**FEDERAL ELECTION COMMISSION**

**11 CFR Parts 102, 104 and 108**

**\[NOTICE 1997‑14\]**

**Recordkeeping and Reporting**

  --------------- -------------------------------------------------------
  **AGENCY:**     Federal Election Commission

  **ACTION:**     Notice of Proposed Rulemaking

  **SUMMARY:**    The Federal Election Commission requests comment on
                  proposed revisions to regulations that govern
                  recordkeeping, reporting, and filing with State
                  officers under the Federal Election Campaign Act of
                  1971, as amended (\"the Act\" or \"FECA\"). The
                  proposed revisions, many of which are technical in
                  nature, would clarify and simplify requirements for
                  recording, reporting, and filing reports of
                  campaign‑related receipts and disbursements. The
                  revisions are intended to address issues that have
                  arisen since the rules were last amended. Please note
                  that the draft rules which follow do not represent a
                  final decision by the Commission on issues presented in
                  this rulemaking.

  **DATES:**      Comments must be received on or before \[Insert 30 days
                  after date of publication in the [Federal]{.underline}
                  [Register]{.underline}\]. If the Commission receives
                  requests to testify, it will hold a hearing on November
                  5, 1997 at 10:00 a.m. Persons wishing to testify should
                  so indicate in their written comments.

  **ADDRESS:**    Comments should be addressed to Ms. Susan E. Propper,
                  Assistant General Counsel, and must be submitted in
                  either written or electronic form. Written comments
                  should be sent to the Commission's postal service
                  address: Federal Election Commission, 999 E Street,
                  N.W., Washington, D.C. 20463. Faxed comments should be
                  sent to (202) 219-3923. Commenters submitting faxed
                  comments should also submit a printed copy to the
                  Commission's postal service address to ensure
                  legibility. Comments may also be sent by electronic
                  mail to "recrep@fec.gov". Commenters sending comments
                  by electronic mail should include their full name,
                  electronic mail address and postal service address
                  within the text of their comments. All comments,
                  regardless of form, must be submitted by \[Insert 30
                  days after date of publication in the [Federal
                  Register.\]]{.underline} Comments that do not contain
                  the full name, electronic mail address and postal
                  service address of the commenter will not be
                  considered.
  --------------- -------------------------------------------------------

+--------------+-------------------------------------------------------+
| **FOR        | Ms. Susan E. Propper, Assistant General Counsel, or   |
| FURTHER**    | Ms. Teresa A. Hennessy, Attorney, 999 E Street, N.W., |
|              | Washington, D.C. 20463, (202) 219‑3690 or (800)       |
| **I          | 424‑9530.                                             |
| NFORMATION** |                                                       |
|              |                                                       |
| **CONTACT:** |                                                       |
+--------------+-------------------------------------------------------+

**SUPPLEMENTARY**

**INFORMATION:** The FECA\'s principal requirements for recording and
reporting contributions and expenditures in connection with Federal
elections currently appear at 11 CFR 102.9 and 104.3. The first rule
prescribes procedures for committees that qualify as political
committees under the Act to follow in recordkeeping. The second sets
forth procedures for political committees to follow in reporting
campaign‑related receipts and disbursements. The procedures apply to
authorized committees, i.e. committee(s) designated by a candidate to
receive contributions and make expenditures on his or her behalf, and
unauthorized committees, those not so designated by a candidate. 11 CFR
100.5(f).

Although the Commission has made several changes to these sections in
earlier rulemakings, it is now taking a comprehensive look at the
recordkeeping and reporting requirements. Disclosure of campaign finance
in connection with Federal elections is a major goal of the FECA, as
recognized by the Supreme Court. [See Buckley v. Valeo,]{.underline} 424
U.S. 1, 67‑69 (1976). Hence, the Commission is undertaking to clarify
\-- and where possible, to simplify \-- the requirements. The Commission
is aware of the ongoing need to balance the public interest in effective
and timely disclosure with the concerns of the regulated community about
reporting burdens. Thus, the draft rules propose several key changes:
reorganizing the reporting requirements by retaining the provisions
applicable to unauthorized committees at 11 CFR 104.3 and moving the
reporting requirements for candidates' authorized committees to new 11
CFR 104.17; permitting alternatives for reporting loan repayments;
simplifying the reporting requirements for draws on a line of credit;
and clarifying procedures for reporting disbursements paid by credit
card(s).

Concurrently, a review is underway of the relevant reporting forms: Form
3 for authorized committees and Form 3X for unauthorized committees.
Under the proposed revisions, the rules and forms would be revised in a
parallel manner. Draft revised Form 3 and Form 3X are available on
request from the Commission's Public Records Branch at 999 E Street, NW,
Washington, DC 20463 (202/219-4140 or 800/424-9530).

Lastly, the Act's requirements for filing reports with State officers
appear at 11 CFR part 108. The regulations provide that any reports
required under the Act are also required to be filed with the Secretary
of State, or other State officer, of the appropriate State(s). The
regulations identify the "appropriate" State(s) and set forth duties for
State officers regarding the reports. [See]{.underline},
[e.g.]{.underline}, 11 CFR 108.2 and 108.6. The Commission seeks to
comport these rules with recent amendments to the FECA, providing that
these requirements do not apply in certain circumstances. Public Law No.
104-79, 109 Stat. 791 (1995).

The Commission seeks comment on the proposed regulations. It requests
that any comments on the reporting forms be forwarded with comments on
the proposed reporting rules. The Commission also welcomes comments on
the recordkeeping and reporting process, in general, including any
issues not covered by the proposed regulations. A summary of the
proposed revisions follows.

**A. Proposed 11 CFR 102.9 - Accounting for Contributions and
Expenditures**

Proposed section 102.9, governing recordkeeping for contributions and
expenditures, would redesignate current paragraphs (a)(1)‑(3) as
paragraphs (a)(2)‑(4), respectively. The draft rule also would propose
several substantive changes for procedures set forth at current
paragraphs (a), (b) and (d).

**1. Proposed Recordkeeping for Contributions**

The proposed revisions first would codify recordkeeping requirements for
contributions of \$50 or less. A committee would have two options for
maintaining this information. It may retain the information specified
for contributions in excess of \$50 at redesignated paragraph (a)(2).
Or, for many small contributions received at a fundraising event, the
committee may record the name of the event, the date(s) contributions
are received at the event, and the total amount of contributions
received on each day of the event.

The Act requires that a treasurer of a political committee maintain an
account of all contributions received by or on behalf of the committee
but does not specify how records should be kept of receipts under \$50.
2 U.S.C. 432(c)(1). Currently, the rule elaborates that the treasurer
may use "any reasonable accounting procedure" to maintain these records.
11 CFR 102.9(a). The Commission has suggested methods of recording
receipts under \$50 in Advisory Opinions (\"AO\") 1981‑48 and 1980‑99.
This section would codify that guidance at new paragraph (a)(1).

**2. Proposed Recordkeeping for Disbursements**

The draft rule would continue the current rule's definition of "payee".
[See]{.underline} proposed paragraph (b)(2)(i)(A). The rule would
provide that a "payee" is a person who receives payment directly from
the committee, or indirectly from an agent of the committee, in return
for goods or services extended to the committee or its agent. To comply
with the proposed section, a committee therefore must retain records for
all disbursements it makes, including those by its agent, or primary
payee, to other vendors that perform work for the committee, or
secondary payees. As presented later, a committee similarly would be
required to report all disbursements: payments to primary payees would
be reported as disbursements and, under certain circumstances, payments
to secondary payees would be reported as memo entries. [See]{.underline}
proposed sections 104.3(c)(2) and 104.17(c)(2).

The Commission has addressed recording and reporting disbursements to
payees in AO 1996-20, AO 1983-25 and in audits. In AO 1996-20, the
Commission determined that the principal campaign committee ("PCC") \--
the committee designated by the candidate as his main authorized
committee \-- for the re-election of a Member of Congress was permitted
to reimburse the Member's Chief of Staff ("COS") for his
campaign-related travel expenses. [See]{.underline} 11 CFR 100.5(e)(1),
101.1 and 102. The Commission stated that the PCC must report as memo
entries the COS' payments to vendors for the travel expenses "\...to
achieve full disclosure but not inflate disbursement figures."
[See]{.underline} AO 1996-20, note 3. The Commission reached a different
conclusion in AO 1983-25. There, the Commission determined that, after a
presidential PCC made direct payments to certain media consultants, it
was not required to itemize payments

by the consultants to other vendors which performed work for the PCC as
long as records were maintained for the latter disbursements.

The draft rule would codify the guidance of AO 1996-20 for two reasons.
First, the

reporting method referenced in this opinion would indicate how a
committee's disbursements are

actually used and, thus, would serve the disclosure policy underlying
the Act. Relying alone on

the recordkeeping requirements in AO 1983-25 would not as effectively
result in such disclosure.

Next, the two committees in the opinions are different legal entities
under the Act. The Presidential campaign committee was a recipient of
public funding and, therefore, was required

to undergo a mandatory audit. 26 U.S.C. 9007 and 9038. It also was
required to maintain

records of disbursements to secondary payees. [See]{.underline} 11 CFR
9003.5, 9033.1(b)(7) and 9033.11.

Hence, even if publicly funded committees were not required to report
disbursements to

secondary payees, the Commission could rely on audits to examine these
disbursements. On the

other hand, Title 2 committees, such as the PCC in AO 1996-20, do not
receive public funding

and are not required to be audited by statute. [Compare]{.underline} 2
U.S.C. 438(b). Thus, the mechanism of

a recordkeeping and reporting requirement is necessary so that the
Commission may examine

how Title 2 committees directly, and indirectly, use funds. The
Commission welcomes comments

on the proposed clarification.

The draft rule would revise the recordkeeping requirements in other
respects. The draft

rule would more clearly state that an individual who receives an advance
from a committee for

his or her own travel or subsistence would be a "payee". The draft rule
would raise the amount

of the qualifying advance from \$500 or less to \$1,000 or less, to
accommodate inflationary

increases. [See]{.underline} proposed paragraph (b)(2)(i)(B).

The documentation requirements for disbursements also would be revised.
The draft rule would require that if a committee makes an advance for
travel or subsistence expenses, it must keep [all]{.underline} expense
account documentation related to the advance. The present rule requires
only that the committee maintain "the expense voucher [or]{.underline}
other expense account documentation" (emphasis added). Thus, committees
now may satisfy their recordkeeping obligations by retaining only one
type of documentation, even if more records originally existed for a
particular expense. The Commission proposes this change because the
present rule may conflict with the general requirement to maintain
records stated at 11 CFR 104.14. Moreover, the Commission has discovered
that an expense voucher may have required information that other expense
account documentation lacks, or vice-versa. The proposed documentation
requirement would not require committees to create new records. Rather,
it would clarify that committees must preserve all records related to
disbursements, consistent with section 104.14.

The draft rule specifically would address documentation requirements for
disbursements by bank draft accounts and debit cards. These financial
instruments are more commonly used today by committees and have unique
characteristics. Therefore, the Commission is providing guidance on how
to retain required information for transactions based on these. The
Commission also would welcome comments on suitable documentation for
these transactions. Please note that the proposed requirements for bank
draft accounts are distinct from those for share draft accounts at
credit unions, addressed at current paragraph (b)(2)(iii). The new
provisions would address a current concern of committees and lead to
more complete, useful information for committees and the Commission.
[See]{.underline} proposed paragraph (b)(2) and new paragraphs
(b)(2)(iv) and (v).

Further, the draft rule would clarify that a committee treasurer must
comply with both the \"best efforts\" rule and the requirements of 11
CFR 104.14. Principally, a treasurer would be required to meet the
recordkeeping duties set forth at proposed section 102.9 and, at the
same time, to maintain bank records and other documents related to
reports required under 11 CFR part 104. [See]{.underline} proposed
paragraph (d).

The proposed revisions also would require that, in recording
contributions to candidates, a committee identify the election(s) for
which these are made. [See]{.underline} proposed paragraph (b)(1)(iii).
In addition, the proposed revisions would amend paragraph (b)(1)(iv) of
the section to cross-reference the new citations for the definition of
"purpose" in proposed sections 104.3 and 104.17. The final rules will
contain conforming amendments to other sections of the regulations to
reflect the revisions proposed for this section.

**B. Proposed 11 CFR 104.3 - Contents of Reports for Unauthorized
Committees**

**1. Proposed Restructuring of Current 11 CFR 104.3**

The Commission proposes to restructure, into two sections, 11 CFR 104.3
which governs

the contents of reports political committees must file. Proposed 11 CFR
104.3 would state the requirements applied to all unauthorized
committees for reporting receipts and disbursements.

The corresponding requirements for authorized committees would appear at
new 11 CFR 104.17. (Please note that the Commission recently repealed
former 11 CFR 104.17 as an obsolete rule.

60 Fed. Reg. 56506 (November 9, 1995)). The purpose of the proposed
restructuring is to clarify

points of Commission policy, simplify the preparation of reports
pursuant to 2 U.S.C. 434, and

facilitate committees' efforts to locate the rules that apply to each.
The Commission welcomes comments on the proposed restructuring.

**2. Proposed Reporting Requirements for Unauthorized Committees**

As amended, the section would follow the organization of current 11 CFR
104.3 except

for the changes discussed below. Most of the proposed changes would
appear at draft paragraphs

(b), (c), (k) and (l) to address procedures for reporting receipts and
disbursements, amending

reports and reporting disbursements paid by credit card(s),
respectively. New paragraph (a)

would state the rule\'s scope and refer authorized committees to the
reporting requirements at new section 104.17.

**a. Reporting Receipts of Unauthorized Committees**

The proposed amendments would delete the reference to traveler's checks
in the

definition of \"Cash on hand\". Under this amendment, a committee may
hold traveler's checks

only after receiving these as contributions, [see]{.underline} 11 CFR
104.8, and before depositing these

pursuant to 11 CFR 103.3(a). The proposed amendment is intended to
comport with the Act and

to address substantial problems raised by the use of traveler's checks
for disbursements. The Act requires that, except for petty cash fund
expenditures, a committee issue a check from an account

at its campaign depository to make a disbursement. 2 U.S.C. 432(h).
[See]{.underline} [also]{.underline} 11 CFR 102.10

and 103.3. Traveler's checks are unlike these checks: traveler's checks
are not forwarded to a committee's campaign depository and are
unavailable for review. Thus, at times committees

have been unable to identify payees or the purpose of disbursements by
traveler's checks, and the Commission's efforts to evaluate a
committee's compliance with the Act have been frustrated.

The Commission welcomes comment on the proposal to limit the role of
traveler's checks in campaign finance. [See]{.underline} redesignated
paragraph (b)(2).

The categories and itemizations of receipts for unauthorized committees
would be

reorganized and revised in draft paragraphs (b)(3) and (4).
Concurrently, Form 3X would be

revised to conform to the proposed rule. Similar provisions for
authorized committees would be addressed in new section 104.17.

Paragraph (b)(3) would set forth the revised categories of receipts that
must be reported

on the Detailed Summary Page of Form 3X. The revisions would reflect the
types of receipts

received by unauthorized committees in recent years. For example, the
draft rule would add two

new categories: "loan repayments received" and "refunds of contributions
made by the reporting committee to political committees".
[See]{.underline} proposed paragraphs (b)(3)(vi) and (viii). In
addition,

the Commission proposes to reduce the burden on committees by deleting
the itemized and

unitemized sub-categories for "offsets to operating expenditures" and
"other receipts". [See]{.underline}

proposed paragraphs (b)(3)(vii) and (ix). The draft rule also would
clarify that the category of "contributions from persons" would include
contributions from committees that do not qualify as political
committees under the Act, and that "offsets to operating expenditures"
would refer to

rebates and refunds from vendors. [See]{.underline} proposed paragraphs
(b)(3)(i), (ii) and (vii). Further, the

draft paragraph would require year-to-date reporting for itemized and
unitemized sub-categories.

The proposed itemizations of receipts for unauthorized committees, which
must be

reported on Schedule A of Form 3X, would follow the revisions proposed
for reporting

categories of receipts, discussed above. Thus, the proposed rule would
add an itemization for

loan repayments received, clarify that the current itemization for
"offsets" refers to rebates and

refunds from vendors, and add an itemization for refunds of
contributions. [See]{.underline} proposed paragraphs (b)(4)(v)-(vii).

**b. Reporting Disbursements of Unauthorized Committees**

The draft rule would reorganize and revise requirements for reporting
categories and itemizations of disbursements at proposed paragraphs
(c)(1) and (2). The proposed revisions would appear on Form 3X,
concurrently under revision. (Similar requirements for authorized
committees would be moved to new section 104.17.) The draft rule also
would cross-reference new reporting requirements for disbursements paid
by credit card found at new paragraph (l).

The categories of disbursements, which are reported as total amounts on
the Detailed Summary Page of Form 3X, would be revised to reflect
contemporary disbursement practices by committees. Illustratively, the
categories for refunds of contributions to persons and to political
committees would replace "offsets". [See]{.underline} proposed
paragraphs (c)(1)(ix) and (x). These revisions also would correspond to
amendments proposed for reports of receipts. To ease committees'
reporting burdens, the draft rule would delete itemized and unitemized
sub-categories for "other disbursements". [See]{.underline} proposed
paragraph (c)(1)(xii). The proposed amendments additionally would
clarify which disbursements are covered by categories in the current
rule for operating expenditures, transfers to affiliated or party
committees, coordinated party expenditures under 11 CFR 110.7, and other
disbursements. [See]{.underline} proposed paragraphs (c)(1)(ii), (iii),
(vi), and (xii). As for receipts, the proposed rule would require
year-to-date reporting for itemized and unitemized sub-categories of
disbursements.

The revised itemizations of disbursements for unauthorized committees,
which must be reported on Schedule B of Form 3X, would appear at
proposed paragraph (c)(2). The amended rule would clarify that a
committee may report a loan repayment in two ways: report the sum of the
principal and interest as a single loan repayment, or report the
principal as a loan repayment and the interest as an operating
expenditure. (Committees would continue to report on Schedule C
repayments of principal and the outstanding principal balance for each
loan.) In the past, the Commission has instructed that each interest
payment be reported as a separate operating expenditure.
[See]{.underline} AO 1991-9 and AO 1986-45. Although the latter method
is consistent with the Act's requirements, the former may be easier for
reporting committees. The Commission seeks to ease the reporting burden
on committees and requests comment on the proposal to permit alternative
reporting methods for loan repayments. [See]{.underline} proposed
paragraph (c)(2)(vi).

The Commission seeks comments on related points raised by Schedule D.
For example, should a committee report as a payment toward a debt
incurred for goods or services only the principal paid and report as an
operating expenditure the finance charges paid? Or, should a committee
report the sum of these as a debt payment? The Commission is considering
permitting both reporting methods, and requiring that payments
(including accrued interest) on debts owed [to]{.underline} a committee
be reported along similar lines.

The revisions proposed for itemizations of disbursements generally would
follow the revisions proposed for categories of disbursements, discussed
above. Thus, a committee would itemize "refunds of contributions" to
persons and to political committees in place of "offsets to
contributions". [See]{.underline} proposed paragraphs (c)(2)(viii) and
(ix). The proposed rule would add a requirement that, for certain
itemized disbursements, a committee identify the election for which the
disbursement was made. [See]{.underline} proposed paragraphs
(c)(2)(iii)-(v) and (vii). Where a disbursement is a contribution, a
committee would be required to identify the election for which it made
the contribution and, hence, the particular contribution limit against
which the contribution must be counted, e.g. 1998 General Election.
[See]{.underline} 2 U.S.C. 441a.

**c. Additional Revisions to Section 104.3**

Significant changes are proposed at paragraphs (e), "Reporting debts and
obligations", (h), "Legal and accounting services", (k), "Amending
reports", and (l), "Credit card payments", of the draft rule. With
respect to paragraph (e), the provision governing loans to candidates
would be moved to new section 104.17. The proposed revisions also would
simplify the current rule to require that, for a line of credit, a
committee file Schedule C-1 only when it reports the receipt of a line
of credit or a restructuring of the line. As revised, the rule would
require a committee to report each draw on a line of credit only as a
receipt on Schedule A.

The Commission proposes to simplify the reporting requirements because
it appears that committees often make numerous draws on a line of credit
in a single day. The draws usually

are made without restructuring the line of credit, i.e. changing the
repayment terms such as the interest rate. The Commission therefore has
questioned the present practice of requiring a Schedule C‑1 for every
routine draw. The Commission believes that it would be more

informative to require that, after the initial Schedule C-1, a committee
file a subsequent Schedule C-1 only to report a restructuring of the
line. This approach would ease the burden on

committees while protecting the public interest in disclosure. The
Commission emphasizes that

a committee would remain obligated to report, as with any debt or
obligation, the outstanding balance on a line of credit on Schedule C.

The reporting requirements would be streamlined for a committee that
receives legal and accounting services pursuant to 11 CFR 100.7(b)(13)
and (14). Draft paragraph (h) would delete the current requirement that
a committee report each person providing the services. The Commission
also is proposing to institute a \$200 threshold for "itemizing"
receipts of these services: a committee would specify in a memo entry,
on Schedule A, the regular employers of persons providing the services
which have spent more than \$200 for the services during the calendar
year. For "unitemized" receipts of the services, or those from employers
which have not met the \$200 threshold, a committee instead would report
as a memo entry, on Schedule A, the total of amounts paid by regular
employers for the services and maintain all records of the services as
described in 11 CFR 102.9(c). A memo entry is supplemental information
about a specific transaction, and the dollar amount recorded in the memo
entry is not included in the totals reported on the Detailed Summary
Page for Form 3X (or Form 3). Thus, for an employer meeting the \$200
threshold, a committee would report a memo entry: Employer A / Address,
\$50, on 11/22/96 (where Employer A had spent \$250 for the services in
1996). For regular employers not meeting the threshold, a committee
would report a memo entry: \$500 received in "unitemized" exempt legal
and accounting services (for example, to reflect 5 employers which
individually had not spent more than \$200 for the services in 1996).

New paragraph (k) would be added to clarify the process for amending
reports that are

filed with the Commission in hard-copy form. The new paragraph would
present: the deadline

for filing an amendment; optional methods for filing amendments; and a
provision for identifying

the specific changes in the amended report(s). These provisions would
apply both to

amendments prompted by a Commission notice and to those initiated by a
committee after

discovering an error, omission or change in information. The Commission
proposes to

standardize the amendment process to simplify a committee's reporting
obligations. The

proposed revisions also are intended to address an issue that frequently
arises concerning amendments to longer reports as well as shorter
reports, such as Schedule H-4 ("Joint Federal and NonFederal Activity
Schedule"). A mechanism to quickly and clearly identify the changes on
amended pages, or reports, submitted by a committee is necessary to
ensure the accuracy of the Commission's database and to assist the
review of disclosure reports. The draft rule provides one mechanism for
ensuring that the Commission and the public are able to locate easily
new or amended information in a report. The Commission welcomes
suggestions as to other effective methods for achieving this result, and
seeks comment generally on the proposed amendment process. In addition,
the Commission notes that a committee which amends an electronically
filed report must follow a different procedure set forth at 11 CFR
104.18.

New paragraph (l) would clarify and simplify reporting obligations for
disbursements paid by credit card. These provisions would apply to all
disbursements subject to the requirements proposed for categories of
disbursements, and itemized entries for the categories, discussed
earlier. The new paragraph would define a credit card as representing a
credit account with a depository institution or other corporation that
is not a depository institution. [See]{.underline} 11 CFR 103.2. For
some credit cards, the monthly balance must be paid in full; for others,
it may be paid in part or in full. A committee would be required to
itemize on Schedule B each payment to a credit card company, the
depository institution or other corporation receiving the payment, the
date and the amount of payment. For example, for a payment that covers
an entire monthly balance, the committee would report: ABC National Bank
(VISA), Anytown, Any State, 12/05/96, \$2,000.00. The committee also
would include the payment in the total for the appropriate category on
the Detailed Summary Page of Form 3X (or Form 3).

Under the new provisions, if the disbursement is a partial payment of a
monthly credit card balance, the committee first would report the
information required for a full payment, as noted above, and next report
a memo entry on Schedule B. The memo entry would report the creditor,
the outstanding credit balance, and the corresponding date. In the
example above, the committee would report as a memo entry: ABC National
Bank (VISA), \$1,000 balance, as of 12/05/96. It would not include
\$1,000 in the appropriate totals on the Detailed Summary Page, but it
would report the unpaid balance as a debt under 11 CFR 104.11(b).

Whether paying its bill in full or in part, a committee also would be
required to report,

as a memo entry on Schedule B, each expenditure that is separately
listed on a monthly credit

card statement and that would be required to be itemized under proposed
paragraph (c)(2). In the example above, the committee would report as a
memo entry: \$600 to XYZ Printing Company, Anytown, Any State, 12/01/96,
by ABC National Bank VISA, for campaign literature. If a committee made
multiple expenditures to a particular vendor during a single reporting
period and each was required to be itemized, the committee would report
a memo entry for each

expenditure. Thus, a committee would itemize a disbursement to pay all,
or part, of a credit card balance and would identify the itemizable,
underlying expenditures that were paid by credit card. [See]{.underline}
new paragraphs (l)(2) and (3).

In the Commission\'s experience, many committees pay for disbursements
with credit

card(s) and subsequently make partial payments to the credit card
company. Thus, regulations

tailored to these transactions would disclose more information about a
committee's

disbursements as well as identify a committee\'s outstanding credit
balances. The Commission welcomes comment on the proposal to include the
new paragraph in the reporting requirements.

Lastly, the proposed amendments would modify section 104.3 in several
other respects. The draft rule would substitute the term "savings
association" for "savings and loan institutions" to reflect current
regulatory practice. [See]{.underline} 12 CFR 561.43 ([Regulations
Applicable to]{.underline} [All Savings Associations]{.underline},
Office of Thrift Supervision, U.S. Department of Treasury). In addition,
the draft provision for reporting "cash on hand" would cross-reference
to 11 CFR 104.13 to clarify that, when a committee receives a non-liquid
asset (such as a computer) as an in-kind contribution , it should report
the contribution in a memo entry rather than as cash. [See]{.underline}
proposed paragraph (b)(2). Current paragraph (c), "Summary of
contributions and operating expenditures", would be adjusted to reflect
the amendments proposed for reporting categories of receipts and
disbursements. [See]{.underline} proposed paragraph (d). Finally, the
proposed amendments would move current paragraph (f), "Consolidated
reports", to new section 104.17 as it relates solely to authorized
committees, and add guidance for national party committees in proposed
paragraph (g), "Building funds".

**C**. **New 11 CFR 104.17 - Contents of Reports for Authorized
Committees**

The new rule would contain all the reporting provisions applicable to
authorized committees of candidates. Also, Form 3 would be revised to
reflect these provisions. New section 104.17 generally would follow the
organization of proposed section 104.3, thus simplifying the reporting
process for authorized committees. The discussion below concentrates on
the provisions unique to authorized committees and not discussed in the
preceding discussion of proposed section 104.3.

**1. Reporting Receipts** **of Authorized Committees**

The new rule would address reporting receipts by authorized committees
at new paragraph (b) and would correspond to current 11 CFR 104.3(a)(3)
and (4). The categories of receipts at new paragraph (b)(3) would be
reported as total amounts on the Detailed Summary Page of Form 3. The
new section would specify more clearly which categories include the
following receipts: contributions from the candidate; loans made,
guaranteed or endorsed by the candidate; Federal matching funds for
presidential candidates; and the new factor of contributions refunded by
authorized committees for other Federal candidates. [See]{.underline}
new paragraphs (b)(3)(iii), (vi), (vii), and (ix). The draft categories
also would provide for transfers from other committees authorized by the
candidate, to the extent permitted by Commission regulations.
[See]{.underline} new paragraph (b)(3)(v) and 11 CFR 110.3(c)(4)and (5)
and 110.8(d)(2). In addition, reimbursements by any person for "personal
use" of committee funds would be added to the category of "other
receipts". [See]{.underline} new paragraph (b)(3)(x). "Personal use"
consists of the use of campaign funds for an obligation of any person
that would exist irrespective of the candidate's campaign or duties as a
Federal officeholder. Certain payments for travel or vehicle expenses
may include both legitimate officeholder or campaign activities and
personal business. The portion of these costs associated with personal
activities must be reimbursed under 11 CFR 113.1(g)(1)(ii)(C) or (D).

As drafted, the categories would continue to state that coordinated
party expenditures, made pursuant to 11 CFR 110.7, are not contributions
and would add that loan repayments received are included as "other
receipts". [See]{.underline} new paragraph (b)(3)(ii) and (x). To ease

reporting burdens, the draft rule would delete the requirements for
reporting total itemized and unitemized "offsets to operating
expenditures" and "other receipts". [See]{.underline} new paragraphs
(b)(3)(viii) and (x).

The draft rules for itemizing receipts, which must be reported on
Schedule A of Form 3,

would follow the changes proposed for categories of receipts. The new
section also would add

that an authorized committee specify the election for which
contributions from persons and from political committees are made when
it itemizes the contributions. [See]{.underline} draft paragraphs
(b)(4)(i)

and (ii). In addition to the requirements at proposed section 104.3, a
committee would be

required to itemize all loans it has received including those made to
the candidate as the

committee's agent. If any loan itemized under draft paragraph (b)(4)(v)
represents a contribution

by a lender, endorser or guarantor, the committee would be required to
report the election for

which the contribution was made. As drafted, the section would add a
provision governing the itemization of contributions by the candidate,
excluding any loans by the candidate. [See]{.underline} new paragraph
(b)(4)(iii) and (v).

**2. Reporting Disbursements of Authorized Committees**

The new rule would govern reporting disbursements at new paragraph (c).
This new paragraph would correspond to current 11 CFR 104.3(b)(2) and
(4).

One issue on which the Commission seeks comment concerns the requirement
that

authorized committees report the "purpose" of committee disbursements.
[See]{.underline} new paragraphs (c)(2)(i)(A) and (B). In particular,
the Commission seeks comment on whether to require more information on
committees' statements of "purpose" in the interests of monitoring
adequately

possible instances of personal use of campaign funds. 11 CFR
113.1(g)(1)(i) and (ii). It is intended that any new requirement would
generate meaningful disclosure about committee disbursements, as
intended by the Act, without significantly increasing committees'
reporting burdens.

The Commission's current regulations closely follow the legislative
guidance on this

point:

It is the opinion of the Committee that the purpose requirement will be
satisfied

by a short statement or description, no more than one or two words in
most

cases, of why the money was spent. The particulars, i.e., the details,
of the

disbursement are not required by the statute.

H.R. Rep. No.422, 96th Cong., 1st Sess. 18 (1979). Despite suggestions
in comments received

in the Commission's rulemaking on "personal use", 60 Fed. Reg. 7862
(February 9, 1995), the Commission has been reluctant to conclude that
the purpose statement serves only to regulate

personal use of campaign funds. These statements provide required
information about other

committee disbursements, such as a committee's contributions to a
committee authorized by

another candidate. Over the years, however, purpose statements often
have lacked sufficient

detail to enable the Commission to determine whether a certain
disbursement represents a

candidate\'s personal use of campaign funds. [See]{.underline} Matter
Under Review 3107. In addition, a

more informative purpose statement may be necessary to determine whether
a disbursement by

an authorized committee for an office-holder not seeking re-election is
impermissible personal

use.

The Commission is obligated to enforce the Act\'s prohibition on
personal use of

campaign funds. 2 U.S.C. 439a. Currently, the only reporting provisions
addressing this ban are

the requirement for statements of purpose and the requirement to
describe certain disbursements

for travel and vehicle expenses for which the committee expects
reimbursement. [See]{.underline} 11 CFR 104.17(c)(2)(i)(A) and (B); 11
CFR 113.1(g)(1)(ii)(C) and (D). Hence, the Commission requests comment
on possible mechanisms for generating more disclosure of the purpose of
committee disbursements without heavily burdening reporting committees.

As drafted, the new rule would cross-reference to draft paragraph (l)
governing disbursements paid by credit card. The categories of
disbursements, at new paragraph (c)(1), would be reported as total
amounts on the Detailed Summary Page of Form 3. The draft rule would
specify which categories include the following receipts: transfers to
other committees authorized by the candidate; repayments of loans made
or guaranteed by the candidate; and disbursements by authorized
committees for presidential candidates not subject to the limitations at
11 CFR 110.8. [See]{.underline} new paragraphs (c)(1)(ii) - (iv). Also,
the new rule would add a category for contributions to committees
authorized by other candidates for Federal office. [See]{.underline} new
paragraph (c)(1)(viii). The new categories of refunds of contributions
to persons and to political committees would replace the current
category of "offsets to contributions". [See]{.underline} new paragraphs
(c)(1)(v) and (vi). To ease committees' reporting burdens, the new rule
would eliminate reporting itemized and unitemized subcategories for
"other disbursements". [See]{.underline} draft paragraph (c)(1)(ix).

Paragraph (c)(2) would contain the reporting requirements for itemizing
disbursements on Schedule B of Form 3. The draft rule would add a
requirement that a committee identify the election for which
contributions and loans to authorized committees for other candidates
are made. [See]{.underline} new paragraphs (c)(2)(iii) and (v). A
committee would be required to itemize repayments for all loans used in
the campaign, whether these were made to the committee or to the
candidate. [See]{.underline} draft paragraph (c)(2)(iv).

**3. Additional Revisions to New Section 104.17**

Generally, new paragraphs (d)-(l) would correspond to proposed
paragraphs (d)-(l) of section 104.3 with certain exceptions. The draft
rule would provide for reporting loans to candidates and would move
"Consolidated reports" from current 11 CFR 104.3(f). [See]{.underline}
new paragraphs (e)(2), (3) and (g).

The final rules will contain conforming amendments to other sections of
the regulations to reflect changes in cross-reference citations,
resulting from the reorganization of 11 CFR 104.3 into two sections and
the proposed revisions included therein.

**D. 11 CFR Part 108 - Filing copies of reports and statements with
State officers**

The FECA governs, [inter alia]{.underline}, the filing of campaign
finance reports and statements by political committees with Secretaries
of State or equivalent State officers. Similarly, the Act specifies the
duties of State officers to maintain the duplicate reports. 2 U.S.C.
439. On December 28, 1995, Public Law No. 104-79, 109 Stat. 791 (1995),
amended the FECA to provide that the filing and maintenance requirements
no longer apply where the Commission determines that a State maintains a
system that permits electronic access to, and duplication of, reports
and statements filed with the Commission. Public Law No. 104-79, § 2
(codified at 2 U.S.C. 439(c)).

The proposed rule would revise 11 CFR part 108 to conform to the
statutory amendments. It also would ease reporting burdens for political
committees and other persons as well as filing responsibilities for
State offices. For example, an unauthorized committee or other person,
making independent expenditures under 11 CFR part 109, would not be
required to file a

copy of campaign finance reports with the relevant State officer where
the Commission has determined that the State office maintains a system
that can receive and duplicate optically imaged reports from the
Commission. Optically imaged reports are stored on special optical
disks. [See]{.underline} proposed sections 108.1(b)(1) and 108.3(b).
These are unlike microfilm and microfiche. This method also is distinct
from electronic filing of reports, which was the subject of a separate
rulemaking by the Commission. [See]{.underline} 61 Fed. Reg. 42371
(August 15, 1996). Current technology requires that the images be stored
and maintained on specialized equipment at the Commission. To access and
retrieve these images, states must have the equipment necessary to
connect to the Commission's imaging system. Although currently no state
office has the necessary capability, the Commission expects that states
will begin to gain the capability in the near future.

The proposed revisions would apply to reports filed in connection with
primaries for presidential and vice-presidential candidates as well as
reports by unauthorized committees in connection with a presidential
election. [See]{.underline} proposed sections 108.2 and 108.4. The
revisions also would apply to reports filed in connection with a
candidate's campaign for the office of Representative in, Delegate or
Resident Commissioner to the Congress. The 1995 amendments and a
subsequent rulemaking on the point of entry for campaign finance reports
provide that these reports now are filed with the Commission, rather
than the Clerk of the House of Representatives. Public Law No. 104-79, §
3; 61 Fed. Reg. 3549 and 6095 (February 1 and 16, 1996). Hence, the
Commission includes the reports in the optical imaging process and is
able to make the reports available to State offices.

However, reports filed by a candidate, or authorized committee(s) of a
candidate, to the office of Senator would not be covered. Since these
reports are filed with the Secretary of the Senate, the Commission does
not receive the original reports and cannot optically image the copies
it receives. Consequently, it is unable to make the reports available to
State offices by this method. [See]{.underline} proposed section 108.3.

Lastly, the provisions governing the duties of state officers to
maintain the duplicate reports would be modified to correspond to the
1995 amendments. [See]{.underline} proposed section 108.6.

The Commission seeks comment on all proposed revisions to the
regulations concerning recordkeeping, reporting, and filing with State
offices and on the proposed conforming amendments. The Commission also
welcomes comment on these requirements generally, including any issues
not covered by the proposed regulations. Please note that a subsequent
rulemaking may cover other issues addressed by Parts 102 and 104.

**CERTIFICATION OF NO EFFECT PURSUANT TO 5 U.S.C. § 605(b)**

(Regulatory Flexibility Act)

The attached proposed rules would not, if promulgated, have a
significant economic impact on a substantial number of small entities.
The majority of the attached proposed rules would clarify recordkeeping
and reporting requirements under the Federal Election Campaign Act, and
any affected entities already are required to comply with the
Commission\'s requirements in this area. The remaining attached proposed
rules for filing copies of reports with State officers would conform to
statutory amendments and reduce any reporting burden of affected
entities. Therefore, these rules would not have a significant economic
effect on a substantial number of small entities.

**LIST OF SUBJECTS**

**11 CFR PART 102**

Political candidates

Reporting and recordkeeping requirements

**11 CFR PART 104**

Campaign funds

Political candidates

Political committees and parties

Reporting and recordkeeping requirements

**11 CFR PART 108**

Elections

Reporting and recordkeeping requirements

For the reasons set out in the preamble, it is proposed to amend
Subchapter A, Chapter I of Title 11 of the [Code of Federal
Regulations]{.underline} as follows:

**PART 102 ‑ REGISTRATION, ORGANIZATION, AND RECORDKEEPING BY POLITICAL
COMMITTEES (2 U.S.C. 433)**

1\. The authority citation for Part 102 would continue to read as
follows:

Authority: 2 U.S.C. 432, 433, 438(a)(8), 441d.

2\. Section 102.9 would be amended by redesignating paragraphs
(a)(1)‑(3) as paragraphs (a)(2)‑(4), respectively, by adding new
paragraph (a)(1), by revising paragraphs (a)(2)‑(4), (b)(1)(iii) and
(iv), (b)(2) and (b)(2)(i)(A) and (B), by adding new (b)(2)(iv) and (v),
and by revising paragraph (d) to read as follows:

**§ 102.9 Accounting for contributions and expenditures (2 U.S.C.
432(c)).**

\* \* \* \* \*

\(a\) \* \* \*

> \(1\) For contributions of \$50 or less, a committee may satisfy the
> requirements of
>
> this section by keeping either: the name and address of each
> contributor, the date of receipt and the amount of each contribution;
> or, if the committee received many small contributions under \$50 each
> through a fundraising event, the name of the event, the date(s)
> contributions were received at the event, and the total amount of
> contributions received on each day of the event.
>
> \(2\) For contributions in excess of \$50 each, the account shall
> include the name and address of the contributor, the date of receipt
> and amount of each contribution.
>
> \(3\) For contributions from any person whose contributions aggregate
> more than \$200 during a calendar year, the account shall include the
> identification of the person, the date of receipt and amount of each
> contribution.
>
> \(4\) For contributions from a political committee, the account shall
> include the identification of the political committee, the date of
> receipt and amount of each contribution.

\(b\) (1) \* \* \* The account shall consist of a record of:

> \* \* \*
>
> \(iii\) if the disbursement is made for a candidate, the name, the
> election (e.g.
>
> primary or general) and office (including State and Congressional
> district,
>
> if any) sought by the candidate.
>
> \(iv\) For purposes of 11 CFR 102.9(b)(1), [purpose]{.underline} has
> the same meaning given
>
> the term at 11 CFR 104.3(c)(2)(i)(A) and (B) and 104.17(c)(2)(i)(A)
> and
>
> (B).
>
> \(2\) In addition to the account to be kept under paragraph (b)(1) of
> this section, the
>
> receipt(s) or invoice(s) from the payee or the canceled check(s) to
> the payee shall
>
> be obtained and kept for each disbursement in excess of \$200, by or
> on behalf of,
>
> the committee, except that credit card transactions shall be
> documented in
>
> accordance with paragraph (b)(2)(ii) of this section, disbursements by
> share draft
>
> or check drawn on a credit union account shall be documented in
> accordance with
>
> paragraph (b)(2)(iii) of this section, bank draft account
> disbursements shall be
>
> documented in accordance with paragraph (b)(2)(iv) of this section,
> and debit card
>
> transactions shall be documented in accordance with paragraph
> (b)(2)(v) of this
>
> section.
>
> \(i\) (A) For purposes of paragraph (b)(2) of this section,
> [payee]{.underline} means the person who provides the goods or
> services to the committee or its agent in return for payment, except
> that an employee of a political committee, or other individual, who
> receives an advance from the committee of \$1,000 or less for his or
> her own travel and subsistence shall be considered the payee for that
> advance.
>
> \(B\) For any advance to an employee of a political committee, or
> other individual, of \$1,000 or less for travel and subsistence, the
> committee shall obtain and keep all expense account documentation
> including the expense voucher and the canceled check(s) to the
> recipient of the advance.
>
> \* \* \*
>
> \(iv\) For purposes of paragraph (b)(2) of this section, a copy of the
> draft drawn on a bank draft account may be used as a duplicate record
> of the draft provided that the monthly account statement showing that
> the draft was paid by the bank also is retained.
>
> \(v\) For purposes of paragraph (b)(2) of this section, the point of
> sale receipt for a debit card transaction may be used as a duplicate
> record of the transaction provided that the monthly account statement
> reflecting the debit charge also is retained.

\* \* \* \* \*

\(d\) \* \* \* The treasurer, or his or her authorized agent, also shall
meet the requirements of 11 CFR 104.14.

\* \* \* \* \*

**PART 104 ‑ REPORTS BY POLITICAL COMMITTEES (2 U.S.C. 434)**

3\. The authority citation for Part 104 would continue to read as
follows:

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

4\. Section 104.3 would be amended by revising the section to read as
follows:

**§ 104.3 Contents of reports for political committees other than
authorized committees**

**(2 U.S.C. 434(b), 439a).**

\(a\) [Scope]{.underline}. The requirements of this section apply to all
political committees other than authorized committees. Authorized
committees shall meet the requirements for reporting receipts and
disbursements set forth at 11 CFR 104.17.

\(b\) [Reporting of Receipts.]{.underline}

> \(1\) [General]{.underline}. Each report filed under this section
> shall disclose the total amount of receipts for the reporting period
> and for the calendar year and shall disclose the information set forth
> at paragraphs (b)(2) through (4) of this section. The first report
> filed by a committee shall also include all amounts received prior to
> becoming a political committee under 11 CFR 100.5, even if these
> amounts were not received during the current reporting period.
>
> \(2\) [Cash on hand]{.underline}. The amount of cash on hand at the
> beginning of the
>
> reporting period, including: currency; balance on deposit in banks,
> savings associations and other depository institutions; certificates
> of deposit,
>
> treasury bills and any other committee investments valued at cost.
>
> Non‑liquid assets on hand, if received as in‑kind contributions,
> should be
>
> reported in accordance with 11 CFR 104.13.
>
> \(3\) [Categories of receipts]{.underline}. Each report shall disclose
> the total amount of
>
> receipts received during the reporting period and during the calendar
> year
>
> for each of the following categories:
>
> \(i\) Contributions from persons other than political committees,
>
> including individuals and committees that do not qualify as
>
> political committees under the Act;
>
> \(A\) Itemized contributions;
>
> \(B\) Unitemized contributions;
>
> \(ii\) Contributions from political committees;
>
> \(A\) Party committees;
>
> \(B\) Authorized committees;
>
> \(C\) Unauthorized committees other than party committees;
>
> \(iii\) Total contributions (add contributions from persons to
> contributions from political committees);
>
> \(iv\) Transfers from affiliated committees and, where the reporting
>
> committee is a political party committee, transfers from other party
> committees of the same party, regardless of whether the
>
> committees are affiliated;
>
> \(v\) Loans received;
>
> \(vi\) Loan repayments received;
>
> \(vii\) Offsets to operating expenditures, such as vendor refunds and
> rebates;
>
> \(viii\) Refunds of contributions made by the reporting committee to
> political
>
> committees;
>
> \(ix\) Other receipts (such as dividends and interest);
>
> \(x\) The total sum of all receipts.
>
> \(4\) [Itemization of receipts]{.underline}. The identification (as
> defined at 11 CFR 100.12) of each contributor and the aggregate
> year-to-date total for the contributor in each of the following
> categories shall be reported.
>
> \(i\) Each person other than a political committee, including
> individuals and committees which do not qualify as political
> committees under the Act, who makes a contribution to the reporting
> committee during the reporting period, whose contribution(s) aggregate
> in excess of \$200 per calendar year, together with the date of
> receipt and amount of the contribution(s), except that the reporting
> committee may elect to report this information for contributors of
> lesser amount(s) on a separate schedule;
>
> \(ii\) All political committees which make contributions to the
> reporting committee during the reporting period, together with the
> date of receipt and amount of the contribution(s);
>
> \(iii\) Each affiliated political committee which transfers funds to
> the
>
> reporting committee during the reporting period and, where the
>
> reporting committee is a political party committee, each transfer of
>
> funds to the reporting committee from another party committee of
>
> the same party regardless of whether the committees are affiliated,
>
> together with the date and amount of the transfer;
>
> \(iv\) Each person who makes a loan to the reporting committee during
>
> the reporting period, together with the identification of any
>
> endorser or guarantor of the loan, the date the loan was made, and
>
> the amount or value of the loan;
>
> \(v\) Each person who makes a loan repayment to the reporting
>
> committee during the reporting period, together with the date and
>
> amount of the repayment;
>
> \(vi\) Each person who provides an offset to operating expenditures,
>
> such as vendor rebates and refunds, to the reporting committee in
>
> an aggregate amount in excess of \$200 within the calendar year,
>
> together with the date and amount of the offset;
>
> \(vii\) Each political committee, including authorized committees,
> which
>
> refunds during the reporting period a contribution made by the
>
> reporting committee, together with the date of receipt and amount
>
> of the refund; and
>
> \(viii\) Each person who provides any dividend, interest, or other
> receipt
>
> to the reporting committee, in an aggregate amount in excess of
>
> \$200 within the calendar year, together with the date and amount
>
> of the receipt.

\(c\) [Reporting of Disbursements]{.underline}. Each report filed under
this section shall disclose the total amount of all disbursements for
the reporting period and for the calendar year and shall disclose the
information set forth at paragraphs (c)(1) and (2) of this section. If a
committee has paid any disbursements by credit card, the committee shall
report the disbursements in accordance with paragraph (l) of this
section. The first report filed by a committee shall also include all
amounts disbursed prior to becoming a political committee under 11 CFR
100.5, even if these amounts were not disbursed during the current
reporting period.

\(1\) [Categories of disbursements]{.underline}. Each report shall
disclose the total amount

of disbursements made during the reporting period and during the

calendar year in each of the following categories:

> \(i\) Shared Federal and nonfederal operating expenditures;
>
> \(A\) Federal share;
>
> \(B\) Nonfederal share;
>
> \(ii\) Other Federal operating expenditures;
>
> \(A\) Itemized expenditures;
>
> \(B\) Unitemized expenditures;
>
> \(C\) Total Federal operating expenditures;
>
> \(iii\) Transfers to affiliated political committees and, where the
>
> reporting committee is a political party committee, transfers to
>
> other party committees of the same party, regardless of whether
>
> the committees are affiliated;
>
> \(iv\) Contributions to political committees including authorized
>
> committees and unauthorized committees, such as party
>
> committees;
>
> \(v\) Independent expenditures made (2 U.S.C. 434(b)(4)(H)(iii));
>
> \(vi\) Coordinated party expenditures made (2 U.S.C. 441a(d));
>
> \(vii\) Loan repayments made;
>
> \(viii\) Loans made by the reporting committee;
>
> \(ix\) Refunds of contributions to persons, including individuals,
> other
>
> than political committees;
>
> \(A\) Itemized refunds;
>
> \(B\) Unitemized refunds;
>
> \(x\) Refunds of contributions to political committees;
>
> \(A\) Party committees;
>
> \(B\) Authorized committees;
>
> \(C\) Unauthorized committees other than party committees;
>
> \(xi\) Total contribution refunds (add contribution refunds to persons
>
> and contribution refunds to political committees);
>
> \(xii\) Other disbursements, including any disbursements to nonfederal
>
> candidate committees;
>
> \(xiii\) Total disbursements;
>
> \(xiv\) Total Federal disbursements.

\(2\) [Itemization of disbursements]{.underline}. Each report shall
disclose the full name

and address of each person in each of the following categories, as well
as

the information required by each category. For each disbursement

governed by paragraphs (c)(2)(i) or (x) of this section, the report
shall

disclose this information for each vendor or other person to whom a

disbursement is made directly by the committee, and shall contain a

memo entry for each vendor or other person to whom a disbursement is

made by an agent of the committee.

> \(i\) Each person to whom an expenditure in an aggregate amount or
>
> value in excess of \$200 within the calendar year is made by the
>
> reporting committee to meet the committee\'s operating expenses,
>
> together with the date, amount, and purpose of the operating
>
> expenditure;
>
> \(A\) As used in paragraph (c)(2) of this section, purpose means
>
> a brief statement or description of why the disbursement
>
> was made.
>
> \(B\) Examples of statements or descriptions which adequately
>
> describe the purpose of a disbursement include the
>
> following: dinner expenses, media, salary, polling, travel,
>
> party fees, phone banks, travel expenses, travel expense
>
> reimbursement, and catering costs. However, statements or
>
> descriptions such as [advance, election day expenses,
> other]{.underline}
>
> [expenses, expenses, expense reimbursement,
> miscellaneous]{.underline},
>
> [outside services, get‑out‑the‑vote and voter
> registration]{.underline} would
>
> not meet the requirements of paragraph (c)(2) of this section for
>
> reporting the purpose of an expenditure.

\(ii\) Each affiliated political committee to which a transfer is made
by

the reporting committee during the reporting period and, where the

reporting committee is a political party committee, each transfer of

funds by the reporting committee to another party committee of

the same party regardless of whether the committees are affiliated,

together with the date and amount of the transfer;

> \(iii\) Each political committee, which has received a contribution
> from
>
> the reporting committee during the reporting period, together with
>
> the date and amount of the contribution and, for contributions to
>
> authorized committees, the candidate\'s name, the election (e.g.
>
> primary or general) and office sought (including State or
>
> Congressional district, where applicable);

\(iv\) (A) Each person who receives any disbursement during the

reporting period in an aggregate amount or value in excess

of \$200 within the calendar year in connection with an

independent expenditure by the reporting committee,

together with the date, amount, and purpose of the

independent expenditure(s);

> \(B\) For each independent expenditure reported, the committee
>
> must also provide a statement which indicates whether the
>
> independent expenditure is in support of, or in opposition
>
> to, a particular candidate, as well as the name of the
>
> candidate, the election and office sought by the candidate
>
> (including State and Congressional district, where
>
> applicable), and a certification, under penalty of perjury,
>
> as to whether the independent expenditure is made in
>
> cooperation, consultation or concert with, or at the request
>
> or suggestion of, any candidate or any authorized
>
> committee or its agent;

\(C\) The information required by paragraph (c)(2)(iv)(A) and

\(B\) of this section shall be reported on Schedule E as part

of a report covering the reporting period in which the

aggregate disbursements for any independent expenditure

to any person exceed \$200 per calendar year. Schedule E

shall also include the total of all such expenditures of \$200

or less made during the reporting period.

\(v\) Each person who receives any expenditure from the reporting

committee during the reporting period in connection with an

expenditure under 11 CFR 110.7 (2 U.S.C. 441a(d)), together with

the date, amount, and purpose of the expenditure as well as the

name of, and the election and office sought by (including State and

Congressional district, where applicable), the candidate on whose

behalf the expenditure is made;

\(vi\) Each person who receives a loan repayment from the reporting

committee during the reporting period, together with the date and

amount of repayment;

\(A\) For each loan repayment, the committee shall either report

the principal and the interest as separate disbursements,

or, it shall report the sum of these as a single

disbursement. If the committee applies the former

method, the principal shall be reported on Schedules B and C as a

loan repayment and the interest shall be reported on

Schedule B as an operating expenditure. If the committee

applies the latter method, the sum of the principal and the

interest shall be reported on Schedule B as a loan

repayment and only the principal shall be reported on Schedule C;

\(B\) The committee shall use one reporting method for the

duration of a loan;

\(vii\) Each person who has received a loan from the reporting committee

during the reporting period, together with the date and amount or

value of the loan, and for any authorized committee that has

received a loan, the candidate\'s name, the election and office

sought (including State or Congressional district, where

applicable);

\(viii\) Each person, other than a political committee, who receives a

contribution refund from the reporting committee during the

reporting period where the receipt of the contribution was reported

under paragraph (b)(4)(i) of this section, together with the date and

amount of the refund;

\(ix\) Each political committee which receives a contribution refund

from the reporting committee during the reporting period where

the receipt of the contribution was reported under paragraph

(b)(4)(ii) of this section, together with the date and amount of the

refund; and

> \(x\) Each person, including nonfederal candidate committees, who has
> received any disbursement during the reporting period not otherwise
> disclosed under paragraph (c)(2) of this section, to whom the
> aggregate amount or value of disbursements made by the reporting
> committee exceeds \$200 within the calendar year, together with the
> date, amount, and purpose of the disbursement(s).

\(d\) [Summary of contributions and operating expenditures]{.underline}.
Each report filed under this section shall disclose for both the
reporting period and the calendar year:

> \(1\) (i) The total contributions to the reporting committee;
>
> \(ii\) The total of contribution refunds;

\(iii\) The net contributions (subtract total of contribution refunds
from

total contributions);

\(2\) (i) The reporting committee\'s total Federal operating
expenditures;

> \(ii\) The total offsets to operating expenditures; and

\(iii\) The net Federal operating expenditures (subtract total offsets
from

total Federal operating expenditures).

\(e\) [Reporting debts and obligations]{.underline}. Each report filed
under this section shall, on Schedule C or D, as appropriate, disclose
the amount and nature of outstanding debts and obligations owed by or to
the reporting committee. Where these debts and obligations are settled
for less than their reported amount or value, each report filed under
this section shall contain a statement as to the circumstances and
conditions under which the debts or obligations were extinguished and
the amount paid. [See]{.underline} 11 CFR 116.7.

\(1\) In addition, when a committee obtains a loan or a line of credit
from a

lending institution as described in 11 CFR 100.7(b)(11) and
100.8(b)(12),

it shall disclose in the next due report the following information on

Schedule C‑1:

> \(i\) The date and amount of the loan or line of credit;

\(ii\) The interest rate and repayment schedule of the loan or line of

credit;

\(iii\) The types and value of traditional collateral or other sources
of

repayment that secure the loan or the line of credit, and whether

that security interest is perfected;

\(iv\) An explanation of the basis upon which the loan was made or the

line of credit established, if not made on the basis of either

traditional collateral or other sources of repayment described in 11

CFR 100.7(b)(11)(i)(A) and (B) and 100.8(b)(12)(i)(A) and (B);

and

> \(v\) A certification from the lending institution that the
> borrower\'s
>
> responses to paragraphs (e)(1)(i)‑(iv) of this section are accurate,
>
> to the best of the lending institution\'s knowledge; that the loan was
>
> made or the line of credit established on terms and conditions
>
> (including interest rate) no more favorable at the time than those
>
> imposed for similar extensions of credit to other borrowers of
>
> comparable credit worthiness; and that the lending institution is
>
> aware of the requirement that a loan or line of credit must be made
>
> on a basis which assures repayment and that the lending institution
>
> has complied with Commission regulations at 11 CFR
>
> 100.7(b)(11) and 100.8(b)(12).

\(2\) The committee shall submit a copy of the loan or line of credit
agreement

which describes the terms and conditions of the loan or line of credit
when

it files Schedule C‑1.

\(3\) The committee shall file with the next due report a Schedule C‑1
each

time a loan or a line of credit is restructured to change the terms of
the

repayment.

\(4\) The committee shall report a receipt of funds in the next due
report, on

Schedule A, each time it makes a draw on a line of credit.

\(f\) [Use of pseudonyms]{.underline}.

\(1\) To determine whether the names and addresses of its contributors
are

being used in violation of 11 CFR 104.15 to solicit contributions or for

commercial purposes, a committee may submit up to ten (10) pseudonyms

on each report filed under this section.

\(2\) For purposes of this section, a pseudonym is a wholly fictitious
name

which does not represent the name of an actual contributor to a

committee.

\(3\) If a committee uses pseudonyms it shall subtract the total dollar
amount of

the fictitious contributions from the total amount listed on line
11(a)(ii) of

the Detailed Summary page, \"Contributions from Individuals/Persons,

Unitemized\". Thus the committee will, for this purpose only, be

overstating the amount of itemized contributions received and

understating the amount of unitemized contributions received.

\(4\) No committee which files reports under this section shall
attribute more

than \$5,000 in contributions to the same pseudonym in any calendar
year.

\(5\) A committee using pseudonyms shall send a list of the pseudonyms
under

separate cover directly to the Reports Analysis Division, Federal
Election

Commission, 999 E Street, N.W., Washington, DC 20463, on or before the
date on which any report containing such pseudonyms is filed with the

Secretary of the Senate or the Commission. The Commission shall

maintain the list, but shall exclude it from the public record. A
committee

shall not send any list of pseudonyms to the Secretary of the Senate or
to

any Secretary of State or equivalent State officer.

\(6\) A committee shall not use pseudonyms for the purpose of
circumventing the reporting requirements or the limitations and
prohibitions of the Act.

\(g\) [Building funds]{.underline}. Gifts, subscriptions, loans,
advances, deposits of money or anything of value made to defray costs of
construction or purchase of office facilities received by a political
committee in accordance with 11 CFR 100.7(b)(12) shall be reported as a
memo entry on Schedule A. National party committees shall report
building fund receipts and disbursements in accordance with 11 CFR
104.8(f) and 104.9(d).

\(h\) [Legal and accounting services.]{.underline} A committee which
receives legal or accounting services pursuant to 11 CFR 100.7(b)(13)
and (14) during the reporting period shall report the services in
accordance with paragraphs (i)(1) or (2) of this section.

> \(1\) If the regular employer of person(s) who provide the services
> has paid in excess of \$200 for the services during the calendar year,
> the committee shall report as a memo entry, on Schedule A, the amounts
> paid for the services by the regular employer together with the
> date(s) the services were performed.

\(2\) For each regular employer who has paid no more than \$200 for the
services during the calendar year, the committee shall report as a memo
entry, on Schedule A, the sum of the amount(s) paid by each regular
employer of person(s) who provide the services. The committee shall
preserve all records of these services, for the period required by 11
CFR 102.9(c), to reflect the name of each regular employer, the amounts
paid by each, and the date(s) the services were performed.

\(i\) [Cumulative reports]{.underline}. The reports required to be filed
under 11 CFR 104.5 shall be cumulative for the calendar year to which
they relate, but if there has been no change in a category reported in a
previous report during that year, only the amount thereof need be
carried forward.

\(j\) [Earmarked contributions]{.underline}. Earmarked contributions
shall be reported in accordance with 11 CFR 110.6. [See
also]{.underline} 11 CFR 102.8(c).

\(k\) [Amending reports]{.underline}. A committee shall change or
correct a report previously filed under this section, no later than the
next due report, after the committee discovers an error, omission or
change in the information submitted in the report. A committee may
submit only those pages that have been changed or corrected, or it may
refile the entire, amended report. The committee shall identify the
changes, either in a cover letter or on the amended pages or report, by
specifying the lines on the Schedule(s) or Form(s) that have been
amended.

\(l\) [Credit card payments]{.underline}.

\(1\) Where a committee has paid, by credit card, any disbursement(s)
subject to paragraphs (c)(1) and (2) of this section, the committee
shall report

these disbursements in accordance with this paragraph. For the purposes

of this section, a credit card represents a credit account with a
depository

institution ([see]{.underline} 11 CFR 103.2) or other corporation that
is not a depository

institution. A credit account may permit the committee to make a partial
payment of each monthly balance or may require the committee to pay each
monthly balance in full.

\(2\) The reporting committee shall itemize on Schedule B each payment
to a credit card issuer by specifying the depository institution or
other corporation to

which payment was made, the date and amount of payment. Where the
committee has made a partial payment of a monthly balance, the committee
shall report a memo entry for the outstanding credit balance on Schedule
B and report the outstanding balance as a debt to the extent required by
11 CFR 104.11(b).

\(3\) Any disbursement reflected on a monthly account statement for a
credit

card, that otherwise is required to be itemized by paragraph (c)(2) of
this

section, shall be reported as a memo entry on Schedule B in addition to

the information required under paragraph (l)(2) of this section.

5\. New section 104.17 would be added to read as follows:

**§ 104.17 Contents of reports for authorized committees (2 U.S.C.
434(b), 439a).**

\(a\) [Scope]{.underline}. The requirements of this section apply to all
authorized committees of candidates for Federal office. All other
political committees shall meet the requirements for reporting receipts
and disbursements set forth at 11 CFR 104.3.

\(b\) [Reporting of Receipts]{.underline}.

\(1\) [General.]{.underline} Each report filed under this section shall
disclose the total amount of

receipts for the reporting period and for the calendar year and shall

disclose the information set forth at paragraphs (b)(2) through (4) of
this

section. The first report filed by a committee shall also include all

amounts received prior to becoming a political committee under 11 CFR

100.5, even if these amounts were not received during the current

reporting period.

> \(2\) [Cash on hand]{.underline}. The amount of cash on hand at the
> beginning of the
>
> reporting period, including: currency; balance on deposit in banks,
> savings
>
> associations and other depository institutions; certificates of
> deposit,
>
> treasury bills and any other committee investments valued at cost.
>
> Non‑liquid assets on hand, if received as in‑kind contributions,
> should be
>
> reported in accordance with 11 CFR 104.13.
>
> \(3\) [Categories of receipts]{.underline}. Each report shall disclose
> the total amount of
>
> receipts received during the reporting period and during the calendar
> year
>
> for each of the following categories:
>
> \(i\) Contributions from persons other than political committees,
>
> including individuals and committees that do not qualify as
>
> political committees under the Act, but excluding the candidate
>
> who authorized the reporting committee;
>
> \(A\) Itemized contributions;
>
> \(B\) Unitemized contributions;
>
> \(ii\) Contributions from political committees;
>
> \(A\) Party committees, except that expenditures made under 11
>
> CFR 110.7 (2 U.S.C. 441a(d)) by a party committee shall
>
> not be reported as contributions by the authorized
>
> committee on whose behalf they are made;
>
> \(B\) Authorized committees of other candidates;
>
> \(C\) Unauthorized committees other than party committees;
>
> \(iii\) Contributions from the candidate, excluding loans which are
>
> reported under paragraph (b)(3)(vi)(A) of this section;
>
> \(iv\) Total contributions (add contributions from persons, political
>
> committees and the candidate);
>
> \(v\) Transfers from other committee(s) authorized by the candidate,
>
> regardless of amount;
>
> \(vi\) Loans received;
>
> \(A\) Loans made, guaranteed, or endorsed by the candidate to
>
> his or her authorized committee;
>
> \(B\) All other loans to the committee;
>
> \(C\) Total loans;
>
> \(vii\) For authorized committee(s) of Presidential candidates,
> Federal
>
> funds received under chapters 95 and 96 of the Internal Revenue
>
> Code of 1954 (Title 26, United States Code);
>
> \(viii\) Offsets to operating expenditures, such as vendor refunds and
>
> rebates;
>
> \(ix\) Refunds of contributions made by the reporting committee to
>
> committees authorized by other candidates for Federal office and
>
> to other political committees;
>
> \(x\) Other receipts (such as dividends, interest, loan repayments and
>
> reimbursements received pursuant to 11 CFR 113.1(g));
>
> \(xi\) The total sum of all receipts.
>
> \(4\) [Itemization of receipts]{.underline}. The identification (as
> defined at 11 CFR 100.12)
>
> of each contributor and the aggregate year‑to‑date total for the
> contributor
>
> in each of the following categories shall be reported.
>
> \(i\) Each person other than a political committee, including
> individuals
>
> and committees that do not qualify as political committees under
>
> the Act but excluding the candidate who authorized the reporting
>
> committee, who makes a contribution to the committee during the
>
> reporting period, whose contribution(s) aggregate in excess of \$200
> per calendar year, together with the date of receipt, the
>
> amount of the contribution(s) and the election(s) (e.g. primary or
>
> general) for which each contribution is made, except that the
>
> committee may elect to report this information for contributors of
>
> lesser amount(s) on a separate schedule;
>
> \(ii\) All political committees which make contributions to the
> reporting
>
> committee during the reporting period, together with the date of
>
> receipt, amount of the contribution and the election(s) for which
>
> each contribution is made;
>
> \(iii\) Each contribution by the candidate to the reporting committee
>
> during the reporting period, together with the date of receipt and
>
> amount of the contribution;
>
> \(iv\) Each committee authorized by the candidate which transfers
> funds
>
> to the reporting committee during the reporting period, together
>
> with the date and amount of the transfer;
>
> \(v\) Each person who makes a loan during the reporting period to the
>
> reporting committee or to the candidate acting as an agent of the
>
> committee, together with the identification of any endorser or
>
> guarantor of the loan, the date the loan was made, the amount or
>
> value of the loan, and, where applicable, the election(s) for which
>
> the loan was made;
>
> \(vi\) Each person who makes a loan repayment to the reporting
>
> committee during the reporting period, together with the date and
>
> amount of the repayment;
>
> \(vii\) Each person who provides an offset to operating expenditures,
> such
>
> as vendor rebates and refunds, to the reporting committee, in an
>
> aggregate amount in excess of \$200 within the calendar year,
>
> together with the date and amount of the offset;
>
> \(viii\) Each authorized committee for other candidates for Federal
> office
>
> and any other political committee which, during the reporting
>
> period, refunds a contribution made by the reporting committee,
>
> together with the date of receipt and amount of the refund; and
>
> \(ix\) Each person who provides any dividend, interest, reimbursement
>
> received pursuant to 11 CFR 113.1(g) or other receipt to the
>
> reporting committee, in an aggregate amount in excess of \$200
>
> within the calendar year, together with the date and amount of the
>
> receipt.

\(c\) [Reporting of Disbursements]{.underline}. Each report filed under
this section shall disclose the total amount of disbursements for the
reporting period and for the calendar year and shall disclose the
information set forth at paragraph (c)(1) and (2) of this section. If a
committee has paid any disbursements by credit card, the committee shall
report these in accordance with paragraph (l) of this section. The first
report filed by a committee shall also include all amounts disbursed
prior to becoming a political committee under 11 CFR 100.5, even if
these amounts were not disbursed during the current reporting period.

\(1\) [Categories of disbursements]{.underline}. Each report shall
disclose the total amount

of disbursements made during the reporting period and during the

calendar year in each of the following categories:

> \(i\) Operating expenditures;
>
> \(A\) Itemized expenditures;
>
> \(B\) Unitemized expenditures;
>
> \(C\) Total operating expenditures;
>
> \(ii\) Transfers to other committees authorized by the candidate;
>
> \(iii\) Loan repayments made;
>
> \(A\) Repayment of loans made by or guaranteed by the
>
> candidate;
>
> \(B\) Repayment of all other loans;
>
> \(C\) Total loan repayments;
>
> \(iv\) For an authorized committee of a candidate for the office of
>
> President, disbursements not subject to the limitations of 11 CFR
>
> 110.8 (2 U.S.C. 441a(b));
>
> \(v\) Refunds of contributions to persons, including individuals but
>
> excluding the candidate and political committees;
>
> \(A\) Itemized refunds;
>
> \(B\) Unitemized refunds;
>
> \(vi\) Refunds of contributions to political committees;
>
> \(A\) Party committees;
>
> \(B\) Authorized committees for other candidates for Federal
>
> office;
>
> \(C\) Unauthorized committees other than party committees;
>
> \(vii\) Total contribution refunds (add contribution refunds to
> persons
>
> and contribution refunds to political committees);
>
> \(viii\) Contributions to committees authorized by other candidates
> for
>
> Federal office and to other political committees;
>
> \(ix\) Other disbursements, including any disbursements to nonfederal
>
> candidate committees;
>
> \(x\) Total disbursements.

\(2\) [Itemization of disbursements]{.underline}. Each report shall
disclose the full name and address of each person in each of the
following categories, as well as the

information required by each category, whether the disbursement was

made by the reporting committee or the candidate acting as its agent.
For

each disbursement governed by paragraphs (c)(2)(i) or (viii) of this

section, the report shall disclose this information for each vendor or
other

person to whom a disbursement is made directly by the committee, and

shall contain a memo entry for each vendor or other person to whom a

disbursement is made by an agent of the committee.

> \(i\) Each person to whom an expenditure in an aggregate amount or
>
> value in excess of \$200 within the calendar year is made by the
>
> reporting committee to meet the committee's operating expenses,
>
> together with the date, amount, and purpose of the operating
>
> expenditure;
>
> \(A\) As used in paragraph (c)(2) of this section, purpose means
>
> a brief statement or description of why the disbursement
>
> was made.
>
> \(B\) Examples of statements or descriptions which adequately
>
> describe the purpose of a disbursement include the
>
> following: dinner expenses, media, salary, polling, travel,
>
> party fees, phone banks, travel expenses, travel expense
>
> reimbursement, and catering costs. However, statements or
>
> descriptions such as [advance, election day expenses,
> other]{.underline}
>
> [expenses, expenses, expense reimbursement]{.underline},
>
> [miscellaneous, outside services, get‑out‑the‑vote and
> voter]{.underline}
>
> [registration]{.underline} would not meet the requirements of
> paragraph
>
> (c)(2) of this section for reporting the purpose of an
>
> expenditure.
>
> \(C\) In addition to reporting the purpose described in
>
> paragraph (c)(2)(i)(A) and (B) of this section,
>
> whenever the reporting committee itemizes a
>
> disbursement that is partially or entirely a personal
>
> use for which reimbursement is required under 11
>
> CFR 113.1(g)(1)(ii)(C) or (D), it shall provide a
>
> brief explanation of the activity for which
>
> reimbursement is required.
>
> \(ii\) Each committee authorized by the same candidate to which a
>
> transfer is made by the reporting committee during the reporting
>
> period, together with the date and amount of the transfer;
>
> \(iii\) Each authorized committee for other candidates for Federal
> office
>
> and any other political committee which has received a
>
> contribution from the reporting committee during the reporting
>
> period, together with the date and amount of the contribution and,
>
> for any authorized committee that has received a contribution, the
>
> candidate\'s name, the election (e.g. primary or general) and office
>
> sought (including State or Congressional district, where
>
> applicable);
>
> \(iv\) Each person who receives a loan repayment from the reporting
>
> committee during the reporting period, together with the date and
>
> amount of the loan repayment;
>
> \(A\) All loan repayments from the reporting committee;
>
> \(B\) All loan repayments from the candidate, if the proceeds of
>
> the loan were used in connection with the candidate\'s
>
> campaign;
>
> \(C\) For each loan repayment, the committee shall either report
>
> the principal and the interest as separate disbursements, or,

it shall report the sum of these as a single disbursement. If the

committee applies the former method, the principal shall be

reported on Schedules B and C as a loan repayment and the

> interest shall be reported on Schedule B as an operating
>
> expenditure. If the committee applies the latter method, the sum
>
> of the principal and the interest shall be reported on Schedule B
>
> as a loan repayment and only the principal shall be reported on
>
> Schedule C;
>
> \(D\) The committee shall use one reporting method for the
>
> duration of a loan;
>
> \(v\) Each person who has received a loan from the reporting committee
>
> during the reporting period, together with the date and amount or
>
> value of the loan, and for any authorized committee that has
>
> received a loan, the candidate's name, the election and office
>
> sought (including State or Congressional district, where
>
> applicable);
>
> \(vi\) Each person who receives a contribution refund from the
> reporting
>
> committee during the reporting period where the receipt of the
>
> contribution was reported under paragraph (b)(4)(i) of this section,
>
> together with the date and amount of the refund;
>
> \(vii\) Each political committee which receives a contribution refund
>
> from the reporting committee during the reporting period where
>
> the receipt of the contribution was reported under paragraph
>
> (b)(4)(ii) of this section, together with the date and amount of the
>
> refund; and
>
> \(viii\) Each person, including nonfederal candidate committees, who
> has
>
> received any disbursement during the reporting period not
>
> otherwise disclosed under paragraph (c)(2) of this section, to
>
> whom the aggregate amount or value of disbursements made by
>
> the reporting committee exceeds \$200 within the calendar year,
>
> together with the date, amount, and purpose of the
>
> disbursement(s).

\(d\) [Summary of contributions and operating expenditures]{.underline}.
Each report filed under this section shall disclose for both the
reporting period and the calendar year:

> \(1\) (i) The total contributions to the reporting committee;
>
> \(ii\) The total of contribution refunds;

\(iii\) The net contributions (subtract total of contribution refunds
from

total contributions);

\(2\) (i) The reporting committee\'s total Federal operating
expenditures;

> \(ii\) The total offsets to operating expenditures; and

\(iii\) The net Federal operating expenditures (subtract total offsets
from

total Federal operating expenditures).

\(e\) [Reporting debts and obligations]{.underline}.

\(1\) Each report filed under this section shall, on Schedule C or D, as
appropriate, disclose the amount and nature of outstanding debts and
obligations owed by or to the reporting committee. Where these debts and
obligations are settled for less than their reported amount or value,
each report filed under this section shall contain a statement as to the
circumstances and conditions under which the debts or obligations were
extinguished and the amount paid. [See]{.underline} 11 CFR 116.7.

\(2\) A loan obtained by an individual prior to becoming a candidate for
use in connection with that individual's campaign shall be reported as
an outstanding loan owed to the lender by the candidate's principal
campaign committee, if the loan is outstanding at the time the
individual becomes a candidate.

\(3\) When a candidate or a committee obtains a loan or a line of credit
from a lending institution as described in 11 CFR 100.7(b)(11) and
100.8(b)(12), it shall disclose in the next due report the following
information on Schedule C‑1 or C-P-1:

> \(i\) The date and amount of the loan or line of credit;

\(ii\) The interest rate and repayment schedule of the loan or line of

credit;

\(iii\) The types and value of traditional collateral or other sources
of

repayment that secure the loan or the line of credit, and whether

that security interest is perfected;

\(iv\) An explanation of the basis upon which the loan was made or the

line of credit established, if not made on the basis of either

traditional collateral or other sources of repayment described in 11

CFR 100.7(b)(11)(i)(A) and (B) and 100.8(b)(12)(i)(A) and (B);

and

> \(v\) A certification from the lending institution that the
> borrower\'s
>
> responses to paragraphs (e)(1)(i)‑(iv) of this section are accurate,
>
> to the best of the lending institution\'s knowledge; that the loan was
>
> made or the line of credit established on terms and conditions
> (including interest rate) no more favorable at the time than those
> imposed for similar extensions of credit to other borrowers of
> comparable credit worthiness; and that the lending institution is
> aware of the requirement that a loan or line of credit must be made on
> a basis which assures repayment and that the lending institution has
> complied with Commission regulations at 11 CFR 100.7(b)(11) and
> 100.8(b)(12).
>
> \(4\) The committee shall submit a copy of the loan or line of credit
> agreement
>
> which describes the terms and conditions of the loan or line of credit
>
> when it files Schedule C‑1 or C-P-1.
>
> \(5\) The committee shall file with the next due report a Schedule C‑1
> or C-P-1 each time a loan or a line of credit is restructured to
> change the terms of the repayment.
>
> \(6\) The committee shall report a receipt of funds in the next due
> report, on
>
> Schedule A, each time it makes a draw on a line of credit.
>
> \(f\) [Use of pseudonyms]{.underline}.
>
> \(1\) To determine whether the names and addresses of its contributors
> are
>
> being used in violation of 11 CFR 104.15 to solicit contributions or
> for
>
> commercial purposes, a committee may submit up to ten (10) pseudonyms
> on each report filed under this section.
>
> \(2\) For purposes of this section, a pseudonym is a wholly fictitious
> name
>
> which does not represent the name of an actual contributor to a
>
> committee.

\(3\) If a committee uses pseudonyms it shall subtract the total dollar
amount of the fictitious contributions from the total amount listed on
line 11(a)(ii) of the Detailed Summary page, \"Contributions from
Individuals/Persons, Unitemized\". Thus the committee will, for this
purpose only, be overstating the amount received and understating the
amount of unitemized contributions received. (4) No committee which
files reports under this section shall attribute more

than \$5,000 in contributions to the same pseudonym in any calendar
year.

\(5\) A committee using pseudonyms shall send a list of the pseudonyms
under

separate cover directly to the Reports Analysis Division, Federal
Election

Commission, 999 E Street, N.W., Washington, DC 20463, on or before

the date on which any report containing such pseudonyms is filed with
the

Secretary of the Senate or the Commission. The Commission shall

maintain the list, but shall exclude it from the public record. A
committee shall not send any list of pseudonyms to the Secretary of the
Senate or to any Secretary of State or equivalent State officer.

\(6\) A committee shall not use pseudonyms for the purpose of
circumventing

the reporting requirements or the limitations and prohibitions of the
Act.

\(g\) [Consolidated reports]{.underline}. Each principal campaign
committee shall consolidate in

each report those reports required to be filed with it. These
consolidated reports shall include reports submitted to it by any
authorized committees and the principal campaign committee\'s own
report. The consolidation shall be made on FEC Form 3‑Z and shall be
submitted with the reports of the principal campaign committee and with
the reports, or applicable portions thereof, of the committees shown on
the consolidation.

\(h\) [Legal and accounting services.]{.underline} A committee which
receives legal or accounting services pursuant to 11 CFR 100.7(b)(14)
during the reporting period shall report the services in accordance with
paragraphs (i)(1) or (2) of this section.

> \(1\) If the regular employer of person(s) who provide the services
> has paid in excess of \$200 for the services during the calendar year,
> the committee shall report as a memo entry, on Schedule A, the amounts
> paid for the services by the regular employer together with the
> date(s) the services were performed.

\(2\) For each regular employer who has paid no more than \$200 for the
services during the calendar year, the committee shall report as a memo
entry, on Schedule A, the sum of the amount(s) paid by each regular
employer of person(s) who provide the services. The committee shall
preserve all records of these services, for the period required by 11
CFR 102.9(c), to reflect the name of each regular employer, the amounts
paid by each, and the date(s) the services were performed.

\(i\) [Cumulative reports]{.underline}. The reports required to be filed
under 11 CFR 104.5 shall be cumulative for the calendar year to which
they relate, but if there has been no change in a category reported in a
previous report during that year, only the amount thereof need be
carried forward.

\(j\) [Earmarked contributions]{.underline}. Earmarked contributions
shall be reported in accordance with 11 CFR 110.6. [See]{.underline}
also 11 CFR 102.8(c).

\(k\) [Amending reports]{.underline}. A committee shall change or
correct a report previously filed under this section, no later than the
next due report, after it discovers an error, omission or change in the
information submitted in the report. A committee may submit only those
pages that have been changed or corrected, or it may refile the entire,
amended report. The committee shall identify the changes, either in a
cover letter or on the amended pages or report, by specifying the lines
on the Schedule(s) or Form(s) that have been amended.

\(l\) [Credit card payments]{.underline}.

\(1\) Where a committee has paid, by credit card, any disbursement(s)
subject to paragraphs (c)(1) and (2) of this section, the committee
shall report these disbursements in accordance with this paragraph. For
the purposes of this section, a credit card represents a credit account
with a depository institution (see 11 CFR 103.2) or other corporation
that is not a depository institution. A credit account may permit the
committee to make a partial payment of each monthly balance or may
require the committee to pay each monthly balance in full.

\(2\) The reporting committee shall itemize on Schedule B each payment
to a credit card issuer by specifying the depository institution or
other corporation to which payment was made, the date and amount of
payment. Where the committee has made a partial payment of a monthly
balance, the committee shall report a memo entry for the outstanding
credit balance on Schedule B and report the outstanding balance as a
debt to the extent required by 11 CFR 104.11(b).

\(3\) Any disbursement reflected on a monthly account statement for a
credit card, that otherwise is required to be itemized by paragraph
(c)(2) of this section, shall be reported section, shall be reported as
a memo entry on Schedule B in addition to

the information required under paragraph (l)(2) of this section.

**PART 108 - FILING COPIES OF REPORTS AND STATEMENTS WITH STATE OFFICERS
(2 U.S.C. 439)**

6\. The authority citation for Part 108 would continue to read as
follows:

Authority: 2 U.S.C. 434(a)(2), 438(a)(8), 439, 453.

7\. Section 108.1 would be amended by redesignating the text as
paragraph (a), revising the first sentence of paragraph (a), and adding
new paragraph (b) to read as follows:

**§ 108.1 Filing Requirements (2 U.S.C. 439(a)(1)).**

\(a\) Except as provided in paragraph (b)(1) of this section, a copy of
each report and statement required to be filed by any person under the
Act shall be filed either with the Secretary of State of the appropriate
State or with the State officer who is charged by State law with
maintaining state election campaign reports. \* \* \*

\(b\) (1) The filing requirements and duties of State officers under 11
CFR part 108 shall not apply to a State if the Commission has determined
that the State maintains a system that can electronically receive and
duplicate reports and statements filed with the Commission.

\(2\) The provisions of paragraph (b)(1) of this section shall not apply

to reports filed by candidates, and the authorized committees of
candidates, for nomination for election, or election, to the office of
Senator. See 11 CFR 108.3(a)(1).

8\. Section 108.2 would be amended by revising the first sentence to
read as follows:

**§ 108.2 Filing copies of reports and statements in connection with the
campaign of any candidate seeking nomination for election to the Office
of President or Vice-President (2 U.S.C. 439(a)(2)).**

Except as provided in 11 CFR 108.1(b)(1), a copy of each report and
statement required to be filed under the Act (including 11 CFR part 104)
by a Presidential or Vice Presidential candidate's principal campaign
committee, or under 11 CFR 104.4 or part 109 by any other person making
independent expenditures, in connection with a candidate seeking
nomination for election to the office of President or Vice-President,
shall be filed with the State officer of each State in which an
expenditure is made in connection with the campaign of a candidate
seeking nomination for election to the office of President or
Vice-President. \* \* \*

9\. Section 108.3 would be amended to read as follows:

**§ 108.3 Filing copies of reports and statements in connection with the
campaign of any congressional candidate (2 U.S.C. 439(a)(2)).**

\(a\) (1) A copy of each report and statement required to be filed under
11 CFR part 104 by candidates, and the authorized committees of
candidates, for nomination for election, or election, to the office of
Senator, shall be filed with the appropriate State officer of that State
in which an expenditure is made in connection with the campaign.

\(2\) Except as provided in 11 CFR 108.1(b)(1), a copy of each report
and statement

required to be filed by any unauthorized committee under 11 CFR part
104, or by any other person under 11 CFR part 109, in connection with a
campaign for nomination for election, or election to, the office of
Senator, shall be filed with the appropriate State officer of that State
in which an expenditure is made in connection with the campaign.

\(b\) Except as provided in 11 CFR 108.1(b)(1), a copy of each report
and statement required to be filed under 11 CFR part 104 by candidates,
and authorized committees of candidates, for nomination for election, or
election, to the office of Representative in, Delegate or Resident
Commissioner to the Congress, or by unauthorized committees, or by any
other person

under 11 CFR part 109, in connection with these campaigns shall be filed
with the appropriate State officer of that State in which an expenditure
is made in connection with the campaign.

\(c\) Unauthorized committees that file reports pursuant to paragraph
(b) of this section are required to file, and the Secretary of State is
required to retain, only that portion of the report applicable to
candidates seeking election in that State.

10\. Section 108.4 would be amended to read as follows:

**§ 108.4 Filing copies of reports by committees other than principal
campaign**

**committees (2 U.S.C. 439(a)(2)).**

Except as provided in 11 CFR 108.1(b)(1), any unauthorized committee,
which makes contributions in connection with a Presidential election and
which is required to file a report(s) and statement(s) under the Act,
shall file a copy of the report(s) and statement(s) with the State
officer of the State in which both the recipient and contributing
committees have their headquarters.

11\. Section 108.6 would be amended by revising the introductory text to
read as follows:

**§ 108.6 Duties of State officers (2 U.S.C. 439(b)).**

Except as provided in 11 CFR 108.1(b)(1), the Secretary of State, or the
equivalent State officer, shall carry out the duties set forth in 11 CFR
108.6(a) through (d):

\* \* \* \* \*

12\. Section 108.8 would be amended to read as follows:

**§ 108.8 Exemption for the District of Columbia**

Any copy of a report required to be filed with the equivalent officer in
the District of Columbia under 11 CFR part 108 shall be deemed to be
filed if the original has been filed with the Secretary or the
Commission, as appropriate.

DATE: \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_
\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

John Warren McGarry

Chairman

Federal Election Commission

BILLING CODE: 6715-01-M