Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations 38415

§ 784.14 Death, incompetency, or

disappearance.

In the case of death, incompetency,

disappearance or dissolution of a person

that is eligible to receive benefits in

accordance with this part, such person

or persons specified in part 707 of this

chapter may receive such benefits, as

determined appropriate by FSA.

§ 784.15 Maintaining records.

Persons making application for

benefits under this program must

maintain accurate records and accounts

that will document that they meet all

eligibility requirements specified

herein. Such records and accounts must

be retained for 3 years after the date of

payment to the sheep and lamb

operations under this program.

Destruction of the records after such

date shall be the risk of the party

undertaking the destruction.

§ 784.16 Refunds; joint and several

liability.

(a) In the event there is a failure to

comply with any term, requirement, or

condition for payment arising under the

application, or this part, and if any

refund of a payment to FSA shall

otherwise become due in connection

with the application, or this part, all

payments made under this part to any

sheep and lamb operation shall be

refunded to FSA together with interest

as determined in accordance with

paragraph (c) of this section and late

payment charges as provided in part

1403 of this title.

(b) All persons signing a sheep and

lamb operation’s application for

payment as having an interest in the

operation shall be jointly and severally

liable for any refund, including related

charges, which is determined to be due

for any reason under the terms and

conditions of the application or this part

with respect to such operation.

(c) Interest shall be applicable to

refunds required of any person under

this part if FSA determines that

payments or other assistance was

provided to a person who was not

eligible for such assistance. Such

interest shall be charged at the rate of

interest which the United States

Treasury charges the Commodity Credit

Corporation (CCC) for funds, from the

date FSA made such benefits available

to the date of repayment or the date

interest increases as determined in

accordance with applicable regulations.

FSA may waive the accrual of interest

if FSA determines that the cause of the

erroneous determination was not due to

any action of the person.

(d) Interest determined in accordance

with paragraph (c) of this section may

be waived at the discretion of FSA alone

for refunds resulting from those

violations determined by FSA to have

been beyond the control of the person

committing the violation.

(e) Late payment interest shall be

assessed on all refunds in accordance

with the provisions of, and subject to

the rates prescribed in 7 CFR part 792.

(f) Any excess payments made by FSA

with respect to any application under

this part must be refunded.

(g) In the event that a benefit under

this subpart was provided as the result

of erroneous information provided by

any person, the benefit must be repaid

with any applicable interest.

Signed at Washington, DC, on June 16,

2000.

George Arredondo,

Acting Administrator, Farm Service Agency.

[FR Doc. 00–15724 Filed 6–19–00; 11:19 am]

BILLING CODE 3410–05–P

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.

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., § 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

38416 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations

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., § 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.

Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations 38417

1Note 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.

2These calculations can be estimated by using the

Detailed Summary Page of the appropriate FEC

Form for filing receipts and disbursements.

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.

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

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

38418 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations

3Because 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.

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.

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

Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations 38419

4 1999 GAH. B. 1630.

5NY ELEC § 14–102.

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 fortyeight 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.

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

38420 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations

6 11 CFR 104.5(c).

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 nonelection 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.

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’ nonelection 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

Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations 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

38422 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations

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 nonfilers 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 nonfilers 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:

§ 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:

§ 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:

§ 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

Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations 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:

§ 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:

§ 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

38424 Federal Register / Vol. 65, No. 120 / Wednesday, June 21, 2000 / Rules and Regulations

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:

§ 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:

§ 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).

§ 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).

§ 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

SOCIAL SECURITY ADMINISTRATION

20 CFR Part 404

RIN 0960–AE85

Reduction of Title II Benefits Under the

Family Maximum Provisions in Cases

of Dual Entitlement

AGENCY: Social Security Administration

(SSA).

ACTION: Final rules.

SUMMARY: The interim final rules

published at 64 FR 57774, on October

27, 1999, are adopted as final without

change. These rules amend the family

maximum provisions under title II of

the Social Security Act (the Act). These

rules amend how we compute the total

monthly benefits payable to a family

when one or more of the beneficiaries

are entitled to benefits on another

earnings record. In certain specific

circumstances, this change to our rules

will increase the amount of benefits

payable to some family members

entitled on the record to which the

family maximum applies. These final

rules adopt nationwide the holding of

the U.S. Court of Appeals for the First

Circuit in Parisi by Cooney v. Chater.

DATES: These regulations are effective

October 27, 1999.

FOR FURTHER INFORMATION CONTACT: Bill

Hilton, Social Insurance Specialist,

Office of Program Benefits, Social

Security Administration, 6401 Security

Boulevard, Baltimore, MD 21235–6401,

(410) 965–2468 or TTY (410) 966–5609.

For information on eligibility, claiming

benefits or coverage of earnings, call our

national toll-free number, 1–800–772–

1213 or TTY 1–800–325–0778.

SUPPLEMENTARY INFORMATION:

Background

Section 203(a) of the Act establishes

a limit, derived from a worker’s primary

insurance amount (PIA), on the total

monthly benefits to which dependents

or survivors may be entitled on the basis

of one worker’s earnings record (the

family maximum). Under our previous

regulations, the benefits of each

claimant entitled on the worker’s

earnings record were reduced

proportionally so that the total monthly

benefits of those entitled on the record

in one month did not exceed the family

maximum. In calculating total monthly