the
second day following (48-hour reports) the date on which the spending
threshold is reached in accordance with 11 CFR 104.4(f); paragraph (e)
for 48-hour notices of last-minute contributions -- "filed" means
received by the Commission or the Secretary of the Senate within 48
hours of the receipt of a "last-minute" contribution of \$1,000 or more.

Paragraph (c) of section 100.19 would remain unchanged.

Proposed revisions to paragraph (d) of section 100.19 would also require
that the new 48-hour reports of independent expenditures, like the
24-hour reports, must be [received]{.underline} rather than
[filed]{.underline} by the filing deadline. The proposed 48-hour
reporting provision would allow filers to submit their reports using
facsimile machines or electronic mail, as long as they are not required
under 11 CFR 104.18 to file electronically. Under pre-BCRA paragraph (d)
of section 100.19, 24-hour reports of independent expenditures are only
considered timely filed if they are [received]{.underline} by the
Commission or Secretary of the Senate within 24 hours of the time the
expenditure is made.[^1] Thus, sending 24-hour reports by mail is not a
viable option because it is unlikely that these reports will be received
by the Commission within 24 hours of the making of the expenditure.
[See]{.underline} [Final Rules and Explanation and Justification for 11
CFR 100.19]{.underline}, 67 [Fed. Register]{.underline} 12,834 (March
20, 2002.) Pre-BCRA paragraph (d) also states that 24-hour reports may
be filed by facsimile machine or electronic mail, in addition to other
permissible means of filing (e.g., hand delivery or overnight courier).
Because the reasons behind the handling of 24-hour reports apply equally
to the essentially similar 48-hour reports, the Commission is proposing
this parallel rule.

Additional proposed changes to 11 CFR 100.19 are being addressed by the
Commission in a separate rulemaking. [See]{.underline} "[Electioneering
Communications" Notice of Proposed Rulemaking]{.underline}, 67 [Fed.
Register]{.underline} 51,131 (Aug. 7, 2002).

[B. 11 CFR 104.5 Filing Dates (2 U.S.C. 434(a)(2))]{.underline}

Proposed paragraph (g) of 11 CFR 104.5 would move the pre-BCRA contents
of paragraph (g) to proposed paragraph (g)(2) with revisions, and would
add a new paragraph (g)(1), which would require that 48-hour reports of
independent expenditures must be received by the Commission no later
than 11:59 p.m. Eastern Standard/Daylight Time of the second day
following the date on which a communication is publicly distributed or
otherwise publicly disseminated. Pre-BCRA paragraph (g) of 11 CFR 104.5
states that 24-hour reports of independent expenditures must be received
by the appropriate officers no later than 24 hours after such
independent expenditure is made.

[II. Where Must Reports be Filed? 11 CFR 105.2 Place of Filing; Senate
Candidates, their Principal Campaign Committees, and Committees
Supporting Only Senate Candidates (2 U.S.C. 434(g)(3))]{.underline}

The Commission's pre-BCRA regulations require that 24-hour reports of
independent expenditures supporting or opposing Senate candidates be
filed with the Secretary of the Senate. [See]{.underline} pre-BCRA 11
CFR 104.4(c), 109.2(b). In BCRA, Congress establishes the Commission as
the place of filing for both 24- and 48-hour reports of independent
expenditures, regardless of the office being sought by the clearly
identified candidate. 2 U.S.C. 434(g)(3)(A). The proposed revisions to
section 105.2 would place the text of pre-BCRA 11 CFR 105.2 in proposed
paragraph (a), adding the heading, "General Rule." New proposed
paragraph (b) of 11 CFR 105.2 would be headed, "Exceptions," and would
state that 24- and 48-hour reports of independent expenditures, and
electioneering communications, [see]{.underline} 11 CFR 104.19, must be
filed with the Commission even if the candidate supported or opposed is
running for the Senate.

2 U.S.C. 434(f).

[III. 11 CFR 104.4 Independent Expenditures by Political
Committees]{.underline}

[(2 U.S.C. 434(b), (g))]{.underline}

The Commission has established reporting requirements for political
committees making independent expenditures in accordance with 2 U.S.C.
434(b) and (g). [See]{.underline} pre-BCRA 11 CFR 104.4. Paragraph (a)
of section 104.4 would be unaffected, other than the addition of a new
heading, a grammatical correction and an updated cross-reference.

Proposed new paragraph (b) would address reports of independent
expenditures made at any point in the campaign up to and including the
20^th^ day before an election. Proposed paragraph (b)(1) would address
independent expenditures aggregating [less than \$10,000]{.underline}
with respect to a given election during the calendar year, up to and
including the 20^th^ day before an election. This calendar year
aggregation would be based on 2 U.S.C. 434(b)(4), which requires
calendar year aggregation for reports of independent expenditures by
political committees. The Commission requests comments on whether a
different time period, such as an election cycle, should be employed
instead of the calendar year period.

Under this calendar year approach, political committees would report the
independent expenditures on Schedule E of FEC Form 3X, filed no later
than the regular reporting date under 11 CFR 104.5. The Commission would
interpret 2 U.S.C. 434(g), added to the Act by BCRA, to require
aggregation toward the various thresholds for independent expenditure
reporting to be done on a per election basis within the calendar year.
For example, if a political committee made \$5,000 in independent
expenditures with respect to a Senate race, and \$5,000 in independent
expenditures with respect to a House race, and both of these events
occurred before the twentieth day before the election, that political
committee would not be required to file 48-hour reports, but would be
required to disclose the independent expenditures in its regularly
scheduled reports. If the political committee makes \$5,000 in
independent expenditures with respect to a clearly identified candidate
in the primary, and an additional \$5,000 in independent expenditures
with respect to the same candidate in the general election, no 48-hour
reports would be required; but again the committee would be required to
disclose the independent expenditures in its regularly scheduled
reports.

Paragraph (b)(2) would address independent expenditures aggregating
[\$10,000 or more]{.underline} during the calendar year up to and
including the 20^th^ day before an election. These reports would also be
filed on Schedule E of FEC Form 3X. However, these reports would be
required to be received by the Commission no later than 11:59 p.m.
Eastern Standard/Daylight Time of the second day following the date on
which a communication which constitutes an independent expenditure is
publicly distributed or otherwise publicly disseminated. Further,
political committees would have to file an additional 48-hour report
each time subsequent independent expenditures reach the \$10,000
threshold with respect to the same election to which the first report
related.

The Commission proposes revisions to renumbered paragraph (c) (i.e.,
pre-BCRA 11 CFR 104.4(b)) stating that 24-hour reports must be
[received]{.underline} by the Commission no later than 11:59 p.m.
Eastern Standard/Daylight Time of the day following the date on which
the \$1,000 threshold is reached during the final twenty days before the
election. Further, proposed revisions to this paragraph would
specifically state that additional 24-hour reports must be filed each
time during the 24-hour reporting period that subsequent independent
expenditures reach or exceed the \$1,000 threshold with respect to the
same election to which the previous report related.

Proposed paragraph (d) would contain the report verification information
currently found in pre-BCRA paragraph (b) of section 104.4. There would
be non-substantive grammatical changes to conform this paragraph to
other changes in the overall section.

Proposed paragraph (e) would largely restate pre-BCRA paragraph (c) of
section 104.4. The most significant proposed change to this paragraph
would be to make the Commission and not the Secretary of the Senate the
place of filing for 24- and 48-hour reports of independent expenditures
relating to Senate candidates. 2 U.S.C. 434(g)(3). [See]{.underline} the
discussion of 11 CFR 105.2, above.

Proposed paragraph (f) of 11 CFR 104.4 would address aggregation of
independent expenditures for reporting purposes. The provisions of
pre-BCRA 11 CFR 109.1(f) would be redesignated and revised to explain
when and how political committees and other persons making independent
expenditures must aggregate independent expenditures for purposes of
determining whether 48-hour and 24-hour reports must be filed. Note that
this proposed aggregation rule would apply to independent expenditures
by political committees, as well as other persons; proposed 11 CFR
109.10(c) and (d) would cross-refer to this paragraph. Proposed
paragraph (f) would establish that every date on which a communication
that constitutes an independent expenditure is "publicly distributed" or
otherwise publicly disseminated serves as the date that every person
must use to determine whether the total amount of independent
expenditures has, in the aggregate, reached or exceeded the threshold
reporting amounts (\$1,000 for 24-hour reports or \$10,000 for 48-hour
reports). The term "publicly distributed" would have the same meaning as
in proposed

11 CFR 100.29(b)(6), which the Commission has proposed as part of a
separate rulemaking. [See]{.underline} "[Electioneering Communications"
Notice of Proposed Rulemaking]{.underline}, 67 [Fed.
Register]{.underline} 51,131 (Aug. 7, 2002). Thus, proposed paragraph
(f) would set the same date as the starting date from which a person
would have one or two days, where applicable, to file a 24-hour or
48-hour report on independent expenditures.

In addition, Congress changed the reporting requirements by adding the
phrase "or contracts to make" to the statute. 2 U.S.C. 434(g)(1), (2).
BCRA ties 24-hour and 48-hour reporting of independent expenditures to
the time when a person "makes or contracts to make independent
expenditures . . . " aggregating at or above the \$1,000 and \$10,000
thresholds, respectively. 2 U.S.C. 434(g)(4). Therefore, under proposed
11 CFR 104.4(f), each person would be required to include as of the
proposed trigger date, in the calculation of the aggregate amount of
independent expenditures both disbursements for independent expenditures
[and]{.underline} all contracts obligating funds for disbursement for
independent expenditures. Under this approach and the proposed timing
requirements described above, once a communication that constitutes an
independent expenditure is publicly distributed or disseminated as
explained above, the person who paid for, or who contracted to pay for,
the communication would be able to determine whether the communication
satisfied the "express advocacy" requirement of the definition of an
independent expenditure ([See]{.underline} 11 CFR 100.16) and would be
therefore be able to determine whether the disbursement for that
communication constituted an independent expenditure. A person reaching
or exceeding the applicable reporting threshold would be responsible for
submitting a report by 11:59 p.m. Eastern Standard/Daylight Time of the
day after, for 24-hour reporting, or two days after, for 48-hour
reporting, the date of the public distribution or dissemination of that
communication.

The Commission seeks comment on its proposed interpretation of BCRA's
"makes or contracts to make" language and the triggering mechanism for
24-hour and 48-hour reports. Specifically, the Commission seeks comment
on an alternative interpretation that would make the actual disbursement
or the execution of the contract to make the disbursement for an
independent expenditure, rather than the public distribution or
dissemination of the resulting communication, the triggering mechanism
for the reporting requirements once the disbursements and obligations
equal or exceed the respective thresholds. This change would require
earlier reporting than is currently required or proposed (i.e., when the
communication is publicly disseminated). The policy reasons for adopting
this alternative interpretation would be similar to those described in
the NPRM on reporting of electioneering communications.
[See]{.underline} "[Electioneering Communications" Notice of Proposed
Rulemaking]{.underline}, 67 [Fed. Register]{.underline} 51,131 (Aug. 7,
2002).

[IV. Proposed 11 CFR 109.10 How Do Persons Other Than Political
Committees Report Independent Expenditures (2 U.S.C. 434(c), (d), and
(g))?]{.underline}

Proposed new section 109.10 would set forth the revised reporting
requirements of pre-BCRA section 109.2. Under proposed new section
109.10, persons other than political committees would have to report
their independent expenditures on either FEC Form 5 or in a signed
statement containing certain information regarding the person who made
the independent expenditure and the nature of the expenditure itself.

Proposed paragraph (a) of 11 CFR 109.10 would provide a cross-reference
to 11 CFR 104.4 for political committees, under which they must report
independent expenditures. Paragraph (a) of pre-BCRA 11 CFR 109.2 would
be moved to proposed paragraphs (b) and (c) of section 109.10.

Proposed paragraph (c) would address reports of independent expenditures
aggregating \$10,000 or more with respect to a given election from the
beginning of the calendar year up to and including the 20^th^ day before
an election. This proposed paragraph would require that 48-hour reports
of independent expenditures be [received]{.underline} rather than
[filed]{.underline} by 11:59 pm of the second day after the date on
which the \$10,000 threshold is reached. [See]{.underline} discussion of
[received]{.underline} versus [filed]{.underline} in section 100.19,
above. Pre-BCRA paragraph (b) of section 109.2 indicates that 24-hour
reports must be received after a disbursement is made for an independent
expenditure, but no later than 24 hours after an independent expenditure
is "made" under pre-BCRA paragraph 109.1(f). [See]{.underline} the
discussion of proposed 11 CFR 104.4(f), above. Under the proposed rules,
paragraph (b) of pre-BCRA section 109.2 would be moved to new paragraph
(d) of 11 CFR 109.10 and revised to reflect the modification to the
aggregation and filing requirements in proposed 11 CFR 100.19(d) and
104.4 that are discussed above.

Proposed revisions to paragraph (d) of 11 CFR 109.10 (pre-BCRA 11 CFR
109.2(b)) would also mirror the changes in 11 CFR 104.4(c) as to when
24-hour reports of independent expenditures aggregating \$1,000 or more
after the 20th day before the election.

Proposed paragraph (e) of 11 CFR 109.10 (i.e., pre-BCRA 11 CFR
109.2(a)(1) and (c)) would address the contents and verification of
statements filed in lieu of FEC Form 5. Proposed paragraph (e) would
include one significant change from pre-BCRA 109.2(a)(1) and (c): a
person making an independent expenditure would now be required to
certify that the expenditure was made independently from a political
party committee and its agents, in addition to the pre-BCRA requirement
of certification that the expenditure was not coordinated with a
candidate, the candidate's authorized committee, or an agent of either
of the foregoing. This change reflects the addition of political party
committees to the definition of "independent expenditure" in 2 U.S.C.
431(17) and the description of coordination in 2 U.S.C.
441a(a)(7)(B)(ii) under BCRA. For the same reasons explained with
reference to the definition of "independent expenditure" in proposed 11
CFR 100.16, the Commission would continue to include "consultation" in
the description of activity that would cause an expenditure to lose its
independence (i.e., "in cooperation, [consultation]{.underline}, or
concert with" a candidate or political party committee) even though the
statutory definition in 2 U.S.C. 431(17) does not retain the term.

**§ 109.11 Non-Authorization Notice (Disclaimers) (2 U.S.C. 441d)**

The Commission would move the disclaimer requirement for independent
expenditure communications from pre-BCRA 11 CFR 109.3 to proposed
section 109.11. There would be no substantive changes to this section.
Proposed changes to 11 CFR 110.11 itself will be forthcoming in a
separate rulemaking, in light of BCRA's changes to the statutory
disclaimer requirement. [See]{.underline} 2 U.S.C. 441d.

## Proposed Subpart C of Part 109 \-- Coordination

# I. Proposed 11 CFR 109.20 What Does "Coordinated" Mean?

Congress did not define the term "coordinated" directly in FECA or in
BCRA, but it did provide that an expenditure is considered to be a
contribution to a candidate when it is "made by any person in
cooperation, consultation, or concert, with, or at the request or
suggestion of," that candidate, the authorized committee of that
candidate, or their agents. 2 U.S.C. 441a(a)(7)(B)(i). Likewise, in
BCRA, Congress added a new paragraph to section 441a(a)(7)(B) to require
that expenditures "made by any person (other than a candidate or
candidate's authorized committee) in cooperation, consultation, or
concert, with, or at the request or suggestion of, a national, State, or
local committee of a political party shall be considered to be
contributions made to such party committee."

2 U.S.C. 441a(a)(7)(B)(ii). Also, as explained above, an expenditure
would not be "independent" if it is "made in cooperation, consultation,
or concert, with, or at the request or suggestion of," a candidate or a
political party committee. [See]{.underline} proposed

11 CFR 100.16.

Proposed section 109.20 would incorporate the language in 2 U.S.C.
441a(a)(7)(B)(i) and (ii) into the Commission's regulations. While the
definition of "coordinated" in proposed paragraph 109.20(a) would
potentially encompass a variety of payments made by a person on behalf
of a candidate or party committee, the Commission recognizes that the
majority of issues regarding coordination involve communications.
Therefore, the proposed regulations in 11 CFR 109.21 and 109.37 would
specifically address the meaning of the phrase "made in cooperation,
consultation, or concert, with, or at the request or suggestion of" in
the context of communications.

In addition, proposed paragraph 109.20(b) would address expenditures
that are not made for communications but that are coordinated with a
candidate or political party committee. The Commission proposes to move
pre-BCRA 11 CFR 109.1(c), to proposed paragraph (b). This provision
would also be revised to make it clear that these other expenditures,
when coordinated, are also in-kind contributions (or coordinated party
expenditures, if a political party committee so elects) to the candidate
or political party committee with whom or with which they are
coordinated. The exceptions contained in 11 CFR part 100, subpart C
(exceptions to the definition of "contribution") and subpart E
(exceptions to the definition of "expenditure") would continue to apply.
The Commission requests comment on whether these non-communication
expenditures should be further addressed in a later rulemaking.

### II. Background: The Commission's Pre-BCRA Coordination Regulations

Prior to the enactment of BCRA, the Commission initiated a series of
rulemakings in response to the Supreme Court's ruling on the appropriate
application of the so-called "coordinated party expenditure" provisions
of FECA. [See]{.underline} [Colorado Republican Federal Campaign
Committee v. Federal Election Commission]{.underline}, 518 U.S. 604
(1996) ("Colorado I"). For example, the Commission addressed the issue
of coordination when it promulgated 11 CFR 100.23 in December 2000.
[See]{.underline} [Explanation and Justification of General Public
Political Communications Coordinated with Candidates and Party
Committees; Independent Expenditures]{.underline}, 65 [Fed.
Register]{.underline} 76,138 (Dec. 6, 2000). Section 100.23 defined a
new term, "coordinated general public political communication," drawing
from judicial guidance in [Federal Election Commission v. The Christian
Coalition]{.underline}*,* 52 F.Supp.2d 45, 85 (D.D.C. 1999) ("[Christian
Coalition]{.underline}"), to determine whether expenditures for
communications by unauthorized committees, advocacy groups, and
individuals were coordinated with candidates or qualified as independent
expenditures. Consistent with [Christian Coalition]{.underline},
[id]{.underline}. at 92, the Commission's regulations stated that such
coordination could be found when candidates or their representatives
influenced the creation or distribution of the communications by making
requests or suggestions regarding, or exercising control or
decision-making authority over, or engaging in "substantial discussion
or negotiation" regarding, various aspects of the communications. 11 CFR
100.23(c)(2). The regulations explained that "substantial discussion or
negotiation may be evidenced by one or more meetings, conversations or
conferences regarding the value or importance of the communication for a
particular election." 11 CFR 100.23(c)(2)(iii).

# III. Proposed 11 CFR 109.21 What is a "Coordinated Communication"?

In BCRA, Congress expressly repealed 11 CFR 100.23, Pub. L. 107-155,
sec. 214(b) (March 27, 2002), and instructed the Commission to
promulgate new regulations on "coordinated communications paid for by
persons other than candidates, authorized committees of candidates, and
party committees." Pub. L. 107-155, sec. 214(c) (March 27, 2002).
Congress also mandated that the new regulations address four specific
aspects of coordinated communications: republication of campaign
materials; the use of a common vendor; communications directed or made
by a former employee of a candidate or political party; and
communications made after substantial discussion about the communication
with a candidate or party. [See]{.underline} Pub. L. 107-155, sec.
214(c)(1) through (4) (March 27, 2002).

### A. Basic Elements of a "Coordinated Communication"

Proposed paragraph (a) of section 109.21 would set forth the three
required elements of a "coordinated communication," which would comprise
a three-part test. For a communication to be "coordinated" under the
proposed rule, all three parts of the test would have to be satisfied.
While no one of these elements standing alone fully answers the question
of whether a communication is for the purpose of influencing a Federal
election, [see]{.underline} 11 CFR 100.52(a), 100.111(a), the Commission
proposes that the satisfaction of all of the three specific tests set
out in the proposed regulation justifies the conclusion that payments
for the coordinated communication are for the purpose of influencing a
Federal election.

The first part of the three-part test, in proposed paragraph (a)(1),
would be that the communication would have to be paid for by someone
other than a candidate, an authorized committee, or a political party
committee. However, a person's status as a candidate would not exempt
him or her from the coordination regulations with respect to payments he
or she makes on behalf of a different candidate. Under proposed
paragraph (a)(2), the second part of the three-part test would be a
"content standard" regarding the subject matter of the communication.
The content standards would be addressed in detail in proposed paragraph
(c) of this section. Under proposed paragraph (a)(3), the final part of
the test would be a "conduct standard" regarding the interactions
between the person paying for the communication and the candidate or
political party committee. The conduct standards would be addressed in
detail in proposed paragraph (d).

[B. Treatment of Coordinated Communications as In-Kind
Contributions]{.underline}

Proposed paragraph (b) of section 109.21 would provide that a payment
for a coordinated communication would be made "for the purpose of
influencing" an election for Federal office, a phrase used by Congress
in the definition of both "expenditure" and "contribution." 2 U.S.C.
431(8)(A) and (9)(A). Thus, the Commission would make a determination
that satisfying the content and conduct standards of proposed

11 CFR 109.21 would, in turn, satisfy the statutory requirements for an
expenditure and a contribution.

Proposed paragraph (b)(1) would state the general rule that a payment
for a coordinated communication would constitute an in-kind contribution
to the candidate or political party committee with whom or with which it
is coordinated, unless excepted under subpart C of 11 CFR part 100.
Please note that this section encompasses communications described in 11
CFR 100.29(a)(1) (electioneering communications) in addition to other
communications. Congress expressly provided that when these
communications are coordinated with a candidate or political party
committee, they must be treated like other coordinated communications in
that disbursements for these communications are in-kind contributions to
the candidate or party committee with whom or which they were
coordinated. [See]{.underline} 2 U.S.C. 441a(a)(7)(C).

Proposed paragraph (b)(2) would create an exception to the general rule
of proposed paragraph (b)(1). Under the general rule in proposed
paragraph (b)(1), a candidate or a political party committee would be
deemed to receive an in-kind contribution, subject to the contribution
limits, prohibitions, and reporting requirements of the Act. As
explained below, two of the conduct standards, found in proposed
paragraphs (d)(4) and (d)(5) of section 109.21, would not focus on the
conduct of the candidate, his or her authorized committee, or his or her
agents, but would focus on the conduct of the person paying for the
communication, a common vendor, or a former employee. To avoid the
result where a candidate or political party committee might be held
responsible for receiving or accepting an in-kind contribution that did
not result from its conduct or the conduct of its agents, the Commission
proposes to explicitly provide that the candidate or political party
committee would not receive or accept in-kind contributions that result
from conduct described in the proposed conduct standards of paragraphs
(d)(4) and (d)(5) of section 109.21. This treatment would be generally
analogous to the handling of republished campaign materials under the
Commission's current regulations. [See]{.underline} 11 CFR 109.1(d)(1).
However, please note that the person paying for a communication that is
coordinated because of conduct described in proposed paragraphs (d)(4)
or (d)(5) would still be responsible for making an in-kind contribution
for purposes of the contribution limitations, prohibitions, and
reporting requirements of the Act.

Proposed paragraph (b)(3) of 11 CFR 109.21 would provide that a
political committee, other than a political party committee (which would
be covered in proposed subpart D), must report payments for coordinated
communications as in-kind contributions to the candidate or political
party committee with whom or which they are coordinated. Proposed
paragraph (b) would also clarify that a political party committee with
which a communication is coordinated must report that communication as
an in-kind contribution received under 11 CFR 104.13. The recipient
political party committee must also report making a corresponding
expenditure in the same amount. 11 CFR 104.13.

[C. Content Standards]{.underline}

> The Commission proposes to include "content standards" in the
> definition of "coordinated communication." Such content standards
> would serve to limit 11 CFR 109.21 to communications whose subject
> matter is reasonably related to an election. The purpose of the
> content standards would not be to definitively decide if the content
> of the communication is for the purpose of influencing a Federal
> election. Answering that larger question would be the purpose of the
> three-part test of which the content standard would be one part.
>
> Proposed paragraph (c) would set out four possible content standards.
> A communication that satisfies any one of the four would be deemed to
> satisfy the "content" requirement of the proposed regulation.
>
> Under proposed paragraph (c)(1), the first content standard would be
> whether the communication satisfies the requirements of a
> communication described in proposed 11 CFR 100.29 or communication
> that would otherwise be "electioneering communication." Notice of
> Proposed Rulemaking, "Electioneering Communications," 67 [Fed.
> Register]{.underline} 51,131 (Aug. 7, 2002).

The second proposed content standard addresses the Congressional
requirement that the Commission's new rules on coordinated
communications address the "republication of campaign materials."
[See]{.underline} Pub. L. 107-155, sec. 214(c)(1) (March 27, 2002). The
Commission proposes to satisfy this mandate by providing, in proposed
paragraph (c)(2) of section 109.21 that the republication of candidate
materials in a communication would satisfy the content standard if the
republication, dissemination, or distribution, in whole or in part,
amounts to a contribution under proposed 11 CFR 100.57 (discussed
below).

In light of the candidate's initial role in preparing the campaign
material that is subsequently incorporated into a different,
"republished" communication, it is possible that the candidate's
involvement in the original preparation of part or all of that content
might be construed as triggering one or more of the proposed conduct
standards in paragraph (d) of this section. To avoid this result, the
Commission would clarify that the candidate's actions in preparing the
[original]{.underline} campaign materials are not to be considered in
the conduct analysis of proposed paragraph (d). Instead, the proposed
rules in 11 CFR 109.21(d)(6) would only focus on the conduct of the
candidate that occurs after the initial preparation the campaign
materials. For example, if a candidate requests or suggests that a
supporter pay for the republication of a campaign ad, the resulting
communication paid for by the supporter would satisfy both a content
standard (republication) and conduct standard (request or suggestion,
[see]{.underline} discussion of proposed 11 CFR 109.21(d)(1) below) and
would therefore be a coordinated communication. The Commission also
proposes a second sentence in proposed paragraph (a)(3) of section
109.21 indicating that that the republication content standard of
proposed paragraph (c)(2) is evaluated under the conduct standard in
proposed paragraph (d)(6).

> The third content standard in proposed paragraph (c)(3) of section
> 109.21 would state that a communication would also satisfy the content
> standard if it "expressly advocates" the election or defeat of a
> clearly identified candidate for Federal office.

In addition to electioneering communications described in proposed 11
CFR 100.29, communications that republish campaign materials, and
communications that "expressly advocate" the election or defeat of a
clearly identified candidate, the Commission is considering a number of
other possible content standards. In this NPRM, the Commission presents
and discusses three other possible content standards, which are labeled
Alternatives A through C in the proposed rules. Any, all, or none of
these alternatives could be adopted in the final rules.

Each of these alternatives is framed in terms of a "public
communication," a term added to the Act by BCRA. 2 U.S.C. 431(22); 11
CFR 100.26. The use of the term "public communication" would provide
consistency within the regulations and would distinguish covered
communications from, for example, private correspondence and internal
communications between a corporation or labor organization and its
restricted class. In addition, although the term "public communication"
covers a broad range of communications, it does not cover some forms of
communications, such as those transmitted using the Internet and
electronic mail. 11 CFR 100.26. The Commission seeks comment on whether
it is appropriate to limit the scope of coordinated communications
through the use of the term "public communication," or whether it would
be adequate for this purpose to require only that the communication be
"made available to the public." The Commission also seeks comment on
these three alternatives, as well as any other possible standards.

[Alternative A]{.underline}

The first alternative, labeled "Alternative A" in the proposed rules,
would require that the communication be a public communication, as
defined in 11 CFR 100.26, and that it clearly identify a Federal
candidate. The terms "clearly identified" and "candidate" are defined in
11 CFR 100.17 and 100.3, respectively. This alternative would seem to
cover the widest range of public communications of all the alternatives.

[Alternative B]{.underline}

The second alternative, labeled "Alternative B" in the proposed rules,
would require that the communication promote or support or attack or
oppose a clearly identified candidate. This standard would be modeled on
one of the definitions of "Federal election activity" added to the Act
by BCRA. 2 U.S.C. 431(20)(A)(iii), 11 CFR 100.24. A public communication
that refers to a clearly identified Federal candidate, and "that
promotes or supports . . . or attacks or opposes" the candidate or his
or her opponent is one type of Federal election activity. The phrase
"promote or support, or attack or oppose" is also the key component of
the alternative statutory definition of "electioneering communication."
[See]{.underline} 2 U.S.C. 434(f)(3)(A)(ii).

The content standards set out in proposed paragraph (c) would apply to
any person who or which pays for a communication, including political
party committees. [See]{.underline} proposed 11 CFR 109.37(a)(2),
discussed below, which would cover coordination of communications paid
for by political party committees. The Commission seeks comment on
whether, in the context of coordination, communications paid for by
political party committees should be analyzed under different or
additional content standards. For example, should the
promote-or-support-or attack-or-oppose content standard set out in
Alternative B apply only to communications paid for by political party
committees, and not to other persons? Should it be the only content
standard applicable to communications paid for by political party
committees?

### Alternative C

The third alternative, labeled "Alternative C" in the proposed rules,
would represent a new approach. This possible content standard would
attempt to focus as much as possible on the face of the public
communication or on facts on the public record. This latter point is
important. The intent would be to require as little characterization of
the meaning or the content of communication, or inquiry into the
subjective effect of the communication on the reader, viewer, or
listener as possible. [See]{.underline} [Buckley v. Valeo]{.underline},
424 U.S. 1, 42-44 (1975). For example, it should not require inquiry
into whether the communication "garners or diminishes support" for the
candidate or was designed to urge the public to elect a certain
candidate or party. [Cf.]{.underline} AO 1984-15 and 1985-14 (the former
"electioneering message" standard). Alternative C would be applied by
asking if certain things are true or false about the face of the public
communication or with limited reference to external facts on the public
record.

The proposed content standard would consist of a test based on three
factors. If the public communication satisfies all three factors of the
test, it would be deemed to satisfy the content standard.

The first factor would be proximity in time to a Federal election.
Proposed paragraph (c)(4)(i) would require that the public communication
must be made 120 days or fewer before either a primary election or a
general election in which a Federal candidate appears on the ballot. The
120-day time-frame would be borrowed from

2 U.S.C. 431(20)(A)(i) ([see]{.underline} 11 CFR 100.24(b)(1)), and it
would have several advantages. First, it would be a "bright-line" rule.
Second, it would focus the regulation on activity reasonably close to an
election, but not so distant from the election as to implicate political
discussion at other times. The Commission seeks comment on what, if any,
regulation should apply more than 120 days from an election in this
context.

The second factor would relate to the intended audience of the public
communication. Proposed paragraph (c)(4)(ii) would provide that a public
communication must be "directed to voters in the jurisdiction of the
clearly identified Federal candidate." For example, a public
communication that otherwise makes express statements about promoting or
attacking Representative X or Senator Y for their stance on the "X-Y
Bill" would not satisfy this requirement if it were only broadcast in
Washington, D.C., and not in either member's district or State. For
purposes of this paragraph, "jurisdiction" would mean a member of
Congress' district, the State of a U.S. Senator, and the entire United
States for the President and Vice President in the general election or
before the national nominating convention.

The third factor, which would be in paragraph (c)(4)(iii), would focus
on public communications that are specifically linked to a clearly
identified candidate. This factor would look to whether the public
communication, on its face, makes express statements about the record or
position or views on an issue, or the character, or the qualifications
or fitness for office, or party affiliation of a clearly identified
candidate. If this factor is satisfied, in a context where the factors
in proposed paragraphs (c)(4)(i) and (ii) are also satisfied, the
combination of these factors would lead to the conclusion that the
public communication satisfies the content standard.

The Commission seeks comment on whether the third factor in Alternative
C should be deleted from this proposed content standard. By deleting the
third factor, the resulting content standard would resemble the
"electioneering communication" content standard in proposed paragraph
(c)(1), but with a broader time frame (120 days compared with 30 or 60
days) and with a different "targeting" requirement. Eliminating the
third factor from Alternative C would allow for coordination to be
established in the case of a communication that does not refer to a
candidate's position on an issue, but rather refers specifically to a
candidate along with his or her party's position on the issue or with
the stand of another politician on the issue.

The Commission notes that most of the proposed content standards would
require that a communication refer to a clearly identified candidate.
The Commission seeks comment on whether a person whose interactions with
a political party committee satisfy the conduct standard, and who pays
for a communication that merely says "Vote Democratic" or "Vote
Republican," should be deemed to have made a coordinated communication,
even though no specific candidate is mentioned. Should proposed 11 CFR
109.21(c) include a content standard that would cover this type of
communication?

[D. Conduct Standards]{.underline}

Proposed paragraph (d) of section 109.21 would list special types of
conduct that would satisfy the "conduct standard" of the proposed,
three-part coordination formula. Under the proposed rules, if one of
these types of conduct is present, and the other requirements described
in paragraphs (a) and (c) are satisfied, the communication would not be
made "totally independently" from the candidate or party committee,
[see]{.underline} [Buckley]{.underline}, 424 U.S. at 47, and thus would
be coordinated. The Commission emphasizes that the conduct standards in
proposed paragraph (d) would only apply if the communication in question
also satisfies one or more of the "content standards" in proposed
paragraph (c) of section 109.21. The introductory sentence of proposed
paragraph (d) would implement a Congressional mandate in BCRA that the
coordination regulation not require "agreement or formal collaboration."
Pub. L. 107-155, sec. 214(c) (March 27, 2002); [see]{.underline} more
complete discussion below.

> [1. Request or Suggestion]{.underline}

Under the Act, as amended by BCRA, an expenditure made by any person at
the "request or suggestion" of a candidate, an authorized committee, a
political party committee, or an agent of any of the foregoing is a
contribution to the candidate or political party committee. 2 U.S.C.
441a(a)(7)(B)(i), (ii). The first proposed conduct standard, in proposed
11 CFR 109.21(d)(1), would implement this "request or suggestion"
statutory language, which would have two prongs. Satisfying either prong
would satisfy the proposed conduct standard.

The first prong, in proposed paragraph (d)(1)(i), would be satisfied if
the person creating, producing, or distributing the communication does
so at the request or suggestion of a candidate, authorized committee,
political party committee, or agent of any of the foregoing. The
[Buckley]{.underline} court originally drew on the 1974 House and Senate
reports accompanying the 1974 Amendments to the Act when it upheld
language in that Act that distinguished a communication made "at the
request or suggestion" of the candidate or political party committee
from those that are made "totally independently from the candidate and
his campaign." [Buckley,]{.underline} 424 U.S. at 47 (citing H.R. Rep.
No. 93-1239, p. 6 (1974) and S. Rep. No. 93-689, p. 18 (1974)). A
"request or suggestion" is therefore a form of coordination under the
Act, as approved by [Buckley]{.underline}. A request or suggestion
encompasses the most direct form of coordination, given that the
candidate or political party committee communicates desires to another
person who effectuates them.

The Commission notes that this provision, for example, would not apply
to general appeals for support, such as a speech at a campaign rally,
but, in appropriate cases, would apply to requests or suggestions to
specific individuals or small groups for the creation, production, or
distribution of communications.

The second prong of the proposed "request or suggestion" conduct
standard (proposed paragraph (d)(1)(ii)) would be satisfied if a person
paying for the communication suggests the creation, production, or
distribution of the communication to the candidate, authorized
committee, political party committee, or agent of any of the foregoing,
and the candidate or political party committee assents to the
suggestion. This second prong of the proposed conduct standard would be
intended to prevent circumvention of the statutory "request or
suggestion" language (2 U.S.C. 441a(a)(7)(B)(i), (ii)) by, for example,
the expedient of implicit understandings that a candidate or political
party committee never formally requests or suggests a communication, but
nonetheless creates the expectation that the suggestion should be made
by a person paying for the communication.

The requirement of assent would limit the reach of the proposed
regulation. A candidate or a political party committee would have
accepted an in-kind contribution only if there is assent to the
suggestion; by rejecting the suggestion, the candidate or political
party committee may unilaterally avoid any coordination. The Commission
requests comments on whether "express" assent should be required. Should
the rule cover situations where assent is implied, and if so, how?

As discussed above, the [Buckley]{.underline} Court expressly recognized
a request or suggestion by a candidate as a direct form of coordination
resulting in a contribution. [Buckley]{.underline}, 424 U.S. at 47. The
Commission seeks comment on whether this unique nature of requests or
suggestions by candidates or political party committees indicates that
such conduct should be handled differently under the proposed
coordination regulations. Specifically, should a request or suggestion
for a communication by a candidate or political party committee be
viewed as a special case, and as sufficient, in and of itself and
without reference to a "content standard," to establish coordination?

> [2. Materially Involved in Decisions]{.underline}

The second conduct standard proposed 11 CFR 109.21(d)(2), would address
situations in which a candidate, authorized committee, or a political
party committee is "materially involved in decisions" regarding specific
aspects of a public communication paid for by someone else. Those
specific aspects would be listed in proposed paragraphs (i) through (vi)
of paragraph (d)(2): (i) the content of the communication; (ii) the
intended audience; (iii) the means and mode of the communication; (iv)
the specific media outlet used; (v) the timing or frequency of the
communication; or (vi) the size or prominence of a printed communication
or duration of a communication on a television, radio, or cable station
or by telephone.

In this proposed regulation, "material" would have its ordinary legal
meaning, which is "important; more or less necessary; having influence
or effect; going to the merits." [Black's Law Dict.]{.underline} (6^th^
ed. 1990) p. 976. Thus, the term "materially involved in decisions"
would not be intended to encompass all interactions, only those which
are important to the communication. In addition to the materiality of
the candidate's involvement in decisions regarding the communication
under proposed paragraph (d)(3) through (d)(5), the Commission would
focus on the materiality of the information conveyed, and its specific
use.

A candidate or political party committee would be considered "materially
involved" in the decisions enumerated in paragraph (d)(2) if either
shares material information about campaign plans, projects, activities,
or needs with the person making the communication. Likewise, a candidate
or political party committee would be "materially involved in decisions"
if the candidate, political party committee, or agent conveys approval
or disapproval of the other person's plans. The Commission notes,
however, that as with the "request or suggest" standard, the "materially
involved" standard would not apply to general appeals for support, such
as a speech, but specifically to the creation, production, or
distribution of communications.

The Commission invites comments on the wording and scope of this
standard. In particular, the Commission welcomes comment on whether, and
if so, how, the phrases "materially involved" and "decisions" should be
further defined in the rules.

> [3. Substantial Discussion]{.underline}

In BCRA, Congress also directed the Commission to address "payments for
communications made by a person after substantial discussion about the
communication with a candidate or political party." Pub. L. 107-155,
sec. 214(c)(4) (March 27, 2002). Under proposed paragraph (d)(3) of 11
CFR 109.21, a communication would meet the conduct standard if it is
created, produced, or distributed after one or more substantial
discussions between the person paying for the communication, or the
person's agents, and the candidate clearly identified in the
communication, his or her authorized committee, his or her opponent, or
the opponent's authorized committee, a political party committee, or
their agents. Proposed paragraph (d)(3) would explain that a
"discussion" would be "substantial" if information about the plans,
projects, activities, or needs of the candidate or political party
committee that is material to the creation, production or distribution
of the communication is conveyed to a person paying for the
communication. "Discuss" would have its plain and ordinary meaning,
which the Commission understands to mean an interactive exchange of
views or information. "Material" would have the meaning explained above
in the context of proposed paragraph (d)(2) of section 109.21 ("material
involvement"). In other words, the substantiality of the discussion
would be measured by the materiality of the information conveyed in the
discussion. The Commission seeks comments as to whether additional
explanation or examples should be provided to further refine the term
"substantial discussion."

> [4. Employment of Common Vendor]{.underline}

In BCRA, Congress required the Commission to address "the use of a
common vendor" in the context of coordination. Pub. L. 107-155, sec.
214(c)(2) (March 27, 2002). Proposed paragraph (d)(4) of section 109.21
would create a conduct standard to implement this Congressional mandate.
It would explain what a common vendor is, and provide that the use of a
common vendor in the creation, production, or distribution of a
communication satisfies the conduct standard if three conditions are all
met.

The first condition, in proposed paragraph (d)(4)(i), would be that the
person paying for the communication, or the agent of such a person, must
contract with, or employ, a "commercial vendor" to create, produce, or
distribute the communication. The term "commercial vendor" is defined in
the Commission's pre-BCRA regulations as "any person\[\] providing goods
or services to a candidate or political committee whose usual and normal
business involves the sale, rental, lease, or provision of those goods
or services." 11 CFR 116.1(c). Thus, this standard would only apply to a
vendor whose usual and normal business includes the creation,
production, or distribution of communications, and would not apply to
the activities of persons who do not create, produce, or distribute
communications as a commercial venture.

The second condition, in proposed paragraph (d)(4)(ii), would be that
the commercial vendor must have a previous or current relationship with
the candidate or political party committee that puts the commercial
vendor in a position to acquire material information about the plans,
projects, activities, or needs of the candidate or political party
committee. This previous or current relationship would be defined in
terms of nine specific services related to campaigning and campaign
communications, which would be enumerated in proposed paragraphs
(d)(4)(ii)(A) through (I). Note that these services would have to have
been rendered during the current election cycle. Such a previous or
current relationship, as defined, would put the "common vendor" in a
position to convey material information about the plans, projects,
activities, or needs of the candidate or political party committee to
the person paying for the communication.

The proposed regulation refers to the current election cycle as a
temporal limit on the operation of the regulation. "Election cycle"
would have the meaning defined in 11 CFR 100.3. The Commission seeks
comment on whether a different time period, such as a fixed two-year
period, would more accurately align the proposed rule with existing
campaign practices. Or, should the time limit be the "the current
election cycle, but not more than the previous two years of that
election cycle"?

The third condition, in proposed paragraph (d)(4)(iii), would require
that the commercial vendor make use of or convey material information
about, the plans, projects, activities, or needs of the candidate or
political party committee, or material information used by the
commercial vendor in serving the candidate or political party committee,
to the person paying for the communication. This requirement would be
intended to encompass situations in which the vendor assumes the role of
a conduit of information between a candidate or political party
committee and the person making or paying for the communication, as well
as situations in which the vendor makes use of the information received
from the candidate or political party committee without actually
transferring that information to another person.

The Commission seeks comment about whether the conduct standard in
proposed paragraph (d)(4) would adequately address the Congressional
mandate in section 214(c)(2) of BCRA. The Commission also seeks comment
on whether purchasing advertising time slots for television, radio, or
other media should be added to the list of common vendor services
covered in proposed paragraph (d)(4)(ii).

> [5. Former Employee/Independent Contractor]{.underline}

In BCRA, Congress required the Commission to address "persons who
previously served as an employee of" a candidate or political party
committee in the context of coordination. Pub. L. 107-155, sec.
214(c)(3) (March 27, 2002). Proposed paragraph (d)(5) of section 109.21
would create a conduct standard to implement this Congressional mandate.

Proposed paragraph (d)(5) would apply to communications paid for by a
person who was previously an employee or an independent contractor of a
candidate, authorized committee, or political party committee, or by the
employer of such a person. Note that this employment or independent
contractor relationship would have to exist during the current election
cycle, as a temporal limit on the operation of the regulation. "Election
cycle" would have the meaning defined in 11 CFR 100.3. As discussed
above with regard to proposed paragraph (d)(4) on common vendors, the
Commission requests comments on whether this time period should be a
fixed two-year period, or the same election cycle, but not more than two
years.

This proposed conduct standard would expressly extend to a person who
had previously served as an "independent contractor" of a candidate or
political party committee to preclude circumvention of the rule by the
expedient of characterizing an "employee" as an "independent contractor"
where the characterization makes no difference in the person's
relationship with the candidate or political party committee. This
proposed coordination standard would also apply to the employer of a
person who was an employee or independent contractor of a candidate,
authorized committee, or political party committee. The Commission
interprets the Congressional intent behind section 214(c)(3) of BCRA to
encompass situations in which former employees, who by virtue of their
former employment have been in a position to acquire material
information about the plans, projects, activities, or needs of the
candidate or political party committee, may subsequently use that
information or convey it to a person paying for a communication.

Proposed paragraph (d)(5) would require that the former employee
actually make use of, or convey material information about, the plans,
projects, activities, or needs of the candidate or political party
committee, or material information used by the former employee in
serving the candidate or political party committee, to the person paying
for the communication. As with the proposed conduct standard covering
common vendors, this requirement would be intended to encompass both
situations in which the former employee assumes the role of a conduit of
information and situations in which the former employee makes use of the
information but does not share it with the person who is paying for the
communication.

The Commission proposes this conduct standard to address what it
understands to be Congress' primary concern, which is a situation in
which a former employee of a candidate goes to work for a third party
that pays for a communication that promotes or supports the former
employer/candidate or attacks or opposes the former employer/candidate's
opponent. The conduct standard, as proposed, does not require that the
former employee act under the continuing direction or control of, at the
behest of, or on behalf of, his or her former employer. This is because
a former employee who acts under such circumstances is a present agent,
and would presumably be regulated as an agent, not as a former employee.
To give effect to the statutory language that mandates the Commission's
coordination regulations address "former employees" ([see]{.underline}
Pub. L. 107-155, sec. 214(c)(3)) the Commission assumes that a "former
employee," as that term is used in the statute, must be different from
"agent."

The Commission seeks comment on whether a requirement of continuing
direction or control by the former employer/candidate should be added to
the proposed conduct standard. Consider, for example, an employee of a
candidate in a contested primary who leaves the employment of that
candidate to work for a third-party organization that makes a
communication satisfying one or more of the proposed content standards.
Under the proposed conduct standard, that third-party organization could
be found to make an in-kind contribution. Assuming that the former
employee is not acting under the continuing direction or control of, at
the behest of, or on behalf of, his or her former employer, it can be
argued that the third-party organization is making an independent
expenditure or a non-coordinated disbursement for an electioneering
communication, albeit with the windfall of the former employee's
knowledge. Should the regulation provide that the third-party
organization does not make an in-kind contribution in this specific
circumstance?

The Commission also seeks comment on a related situation illustrated by
the following example. Consider an employee, disgruntled or otherwise,
of a candidate in a contested primary who leaves the employment of that
candidate to work for a third-party organization that makes a
communication satisfying one or more of the proposed content standards.
Under the proposed conduct standard, that third-party organization could
be found to make an in-kind contribution. But suppose the third-party
organization uses information gained by the employee to run ads critical
of the former employer or that favor the opponent of the former
employer? Assume also that the third-party organization has no contact
with the opponent, his campaign or any agent of the opponent. Should the
Commission consider those communications to be in-kind contributions to
the candidate who is the intended beneficiary? Or, assuming that the
communication would otherwise qualify as an independent expenditure or
electioneering communication, should the Commission merely consider this
third-party communication to be either an independent expenditure or a
no-coordinated disbursement for an electioneering communication?

The Commission seeks comment about whether this proposed conduct
standard should be extended to volunteers, such as "fundraising
partners," who by virtue of their relationship with a candidate or a
political party committee, have been in a position to acquire material
information about the plans, projects, activities, or needs of the
candidate or political party committee.

### E. No Requirement of Agreement or Formal Collaboration

When Congress, in BCRA, required the Commission to promulgate new
regulations on coordinated communications, it specifically barred any
regulatory requirement of "agreement or formal collaboration" to
establish coordination. Pub. L. 107-155, sec. 214(c) (March 27, 2002).
The proposed regulation at 11 CFR 109.21(e) would explicitly implement
that Congressional mandate. Although Congress did not define this term,
the Commission notes that earlier versions of BCRA stated that
"collaboration or agreement" would not be required to show coordination.
[See]{.underline} S. 27, 107th Cong., 1^st^ Sess. (as passed by the
Senate and transferred to the House, 478 Cong. Rec. H2547 (May 22,
2001)). The phrase "agreement or formal collaboration" reached its final
form through a substitute amendment to H.R. 2356 offered by
Representative Shays. [See]{.underline} H. Amdt. 417, 478 Cong. Rec.
H393 through H492 (February 13, 2002).

The Commission would therefore attach significance to the addition of
the term "formal" as it modifies the term "collaboration." Thus, the
conduct standards proposed in paragraph (d) of section 109.21 would
require some degree of collaboration. However, proposed paragraph (e)
would state that this collaboration need not be "formal," in the sense
of being planned or systematically approved or executed.

Under proposed paragraph (e), the word "agreement" would be explained as
well. A finding of coordination under proposed section 109.21 would not
require a showing of a mutual understanding or meeting of the minds as
to all, or even most, of the material aspects of a communication. Even a
minimal amount of agreement would mean the communication would not be
made "totally independently" from the candidate or party.
[See]{.underline} [Buckley]{.underline}, 424 U.S. at 47. In the case of
a request or suggestion under proposed paragraph (d)(1) of section
109.21, agreement is not required at all.

[F. Should Exceptions Apply to the Content and Conduct
Standards?]{.underline}

Proposed 11 CFR 109.21 does not include any exceptions. The Commission
seeks comment on whether exceptions to the proposed content or conduct
standards should be included in the final rule. For example, should
there be an exception to the content standards for communications that
refer to the "popular name" of a bill or law that includes the name of a
Federal candidate who was a sponsor of the bill or law? Should there be
an exception to the conduct standards for a candidate's response to an
inquiry about his or her position on legislative or policy issues?

[IV. Proposed 109.22 Who is Prohibited from Making Coordinated
Communications?]{.underline}

The Commission proposes a separate section to make it clear that any
person who is otherwise prohibited from making a contribution or
expenditure is also prohibited from making a coordinated communication.
The Commission seeks comment on whether it is necessary to include this
separate section.

## 

## Proposed Subpart D of Part 109 \-- Special Provisions for Political Party Committees

[I. Proposed 11 CFR 109.30 How are Political Party Committees Treated
for Purposes of Coordinated and Independent Expenditures?]{.underline}

National, State, and subordinate committees of political parties may
make expenditures up to prescribed limits in connection with the general
election campaigns of Federal candidates without counting such
expenditures against the committees' contribution limits.
[See]{.underline} 2 U.S.C. 441a(d). These expenditures are commonly
referred to as "coordinated party expenditures." Political party
committees, however, need not demonstrate actual coordination with their
candidates to avail themselves of this additional spending authority.

In BCRA, Congress sets certain new restrictions on these "coordinated
party expenditures" and related restrictions on political party
committee independent expenditures. There are also certain new
restrictions on transfers and assignments of coordinated party
expenditure authorizations between party committees. 2 U.S.C.
441a(d)(4)(A) through (C).

The Commission proposes an introduction to subpart D of part 109 that
would state how political party committees are treated for purposes of
coordinated and independent expenditures. Proposed section 109.30 would
first clarify that party committees may make independent expenditures
subject to the provisions of proposed sections 109.35 and 109.36.
([See]{.underline} discussion below.) Second, proposed section 109.30
would explain that political party committees may support candidates
with "coordinated party expenditures," a term that would be defined at
proposed 11 CFR 109.31, and would state that these coordinated party
expenditures are subject to limits that are separate from and in
addition to the contribution limits at 11 CFR 110.1 and 110.2.

# II. Proposed 11 CFR 109.31 What is a "Coordinated Party Expenditure"? 

FECA provides a special expenditure authority for coordinated party
expenditures that is available only to certain political party
committees. 2 U.S.C. 441a(d). The Commission would, in proposed section
109.31, define "coordinated party expenditures" to include payments made
by a national committee of a political party and a State committee of a
political party, including any subordinate committee of a State
committee, for something of value in connection with the general
election campaign of a candidate. Proposed section 109.31 would also
introduce the term "party coordinated communication" (which would be
defined in proposed section 109.37) as an example of something of value
for which political party committees may make a coordinated party
expenditure.

[III. Proposed 11 CFR 109.32 What are the Coordinated Party Expenditure
Limits?]{.underline}

The Commission proposes to move the coordinated party expenditure limits
found at pre-BCRA 11 CFR 110.7(a) and (b) to proposed section 11 CFR
109.32. This new section would retain the basic organizational structure
of paragraphs (a) and (b) of pre-BCRA section 110.7.

The Commission would set forth in proposed paragraph (a), in amended
fashion, the coordinated party expenditure limit for the national
committee of a political party for presidential elections that appears
at pre-BCRA section 110.7(a). Because political party committees may
also make independent expenditures, [Colorado I]{.underline}, 518 U.S.
at 618, the Commission would clarify that the "expenditures" referred to
in proposed section 109.32 are "coordinated party expenditures." This
change also appears in proposed paragraphs (a)(1), (2), (3), and (4) of
section 109.32. In addition, proposed paragraph (a)(2), setting out the
coordinated party expenditure limit at two cents multiplied by the
voting age population of the United States, would state that this limit
shall be increased in accordance with 11 CFR 110.17, which would amend
pre-BCRA 11 CFR 110.9(c). [See]{.underline} [Notice of Proposed
Rulemaking, Contribution Limitations and Prohibitions]{.underline}*,* 67
[Fed. Register]{.underline} 54,366 (August 22, 2002.) In addition,
proposed paragraph (a)(2) of section 109.32 would refer to the term
"voting age population" at proposed 11 CFR 110.18, discussed below.

Further, proposed 11 CFR 109.32(a)(4), to which pre-BCRA 11 CFR
110.7(a)(6) would be moved, would provide that coordinated party
expenditures on behalf of presidential candidates do not count against
the candidate's expenditure limitations under 11 CFR 110.8. Proposed
paragraph (a)(4) of section 109.32 would also state that the national
party committee may make such expenditures and may assign their spending
authority to other political party committees to do so under proposed
section 109.33, which is discussed below.

Proposed paragraph (b) would set forth, and make minor changes to, the
regulations, pre-BCRA, at 11 CFR 110.7(b) addressing coordinated party
expenditure limits of the national committee of a political party and a
State committee of a political party, including any subordinate
committee of a State committee, for Federal elections other than
presidential elections. As in proposed paragraph (a) above, proposed
paragraph (b) would specify that the "expenditures" referred to in
paragraphs (b)(1), (2), and (4) are coordinated party expenditures. In
addition, proposed paragraph (b)(2), setting out the coordinated party
expenditure limits of two cents multiplied by the voting age population
of the United States and dollar figures of \$10,000 and \$20,000, would
be subject to proposed paragraphs (b)(3) and (b)(4) regarding inflation
adjustments and the relationship with contribution limits.

[IV. Proposed 11 CFR 109.33 May a Political Party Committee Assign its
Coordinated Party Expenditure Authority to Another Political Party
Committee?]{.underline} Proposed 11 CFR 109.33 would continue the
pre-BCRA rule permitting assignment of coordinated party expenditure
authority between political party committees by consolidating the
authorizing provisions found in the pre-BCRA regulations at 11 CFR
110.7(a)(4) and (c). Such assignments, however, would be prohibited
under certain circumstances in which the assigning political party
committee had made coordinated party expenditures (using part of the
spending authority) and the intended assignee political party committee
had made or intends to make independent expenditures with respect to the
same candidate during an election cycle. [See]{.underline} 2 U.S.C.
441a(d)(4)(C) and proposed 11 CFR 109.35(c).

Proposed paragraph (a) of section 109.33 would also restate the
Commission's longstanding policy that a political party committee with
authority to make coordinated party expenditures may assign all or part
of that authority to other political party committees, and that this
interpretation extends to both national and State committees of
political parties. [See]{.underline} [Campaign Guide for Political Party
Committees]{.underline} at p.16 (1996). Proposed paragraph (a) of
section 109.33 would also state that coordinated party expenditure
authority may be assigned only to other political party committees.
[See]{.underline} 2 U.S.C. 441a(d), and pre-BCRA 11 CFR 110.7(a)(4),
which indicates that coordinated expenditures may be made "through any
designated agent, including State and subordinate party committees." The
Commission makes this change to preclude confusion, and possible
circumvention of the restrictions on transfers and assignments between
political party committees found in BCRA. 2 U.S.C. 441a(d)(4)(B), (C).

Proposed paragraph (a) would provide that whenever a political party
committee authorized to make coordinated party expenditures assigns
another political party committee to use part or all of its spending
authority, the assignment must be in writing, must specify a dollar
amount, and must be made before the assigned party committee actually
makes the coordinated party expenditure. [See]{.underline} [Campaign
Guide for Political Party Committees]{.underline} at p.16 (1996). This
would apply to both national and State party committees.

Proposed paragraph (b) of section 109.33 would continue the pre-BCRA
rule in 11 CFR 110.7(c) that, for purposes of the coordinated spending
limits, a State committee includes subordinate committees of the State
committee. Proposed paragraph (b) of section 109.33 would add district
and local political party committees ([see]{.underline} 11 CFR
100.14(b)) to the extent that they are assigned authority to make
coordinated party expenditures by another political party committee.

Finally, proposed paragraphs (b)(1) and (2) of section 109.33 would
contain the pre-BCRA rule in 11 CFR 110.7(c)(1) and (2) setting out
State committees' methods of administering the coordinated party
expenditure authority.

The Commission seeks comments on whether to require political party
committees to attach copies of written assignments to reports they file
with the Commission, or to fax or e-mail them if they are electronic
filers.

[V. Proposed 11 CFR 109.34 When May a Political Party Committee Make
Coordinated Party Expenditures?]{.underline}

Proposed 11 CFR 109.34 would continue the pre-BCRA rule in 11 CFR
110.7(d) permitting a political party committee to make coordinated
party expenditures in connection with the general election campaign
before or after its candidate has been nominated. All pre-nomination
coordinated expenditures would continue to be subject to the coordinated
party expenditure limitations, whether or not the candidate on whose
behalf they are made receives the party's nomination.

[VI. 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 a Candidate's
Campaign?]{.underline}

Under BCRA, Congress prohibits political party committees, under certain
conditions, from making coordinated party expenditures, independent
expenditures, and transfers and assignments to other political party
committees. 2 U.S.C. 441a(d)(4). Congress plainly intended to combine
certain political party committees into a collective entity or entities
for purposes of these prohibitions. 2 U.S.C. 441a(d)(4)(B). The
statutory language and legislative history raise a significant threshold
question of statutory interpretation: Whether an entire, nationwide
political party is to be treated as a single entity or as separate
national and State political party entities for the purposes of these
restrictions. The Commission would adopt the latter approach in proposed
11 CFR 109.35. This interpretation, in turn, raises additional issues
regarding which political party committees are to be included in certain
defined groups of political party committees for the purposes of the new
restrictions in BCRA.

[A. Applicability of Prohibitions]{.underline}

[1. Statutory Interpretation]{.underline}

Congress provided that for the purposes of these new prohibitions, "all
political committees established and maintained by a national political
party (including all Congressional campaign committees) and all
political committees established and maintained by a State political
party (including any subordinate committee of a State committee) shall
be considered to be a single political committee." 2 U.S.C.
441a(d)(4)(B).

One reading of this statutory provision would combine all committees
established and maintained by a political party at all levels into "a
single political committee" for the purposes of the prohibitions
discussed below. An alternative reading would provide that all
committees established and maintained by a national political party,
including Congressional campaign committees, would be "a single
political committee," while all committees established and maintained by
a given State political party, including any subordinate committee of a
State committee, would be another "single political committee." The
Commission notes that the Senate sponsors of BCRA stated that all
national and State committees of a political party are considered to be
one entity for the purposes of the prohibitions codified at 2 U.S.C.
441a(d)(4). [See]{.underline} 148 Cong. Rec. S1993 (daily ed. March 18,
2002) (section-by-section analysis included by Sen. Feingold in the
Record); 148 Cong. Rec. S2144 (daily ed. March 20, 2002) (statement of
Sen. McCain).

One of the new prohibitions, regarding political party committee
transfers and assignments, would appear to imply that political parties
are inherently divisible into different groups of political committees.
[See]{.underline} 2 U.S.C. 441a(d)(4)(C). This is because, without more
than one group of political party committees, no transfers or
assignments [between]{.underline} political party committee groups could
occur. In other words, if there were only a single group, there could be
no transfers or assignments and thus this provision would be without
effect. [See]{.underline} [Colautti v. Franklin]{.underline}, 439 U.S.
379, 392 (1979) (it is an "elementary canon of construction that a
statute should be interpreted so as not to render one part
inoperative"). Therefore, to give the transfers and assignments
provision effect, the Commission believes that BCRA may contemplate
multiple groups of political party committees. [See]{.underline} 2
U.S.C. 441a(d)(4). The Commission seeks comment on this interpretation
of the statute.

[2. Proposed Rule]{.underline}

In light of the foregoing statutory interpretation, proposed 11 CFR
109.35 would contemplate multiple political party committee groups.
Proposed paragraphs (a)(1) and (a)(2) would apply this interpretation by
combining all political committees established and maintained by a
national political party into one group and all political committees
established and maintained by a given State political party into another
group. [See]{.underline}

2 U.S.C. 441a(d)(4)(B). The Commission would use these "political party
groups" to implement the prohibitions discussed below.

Under proposed paragraph (a)(1), the national "political party group"
would combine the national committee of a given political party, all
Congressional campaign committees of that political party, and all
political committees established, financed, maintained, or controlled by
any of the foregoing. The Commission notes that the phrase,
"established, financed, maintained, or controlled" would differ from the
statutory phrase, "established and maintained." The proposed
formulation, however, would be consistent with, and serve the same
purposes as, the analogous anti-proliferation provision in FECA. 2
U.S.C. 441a(a)(5). Under section 441a(a)(5), for the purposes of the
contribution limitations, all contributions made by political committees
"established or financed or maintained or controlled" by the same person
or entity shall be considered to have been made by a single political
committee. 2 U.S.C. 441a(a)(5).

A State "political party group" would combine the State committee of a
given political party in a given State, all subordinate committees of
that State committee, and all district or local committees of that
political party within that State that meet the definition of "political
committee" under 11 CFR 100.5. [See]{.underline} proposed 11 CFR
109.35(a)(2). Subordinate committees are expressly mentioned in the
statute. 2 U.S.C. 441a(d)(4)(B).

The Commission notes that the prohibitions discussed below would appear
to apply to district or local committees because those prohibitions
apply to any "committee of a political party." [See]{.underline}
2 U.S.C. 441a(d)(4)(A) and (C). The regulatory definition of district
and local committee includes the requirement that the organization be
part of the "official party structure." 11 CFR 100.14(b).

The Commission notes that the phrase "established, financed, maintained,
or controlled" would differ from the statutory phrase "established and
maintained." [See]{.underline}

2 U.S.C. 441a(d)(4)(B). The proposed rule would be based on the
Commission's definitions of "State committee" and "subordinate
committee" at 11 CFR 100.14(a) and (c), which both use the phrase
"established, financed, maintained, or controlled," given that both
would be included in the proposed State political party group.

The Commission seeks comment on the proposed combinations of committees
of a political party into a national political party group and into
State political party groups. For example, should the State political
party group in a given State include district or local committees in
that State only to the extent that the State party exercises functional
control over them?

[B. Prohibition on Certain Coordinated and Independent
Expenditures]{.underline}

Congress provided in BCRA that on or after the date on which a political
party nominates a candidate, no "committee of the political party" may
make: 1) any coordinated expenditure under 2 U.S.C. 441a(d) with respect
to the candidate during the election cycle at any time after "it" makes
any independent expenditure with respect to the candidate during the
election cycle; or 2) any independent expenditure with respect to the
candidate during the election cycle at any time after "it" makes any
coordinated expenditure under 2 U.S.C. 441a(d) with respect to the
candidate during the election cycle. 2 U.S.C. 441a(d)(4)(A).

Arguably, the use of the pronoun "it" in the statute is ambiguous in
that it could be construed to refer either to the entire political party
or to only a committee within the party. However, as explained above,
the Commission would interpret the statute in terms of national and
State "political party groups." In the terms of this proposed
interpretation, "it" would be construed to mean a given "political party
group." Thus, the Commission would interpret the prohibition on making
both independent and coordinated expenditures with respect to a given
candidate after nomination as applying to the "political party groups"
defined above, and not to the party as a whole.

The language of proposed paragraph (b) would generally track the
statutory language, but would employ new terms in places to clarify its
application. Proposed

11 CFR 109.35(b)(1) would prohibit a political committee within a
political party group from making any post-nomination coordinated party
expenditure under section 109.32 in connection with the general election
campaign of a candidate at any time after any committee within that
political party group makes any post-nomination independent expenditure
with respect to that candidate. 2 U.S.C. 441a(d)(4). Proposed paragraph
(b)(2) would prohibit a political committee within a political party
group from making any post-nomination independent expenditure with
respect to a candidate at any time after any political committee within
that political party group makes any post-nomination coordinated
expenditure under section 109.32 in connection with the general election
campaign of that candidate. As soon as a political committee within a
political party group makes an independent expenditure or a coordinated
party expenditure with respect to a candidate after nomination, all
political committees within that political party group are bound during
the remainder of the election cycle to whichever type of expenditure the
first political committee makes. 2 U.S.C. 441a(d)(4).

The restrictions in proposed paragraphs (b)(1) and (b)(2) would apply
"during the remainder of the election cycle." [See]{.underline} 2 U.S.C.
441a(d)(4)(A). This would clarify that proposed paragraph (b) would
apply to exclusively post-nomination events through the end of the
election cycle. The prohibitions would apply to political committees
within a political party group upon the first post-nomination
independent or coordinated expenditure by a committee within that
political party group and would run until the end of the election cycle.

The Commission notes that coordinated party expenditures and independent
expenditures made by a political committee within a political party
group [before]{.underline} nomination would have no bearing on the
application of proposed paragraph (b).

Under proposed paragraph (d)(2) of section 109.35, the term "election
cycle" has the meaning in 11 CFR 100.3(b), except that the election
cycle ends on the date of the general election runoff, if one is held.
For purposes of 11 CFR 109.35, "election cycle" would thus begin on the
first day following the date of the previous general election for the
office or seat which the candidate seeks and ending on the date on which
the general election for the office or seat that the individual seeks is
held, or on the date of any general election runoff is held. Since
proposed paragraph (b) of section 109.35 would only apply after
nomination, [see]{.underline} 2 U.S.C. 441a(d)(4), the "election cycle"
period for this provision would effectively extend from nomination
through the general election or general election runoff. Finally, the
Commission notes that the political party of a candidate running in a
general election runoff would not be permitted an additional coordinated
party expenditure authority with respect to that candidate for the
runoff. [See]{.underline} [Democratic Senatorial Campaign Committee v.
FEC]{.underline}, No. 93-1321 (D.D.C., November 14, 1994.)

In proposed paragraph (d)(1), the Commission would define when
independent expenditures that are made by a political party committee
are "with respect to" a candidate, for purposes of section 109.35.
Independent expenditures made "with respect to" a candidate would
include those independent expenditures expressly advocating the defeat
of any other candidate seeking nomination for election, or election, to
the Federal office sought by that party's candidate. The Commission's
proposed definition would facilitate the appropriate coverage, and help
avoid circumvention, of the prohibitions at proposed paragraph (b) of
section 109.35 discussed above and proposed paragraph (c) of section
109.35 discussed below. [See]{.underline} proposed 11 CFR 100.16
(definition of express advocacy that includes communications expressly
advocating the "election or defeat" of a clearly identified candidate).

###### [C. Prohibition on Certain Transfers and Assignments]{.underline}

Congress provided in BCRA that a "committee of a political party" that
makes coordinated party expenditures with respect to a candidate shall
not, during an election cycle, transfer any funds to, assign authority
to make coordinated party expenditures under 2 U.S.C. 441a(d) to, or
receive a transfer of funds from, a "committee of the political party"
that has made or intends to make an independent expenditure with respect
to the candidate. 2 U.S.C. 441a(d)(4)(C). Congress apparently intended
to prevent a circumvention of the prohibition against making both
coordinated and independent expenditures by means of transfers or
assignments. On its face, this prohibition applies only to a "committee
of a political party" that is making coordinated party expenditures with
respect to a candidate. Although Congress prohibits transfers in either
direction between a party committee making coordinated party
expenditures and a political party committee making or intending to make
independent expenditures with respect to the same candidate, Congress
prohibits assignments of coordinated party expenditure spending
authority only from the political party committee making coordinated
expenditures to a political party committee making or intending to make
independent expenditures, and not in the other direction.

Proposed paragraph (c) of 11 CFR 109.35 would generally track the
statutory language in 2 U.S.C. 441a(d)(4)(C), employing the terms
defined in proposed section 109.35. It would prohibit transfers of funds
and some assignments of authority to make coordinated party expenditures
between political committees in different political party groups after
the occurrence of two events: 1) a political committee within a
political party group makes a coordinated party expenditure in
connection with the general election campaign of a candidate, and 2) a
political committee within another political party group makes an
independent expenditure or declares its intention to do so with respect
to the same candidate. After these two events take place, no political
committee within one political party group would be able make any
transfers to, or receive any transfers from, any political committee
within the other political party group during the remainder of the
election cycle. Also, after these two events take place, no political
committee within a political party group electing to make coordinated
party expenditures would be able to assign authority to make coordinated
party expenditures in connection with the general election campaign of a
candidate to any political committee within the political party group
electing to make independent expenditures during the remainder of the
election cycle. This proposed provision would not, however, prohibit
transfers and assignments between committees [within]{.underline} a
given political party group.

The Commission seeks comment on the approach in proposed 11 CFR
109.35(c). Should the Commission set forth rules requiring party
committees to keep track of the expenditure activities of other party
committees, within the same or another political party group?
[Cf]{.underline}. proposed section 109.33, pre-BCRA 11 CFR 110.7(c),
which places responsibility on the State committee to insure that the
coordinated party expenditures of the entire party organization are
within the limitations.

In proposed 11 CFR 109.35(c), the Commission would replace the statutory
phrase "during the election cycle" in the statute with "during the
remainder of the election cycle." [See]{.underline} 2 U.S.C.
441a(d)(4)(C). As noted above, the transfer prohibitions would only go
into effect after the occurrence of the two specific events. Thus, the
period during which the prohibitions would apply would start after the
occurrence of both events and run until the end of the election cycle.

In contrast to the prohibition on a party committee making both
independent and coordinated expenditures with respect to a candidate,
that is expressly limited to the post-nomination period, the transfers
and assignments provision does not include the same restriction and thus
could apply prior to nomination as well as after nomination.
[See]{.underline} 2 U.S.C. 441a(d)(4)(A) and (C); proposed 11 CFR
109.34, which would be renumbered from 11 CFR 110.7(d) (party committees
may make coordinated expenditures in connection with the general
election campaign before their candidates have been nominated);
[see]{.underline} [also]{.underline} [Colorado I]{.underline} (involved
pre-nomination independent expenditures by a State party committee).
Indeed, the Commission's proposed rules regarding "election cycle" would
clarify that the prohibitions in proposed 11 CFR 109.35(c) could take
effect prior to nomination. As noted above, "election cycle" begins on
the first day following the date of the previous general election, and
may span a two, four, or six year period depending on the office sought,
although in practice it would be unusual for the prohibitions of
proposed 11 CFR 109.35(c) to go into effect far before the date of
nomination. In addition, such prohibitions would only go into effect.
After a committee within one political party group made a coordinated
party expenditure with respect to the candidate and a committee within
another political party group made or intended to make an independent
expenditure with respect to the same candidate. [See]{.underline}
proposed 11 CFR 109.35(c).

Comment is sought on the distinction between the post-nomination
application of proposed 11 CFR 109.35(b) and the pre- and
post-nomination application of proposed 11 CFR 109.35(c). As an
alternative approach, is there an interpretation of the transfers and
assignments provision in the statute such that the prohibitions would
only apply [after]{.underline} nomination? [See]{.underline} 2 U.S.C.
441a(d)(4)(C).

Comment is also sought on whether the prohibitions in proposed paragraph
(c) should only go into effect after the occurrence of the two specified
expenditures. Is there an interpretation of 2 U.S.C. 441a(d)(4)(C) that
would restrict transfers and assignments [prior]{.underline} to a
political party group making coordinated expenditures with respect to a
candidate and the other political party group making or intending to
make independent expenditures with respect to the candidate?

Finally, the Commission notes that it is not at this time proposing
specific rules to implement the statutory language "intends to make" an
independent expenditure with respect to the candidate. 2 U.S.C.
441a(d)(4)(C). The Commission seeks comment on whether such rules are
necessary, and if so, how would they implement the statutory language.

> [D. Impact of Political Party Committee Activity Carried Out Pursuant
> to Contribution Limits]{.underline}

2 U.S.C. 441a(d)(4) applies to coordinated party expenditures and to
political party committee independent expenditures. Congress did not
directly address political party committees' monetary and in-kind
contributions to candidates that are subject to the contribution limits
under 2 U.S.C. 441a(a) and 441a(h). [See]{.underline} 2 U.S.C 441a(d)(1)
("[Notwithstanding any other provision of law with respect to . . .
limitations on contributions]{.underline}, \[political party
committees\] may make expenditures in connection with the general
election campaign of candidates for Federal office, subject to the
limitations contained \[in this subsection\]" \[emphasis added\]).
[See]{.underline} [also]{.underline} proposed 11 CFR 109.30, 109.32.

Political party committees may make in-kind contributions to a candidate
in the form of party coordinated communications, as addressed in
proposed 11 CFR 109.37. The Commission notes that such coordination
between political party committee and candidate may compromise the
actual independence of any simultaneous or subsequent independent
expenditures the political party committee may attempt with respect to
that candidate. [See]{.underline} [Buckley v. Valeo]{.underline}, 424
U.S. at 47 (in striking down limits on independent expenditures, the
Court described such expenditures as made "[totally]{.underline}
independently of the candidate and his campaign" \[emphasis added\]).
Comment is sought on this analysis.

[E. Transfers under 11 CFR 102.6(a)(1)(ii)]{.underline}

As a result of the enactment of 2 U.S.C. 441a(d)(4) and other provisions
from BCRA affecting transfers between political party committees, the
Commission proposes to revise 11 CFR 102.6(a)(1)(ii) to clarify the
interaction of this section with certain provisions of BCRA. Before
BCRA, the Commission permits unlimited transfers between or among
national party committees, State party committees and/or any subordinate
committees. [See]{.underline} pre-BCRA 11 CFR 102.6(a)(1)(ii).

First, in BCRA, Congress provided that a national committee of a
political party, including a national Congressional campaign committee
of a political party, may not solicit, receive, or direct to another
person a contribution, donation, or [transfer]{.underline} of funds or
other thing of value, or spend any funds, that are not subject to the
limitations, prohibitions, and reporting requirements of FECA. 2 U.S.C.
441i(a); [see]{.underline} [Explanation and Justification for 11 CFR
300.10(a)]{.underline}, 67 [Fed. Register]{.underline} 49,122 (July 29,
2002).

Second, in the "Levin Amendment," Congress placed restrictions on how
State, district, and local party committees raise "Levin funds" and
prohibited certain transfers between political party committees.
[See]{.underline} 2 U.S.C. 441i(b)(2)(C)(i); [Explanation and
Justification for 11 CFR 300.31]{.underline}, 67 [Fed.
Register]{.underline} 49,124 (July 29, 2002).

Third, also in the Levin Amendment, Congress provided that a State,
district, or local committee of a political party that spends Federal
funds and Levin funds for Federal election activity must raise those
funds solely by itself. These committees may not receive or use
transferred funds in contravention of such requirements. 2 U.S.C.
441i(b)(2)(B)(iv); [see]{.underline} [Explanation and Justification for
11 CFR 300.34(a) and (b)]{.underline}, 67 [Fed. Register]{.underline}
49,127 (July 29, 2002).

Fourth, Congress provided in BCRA that a committee of a political party
that makes coordinated party expenditures under 2 U.S.C. 441a(d) in
connection with the general election campaign of a candidate shall not,
during that election cycle, transfer any funds to, assign authority to
make coordinated party expenditures under this subsection to, or receive
a transfer from, a committee of the political party that has made or
intends to make an independent expenditure with respect to the
candidate. 2 U.S.C. 441a(d)(4)(C); [see]{.underline} proposed 11 CFR
109.35(c), discussed above.

The Commission proposes the addition of a new opening clause in
paragraph (a)(1)(ii) of section 102.6 incorporating these restrictions
by reference into the rules regarding the transfer of funds and the use
of transferred funds.

[VII. Proposed 11 CFR 109.36 Are There Additional Circumstances Under
Which a Party Committee is Prohibited from Making Independent
Expenditures?]{.underline}

Prior to the enactment of BCRA, a national committee of a political
party was prohibited from making independent expenditures in connection
with the general election campaign of a candidate for President.
[See]{.underline} 11 CFR 110.7(a)(5). In [Colorado I]{.underline}, the
Supreme Court held that political party committees may make independent
expenditures, but indicated that its decision involved only
Congressional races, and did not address issues that might grow out of
the public funding of presidential campaigns. 518 U.S. at 611-612. Of
course, not all presidential campaigns are publicly-funded, thus raising
an additional category of circumstances not addressed by the Court in
[Colorado I]{.underline}.

However, Congress may have effectively repealed the prohibition at

11 CFR 110.7(a)(5). [See]{.underline} 2 U.S.C. 441a(d)(4). Under a new
statutory provision, Congress prohibits political party committees from
making both post-nomination independent expenditures and post-nomination
coordinated expenditures in support of a candidate. [See]{.underline} 2
U.S.C. 441a(d)(4)(A). A national party committee could thus make
independent expenditures with respect to a candidate after nomination
unless the committee had already made post-nomination coordinated
expenditures with respect to that candidate. Because this provision
appears to equally apply to party committee expenditures in support of
presidential or Congressional candidates, a national party committee
would appear able to make independent expenditures with respect to a
presidential candidate. Thus, Congress appears to have superseded 11 CFR
110.7(a)(5). Finally, this interpretation appears to apply regardless of
whether a presidential candidate accepts public funding. The legislative
history of BCRA does not appear to address the issue of prohibitions on
independent expenditures by national party committees in connection with
presidential elections.

Rather than completely delete the prohibition at 11 CFR 110.7(a)(5),
however, the Commission proposes to limit its application to certain
limited circumstances in which the national committee of a political
party serves as the principal campaign committee or authorized committee
of its presidential candidate, as permitted under 2 U.S.C.
432(e)(3)(A)(i) and 441a(d)(2). [See]{.underline} 11 CFR 102.12(c)(1)
and 9002.1(c). Such a prohibition would be consistent with proposed 11
CFR 100.16(b) (redesignated from pre-BCRA section 109.1(e)) providing
that no expenditure by an authorized committee of a candidate on behalf
of that candidate shall qualify as an independent expenditure.

Comments are sought on whether the prohibition at pre-BCRA 11 CFR
110.7(a)(5) should be limited to the circumstances identified in
proposed 11 CFR 109.36 or whether the prohibition should be removed
completely.

# VIII. Proposed 11 CFR 109.37 What is a "Party Coordinated Communication"? 

In BCRA, Congress requires the Commission to promulgate new regulations
on "coordinated communications" that are paid for by persons other than
candidates, authorized committees of candidates, and party committees.
Pub. L. 107-155, sec. 214(b), (c); [see]{.underline} proposed 11 CFR
109.21 above. Although Congress did not specifically direct the
Commission to address coordinated communications paid for by political
party committees, the Commission proposes to do so to give clear
guidance to those affected by BCRA.

Proposed section 109.37 would generally apply the same regulatory
analysis to communications paid for by the political party committees
that would be applied to communications paid for by other persons.
[See]{.underline} proposed 11 CFR 109.21(a) through (e). This analysis
would determine when communications paid for by a political party
committee would be considered to be coordinated with a candidate, a
candidate's authorized committee, or their agents. The Commission bases
the proposed similarity of coordination standards on two Supreme Court
cases, [Colorado I]{.underline} and [Federal Election Commission v.
Colorado Republican Federal Campaign Committee]{.underline}, 533 U.S.
431 (2001) ("Colorado II"). In [Colorado I]{.underline}, the Supreme
Court in a plurality opinion concluded that political parties, like
other persons paying for political communications, are capable of making
independent expenditures on behalf of their candidates for Federal
office, and that it would violate the First Amendment to subject such
independent expenditures to the 2 U.S.C. 441a(d) expenditure limits.
[Colorado I]{.underline}, 518 U.S. at 615-616. Subsequently in [Colorado
II]{.underline}, the Supreme Court, in upholding the constitutionality
of coordinated party expenditure limits at 2 U.S.C. 441a(d), stated that
political parties are in the same position as other persons who have
contribution limits potentially affected by coordination. [Colorado
II]{.underline}, 533 U.S. at 455.

Comment is sought on this approach. Should political party committee
communications be subject to the same conduct standards at proposed 11
CFR 109.21(d) for coordination with candidates as are communications by
other persons? Should the "content standards" at proposed 11 CFR
109.21(c) be the same for political party committee communications as
for communications by other persons? If not, how should the standards
vary? Would such variations be confusing? Are any of the possible
content standards set forth at proposed 11 CFR 109.21(c)(4) alternatives
(A) through (C) appropriate for political party committees? In light of
the relationship between political party committees and candidates,
should any of the conduct standards set forth at proposed 11 CFR
109.21(d) be excluded from application to political party committee
communications? On the other hand, in light of such relationship, should
there be additional or different conduct standards that would only apply
to political party committees? Should any exceptions apply to party
committee communications? Should the conduct standards set forth at
proposed 11 CFR 109.21(d) vary depending on whether the party
communication was made prior to nomination or after nomination? Finally,
should the "content" standard of communications other than
electioneering communications vary depending on whether the political
party communication was made prior to nomination or after nomination?

Following proposed 11 CFR 109.21(a), proposed section 109.37(a) would
define the circumstances in which communications paid for by political
party committees would be considered to be coordinated with a candidate,
a candidate's authorized committee, or agents thereof. Under proposed 11
CFR 109.37(a)(1) through (3), such communications would be deemed to be
"party coordinated communications" when they were paid for by a
political party committee or its agent, satisfy at least one of the
content standards in 11 CFR 109.21(c), and satisfy at least one of the
conduct standards in 11 CFR 109.21(d).

For the content standards for party coordinated communications, in
proposed paragraph (a)(2) of section 109.37, the Commission would refer
to the content standards proposed in 11 CFR 109.21(c). The Commission
also proposes a second sentence in proposed paragraph (a)(2) of section
109.37 indicating that the republication content standard of proposed 11
CFR 109.21(c)(2) is evaluated under the conduct standard in proposed 11
CFR 109.21(d)(6). [See]{.underline} the discussion above of proposed 11
CFR 109.21(c).

For the conduct standards for party coordinated communications, in
proposed paragraph (a)(3) of section 109.37, the Commission would refer
to the conduct standards proposed in 11 CFR 109.21(d). As in proposed 11
CFR 109.21(d), agreement or formal collaboration would not be necessary
for a finding that a communication is coordinated. [See]{.underline} the
discussion above of proposed 11 CFR 109.21(d) and (e). The Commission
also proposes a second sentence in proposed paragraph (a)(3) of section
109.37 addressing circumstances in which the in-kind contribution
results solely from conduct in 11 CFR 109.21(d)(4) or (d)(5). Under
these circumstances, the candidate would not receive or accept an
in-kind contribution. [See]{.underline} the discussion above regarding
proposed 11 CFR 109.21(b)(2).

Proposed 11 CFR 109.37(b) would explain the treatment of party
coordinated communications. This paragraph would provide that political
party committees must treat payments for communications coordinated with
candidates as either in-kind contributions or coordinated party
expenditures.

The Commission would except from proposed 11 CFR 109.37(b) such payments
that are otherwise excepted from the definitions of "contribution" and
"expenditure" found at 11 CFR part 100 subparts C and E. For example,
the payment by a State or local committee of a political party of the
costs of preparation, display, or mailing or other distribution incurred
by such committee with respect to a printed slate card, sample ballot,
palm card, or other printed listing(s) of three or more candidates for
any public office for which an election is held in the State in which
the committee is organized is not a contribution or an expenditure. 11
CFR 100.80 and 100.140. Thus, if such communications were coordinated
with candidates, the payments for such communications would not be
treated as either in-kind contributions or as coordinated party
expenditures.

For such a payment that a political party committee treats as an in-kind
contribution, proposed paragraph (b)(1) of section 109.37 would state
that it is made for the purpose of influencing a Federal election.
[See]{.underline} the discussion above regarding proposed 11 CFR
109.21(b).

For such a payment that a political party committee treats as a
coordinated party expenditure, proposed paragraph (b)(2) of section
109.37 would state that such expenditure is made pursuant to coordinated
party expenditure authority under proposed 11 CFR 109.32 in connection
with the general election campaign of the candidate with whom it was
coordinated.

Finally, proposed paragraphs (b)(1) and (b)(2) of section 109.37 would
each refer to the reporting obligations flowing from party coordinated
communications under 11 CFR part 104.

## Additional Proposed Regulatory Changes

[Proposed 11 CFR 100.57 Dissemination, Distribution, or Republication of
Candidate Campaign Materials]{.underline}

The FECA categorizes a payment of the dissemination, distribution, or
republication of campaign materials created by a candidate as an
expenditure made by the person making the payment. [See]{.underline} 2
U.S.C. 441a(7)(B)(iii) (redesignated from pre-BCRA 2 U.S.C.
441a(7)(B)(ii)). In addition, when such an expenditure is coordinated
with a candidate, it is treated as an in-kind contribution received by
the candidate with whom the communication was coordinated.
[See]{.underline} 2 U.S.C. 441a(7)(B)(i). Likewise, under BCRA, when
such an expenditure is coordinated with a political party committee, it
is also a contribution received by the political party committee with
which it is coordinated. [See]{.underline} 2 U.S.C. 441a(7)(B)(ii).
Under the pre-BCRA regulations at 11 CFR 109.1(d)(1), payments for the
dissemination, distribution, or republication of the campaign material
count against the contribution limits of the person financing the
dissemination, distribution, or republication, and political committees
and any other person who is otherwise required to report expenditures
are required to report the payment in the same manner as other
expenditures, regardless of whether coordination occurred. A candidate
does not incur any reporting obligations regarding the dissemination,
distribution, or republication of campaign material by another person in
the absence of coordination.

The Commission's pre-BCRA regulation at 11 CFR 109.1(d)(1) would be
moved to the definition of contribution at proposed 11 CFR 100.57 as
part of the proposed reorganization of 11 CFR part 109. The Commission
would make changes to reflect Congress's determination that
dissemination, distribution, or republication of campaign material in
coordination with a political party committee, as well as with a
candidate, constitutes a contribution. In addition, the dissemination,
distribution, or republication of campaign material would be coordinated
if the dissemination, distribution, or republication satisfies the
conduct standards set forth in proposed 11 CFR 109.21(d)(6). The only
other substantive change would be the addition of several exceptions
explained below. The Commission seeks comment on the proposed location
of the new regulation (that is, whether the dissemination, distribution,
or republication of campaign material should be made a part of the
definition of "contribution"), and whether a corresponding provision
should be added to the definition of an "expenditure" in 11 CFR part
100, subpart D, to maintain a parallel structure with the contribution
definition. Alternatively, given that the pre-BCRA statute and BCRA
categorize dissemination, distribution, or republication of campaign
materials as "expenditures", 2 U.S.C. 441a(a)(7)(B)(iii), the Commission
seeks comment on whether such dissemination, distribution, or
republication should be considered a contribution by the person paying
for the materials absent coordination with the campaign. Please note
that this alternative is not included in the text of the draft
regulations.

In addition, the Commission notes that 2 U.S.C. 441a(a)(7)(B)(iii)
refers to "campaign materials prepared by the candidate, his campaign
committees, or their authorized agents," but does not include campaign
materials prepared by political party committees. The Commission
requests comment on whether the latter campaign materials should be
included in light of the fact that Congress now considers coordination
with a political party committee to result in a contribution. 2 U.S.C.
441a(a)(7)(B)(ii).

In proposed 11 CFR 100.57, the Commission would include new exceptions
for different types of republication of campaign material so that they
would not constitute contributions. In proposed 11 CFR 100.57(b)(1), the
Commission would make it clear that candidates and political party
committees are permitted to republish or disseminate their own materials
without making a contribution. Proposed paragraph (b)(2) would exempt
the use of material when it is used to advocate the defeat of the
candidate or party who prepared the material. For example, Person A
would not make a contribution to Candidate B if Person A incorporates
part of Candidate B's campaign material into its own public
communication that advocates the defeat of Candidate B. However, if the
same public communication also urged the election of Candidate B's
opponent, Candidate C, and incorporated a picture or quote that had been
prepared by Candidate C's campaign, then the result would constitute a
contribution to Candidate C.

A third exception in paragraph (b)(3) would make it clear that campaign
material may be republished as part of a [bona fide]{.underline} news
story as provided in 11 CFR 100.73 or 11 CFR 100.132. In proposed
paragraph (b)(4), the Commission would continue to allow a corporation
or labor organization to make limited use of candidate materials in
communications to its restricted class, as provided in 11 CFR
114.3(c)(1).

Finally, in proposed paragraph (b)(5), the Commission would recognize
that a national, State, or subordinate committee of a political party
would make a coordinated party expenditure rather than an in-kind
contribution when it pays for the dissemination, distribution, or
republication of campaign material using coordinated party expenditure
authority under 11 CFR 109.32. This proposed rule is somewhat broader
than pre-BCRA 11 CFR 109.1(d)(2), which provided that a State or
subordinate party committee could engage in such dissemination,
distribution, or republication as agents designated by a national
committee pursuant to 11 CFR 110.7(a)(4).

The Commission seeks comments on whether any additional exceptions
should be added in proposed paragraph (b), such as an exception for the
republication of campaign materials in a non-partisan voter guide, and
whether the proposed exceptions are appropriate.

## 

## Contribution and Expenditure Limitations and Prohibitions

[I. Proposed 11 CFR 110.1 and 110.2 Limits on Contributions Made to
Political Committees Making Independent Expenditures]{.underline}

The Commission proposes to clarify that the section 110.1 and 110.2
limitations on contributions to political committees making independent
expenditures would apply to contributions made by multicandidate
committees and other persons to political party committees that make
independent expenditures. [See]{.underline} proposed 11 CFR 110.1(n) and
110.2(k). Paragraphs 110.1(n) and 110.2(k) would apply to contributions
by multicandidate committees and contributions by persons other than
multicandidate committees, respectively. These two proposed paragraphs
would replace pre-BCRA paragraphs (d)(2) of sections 110.1 and 110.2
regarding the application of the contribution limits to contributions to
committees that make independent expenditures.

These sections need to be updated because under pre-BCRA paragraphs
(d)(2) of each section, the Commission recognized that political
committees other than party committees may make independent
expenditures, but did not contemplate party committees doing so.
[See]{.underline} [Colorado I]{.underline}, 518 U.S. at 618. For
example, national party committees may receive contributions aggregating
\$20,000 per year from individuals, a contribution limit that Congress
increased to \$25,000 for contributions made on or after January 1,
2003. [See]{.underline} 2 U.S.C. 441a(a)(1)(B). Consequently, under the
proposed new language, the \$20,000 (\$25,000) contribution limit would
continue to apply when the recipient national party committee uses the
contribution to make independent expenditures. The Commission notes that
11 CFR 110.1(h) regarding contributions to political committees
supporting the same candidate, remains in effect and unchanged except to
the extent that the support to candidates by political party committees
may now include independent expenditures. The Commission requests
comments on proposed new paragraph (n) of section 110.1 and new
paragraph (k) of section 110.2.

Additional proposed changes to 11 CFR 110.1 and 110.2 are being
addressed in a separate rulemaking on BCRA's increased contribution
limits. [See]{.underline} [Notice of Proposed Rulemaking]{.underline},
67 [Fed. Register]{.underline} 54,366 (August 22, 2002).

# II. Proposed 11 CFR 110.7 Removed and Reserved

The pre-BCRA regulations at 11 CFR 110.7 contain the coordinated party
expenditure limits and related provisions. As noted above, the
Commission proposes to incorporate section 110.7, in amended form, into
11 CFR part 109, subpart D. Specifically, the provisions in section
110.7 would be revised and redesignated as follows: 11 CFR 110.7(a) and
(b) to 11 CFR 109.32(a) and (b) and 109.36; section 110.7(c) to section
109.33; and section 110.7(d) to section 109.34.

# **Presidential Candidate Expenditure Limitations**

# Proposed 11 CFR 110.8 Presidential Candidate Expenditure Limitations

As in proposed 11 CFR 109.32(a) and (b) discussed above, the Commission
would clarify that the expenditure limits for publicly funded
Presidential candidates would be increased in accordance with 11 CFR
110.9(c). [See]{.underline} proposed 11 CFR 110.8(a)(2). To accommodate
this proposed new section 110.8(a)(2), the Commission proposes to
re-designate pre-BCRA paragraphs (a)(1) and (a)(2) as (a)(1)(i) and
(a)(1)(ii), respectively.

In proposed 11 CFR 110.8(a)(3), the Commission would reference the
definition of "voting age population" at proposed 11 CFR 110.18. The
voting age population is a factor in the calculation of expenditure
limitations in 11 CFR 110.8(a). Finally, the Commission is proposing
additional changes to 11 CFR 110.9(c) in a separate rulemaking.
[See]{.underline} [Notice of Proposed Rulemaking]{.underline}, 67 [Fed.
Register]{.underline} 54,366 (August 22, 2002). Comment is sought on
these proposals.

## 

## Voting Age Population

# Proposed 11 CFR 110.18 Voting Age Population

The Commission proposes a redesignation of pre-BCRA section 110.9(d)
regarding voting age population ("VAP") to proposed 11 CFR 110.18 as
part of a reorganization of section 110.9. This provision is referenced
in proposed paragraphs 109.32(a) and (b) (coordinated party expenditure
limits) and 110.8(a)(3) (presidential candidate expenditure limits)
where the VAP is used as a factor in calculating the limits. Proposed
section 110.18 would be revised from pre-BCRA section 110.9(d) only by
noting the fact of, rather than the Commission assuring, that the
Secretary of Commerce shall each year certify to the Commission and
publish in the Federal Register an estimate of the VAP pursuant to 2
U.S.C. 441a(e). Proposed changes to the other provisions of section
110.9, including section 110.9(c) as noted above, are included in a
separate rulemaking. [See]{.underline} [Notice of Proposed
Rulemaking]{.underline}, 67 [Fed. Register]{.underline} 54,366 (August
22, 2002). Comment is sought on this proposal.

## Corporate and Labor Organization Activity

[Proposed 11 CFR 114.4(c)(5) Voter Guides]{.underline}

Paragraph (c)(5) of section 114.4 pertains to voter guides paid for by
corporations and labor organizations. The Commission proposes several
changes to this paragraph to conform with other regulatory changes
proposed in response to BCRA.

The pre-BCRA version of paragraphs (c)(5)(i) and (ii) of section 114.4
provides that a corporation or labor organization must not, among other
things, "contact" a candidate in the preparation of a voter guide,
except in writing. In this rulemaking, the Commission proposes
coordination rules that would allow a person, such as a corporation or
labor union, to contact a candidate to inquire about the candidate's
positions on the issues without a subsequent communication paid for by
that person being deemed coordinated with the candidate (assuming there
was no other evidence of coordination). [See]{.underline} 109.21(f).
Accordingly, proposed paragraphs (c)(5)(i) and (ii) of section 114.4
would be amended to delete the prohibition against any contact with a
candidate in the preparation of a voter guide.

Pre-BCRA paragraph (c)(5)(ii) of section 114.4 provides that a
corporation or a labor union preparing a voter guide may direct
questions in writing to a candidate. In the coordination rules proposed
in this rulemaking, a person, such as a corporation or labor union, may
informally contact a candidate to inquire about the candidate's
positions on the issues without a subsequent communication paid for by
that person being deemed coordinated with the candidate (assuming there
was no other evidence of coordination). [See]{.underline} 109.21(f).
That is, the inquiry would not need be in writing. Accordingly, proposed
paragraph (c)(5)(ii) of section 114.4 would be amended to delete the
requirement that contact with the candidate be in writing.

The Commission would also make several non-substantive changes to
proposed paragraphs (c)(5)(i) and (ii) to conform these provisions to
the statutory provisions on which they are based. [Compare]{.underline}
2 U.S.C. 441a(a)(7)(B) with 11 CFR 114.5(c)(5)(i) and (ii).

The Commission notes that an appeals court in one circuit has
invalidated portions of pre-BCRA 11 CFR 114.4(c)(5). [See]{.underline}
[Clifton v. Federal Election Commission]{.underline}, 927 F.Supp. 493
(D. Me. 1996), [modified in part and remanded in part]{.underline}, 114
F.3d 1309 (1^st^ Cir. 1997), [cert. denied]{.underline}*,* 522 U.S. 1108
(1998). Subsequently, in 1999, the Commission received a Petition for
Rulemaking asking the Commission to repeal its voter guide regulation.
The Commission published a Notice of Availability. [See]{.underline}
64 [Fed.]{.underline} [Register]{.underline} 46,319 (Aug. 25, 1999). The
Commission's present rulemaking proposes changes necessitated by BCRA,
and the Commission would reserve any additional changes to the voter
guide regulations to a future rulemaking. Comment is sought on this
approach.

**Certification of No Effect Pursuant to 5 U.S.C. 605(b)**

**\[Regulatory Flexibility Act\]**

The Commission certifies that the attached proposed rules, if
promulgated, will 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, and other political committees are not small entities
under

5 U.S.C. 601 because they are not small businesses, small organizations,
or small governmental jurisdictions. Further, individual citizens
operating under these rules are not small entities.

To the extent that any political committee may fall within the
definition of "small entities," their numbers are not substantial,
particularly the number that would coordinate expenditures with
candidates or political party committees in connection with a Federal
election.

In addition, the small entities to which the rules would apply would not
be unduly burdened by the proposed rules because there is no significant
extra cost involved, as independent expenditures must already be
reported. Collectively, the differential costs will not exceed 100
million dollars per year. In addition, new reporting requirements would
not significantly increase costs, as they only apply to those spending
\$10,000 or more on independent expenditures, and the actual reporting
requirements are the minimum necessary to comply with the new statute
enacted by Congress.

List of Subjects

[11 CFR Part 100]{.underline}

Elections

[11 CFR Part 102]{.underline}

Political committees and parties, reporting and recordkeeping
requirements.

[11 CFR Part 104]{.underline}

> Campaign funds, political committees and parties, reporting and
> recordkeeping requirements.

# 11 CFR Part 105

Document filing.

[11 CFR Part 109]{.underline}

Elections, reporting and recordkeeping requirements.

[11 CFR Part 110]{.underline}

Campaign funds, political committees and parties.

## [11 CFR Part 114]{.underline}

Business and industry, elections, labor.

for the reasons set out in the preamble, the Federal Election Commission
proposes to amend subchapter A of chapter 1 of title 11 of the [Code of
Federal Regulations]{.underline} as follows:

part 100 -- scope and definitions

1\. The authority citation for part 100 would be revised to read as
follows:

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

2\. Section 100.16 would be revised to read as follows:

§ 100.16 Independent expenditure (2 U.S.C. 431(17)).

\(a\) The term [independent expenditure]{.underline} means an
expenditure by a person for a communication expressly advocating the
election or defeat of a clearly identified candidate that is not made in
cooperation, consultation, or concert with, or at the request or
suggestion of, a candidate, a candidate's authorized committee, or their
agents, or a political party committee or its agents. A communication is
"made in cooperation, consultation, or concert with, or at the request
or suggestion of, a candidate, a candidate's authorized committee, or
their agents, or a political party committee or its agents" if it is a
coordinated communication under 11 CFR 109.21 or a party coordinated
communication under 11 CFR 109.37.

\(b\) No expenditure by an authorized committee of a candidate on behalf
of that candidate shall qualify as an independent expenditure.

3\. In section 100.19, paragraphs (b) and (d) would be revised to read
as follows:

**§ 100.19 File, filed, or filing (2 U.S.C. 434(a)).**

\* \* \* \* \*

\(b\) [Timely filed. General rule.]{.underline} A document other than
those addressed in paragraphs (c) through (f) of this section is timely
filed upon deposit as registered or certified mail in an established
U.S. Post Office and postmarked no later than 11:59 p.m. Eastern
Standard/Daylight Time of the day of the filing date, except that
pre-election reports so mailed must be postmarked no later than 11:59
p.m. Eastern Standard/Daylight Time of the fifteenth day before the date
of the election. Documents sent by first class mail must be received by
the close of business on the prescribed filing date to be timely filed.

\* \* \* \* \*

\(d\) 48-hour and 24-hour reports of independent expenditures.

\(1\) [48-hour reports of independent expenditures]{.underline}. A
48-hour report of independent expenditures under 11 CFR 104.4(b) or
109.10(c) is timely filed when it is received by the Commission no later
than 11:59 p.m. Eastern Standard/Daylight Time of the second day
following the date on which independent expenditures aggregate \$10,000
or more in accordance with 11 CFR 104.4(f), any time during the calendar
year up to and including the 20^th^ day before an election.

\(2\) [24-hour reports of independent expenditures]{.underline}. A
24-hour report of independent expenditures under 11 CFR 104.4(c) or
109.2(c) is timely filed when it is received by the Commission no later
than 11:59 p.m. Eastern Standard/Daylight Time of the day following the
date on which independent expenditures aggregate at least \$1,000, in
accordance with 11 CFR 104.4(f), during the period less than 20 days but
more than 24 hours before an election.

\(3\) [Permissible means of filing.]{.underline} In addition to other
permissible means of filing, a 24-hour report or 48-hour report of
independent expenditures may be filed using a facsimile machine or by
electronic mail if the filer is not required to file electronically in
accordance with 11 CFR 104.18.

\* \* \* \* \*

4\. Part 100 would be revised by removing and reserving section 100.23
to read as follows:

**§ 100.23 \[Removed and reserved.\]**

5\. Part 100, subpart B would be revised by adding section 100.57 to
read as follows:

**§ 100.57 Dissemination, distribution, or republication of candidate
campaign materials (2 U.S.C. 441a(a)(7)(B)(iii).**

\(a\) Except as provided in paragraph (b) of this section, a payment for
the dissemination, distribution, or republication, in whole or in part,
of any broadcast or of any written, graphic, or other form of campaign
materials prepared by a candidate, the candidate's authorized committee,
or an agent of any of the foregoing is a contribution to the candidate
or political party committee if the dissemination, distribution, or
republication or campaign materials satisfies any of the conduct
standards set forth in 11 CFR 109.21(d)(6) with respect to any conduct
other than the original preparation of campaign materials. If the
dissemination, distribution, or republication of campaign materials is
not coordinated with a candidate or political party committee, then the
payment for such dissemination, distribution, or republication is a
contribution by the person making the payment for the purposes of that
person's contribution limits and reporting requirements. The candidate
who prepared the campaign material does not receive or accept an in-kind
contribution that results solely from the dissemination, distribution,
or republication of campaign material originally prepared by that
candidate, unless the dissemination, distribution, or republication of
the campaign materials is coordinated with that candidate or a political
party committee as a result of conduct other than the original
preparation of campaign materials.

\(b\) The following uses of campaign materials do not constitute a
contribution to the candidate who originally prepared the materials:

> \(1\) The campaign material is disseminated, distributed, or
> republished by the candidate, the candidate's authorized committee, or
> an agent of either of the foregoing who prepared that material;
>
> \(2\) The campaign material is incorporated into a communication that
> advocates the defeat of the candidate or party that prepared the
> material;
>
> \(3\) The campaign material is disseminated, distributed, or
> republished in a news story, commentary, or editorial exempted under
> 11 CFR 100.73 or 11 CFR 100.132;

\(4\) The campaign material used consists of a brief quote or portions
of materials that demonstrate a candidate's position as part of a
corporation's or labor organization's expression of its own views to its
restricted class under 11 CFR 114.3(c)(1); or

> \(5\) A national political party committee or a State or subordinate
> political party committee pays for such dissemination, distribution,
> or republication of campaign materials using coordinated party
> expenditure authority under 11 CFR 109.32.

**part 102 -- registration, organization, and recordkeeping by political
committees (2 U.s.c. 433)**

6\. 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), and 441d.

7\. Section 102.6(a)(1)(ii) would be revised to read as follows:

**§ 102.6 Transfers of funds; collecting agents.**

\(a\) \* \* \*

\(1\) \* \* \*

> \(ii\) Subject to the restrictions set forth at 11 CFR 109.35(c),
> 300.10(a), 300.31, 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 104 ‑‑ REPORTS BY POLITICAL COMMITTEES (2 U.S.C. 434)**

8\. The authority citation for part 104 would continue to read as
follows:

Authority: 2 U.S.C. 431(1), 431(8), 431(9), 432(i), 434, 438(a)(8) and
(b), and 439a.

9\. Section 104.4 would be revised to read as follows:

**§ 104.4 Independent expenditures by political committees (2 U.S.C.
434(b), (d), and (g)).**

\(a\) [Regularly scheduled reporting.]{.underline} Every political
committee that makes independent expenditures must report all such
independent expenditures on Schedule E in accordance with 11 CFR
104.3(b)(3)(vii). Every person other than a political committee must
report independent expenditures in accordance with 11 CFR 109.10.

\(b\) [Reports of independent expenditures made at any time up to and
including the 20^th^ day before an election.]{.underline}

(1) [Independent expenditures aggregating less than \$10,000 in a
    calendar year]{.underline}. Political committees must report on
    Schedule E of FEC Form 3X at the time of their regular reports in
    accordance with 11 CFR 104.3, 104.5 and 104.9, all independent
    expenditures aggregating less than \$10,000 with respect to a given
    election any time during the calendar year up to and including the
    20^th^ day before an election.

(2) [Independent expenditures aggregating \$10,000 or more in a calendar
    year]{.underline}.

> Political committees must report on Schedule E of FEC Form 3X all
> independent expenditures aggregating \$10,000 or more with respect to
> a given election any time during the calendar year up to and including
> the 20^th^ day before an election. Political committees must ensure
> that the Commission receives these reports no later than 11:59 p.m.
> Eastern Standard/Daylight Time of the second day following the date on
> which a communication that constitutes an independent expenditure is
> publicly distributed or otherwise publicly disseminated. Each time
> subsequent independent expenditures relating to the same election
> aggregate an additional \$10,000 or more, the political committee must
> ensure that the Commission receives a new 48-hour report of the
> subsequent independent expenditures. [See]{.underline} 11 CFR 104.4(f)
> for aggregation. Each 48-hour report must contain the information
> required by 11 CFR 104.3(b)(3)(vii) indicating whether the independent
> expenditure is made in support of, or in opposition to, the candidate
> involved. In addition to other permissible means of filing, a
> political committee may file the 48-hour reports under this section by
> any of the means permissible under 11 CFR 100.19(d)(3).

\(c\) [Reports of independent expenditures made less than 20 days, but
more than 24 hours before the day of an election.]{.underline} Political
committees must ensure that the Commission receives reports of
independent expenditures aggregating \$1,000 or more with respect to a
given election, after the 20th day, but more than 24 hours, before 12:01
a.m. of the day of the election, no later than 11:59 p.m. Eastern
Standard/Daylight Time of the day following the date on which a
communication is publicly distributed or otherwise publicly
disseminated. Each time subsequent independent expenditures relating to
the same election aggregate \$1,000 or more, the political committee
must ensure that the Commission receives a new 24-hour report of the
subsequent independent expenditures. Each 24-hour report shall contain
the information required by 11 CFR 104.3(b)(3)(vii) indicating whether
the independent expenditure is made in support of, or in opposition to,
the candidate involved. Political committees may file reports under this
section by any of the means permissible under 11 CFR 100.19(d)(3).

\(d\) [Verification]{.underline}. Political committees shall verify
reports of independent expenditures filed under paragraph (b) or (c) of
this section by one of the methods stated in paragraph (d)(1) or (2) of
this section. Any report verified under either of these methods shall be
treated for all purposes (including penalties for perjury) in the same
manner as a document verified by signature.

\(1\) For reports filed on paper (e.g., by hand delivery, U.S. Mail or
facsimile machine), the treasurer of the political committee that made
the independent expenditure shall certify, under penalty of perjury, the
independence of the expenditure by handwritten signature immediately
following the certification required by 11 CFR 104.3(b)(3)(vii).

\(2\) For reports filed by electronic mail, the treasurer of the
political committee that made the independent expenditure shall certify,
under penalty of perjury, the independence of the expenditure by typing
the treasurer's name immediately following the certification required by
11 CFR 104.3(b)(3)(vii).

\(e\) [Where to file]{.underline}. Political committees must file
reports of independent expenditures under this section and part 109 as
set forth at paragraphs (c)(1) and (2) of this section.

\(1\) For independent expenditures in support of or in opposition to, a
candidate for President or Vice President: with the Commission and the
Secretary of State for the State in which the expenditure is made.

\(2\) For independent expenditures in support of, or in opposition to, a
candidate for the Senate or the House of Representatives: with the
Commission and the Secretary of State for the State in which the
candidate is seeking election.

\(f\) [Aggregating independent expenditures for reporting
purposes]{.underline}. For purposes of determining whether 24-hour and
48-hour reports must be filed in accordance with paragraphs (b) and (c)
of this section and 11 CFR 109.10(c) and (d), aggregations of
independent expenditures must be calculated as of the first date during
the calendar year on which a communication that constitutes an
independent expenditure is publicly distributed or otherwise publicly
disseminated, and as of the date that any such communication with
respect to the same election is subsequently publicly distributed or
otherwise publicly disseminated. Every person must include in the
aggregate total all disbursements for independent expenditures, and all
enforceable contracts, either oral or written, obligating funds for
disbursements for independent expenditures, made with respect to any
communication that has been publicly distributed or otherwise publicly
disseminated, during the calendar year, with respect to a given election
for Federal office.

10\. In section 104.5, paragraph (g) would be revised as follows:

**§ 104.5 Filing dates (2 U.S.C. 434(a)(2)).**

\* \* \* \* \*

\(g\) [Reports of independent expenditures.]{.underline}

\(1\) [48-hour reports of independent expenditures]{.underline}. Every
person who or which must file a 48-hour report under 11 CFR 104.4(b)
must ensure the Commission receives the report no later than 11:59 p.m.
Eastern Standard/Daylight Time of the second day following the date on
which a communication that constitutes an independent expenditure is
publicly distributed or otherwise publicly disseminated. Each time
subsequent independent expenditures by that person relating to the same
election as that to which the previous report relates aggregate \$10,000
or more, that person must ensure that the Commission receives a new
48-hour report of the subsequent independent expenditures no later than
11:59 p.m. Eastern Standard/Daylight Time of the second day following
the date on which the \$10,000 threshold is reached or exceeded.
[See]{.underline} 11 CFR 104.4(f) for aggregation.

\(2\) [24-hour report of independent expenditures.]{.underline} Every
person who or which must file a 24-hour report under 11 CFR 104.4(c)
must ensure that the Commission receives the report no later than 11:59
p.m. Eastern Standard/Daylight Time of the day following the date on
which a communication that constitutes an independent expenditure is
publicly distributed or otherwise publicly disseminated. Each time
subsequent independent expenditures by that person relating to the same
election as that to which the previous report relates aggregate \$1,000
or more, that person must ensure that the Commission receives a 24-hour
report of the subsequent independent expenditures no later than 11:59
p.m. Eastern Standard/Daylight Time of the day following the date on
which the \$1,000 threshold is reached or exceeded. [See]{.underline} 11
CFR 104.4(f) for aggregation.

\(3\) Each 24-hour or 48-hour report of independent expenditures filed
under this section shall contain the information required by 11 CFR
104.3(b)(3)(vii) indicating whether the independent expenditure is made
in support of, or in opposition to, the candidate involved.

\(4\) For purposes of this part, a communication that is mailed to its
intended audience is publicly disseminated when it is relinquished to
the U.S. Postal Service.

\* \* \* \* \*

**PART 105 -- DOCUMENT FILING (2 U.S.C. 432(g))**

11\. The authority citation for part 105 would be revised to read as
follows:

Authority: 2 U.S.C. 432(g), 434, 438(a)(8).

12\. Section 105.2 would be revised to read as follows:

> **§ 105.2 Place of filing; Senate candidates, their principal campaign
> committees, and committees supporting only Senate candidates (2 U.S.C.
> 432(g)(2), 434(g)(3)).**

\(a\) [General Rule]{.underline}. Except as provided in paragraph (b) of
this section, all designations, statements, reports, and notices as well
as any modification(s) or amendment(s) thereto, required to be filed
under 11 CFR parts 101, 102, and 104 by a candidate for nomination or
election to the office of United States Senator, by his or her principal
campaign committee or by any other political committee(s) that supports
only candidates for nomination for election or election to the Senate of
the United States shall be filed in original form with, and received by,
the Secretary of the Senate, as custodian for the Federal Election
Commission.

\(b\) [Exceptions]{.underline}. The following statements and reports
must be filed with the Commission and not with the Secretary of the
Senate, even if the communication refers to a Senatorial candidate:

> \(1\) 48-hour statements of electioneering communications; and
>
> \(2\) 24-hour and 48-hour reports of independent expenditures.

13\. Part 109 would be revised to read as follows:

**PART 109 -- COORDINATED AND INDEPENDENT EXPENDITURES (2 U.S.C.
431(17), 441a, Pub. L. 107-155 sec. 214(c) (March 27, 2002)).**

Sec.

###### Subpart A -- Scope and Definitions

§ 109.1 When will this part apply?

§ 109.2 \[Removed and reserved\]

§ 109.3 Definitions.

**Subpart B -- Independent Expenditures**

§ 109.10 How do political committees and other persons report
independent expenditures?

§ 109.11 When is a "non-authorization notice" (disclaimer) required?

###### Subpart C -- Coordination

§ 109.20 What does "coordinated" mean?

§ 109.21 What is a "coordinated communication"?

§ 109.22 Who is prohibited from making coordinated communications?

**Subpart D -- Special Provisions for Political Party Committees**

§ 109.30 How are political party committees treated for purposes of
independent expenditures and coordination?

§ 109.31 What is a "coordinated party expenditure"?

§ 109.32 What are the coordinated party expenditure limits?

§ 109.33 May a political party committee assign its coordinated party
expenditure limit to another political party committee?

§ 109.34 When can a political party committee make coordinated party
expenditures?

§ 109.35 What are the restrictions on a political party making both
independent expenditures and coordinated party expenditures in
connection with a candidate?

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

§ 109.37 What is a "party coordinated communication"?

Authority: 2 U.S.C. 431(17), 434(c), 441a; Pub. L. 155-107 214(c).

# **Subpart A -- Scope and Definitions**

**§ 109.1 When will this part apply?**

This part applies to expenditures that are made independently from a
candidate, an authorized committee, a political party committee, or
their agents, and to those payments that are made in coordination with a
candidate, a political party committee, or their agents. The regulations
in this part explain the differences between the two kinds of payments
and state how each type of payment must be reported and who must report
it. In addition, subpart D of part 109 describes procedures and limits
that apply only to payments, transfers, and assignments made by
political party committees.

**§ 109.2 \[Removed and reserved\]**

**§ 109.3 Definitions.**

For the purposes of 11 CFR part 109 only, [agent]{.underline} means any
person who has actual authority, either express or implied, to engage in
any of the following activities on behalf of the specified persons:

\(a\) In the case of a national, State, district, or local committee of
a political party, any one or more of the activities listed in
paragraphs (a)(1) through (a)(5) of this section:

> \(1\) To request or suggest that a communication be created, produced,
> or distributed.
>
> \(2\) To make or authorize any communication described in 11 CFR
> 100.29(a)(1), or to make or authorize a public communication that
> meets the content standard set forth in 11 CFR 109.21(c).
>
> \(3\) To create, produce, or distribute any communication at the
> request or suggestion of a candidate.
>
> \(4\) To be materially involved in decisions regarding:
>
> \(i\) The content of the communication;
>
> \(ii\) The intended audience;
>
> \(iii\) The specific media outlet used;
>
> \(iv\) The timing or frequency of the communication;
>
> \(v\) The size or prominence of a printed communication or duration of
> a communication on a television, radio, or cable station or by
> telephone; or,
>
> \(vi\) The script of a telephone message.
>
> \(5\) To make or direct a communication that is created, produced, or
> distributed with the use of material or information derived from a
> substantial discussion about the communication with a candidate.

\(b\) In the case of an individual who is a Federal candidate or an
individual holding Federal office, any one or more of the activities
listed in paragraphs (b)(1) through (b)(5) of this section:

> \(1\) To request or suggest that a communication be created, produced,
> or distributed.
>
> \(2\) To make or authorize any communication described in 11 CFR
> 100.29(a)(1), or to make or authorize a public communication that
> meets the content criteria set forth in 11 CFR 109.21(c).
>
> \(3\) To request or suggest that any other person create, produce, or
> distribute any communication.
>
> \(4\) To be materially involved in decisions regarding:
>
> \(i\) The content of the communication;
>
> \(ii\) The intended audience;
>
> \(iii\) The specific media outlet used;
>
> \(iv\) The timing or frequency of the communication;
>
> \(v\) The size or prominence of a printed communication or duration of
> a communication on a television, radio, or cable station or by
> telephone; or,
>
> \(vi\) The script of a telephone message.
>
> \(5\) To provide material or information to assist another person in
> the creation, production, or distribution of any communication.

**Subpart B -- Independent Expenditures**

> **§ 109.10 How do political committees and other persons report
> independent expenditures?**
>
> \(a\) Political committees, including political party committees, must
> report independent expenditures under 11 CFR 104.4.
>
> \(b\) Every person, other than a political committee, who makes
> independent expenditures aggregating in excess of \$250 with respect
> to a given election in a calendar year shall file a verified
> statement, or report on FEC Form 5 with the Commission or Secretary of
> the Senate containing the information required by paragraph (e) of
> this section. Every person filing a report or statement under this
> section shall do so at the end of the reporting period during which
> any such independent expenditures that aggregate in excess of \$250 is
> made and in any reporting period thereafter in which additional
> independent expenditures are made.

\(c\) Every person, other than a political committee, who makes
independent expenditures aggregating \$10,000 or more with respect to a
given election any time during the calendar year up to and including the
20th day before an election, must report the independent expenditures on
FEC Form 5, or by signed statement if the person is not otherwise
required to file electronically under 11 CFR 104.18. ([See]{.underline}
11 CFR 104.4(f) for aggregation). The person making the independent
expenditures aggregating \$10,000 or more must ensure that the
Commission receives the report or statement no later than 11:59 p.m.
Eastern Standard/Daylight Time of the second day following the date on
which a communication is publicly distributed or otherwise publicly
disseminated. Each time subsequent independent expenditures relating to
the same election aggregate an additional \$10,000 or more, the person
making the independent expenditures must ensure that the Commission
receives a new 48-hour report of the subsequent independent
expenditures. Each 48-hour report must contain the information required
by paragraph (e)(1) of this section.

\(d\) Every person making, after the 20th day, but more than 24 hours
before 12:01 a.m. of the day of an election, independent expenditures
aggregating \$1,000 or more with respect to a given election must report
those independent expenditures and ensure that the Commission receives
the report or signed statement no later than 11:59 p.m. Eastern
Standard/Daylight Time of the day following the date on which a
communication is publicly distributed or otherwise publicly
disseminated. Each time subsequent independent expenditures relating to
the same election aggregate \$1,000 or more, the person making the
independent expenditures must ensure that the Commission receives a new
24-hour report of the subsequent independent expenditures.
[See]{.underline} 11 CFR 104.4(f) for aggregation. Such report or
statement shall contain the information required by paragraph (e) of
this section.

\(e\) [Verified statements.]{.underline}

\(1\) [Contents of verified statement]{.underline}. If a signed
statement is submitted, the statement shall include:

\(i\) The reporting person\'s name, mailing address, occupation, and the
name of his or her employer, if any;

\(ii\) The identification (name and mailing address) of the person to
whom the expenditure was made;

\(iii\) The amount, date and purpose of each expenditure;

\(iv\) A statement that indicates whether such expenditure was in
support of, or in opposition to a candidate, together with the
candidate\'s name and office sought;

\(v\) A verified certification under penalty of perjury as to whether
such expenditure was made in cooperation, consultation or concert with,
or at the request or suggestion of a candidate, a candidate's authorized
committee, or their agents, or a political party committee or its
agents; and

\(vi\) The identification of each person who made a contribution in
excess of \$200 to the person filing such report, which contribution was
made for the purpose of furthering the reported independent expenditure.

\(2\) [Verification of independent expenditure statements and
reports]{.underline}. Every person shall verify reports of independent
expenditures filed pursuant to the requirements of this section by one
of the methods stated in paragraph (2)(i) or (ii) of this section. Any
report verified under either of these methods shall be treated for all
purposes (including penalties for perjury) in the same manner as a
document verified by signature.

\(i\) For reports filed on paper (e.g., by hand delivery, U.S. Mail or
facsimile machine), the person who made the independent expenditure
shall certify, under penalty of perjury, the independence of the
expenditure by handwritten signature immediately following the
certification required by paragraph (e)(1)(v) of this section.

\(ii\) For reports filed by electronic mail, the person who made the
independent expenditure shall certify, under penalty of perjury, the
independence of the expenditure by typing the treasurer's name
immediately following the certification required by paragraph (e)(1)(v)
of this section.

**§ 109.11 When is a "non-authorization notice" (disclaimer) required?**

Whenever any person makes an independent expenditure for the purpose of
financing communications expressly advocating the election or defeat of
a clearly identified candidate, such person shall comply with the
requirements of 11 CFR 110.11.

# **Subpart C -- Coordination**

**§ 109.20 What does "coordinated" mean?**

\(a\) [Coordinated]{.underline} means made in cooperation, consultation
or concert with, or at the request or suggestion of, a candidate, a
candidate's authorized committee, or their agents, or a political party
committee or its agents.

\(b\) Any expenditure that is coordinated within the meaning of
paragraph (a) of this section, but is not made for a coordinated
communication under 11 CFR 109.21 or a party coordinated communication
under 11 CFR 109.37, is an in-kind contribution or a coordinated party
expenditure with respect to the candidate or political party committee
with whom or with which it was coordinated, unless otherwise exempted
under 11 CFR part 100, subparts C or E.

**§ 109.21 What is a "coordinated communication"?**

\(a\) [Definition]{.underline}. A communication is coordinated with a
candidate, an authorized committee, or their agents, or a political
party committee or its agents when the communication:

\(1\) Is paid for by a person other than that candidate, or an
authorized committee, a political party committee, or agent of any of
the foregoing;

> \(2\) Satisfies at least one of the content standards in paragraph (c)
> of this section; and
>
> \(3\) Satisfies at least one of the conduct standards in paragraph (d)
> of this section. For a communication that satisfies the content
> standard in paragraph (c)(2) of this section, the conduct standard in
> paragraph (d)(6) of this section must be satisfied for the
> communication to be deemed coordinated.

\(b\) [Treatment as an in-kind contribution; Reporting.]{.underline}

\(1\) [General rule.]{.underline} A payment for a communication that is
coordinated with a candidate or political party committee is made for
the purpose of influencing a Federal election, and is an in-kind
contribution under 11 CFR 100.52(d) to the candidate or political party
committee with whom or which it was coordinated, unless excepted under
11 CFR part 100, subpart C.

> \(2\) [In-kind contributions resulting from conduct described in
> paragraphs (d)(4) or (d)(5) of this section.]{.underline}
> Notwithstanding paragraph (b)(1) of this section, the candidate,
> authorized committee, or political party committee with whom or which
> a communication is coordinated does not receive or accept an in-kind
> contribution that results from conduct described in paragraphs (d)(4)
> or (d)(5) of this section, unless the candidate, authorized committee,
> or political party committee engages in conduct described in
> paragraphs (d)(1) through (d)(3) of this section.

\(3\) [Reporting of coordinated communications.]{.underline} A political
committee, other than a political party committee, that makes a
coordinated communication must report the payments for the communication
as a contribution made to the candidate or political party committee
with whom or which it was coordinated and as an expenditure in
accordance with 11 CFR 104.3(b)(1)(v). A political party committee with
which a communication paid for by another person is coordinated must
report the usual and normal value of the communication as an in-kind
contribution received and as an expenditure in accordance with 11 CFR
104.13.

\(c\) [Content standards]{.underline}. Any one of the following types of
content satisfies the content standard of this section:

\(1\) The communication would otherwise be considered an electioneering
communication under 11 CFR 100.29; or

\(2\) The communication disseminates, distributes, or republishes, in
whole or in part, campaign materials prepared by a candidate, the
candidate's authorized committee, or an agent of any of the foregoing,
unless the dissemination, distribution, or republication is excepted
under 11 CFR 100.57(b); or

\(3\) The public communication expressly advocates the election or
defeat of a clearly identified candidate for Federal office; or

Alternative A:

> \(4\) The communication is a public communication, as defined in
>
> 11 CFR 100.26, that refers to a clearly identified candidate for
> Federal office.

Alternative B:

> \(4\) The communication is a public communication, as defined in
>
> 11 CFR 100.26, that promotes or supports or attacks or opposes a
> clearly identified candidate for Federal office.

Alternative C:

\(4\) The communication is a public communication, as defined in

> 11 CFR 100.26, and each of the following statements in paragraphs
> (c)(4)(i), (ii), and (iii) of this section are true.

\(i\) The public communication is made 120 days or fewer before a
general, special, or runoff election, or 120 days or fewer before a
primary or preference election, or a convention or caucus of a political
party that has authority to nominate a candidate;

\(ii\) The public communication is directed to voters in the
jurisdiction of the clearly identified candidate; and

> \(iii\) The public communication makes express statements about the
> record or position or views on an issue, or the character, or the
> qualifications or fitness for office, or party affiliation, of a
> clearly identified Federal candidate.

\(d\) [Conduct standards]{.underline}. Any one of the following types of
conduct satisfies the conduct standard of this section whether or not
there is agreement or formal collaboration, as defined in paragraph (e)
of this section:

\(1\) [Request or suggestion]{.underline}.

(i) The communication is created, produced, or distributed at the
    request or suggestion of a candidate or an authorized committee,
    political party committee, or agent of any of the foregoing; or

(ii) The communication is created, produced, or distributed at the
     suggestion of a person paying for the communication and the
     candidate, authorized committee, political party committee, or
     agent of any of the foregoing, assents to the suggestion.

\(2\) [Material involvement]{.underline}. A candidate, an authorized
committee, a political party committee, or an agent of any of the
foregoing, is materially involved in decisions regarding:

> \(i\) The content of the communication;
>
> \(ii\) The intended audience for the communication;
>
> \(iii\) The means or mode of the communication;
>
> \(iv\) The specific media outlet used for the communication;
>
> \(v\) The timing or frequency of the communication; or
>
> \(vi\) The size or prominence of a printed communication, or duration
> of a communication by means of broadcast, cable, or satellite.

\(3\) [Substantial discussion]{.underline}. The communication is
created, produced, or distributed after one or more substantial
discussions about the communication between the person paying for the
communication, or the employees or agents of the person paying for the
communication, and the candidate who is clearly identified in the
communication, or his or her authorized committee, or his or her
opponent or the opponent's authorized committee, or a political party
committee, or an agent of any of the foregoing. A discussion is
substantial within the meaning of this paragraph if information about
the plans, projects, activities, or needs of the candidate or political
party committee is conveyed to a person paying for the communication,
and that information is material to the creation, production, or
distribution of the communication.

\(4\) [Common vendor]{.underline}. All of the following statements in
paragraphs (d)(4)(i) through (d)(4)(iii) of this section are true:

\(i\) The person paying for the communication, or an agent of such
person, contracts with or employs a commercial vendor to create,
produce, or distribute the communication;

\(ii\) That commercial vendor, including any employee of the commercial
vendor, has provided any of the following services to the candidate who
is clearly identified in the communication, or his or her authorized
committee, or his or her opponent or the opponent's authorized
committee, or a political party committee, or an agent of any of the
foregoing, in the current election cycle:

(A) Development of media strategy;

(B) Selection of audiences;

(C) Polling;

(D) Fundraising;

(E) Developing the content of a public communication;

(F) Producing a public communication;

(G) Identifying or developing voter lists, mailing lists, or donor
    lists;

(H) Selecting personnel, contractors, or subcontractors; or

(I) Consulting or otherwise providing political or media advice; and

\(iii\) That commercial vendor makes use of or conveys to the person
paying for the communication:

\(A\) Material information about the plans, projects, activities, or
needs of the candidate who is clearly identified in the communication,
or his or her authorized committee, or his or her opponent or the
opponent's authorized committee, or a political party committee, or an
agent of any of the foregoing; or

\(B\) Material information used previously by the commercial vendor in
providing services to the candidate who is clearly identified in the
communication, or his or her authorized committee, or his or her
opponent or the opponent's authorized committee, or a political party
committee, or an agent of any of the foregoing.

\(5\) [Former employee or independent contractor.]{.underline} Both of
the following statements in paragraph (d)(5)(i) and (d)(5)(ii) of this
section are true:

\(i\) The communication is paid for by a person, or by the employer of a
person, who was an employee or independent contractor of the candidate
who is clearly identified in the communication, or his or her authorized
committee, or his or her opponent or the opponent's authorized
committee, or a political party committee, or an agent of any of the
foregoing, during the current election cycle; and,

\(ii\) That former employee or independent contractor makes use of or
conveys to the person paying for the communication:

\(A\) Material information about the plans, projects, activities, or
needs of the candidate who is clearly identified in the communication,
or his or her authorized committee, or his or her opponent or the
opponent's authorized committee, or a political party committee, or an
agent of any of the foregoing; or

\(B\) Material information used by the former employee or independent
contractor in providing services to the candidate who is clearly
identified in the communication, or his or her authorized committee, or
his or her opponent or the opponent's authorized committee, or a
political party committee, or an agent of any of the foregoing.

\(6\) [Conduct pertaining to communications that disseminate,
distribute, or republish campaign material prepared by a
candidate.]{.underline} A communication that satisfies the content
requirement of paragraph (c)(2) of this section shall only be considered
to satisfy one or more of the conduct standards of this section if the
candidate or authorized committee that initially prepared the campaign
material engages in any of the conduct described in paragraphs (d)(1)
through (d)(3) of this section with respect to the subsequent
dissemination, distribution, or republication of the campaign materials.

\(e\) [Agreement or formal collaboration.]{.underline} Agreement or
formal collaboration between the person paying for the communication and
the candidate clearly identified in the communication, his or her
authorized committee, his or her opponent, or the opponent's authorized
committee, a political party committee, or an agent of any of the
foregoing, is not required for a communication to be considered a
coordinated communication. [Agreement]{.underline} means a mutual
understanding or meeting of the minds on all or any part of the material
aspects of the communication or its dissemination. [Formal
collaboration]{.underline} means planned, or systematically organized,
work on the communication.

**109.22 Who is prohibited from making coordinated communications?**

Any person who is otherwise prohibited from making contributions or
expenditures under any part of the Act or Commission regulations is
prohibited from paying for a coordinated communication.

**Subpart D -- Special Provisions for Political Party Committees**

§ 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]{.underline} 11 CFR 109.35 and
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]{.underline} 11 CFR 109.31 through 11 CFR 109.35.

**§ 109.31 What is a "coordinated party expenditure"?**

[Coordinated party expenditures]{.underline} include payments made by a
national committee of a political party, including a national
Congressional campaign committee, or a State committee of a political
party, including any subordinate committee of a State committee, under 2
U.S.C. 441a(d) for anything of value in connection with the general
election campaign of a candidate, including party coordinated
communications defined at 11 CFR 109.37.

**§ 109.32 What are the coordinated party expenditure limits?**

\(a\) [Coordinated party expenditures in presidential
elections]{.underline}.

\(1\) The national committee of a political party may make coordinated
party expenditures in connection with the general election campaign of
the party's candidate for President of the United States affiliated with
the party.

\(2\) The coordinated party expenditures shall not exceed an amount
equal to two cents multiplied by the voting age population of the United
States. [See]{.underline} 11 CFR 110.18. This limitation shall be
increased in accordance with 11 CFR 110.17.

\(3\) Any coordinated party expenditure under paragraph (a) of this
section shall be in addition to\--

> \(i\) Any expenditure by a national committee of a political party
> serving as the principal campaign committee of a candidate for
> President of the United States; and
>
> \(ii\) Any contribution by the national committee to the candidate
> permissible under 11 CFR 110.1 or 110.2.

\(4\) Any coordinated party expenditures made by the national committee
of a political party pursuant to paragraph (a) of this section, or made
by any other party committee designated by a national committee of a
political party under 11 CFR 109.33, on behalf of that party's
presidential candidate shall not count against the candidate's
expenditure limitations under 11 CFR 110.8.

\(b\) [Coordinated party expenditures in other Federal
elections.]{.underline}

\(1\) The national committee of a political party, and a State committee

> of a political party, including any subordinate committee of a State
> committee, may each make coordinated party expenditures in connection
> with the general election campaign of the party's candidate for
> Federal office in that State.

\(2\) The coordinated party expenditures shall not exceed:

> \(i\) In the case of a candidate for election to the office of
> Senator, or of Representative from a State which is entitled to only
> one Representative, the greater of\--
>
> \(A\) Two cents multiplied by the voting age population of the State
> ([see]{.underline} 11 CFR 110.18); or

\(B\) Twenty thousand dollars.

> \(ii\) In the case of a candidate for election to the office of
> Representative, Delegate, or Resident Commissioner in any other State,
> \$10,000.
>
> \(3\) The limitations in paragraph (b)(2) of this section shall be
> increased in accordance with 11 CFR 110.17(c).
>
> \(4\) Any coordinated party expenditure under paragraph (b) of this
> section shall be in addition to any contribution by a political party
> committee to the candidate permissible under 11 CFR 110.1 or 110.2.

§ 109.33 May a political party committee assign its coordinated party
expenditure limit to another political party committee?

\(a\) Except as provided in 11 CFR 109.35(c), 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 in 11 CFR 109.32 to
another political party committee, provided that before the coordinated
party expenditure is made, the national or State committee specifies in
writing to the assigned political party committee the amount the
assigned political party committee may spend.

\(b\) For purposes of the coordinated party expenditure limits, [State
committee]{.underline} includes a subordinate committee of a State
committee and includes a district or local committee. State committees
and subordinate State committees and district or local committees
combined shall not exceed the coordinated party expenditure limits set
forth in 11 CFR 109.32. The State committee shall administer the
limitation in one of the following ways:

\(1\) The State committee shall be responsible for insuring that the

coordinated party expenditures of the entire party organization are
within

the coordinated party expenditure limits, including receiving reports
from any subordinate committee of a State committee or district or local
committee making coordinated party expenditures under 11 CFR 109.32, and
filing consolidated reports showing all coordinated party expenditures
in the State with the Commission; or

\(2\) Any other method, submitted in advance and approved by the
Commission, that permits control over coordinated party expenditures.

§ 109.34 When may a political party committee make coordinated party
expenditures?

A political party committee authorized to make coordinated party
expenditures may make such expenditures in connection with the general
election campaign before or after its candidate has been nominated. All
pre-nomination coordinated party expenditures shall be subject to the
coordinated party expenditure limitations of this subpart, whether or
not the candidate on whose behalf they are made receives the party's
nomination.

§ 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?

\(a\) [Applicability]{.underline}. For the purposes of this subpart:

\(1\) The national committee of a given political party, all
Congressional campaign committees of that political party, and all
political committees established, financed, maintained, or controlled by
any of the foregoing, together comprise a [political party
group]{.underline}.

> \(2\) The State committee of a given political party in a given State,
> all subordinate committees of that State committee, and all district
> or local committees of that political party within that State that
> meet the definition of political committee under 11 CFR 100.5,
> together comprise a [political party group]{.underline}.
> [See]{.underline} 11 CFR 100.14.

\(b\) [Restrictions on certain expenditures.]{.underline} On or after
the date on which a political party nominates a candidate for election
to Federal office, no political committee within a given political party
group may do any of the following during the remainder of the election
cycle:

> \(1\) Make any coordinated party expenditure under 11 CFR 109.32 in
> connection with the general election campaign of that candidate at any
> time after any political committee within that political party group
> makes any independent expenditure with respect to that candidate; or
>
> \(2\) Make any independent expenditure with respect to that candidate
> at any time after any political committee within that political party
> group makes any coordinated party expenditure under 11 CFR 109.32 in
> connection with the general election campaign of that candidate.

\(c\) [Restrictions on certain transfers and assignments.]{.underline}
On or after the date that a political committee within a political party
group makes any coordinated party expenditure under 11 CFR 109.32 in
connection with the general election campaign of a candidate, no
political committee within that same political party group may do any of
the following during the remainder of the election cycle:

\(1\) Transfer any funds to, or receive a transfer of any funds from,
any political committee within another political party group if any
political committee within that other political party group has made or
intends to make an independent expenditure with respect to that
candidate; or

> \(2\) Assign all or any portion of its authority to make coordinated
> party expenditures under 11 CFR 109.32 in connection with the general
> election campaign of that candidate to any political committee within
> another political party group if any political committee within that
> other political party group has made or intends to make an independent
> expenditure with respect to that candidate. [See]{.underline} 11 CFR
> 109.33.

\(d\) [Definitions]{.underline}. For the purposes of this section:

> \(1\) An independent expenditure made by a political party committee
> [with respect to]{.underline} a candidate includes independent
> expenditures expressly advocating the election of that party's
> candidate, as well as independent expenditures expressly advocating
> the defeat of any other candidate seeking nomination for election, or
> election, to the Federal office sought by that party's candidate.
>
> \(2\) [Election cycle]{.underline} has the meaning in 11 CFR 100.3(b),
> except that the election cycle ends on the date of the general
> election runoff, if any.

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

The national committee of a political party must not make independent
expenditures in connection with the general election campaign of a
candidate for President of the United States if the national committee
of a political party is designated as the authorized committee of its
presidential candidate pursuant to 11 CFR 9002.1(c).

§ 109.37 What is a "party coordinated communication"?

\(a\) [Definition]{.underline}. A political party communication is
coordinated with a candidate, a candidate's authorized committee, or
their agents, when the communication satisfies the conditions set forth
in paragraphs (a)(1), (a)(2), and (a)(3) of this section.

\(1\) The communication is paid for by a political party committee or
its agent.

\(2\) The communication satisfies at least one of the content standards
in 11 CFR 109.21(c). For a communication that satisfies the content
standard in 11 CFR 109.21(c)(2), the conduct standard in 11 CFR
109.21(d)(6) must be satisfied before the communication shall be deemed
coordinated.

> \(3\) The communication satisfies at least one of the conduct
> standards in 11 CFR 109.21(d). Notwithstanding paragraph (b)(1) of
> this section, the candidate with whom a party coordinated
> communication is coordinated does not receive or accept an in-kind
> contribution that results from conduct described in 11 CFR
> 109.21(d)(4) or (d)(5), unless the candidate or authorized committee
> engages in conduct described in 11 CFR 109.21 d)(1) through (d)(3).

\(b\) [Treatment of a party coordinated communication.]{.underline} A
payment by a political party committee for a communication that is
coordinated with a candidate, and that is not otherwise exempted under
11 CFR part 100, subpart C or E, must be treated by the political party
committee making the payment as either:

> \(1\) An in-kind contribution for the purpose of influencing a Federal
> election under 11 CFR 100.52(d) to the candidate with whom it was
> coordinated, which must be reported under 11 CFR part 104; or
>
> \(2\) A coordinated party expenditure pursuant to coordinated party
> expenditure authority under 11 CFR 109.32 in connection with the
> general election campaign of the candidate with whom it was
> coordinated, which must be reported under 11 CFR part 104.

part 110 -- contribution and expenditure limitations and prohibitions

14\. The authority citation for part 110 would be revised to read as
follows:

Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 437d(a)(8), 441a, 441b,
441d, 441e, 441f, 441g, 441h, and 441k.

15\. In section 110.1, paragraph (d) would be revised and paragraph (n)
would be added to read as follows:

**§ 110.1 Contributions by persons other than multicandidate political
committees.**

\* \* \* \* \*

\(d\) [Contributions to other political committees]{.underline}. No
person shall make contributions to any other political committee in any
calendar year which, in the aggregate, exceed \$5,000.

\* \* \* \* \*

\(n\) Contributions to committees making independent expenditures. The
limitations on contributions of this section also apply to contributions
made to political committees making independent expenditures under 11
CFR Part 109.

16\. In section 110.2, paragraph (d) would be revised and paragraph (k)
would be added to read as follows:

**§ 110.2 Contributions by multicandidate political committees.**

\* \* \* \* \*

\(d\) [Contributions to other political committees]{.underline}. No
multicandidate political committee shall make contributions to any other
political committee in any calendar year which, in the aggregate, exceed
\$5,000.

\* \* \* \* \*

\(k\) Contributions to multicandidate political committees making
independent expenditures. The limitations on contributions of this
section also apply to contributions made to multicandidate political
committees making independent expenditures under 11 CFR Part 109.

17\. Section 110.7 would be removed and reserved.

§ 110.7 \[Removed and reserved\].

18\. In section 110.8, paragraph (a) would be amended as follows:

\(a\) The introductory text would be redesignated as paragraph (a)(1);

\(b\) Paragraph (a)(1) would be redesignated as paragraph (a)(1)(i);

\(c\) Paragraph (a)(2) would be redesignated as paragraph (a)(1)(ii);

\(d\) Paragraph (a)(2) would be revised to read as follows; and

\(e\) A paragraph (a)(3) would be added to read as follows:

§ 110.8 Presidential candidate expenditure limitations.

\(a\) \* \* \*

\(2\) The expenditure limitations in paragraph (a)(1) of this section
shall be increased in accordance with 11 CFR 110.9(c).

\(3\) Voting age population is defined at 11 CFR 110.18.

\* \* \* \* \*

19\. In part 110 section 110.18 would be added to read as follows:

**§ 110.18 Voting Age Population.**

There is annually published by the Department of Commerce in the
[Federal Register]{.underline} an estimate of the voting age population
based on an estimate of the voting age population of the United States,
of each State, and of each Congressional district. The term [voting age
population]{.underline} means resident population, 18 years of age or
older.

## 

## PART 114 -- CORPORATE AND LABOR ORGANIZATION ACTIVITY

20\. The authority citation for part 114 would continue to read as
follows:

Authority: 2 U.S.C. 431(8)(B), 431(9)(B), 432, 434(a)(11), 437d(a)(8),
438(a)(8), and 441b.

21\. In section 114.4, paragraphs (c)(5)(i) and (c)(5)(ii)(A) would be
revised to read as follows:

§ 114.4 Disbursements for communications beyond the restricted class in
connection with a Federal election.

\* \* \*

\(c\) [Communications by a corporation or labor organization to the
general public.]{.underline}

\* \* \*

\(5\) [Voter guides.]{.underline}

\* \* \*

\(i\) The corporation or labor organization must not act in cooperation,
consultation, or concert with or at the request or suggestion of the
candidates, the candidates' committees or agents regarding the
preparation, contents and distribution of the voter guide, and no
portion of the voter guide may expressly advocate the election or defeat
of one or more clearly identified candidate(s) or candidates of any
clearly identified political party.

> \(ii\) (A) The corporation or labor organization must not act in
> cooperation, consultation, or concert with or at the request or
> suggestion of the candidates, the candidates' committees or agents
> regarding the preparation, contents and distribution of the voter
> guide;
>
> \* \* \* \* \*

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

Scott E. Thomas

#####  Commissioner

Federal Election Commission

DATED: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

> BILLING CODE: 6715-01-P

[^1]: Note that BCRA, as passed on February 14, 2002, in the House and
    on March 20, 2002, in the Senate, would have required 24-hour
    reports to be [filed]{.underline} rather than [received]{.underline}
    within 24 hours of the time the independent expenditure was made. In
    technical corrections to BCRA, Congress amended section 212 of BCRA
    by reinstating the [received]{.underline} requirement. H. Con. Res.
    361.