76628 Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Proposed Rules 

proposed rules would not increase costs 

of compliance and may decrease such 

costs.

List of Subjects 

11 CFR Part 100 

Elections. 

11 CFR Part 104 

Campaign funds, Political committees 

and parties, Reporting and 

recordkeeping requirements.

For the reasons set forth in the 

preamble, the Federal Election 

Commission proposes to amend 

Subchapter A of Chapter I of Title 11 of 

the Code of Federal Regulations as 

follows:

PART 100—SCOPE AND DEFINITIONS 

(2 U.S.C. 431) 

1. The authority citation for Part 100 

would continue to read as follows:

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

3. Section 100.19 would be amended 

by revising paragraph (b) to read as 

follows:

§ 100.19 File, filed or filing (2 U.S.C. 

434(a)).

* * * * *

(b) Timely filed. (1) A document, 

other than those addressed in 

paragraphs (c) through (g) of this 

section, is timely filed if: 

(i) Deposited: 

(A) As registered or certified mail in 

an established U.S. Post Office; 

(B) As Priority Mail or Express Mail, 

with a delivery confirmation, in an 

established U.S. Post Office; or 

(C) With an overnight delivery service 

and scheduled to be delivered no more 

than three business days after the date 

of deposit and recorded in the overnight 

delivery service’s on-line tracking 

system; and 

(ii) The postmark on the document 

must be dated no later than 11:59 p.m. 

Eastern Standard/Daylight Time on the 

filing date, except that pre-election 

reports must have a postmark dated no 

later than 11:59 p.m. Eastern Standard/

Daylight Time on the fifteenth day 

before the date of the election. 

(2) Documents, other than those 

addressed in paragraphs (c) through (g) 

of this section, sent by first class mail 

or by any means other than those listed 

in paragraph (b)(1)(i) of this section 

must be received by the close of 

business on the prescribed filing date to 

be timely filed. 

(3) As used in this paragraph (b) and 

in § 104.5, 

(i) Overnight delivery service means a 

private delivery service business of 

established reliability that offers an 

overnight delivery service option. 

(ii) Postmark means a U.S. Postal 

Service postmark or the verifiable date 

of deposit with an overnight delivery 

service.

* * * * *

PART 104—REPORTS BY POLITICAL 

COMMITTEES AND OTHER PERSONS 

(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(i), 434, 438(a)(8) and (b), 439a, 441a, and 

36 U.S.C. 510.

4. Section 104.5 would be amended 

by revising paragraphs (a)(2)(i)(A), 

(c)(1)(ii)(A), and (e) to read as follows:

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

(a) * * * 

(2) Additional reports in the election 

year. (i) Pre-election reports. (A) Preelection reports for the primary and 

general election must be filed no later 

than 12 days before any primary or 

general election in which the candidate 

seeks election. If sent by registered or 

certified mail, Priority Mail or Express 

Mail with a delivery confirmation, or by 

an overnight delivery service and 

scheduled to be delivered no more than 

three business days from deposit and 

recorded in the overnight delivery 

service’s on-line tracking system, the 

postmark on the report must be dated no 

later than the 15th day before any 

election.

* * * * *

(c) * * * 

(1) * * * 

(ii) Pre-election reports. (A) Preelection reports for the primary and 

general election shall be filed by a 

political committee which makes 

contributions or expenditures in 

connection with any such election if 

such disbursements have not been 

previously disclosed. Pre-election 

reports shall be filed no later than 12 

days before any primary or general 

election. If sent by registered or certified 

mail, Priority Mail or Express Mail with 

a delivery confirmation, or by an 

overnight delivery service and 

scheduled to be delivered no more than 

three business days from deposit and 

recorded in an on-line tracking system, 

the postmark on the report shall be 

dated no later than the 15th day before 

any election.

* * * * *

(e) Date of filing. A designation, report 

or statement, other than those addressed 

in paragraphs (f), (g), and (j) of this 

section, sent by registered or certified 

mail, Priority Mail or Express Mail with 

a delivery confirmation, or by an 

overnight delivery service and 

scheduled to be delivered no more than 

three business days from deposit and 

recorded in an on-line tracking system, 

shall be considered filed on the date of 

the postmark except that a twelve day 

pre-election report sent by such mail or 

overnight delivery service must have a 

postmark dated no later than the 15th 

day before any election. Designations, 

reports or statements, other than those 

addressed in paragraphs (f), (g), and (j) 

of this section, sent by first class mail, 

or by any means other than those lists 

in this paragraph (e), must be received 

by the close of business of the 

prescribed filing date to be timely filed. 

Designations, reports or statements 

electronically filed must be received 

and validated at or before 11:59 p.m., 

Eastern Standard/Daylight Time on the 

prescribed filing date to be timely filed.

* * * * *

Dated: December 17, 2004. 

Bradley A. Smith, 

Chairman, Federal Election Commission.

[FR Doc. 04–27972 Filed 12–21–04; 8:45 am] 

BILLING CODE 6715–01–P

FEDERAL ELECTION COMMISSION

11 CFR Part 114 

[Notice 2004–18] 

Payroll Deductions by Member 

Corporations for Contributions to a 

Trade Association’s Separate 

Segregated Fund

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Election 

Commission requests comments on 

proposed amendments to its rules 

regarding contributions to the separate 

segregated fund (‘‘SSF’’) of a trade 

association by employee-stockholders 

and executive and administrative 

personnel (collectively, ‘‘restricted class 

employees’’) of corporations that are 

members of the trade association. 

Currently, the Commission’s regulations 

prohibit any corporate member of a 

trade association from using a payroll 

deduction or check-off system for 

employee contributions to the trade 

association’s SSF. The Commission 

proposes to amend its regulations to 

permit a corporate member of a trade 

association to provide incidental 

services to collect and forward 

contributions from its restricted class 

employees to the SSF of the trade 

association, including a payroll

Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Proposed Rules 76629

1The term ‘‘check-off system’’ as used here means 

a method by which an employee affirmatively 

designates a portion of his or her salary to be 

collected through payroll deductions and 

contributed to a trade association’s SSF, by 

checking that designation on a pre-printed form or 

card.

deduction or check-off system, upon 

written request of the trade association. 

In addition, the proposed regulations 

would require any corporate member of 

a trade association that provides 

incidental services for contributions to 

the trade association’s SSF also to 

provide the same services for 

contributions to the SSF of any labor 

organization that represents employees 

of the corporation, upon written request 

of the labor organization and at a cost 

not to exceed actual expenses incurred. 

The Commission has not made any final 

decisions on the amendments proposed 

in this Notice and requests comments 

on them. Further information appears 

below.

DATES: Comments must be received on 

or before January 21, 2005. If the 

Commission receives sufficient requests 

to testify, it may hold a hearing on these 

proposed rules. Commenters wishing to 

testify at the hearing must so indicate in 

their written or electronic comments.

ADDRESSES: All comments should be 

addressed to Mr. Brad C. Deutsch, 

Assistant General Counsel, and must be 

submitted in either electronic or written 

form. Commenters are strongly 

encouraged to submit comments 

electronically to ensure timely receipt 

and consideration. Electronic mail 

comments should be sent to 

paydeduct@fec.gov and may also be 

submitted through the Federal 

eRegulations Portal at 

www.regulations.gov. All electronic 

comments must include the full name, 

electronic mail address, and postal 

service address of the commenter. 

Electronic comments that do not contain 

the full name, electronic mail address, 

and postal service address of the 

commenter will not be considered. If the 

electronic comments include an 

attachment, the attachment must be in 

the Adobe Acrobat (.pdf) or Microsoft 

Word (.doc) format. Faxed comments 

should be sent to (202) 219–3923, with 

printed copy follow-up. Written 

comments and printed copies of faxed 

comments should be sent to the Federal 

Election Commission, 999 E Street, 

NW., Washington, DC 20463. The 

Commission will post public comments 

on its Web site. If the Commission 

decides that a hearing is necessary, the 

hearing will be held in the 

Commission’s ninth floor meeting room, 

999 E Street NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Mr. 

Brad C. Deutsch, Assistant General 

Counsel, or Ms. Amy L. Rothstein, 

Attorney, 999 E Street NW., 

Washington, DC 20463, (202) 694–1650 

or (800) 424–9530.

SUPPLEMENTARY INFORMATION: With this 

notice, the Commission is publishing 

and seeking comments on a proposed 

amendment to its regulations regarding 

corporate use of payroll deduction or 

check-off systems1 to collect and 

forward voluntary employee 

contributions to the SSF of a trade 

association of which the corporation is 

a member. The Commission’s 

regulations currently prohibit member 

corporations from making payroll 

deduction or check-off systems available 

for employee contributions to a trade 

association’s SSF. See 11 CFR 

114.8(e)(3).

The Commission is publishing this 

proposed rule in response to a petition 

for rulemaking. See Notice of 

Availability, 68 FR 60887 (October 24, 

2003). The Commission emphasizes, 

however, that it has not made any final 

decision on whether to amend the 

existing rules on this subject, and 

invites comments on the proposed 

rulemaking. 

The Commission proposes to amend 

11 CFR 114.8(e)(3) to remove the current 

prohibition on corporate use of a payroll 

deduction or check-off system for 

employee contributions to the SSF of a 

trade association of which the 

corporation is a member. The proposed 

rule would add a new paragraph 

114.8(e)(4), which would specifically 

authorize a member corporation to 

provide incidental services to collect 

and forward contributions from its 

restricted class employees to a trade 

association’s SSF, including a payroll 

deduction or check-off system, upon 

written request of the trade association. 

Further, the proposed rule would 

require any corporation that provides 

these incidental services also to make 

the same services available to a labor 

organization representing members who 

work for the corporation, upon written 

request by the labor organization and at 

a cost not to exceed any actual expenses 

incurred. Finally, the proposed rule 

would make a conforming change to 11 

CFR 114.2(f), to clarify that the 

provision of incidental services 

pursuant to proposed 11 CFR 114.8(e)(4) 

is not a prohibited corporate facilitation. 

Legal Context 

The Federal Election Campaign Act of 

1971, as amended (the ‘‘Act’’), and the 

Commission’s regulations permit any 

trade association to solicit contributions 

to the trade association’s SSF from the 

stockholders and executive and 

administrative personnel, and their 

families, of the trade association’s 

member corporations, if the member 

corporation involved has separately and 

specifically approved the solicitation 

and has not approved a solicitation by 

any other trade association for the same 

calendar year. See 2 U.S.C. 

441b(b)(4)(D); 11 CFR 114.8(c). Once 

these conditions are met, ‘‘[t]here is no 

limitation on the method of soliciting 

voluntary contributions or the method 

of facilitating the making of voluntary 

contributions which a trade association 

may use.’’ 11 CFR 114.8(e)(3). 

Although the regulations do not limit 

the methods that a trade association 

may use to solicit and facilitate the 

making of voluntary contributions to its 

SSF from the restricted class employees 

of consenting member corporations, the 

regulations do limit the methods that a 

consenting member corporation may use 

to collect and distribute those 

contributions. Specifically, a ‘‘member 

corporation may not use a payroll 

deduction or check-off system for 

executive or administrative personnel 

contributing to the separate segregated 

fund of the trade association.’’ Id. The 

Commission has interpreted this 

prohibition to extend to all employees 

of the corporation that may be solicited 

by the trade association (i.e., restricted 

class employees), including the member 

corporation’s employee-stockholders. 

See Advisory Opinion 1989–3. 

In recent years, the Commission has 

given corporations some latitude in 

collecting and transmitting 

contributions to a trade association’s 

SSF, so long as the collection did not 

involve employee payroll deductions. 

For instance, in Advisory Opinion 

2003–22, the Commission interpreted 

the regulations to permit a corporate 

member of a trade association to collect 

voluntary contributions in the form of 

paper checks from its executive and 

administrative personnel, and to 

transmit the contributions to the trade 

association’s SSF. In that opinion, the 

Commission also interpreted the 

regulations to permit corporate 

executives who were collecting 

employee contribution checks to use the 

member corporation’s inter-office mail 

system to help collect the checks, and 

to provide envelopes and postage in 

which contributors could send their 

contributions to the trade association’s 

SSF. 

Moreover, the Commission has 

permitted member corporations to 

deduct contributions electronically to a 

trade association’s SSF, so long as the 

member corporations did not deduct the 

76630 Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Proposed Rules 

2Petitioners identified several concerns as having 

prompted the prohibition, including a concern that 

labor unions be given equal access to fundraising 

methods used by corporations, and a concern that 

corporate facilitation of contributions to a trade 

association’s SSF would be prohibited by the Act. 

These issues are addressed further in the text of this 

Notice.

contributions from employee payrolls. 

See Advisory Opinions 2000–4 and 

1998–19. In addition, the Commission 

has permitted a trade association to pay 

for electronically deducting monthly 

contributions to its SSF from the 

personal checking accounts of restricted 

class employees of consenting member 

corporations. See Advisory Opinion 

1999–35. The Commission also has 

permitted State leagues of a federation 

of trade associations and the leagues’

local corporate members to serve as 

collecting agents for contributions to the 

federation’s SSF, and to pay expenses 

incurred in connection with that 

activity. See Advisory Opinion 1998–19; 

compare to Advisory Opinion 2000–4. 

The Petition for Rulemaking 

On September 3, 2003, the 

Commission received a Petition for 

Rulemaking (the ‘‘Petition’’) from 

America’s Community Bankers and its 

SSF, the America’s Community Bankers 

Community Campaign Committee 

(collectively, ‘‘Petitioners’’). Petitioners 

asked the Commission to amend the 

regulations to permit, rather than to 

prohibit, a member corporation to use a 

payroll deduction or check-off system 

for contributions by its restricted class 

employees to a trade association’s SSF. 

Petitioners advanced four arguments 

in support of their request. First, 

Petitioners asserted that the Act does 

not require the exclusion of payroll 

deduction and check-off systems from 

permissible methods of collecting and 

forwarding contributions to a trade 

association’s SSF. Second, Petitioners 

asserted that the prohibition on payroll 

deduction and check-off systems is 

inconsistent with Commission advisory 

opinions and other Commission 

regulations. Third, Petitioners asserted 

that the concerns that prompted the 

prohibition in the first place, as 

discussed at a June 29, 1976 

Commission meeting, (1) resulted from 

a misunderstanding on the part of some 

of the commissioners at the meeting, (2) 

are inconsistent with later Commission 

actions, and (3) could have been 

addressed by means other than the 

prohibition.2 Finally, Petitioners 

asserted that factual and legal changes 

that have occurred since the prohibition 

was promulgated in 1976 warrant a 

change in the regulations.

In accordance with its usual 

procedures, the Commission published 

a notice stating that the Petition was 

available for public review and 

comment. See Notice of Availability, 68 

FR 60887 (October 24, 2003). The 

comment period closed on November 

24, 2003. The Commission received 30 

comments in response to the Notice of 

Availability: 22 from trade associations, 

six from corporate members of one of 

the trade associations that submitted 

comments, one from a professional 

association, and one from a Member of 

Congress. The comments submitted by 

the six corporations were substantially 

identical both to each other and to 

comments submitted by the trade 

association to which the corporations 

belonged. 

Summary of Comments on the Petition 

for Rulemaking 

All of the comments received by the 

Commission supported the Petition for 

Rulemaking. The commenters’

arguments in favor of the Petition fell 

into three categories: legal, policy and 

practical. 

1. Legal Arguments 

Almost all of the commenters 

addressed the question of whether the 

Act prohibits member corporations from 

using payroll deduction and check-off 

systems to collect voluntary 

contributions to a trade association’s 

SSF from restricted class employees. All 

of the commenters that addressed the 

question concluded that the Act does 

not prohibit the use of payroll 

deduction and check-off systems.

Moreover, several commenters 

asserted that eliminating the prohibition 

would be consistent with the Act’s 

broad grant of authority to trade 

associations to solicit contributions to 

their SSFs from the restricted class of 

consenting member corporations, as set 

out in 2 U.S.C. 441b(b)(4)(D). Several 

commenters also asserted that 

eliminating the regulatory prohibition 

would be consistent with the Act’s 

exclusion of corporate, trade association 

and labor union payments for 

establishing, administering and 

soliciting contributions to an SSF from 

the definition of ‘‘contribution or 

expenditure,’’ as set out in 2 U.S.C. 

441b(b)(2)(C). 

With respect to the regulation itself, a 

few commenters perceived an 

inconsistency between the first sentence 

of 11 CFR 114.8(e)(3), which permits a 

trade association to use any method to 

solicit and facilitate the making of 

voluntary contributions from restricted 

class employees of consenting member 

corporations, and the second sentence 

of 11 CFR 114.8(e)(3), which contains 

the prohibition on member 

corporations’ use of payroll deduction 

and check-off systems at issue here. The 

commenters opined that only the first 

sentence is consistent with the Act. 

Several commenters indicated that the 

Commission’s own advisory opinions 

support eliminating the prohibition. 

Specifically, the commenters argued 

that the prohibition is inconsistent with 

(1) Advisory Opinion 2003–22, which 

permits a member company to collect 

and forward employee contributions in 

the form of checks to a trade 

association’s SSF; (2) Advisory 

Opinions 1995–28, 1995–17, 1989–18 

and 1980–89, which allow a member 

corporation to contribute to a trade 

association to help defray the costs of 

establishing, administering and 

soliciting for the trade association’s SSF; 

and (3) Advisory Opinions 1999–35, 

1998–19, 1997–9 and 1986–7, which 

permit contributions to a trade 

association’s SSF or a membership 

association’s SSF to be automatically 

debited from contributors’ accounts. 

2. Policy Arguments 

Several commenters perceived a lack 

of a policy rationale for the prohibition 

on corporate use of payroll deductions 

to collect voluntary employee 

contributions to a trade association’s 

SSF. They argued that the lack of an 

underlying policy purpose was 

demonstrated by the Commission’s 

issuance of advisory opinions 

permitting other methods of collecting 

contributions to a trade association’s 

SSF. 

In addition, a number of commenters 

asserted that any underlying policy 

rationale for the prohibition has been 

rendered obsolete by the growth in the 

use of electronic methods for making 

and receiving payments since 1976, 

including by federal government 

agencies such as the Internal Revenue 

Service and the Social Security 

Administration. The commenters noted 

the decreasing role of paper checks in 

American society. They cited to the 

growing prevalence of electronic payroll 

deductions in the workplace, the large 

number of employees who currently use 

payroll deductions and the variety of 

goods and services paid through payroll 

deductions, such as health and life 

insurance premiums, flexible spending 

accounts, retirement savings plans, 

charitable contributions, loan and 

mortgage payments, gym memberships 

and club dues. 

One commenter stated that questions 

regarding the permissibility of various 

forms of electronic deductions are likely 

to increase, both in number and in 

Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Proposed Rules 76631

complexity, as technology advances and 

as corporations provide more innovative 

financial services to their employees. 

This commenter suggested that 

amending the regulations to permit 

payroll deductions would eliminate the 

need for the Commission to answer 

these questions on a case-by-case basis 

through the advisory opinion process. 

Several commenters also indicated 

that removing the regulatory prohibition 

could help to promote fairness. 

According to one commenter, the 

current regulation disadvantages SSFs 

sponsored by smaller trade associations 

that try to compete in the political arena 

against SSFs sponsored by larger trade 

associations, presumably because larger 

trade associations and their SSFs have 

greater resources to devote to SSF 

fundraising efforts. This commenter 

suggested that removing the regulatory 

prohibition on payroll deductions could 

help smaller trade associations’ SSFs to 

raise funds and thus to compete with 

larger trade associations’ SSFs in 

representing their members’ political 

interests. 

In addition, several commenters 

complained that SSFs sponsored by 

trade associations are at a disadvantage 

compared to SSFs sponsored by 

corporations and labor organizations, 

not only because the regulations permit 

payroll deductions of contributions to 

corporate and labor organization SSFs, 

but also because they require trade 

association SSFs to obtain prior 

approval before soliciting restricted 

class employees, without imposing any 

analogous prior approval requirement 

on corporate and labor organization 

SSFs. These commenters suggested that 

removing the prohibition on member 

corporations’ use of payroll deductions 

to collect employee contributions to a 

trade association’s SSF could help to 

rectify a perceived inequality in the 

fundraising abilities of trade association 

SSFs on the one hand, and corporate 

and labor organization SSFs on the 

other hand. 

Finally, some commenters pointed 

out that not all corporate members of 

trade associations have their own SSFs, 

and that these companies may rely on 

their trade association’s SSF to serve as 

their political voice. According to these 

commenters, a trade association’s SSF is 

one of the most accessible mechanisms 

for political participation by restricted 

class employees of companies that do 

not have their own SSFs, and allowing 

payroll deduction and check-off systems 

would allow restricted class employees 

to spread out their contributions easily 

over time. 

3. Practical Arguments 

A number of commenters addressed 

the practical advantages of permitting 

member corporations to make payroll 

deductions available to their restricted 

class employees for contributions to a 

trade association’s SSF. The 

commenters described payroll 

deductions as, among other things, 

widely available, reliable, simple to 

administer, convenient and imposing 

minimal or no cost on the corporations 

that offer them.

According to these commenters, the 

benefits of permitting a member 

corporation to collect voluntary 

employee contributions to a trade 

association’s SSF through a payroll 

deduction or check-off system would 

extend to every party to the transaction. 

Contributing employees would find it 

more convenient and affordable to have 

smaller, regular contributions 

automatically deducted from their 

paychecks than to write a single check 

for a larger sum. Member corporations 

would find it more efficient and less 

costly to collect employee contributions 

through automatic payroll deductions, 

and those that did not would be free to 

use other methods of collecting 

contributions. Trade associations would 

be able to reduce their SSF fundraising 

expenses, and their SSFs would find it 

easier to track and document both 

contributing individuals and individual 

contributions. The end result, according 

to these commenters, would be 

increased participation by individuals 

in the political process and enhanced 

reporting of their contributions. 

Analysis 

The Petition and comments raise a 

reasonable question as to whether the 

regulatory prohibition against payroll 

deduction and check-off systems 

continues to make sense. Accordingly, 

the Commission concludes that the 

goals of the Act and the interests of the 

regulated community would be best 

served by further examination of this 

issue and invites public comments on it. 

1. Proposed Changes to 11 CFR 114.8(e) 

The Commission proposes amending 

11 CFR 114.8(e) to remove the 

prohibition on a corporation’s use of a 

payroll deduction or check-off system 

for contributions by restricted class 

employees to the SSF of a trade 

association of which the corporation is 

a member. The Commission proposes to 

effect this change by deleting the second 

sentence of 11 CFR 114.8(e)(3) in its 

entirety and by adding a new paragraph 

114.8(e)(4). Existing paragraph 

114.8(e)(4) would be redesignated as 

114.8(e)(5). 

As proposed, new paragraph 

114.8(e)(4) would permit, but not 

require, a corporation to provide 

incidental services to collect and 

forward contributions from its restricted 

class employees to the SSF of a trade 

association of which the corporation is 

a member, upon written request of the 

trade association. Based on information 

in the Petition and in the comments 

regarding the wide availability and 

minimal cost of payroll deductions, the 

proposed regulation would expressly 

authorize the use of a payroll deduction 

or check-off system as an incidental 

service. The Commission invites public 

comments on this issue. 

In addition to permitting a member 

corporation to provide incidental 

services to collect and forward 

employee contributions to a trade 

association’s SSF, proposed paragraph 

114.8(e)(4) would require any 

corporation that provides these services 

to make the same services available to 

a labor organization representing 

employees of the corporation, upon 

written request of the labor organization 

and at a cost that does not exceed any 

actual expenses incurred. The 

Commission considers this requirement 

to be necessary to prevent 

circumvention of provisions in the Act 

and Commission regulations that seek to 

prevent corporate SSFs from gaining an 

unfair fundraising advantage over labor 

organization SSFs. See 2 U.S.C. 

441b(b)(6) and 11 CFR 114.5(k)(1).

The Petitioners and some of the 

commenters noted that a corporation 

without its own SSF might rely 

exclusively on its trade association’s 

SSF to represent its corporate interests 

in the political arena. Absent the 

requirement in proposed paragraph 

114.8(e)(4) that a member corporation 

make incidental services available to a 

labor organization representing 

employees of the corporation if the 

corporation makes those services 

available to a trade association, a 

corporation could allow restricted class 

employees to contribute through payroll 

deductions to the corporation’s proxy 

SSF administered by a trade association, 

without permitting employees who are 

members of a labor organization to 

contribute to their labor organization’s 

SSF through payroll deductions. This 

outcome would create an inequality that 

could subvert the careful balance struck 

in the Act and Commission regulations 

between corporate SSFs and labor 

organization SSFs. The Commission 

invites public comments on this issue. 

The only distinction in the proposed 

rule between providing incidental 

76632 Federal Register / Vol. 69, No. 245 / Wednesday, December 22, 2004 / Proposed Rules 

services to collect and forward 

employee contributions to a trade 

association’s SSF on the one hand, and 

providing incidental services to collect 

and forward employee contributions to 

a labor organization’s SSF on the other 

hand, is in the area of reimbursement. 

The proposed rule would not require a 

trade association or its SSF to reimburse 

the corporation for any actual expenses 

that the corporation incurs in providing 

the incidental services. As the 

Commission has stated previously, 

‘‘incidental services by corporate 

members would not require 

reimbursement by the trade association 

since, in any event, reimbursement if 

required would come from membership 

dues paid to the trade association by its 

corporate members.’’ Advisory Opinion 

1979–8 at 2, citing to Federal Election 

Regulations, Explanation and 

Justification, House Document No. 95–

44, page 114. See also Advisory Opinion 

1978–13. 

A labor organization or its SSF that 

receives incidental services from a 

corporate employer of members of the 

labor organization, by contrast, would 

be required to reimburse the corporation 

for the cost of providing those services. 

The Commission has previously found 

that a prohibited corporate contribution 

would result from a failure by a labor 

organization to reimburse a corporation 

for actual expenses incurred by the 

corporation in providing a payroll 

deduction or check-off system for 

contributions to the labor organization’s 

SSF. See Advisory Opinions 1981–39 

and 1979–21. The Commission invites 

public comments on this issue. 

2. Proposed Changes to 11 CFR 114.2(f) 

The Commission proposes making a 

conforming change to the regulation that 

currently prohibits a corporation from 

facilitating the making of contributions 

to political committees, other than to 

the corporation’s own SSF. See 11 CFR 

114.2(f)(1). The term ‘‘facilitation’’

means using corporate resources or 

facilities to engage in fundraising 

activities in connection with any federal 

election. Id. Facilitation does not 

include, however, enrollment by a 

corporation or labor organization of 

members of the corporation’s or labor 

organization’s restricted class in a 

payroll deduction plan or check-off 

system to make contributions to the 

corporation’s or labor organization’s 

SSF. See 11 CFR 114.2(f)(4)(i). 

The Commission proposes adding a 

new paragraph (5) to 11 CFR 114.2(f), to 

specify that facilitation also would not 

include the provision of incidental 

services by a corporation to collect and 

forward voluntary contributions from its 

restricted class employees to the SSF of 

a trade association of which the 

corporation is a member, pursuant to 11 

CFR 114.8(e)(4), as revised. The new 

paragraph would state that a corporation 

could collect the contributions through 

a payroll deduction or check-off system. 

The Commission invites public 

comments on this proposal. 

Certification of No Effect Pursuant to 5 

U.S.C. 605(b) (Regulatory Flexibility 

Act) 

The attached proposed rules, if 

promulgated, would not have a 

significant economic impact on a 

substantial number of small entities. 

The basis for this certification is that the 

proposed rules permit, but do not 

require, a corporation to provide 

incidental services to collect and 

forward contributions from its restricted 

class employees to the separate 

segregated fund of a trade association of 

which the corporation is a member, 

including the use of a payroll deduction 

or check-off system. Under current law, 

a corporation is permitted to collect and 

transmit contributions manually to the 

SSF of a trade association to which the 

corporation belongs. If promulgated, the 

proposed rule should enable those 

corporations that wish to transmit 

employee contributions to trade 

association SSFs to do so more 

efficiently and using fewer resources.

List of Subjects in 11 CFR Part 114 

Business and industry, elections, 

labor.

For the reasons set out in the 

preamble, the Federal Election 

Commission proposes to amend 

subchapter A of chapter 1 of title 11 of 

the Code of Federal Regulations as 

follows:

PART 114—CORPORATE AND LABOR 

ORGANIZATION ACTIVITY 

1. The authority citation for part 114 

continues to read as follows:

Authority: 2 U.S.C. 431(8)(B), 431(9)(B), 

432, 434, 437d(a)(8), 441b.

2. Amend § 114.2 by adding new 

paragraph (f)(5), to read as follows:

§ 114.2 Prohibitions on contributions and 

expenditures.

* * * * *

(f) * * * 

(5) Facilitating the making of 

contributions also does not include the 

provision of incidental services by a 

corporation to collect and forward 

contributions from its employee 

stockholders and executive and 

administrative personnel to the separate 

segregated fund of a trade association of 

which the corporation is a member, 

including collection through a payroll 

deduction or check-off system, pursuant 

to 11 CFR 114.8(e)(4). 

3. Amend § 114.8 by revising 

paragraph (e)(3), by redesignating 

paragraph (e)(4) as new paragraph (e)(5), 

and by adding a new paragraph (e)(4) to 

read as follows:

§ 114.8 Trade associations.

* * * * *

(e) * * * 

(3) There is no limitation on the 

method of soliciting voluntary 

contributions or the method of 

facilitating the making of voluntary 

contributions which a trade association 

may use. 

(4) A corporation may provide 

incidental services to collect and 

forward contributions from its employee 

stockholders and executive and 

administrative personnel to the separate 

segregated fund of a trade association of 

which the corporation is a member, 

including a payroll deduction or checkoff system, upon written request of the 

trade association. Any corporation that 

provides such services shall make those 

services available to a labor organization 

representing any members working for 

the corporation, upon written request of 

the labor organization and at a cost 

sufficient only to reimburse the 

corporation for the expenses incurred 

thereby.

* * * * *

Dated: December 17, 2004. 

Bradley A. Smith, 

Chairman, Federal Election Commission.

[FR Doc. 04–27971 Filed 12–21–04; 8:45 am] 

BILLING CODE 6715–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration 

14 CFR Part 39 

[Docket No. 93–ANE–07–AD] 

RIN 2120–AA64 

Airworthiness Directives; Teledyne 

Continental Motors (Formerly Bendix) 

S–20, S–1200, D–2000, and D–3000 

Series Magnetos

AGENCY: Federal Aviation 

Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking 

(NPRM). 

SUMMARY: The FAA proposes to 

supersede an existing airworthiness 

directive (AD) for Teledyne Continental