[Federal Register Volume 65, Number 120 (Wednesday, June 21, 2000)]
[Rules and Regulations]
[Pages 38415-38424]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 00-15668]


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FEDERAL ELECTION COMMISSION

11 CFR Parts 100, 101, 102, 104, 109, 114, 9003, and 9033

[Notice 2000-13]


Electronic Filing of Reports by Political Committees

AGENCY: Federal Election Commission.

ACTION: Final Rules and Transmittal of Regulations to Congress.

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SUMMARY: The Federal Election Commission is revising its regulations to 
implement a mandatory electronic filing system for reports of campaign 
finance activity filed with the agency. Beginning with reporting 
periods that start on or after January 1, 2001, all political 
committees (except the authorized committees of candidates for U.S. 
Senate) and other persons will be required to file electronically when 
either their total contributions or total expenditures within a 
calendar year exceed, or are expected to exceed, $50,000. The 
Commission has had a voluntary electronic filing system in place since 
1996. Voluntary electronic filing will still be an option for political 
committees and persons who do not exceed the $50,000 threshold. This 
mandatory system is designed to reflect recent changes to the Federal 
Election Campaign Act of 1971. Further information is provided in the 
supplementary information that follows.

DATES: Further action, including the publication of a document in the 
Federal Register announcing an effective date, will be taken after 
these regulations have been before Congress for 30 legislative days 
pursuant to 2 U.S.C. 438(d) and 26 U.S.C. 9009(c) and 9039(c).

FOR FURTHER INFORMATION CONTACT:  Ms. Rosemary Smith, Assistant General 
Counsel, or Cheryl Fowle, Attorney, 999 E Street, NW, Washington, DC 
20463, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION:  The Commission is publishing today the 
final text of new regulations to be added to 11 CFR 100.19 and 11 CFR 
104.18 and revisions to the regulations at 11 CFR 101.1, 102.2, 104.5, 
109.2, 114.10, 9003.1 and 9033.1 making electronic filing mandatory for 
certain political committees and other persons. These rules implement 
provisions of Public Law 106-58, (Pub. L. No. 106-58, 106th Cong., 
Sec. 639, 113 Stat. 430, 476-477 (1999)) which amended the Federal 
Election Campaign Act of 1971, 2 U.S.C. 431 et seq. (``FECA'' or ``the 
Act''), to require, inter alia, that the Commission make electronic 
filing mandatory for political committees and other persons required to 
file with the Commission who, in a calendar year, have, or have reason 
to expect to have, total contributions or total expenditures exceeding 
a threshold amount to be set by the Commission. The final rules 
announced today set the threshold at $50,000 per calendar year.
    The 1999 amendment to the FECA and the regulations (11 CFR 104.18) 
maintain the voluntary electronic filing system for political 
committees or persons who do not exceed, or who do not have reason to 
expect to exceed, the $50,000 threshold of financial activity. The 
Commission encourages committees below these thresholds to voluntarily 
file their reports electronically.
    Public Law 106-58 requires the mandatory system to be in place for 
reports covering periods after December 31, 2000.
    Section 438(d) of Title 2, United States Code and sections 9009(c) 
and 9039(c) of Title 26, United States Code require that any rules or 
regulations prescribed by the Commission to carry out the provisions of 
Titles 2 and 26 of the United States Code be transmitted to the Speaker 
of the House of Representatives and the President of the Senate 30 
legislative days before they are finally promulgated. These regulations 
were transmitted to Congress on June 16, 2000.

Explanation and Justification

    The Commission initiated this rulemaking by publishing a Notice of 
Proposed Rulemaking (``NPRM'') in the Federal Register on April 11, 
2000, 65

[[Page 38416]]

FR 19339 (April 11, 2000). The NPRM contained proposed rules covering, 
inter alia, the threshold amount, what reports are covered and the 
requirement for publicly funded candidates to agree to file 
electronically.
    The comment period ended on May 11, 2000. The Commission received 
three comments, one from U. S. Public Interest Research Group, and one 
from National Association of Business Political Action Committees. In 
addition, the Internal Revenue Service (``IRS'') submitted a comment in 
which it said that the proposed rules are not inconsistent with IRS 
regulations or the Internal Revenue Code.
    The goals of the electronic filing system include more complete and 
rapid on-line access to reports on file with the Commission, reduced 
paper filing and manual processing, and more efficient and cost-
effective methods of operation for filers and for the Commission. The 
1999 amendment to the FECA requires that the Commission make 
electronically filed reports, designations or statements available on 
its web site not later than 24 hours after the Commission receives 
them. Pub. L. No. 106-58, 106th Cong., Sec. 639(a), 113 Stat. 430, 476 
(1999). Currently, reports that are filed under the voluntary system of 
electronic filing are posted in viewable form on the Commission's web 
site within five minutes and detailed data are available in the 
Commission's databases within 24 to 48 hours (depending on the time of 
receipt). In contrast, under the current paper filing system, the time 
between receipt of a report and its appearance in viewable form on the 
Commission's web site is 48 hours. Additionally, while some summary 
data is available in the Commission's indexes within 48 hours, it can 
take as long as 30 days before the detailed data filed on paper is 
available in those databases. Thus, the greater the number of pages 
that are filed electronically, the greater the volume of data that is 
almost instantly available. Additionally, decreasing the volume of 
paper filed will decrease the processing time of the reports that are 
filed on paper, making them more rapidly available in the Commission's 
databases.

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

    The Commission's regulations at 11 CFR 100.19 define file, filed, 
or filing with respect to reports filed on paper. New paragraph (c) is 
being added to section 100.19 to define these terms with respect to 
electronically filed reports. In order to be timely filed, the report 
must be received and validated by the Commission's computer system on 
or before 11:59 p.m. Eastern Standard Time (or Eastern Daylight Time, 
as appropriate) on the prescribed filing date. The computer validation 
program ensures that all required information is disclosed. 
Additionally the validation program is being updated to require that 
the figures disclosed within the report add up to the figures reported 
on the Detailed Summary Page and that committees correctly indicate the 
type of report being filed. Incomplete or incorrect reports that do not 
pass validation will not be accepted and will not be considered filed. 
Please note, however, that using the Commission's FECFile software will 
ensure that all numbers in the report add up to the correct total. The 
Commission received one comment on this issue in response to its NPRM 
on its new administrative fine program. (See 65 FR 16534, March 29, 
2000.) The commenter, Akin, Gump, Strauss, Hauer & Feld, L.L.P., argued 
that the Commission's rules should clarify the date and time when an 
electronic report is considered ``filed.'' Thus, paragraph (c) is being 
added to this section.

Section 101.1  Candidate designations (2 U.S.C. 432(e)(1)).

    The Commission is revising paragraph (a) of section 101.1 to 
clarify that if a candidate exceeds, or has reason to expect to exceed 
the $50,000 threshold, he or she must file his or her Statement of 
Candidacy electronically on FEC Form 2. The Commission anticipates that 
its free FECFile software will generate FEC Form 2 by January 1, 2001, 
when these regulations take effect. The Commission received no comments 
on this provision.

Section 102.2  Statement of organization: Forms and committee 
identification number (2 U.S.C. 433(b)(c)).

    Commission regulations at 11 CFR 102.2(a)(1)(i) through (vi) 
require a political committee to provide certain identifying 
information on its Statement of Organization (FEC Form 1). New 
paragraph (a)(1)(vii) requires any political committee that has an 
Internet web site to provide the address of its web site as part of its 
address on FEC Form 1. Additionally, it requires any committee that is 
required to file electronically, and that has an electronic mail 
address, to include its electronic mail address as part of its address 
on FEC Form 1. The Commission received no comments on these changes.
    Revisions to paragraph (a)(2) clarify that if a committee is 
required to file electronically, it must file amendments to its 
Statement of Organization (FEC Form 1) electronically. The Commission 
anticipates that its free FECFile software will generate FEC Form 1 by 
January 1, 2001, when these regulations take effect. The Commission 
received one comment on the issue of filing amendments by electronic 
letter. For the reasons explained at ``F. Amending Reports,'' infra, 
the Commission is not allowing filers to amend electronic reports by 
electronic letter, rather than using the appropriate electronic FEC 
form.

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

    The Commission's regulations at 11 CFR 104.5(e) define when a paper 
report is considered filed with respect to when and how it is mailed. A 
new sentence is being added to paragraph (e) to provide that, in order 
to be timely filed electronically, the report, designation or statement 
must be received and validated by the Commission's computer system on 
or before 11:59 p.m. Eastern Standard Time (or Eastern Daylight Time, 
as appropriate) on the prescribed filing date. Incomplete or incorrect 
reports that do not pass validation will not be accepted and will not 
be considered filed. The Commission is adding the new sentence to 
paragraph (e) of this section to follow the changes in 11 CFR 101.1.

Section 104.18  Electronic filing of reports (2 U.S.C. 432(d) and 
434(a)(11)).

    Section 104.18 is being reorganized. New paragraph (a) sets forth 
the thresholds and rules for mandatory electronic filing. Former 
paragraph (a) ``General'' is redesignated as paragraph (b) 
``Voluntary'' and sets forth the rules with regard to who may 
voluntarily file electronically. New paragraph (c) has been added to 
define which reports under the 1999 amendment to the FECA must be filed 
electronically. Former paragraphs (b) through (g) are being 
redesignated as paragraphs (d) through (i). These provisions apply to 
both mandatory and voluntary electronic filing. Paragraph (d) continues 
to state the format requirements for the electronic filing system (both 
mandatory and voluntary). Paragraph (e) sets forth the rules on the 
acceptance and validation of electronically filed reports. Paragraph 
(f) addresses amending electronic reports. Paragraph (g) sets forth 
signature requirements. Rules for schedules and forms requiring third 
party signatures are in paragraph (h), and paragraph (i) addresses the 
preservation of reports.

[[Page 38417]]

A. Who Must File Electronically

    The mandatory electronic filing provisions of Public Law 106-58 and 
new paragraph (a) of 11 CFR 104.18 apply to those political committees 
and other persons who are required to file reports, statements and 
designations with the FEC. This includes House and Presidential 
candidates and their authorized committees, party committees, 
nonconnected committees, and separate segregated funds required to file 
with the Commission. Mandatory electronic filing does not apply to 
candidates for United States Senate and their authorized committees 
because Senate candidates and their committees must file with the 
Secretary of the Senate. Senate candidates are, however, encouraged to 
electronically file an unofficial copy of their reports, designations 
and statements with the FEC for the purposes of faster disclosure.
    The Commission received one comment requesting clarification that 
the threshold applies to each individual committee and not to the total 
activity of all affiliated committees. While affiliated unauthorized 
committees share contribution limits, they do not file consolidated 
reports. Thus, the Commission has concluded that it would be overly 
burdensome to require all affiliated unauthorized committees to file 
electronically if, in the aggregate they exceed, or have reason to 
expect to exceed, the threshold. Therefore, the threshold applies to 
each individual unauthorized committee whether or not it is affiliated 
with other committees.
    In contrast, authorized committees of a candidate are affiliated 
and share contribution limits, but the principal campaign committee 
files one consolidated report incorporating all reports from all other 
authorized committees (except joint fundraising committees, see infra) 
for that candidate for that election. The principal campaign committee 
also forwards to the Commission, along with its own, the reports of the 
other authorized committees. Therefore, all authorized committees of a 
candidate must file electronically if the total of all contributions 
and expenditures from all authorized committees for that election 
exceeds, or the committees have reason to expect the totals to exceed, 
the threshold.
    Joint fundraising representatives (see 11 CFR 102.17) must file 
electronically if they have, or have reason to expect to have, total 
contributions or total expenditures exceeding the $50,000 threshold. 
Thus, if for example, a joint fundraiser raises total contributions of 
$65,000 that it divides equally between the three participating 
committees, including itself, the joint fundraising representative must 
file electronically.
    Other persons, including individuals and qualified nonprofit 
corporations, must file electronically if they make independent 
expenditures exceeding $50,000 in a calendar year.\1\ Please note, 
however, that the provision in the NPRM that would have applied the new 
electronic filing rules to corporations or labor organizations making 
communications in excess of $50,000 to their restricted classes has 
been deleted from the final rules because these disbursements are not 
expenditures. 2 U.S.C. 431(9)(B)(iii) and (v) and 441b(b)(2) and 11 CFR 
100.8(b)(4). The Commission received no comments on this issue.
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    \1\ Note that under 11 CFR 104.4(c) and 105.4, independent 
expenditures in favor of, or opposition to, candidates for the U.S. 
Senate must be filed with the Secretary of the Senate and, therefore 
are not subject to this regulation.
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B. Threshold

    The Commission has set $50,000 as the appropriate threshold for all 
political committees and other persons because, as discussed below, 
data from the 1996 and 1998 election cycles indicate that at that 
threshold, the goals of the statutory amendment are maximized and the 
effect on the political committees and other persons is minimized.

1. Nonfederal Funds; Cash on Hand; Debts

    The Commission received one comment requesting clarification that, 
since the purpose of the FECA is the disclosure of federal activity, 
the new rule applies only when a committee makes $50,000 in 
expenditures or receives $50,000 in contributions as defined in 2 
U.S.C. 431(8) and (9) and 11 CFR 100.7 and 100.8. The commenter is 
correct that for purposes of determining if a filer has exceeded, or 
has reason to expect to exceed, the $50,000 filing threshold, 
nonfederal funds should be excluded from the calculation.
    In addition, please note that cash on hand and debt that is 
outstanding at the beginning of the calendar year are not included in 
the threshold calculation. Thus, the calculation of the threshold takes 
into account only those contributions received or expenditures made, or 
expected to be received or made, within the calendar year.
    To calculate whether the committee has exceeded the threshold, use 
the following formulas: \2\
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    \2\ These calculations can be estimated by using the Detailed 
Summary Page of the appropriate FEC Form for filing receipts and 
disbursements.
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    Unauthorized committees other than political party committees (FEC 
Form 3X).
    Contributions: Total contributions (from individuals and other 
persons, political party committees and other political committees) 
minus refunds of contributions (to individuals and other persons, 
political party committees and other political committees) plus 
transfers from affiliated federal committees.
    Expenditures: Total federal operating expenditures plus transfers 
to affiliated federal committees plus contributions to federal 
candidates/committees and other political committees plus independent 
expenditures.
    Political Party Committees (FEC Form 3X).
    Contributions: Total contributions (from individuals and other 
persons, political party committees and other political committees) 
minus refunds of contributions (to individuals and other persons, 
political party committees and other political committees) plus 
transfers from affiliated federal political party committees.
    Expenditures: Total federal operating expenditures plus transfers 
to affiliated federal political party committees plus contributions to 
federal candidates/committees and other political committees plus 
independent expenditures plus coordinated expenditures.
    Authorized committees (FEC Form 3, or FEC Form 3P (Presidential 
candidates only)).
    Contributions: Total contributions (from individuals and other 
persons, political party committees, other political committees and the 
candidate, including the outstanding balance of any loans made, 
guaranteed or endorsed by the candidate or other person) minus any 
refunds of contributions (to individuals and other persons, political 
party committees or other political committees).
    Expenditures: Total operating expenditures plus total contributions 
to other federal candidates, political party committees or other 
federal political party committees.

2. Candidates and Authorized Committees

    Data from the 1996 and 1998 election cycles show that this 
threshold would

[[Page 38418]]

make 96% to 98% \3\ of all financial activity reported by House and 
Presidential campaign committees almost immediately available on both 
the FEC's web site and in the agency's on-line databases. The 
historical information shows that of the 1,837 to 2,231 authorized 
committees filing with the Commission between 1995 and 1998, 31% to 44% 
of the committees (599 to 982 committees) had aggregate contributions 
or expenditures exceeding $50,000. These authorized committees filed 
43% to 73% of the reports (2,162 to 12,646 reports), and 73% to 88% 
(66,569 to 282,339 pages) of the total number of pages filed by 
authorized committees. If 73% to 88% of the total number of pages filed 
by authorized committees is filed electronically, the Commission can 
manually process the remaining 12% to 29% of the pages more quickly to 
substantially reduce the amount of time before the information is 
available in Commission databases.
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    \3\ Because the data was taken over a period of two election 
cycles that included a Presidential-election year (1996), a midterm-
election year (1998) and two non-election years (1995 and 1997), the 
number of committees, reports and pages filed and financial figures 
vary--increasing in election years, decreasing in non-election 
years. The percentages and numbers used in this document are the 
high and low figures of the four year span. Please note that the 
high or low percentage may have come from one year and the high or 
low actual number may have come from a different year.
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    The effect of a $50,000 threshold on candidates and authorized 
committees will be minimal since, based on the 1996 and 1998 election 
cycle data, only the largest 30% to 40% of registered authorized 
committees would be required to file electronically.

3. Party Committees

    At the $50,000 level, historical data from the 1996 and 1998 
election cycles show that of the 373 to 451 party committees filing 
with the Commission, 36% to 41% of them (142 to 182 committees) 
consistently disclosed over 99% (between $213 million and $459 million) 
of party activity. Of the total number of pages filed by party 
committees, 93% to 96% (71,598 to 210,242 pages) would have been filed 
electronically, thereby greatly decreasing the amount of paper 
processing by the committees and the FEC and considerably increasing 
the amount of data that would be almost immediately available.
    Based on the 1996 and 1998 election cycle data, the impact on party 
committees will be relatively small since only 36% to 41% of all party 
committees registered with the Commission during those election cycles 
would have been required to file electronically. Thus, the smallest 59% 
to 64% of party committees could continue to file paper reports.

4. Nonconnected Committees

    At the $50,000 level, in the 1996 and 1998 election cycles, of the 
840 to 933 nonconnected committees filing with the Commission, 15% to 
22% of them (128 to 202 committees) disclosed 88% to 93% of the 
activity by nonconnected committees (representing approximately $29 
million to $65 million of the total $33 million to $70 million 
disclosed by nonconnected committees). Additionally at that level, 59% 
to 68% (16,794 to 44,907 pages) of the total number of pages filed by 
nonconnected committees would have been filed electronically, causing a 
significant decrease in paper processing and a corresponding increase 
in the amount of data more rapidly disclosed.
    The number of nonconnected committees affected will be relatively 
small since the historical data from the 1996 and 1998 election cycles 
show that only the largest 15% to 22% of the nonconnected committees 
registered with the Commission would have been required to file 
electronically.

5. Separate Segregated Funds

    At the $50,000 level, in the 1996 and 1998 election cycles, of the 
2,938 to 2,976 SSFs registered with the Commission, 22% to 28% of them 
(632 to 825 committees) disclosed 85% to 89% ($138 million to $211 
million) of the total SSF financial activity. This represents 63% to 
68% (between 94,670 and 110,864 pages) of the total number of pages 
filed by SSFs. Based on historical data, the decrease in the amount of 
paper filed would represent approximately 100,000 pages of data and 
hundreds of millions of dollars available almost instantly on the 
Commission's web site and in the agency's databases.
    The impact on SSFs will be small considering that, in the 1996 and 
1998 election cycles, only 22% to 28% of all SSFs registered with the 
Commission would have been required to file electronically. Thus, the 
smallest 72% to 78% (approximately 2,300 committees) of SSFs will 
continue to have the option of filing paper reports.
    The NPRM requested comments on whether SSFs should have a lower 
threshold than other filers because their administrative costs can be 
paid by their connected organizations. One commenter opposed setting a 
different threshold because that would lead to confusion and burden 
SSFs with higher administrative costs than those of other types of 
committees. The Commission has concluded that it is not appropriate to 
treat SSFs differently than other types of committees. Therefore it is 
establishing a uniform $50,000 threshold for all filers.

6. Other Persons Making Independent Expenditures

    The 1999 amendment to the FECA requires that ``a person'' who is 
required to file under the Act must file electronically if that person 
exceeds, or has reason to expect to exceed, the threshold. Therefore, 
in addition to the committees discussed above, new paragraph (a) of 
section 104.18 also applies the $50,000 threshold to any other persons 
defined in 11 CFR 100.10 who are required to file a ``designation, 
statement or report'' with the Commission. This applies only to 
individuals or qualified non-profit corporations (``QNCs'') making 
independent expenditures. 11 CFR 109.2. Thus, under the new rules, 
individuals and QNCs will be required to file electronically if they 
make independent expenditures in excess, or that are expected to be in 
excess, of $50,000 in a calendar year.
    Data from the 1996 and 1998 election cycles show that the between 
7% and 19% (between 2 and 24 persons) of other persons filing with the 
Commission had aggregate contributions or aggregate expenditures 
exceeding $50,000 in a calendar year. During that four year period, 
those persons who exceeded the threshold accounted for 33% and 50% of 
all activity by other persons in the non-election years, and as high as 
94% of all activity by other persons in the Presidential election year 
and 91% in the midterm election year.
    The effect of the final rules in section 104.18(a) on this category 
of filer will be small because historical data show that the number of 
these other filings is very small. For example, in 1995 and 1997 (the 
non-election years), only two of 28 and 23 filers (less than 10% in 
each case), respectively, would have been required to file 
electronically under the proposed rules. In 1996 and 1998 (1996 being a 
Presidential election year), the total numbers of filers who would have 
been affected were 24 of 128 filers (19%) and 13 of 75 filers (17%), 
respectively.

7. All Committees

    The historical data for the 1996 and 1998 election cycles show that 
if a $50,000 mandatory electronic filing threshold had been in place at 
that time, hundreds of thousands of pages would have been filed 
electronically, dramatically decreasing the amount of paper processed 
by both committees

[[Page 38419]]

and the Commission. Additionally, the amount of financial data that 
would have been almost instantly disclosed by electronic filing would 
have been between $544 million and $1.2 billion.

8. Comments on Threshold Amount

    The Commission received two comments on the $50,000 threshold. 
While one commenter strongly favored electronic filing to improve 
disclosure, it urged the Commission to adopt a much lower threshold of 
$5,000 because that is the level at which candidates are required to 
register and begin filing with the Commission. The Commission has 
determined that a $5,000 threshold is not practical. The 1999 amendment 
to the FECA requires persons to file electronically if they ``have 
reason to expect to'' exceed the threshold. Under 2 U.S.C. 431(2) and 
11 CFR 100.3, an individual is not a candidate and is not required to 
register and report financial activity until he or she actually exceeds 
$5,000 in contributions or expenditures. Therefore, to set the 
electronic filing threshold at $5,000 would require individuals to 
report electronically before they become candidates under the FECA. 
Additionally, setting the threshold at $5,000 might be overly 
burdensome to smaller political committees and other persons who do not 
have access to the computer hardware required to file electronically.
    The second commenter stated that its membership was split over the 
$50,000 proposed threshold. The commenter recommended raising the 
threshold to $100,000 per calendar year. The Commission believes that 
setting the threshold at $100,000 for all committees and other persons 
would vastly increase the amount of paper to be filed and processed, 
thus greatly decreasing the amount of information immediately available 
to the public. For example, according to historical data from the 1996 
and 1998 election cycles, by raising the threshold from $50,000 to 
$100,000 an additional 512-610 committees would be allowed to file 
paper reports numbering between 2,906 and 6,406. Those reports 
represented 35,341 to 61,275 pages and between $34 million and $41 
million in financial activity. The Commission estimates that processing 
the increased number of reports and pages at a $100,000 threshold would 
take a minimum of thirty days to complete. If those additional reports 
are filed electronically, the information will be on the Commission's 
web site within a few minutes and in the Commission's indexes within 
twenty-four to forty-eight hours of receipt.
    The second commenter also stated that the $50,000 threshold might 
be too burdensome on some committees that just slightly exceed the 
threshold. The Commission notes that some states have laws requiring 
electronic filing at much lower thresholds. For example, a recent 
Georgia statute \4\ sets the threshold for candidates at $25,000 
beginning January 1, 2001. On January 1, 2003, the threshold for 
candidates drops to $10,000 and the threshold for independent 
committees (e.g., clubs, associations and political action committees) 
will be $5,000. In New York, any committee that raises or spends, or 
has reason to expect to raise or spend, more than $1,000 in a calendar 
year must file electronically. \5\ Given the lower levels set by some 
states, the Commission has concluded that the $50,000 will not be 
overly burdensome on political committees.
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    \4\ 1999 GAH. B. 1630.
    \5\ NY ELEC Sec. 14-102.
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9. Threshold Per Calendar Year

    The 1999 amendment to the Act requires that persons who are 
required to file with the Commission must ``maintain and file a 
designation, statement or report for any calendar year in electronic 
form accessible by computers if the person has, or has reason to expect 
to have, aggregate contributions or expenditures in excess of a 
threshold amount determined by the Commission * * *'' [emphasis added] 
113 Stat. 430, 476 (1999). The NPRM proposed calculating the threshold 
on a calendar year basis but sought comments on whether the threshold 
should be calculated on an ``election cycle basis'' instead. The NPRM 
asked whether an election cycle threshold should be used for authorized 
committees only or for all committees and other persons.
    The Commission received one comment on this issue. The commenter 
stated that SSFs typically operate on a calendar year basis, and 
therefore there is no basis for calculating the threshold on an 
election cycle basis.
    The Commission has concluded that the threshold must be determined 
on the calendar year basis for the following reasons. First, the 
Commission notes that Congress specifically provided for an election-
cycle approach regarding reporting of receipts and disbursements by 
authorized committees in the same legislation that specified a 
calendar-year approach to the electronic filing thresholds. (Election 
cycle reporting by authorized committees is being addressed in a 
separate rulemaking. See NPRM 65 FR 25672 (May 3, 2000)). In contrast, 
the legislative language regarding electronic filing refers to the 
calendar year and not the election cycle. Thus, the Commission 
concludes that Congress intended the threshold for mandatory electronic 
filing to be set on a calendar year basis. Second, there is no mention 
of treating authorized committees differently than any other committee 
in either the plain language of the statutory amendment requiring 
mandatory electronic filing or in its legislative history. Nor is there 
support for an election cycle approach in the underlying FEC 
legislative recommendation. Third, since the voluntary electronic 
filing system requires that once committees start filing electronically 
they must do so for the remainder of the calendar year, and since the 
statute requires the voluntary system to be left in place, the 
Commission believes the intent of the underlying legislative 
recommendation and of Congress was to maintain the ``for the calendar 
year'' requirement.

C. Filing for the Calendar Year

    New paragraph (a)(2) of 11 CFR 104.18 requires that once a filer 
exceeds, or has reason to expect to exceed, the threshold, the filer 
must begin filing electronically with his or her next regularly 
scheduled report and continue filing electronically for the remainder 
of the calendar year. Paragraph (a)(2) does not require persons to 
electronically refile any reports, statements or designations that were 
properly filed on paper earlier in the calendar year or earlier in the 
election cycle. For example, if an authorized committee files its April 
quarterly report on paper because it has not exceeded and does not 
expect to exceed the appropriate threshold and, if in June it exceeds 
the $50,000 threshold, the committee must electronically file its July 
quarterly report, but is not expected to go back and electronically 
refile the April report.
    The Commission received one comment on when a committee must begin 
filing electronically upon exceeding, or having reason to expect to 
exceed, the threshold. The commenter recommended allowing monthly 
filers a 90-day grace period between the time they are required to 
begin filing electronically and their first electronically filed 
report. The commenter argued that monthly filers would not have time to 
convert to the electronic filing system if they unexpectedly exceeded 
the threshold. The commenter noted that quarterly filers who exceed the 
threshold in the early part of the quarter have a period of time before 
the first electronic report

[[Page 38420]]

must be filed at the end of the quarter. The Commission cannot adopt 
this approach for several reasons. First, the 1999 amendment to the 
FECA requires political committees to file electronically upon 
exceeding, or having reason to expect to exceed, the threshold. The 
Commission finds no Congressional intent to allow a grace period. The 
Commission notes that other sections of the FECA allow a specific 
number of days before filing is required. For example, an individual 
has 15 days upon becoming a candidate to designate a principal campaign 
committee, and a principal campaign committee has 10 days upon being so 
designated to register with the Commission. 2 U.S.C. 432(e)(1) and 
433(a). Had Congress intended to allow electronic filers a similar 
period of time, it would have so stated. Second, unauthorized 
committees that file monthly have the option to file quarterly instead. 
Since the new regulations take effect on January 1, 2001--a non-
election year--monthly filers could opt to file under the non-election 
year quarterly filer schedule. In non-election years, quarterly filers 
file only mid-year and year-end reports.\6\ Thus, the monthly filers 
will have sufficient time to convert to electronic filing.
---------------------------------------------------------------------------

    \6\ 11 CFR 104.5(c).
---------------------------------------------------------------------------

    Under electronic filing regulations at 11 CFR 104.18(b), voluntary 
electronic filers must continue filing electronically for the remainder 
of the calendar year unless the Commission determines that an 
extraordinary and unforeseen circumstance makes electronic filing 
impracticable. The Commission sought comments on whether a similar 
provision allowing a committee or other person to stop filing 
electronically within the calendar year due to extraordinary and 
unforeseen circumstances should be included in the proposed rules for 
mandatory electronic filers. The Commission received no comments on 
this issue. Because the Commission does not have statutory authority to 
waive reporting requirements under these circumstances and because it 
is the intention of the new regulations that persons who are required 
to file electronically but who file on paper be treated as non-filers 
(see ``4. Non-filers,'' infra) the Commission has determined that no 
such waiver can be established for mandatory electronic filers.

D. Have Reason to Expect to Have

    The NPRM, in paragraph (a)(3) of 11 CFR 104.18 proposed two tests 
to determine when a filer has reason to expect to exceed the threshold. 
(1) A filer should expect to have financial activity above the $50,000 
threshold if it exceeded this amount during the comparable year of the 
previous election cycle; or (2) A filer should expect to have financial 
activity exceeding the threshold if the committee's aggregate 
contributions or expenditures exceeded the threshold during the 
previous calendar year. In addition, comments were sought on three 
other possible approaches that were not included in the proposed 
rules--(1) Should the Commission base the expectation solely on the 
committee's or person's own projections during the year? If so, at what 
point during the year will political committees and other persons be 
expected to make the projection? Should it be a one-time forecast at 
the beginning of the year or a rolling projection that changes as 
necessary throughout the calendar year? (2) Should new filers having no 
historical data on which to base a projection, base their expectations 
of aggregate contributions and expenditures on historical data for 
similarly situated committees in the previous election cycle; or should 
such new committees be presumed to have no reason to expect to exceed 
the threshold until such time as they actually do so? (3) Should a 
filer have reason to expect to exceed the threshold if it raises or 
spends more than one quarter of the proposed yearly threshold in the 
first calendar quarter, or if it raises or spends more than half the 
threshold in the first half of the calendar year? For example, should a 
committee be required to file electronically if it raises $30,000 in 
the first calendar quarter on the grounds that it has reason to expect 
to exceed the $50,000 threshold within the calendar year?
    The Commission received one comment on this issue. The commenter 
stated that under the first proposed test (the ``comparable year'' 
test), its members would be able to make a determination of whether 
they have reason to expect to exceed the threshold. The commenter 
pointed out, however, that many committees' non-election year receipts 
are much lower than the previous, election-year receipts. Therefore, 
the commenter believed that the second proposed test (the ``previous 
year'' test) would not provide an accurate expectation of contributions 
or expenditures for many committees.
    New paragraph (a)(3)(i) contains a combination of the ``comparable 
year'' and the ``previous year'' tests proposed in the NPRM. While the 
Commission understands the commenter's concern with the ``previous 
year'' test, the Commission believes that the administrative 
inconvenience of going from electronic to paper filing for filers 
fluctuating above and below the threshold in election and non-election 
years, respectively, will be overly burdensome on the filers, as well 
as on the Commission. Therefore, the Commission is combining the two 
tests proposed in the NPRM to require that once a committee or other 
person actually exceeds the threshold, that committee or other person 
has reason to expect to exceed the threshold in the following two 
calendar years. For example, if a committee exceeds the threshold in 
May of 2001, it must electronically file its mid-year report due on 
July 31, and its year end report due on January 31 of the following 
year. Furthermore, under new paragraph (a)(3)(i), such a committee has 
reason to expect to exceed the threshold in 2002 and 2003, and must 
electronically file its reports for those years.
    However, the new rules also contain an exception to electronic 
filing for certain candidates who do not intend to run in the next 
federal election. To qualify for this exception, an authorized 
committee must have $50,000 or less in net debts outstanding on January 
1 of the year following the election and must anticipate terminating 
prior to the next election year. In addition, under this exception, the 
candidate must not have qualified as a candidate for the next election 
and must not intend to become a candidate for federal office in the 
next election. The Commission anticipates that this exception is likely 
to apply to the campaign committees of many candidates who have lost 
the election. Candidate's committees meeting these conditions are not 
likely to have financial activity in excess of the $50,000 threshold 
after the election because their only financial activity is likely to 
relate to raising funds to pay off their debts, which total less than 
$50,000.
    The commenter also noted that the third alternative proffered in 
the NPRM, the ``calendar quarter'' test, would require a committee to 
extrapolate annual estimates based on first quarter or first half year 
receipts. The Commission understands the commenter's objection with 
regard to the ``calendar quarter'' test, however, the Commission 
concluded that this test will provide a limited means by which filers 
without any historical data would have reason to expect to exceed the 
threshold, thus requiring them to file electronically before they 
actually meet the threshold, more rapidly disclosing their financial 
activity. Therefore, the

[[Page 38421]]

``calendar quarter'' test is being added to the final rules as a test 
only for those filers who have no historical data.

E. Definition of Reports

    New paragraph (c) adds a definition of reports. The 1999 amendment 
to the FECA defines report as ``. . . a report, designation, or 
statement required by this Act to be filed with the Commission.'' Thus, 
for purposes of 11 CFR 104.18, report means any statement required by 
the FECA and filed with the Commission. Therefore, reports, 
designations and statements that are required by the regulations but 
not the FECA, or that are required to be filed with the Secretary of 
the Senate, are not subject to the mandatory electronic filing 
regulations. The Commission received no comments on this provision.

F. Amending Reports

    The Commission received one comment on paragraph (f) (former 
paragraph (d)) of section 104.18 regarding amending electronic reports. 
The commenter urged the Commission to develop a system whereby 
electronic filers can file letter amendments electronically, rather 
than filing amended forms electronically. The commenter argued that 
letter amendments are easier to file and provide greater opportunity 
for explanation. The Commission's voluntary electronic filing system 
has required amendments to electronic reports to be filed 
electronically since the system's inception in 1996. This process has 
worked well and has provided sufficient information in amendments. 
Further, since electronic filing should decrease the number of errors 
in reports, the number and complexity of amendments may decrease as 
well.
    The Commission is deleting the requirement from paragraph (f) that 
amended reports contain electronic flags or markings that point to the 
portions of the report that are being amended. The Commission now 
requires only that amendments comply with the formatting specifications 
contained in the Electronic Filing Specification Requirements document.

Section 109.2  Reporting of independent expenditures by persons other 
than political committees (2 U.S.C. 434(c))

    Previously, under 11 CFR 109.2(a), persons had the option of 
disclosing independent expenditures by filing either FEC Form 5 or a 
signed statement. Paragraph (a) is being revised to clarify that 
electronic filers do not have the option of reporting independent 
expenditures via signed statement. Beginning with reporting periods 
after December 31, 2000, anyone who exceeds, or has reason to expect to 
exceed, the $50,000 threshold, must disclose these independent 
expenditures electronically on FEC Form 5. Please note that FEC Form 5 
must be notarized. Therefore, under paragraph (h) of 11 CFR 104.18, the 
filer must submit the notary seal and signature either by submitting a 
paper copy of FEC Form 5 in addition to the electronic form, or by 
including a digitized version of the notary seal and signature as a 
separate file in the electronic submission. The Commission anticipates 
that its free FECFile software will generate FEC Form 5 in the near 
future. The Commission received no comments on this section.

Section 114.10  Nonprofit corporations exempt from the prohibition on 
independent expenditures (2 U.S.C. 434(c)).

    Previously, qualified nonprofit corporations (``QNCs'') could 
disclose independent expenditures by either filing FEC Form 5 or by 
filing a signed statement. Revised paragraph (e)(1)(ii) of 11 CFR 
114.10 clarifies that if a QNC exceeds, or has reason to expect to 
exceed, the $50,000 threshold, it must disclose its independent 
expenditures electronically on FEC Form 5. Please note that FEC Form 5 
must be notarized. Therefore, under paragraph (h) of 11 CFR 104.18, the 
filer may submit the notary seal and signature either by filing a paper 
copy of FEC Form 5 in addition to the electronic form or by including a 
digitized version of the notary seal and signature as a separate file 
in the electronic submission. The Commission anticipates that its free 
FECFile software will generate FEC Form 5 in the near future. The 
Commission received no comments on this section.

Section 9003.1  Candidate and committee agreements (2 U.S.C. 9003(a)).

    Former paragraph (b)(11) of 11 CFR 9003.1 stated that, as a 
condition of receiving public funding, Presidential candidates are 
required to agree to file electronically if their data is computerized. 
The Commission is removing electronic filing as a condition for 
receiving public funding because these federally financed Presidential 
candidates will have reason to expect to exceed and, in fact, will 
exceed the $50,000 threshold and, therefore, are required to file 
electronically. The Commission received no comments on this section.

Section 9033.1  Candidate and committee agreements (2 U.S.C. 9033(a)).

    Previously, under paragraph (b)(13) of this section, as a condition 
of receiving public funding Presidential candidates in the primary 
elections were required to agree to file electronically if their data 
is computerized. This requirement is being deleted for the reasons 
explained above. The Commission received no comments on this section.

Other Issues

1. Computerization of Data and FECFile Software

    The Commission's computer systems are currently capable of 
receiving all reports that are required under the new regulations. 
However, the Commission's FECFile software, which is available from the 
agency at no cost, does not currently generate all required forms. For 
example, the FECFile software does not currently generate FEC Form 1 
and 2 (Statement of Organization and Statement of Candidacy, 
respectively), FEC Form 3P for Presidential candidates, FEC Form 4 for 
Convention and Host Committees to report their receipts and 
disbursements, or FEC Form 5 for persons other than political 
committees reporting independent expenditures. The Commission plans to 
update the FECFile software to generate FEC Forms 1 and 2 by January 1, 
2001, and anticipates that FECFile will generate FEC Forms 3P, 4 and 5 
in the near future. The Commission received one comment suggesting that 
the Commission's software should be updated to allow committees to 
import data from the software they currently use for reporting to 
FECFile. The Commission notes that committees are not required to use 
the Commission's filing software. The Commission's computer system is 
designed to accept properly formatted reports using other software 
packages. The Commission's Data Systems Development Division is working 
with the software vendor community to assist the vendors in updating 
their programs to comply with these mandatory electronic filing 
regulations. The comment was forwarded to the FEC Data Systems 
Development Division.

2. Formatting and Standardization Requirements

    The NPRM proposed maintaining the standardization requirements that 
are present in the current voluntary electronic filing system. When the 
voluntary electronic filing system was designed, the Commission created 
``The Federal Election Commission's

[[Page 38422]]

Electronic Filing Specifications Requirements'' (EFSR) document and 
invited comment on that document at that time. The EFSR is available at 
no charge on the Commission's web site. The Commission is updating the 
EFSR and intends to use specifications embodied in the updated EFSR for 
this mandatory electronic filing program. The Commission uses several 
means of communication to relay changes in the EFSR or other system 
changes to electronic filers, including special notices, the FEC's web 
site, the Record newsletter, and electronic mail.
    Please note that the validation program that checks incoming 
reports is also being updated. For example, upon completion of this 
update, the program will no longer accept forms on which the figures 
disclosed within the report do not add up to the figures reported on 
the detailed summary page and forms indicating the incorrect type of 
report.
    The Commission received no comments on the EFSR or the validation 
program.

3. Means of Filing

    The Commission currently accepts properly formatted electronic 
reports on diskettes (either hand delivered or sent by other delivery 
means such as U.S. Postal Service). Although the Commission has no 
plans at this time to cease accepting electronic reports on disk, most 
electronic filers find it more convenient to file via electronic upload 
through an Internet connection.

4. Non-filers

    The FECA and the new regulations at 11 CFR 104.18 make electronic 
filing mandatory for those political committees, candidates, and other 
persons who exceed or who have reason to expect to exceed the threshold 
set by the Commission. Consequently, political committees, candidates, 
and other persons who are required to file electronically, but who fail 
to do so, may be subject to the Commission's enforcement process for 
non-filers and may have their names published as non-filers under 2 
U.S.C. 437g(b) and 438(a)(7). This includes those who are required to 
file electronically but who file paper reports instead. Additionally, 
in 1999, Congress amended 2 U.S.C. 437g(a)(4) and (6)(A) to authorize 
the Commission to impose an administrative fine on late and non-filers 
pursuant to a schedule of civil money penalties. The Commission 
recently promulgated final rules and penalty schedules. See 65 FR 31787 
(May 19, 2000). The Commission received no comments on this issue.

Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory 
Flexibility Act)

    These final rules will not have a significant economic impact on a 
substantial number of small entities. The basis of this certification 
is that the Commission's thresholds are set at a sufficiently high 
level that most, if not all, small political committees are not 
required to file electronically, although they could continue to do so 
voluntarily. In the event that any small committees do exceed the 
proposed threshold, the economic impact is not significant because the 
committees may obtain the FECFile software from the Commission at no 
cost, and the Commission anticipates this software will generate all 
required forms.

List of Subjects

11 CFR Part 100

    Elections.

11 CFR Part 101

    Political candidates, Reporting and recordkeeping requirements.

11 CFR Part 102

    Political committees and parties, Reporting and recordkeeping 
requirements.

11 CFR Part 104

    Campaign funds, Political committees and parties, Reporting and 
recordkeeping requirements.

11 CFR Part 109

    Elections, Reporting and recordkeeping requirements.

11 CFR Part 114

    Business and industry, Elections, Labor.

11 CFR Part 9003

    Campaign funds, Reporting and recordkeeping requirements.

11 CFR Part 9033

    Campaign funds, Reporting and recordkeeping requirements.

    For the reasons set out in the preamble, subchapters A, E and F of 
chapter I of title 11 of the Code of Federal Regulations are amended as 
follows:

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

    1. The authority for part 100 is revised to read as follows:

    Authority: 2 U.S.C. 431, 434(a)(11), 438(a)(8).


    2. Section 100.19 is amended by adding paragraph (c) to read as 
follows:


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

* * * * *
    (c) For electronic filing purposes, a document is timely filed when 
it is received and validated by the Federal Election Commission at or 
before 11:59 p.m., Eastern Standard/Daylight Time, on the filing date.

PART 101--CANDIDATE STATUS AND DESIGNATIONS (2 U.S.C. 432(e))

    3. The authority citation for part 101 is revised to read as 
follows:

    Authority: 2 U.S.C. 432(e), 434(a)(11), 438(a)(f).

    4. Section 101.1 is amended by revising paragraph (a) to read as 
follows:


Sec. 101.1  Candidate designations (2 U.S.C. 432(e)(1)).

    (a) Principal Campaign Committee. Within 15 days after becoming a 
candidate under 11 CFR 100.3, each candidate, other than a nominee for 
the office of Vice President, shall designate in writing a principal 
campaign committee in accordance with 11 CFR 102.12. A candidate shall 
designate his or her principal campaign committee by filing a Statement 
of Candidacy on FEC Form 2, or, if the candidate is not required to 
file electronically under 11 CFR 104.18, by filing a letter containing 
the same information (that is, the individual's name and address, party 
affiliation and office sought, the District and State in which Federal 
office is sought, and the name and address of his or her principal 
campaign committee) at the place of filing specified at 11 CFR part 
105. Each principal campaign committee shall register, designate a 
depository and report in accordance with 11 CFR Parts 102, 103 and 104.
* * * * *

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

    5. The authority citation for part 102 is revised to read as 
follows:

    Authority: 2 U.S.C. 432, 433, 434(a)(11), 438(a)(8), 441d.

    6. Section 102.2 is amended by revising paragraphs (a)(1)(vi) and 
(a)(2), and adding (a)(1)(vii) to read as follows:


Sec. 102.2  Statement of organization: Forms and committee 
identification number (2 U.S.C. 433(b), (c)).

    (a) * * *
    (1) * * *
    (vi) A listing of all banks, safe deposit boxes, or other 
depositories used by the committee; and

[[Page 38423]]

    (vii) The Internet address of the committee's official web site, if 
such a web site exists. If the committee is required to file 
electronically under 11 CFR 104.18, its electronic mail address, if 
such an address exists.
    (2) Any change or correction in the information previously filed in 
the Statement of Organization shall be reported no later than 10 days 
following the date of the change or correction by filing an amended 
Statement of Organization or, if the political committee is not 
required to file electronically under 11 CFR 104.18, by filing a letter 
noting the change(s). The amendment need list only the name of the 
political committee and the change or correction.
* * * * *

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

    7. The authority citation for part 104 continues to read as 
follows:

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

    8. Section 104.5 is amended by revising paragraph (e) to read as 
follows:


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

* * * * *
    (e) Date of filing. A designation, report or statement sent by 
registered or certified mail shall be considered filed on the date of 
the U.S. post mark except that a twelve day pre-election report sent by 
certified or registered mail shall be mailed no later than the 15th day 
before any election. Designations, reports or statements sent by first 
class mail 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.
* * * * *

    9. Section 104.18 is revised to read as follows:


Sec. 104.18  Electronic filing of reports (2 U.S.C. 432(d) and 
434(a)(11)).

    (a) Mandatory. (1) Political committees and other persons required 
to file reports with the Commission, as provided in 11 CFR Parts 105 
and 107, must file reports in an electronic format that meets the 
requirements of this section if --
    (i) The political committee or other person has received 
contributions or has reason to expect to receive contributions 
aggregating in excess of $50,000 in any calendar year; or
    (ii) The political committee or other person has made expenditures 
or has reason to expect to make expenditures aggregating in excess of 
$50,000 in any calendar year.
    (2) Once any political committee or other person described in 
paragraph (a)(1) of this section exceeds or has reason to expect to 
exceed the appropriate threshold, the political committee or person 
must file electronically all subsequent reports covering financial 
activity for the remainder of the calendar year. All electronically 
filed reports must pass the Commission's validation program in 
accordance with paragraph (e) of this section. Reports filed on paper 
do not satisfy a political committee's or other person's filing 
obligations.
    (3) Have Reason to Expect to Exceed.
    (i) A political committee or other person shall have reason to 
expect to exceed the threshold stated in paragraph (a)(1) of this 
section for two calendar years following the calendar year in which the 
political committee or other person exceeds the threshold unless--
    (A) The committee is an authorized committee, and has $50,000 or 
less in nets debts outstanding on January 1 of the year following the 
general election, and anticipates terminating prior to January 1 of the 
next election year; and
    (B) The candidate has not qualified as a candidate for the next 
election and does not intend to become a candidate for federal office 
in the next election.
    (ii) New political committees or other persons with no history of 
campaign finance activity shall have reason to expect to exceed the 
threshold stated in paragraph (a)(1) of this section within the 
calendar year if--
    (A) It receives contributions or makes expenditures that exceed one 
quarter of the threshold amount in the first calendar quarter of the 
calendar year; or
    (B) It receives contributions or makes expenditures that exceed 
one-half of the threshold amount in the first half of the calendar 
year.
    (b) Voluntary. A political committee or other person who files 
reports with the Commission, as provided in 11 CFR part 105, and who is 
not required to file electronically under paragraph (a) of this 
section, may choose to file its reports in an electronic format that 
meets the requirements of this section. If a political committee or 
other person chooses to file its reports electronically, all 
electronically filed reports must pass the Commission's validation 
program in accordance with paragraph (e) of this section. The committee 
or other person must continue to file in an electronic format all 
reports covering financial activity for that calendar year, unless the 
Commission determines that extraordinary and unforeseeable 
circumstances have made it impracticable for the political committee or 
other person to continue filing electronically.
    (c) Definition of report. For purposes of this section, report 
means any statement, designation or report required by the Act to be 
filed with the Commission.
    (d) Format specifications. Reports filed electronically shall 
conform to the technical specifications described in the Federal 
Election Commission's Electronic Filing Specifications Requirements. 
The data contained in the computerized magnetic media provided to the 
Commission shall be organized in the order specified by the Electronic 
Filing Specifications Requirements.
    (e) Acceptance of reports filed in electronic format; validation 
program.
    (1) Each political committee or other person who submits an 
electronic report shall check the report against the Commission's 
validation program before it is submitted, to ensure that the files 
submitted meet the Commission's format specifications and can be read 
by the Commission's computer system. Each report submitted in an 
electronic format under this section shall also be checked upon receipt 
against the Commission's validation program. The Commission's 
validation program and the Electronic Filing Specification Requirement 
are available on request and at no charge.
    (2) A report that does not pass the validation program will not be 
accepted by the Commission and will not be considered filed. If a 
political committee or other person submits a report that does not pass 
the validation program, the Commission will notify the political 
committee or other person that the report has not been accepted.
    (f) Amended reports. If a political committee or other person files 
an amendment to a report that was filed electronically, the political 
committee or other person shall also submit the amendment in an 
electronic format. The political committee or other person shall submit 
a complete version of the report as amended, rather than just those 
portions of the report that are being amended. In addition, amendments 
must be filed in accordance with the Electronic Filing Specification 
Requirements.
    (g) Signature requirements. The political committee's treasurer, or 
any other person having the responsibility to file a designation, 
report or statement under this subchapter, shall verify the report in 
one of the following ways: by submitting a signed certification on

[[Page 38424]]

paper that is submitted with the computerized media; or by submitting a 
digitized copy of the signed certification as a separate file in the 
electronic submission. Each verification submitted under this section 
shall certify that the treasurer or other signatory has examined the 
report or statement and, to the best of the signatory's knowledge and 
belief, it is true, correct and complete. Any verification under this 
section shall be treated for all purposes (including penalties for 
perjury) in the same manner as a verification by signature on a report 
submitted in a paper format.
    (h) Schedules and forms with special requirements. The following 
list of schedules, materials, and forms have special signature and 
other requirements and reports containing these documents shall 
include, in addition to providing the required data within the 
electronic report, either a paper copy submitted with the political 
committee's or other person's electronic report or a digitized version 
submitted as a separate file in the electronic submission: Schedule C-1 
(Loans and Lines of Credit From Lending Institutions), including copies 
of loan agreements required to be filed with that Schedule, Schedule E 
(Itemized Independent Expenditures), Form 5 (Report of Independent 
Expenditures Made and Contributions Received), and Form 8 (Debt 
Settlement Plan). The political committee or other person shall submit 
any paper materials together with the electronic media containing the 
report.
    (i) Preservation of reports. For any report filed in electronic 
format under this section, the treasurer or other person required to 
file any report under the Act shall retain a machine-readable copy of 
the report as the copy preserved under 11 CFR 104.14(b)(2). In 
addition, the treasurer or other person required to file any report 
under the Act shall retain the original signed version of any documents 
submitted in a digitized format under paragraphs (g) and (h) of this 
section.

PART 109--INDEPENDENT EXPENDITURES (2 U.S.C. 431(17), 434(c)).

    10. The authority for part 109 is revised to read as follows:

    Authority: 2 U.S.C. 431(17), 434(a)(11) and (c), 438(a)(8), 
441d.

    11. Section 109.2 is amended by revising the introductory text of 
paragraph (a) to read as follows:


Sec. 109.2  Reporting of independent expenditures by persons other than 
a political committee 2 U.S.C. 434(c)).

    (a) Every person other than a political committee, who makes 
independent expenditures aggregating in excess of $250 during a 
calendar year shall file a report on FEC Form 5 or, if the person is 
not required to file electronically under 11 CFR 104.18, a signed 
statement with the Commission or Secretary of the Senate in accordance 
with 11 CFR 104.4(c).
* * * * *

PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY

    12. The authority citation for part 114 is revised to read as 
follows:

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

    13. Section 114.10 is amended by revising paragraph (e)(1)(ii) to 
read as follows:


Sec. 114.10  Nonprofit corporations exempt from the prohibition on 
independent expenditures.

* * * * *
    (e) * * *
    (1) * * *
    (ii) This certification may be made either as part of filing FEC 
Form 5 (independent expenditure form) or, if the corporation is not 
required to file electronically under 11 CFR 104.18, by submitting a 
letter in lieu of the form. The letter shall contain the name and 
address of the corporation and the signature and printed name of the 
individual filing the qualifying statement. The letter shall also 
certify that the corporation has the characteristics set forth in 
paragraphs (c)(1) through (c)(5) of this section.
* * * * *

PART 9003--ELIGIBILITY FOR PAYMENTS

    14. The authority citation for part 9003 continues to read as 
follows:

    Authority: 26 U.S.C. 9003 and 9009(b).


Sec. 9003.1  [Amended]

    15. Section 9003.1 is amended by removing paragraph (b)(11).

PART 9033--ELIGIBILITY FOR PAYMENTS

    16. The authority citation for part 9033 continues to read as 
follows:

    Authority: 26 U.S.C. 9033 and 9039(b).


Sec. 9033.1  [Amended]

    17. Section 9033.1 is amended by removing paragraph (b)(13).

    Dated: June 16, 2000.
Darryl R. Wold,
Chairman, Federal Election Commission.
[FR Doc. 00-15668 Filed 6-20-00; 8:45 am]
BILLING CODE 6715-01-P