UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBITS 

) 

 Defendant. ) 

FEDERAL ELECTION COMMISSION’S EXHIBITS IN SUPPORT OF ITS 

OPPOSITION TO PLAINTIFF’S APPLICATION FOR A PRELIMINARY 

INJUNCTION 
TABLE OF CONTENTS 

Exhibit 

Number: 

Document: 

1 Political Committee Status; Proposed Rule, 69 Fed. Reg. 11 (March 11, 

2004). 

2 Political Committee Status, Definition of Contribution, and Allocation for 

Separate Segregated Funds and Nonconnented Committees (Nov. 23, 2004). 

 

3 FEC Committee Summary Report, EMILY’s List 2003–2004 Reported 

Activity, available at http://herndon1.sdrdc.com/cgibin/cancomsrs/?_04+C00193433.

4 Sidoti, Liz, “Bush, Kerry to Pull Ads on Friday,” Associated Press 

Newswires, June 7, 2004. 

5 FEC Notice, dated April 7, 2004, available at

http://www.fec.gov/press/press2004/20040407advisory.html. 

6 Disclosure Reports, Year End Form H1s filed by EMILY’s List with FEC 

(1998-2004). 

7 Disclosure Reports, Year End Form H1 filed by EMILY’s List with FEC 

(1995-1996). 

8 Transcript of Public Hearing on Political Committee Status, 

April 14, 2004 (excerpts). 

 

9 Transcript of Public Hearing on Political Committee Status, 

April 15, 2004 (excerpts). 

10. Comments of Senators McCain and Feingold, Representatives Shays and 

Meehan (April 9, 2004). 

 

11. Comments of the United States Chamber of Commerce (April 5, 2004) 

(excerpts). 

12. Comments of Public Citizen (April 5, 2004) (excerpts). 

13. Comments of America Coming Together (April 5, 2004) (excerpts). 
14. Comments of Republican National Committee (April 5, 2004) (excerpts). 

15. Comments of Democracy 21, Campaign Legal Center, and Center for 

Responsive Politics (April 5, 2004) (excerpts). 

16. Comments of the Media Fund (April 5, 2004) (excerpts). 

17. EMILY’s List Website, Where We Come From, available at

http://www.emilyslist.org/about/where-from.html. 

18. EMILY’s List Website, Welcome from Ellen R. Malcolm, available at 

http://www.emilyslist.org/about/welcome.html. 

19. Wisconsin Right to Life, Inc. v. FEC, Civ. No. 04-1260 (DBS, RWR, RLJ) 

(D.D.C. Aug. 17, 2004), slip op. 

20. Disclosure Report, filed by EMILY’s List (July, 24 2002) (excerpts). 

21. ACT Website, About ACT, available at

http://www.actforvictory.org/act.php/home/content/about
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 1 

Political Committee Status; Proposed Rule, 69 Fed. Reg. 11 (March 11, 2004). 

 
Thursday,

March 11, 2004

Part III

Federal Election 

Commission

11 CFR Parts 100, 102, 104, 106, and 114

Political Committee Status; Proposed Rule

11736 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

1This threshold, however, does not apply to 

separate segregated funds and state or local party 

committees. See 2 U.S.C. 431(4)(B) and (C) and 11 

CFR 100.5(b) and (c).

2The Commission is not proposing to change the 

definition of ‘‘political committee’’ applicable to 

party committees, Federal candidates’ authorized 

committees or separate segregated funds.

FEDERAL ELECTION COMMISSION

11 CFR Parts 100, 102, 104, 106, and 

114 

[Notice 2004–6] 

Political Committee Status

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Election 

Commission is seeking comment on 

whether to amend the definition of 

‘‘political committee’’ applicable to 

nonconnected committees. The 

Commission is also considering 

amending its current regulations to 

address when disbursements for certain 

election activity should be treated as 

‘‘expenditures.’’ Related amendments to 

the allocation regulations for 

nonconnected committees and separate 

segregated funds are also under 

consideration to determine whether 

those regulations need further 

refinement. While the Commission 

requests comments on proposed 

changes to its rules, it has made no final 

decisions on any of the proposed 

revisions in this notice. Further 

information is provided in the 

supplementary information that follows.

DATES: The Commission will hold a 

hearing on these proposed rules on 

April 14 and 15, 2004, at 10 a.m. 

Commenters wishing to testify at the 

hearing must submit their request to 

testify along with their written or 

electronic comments by April 5, 2004. 

Commenters who do not wish to testify 

must submit their written or electronic 

comments by April 9, 2004.

ADDRESSES: All comments should be 

addressed to Ms. Mai T. Dinh, Acting 

Assistant General Counsel, and must be 

submitted in either electronic or written 

form. Commenters are strongly 

encouraged to submit comments 

electronically to ensure timely receipt 

and consideration. Electronic mail 

comments should be sent to 

politicalcommitteestatus@fec.gov and 

must include the full name, electronic 

mail address and postal service address 

of the commenter. Electronic mail 

comments that do not contain the full 

name, electronic mail address and 

postal service address of the commenter 

will not be considered. If the electronic 

mail comments include an attachment, 

the attachment must be in the Adobe 

Acrobat (.pdf) or Microsoft Word (.doc) 

format. Faxed comments should be sent 

to (202) 219–3923, with printed copy 

follow-up to ensure legibility. Written 

comments and printed copies of faxed 

comments should be sent to the Federal 

Election Commission, 999 E Street, 

NW., Washington, DC 20463. The 

Commission will post public comments 

on its Web site. The hearing will be held 

in the Commission’s ninth floor meeting 

room, 999 E Street, NW., Washington, 

DC.

FOR FURTHER INFORMATION CONTACT: Ms. 

Mai T. Dinh, Acting Assistant General 

Counsel, Mr. J. Duane Pugh Jr., Senior 

Attorney, or Mr. Daniel E. Pollner, 

Attorney, 999 E Street, NW., 

Washington, DC 20463, (202) 694–1650 

or (800) 424–9530.

SUPPLEMENTARY INFORMATION: 

I. Introduction 

The Bipartisan Campaign Reform Act 

of 2002 (‘‘BCRA’’), which amended the 

Federal Election Campaign Act (‘‘FECA’’ 

or ‘‘the Act’’), was signed into law on 

March 27, 2002. The Supreme Court 

upheld most of BCRA in McConnell v. 

FEC, 540 U.S. —, 124 S. Ct. 619 (2003). 

McConnell recognized that regulation 

of certain activities that affect Federal 

elections is a valid measure to prevent 

circumvention of FECA’s contribution 

limitations and prohibitions. 

Consequently, the Commission is 

undertaking this rulemaking to revisit 

the issue of whether the current 

definition of ‘‘political committee’’ 

adequately encompasses all 

organizations that should be considered 

political committees subject to the 

limitations, prohibitions and reporting 

requirements of FECA. 

FECA, and the Commission’s 

regulations, with certain exceptions, 

define a political committee as ‘‘any 

committee, club, association, or other 

group of persons which receives 

contributions aggregating in excess of 

$1,000 in a calendar year or which 

makes expenditures aggregating in 

excess of $1,000 during a calendar 

year.’’ 2 U.S.C. 431(4)(A); 11 CFR 

100.5(a). FECA subjects political 

committees to certain registration and 

reporting requirements, as well as 

limitations and prohibitions on the 

contributions they receive and make, 

that do not apply to organizations that 

are not political committees. See, e.g., 2 

U.S.C. 432, 433, 441a, 441b; 11 CFR part 

102. 

While the statutory and regulatory 

definitions of ‘‘political committee’’ set 

forth above depend solely on the dollar 

amount of annual contributions 

received and expenditures made, the 

Supreme Court, in Buckley v. Valeo,

explained that to fulfill the purposes of 

FECA, the definition of political 

committee ‘‘need only encompass 

organizations that are under the control 

of a candidate or the major purpose of 

which is the nomination or election of 

a candidate,’’ and does not ‘‘reach 

groups engaged purely in issue 

discussion.’’ Buckley v. Valeo, 424 U.S. 

1, 79 (1976) (emphasis added). The 

Supreme Court has reaffirmed the 

applicability of the ‘‘major purpose’’ test 

in subsequent opinions. See FEC v. 

Massachusetts Citizens for Life, Inc., 479 

U.S. 238 (1986)(‘‘MCFL’’). Therefore, the 

definition of ‘‘political committee’’ 

arguably should have two elements: 

First, the $1,000 contribution or 

expenditure threshold;1 and second, the 

major purpose test for organizations not 

controlled by Federal candidates.

The FECA generally defines 

‘‘expenditures’’ as ‘‘(i) any purchase, 

payment, distribution, loan advance, 

deposit, or gift of money or anything of 

value, made by any person for the 

purpose of influencing any election for 

Federal office; and (ii) a written 

contract, promise, or agreement to make 

an expenditure.’’ 2 U.S.C. 431(9)(A). 

The definition also includes a lengthy 

list of exceptions. 2 U.S.C. 431(9)(B). 

Commission regulations at 11 CFR part 

100, subparts D and E implement this 

statutory definition. Since the 

enactment of the FECA, there have been 

debates about whether certain activities, 

not specifically mentioned in the 

statutory or regulatory definitions, were 

expenditures. BCRA did not amend the 

definition of expenditure, but instead 

categorized certain election-related 

activities into new statutory definitions. 

McConnell shed light on what the 

Supreme Court considered to be 

activities that could affect Federal 

elections. See McConnell, 124 S. Ct. at 

673–675 and 696–697 (upholding 

BCRA’s provisions concerning Federal 

election activity and electioneering 

communications). 

This notice of proposed rulemaking 

(‘‘NPRM’’) explores whether and how 

the Commission should amend its 

regulations defining whether an entity is 

a nonconnected political committee 2

and what constitutes an ‘‘expenditure’’ 

under 11 CFR 100.5(a) or 11 CFR part 

100, subparts D and E. With respect to 

the second element of the definition of 

‘‘political committee,’’ the 

Commission’s regulations do not 

expressly incorporate the ‘‘major 

purpose’’ test into 11 CFR 100.5(a). 

However, the Commission does apply 

the ‘‘major purpose’’ test when assessing 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11737

3By way of historical background, on March 7, 

2001, the Commission published an Advance 

Notice of Proposed Rulemaking (‘‘ANPR’’) seeking 

comment on the definitions of ‘‘political 

committee,’’ ‘‘contribution’’ and ‘‘expenditure.’’ See

‘‘Definition of Political Committee; Advance Notice 

of Proposed Rulemaking,’’ 66 FR 13681 (Mar. 7, 

2001). After receiving comments on the ANPR, the 

Commission voted on September 27, 2001, to hold 

that rulemaking in abeyance pending changes in 

legislation, future judicial decisions, or other 

action. The ANPR and related comments are 

available on the FEC’s Web site at: http://

www.fec.gov/register.htm under ‘‘Definition of 

Political Committee.’’ This NPRM is a separate 

proceeding.

4A communication refers to a clearly identified 

candidate if it includes ‘‘the candidate’s name, 

nickname, photograph, or drawing’’ or if ‘‘the 

identity of the candidate is otherwise aparent 

through unambiguous reference [or] through 

unambiguous reference to his or her status a 

candidate.’’ 11 CFR 100.17.

5The Supreme Court acknowledged that the 

Levin Amendment ‘‘carves out an exception to this 

general rule.’’ McConnell, 124 S.Ct. at 671.

whether an organization is a political 

committee. See, e.g., Advisory Opinions 

(‘‘AOs’’) 1994–25 and 1995–11. In this 

NPRM, the Commission is seeking 

comment on whether to amend its 

regulations to incorporate the major 

purpose test into the regulatory 

definition of ‘‘political committee’’ in 11 

CFR 100.5(a). Furthermore, the 

Commission seeks comment on whether 

the effective date for any final rules that 

the Commission may adopt should be 

delayed until after the next general 

election and whether there is a legal 

basis for delaying the effective date. The 

Commission also seeks comment on 

whether changing the definition of basic 

terms such as ‘‘political committee,’’

‘‘expenditure,’’ and ‘‘contribution,’’ in 

the middle of an election year would 

cause undue disruption to the regulated 

community.3

II. Expenditures 

In Buckley, 424 U.S. at 62–63, the 

Supreme Court first examined FECA’s 

definitions of ‘‘expenditure’’ and 

‘‘contribution’’ and their operative 

phrase, which is ‘‘for the purpose of 

influencing any election for Federal 

office.’’ See 2 U.S.C. 431(8) and (9). The 

Supreme Court found that the ambiguity 

of this phrase posed constitutional 

problems as applied to expenditures 

made by individuals other than 

candidates and organizations other than 

political committees. Buckley, 424 U.S. 

at 77. To avoid the vagueness and 

potential overbreadth of the statutory 

definition, Buckley adopted a narrowing 

construction so that FECA’s definition 

of ‘‘expenditure’’ reached ‘‘only funds 

used for communications that expressly 

advocate the election or defeat of a 

clearly identified candidate.’’ Buckley,

424 U.S. at 79–80.4

A. McConnell v. FEC, 540 U.S. —, 124 

S. Ct. 619 (2003). 

The Supreme Court clarified in 

McConnell that Buckley’s ‘‘express 

advocacy’’ test is not a constitutional 

barrier in determining whether an 

expenditure is ‘‘for the purpose of 

influencing any Federal election.’’

McConnell, 124 S.Ct. at 688–89. The 

Supreme Court explained: ‘‘In narrowly 

reading the FECA provisions in Buckley

to avoid problems of vagueness and 

overbreadth, we nowhere suggested that 

a statute that was neither vague nor 

overbroad would be required to toe the 

same express advocacy line.’’

McConnell, 124 S.Ct. at 688.

With this understanding of express 

advocacy, the Supreme Court found 

constitutional Congress’ regulation of 

two types of activities addressed in 

BCRA: ‘‘Federal election activity,’’ as 

defined in 2 U.S.C. 431(20), and 

‘‘electioneering communication,’’ as 

defined in 2 U.S.C. 434(f)(3)(A)(i). 

McConnell, 124 S.Ct. at 670–77 and 

685–99. In upholding BCRA’s 

amendments to FECA, the Supreme 

Court discussed the effects that Federal 

election activities and electioneering 

communications have on Federal 

elections. 

1. Federal Election Activities 

As the Supreme Court observed in 

McConnell, ‘‘[t]he core of [section 

441i(b)] is a straightforward 

contribution regulation: It prevents 

donors from contributing nonfederal 

funds to state and local party 

committees to help finance ‘‘Federal 

election activity.’ ’’ 124 S.Ct. at 671.5

The Supreme Court noted that this 

regulation arises out of Congressional 

recognition of ‘‘the close ties between 

federal candidates and state party 

committees.’’ Id., at 670. ‘‘Federal 

election activity’’ encompasses four 

distinct categories of activities: (1) Voter 

registration activity during the 120 days 

preceding a regularly scheduled Federal 

election; (2) voter identification, get-outthe-vote (‘‘GOTV’’), and generic 

campaign activity that is conducted in 

connection with an election in which a 

candidate for Federal office appears on 

the ballot; (3) a public communication 

that refers to a clearly identified Federal 

candidate and that promotes, supports, 

attacks, or opposes a candidate for that 

office; and (4) the services provided by 

certain political party committee 

employees. See 2 U.S.C. 431(20) through 

(24); 11 CFR 100.24 through 100.28. 

McConnell referred to all four types of 

Federal election activities as 

‘‘electioneering,’’ and found BCRA’s 

definition of Federal election activities 

to be ‘‘narrowly focused’’ on ‘‘those 

contributions to state and local parties 

that can be used to benefit federal 

candidates directly.’’ McConnell, 124 

S.Ct. at 671 and 674.

Considering the first two types of 

Federal election activities, which 

include certain voter registration, voter 

identification, GOTV and generic 

campaign activities, the Supreme Court 

determined that all of these activities 

‘‘confer substantial benefits on federal 

candidates.’’ McConnell, 124 S.Ct. at 

675. The Supreme Court also stated that 

‘‘federal candidates reap substantial 

rewards from any efforts that increase 

the number of like-minded registered 

voters who actually go to the polls.’’ Id.,

124 S.Ct. at 674. McConnell described 

the factual record as ‘‘show[ing] that 

many of the targeted tax-exempt 

organizations engage in sophisticated 

and effective electioneering activities for 

the purpose of influencing elections, 

including waging broadcast campaigns 

promoting or attacking particular 

candidates and conducting large scale 

voter registration and GOTV.’’ Id., 124 

S.Ct. at 678 n.68. Like the first two 

types, public communications that 

promote, support, attack, or oppose a 

clearly identified Federal candidate, 

‘‘also undoubtedly have a dramatic 

effect on Federal elections. Such ads 

were a prime motivating force behind 

BCRA’s passage * * *. [A]ny public 

communication that promotes or attacks 

a clearly identified federal candidate 

directly affects the election in which he 

is participating.’’ Id., 124 S.Ct. at 675. 

Because the fourth type of Federal 

election activities applies on its face 

only to certain political party 

committees, it is not considered further 

in this proposal. 2 U.S.C. 431(20)(A)(iv). 

2. Electioneering Communications 

An ‘‘electioneering communication’’

is any broadcast, cable, or satellite 

communication that refers to a clearly 

identified Federal candidate, is publicly 

distributed for a fee within 60 days 

before a general election or 30 days 

before a primary election or convention, 

and is targeted to the relevant electorate. 

See 2 U.S.C. 434(f)(3)(A)(i); 11 CFR 

100.29. For communications that refer 

to congressional candidates, targeting 

means the communication can be 

received by 50,000 persons in the 

relevant State or congressional district. 

2 U.S.C. 434(f)(3)(C); 11 CFR 

100.29(b)(5). For communications that 

refer to presidential candidates in the 

nomination context, ‘‘publicly 

distributed’’ means the communication 

11738 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

can be received by 50,000 persons in the 

relevant State prior to its presidential 

primary election or anywhere in the 

United States prior to the presidential 

nominating convention. 11 CFR 

100.29(b)(3)(ii). BCRA establishes 

disclosure requirements for persons 

who make electioneering 

communications. 2 U.S.C. 434(f); 11 

CFR 104.20. McConnell upheld 

regulation of electioneering 

communications against a facial 

challenge, explaining that the definition 

of ‘‘electioneering communication’’

serves ‘‘to replace the narrowing 

construction of FECA’s disclosure 

provisions adopted by this Court in 

Buckley,’’ which, for nonpolitical 

committee groups, was the express 

advocacy construction. McConnell, 124 

S.Ct. at 686 and 695. In so holding, the 

Court observed that ‘‘the definition of 

‘‘electioneering communication’’ raises 

none of the vagueness concerns that 

drove our analysis in Buckley.’’ Id., at 

689. 

BCRA also amended the definition of 

‘‘contribution or expenditure’’ in 2 

U.S.C. 441b to include any payment for 

an electioneering communication, 

thereby expressly prohibiting 

corporations and labor organizations 

from using their general treasury funds 

to pay for electioneering 

communications. McConnell described 

electioneering communications subject 

to 2 U.S.C. 441b as ‘‘communications 

that are intended to, or have the effect 

of, influencing the outcome of federal 

elections.’’ McConnell, 124 S.Ct. at 654. 

BCRA further provides that any 

disbursement for an electioneering 

communication that is coordinated with 

a candidate, candidate authorized 

committee, or a Federal, State, or local 

political party committee shall be 

treated as a contribution to the 

candidate or the candidate’s party and 

as an expenditure by that candidate or 

party. 2 U.S.C. 441a(a)(7)(C). 

In rejecting various challenges to 

BCRA’s electioneering communication 

requirements, the Supreme Court 

addressed the purpose and effect of 

electioneering communications in 

several instances. McConnell concluded 

that while advertisers seeking to evade 

the express advocacy line create 

advertisements that ‘‘do not urge the 

viewer to vote for or against a candidate 

in so many words, they are no less 

clearly intended to influence the 

election.’’ McConnell, 124 S.Ct. at 689. 

The Supreme Court also referred a 

second time to the use of electioneering 

communications ‘‘to influence federal 

elections’’ and quoted approvingly from 

the decision below, which referred to 

electioneering communications as either 

‘‘designed to influence federal 

elections’’ or, in fact, ‘‘influencing 

elections.’’ Id., at 691 (quoting 

McConnell v. FEC, 251 F.Supp.2d 176, 

at 237 (D.D.C. 2003)). The Supreme 

Court also concluded that ‘‘the vast 

majority’’ of advertisements that qualify 

as electioneering communications had 

an ‘‘electioneering purpose,’’ which the 

Court equated with advertisements that 

are ‘‘intended to influence the voters’

decisions and [that] have that effect.’’

McConnell, 124 S.Ct. at 696. The Court 

considered such advertisements to be 

‘‘the functional equivalent of express 

advocacy.’’ Id.

The Commission seeks comment on 

whether the Supreme Court’s treatment 

of Federal election activity or 

electioneering communications in 

McConnell requires or permits the 

Commission to change its regulations 

defining ‘‘expenditure’’ and 

‘‘contribution’’ in 11 CFR part 100, 

subparts B, C, D and E to include those 

concepts. In the alternative, the 

Commission seeks comment on whether 

McConnell recognizes additional 

activities that may be constitutionally 

regulated by Congress, but in the 

absence of new legislation doing so, the 

Commission is prohibited from 

expanding the regulatory definitions of 

‘‘expenditure’’ and ‘‘contribution.’’

The Commission further seeks 

comment on whether, even if it may so 

amend its regulations, the Commission 

should refrain from redefining such 

fundamental and statutorily defined 

terms, in the absence of further 

guidance from Congress. Is it consistent 

with BCRA to include all Federal 

election activity within the regulatory 

definition of ‘‘expenditure’’ when BCRA 

only added electioneering 

communications to the definition of 

‘‘contribution or expenditure’’ in 2 

U.S.C. 441b(b)(2)? Does BCRA’s 

specification in 2 U.S.C. 441a(a)(7)(C) 

that coordinated ‘‘disbursements’’ for 

electioneering communications can be 

contributions provide any guidance 

regarding whether payments for 

electioneering communications should 

be considered expenditures? Is it 

consistent with Congressional intent for 

the Commission to categorize voter 

registration, voter identification, get-outthe-vote and generic campaign activities 

by a State or local candidate committee 

as ‘‘for the purpose of influencing any 

election to Federal office?’’

Does the definition of ‘‘independent 

expenditure’’ in 2 U.S.C. 431(17)(A), 

which requires express advocacy, limit 

Commission’s ability to define an 

‘‘expenditure’’ to communications that 

include express advocacy? If not, can 

communications be considered 

‘‘expenditures’’ if they fail to meet both 

the definition of ‘‘independent 

expenditure’’ in 2 U.S.C. 431(17) and 

the definition of ‘‘coordinated 

communication’’ under 11 CFR 109.21? 

Is the function of the definition of 

‘‘independent expenditure’’ in 2 U.S.C. 

431(17)(A) limited to the 24-hour and 

48-hour reporting requirements in 2 

U.S.C. 434(g)? 

B. Proposed Regulations 

In this NPRM, the Commission 

considers whether, in light of 

McConnell, it should revise current 

regulations to reflect that certain 

communications and certain voter drive 

activities have the purpose of 

influencing Federal elections. This 

proposal includes several alternatives. 

The Commission has not made any final 

decisions on any of the proposed rules 

or alternatives, which are described 

below, and seeks comment on all of 

them. 

1. Proposed 11 CFR 100.5—Definition of 

‘‘political committee’’

Current 11 CFR 100.5(a) specifies that 

any committee, club, association, or 

other group of persons that receives 

contributions aggregating in excess of 

$1,000 or which makes expenditures 

aggregating in excess of $1,000 during a 

calendar year is a political committee. 

In addition to considering amending 

this regulation to include Buckley’s

major purpose test, the proposal for 

which is discussed separately below, 

the Commission is considering 

amending this definition so that the first 

three types of Federal election activity 

and electioneering communications 

would be counted toward the $1,000 

expenditure thresholds. 

Alternative 1–A would define those 

‘‘expenditures’’ that count toward the 

$1,000 threshold, but this definition 

would not apply in any other context in 

which the term ‘‘expenditure’’ is used in 

FECA or in the Commission’s 

regulations. 

The Commission is considering a 

number of issues related to Alternative 

1–A. Should persons other than 

political party committees be subject to 

a rule that treats the first three types of 

Federal election activities as 

‘‘expenditures’’ for purposes of the 

$1,000 threshold in the definition of 

‘‘political committee?’’ Should all of 

Federal election activity and all 

electioneering communications count 

toward political committee status, or 

should the Commission make 

distinctions to count only certain types 

of Federal election activity or only 

certain electioneering communications 

toward political committee status? For 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11739

6State and local candidate committees are subject 

to limitations with respect to their type 3 Federal 

election activities. 2 U.S.C. 441i(f).

example, should Federal election 

activity that does not refer to a clearly 

identified Federal candidate count 

toward political committee status? 

Would a definition of ‘‘expenditure’’

that includes voter drive activities by 

State or local candidate committees on 

behalf of their own candidacies be 

overly broad? 

Should funds received for Federal 

election activities types 1 through 3 or 

electioneering communications count as 

contributions for purposes of the $1,000 

threshold? If any disbursements for 

these activities should count as 

expenditures, should the corresponding 

funds received to make those 

disbursements count as contributions? 

Should the Commission treat funds 

raised by a State or local candidate 

committee through solicitations 

advocating their own election, as well as 

incidentally expressly advocating the 

election or defeat of a clearly identified 

Federal candidate, or promoting, 

supporting, attacking or opposing a 

clearly identified Federal candidate, as 

funds contributed ‘‘for the purpose of 

influencing any election for Federal 

office?’’ Please note that none of the 

regulatory text set forth below relates to 

this proposal regarding ‘‘contributions’’

as used in proposed 11 CFR 

100.5(a)(1)(i). 

Finally, should the Commission 

confine any reexamination of the 

definition of ‘‘expenditure’’ to apply 

only as that term is used as part of the 

definition of ‘‘political committee?’’

FECA already provides two definitions 

of ‘‘expenditure,’’ one in 2 U.S.C. 431(9) 

and a broader definition in 2 U.S.C. 

441b. Currently, ‘‘expenditure’’ in 11 

CFR 100.5(a) uses the definition in 2 

U.S.C. 431(9) and 11 CFR part 100, 

subpart D. Should the Commission 

create by regulation a third definition of 

‘‘expenditure’’ for determining political 

committee status? 

2. 11 CFR Part 100, Subpart D—

Definition of ‘‘expenditure’’

The Commission is also considering 

amendments to its general definition of 

‘‘expenditure’’ to reflect McConnell’s

conclusion that certain communications 

and certain voter drives have the 

purpose or effect of influencing Federal 

elections. 

One approach would be to add 

payments for the Federal election 

activities described in 2 U.S.C. 

431(20)(A)(i) through (iii) and payments 

for electioneering communications to 

the definition of ‘‘expenditure’’ in 11 

CFR part 100, subpart D. In evaluating 

this approach to amending its rules, the 

Commission will consider the same 

issues raised above concerning BCRA’s 

application of the concepts of Federal 

election activities and electioneering 

communications in connection with 

Alternative 1–A. 

BCRA imposes prohibitions and 

restrictions related to Federal election 

activities on national party committees 

(2 U.S.C. 441i(c)), State, district, and 

local political party committees (2 

U.S.C. 441i(b)), Federal candidates (2 

U.S.C. 441i(e)(1)(A), (e)(4)(A), and 

(e)(4)(B)), and State candidates (2 U.S.C. 

441i(f)). Consequently, most of the 

Supreme Court’s consideration of 

Federal election activities arose with 

respect to political party committees. In 

this context, the ‘‘close relationship’’ of 

Federal officeholders and candidates to 

their political parties was part of the 

justification of the Government’s 

interest in regulating Federal election 

activities. See McConnell, 124 S.Ct. at 

668 and n.51. In fact, in disposing of an 

equal protection claim that BCRA 

discriminates against political party 

committees in favor of ‘‘interest 

groups,’’ the Supreme Court 

acknowledged: ‘‘Interest groups, 

however, remain free to raise soft money 

to fund voter registration, GOTV 

activities, mailings, and broadcast 

advertising (other than electioneering 

communications).’’ Id., 124 S.Ct. at 686. 

The approach of including all funds 

disbursed for Federal election activities 

in the definition of ‘‘expenditure,’’ if 

adopted, would extend restrictions 

related to Federal election activities 

beyond political party committees and 

Federal candidates to all persons, 

including a State or local candidate 

committee.6 Would such a regulation be 

consistent with FECA, as amended by 

BCRA? Would it be consistent with 

Congressional intent?

Similarly, BCRA amended the 

definition of ‘‘contribution or 

expenditure’’ in the corporate and labor 

organization prohibitions to include 

payments ‘‘for any applicable 

electioneering communication.’’ 2 

U.S.C. 441b(b)(2). BCRA did not amend, 

however, the definition of 

‘‘expenditure’’ with a broader 

application in 2 U.S.C. 431(9). Would 

the approach of including all payments 

for electioneering communications in 

the regulations implementing the 2 

U.S.C. 431(9) definition of 

‘‘expenditure’’ be consistent with FECA, 

as amended by BCRA? Would it be 

consistent with Congressional intent? 

The proposed rules that follow as 

Alternative 1–B present a narrower 

approach. Although the Supreme 

Court’s discussion of Federal election 

activities in McConnell was framed in 

the political party and candidate 

context, it recognized that these same 

activities by tax-exempt organizations 

do affect Federal elections. McConnell,

124 S.Ct. at 678 n.68. Given the 

Supreme Court’s conclusions that types 

1 through 3 of Federal election activities 

have a demonstrable effect on Federal 

elections, can the Commission conclude 

that the same communications and the 

same activities by actors other than 

political party committees and 

candidates are not expenditures, i.e., 

payments for the purpose of influencing 

a Federal election? In an effort to take 

the Supreme Court’s conclusions into 

consideration, Alternative 1–B would 

incorporate the concepts of Federal 

election activities types 1 through 3, but 

would also recognize that applying 

these concepts to actors other than 

political party committees and 

candidates requires some tailoring of 

Federal election activities.

A proposal to regulate Federal 

election activities by persons other than 

political party committees and 

candidates requires a reexamination of 

those activities in order to determine 

whether those activities carried out by 

such persons are the functional 

equivalent of the same activities when 

carried out by political party 

committees and candidates. Inherent in 

any activities conducted by political 

party committees or candidates is a 

partisan purpose, as the Supreme Court 

has recognized in other contexts. See 

FEC v. Colorado Republican Federal 

Campaign Committee, 533 U.S. 431, 450 

(2001) (noting ‘‘the seemingly 

unexceptionable premise that parties are 

organized for the purpose of electing 

candidates’’ and agreeing that ‘‘political 

parties are dominant players, second 

only to the candidates themselves, in 

federal elections’’). When the proposed 

rules in Alternative 1–B consider 

Federal election activities conducted by 

other persons, they attempt to be 

consistent with McConnell by limiting 

the activities included in the 

‘‘expenditure’’ definition to those with a 

partisan purpose. 

Are the proposed rules consistent 

with McConnell? Do they limit the 

activities included in the ‘‘expenditure’’

definition to those activities that have a 

partisan purpose? Is Alternative 1–B’s 

treatment of a State or local candidate 

committee’s partisan activities 

consistent with BCRA? Is Alternative 1–

B consistent with 2 U.S.C. 441i(e)(4), 

which permits Federal candidates to 

solicit up to $20,000 per individual for 

certain Federal election activities or for 

an entity whose principal purpose is to 

11740 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

conduct certain Federal election 

activities? 

a. Proposed 11 CFR 100.115—Federal 

election activity: Partisan voter drives.

Because the Supreme Court recognized 

that voter registration activity that takes 

place within 120 days before a Federal 

election, voter identification, and getout-the-vote activities ‘‘confer 

substantial benefits on federal 

candidates’’ and because voter drives 

may be for the purpose of influencing 

Federal elections even when performed 

by tax-exempt organizations, Alternative 

1–B would incorporate these aspects of 

Federal election activities in the 

definition of ‘‘expenditure.’’ See 

McConnell, 124 S.Ct. at 675, 678 n.68, 

and the discussion above in part II, A., 

1. Proposed section 100.34 would define 

‘‘partisan voter drives,’’ and proposed 

section 100.115 would include 

payments for voter registration, voter 

identification, and GOTV activities into 

the regulatory definition of 

‘‘expenditure,’’ subject to the exceptions 

described below. 

As reflected in FECA, the proposed 

rules in Alternative 1–B would 

distinguish partisan from nonpartisan 

Federal election activities. FECA 

exempts ‘‘nonpartisan activity designed 

to encourage individuals to vote or 

register to vote’’ from the definition of 

‘‘expenditure.’’ 2 U.S.C. 431(9)(B)(ii). In 

order for voter drives to be 

‘‘nonpartisan,’’ Commission regulations 

currently require that no effort is or has 

been made to determine the party or 

candidate preference of individuals 

before encouraging them to vote. 11 CFR 

100.133. 

Alternative 1–B includes proposed 

changes to section 100.133. First, the 

proposal would expressly state that if 

voter registration or get-out-the-vote 

activities included a communication 

that promotes, supports, attacks, or 

opposes a Federal or non-Federal 

candidate or if it promotes or opposes 

a political party, then the voter 

registration or get-out-the-vote activities 

is partisan. See proposed 11 CFR 

100.133(a). Second, the proposal would 

add a provision that if information 

concerning likely party or candidate 

preference has been used to determine 

which voters to encourage to register to 

vote or to vote, the voter registration and 

get-out-the-vote activities would be 

partisan. See proposed 11 CFR 

100.133(b). 

These proposed changes would 

achieve more harmony between the 

Commission’s approach to this issue 

and the Internal Revenue Service’s (‘‘the 

IRS’s’’) approach. The IRS regulations 

provide that ‘‘to be nonpartisan, voter 

registration and ‘get-out-the-vote’

campaigns must not be specifically 

identified by the organization with any 

candidate or political party.’’ 26 CFR 

1.527–6(b)(5). In a private letter ruling, 

the IRS determined that a voter drive 

was partisan, even though the activities 

‘‘may not be specifically identified with 

a candidate or party in every case.’’ It 

did so due to ‘‘the intentional and 

deliberate targeting of individual voters 

or groups of voters on the basis of their 

expected preference for pro-issue 

candidates, as well as the timing of the 

dissemination and format of the 

materials used.’’ Priv. Ltr. Rul. 99–25–

051 (Mar. 29, 1999). Should the 

Commission otherwise clarify this rule 

or consider any other criteria? 

Should voter identification be 

considered part of get-out-the-vote 

activities subject to section 100.133? If 

so, what changes to the proposed rules, 

if any, are necessary? 

The proposed new rules for voter 

registration and get-out-the-vote 

activities at 11 CFR 100.34(a) and (c) 

would retain by reference the 

nonpartisan exception to the definition 

of ‘‘expenditure’’ in proposed 11 CFR 

100.133. Similarly, proposed 11 CFR 

100.34(b) would exclude disbursements 

for voter identification when no effort 

has been or will be made to determine 

or record the party or candidate 

preference of individuals on the voter 

list from the definition of ‘‘partisan 

voter drive’’ and therefore 

‘‘expenditure.’’ See proposed 11 CFR 

100.34(b) and 100.115. 

The proposed rule at new 11 CFR 

100.115 would also exclude Levin funds 

from the definition of ‘‘expenditure.’’

Levin funds are funds raised by State, 

district, or local political party 

committees and party organizations 

pursuant to 11 CFR 300.31 and 

disbursed by the same committee or 

organization pursuant to 11 CFR 300.32. 

BCRA specifically permits State, 

district, and local political party 

committees to raise and spend Levin 

funds for an allocable portion of voter 

registration, voter identification, and 

get-out-the-vote activities, rather than 

requiring these committees to use 

entirely Federal funds for these Federal 

election activities. 2 U.S.C. 441i(b)(2). 

This exception in BCRA would be 

preserved for State, district, and local 

political party committees and 

organizations by the exclusion of Levin 

funds from the proposed rules. 

State and local political party 

committees may also conduct voter 

drives under the ‘‘coattails’’ exception 

to the definition of ‘‘expenditure.’’ 2 

U.S.C. 431(9)(B)(ix); 11 CFR 100.149. 

Under certain conditions, voter 

registration and GOTV activities 

conducted by these party committees on 

behalf of the Presidential nominees are 

not treated as expenditures. In order to 

leave this exemption unaffected by the 

inclusion of the types 1 and 2 of Federal 

election activity in the definition of 

‘‘expenditure,’’ the proposed rules 

would also amend 11 CFR 100.149 to 

provide expressly that the ‘‘coattails’’

exemption would apply 

notwithstanding proposed 11 CFR 

100.115.

A proposal for the allocation of these 

expenditures is discussed below. 

Proposed section 100.155 would state 

that any non-Federal funds permissibly 

disbursed by a separate segregated fund 

or a nonconnected committee for 

partisan voter drives pursuant to the 

allocation rule in proposed 11 CFR 

106.6 would not be ‘‘expenditures.’’

Consequently, the non-Federal funds 

would not count toward the $1,000 of 

expenditures required for political 

committee status under current 11 CFR 

100.5(a) (or proposed 11 CFR 

100.5(a)(1)(i)). The Commission seeks 

comment on whether this is an 

appropriate conclusion. 

Additionally, the Commission seeks 

comment on the following questions. 

Are proposed sections 100.34 and 

100.115 sufficiently tailored to reflect 

the application of Federal election 

activities to persons other than political 

party committees and candidates? The 

proposed regulations would treat many 

of the voter activities conducted by 

State and local candidate committees on 

behalf of their own candidacies as 

‘‘expenditures.’’ Is there any evidence 

that Congress intended for the 

Commission to categorize such activities 

as ‘‘for the purpose of influencing any 

election for Federal office?’’ Should the 

Commission give any consideration in 

this context to the statutory exemptions 

from the definition of Federal election 

activity set forth in 2 U.S.C. 431(20)(B)? 

Should the proposed rules include an 

exception for the receipt of funds 

solicited by Federal candidates under 2 

U.S.C. 441i(e)(4)(B)(ii), which under 

certain circumstances permits Federal 

candidates to solicit funds from 

individuals of up to $20,000—an 

amount that exceeds the contribution 

limit applicable to certain political 

committees in 2 U.S.C. 441a? Or, should 

the exception in 2 U.S.C. 

441i(e)(4)(B)(ii) be limited to entities 

that are not political committees or that 

confine their voter registration, voter 

identification, and get-out-the-vote 

activities to nonpartisan activities? If the 

exception were confined to nonpartisan 

activities, what evidence, if any, is there 

that Congress intended for the exception 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11741

in 2 U.S.C. 441i(e)(4)(B)(ii) to be 

interpreted in such a way? 

The definition of ‘‘partisan voter 

drive’’ in proposed section 100.34 

would not include some voter 

registration and get-out-the-vote 

activities that would simultaneously fail 

to qualify for the exemption of 

‘‘nonpartisan voter registration and getout-the-vote activities’’ in section 

100.133, in either its current form or as 

proposed to be amended. For example, 

some voter registration activity could 

take place more than 120 days before an 

election, which would mean that 

payments for it would not be 

expenditures. See proposed 11 CFR 

100.34(a) (citing current 11 CFR 

100.24(b)(1)) and 100.115. That same 

activity could also fail to qualify as 

nonpartisan under proposed 11 CFR 

100.133 if it is subject to any of that 

section’s exclusions, which include, for 

example, directing voter drives to 

supporters of a political party. Any 

voter registration or get-out-the-vote 

activities that fall in this ‘‘gap’’ would 

not be expenditures under proposed 

section 100.115, even though they 

would not qualify as ‘‘nonpartisan’’

under the exception in proposed section 

100.133. This gap may be appropriate in 

that it reflects that such activity cannot 

be considered nonpartisan for purpose 

of the exemption, but it may not rise to 

the level of an ‘‘expenditure’’ under 

proposed sections 100.34 and 100.115 

for the same reason that similar activity 

by a political party committee would be 

excluded from the definition of ‘‘Federal 

election activity.’’ 11 CFR 100.24(b)(1). 

Alternatively, this gap could be 

eliminated by either adding an 

additional exemption from the 

definition of ‘‘expenditure’’ in 11 CFR 

part 100, subpart E, or dropping the 

time limitations of current 11 CFR 

100.24(a)(1), (a)(3)(i), and (b)(1) from 

proposed section 100.34. Under the 

latter approach, the time limitations in 

current section 100.24 would be 

maintained with respect to the political 

party committees whose Federal 

election activities are subject to BCRA’s 

time limits. 2 U.S.C. 431(20)(A)(i). The 

Commission seeks comment on these 

issues. 

b. Proposed 11 CFR 100.116—Certain 

public communications. Alternative 1–B 

would also incorporate into the 

definition of ‘‘expenditure’’ payments 

for public communications that refer to 

a political party or a clearly identified 

Federal candidate and promote or 

support, or attack or oppose any 

political party or any Federal candidate. 

See proposed 11 CFR 100.116. This 

proposed rule is based on two types of 

Federal election activities: generic 

campaign activities, which are public 

communications that promote or oppose 

a political party, and public 

communications that promote, support, 

attack, or oppose a clearly identified 

candidate. See 2 U.S.C. 431(20)(A)(ii) 

and (iii); 11 CFR 100.24(a)(1); (b)(2)(ii); 

(b)(3); 100.25; and 100.26. Proposed 

section 100.155 would state that any 

non-Federal funds permissibly 

disbursed by a separate segregated fund 

or a nonconnected committee for public 

communications pursuant to the 

allocation rule in proposed 11 CFR 

106.6 would not be ‘‘expenditures.’’ The 

Commission seeks comment on whether 

this is an appropriate conclusion. 

The Supreme Court found that public 

communications that promote, support, 

attack or oppose a clearly identified 

Federal candidate ‘‘have a dramatic 

effect on federal elections.’’ McConnell,

124 S.Ct. at 675. The Supreme Court 

also found that generic campaign 

activity ‘‘confer[s] substantial benefits 

on federal candidates.’’ Id. If the 

Commission were to apply the voter 

drive activities of types 1 and 2 of 

Federal election activities outside of the 

political party committee context, these 

concepts may require modification to 

incorporate a partisan element. In 

contrast, generic campaign activity and 

type 3 of Federal election activities, by 

definition, include material that either 

promotes, supports, attacks or opposes a 

clearly identified Federal candidate or 

promotes or opposes a political party. 

This partisan content obviates the need 

to tailor these concepts for application 

outside the political party and candidate 

context. 

Consistent with this approach, the 

Commission recently issued Advisory 

Opinion 2003–37 in which it stated that 

‘‘communications that promote, 

support, attack or oppose a clearly 

identified Federal candidate have no 

less a ‘dramatic effect’ on Federal 

elections when aired by other types of 

political committees, rather than party 

committees or candidate committees.’’

AO 2003–37, at 3. In that advisory 

opinion, the Commission concluded 

that public communications that 

promote, support, attack or oppose a 

clearly identified Federal candidate 

when made by political committees are 

expenditures. Proposed section 100.116 

would incorporate this conclusion in 

the Commission’s regulations. It would 

also treat public communications that 

promote or oppose political parties in a 

similar fashion, and it would apply to 

communications made by all persons, 

not just political committees. If new 

rules apply the ‘‘promote, support, 

attack or oppose’’ standard to actors 

other than political party committees 

and candidates, should a temporal 

element be included in any such rule? 

Might an advertisement by a person 

other than a political party committee or 

candidate be properly understood as, for 

example, promoting a Federal candidate 

if publicly distributed close to an 

election, but the same advertisement by 

the same person publicly distributed far 

from an election might not promote the 

candidate? Should any of FECA’s 

temporal limitations, which are 

discussed in connection with 

expenditures generally below, be 

adapted for this purpose?

Would the ‘‘promote, support, attack 

or oppose’’ standard be appropriate for 

those 527 organizations (tax exempt 

‘‘political organizations,’’ discussed 

more infra) that by their very nature 

have influencing elections as a primary 

purpose? Would the ‘‘promote, support, 

attack or oppose’’ standard be 

appropriate for all 527 organizations? 

Should the Commission adopt a 

different standard for 501(c) 

organizations (other tax exempt 

organizations, discussed more infra) 

that would require not only ‘‘promote, 

support, attack or oppose’’ content, but 

also some basis for concluding the 

message is to influence a Federal 

election? Such additional bases could 

include: (1) Reference to the clearly 

identified candidate as a candidate; (2) 

reference to the election or to the voting 

process; (3) reference to the clearly 

identified candidate’s opponent; or (4) 

reference to the character or fitness for 

office of the clearly identified candidate. 

Alternatively, should the Commission 

adopt the ‘‘promote, support, attack or 

oppose’’ standard for 501(c) 

organizations, but build in an exception 

for a message that is confined to 

expressly advocating seeking action by 

the clearly identified candidate on an 

upcoming legislative or executive 

decision without reference to any 

candidacy, election, voting, opponent, 

character, or fitness for office? In 

essence, the Commission seeks 

comment on whether it should define 

what is an expenditure in a way that 

follows the functional distinctions in 

the Internal Revenue Code and 

recognizes that some organizations 

engage in ‘‘grassroots lobbying’’

campaigns primarily designed to affect 

upcoming legislative or executive 

actions. If so, what regulatory language 

would be appropriate? 

In different contexts, FECA now 

provides at least three content standards 

for communications—express advocacy; 

promote, support, attack or oppose; and 

reference to a clearly identified Federal 

candidate. See, e.g., 2 U.S.C. 431(17)(A); 

(20)(A)(iii); 434(f)(3)(A)(i)(I) and 

11742 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

441d(a). What other content standards 

that are not vague or overbroad, if any, 

should be included in the definition of 

‘‘expenditure?’’

c. Electioneering communications.

Alternative 1–B does not include 

payments for electioneering 

communications in the definition of 

‘‘expenditures.’’ Many electioneering 

communications either already are 

included in the definition of 

‘‘expenditure’’ or would be included 

under the proposal. Under the current 

rules, political committees must report 

communications that satisfy the general 

definition of ‘‘electioneering 

communications’’ in 2 U.S.C. 

434(f)(3)(A) as expenditures. 11 CFR 

104.20(b). In addition, if an 

electioneering communication 

promotes, supports, attacks, or opposes 

a Federal candidate, it would also be a 

public communication that promotes, 

supports, attacks, or opposes a Federal 

candidate, which would make it an 

expenditure under proposed section 

100.116. Consequently, the only 

electioneering communications that 

would not be treated as expenditures 

under Alternative 1–B would be those 

made by persons other than political 

committees that do not promote, 

support, attack, or oppose a clearly 

identified Federal candidate. Should the 

final rules include all electioneering 

communications in the definition of 

‘‘expenditure?’’

d. Other potential approaches. The 

Commission also seeks comments on 

other potential approaches to amending 

the definition of ‘‘expenditure’’ in 11 

CFR part 100, subpart D. Should a 

payment’s status as an ‘‘expenditure’’

depend on the identity of the maker? 

For example, should payments for 

public communications that promote, 

support, attack or oppose a Federal 

candidate be expenditures only if made 

by a Federal political committee? 

Are there other identifying 

characteristics that should be 

considered in determining whether a 

payment is an expenditure? For 

example, should payments by a taxexempt, charitable organization 

operating under 26 U.S.C. 501(c)(3) be 

exempt from the definition of 

‘‘expenditure?’’ In this regard, how 

should the Commission interpret the 

Internal Revenue Service’s Technical 

Advice Memorandum 89–36–002 (Sept. 

8, 1989), which permitted a 501(c)(3) 

organization to make advertisements 

that ‘‘support or oppose a candidate in 

an election campaign,’’ without losing 

its 501(c)(3) status for intervening in a 

political campaign? 

Should the Commission consider an 

organization’s status under section 

501(c) or 527 of the Internal Revenue 

Code in determining whether a payment 

is an expenditure? Should some 

activities be expenditures if made by a 

section 527 organization, regardless of 

whether it is a Federal political 

committee? Should the same rules or 

different rules apply to organizations 

operating under section 501(c)(3), (4), or 

(6)? 

Should the timing of a payment affect 

whether it is an ‘‘expenditure?’’ FECA 

and BCRA provide several temporal 

limitations on various provisions that 

recognize the significance of proximity 

to an election. FECA provides that 

certain independent expenditures must 

be reported within 24 hours if made 

during the twenty days before an 

election. 2 U.S.C. 434(g)(1) (formerly 2 

U.S.C. 434(c)(2)(C)). BCRA limits 

electioneering communications to the 

thirty days before a primary election 

and the sixty days before a general 

election. 2 U.S.C. 434(f)(3)(A)(i)(II). 

BCRA also includes voter registration 

activity in Federal election activity only 

in the 120 days before a regularly 

scheduled Federal election. 2 U.S.C. 

431(20)(A)(i). Do any of these time 

periods provide an appropriate temporal 

standard for any expenditures? 

Should the rules address expenditures 

that might be in connection with more 

than one Federal election? The 

Commission recently concluded in an 

advisory opinion that an advertisement 

that was coordinated by a Congressional 

candidate with a presidential campaign 

committee could be a contribution to 

the presidential campaign committee in 

connection with the upcoming 

Presidential primary election in that 

State and an expenditure of the 

Congressional candidate in connection 

with her special election. AO 2004–1. 

Should this conclusion be incorporated 

into regulations or should it be 

reconsidered? 

The Commission also seeks comment 

on whether any aspect of Alternative 1–

B should be revised in order to 

harmonize the definition of 

‘‘expenditure’’ in the Commission’s 

regulations with the approach taken by 

the IRS. Section 527(e)(2) of the Internal 

Revenue Code of 1986, as amended, 

defines the term ‘‘exempt function’’ as 

‘‘the function of influencing or 

attempting to influence the selection, 

nomination, election, or appointment of 

any individual to any Federal, State, or 

local public office or office in a political 

organization, or the election of 

Presidential or Vice Presidential 

electors, whether or not such individual 

or electors are selected, nominated, 

elected, or appointed.’’ 26 U.S.C. 

527(e)(2). IRS regulations implementing 

this statutory definition provide that 

‘‘the term ‘exempt function’ includes all 

activities that are directly related to and 

support the process of influencing or 

attempting to influence the selection, 

nomination, election, or appointment of 

any individual to public office or office 

in a political organization.’’ 26 CFR 

1.527–2(c)(1). IRS regulations also 

specify that whether an expenditure is 

for an exempt function depends on all 

the facts and circumstances. Id.

A Revenue Ruling issued by the IRS 

on December 23, 2003, stated that 

‘‘[w]hen an advocacy communication 

explicitly advocates the election or 

defeat of an individual to public office, 

the expenditure clearly is for an exempt 

function under § 527(e)(2).’’ Rev. Rul. 

04–6, at 4. The Revenue Ruling also 

identified a non-exhaustive list of 

factors that ‘‘tend to show’’ whether an 

advocacy communication on a public 

policy issue is for an exempt function or 

not, in the absence of ‘‘explicit 

advocacy.’’ The six identified factors 

that tend to show a communication is 

for an exempt function are: (a) The 

communication identifies a candidate 

for public office; (b) the timing of the 

communication coincides with an 

electoral campaign; (c) the 

communication targets voters in a 

particular election; (d) the 

communication identifies that 

candidate’s position on the public 

policy issue that is the subject of the 

communication; (e) the position of the 

candidate on the public policy issue has 

been raised as distinguishing the 

candidate from others in the campaign, 

either in the communication itself or in 

other public communications; and (f) 

the communication is not part of an 

ongoing series of substantially similar 

advocacy communications by the 

organization on the same issue. The five 

factors that tend to show a 

communication is not for an exempt 

function are: (a) The absence of one or 

more of the factors listed in (a) through 

(f) above; (b) the communication 

identifies specific legislation, or a 

specific event outside the control of the 

organization, that the organization 

hopes to influence; (c) the timing of the 

communication coincides with a 

specific event outside the control of the 

organization that the organization hopes 

to influence; (d) the communication 

identifies the candidate solely as a 

government official who is in a position 

to act on the public policy issue in 

connection with the specific event; and 

(e) the communication identifies the 

candidate solely in the list of key or 

principal sponsors of the legislation that 

is the subject of the communication. 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11743

To what extent should Alternative 1–

B be modified for harmony with the 

IRS’s approach? 

3. 11 CFR Part 100, Subpart B—

Definition of ‘‘contribution’’

The Commission is also considering 

amending the definition of 

‘‘contribution’’ in 11 CFR part 100, 

subpart B to make changes that would 

correspond to those proposed for the 

definition of ‘‘expenditure’’ in 

Alternative 1–B. Additionally, the 

Commission is considering amending its 

definition of ‘‘contribution’’ to include 

any funds that are received in response 

to a communication containing express 

advocacy of a clearly identified 

candidate. 

a. Amendments corresponding to 

amendments to ‘‘expenditure’’

definition. Current 11 CFR 102.5(b) 

imposes requirements on organizations 

that do not qualify as ‘‘political 

committees’’ under current 11 CFR 

100.5 and that make contributions or 

expenditures. The organization must 

demonstrate through a reasonable 

accounting method that, whenever it 

makes expenditures, it has received 

sufficient funds subject to the 

limitations and prohibitions of FECA to 

make the expenditures. Such 

organizations must also keep records of 

receipts and disbursements and, upon 

request, must make such records 

available to the Commission. See

current 11 CFR 102.5(b)(1). 

Consequently, if the definition of 

‘‘expenditure’’ is amended in any way, 

then any entity making such 

expenditures would be required to do so 

using only contributions that comply 

with the amount limitations and source 

prohibitions of FECA. If the 

Commission adopts the amended 

definition of ‘‘expenditure,’’ as 

proposed in Alternative 1–B, is an 

amendment to Commission regulations 

needed to state that funds used for any 

expenditures are contributions to that 

entity? Please note that proposed rule 

text for this approach is not included 

below, but if the Commission were to 

decide to adopt Alternative 1–B and this 

approach, then the text in the final rules 

amending the definition of 

‘‘contribution’’ would be similar to the 

text in proposed sections 100.115 and 

100.116 regarding ‘‘expenditure.’’

Should entities that are not political 

committees be required to report their 

contributions received and expenditures 

made in this context?

b. Proposed 11 CFR 100.57—Funds 

solicited with express advocacy. The 

Commission is considering whether 

solicitations containing express 

advocacy of federal candidates establish 

that any funds received in response are 

necessarily ‘‘for the purpose of 

influencing any election for Federal 

office,’’ so that they are contributions. 

Proposed section 100.57 would state 

that any funds provided in response to 

a solicitation that contained express 

advocacy for or against a clearly 

identified Federal candidate are 

contributions. If a solicitation states that 

the solicitor intends to take actions to 

elect or defeat a particular candidate, is 

it then logical to treat funds that are 

provided in response as funds that are 

‘‘for the purpose of influencing a 

Federal election?’’ Should the standard 

be that the solicitation must not just 

include express advocacy but state that 

the funds will be used for express 

advocacy? Should funds raised by a 

State or local candidate for his or her 

own candidacy be treated as 

contributions ‘‘for the purpose of 

influencing a Federal election’’ if the 

State or local candidate’s solicitation 

includes express advocacy for or against 

a clearly identified Federal candidate? 

Should proposed section 100.57 also 

include solicitations that expressly 

advocate the election or defeat of 

Federal candidates of a particular party 

without clearly identifying the 

particular candidates? Should the new 

rule use a standard other than express 

advocacy, such as a solicitation that 

promotes, supports, attacks, or opposes 

a Federal candidate, or indicates that 

funds received in response thereto will 

be used to promote, support, attack, or 

oppose a clearly identified Federal 

candidate? Should the new rule specify 

which contributions result from which 

solicitations? Should the new rule 

incorporate the standards in current 11 

CFR 102.5(a)(2)(i) through (iii) to clarify 

further the types of funds received that 

must be treated as contributions? A 

conforming amendment to current 11 

CFR 102.5(a)(2)(ii) would be necessary if 

any rule based on proposed section 

100.57 is adopted. 

4. Proposed 11 CFR 114.4—Corporate 

and Labor Organization 

Communications 

Current 11 CFR 114.4(c)(2) and (d) 

permit corporations and labor 

organizations to conduct voter 

registration and get-out-the-vote 

activities beyond their restricted class 

provided that any communication does 

not expressly advocate the election or 

defeat of any clearly identified 

candidate(s) or candidates of a clearly 

identified political party and subject to 

other restrictions. The Commission 

seeks comment on proposed rules that 

would amend paragraphs (c)(2) and (d) 

and add new paragraph (c)(3) to specify 

that such voter registration and get-outthe-vote activities would be subject to 

the conditions set forth in proposed 11 

CFR 100.133, as discussed above. The 

purpose of such a revision would be to 

ensure that corporations and labor 

organizations would be subject to the 

same conditions as political committees, 

as well as other conditions specific to 

corporations and labor organizations, 

when spending non-Federal funds on 

these voter registration and get-out-thevote activities. The Commission seeks 

comment on whether the same rules 

should apply not only to corporations 

and labor organizations, but also to any 

person or entity who uses corporate or 

labor organization general treasury 

funds for these purposes. 

The Commission also seeks comment 

on whether current 11 CFR 100.133 

should be amended to make clear that, 

when a corporation or labor 

organization conducts voter registration 

or get-out-the-vote activities, it would be 

subject to the requirements of 11 CFR 

100.133 and 114.4(c) and (d). 

Additionally, the Commission seeks 

comment on whether the ‘‘express 

advocacy’’ standard set forth in 11 CFR 

114.4(c)(2) and (d)(1) should be changed 

to the ‘‘promote, support, attack or 

oppose’’ standard. Would the latter 

standard be an appropriate standard for 

determining whether a communication 

has the ‘‘purpose of influencing a 

Federal election?’’ Would such an 

approach be consistent with MCFL? 

Corporations and labor organizations 

may also conduct certain voter 

registration and GOTV activities aimed 

at their restricted classes. 11 CFR 

114.3(c)(4). Because these activities are 

permitted by 11 CFR part 114, they are 

exempt from the definition of 

‘‘expenditure.’’ 2 U.S.C. 431(9)(B)(v); 11 

CFR 100.141. No changes to section 

114.3(c)(4) are proposed because the 

Commission intends to retain this 

exception to the definition of 

‘‘expenditure.’’

III. Major Purpose 

A. Major Purpose Requirement 

The Commission seeks comment as to 

whether the existing definition of 

‘‘political committee’’ in 11 CFR 

100.5(a) should be amended by 

incorporating the major purpose 

requirement, and if so, how that should 

be accomplished. Under the proposed 

section 100.5(a)(1), a committee, club, 

association or group of persons that 

receives in excess of $1,000 in total 

contributions or makes in excess of 

$1,000 in total expenditures would be a 

political committee only if ‘‘the 

nomination or election of one or more 

11744 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

Federal candidates is a major purpose’’

of the committee, club, association or 

group of persons (emphasis added). 

1. Major Purpose or Primary Purpose?

The proposed rule would include the 

indefinite article ‘‘a’’ to modify ‘‘major 

purpose,’’ rather than the definite article 

‘‘the.’’ The consequence would be that 

the major purpose element of the 

definition of ‘‘political committee’’ may 

be satisfied if the nomination or election 

of a candidate or candidates is one of 

two or more major purposes of an 

organization, even if it is not its primary 

purpose. The Commission seeks 

comment regarding whether, to satisfy 

the major purpose requirement, the 

nomination or election of candidates 

must be the predominant purpose of the 

organization, or whether the major 

purpose standard is satisfied when the 

nomination or election of candidates is 

a major purpose of the organization, 

even when the organization spends 

more funds for another purpose. 

In first articulating the major purpose 

requirement in Buckley, the Supreme 

Court determined that the definition of 

political committee ‘‘need only 

encompass organizations that are under 

the control of a candidate or the major 

purpose of which is the nomination or 

election of a candidate.’’ Buckley, 424 

U.S. at 79 (emphasis added). Likewise, 

in MCFL, the Supreme Court observed 

that:

should MCFL’s independent spending 

become so extensive that the organization’s 

major purpose may be regarded as campaign 

activity, the corporation would be classified 

as a political committee. As such it would 

automatically be subject to the obligations 

and restrictions applicable to those groups 

whose primary objective is to influence 

political campaigns.

MCFL, 479 U.S. at 262 (emphasis added 

and citations omitted). These passages 

indicate that the nomination or election 

of candidates must be the major purpose 

or, put another way, the primary 

objective of the organization. In light of 

the Supreme Court’s repeated use of the 

term ‘‘the major purpose,’’ can the 

Commission substitute the term ‘‘a 

major purpose,’’ which appears to have 

a different meaning? 

Could the major purpose standard in 

Buckley nevertheless be interpreted to 

require that the nomination or election 

of candidates be ‘‘a’’ major purpose of 

the organization, even when the 

organization has other, perhaps more 

significant, purposes? The Commission 

notes that the ‘‘major purpose’’

requirement appears only in judicial 

opinions not in any statute, and that the 

Supreme Court has warned against 

‘‘dissect[ing] the sentences of the United 

States Reports as though they were the 

United States Code.’’ St. Mary’s Honor 

Ctr. v. Hicks, 509 U.S. 502, 515 (1993). 

In Aka v. Washington Hosp. Ctr., 156 

F.3d 1284 (D.C. Cir. 1998), the Circuit 

Court explained that ‘‘the [Supreme] 

Court’s every word and sentence cannot 

be read in a vacuum; its 

pronouncements must be read in light of 

the holding of the case and to the degree 

possible, so as to be consistent with the 

Court’s apparent intentions.’’ Id. at 

1291. 

As explained above, in Buckley, the 

Court imposed the ‘‘major purpose’’

requirement because it was concerned 

that the statutory definition of political 

committee ‘‘could be interpreted to 

reach groups engaged purely in issue 

discussion.’’ Buckley, 424 U.S. at 79. 

Consequently, the ‘‘apparent intention’’

of the Court appears to have been to 

limit the applicability of the definition 

of political committee so that it would 

not cover organizations involved 

‘‘purely in issue discussion’’ but that 

nevertheless engage in some incidental 

activity that might otherwise satisfy the 

Act’s $1,000 expenditure or 

contribution political committee 

thresholds. Would it be consistent with 

the Court’s apparent intention for the 

Commission to amend its definition of 

‘‘political committee’’ to only require 

that the nomination or election of 

candidates be a major purpose rather 

than the primary purpose of the 

organization? It seems that an 

organization that has the nomination or 

election of candidates as a major 

purpose is not ‘‘engaged purely in issue 

discussion.’’ Moreover, such a 

definition of political committee 

appears unlikely to cover organizations 

that engage in some incidental activity 

that causes them to exceed the $1,000 

expenditure or contribution thresholds. 

In United States v. Harriss, 347 U.S. 

612, 621–22 (1954), the Supreme Court 

interpreted the meaning of the term 

‘‘principal purpose’’ in the Federal 

Regulation of Lobbying Act. That statute 

provided that certain provisions applied 

only to those persons whose ‘‘principal 

purpose’’ is to aid in the passage or 

defeat of legislation. Id. at 619. The 

Court refused to interpret the statute to 

require that the influencing of 

legislation be the person’s most 

important—or primary—purpose. 

Instead, the Court concluded that the 

phrase ‘‘principal purpose’’ was 

designed to exclude from the coverage 

of the act those persons ‘‘having only an 

incidental purpose of influencing 

legislation.’’ Id. at 622. According to the 

Supreme Court:

[i]f it were otherwise,—if an organization, for 

example, were exempted because lobbying 

was only one of its main activities—the Act 

would in large measure be reduced to a mere 

exhortation against abuse of the legislative 

process. In construing the Act narrowly to 

avoid constitutional doubts, we must also 

avoid a construction that would seriously 

impair the effectiveness of the Act in coping 

with the problem it was designed to alleviate.

Id. at 622–23.

The Court’s ruling in Harriss may be 

instructive because, in that case, the 

Court was interpreting the meaning of 

the word ‘‘principal,’’ which, when 

used as an adjective, is defined as ‘‘most 

important.’’ See Webster’s II New 

Riverside Dictionary 556 (1st ed. 1984). 

The term ‘‘major,’’ on the other hand, is 

defined as ‘‘greater in importance rank 

or stature’’ or ‘‘demanding great 

attention.’’ Webster’s II New Riverside 

Dictionary 421 (1st ed. 1984). Thus, 

‘‘major,’’ unlike ‘‘principal,’’ does not 

signify ‘‘most important’’ or ‘‘primary’’

or ‘‘first in rank.’’ Given that the 

Supreme Court has interpreted the 

phrase ‘‘principal purpose’’ in a statute 

to include an organization for which 

lobbying is merely ‘‘one of its main 

activities,’’ would the Commission be 

justified in interpreting the phrase 

‘‘major purpose’’ in Buckley to also 

mean ‘‘one of its main activities?’’ Is it 

significant that the Court in Buckley

chose to use the phrase ‘‘major purpose’’

instead of ‘‘primary purpose’’ or 

‘‘principal purpose?’’

2. Particular Federal Candidates 

The proposed rule would require that 

the organization have as a major 

purpose the nomination or election of 

candidates for Federal office, as 

opposed to non-Federal office. The 

Commission seeks comment regarding 

whether the proposed rule should be 

limited to the nomination or election of 

Federal candidates or, instead, whether 

the nomination or election of all 

candidates, including candidates for 

non-Federal office will suffice. 

Likewise, the Commission asks whether 

the major purpose requirement 

mandates that the organization be 

involved in the nomination or election 

of one or more particular candidates or, 

instead, whether it is sufficient for the 

organization to have a major purpose of 

nominating or electing certain categories 

of candidates, such as Democrats or 

Republicans, or women, or candidates 

who take a position on a particular 

issue. In FEC v. GOPAC, Inc., 917 F. 

Supp. 851 (D.D.C. 1996), the District 

Court interpreted Buckley and MCFL to 

require that the major purpose of the 

organization be ‘‘the nomination or 

election of a particular candidate or 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11745

candidates for federal office.’’ GOPAC,

917 F. Supp. at 859 (emphasis added). 

The Commission seeks comment as to 

whether this is a proper reading of 

Buckley and MCFL. Should the 

Commission issue regulations that 

conflict with the GOPAC decision? 

3. Existing 11 CFR 100.5(b) through (e) 

Please note that current 11 CFR 

100.5(b) through (e), which identify 

certain organizations that are considered 

to be political committees (separate 

segregated funds, local party 

committees, principal campaign 

committees, and multi-candidate 

committees), do not incorporate the 

‘‘major purpose’’ standard. This is 

because the Commission has 

determined that these organizations, by 

their nature or by definition, have as 

their major—if not primary—purpose, 

the nomination or election of 

candidates. 

For example, current 11 CFR 100.5(b) 

provides that a separate segregated fund 

established under 2 U.S.C. 441b(b)(2)(C) 

is a political committee because, 

pursuant to 2 U.S.C. 441b(b)(2)(C), a 

separate segregated fund is ‘‘to be 

utilized for political purposes.’’ 2 U.S.C. 

441b(b)(2)(C). Current 11 CFR 100.5(c) 

provides that, under certain 

circumstances, the local committee of a 

political party is a political committee 

because, like national parties, these 

organizations exist for the purpose of 

nominating and electing candidates. See

2 U.S.C. 431(4)(C). Moreover, such 

organizations are organized under 

section 527 of the Internal Revenue 

Code, which requires that these 

organizations be organized and operated 

primarily for the purpose of influencing 

or attempting to influence the 

nomination, election or appointment of 

individuals to public office. See 26 

U.S.C. 527(e); see also discussion of 527 

organizations below. Current 11 CFR 

100.5(d) and (e)(1) provide that an 

individual’s principal or authorized 

campaign committees are political 

committees because these organizations 

are established for the purpose of 

nominating or electing an individual to 

public office. See 2 U.S.C. 431(5) and 

(6). Moreover, such organizations are 

‘‘under the control of a candidate,’’ and 

therefore are not subject to the major 

purpose requirement. See Buckley, 424 

U.S. at 79. Finally, current 11 CFR 

100.5(e)(3) provides that multicandidate committees are political 

committees because these organizations 

make and receive contributions for 

Federal elections. Consequently, these 

organizations satisfy the major purpose 

test. 

The Commission proposes no changes 

to existing 11 CFR 100.5(b) through (e). 

Nevertheless, the Commission seeks 

comments regarding whether any 

amendments to these paragraphs are 

necessary. 

B. Major Purpose Tests 

The Commission seeks comment on 

proposed 11 CFR 100.5(a)(2)(i) through 

(iv), which provides four tests for 

determining when an entity would 

satisfy the major purpose requirement. 

Please note that the Commission has not 

made any decisions on whether to adopt 

any of the proposals for the major 

test(s). If the Commission were to decide 

to adopt one or more of the proposed 

major purpose tests, an organization that 

meets any of the major purpose tests 

would be considered to have as a major 

purpose the nomination or election of 

Federal candidates. Consequently, if 

that organization exceeds the $1,000 

contribution or expenditure threshold in 

11 CFR 100.5(a)(1)(i), it would be a 

political committee and would have to 

comply with the registration, reporting 

and other requirements for political 

committees. Are the criteria 

appropriate? Would other criteria be 

more appropriate? 

1. Proposed 11 CFR 100.5(a)(2)(i)—

Avowed Purpose and Spending 

The first of the four proposed major 

purpose tests, which is set forth in 

proposed section 100.5(a)(2)(i), would 

use the organization’s public 

pronouncements and spending to 

determine if its major purpose is to 

nominate or elect candidates. An 

organization would satisfy the major 

purpose element in proposed section 

100.5(a)(2)(i) if: (1) Its organizational 

documents, solicitations, advertising, 

other similar written materials, public 

pronouncements, or any other 

communications demonstrate that its 

major purpose is to nominate, elect, 

defeat, promote, attack, support, or 

oppose a clearly identified candidate or 

candidates for Federal office or the 

Federal candidates of a clearly 

identified political party; and (2) it 

disburses more than $10,000 in the 

current calendar year or any of the 

previous four calendar years on the 

following: (1) Expenditures (including 

independent expenditures); (2) 

contributions; (3) payments for types 1 

through 3 of Federal election activity; 

and (4) payments for all or any part of 

an electioneering communication, as 

defined in 11 CFR 100.29. 

The first prong of the major purpose 

test in proposed section 100.5(a)(2)(i) 

would rely on an organization’s written 

characterization of its own activities. 

This would include the organization’s 

organizational documents, such as its 

charter, constitution, by-laws, etc. The 

second prong would require that an 

organization’s disbursements in 

connection with a Federal election 

exceed $10,000. This two-pronged 

approach would ensure that documents 

or communications that demonstrate 

that an organization’s avowed purpose 

is to nominate, elect, defeat, promote, 

attack, support or oppose a candidate or 

candidates are substantiated by its 

actual disbursements in connection 

with a Federal election.

a. Public Pronouncements. For an 

organization’s public pronouncements 

and other communications to 

demonstrate that the organization has a 

major purpose of nominating, electing, 

promoting, attacking, supporting, or 

opposing clearly identified Federal 

candidates or the Federal candidates of 

a clearly identified political party, the 

written materials and other 

communications must refer to Federal 

candidates of a clearly identified 

political party or to a ‘‘clearly identified 

candidate,’’ which is defined in 11 CFR 

100.17. Thus, under proposed paragraph 

(a)(2)(i), an organization would not be 

considered to have the nomination or 

election of candidates as a major 

purpose where the organization’s public 

communications merely indicate that its 

major purpose is to elect candidates 

holding particular positions (e.g., probusiness candidates or proenvironmental candidates) without 

specifying which candidates hold those 

positions. Such an organization, 

however, could still be considered to 

have the nomination or election of 

candidates as a major purpose under the 

other three major purpose tests—

proposed paragraphs (a)(2)(ii) through 

(iv), which are discussed below. 

The Commission seeks comment 

regarding whether it is appropriate to 

base its major purpose analysis on the 

written public statements, documents, 

solicitations, and other communications 

by an organization. Are there 

circumstances where an organization’s 

written public statements, documents, 

solicitations, and other communications 

would not be an appropriate measure of 

its major purpose? Should the final rule 

take into account the organization’s oral, 

as well as written, communications to 

determine if it satisfies the first prong of 

the major purpose test in proposed 

section 100.5(a)(2)(i)? 

The Commission also seeks comment 

regarding how this provision should 

operate with respect to disavowed major 

purposes or apparently contradictory 

statements of the organization’s major 

purposes. For example, what would be 

11746 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

the outcome if the leader (e.g.,

president, chairperson, etc.) of the 

organization disavows the 

organization’s previously stated 

purpose? What if this disavowal is 

attempted by someone other than the 

organization’s leader? Should the rules 

account for the possibility that an 

organization can disavow its previous 

statements regarding its major purpose? 

Should there be a time limit on the 

applicability of statements made in the 

organization’s communications? For 

example, should statements from five 

years ago be given less weight than more 

current statements? Are these concerns 

alleviated by the second prong of the 

major purpose test set forth in proposed 

section 100.5(a)(2)(i), which would 

require that the organization exceed 

$10,000 in disbursements in connection 

with a Federal election? 

Similarly, what if some of the 

organization’s communications indicate 

that its major purpose is the nomination 

or election of candidates, but other 

communications indicate that it has one 

or more other major purposes? How 

should the major purpose of the 

organization be assessed in these 

situations? Should some 

communications or types of 

communications be afforded greater 

weight then others when assessing 

major purpose under this proposed 

paragraph? For example, should the 

Commission give greater weight to 

statements in the organization’s 

solicitations or in its governing 

documents than it gives to potentially 

self-serving, ambiguous or contradictory 

statements by its leaders or its 

members? Should the Commission 

consider only the statements it makes in 

its solicitations or in its organizational 

documents and ignore statements found 

elsewhere? Would these concerns be 

alleviated by the second prong of the 

major purpose test set forth in proposed 

section 100.5(a)(2)(i), which would 

require that the organization exceed 

$10,000 in disbursements in connection 

with a Federal election? 

b. $10,000 Disbursement Threshold.

To satisfy the second prong of the major 

purpose test set forth in proposed 

section 100.5(a)(2)(i), the organization’s 

disbursements in connection with any 

election for Federal office would have to 

exceed the $10,000 threshold in the 

current year or any of the previous four 

calendar years. For example, to assess 

whether this threshold has been met in 

2004, the Commission would examine 

the organization’s disbursements in 

2000, 2001, 2002, 2003 and 2004. If it 

exceeded the $10,000 threshold in any 

of those years, it would satisfy the 

$10,000 disbursement requirement in 

proposed paragraph (a)(2)(i). Because 

this threshold is an absolute dollar 

amount rather than a percentage of total 

spending, the current year spending 

would be relevant to the analysis. 

Consequently, this provision, unlike 

proposed paragraph (a)(2)(ii), would 

apply to both existing and newly 

established organizations. The 

Commission seeks comment regarding 

the use of this time period in proposed 

paragraph (a)(2)(i). Should the threshold 

have to be met in all four preceding 

years? If the Commission does adopt 

such a four-year look-back provision, 

would it be fair to implement it prior to 

2008? 

The Commission also seeks comment 

regarding the proposed $10,000 

threshold. The Commission notes that 

Congress established a $10,000 

threshold to trigger the reporting 

requirements for electioneering 

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

and 48-hour reporting of independent 

expenditures under 2 U.S.C. 434(g)(2). 

By establishing these $10,000 

thresholds, Congress indicated that it 

believed $10,000 in activity to be 

significant enough to require reporting 

within 48 hours of the activity. Is it 

appropriate for the Commission to adopt 

a similar threshold to use in the major 

purpose test set forth in proposed 

paragraph (a)(2)(i), or is a higher or 

lower threshold more appropriate and 

why? 

The Commission also seeks comment 

on the proposal to count the following 

types of disbursements toward the 

$10,000 threshold: (1) Expenditures 

(including independent expenditures); 

(2) contributions; (3) payments for types 

1 to 3 of Federal election activity; and 

(4) payments for all or any part of an 

electioneering communication, as 

defined in 11 CFR 100.29. Payments for 

Federal election activity would be 

limited to only the first three of the four 

types of Federal election activity 

described in 11 CFR 100.24(b) because 

the fourth type of Federal election 

activity—services provided during any 

month by an employee of a State, 

district, or local committee of a political 

party who spends more than 25 percent 

of that individual’s compensated time 

during that month on activities in 

connection with a Federal election—

applies only to certain political party 

committees, which are presumed to 

satisfy the major purpose requirement. 

The Commission seeks comment 

regarding the types of disbursements 

that would count toward the $10,000 

threshold. Is it appropriate to count 

expenditures (including independent 

expenditures), contributions, Federal 

election activity (types 1 through 3), and 

electioneering communications toward 

the spending threshold? Are there other 

categories or types of disbursements that 

should be included, such as 

administrative costs, overhead, and 

costs associated with volunteer 

activities? Should certain exceptions be 

included and, if so, how should those 

exceptions be crafted? For example, 

since some Federal election activity by 

non-party organizations might be truly 

non-partisan, should the types of voter 

registration, voter identification, get-outthe-vote, and generic campaign activity 

captured in the major purpose analysis 

be confined to partisan activity? Since 

the major purpose test envisioned in the 

proposed rules uses ‘‘a major purpose to 

influence Federal elections’’ test, should 

the four types of disbursements be 

subject to an allocation regime similar to 

those in 11 CFR 106.1 and 106.6, where 

only the allocable Federal portion 

would count toward the $10,000 

threshold? 

As discussed above with regard to the 

proposed amendments to the definition 

of ‘‘expenditure,’’ certain Federal 

election activity influences Federal 

elections. Does this justify counting the 

three types of Federal election activity 

toward the $10,000 disbursement 

threshold? McConnell concluded that 

‘‘[w]hile the distinction between ‘‘issue’’

and express advocacy seemed neat in 

theory, the two categories of 

advertisements proved functionally 

identical in important respects.’’

McConnell, 124 S.Ct. at 650. The 

Supreme Court went on to explain that 

both types of communications ‘‘were 

used to advocate the election or defeat 

of clearly identified candidates, even 

though the so-called issue ads eschewed 

the use of magic words.’’ Id.

Nonetheless, since some electioneering 

communications (and even some 

‘‘promote, support, attack, or oppose’’

messages) by certain non-party 

organizations, such as 501(c) 

organizations might, be confined to 

advocating action regarding a particular 

legislative or executive decision, is there 

a need to develop a more focused 

content analysis for the major purpose 

test? McConnell held that it is 

permissible to treat an organization as a 

political committee even when the 

organization makes only independent 

expenditures and does not make any 

contributions to Federal candidates. Id.

at 665 n.48. Does this justify counting 

independent expenditures toward the 

spending threshold?

2. Proposed 11 CFR 100.5(a)(2)(ii)—50 

Percent Disbursement Threshold 

The second of the four proposed 

major purpose tests is set forth in 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11747

proposed paragraph (a)(2)(ii). This 

paragraph would consider an 

organization to have a major purpose of 

nominating or electing candidates if 

more than 50 percent of the 

organization’s total annual 

disbursements during any of the 

previous four calendar years was spent 

on: (1) Expenditures (including 

independent expenditures); (2) 

contributions; (3) payments for types 1 

through 3 of Federal election activity; 

and (4) payments for all or any part of 

an electioneering communication, as 

defined in 11 CFR 100.29. 

The Commission notes that, unlike 

proposed paragraph (a)(2)(i), this major 

purpose test does not consider the 

organization’s public pronouncements. 

An organization that exceeds the 50 

percent threshold would be considered 

to have the election or nomination of 

candidates as a major purpose 

regardless of whether or not the 

organization’s public pronouncements 

or other communications indicate that it 

has such a major purpose. The 

Commission seeks comments regarding 

whether this major purpose test should 

also include consideration of the 

organization’s public pronouncements 

or other communications, as is the case 

in proposed paragraph (a)(2)(i). 

As set forth above, the relevant years 

for proposed paragraph (a)(2)(ii) would 

be the previous four calendar years. For 

example, to apply proposed paragraph 

(a)(2)(ii) for an organization during the 

year 2004, the relevant years would be 

2000, 2001, 2002, and 2003. If an 

organization’s election-related spending 

exceeded the 50 percent threshold in 

any of these years, it would be 

considered to have the nomination or 

election of candidates as a major 

purpose. Alternatively, should the 

organization’s election-related spending 

have to exceed the 50 percent threshold 

in each of the preceding four years to 

trigger political committee status? 

Because an organization’s total annual 

disbursements are typically unknown 

until the end of the year, the current 

year spending would not be examined 

under this proposed major purpose test. 

That is why, in the example given 

above, the organization’s spending 

during 2004 was not considered. For the 

same reason, this proposed provision 

would be inapplicable to newly 

established organizations that have no 

spending in any prior years. However, 

newly established organizations would 

still be subject to the other three 

proposed major purpose tests, including 

the $50,000 disbursement threshold in 

proposed paragraph (a)(2)(iii). 

The Commission also seeks comment 

on the proposal to consider the 

organization’s spending during the 

previous four calendar years, which 

would cover groups that are active only 

during presidential election years. 

Should the proposed rule look back 

more years or fewer years? If so, how 

many calendar years would it be 

appropriate to examine? What should be 

the effective date of a rule that looks 

back four years? 

The types of spending that would be 

counted toward the 50 percent 

threshold in the major purpose test set 

forth in proposed paragraph (a)(2)(ii) 

would be the same as those that would 

be counted toward the $10,000 spending 

threshold in proposed paragraph 

(a)(2)(i). The Commission seeks 

comment regarding counting these 

categories of disbursements toward the 

50 percent threshold. The Commission 

specifically refers commenters to the 

questions and issues raised above with 

respect to counting these categories of 

disbursements toward the $10,000 

disbursement threshold in proposed 

paragraph (a)(2)(i). 

The Commission also seeks comment 

on the use of the 50 percent threshold. 

Is another percentage more appropriate 

to assess an organization’s major 

purpose? Should the Commission apply 

a 25 percent threshold? Could a very 

large organization that spends less than 

50 percent of its funds on electionrelated disbursements nevertheless have 

a profound effect on Federal elections? 

Does this justify the Commission 

adopting a threshold lower than 50 

percent or would this situation be 

addressed by absolute dollar thresholds 

that would be used in proposed 

paragraphs (a)(2)(i) and (a)(2)(iii). 

Should the size of the percentage 

threshold depend upon the 

determination of whether the 

nomination or election of candidates 

must be the major purpose of the 

organization, or must be only a major 

purpose of the organization? If the 

proper interpretation of the major 

purpose requirement is that the 

nomination or election of candidates 

must be the organization’s primary 

purpose, should this proposed 50 

percent threshold be the only test for 

major purpose adopted by the 

Commission in the final rules? In other 

words, if the nomination or election of 

candidates must be the organization’s 

most important purpose, perhaps only 

those organizations that spend most 

(i.e., more than 50 percent) of their 

funds on the nomination or election of 

candidates satisfy the major purpose 

requirement. 

On the other hand, how should the 

final rule address organizations that 

spend a plurality, but not a majority, of 

their money on nomination and election 

activities? For example, should an 

organization be considered to satisfy the 

major purpose requirement if it spends 

only 30 percent of its funds on electionrelated activities (i.e., those items that 

would count toward the proposed 50 

percent threshold) but does not spend 

more than 30 percent on any other 

activity? To apply such a rule, would 

the Commission have to adopt 

categories of non-election spending so 

that the 70 percent of funds that the 

organization spent on non-election 

purposes would not be combined into a 

single category of ‘‘non-election 

activities,’’ thereby allowing the 

organization to avoid political 

committee status? If such categories are 

required, how should they be crafted? 

3. Proposed 11 CFR 100.5(a)(2)(iii)—

$50,000 Disbursement Threshold 

The third of the four proposed major 

purpose tests, which is set forth in 

proposed paragraph (a)(2)(iii), would 

consider an organization to have the 

nomination or election of Federal 

candidates as a major purpose if it 

spends more than $50,000 in the current 

calendar year or any of the previous four 

calendar years on the following: (1) 

Expenditures (including independent 

expenditures); (2) contributions; (3) 

payments for types 1 through 3 of 

Federal election activity; and (4) 

payments for all or any part of an 

electioneering communication, as 

defined in 11 CFR 100.29. When an 

organization exceeds the $50,000 

spending threshold, it would satisfy the 

major purpose standard. For example, to 

conclude that an organization has a 

major purpose of nominating and 

electing candidates in 2004, under 

proposed paragraph (a)(2)(iii), the 

organization would have to exceed the 

$50,000 threshold in either 2000, 2001, 

2002, 2003 or 2004. The relevant time 

period in proposed 11 CFR 

100.5(a)(2)(iii) is the current calendar 

year or any of the four previous calendar 

years. Because this threshold is an 

absolute dollar amount instead of a 

percentage of total spending, the current 

year spending would be relevant to the 

analysis. Consequently, this provision, 

unlike proposed paragraph (a)(2)(ii) 

would apply to newly established 

organizations. The Commission seeks 

comment regarding the use of this time 

period in proposed paragraph (a)(2)(iii). 

Would it be more appropriate to require 

that the threshold be met in each of the 

four preceding calendar years? 

The Commission seeks comment 

regarding the proposed $50,000 

threshold. The Commission notes that it 

uses a $50,000 threshold to determine 

11748 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

when a political committee is subject to 

mandatory electronic filing of its 

financial disclosure statements. See 11 

CFR 104.18(a). Is this an appropriate 

dollar threshold for triggering major 

purpose under this proposed test or is 

a higher or lower threshold more 

appropriate and why? Is a higher or 

lower threshold more appropriate in 

certain situations or with respect to 

particular types of organizations? 

Should the proposed rule incorporate a 

sliding-scale dollar threshold that 

would increase or decrease depending 

upon the size or type of organization, or 

the type of activity in which the 

organization engages? How might such 

a sliding scale specifically work? Is it 

preferable not to have any major 

purpose criteria based upon a strict 

dollar amount and, if so, how would the 

Commission assess the major purpose of 

a newly established organization?

Like proposed paragraphs (a)(2)(i) and 

(a)(2)(ii), proposed paragraph (a)(2)(iii) 

would count the following types of 

disbursements toward the spending 

threshold: (1) Expenditures (including 

independent expenditures); (2) 

contributions; (3) payments for types 1 

through 3 of Federal election activity; 

and (4) payments for all or any part of 

an electioneering communication, as 

defined in 11 CFR 100.29. The 

Commission seeks comment regarding 

counting these categories of 

disbursements toward the $50,000 

threshold. The Commission specifically 

refers commenters to the questions and 

issues raised above with respect to 

counting these categories of 

disbursements toward the $10,000 

spending threshold in proposed 

paragraph (a)(2)(i). 

4. Proposed 11 CFR 100.5(a)(2)(iv)—527 

Organizations 

Proposed 11 CFR 100.5(a)(2)(iv) offers 

two alternatives for the fourth of the 

four proposed major purpose tests. Both 

alternatives address ‘‘527 

organizations,’’ which are entities 

organized under section 527 of the 

Internal Revenue Code, 26 U.S.C. 527. A 

527 organization is ‘‘a party, committee, 

association, fund, or other organization 

(whether or not incorporated) organized 

and operated primarily for the purpose 

of directly or indirectly accepting 

contributions or making expenditures, 

or both, for an exempt function.’’ 26 

U.S.C. 527(e)(1). An exempt function is 

defined as ‘‘the function of influencing 

or attempting to influence the selection, 

nomination, election, or appointment of 

any individual to any Federal, State, or 

local public office or office in a political 

organization, or the election of 

Presidential or Vice Presidential 

electors.’’ 26 U.S.C. 527(e)(2). 

Alternative 2–A provides that all 527 

organizations would be considered to 

have the nomination or election of 

candidates as a major purpose, but 

carves out five exceptions: (1) Any 527 

organization that is the campaign 

organization of an individual seeking 

nomination, election, appointment or 

selection to a non-Federal office; (2) any 

527 organization that is organized solely 

for the purpose of promoting the 

nomination or election of a particular 

individual to a non-Federal office; (3) 

any 527 organization that engages in 

nomination and election activities only 

with respect to elections in which there 

is no candidate for Federal office on the 

ballot; (4) any 527 organization that 

operates in only one State and which is 

required by the law of that State to file 

financial disclosure reports with a State 

agency; and (5) any 527 organization 

that is organized solely for the purpose 

of influencing the selection, 

appointment, or nomination of 

individuals to non-elective office, or the 

election, selection, nomination or 

appointment of persons to leadership 

positions within a political party. 

The first proposed exception would 

recognize that the major purpose of a 

campaign organization for an individual 

seeking non-Federal office is the 

nomination or election of that 

individual to non-Federal office. 

Consequently, such an organization is 

not likely to have as a major purpose the 

nomination or election of candidates to 

Federal office. The second proposed 

exception would address those 

organizations that are organized solely 

to promote the nomination or election of 

individuals to non-Federal offices, but 

do not fall within the first exception 

because they are not under the control 

of that particular non-Federal candidate. 

The third and fourth proposed 

exceptions pertain to State political 

organizations. The exception in 

proposed section 100.5(a)(2)(iv)(C) 

would address 527 organizations that 

operate only in connection with nonFederal elections and only in States, 

such as Virginia, that hold non-Federal 

elections in years where there is no 

regularly scheduled Federal election 

(i.e., odd-numbered years). Such an 

organization, which does not engage in 

activity in connection with any election 

for Federal office, is not likely to have 

as a major purpose the nomination or 

election of Federal candidates. The 

exception in proposed section 

100.5(a)(2)(iv)(D) would address 

organizations that operate in only one 

State and, under State law, must 

disclose their financial activity to a 

State agency. Such organizations, 

because they operate in only one State, 

would not be deemed to have a major 

purpose of nominating or electing 

Federal candidates solely because they 

are 527 organizations. 

The fifth proposed exception would 

recognize that 527 organizations 

established solely to influence the 

selection, appointment or nomination of 

individuals to non-elective office (e.g.,

judicial appointments), or the 

nomination or election of candidates for 

leadership positions within a political 

party, should be exempt from this 

proposed major purpose test because 

they appear unlikely to have a major 

purpose of nominating or electing 

candidates to Federal office. 

Organizations that do not satisfy any 

of the five exceptions and that receive 

$1,000 in contributions or make $1,000 

in expenditures would be Federal 

political committees under proposed 

section 100.5(a) if they are organized 

under section 527 of the Internal 

Revenue Code. Should the Commission 

consider additional exceptions to 

proposed section 100.5(a)(2)(iv) to 

exclude more organizations, or should 

the Commission conclude that other 

organizations should be treated as 

Federal political committees if they 

satisfy the $1,000 thresholds in 

proposed section 100.5(a)(1)? 

The Commission notes that any 527 

organization that falls within one or 

more of the exceptions contained in 

Alternative 2–A could nevertheless be 

considered to have a major purpose of 

nominating or electing Federal 

candidates under one of the first three 

major purpose tests, such as by 

exceeding the 50 percent threshold set 

forth in proposed paragraph (a)(2)(ii) or 

the $50,000 spending threshold set forth 

in proposed paragraph (a)(2)(iii). The 

Commission seeks comment on whether 

the exceptions contained in Alternative 

2–A are appropriate and whether 

Alternative 2–A should include 

additional exceptions. Alternative 2–B, 

in contrast, would provide that all 527 

organizations would be considered to 

have the nomination or election of 

candidates as a major purpose, and does 

not provide for any exceptions.

The Commission seeks comment 

regarding whether it is necessary and 

appropriate to mention 527 

organizations in the proposed rule, or 

whether it would be better to eliminate 

the fourth major purpose test and 

instead subject 527 organizations, like 

any other organization, to analysis 

under the first three tests. To the extent 

that 527 organizations should be 

explicitly mentioned in the proposed 

rule, which alternative is more 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11749

7This is especially true for 501(c)(3) 

organizations because their communications are 

exempt from the definition of ‘‘electioneering 

communications.’’ See 11 CFR 100.29(c)(6). Thus, 

any disbursements for such communications would 

not count toward a 501(c)(3)’s major purpose as 

electioneering communications. Furthermore, the 

Supreme Court recognized that the Massachusetts 

Citizens for Life, Inc., a nonprofit corporation, 

could become a political committee if its 

independent expenditures become ‘‘so extensive’’

that it satisfies the major purpose requirement. 

MCFL, 479 U.S. at 262.

appropriate, Alternative 2–A, 

Alternative 2–B, or some other 

alternative? 

5. Other Tax-Exempt Organizations 

The proposed rule does not expressly 

mention other tax-exempt organizations, 

such as those organized under section 

501(c) of the Internal Revenue Code, 

because, unlike 527 organizations, these 

organizations could lose their taxexempt status if their primary purpose 

were to influence elections. Should the 

final rule state that certain tax-exempt 

organizations, such as those organized 

under 501(c)(3) or (c)(4) of the Internal 

Revenue Code, will not meet any of the 

major purpose tests because of the 

nature of their tax-exempt status, and 

exempt them from the definition of 

political committee? Or should the final 

rule not provide an exemption for 501(c) 

organizations, recognizing that the 

various thresholds in the major purpose 

tests are set high enough that certain 

501(c) organizations may continue to 

conduct incidental or low levels of 

election activities without satisfying any 

of the major purpose tests and triggering 

political committee status? 7 Would it be 

more appropriate to discard ‘‘a major 

purpose’’ analysis and use instead ‘‘the

major purpose’’ analysis for these types 

of organizations? In this regard, should 

the Commission fashion a test whereby 

it would recognize three broad 

categories of activity for 501(c) 

organizations—‘‘election influencing 

activity,’’ ‘‘legislative or executive 

lobbying activity,’’ and ‘‘educational, 

research, or other activity.’’ If the 

organization put more resources, either 

financially or timewise, into ‘‘election 

influencing activity’’ than it put into 

either of the other two activities, the 

major purpose test would be met.

C. Treatment of Contributions for the 

Major Purpose Requirement 

Should the major purpose 

requirement apply when an 

organization’s status as a political 

committee is based upon its making in 

excess of $1,000 in any contributions or 

expenditures, or only when its status as 

a political committee is based solely 

upon its making of independent 

expenditures in excess of $1,000? In 

Akins v. FEC, 101 F.3d 731 (D.C. Cir. 

1996), vacated, 524 U.S. 11 (1998), one 

appeals court interpreted Buckley and 

MCFL to require application of the 

major purpose test only when political 

committee status is based upon the 

organization’s independent 

expenditures, not when it is based upon 

the organization’s other expenditures, 

including contributions to political 

committees. See Akins, 101 F.3d at 742 

(‘‘the Court clearly distinguished 

independent expenditures and 

contributions as to their constitutional 

significance, and its references to a 

‘major purpose’ test seem to implicate 

only the former’’). Should the Akins

court’s interpretation be incorporated 

into the proposed rule, or should the 

major purpose requirement apply to 

organizations that exceed $1,000 in 

expenditures, not just those that exceed 

$1,000 in independent expenditures 

exclusively?

D. Proper Application of the Major 

Purpose Requirement 

The Commission seeks comment 

regarding whether the definition of 

political committee in 11 CFR 100.5(a) 

should include a major purpose test 

along the lines set forth above or 

whether it should instead incorporate 

the major purpose requirement as an 

exception to the definition of ‘‘political 

committee.’’ For example, if the major 

purpose requirement is incorporated 

into the definition of political 

committee (as it is in the proposed 

rules), an organization, regardless of the 

amount of its contributions and 

expenditures, will not be considered to 

be a political committee unless it is 

shown to have a major purpose of 

nominating or electing candidates. This 

is essentially how the proposed rules 

described above would work. An 

alternative approach, which is not 

reflected in the proposed rules, would 

be to use the major purpose requirement 

as an exception to the definition of 

political committee. Under this 

alternative approach, an organization 

would be considered to be a political 

committee if its expenditures or 

contributions exceed the $1,000 

threshold unless the organization has a 

major purpose other than nominating or 

electing candidates. This alternative 

approach would, to a certain extent, 

place the burden on the organization to 

show that it does not have a major 

purpose of nominating or electing 

candidates. Would this alternative 

approach reflect the correct reading of 

the major purpose requirement as set 

forth in Buckley, MCFL and other cases? 

Although not reflected in the 

proposed rules, the Commission seeks 

comment on the proper application of 

the major purpose requirement to 

complex organizations that include a 

political committee within the 

organization. For instance, should the 

Commission impute major purpose 

across such organizations? Thus, if an 

organization includes a political 

committee, should all other committees 

or organizations within the complex 

organization be deemed to satisfy the 

major purpose test? Or should the 

Commission conclude that its current 

affiliation rules at 11 CFR 100.5(g) 

sufficiently address this issue and no 

amendments to the regulations are 

necessary? 

IV. Conversion of Federally Permissible 

Funds to Federal Funds 

The Commission recognizes that there 

may be a need to provide guidance to 

organizations that become political 

committees after operating for some 

time as a non-political committee 

organization, especially concerning two 

issues: (1) how the new political 

committee should demonstrate that the 

contributions and expenditures that it 

made prior to becoming a political 

organization were paid for with 

Federally permissible funds and (2) how 

it should treat the funds it has cash-onhand on the day that it became a 

political committee. Consequently, to 

address these issues, this NPRM 

includes proposed subpart A—

Organizations that Become Political 

Committees, which would set forth the 

requirements for existing organizations 

that become political committees under 

11 CFR 100.5(a). The proposed rules 

would not apply to organizations that 

register with the Commission as a 

political committee prior to making any 

contributions, expenditures, 

independent expenditures or allocable 

expenditures. The proposed rules do not 

replace any of the Commission’s 

existing rules applicable to political 

committees. All political committees, 

including the political committees 

subject to these proposed rules, would 

remain subject to all of the 

Commission’s rules applicable to 

political committees. 

One purpose of the proposed 11 CFR 

part 102, subpart A is to provide a 

mechanism for organizations that 

become political committees to convert 

into Federal funds some or all of the 

funds received prior to the time that 

they became political committees. As 

explained below, a political committee 

could convert these funds into Federal 

funds by contacting its recent donor(s), 

making certain disclosures, and seeking 

11750 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

the donor(s)’ consent to use the funds 

for the purpose of influencing Federal 

elections. Allowing new political 

committees to convert pre-existing 

funds into Federal funds would achieve 

two goals. First, it would allow political 

committees to account for contributions 

and expenditures made before they 

became political committees that were 

required under the Act and the 

Commission’s regulations to be paid for 

with Federal funds (i.e., funds that 

comply with the source prohibitions, 

amount limitations and other 

requirements of the Act). Non-political 

committees are already required to 

‘‘demonstrate through a reasonable 

accounting method that, whenever such 

an organization makes a contribution or 

expenditure, or payment, the 

organization has received sufficient 

funds subject to the limitations and 

prohibitions of the Act to make such 

contribution, expenditure, or payment.’’

11 CFR 102.5(b)(1). The proposed rules 

would provide guidance on the initial 

reporting requirements for non-political 

committees that subsequently become 

political committees but would not 

impose any new requirements on those 

groups that never become political 

committees. Second, the proposed rules 

would, under certain circumstances, 

allow political committees to transfer to 

their Federal account some of the funds 

in their possession when they became 

political committees. 

The Commission seeks comment 

regarding the need for a mechanism for 

political committees to convert funds 

received prior to becoming a political 

committee into Federal funds. The 

proposed rules, as mentioned above, 

would apply only to those organizations 

that, prior to becoming a political 

committee, made contributions or 

expenditures that were required by the 

Act and the Commission’s regulations to 

be paid for with funds that are subject 

to the amount limitations and source 

prohibitions of the Act. Should the 

Commission also provide a mechanism 

in the final rules for political 

committees that, prior to becoming a 

political committee, did not make any 

disbursements that were required to be 

paid for with funds that are subject to 

the limitations and prohibitions of the 

Act, to convert some or all of its funds 

received prior to becoming a political 

committee into Federal funds and then 

transfer those converted funds into its 

Federal account? 

A. Proposed 11 CFR 102.50

Proposed 11 CFR 102.50 would set 

forth the definitions of four terms used 

in proposed subpart A. ‘‘Allocable 

expenditures’’ would be defined as 

expenditures that are allocable under 11 

CFR 106.1 or 106.6. Given that proposed 

11 CFR 100.115 would make partisan 

voter registration, partisan voter 

identification and partisan get-out-thevote activities ‘‘expenditures’’ and that 

some of these activities would be 

encompassed by ‘‘generic voter drive’’

and subject to allocation in current 

section 106.6, should the final rules 

include these types of voter drive 

activities as ‘‘allocable expenditures?’’

‘‘Covered period’’ would be defined 

as the period of time beginning on 

January 1 of the calendar year 

immediately preceding the calendar 

year in which the organization first 

satisfies the definition of ‘‘political 

committee’’ in 11 CFR 100.5(a) and 

ending on the date that the organization 

first satisfies the definition of ‘‘political 

committee’’ in 11 CFR 100.5(a). This 

covered period is similar to the period 

in 2 U.S.C. 434(f)(2)(E) for disclosing 

information pertaining to individuals 

who donate $1,000 or more to persons 

who make electioneering 

communications. Should the 

Commission adopt a shorter or a longer 

covered period in the final rule? 

For example, if an organization first 

satisfies the definition of political 

committee in 11 CFR 100.5(a) on March 

15, 2004, the covered period for that 

organization would be January 1, 2003, 

until March 15, 2004. For an 

organization that first became a political 

committee on December 31, 2005, 

would have a covered period of January 

1, 2004, until December 31, 2005. 

Consequently, the covered period for 

any organization would be at least one 

year, but would be no longer than two 

years. 

‘‘Federal funds’’ would have the same 

meaning as in 11 CFR 300.2(g). Thus, it 

would mean funds that comply with the 

limitations, prohibitions and reporting 

requirements of the Act.

‘‘Federally permissible funds’’ would 

be defined as funds that comply with 

the amount limitations and source 

prohibitions of the Act and were 

received during the covered period by 

the organization becoming a political 

committee. Federally permissible funds 

are different from Federal funds 

because, although both comply with the 

source prohibitions and amount 

limitations of the Act, federally 

permissible funds do not comply with 

the solicitation and reporting 

requirements of the Act. Moreover, 

federally permissible funds would be 

limited to those funds received during 

the organization’s covered period. Only 

a political committee’s federally 

permissible funds would be able to be 

converted to Federal funds under the 

proposed rules. 

Consequently, not all of the 

organizations pre-existing funds would 

be subject to conversion to Federal 

funds under the proposed rules. Only 

those pre-existing funds that comply 

with the amount limitations and source 

prohibitions of the Act (i.e., federally 

permissible funds) would be subject to 

conversion to Federal funds. 

Consequently, funds donated to the 

organization by a corporation, a labor 

organization or foreign national could 

not be converted to Federal funds 

because these are prohibited sources 

under the Act. See 2 U.S.C. 441b and 

441e. Likewise, a political committee 

would not be able to convert to Federal 

funds an entire $20,000 donation to the 

organization from an individual because 

this amount would exceed the $5,000 

limit for individual contributions to 

non-connected political committees. See

2 U.S.C. 441a(a)(1)(C). Only the first 

$5,000 of such a donation would be able 

to be converted to Federal funds under 

the proposed rule. The remaining 

$15,000 would have to be treated as 

non-Federal funds. 

B. Proposed 11 CFR 102.51 

Proposed 11 CFR 102.51 provides that 

subpart A would apply to a committee, 

club, association, or other group of 

persons that satisfies the definition of 

‘‘political committee’’ under 11 CFR 

100.5(a) and that made contributions, 

expenditures, independent expenditures 

or allocable expenditures during the 

covered period. Consequently, the 

proposed rules would apply to any 

organization that meets the following 

two criteria: (1) It satisfies the 

Commission’s definition of ‘‘political 

committee’; and (2) it has made 

expenditures, allocable expenditures or 

allocable disbursements during the 

covered period. 

C. Proposed 11 CFR 102.52 

Proposed 11 CFR 102.52 would set 

forth the requirements for political 

committees that would be subject to 

proposed subpart A. Proposed 

paragraphs (a) and (b) would remind 

these political committees that they are 

required to register with the 

Commission and to establish a 

campaign depository. These 

requirements already exist under 11 

CFR 102.1(d) and 103.2 and would not 

be altered under the proposed rules. 

Proposed paragraph (c) would require 

each political committee that would be 

subject to proposed subpart A to 

determine the amount of expenditures 

and allocable expenditures and 

disbursements it made during its 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11751

covered period. Thus, under this 

provision, political committees would 

be required to determine how much of 

its spending in the period of time 

immediately before it became a political 

committee was required to have been 

paid for with Federal funds. For 

example, if a disbursement was an 

‘‘expenditure’’ under the Act or the 

Commission’s regulations, it would 

count toward this amount. Likewise, if 

a disbursement was an allocable 

expenditure, it would also go toward 

this amount. 

Proposed paragraph (d) would require 

political committees subject to proposed 

subpart A to determine the amount of 

federally permissible funds that the 

political committee received during its 

covered period. Thus, only donations of 

$5,000 or less from persons other than 

corporations, labor organizations, 

foreign nationals and other prohibited 

sources would be counted toward this 

amount, provided that these donations 

were received by the organization 

during its covered period. 

Proposed paragraph (e) would require 

the political committees that would be 

subject to proposed subpart A to file 

financial disclosure reports with the 

Commission in accordance with part 

104 of the Commission’s regulations and 

proposed 11 CFR 102.56. Part 104 of the 

Commission’s regulations are the 

general reporting requirements 

applicable to all political committees, 

including those that also would be 

subject to proposed subpart A. Proposed 

11 CFR 102.56 are reporting 

requirements that the Commission 

proposes to adopt as part of these 

proposed rules. These additional 

reporting requirements are discussed in 

detail below. 

D. Proposed 11 CFR 102.53 

Proposed 11 CFR 102.53(a) would 

require a political committee subject to 

proposed subpart A to treat the amount 

of expenditures and allocable 

expenditures and disbursements made 

during its covered period as debt owed 

by its Federal account to its non-Federal 

account. For example, if, under 

proposed section 102.52(c), a political 

committee determined that, during its 

covered period, it made $100,000 in 

expenditures and allocable expenditures 

and disbursements, its Federal account 

would owe $100,000 to its non-Federal 

account. Consequently, virtually every 

political committee that would be 

subject to proposed subpart A would, at 

the time it becomes a political 

committee, have debt owed by its 

Federal account to its non-Federal 

account. 

Under proposed paragraph (b), a 

political committee would not be 

permitted to make any contributions, 

expenditures, independent expenditures 

or allocable expenditures until the debt 

owed by the Federal account to the nonFederal account is satisfied. Thus, a 

political committee would be unable to 

make any disbursements that must be 

paid for with Federal funds until the 

debt is satisfied pursuant to proposed 

section 102.53(c). 

Proposed paragraph (c) would provide 

two methods for a political committee 

subject to proposed subpart A to satisfy 

the debt owed by its Federal account to 

its non-Federal account. The first 

method would be for the political 

committee to raise Federal funds and 

transfer those funds to its non-Federal 

account. The other method would be for 

the political committee to convert some 

or all of its federally permissible funds 

to Federal funds. The proposed rule 

would allow the political committee to 

satisfy the debt owed by its Federal 

account by using either method or both 

methods in combination. 

As set forth above, the Commission is 

seeking comment regarding whether 

political committees should be 

permitted to maintain non-Federal 

accounts. How would the conversion to 

Federal funds operate if the Commission 

were to adopt a final rule prohibiting 

Federal political committees from 

maintaining non-Federal accounts? 

E. Proposed 11 CFR 102.54 

Proposed section 102.54 would set 

forth the procedure through which a 

political committee that is subject to 

proposed subpart A may convert some 

or all of its federally permissible funds 

to Federal funds. The proposed rule 

would provide a two-step process for a 

political committee to convert its 

federally permissible funds into Federal 

funds. First, the political committee 

would be required to send written 

notification to the donor(s) of any 

Federally permissible funds to be 

converted into Federal funds. The 

written notification would need to:

(1) Inform the donor(s) that the political 

committee has registered as a 

Federal political committee; 

(2) Make all disclaimers required by 11 

CFR 110.11; 

(3) Inform the donor(s) of the amount of 

the federally permissible funds 

donated by the donor(s) that the 

political committee seeks to convert 

to Federal funds and request that 

the donor(s) grant written consent 

for the political committee to use 

that amount of federally permissible 

funds for the purpose of influencing 

Federal elections;

(4) Advise the donor(s) that they may 

grant written consent for an amount 

of federally permissible funds lower 

than the amount requested, and that 

they may refuse to grant consent 

entirely; and 

(5) Inform the donor(s) that, by granting 

consent, the donor(s) will be 

deemed to have made a 

contribution to a Federal political 

committee, that the contribution is 

subject to the amount limitations 

and source prohibitions of the Act, 

and that the contribution will be 

deemed to have been made on the 

date that the written consent is 

signed by the donor(s).

Second, the political committee would 

be required to receive the written 

consent from the donor(s) within 60 

days after the political committee first 

satisfies the definition of ‘‘political 

committee’’ in 11 CFR 100.5. 

If the political committee satisfies the 

requirements of proposed 11 CFR 

102.54, the funds for which it receives 

written consent pursuant to proposed 

paragraph (b) would be considered to be 

converted to Federal funds and may be 

used to satisfy the debt owed by the 

Federal account. The Commission notes 

that, under the proposed rules, the 

political committee would need to 

receive the written consent from the 

donor(s) within sixty days after the 

political committee becomes a political 

committee under 11 CFR 100.5. The 

funds for which the political committee 

receives written consent from the 

donor(s) after that date would not be 

able to be converted to Federal funds 

and used to satisfy the debt owed by the 

Federal account. 

The Commission seeks comment 

generally regarding the proposed 

procedure for converting federally 

permissible funds into Federal funds. 

The written notice requirements under 

proposed section 102.54(a) are designed 

to serve at least two purposes. First, 

they would ensure that the donor(s) are 

fully informed that their donations will 

be or have been used by the political 

committee for the purpose of 

influencing Federal elections and that 

the donor(s) are given a reasonable 

opportunity to object to such use. 

Second, the disclosures would ensure 

that the donor(s) have adequate 

information to comply with the 

contributions limitations of the Act. Are 

any of the requirements for the written 

notice under proposed paragraph 

102.54(a) unnecessary? Should any 

other requirements be added? Is it 

appropriate to require that the donor(s) 

grant their consent to the conversion of 

their donated funds in writing? Should 

11752 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

oral consent, perhaps subject to a 

requirement that the oral consent be 

memorialized in writing, be sufficient? 

Should the Commission adopt the 60-

day time limit in proposed paragraph 

102.54(b)? The 60-day time limit is 

designed to ensure that any conversion 

of Federally permissible funds to 

Federal funds occurs shortly after the 

political committee achieves political 

committee status under 11 CFR 100.5(a). 

Limiting the time period for conversion 

also will allow for the Commission and 

the public to more easily assess a 

political committee’s compliance with 

these proposed rules. Is a time limit 

necessary? Would a time period other 

than 60 days be preferable? If so, how 

long should the conversion period last? 

Would it be preferable to adopt an 

implied consent procedure, whereby the 

political committee would send a 

written notification to the donor(s), but 

would not have to wait for the donor(s) 

to affirmatively consent to the 

conversion. Instead, the political 

committee may consider the donor(s) to 

have consented to the transfer unless 

and until it receives an affirmative 

objection to the conversion from the 

donor(s). Such a procedure would be 

similar to the procedures the 

Commission adopted for redesignation 

and reattribution of certain apparently 

excessive contributions to authorized 

candidate committees under 11 CFR 

110.1(k)(3)(ii)(B) and 11 CFR 

110.1(b)(5)(ii)(B). Are there reasons that 

the Commission should or should not 

adopt a similar regime to govern 

conversion of federally permissible 

funds to Federal funds in proposed 

subpart A? 

F. Proposed 11 CFR 102.55 

Proposed 11 CFR 102.55 would 

provide a mechanism for political 

committees to convert an amount of 

Federally permissible funds to Federal 

funds that is greater than the amount of 

debt owed by its Federal account. A 

political committee that successfully 

converts an amount of federally 

permissible funds to Federal funds that 

is greater than the amount of debt owed 

by its Federal account would be 

required to first use the converted funds 

to satisfy the debt owed by its Federal 

account. The surplus converted Federal 

funds (i.e., the amount of converted 

federally permissible funds exceeding 

the amount of debt owed by the political 

committee’s Federal account) may then 

be transferred to the political 

committee’s Federal account. The 

amount of converted Federal funds 

transferred to the Federal account under 

this proposed section, however, may be 

no greater than the amount of cash-onhand that the political committee had in 

its possession at the time it first became 

a political committee under 11 CFR 

100.5(a). 

For example, if a political committee 

has $50,000 in debt owed by its Federal 

account and is able to convert $75,000 

of its Federally permissible funds into 

Federal funds pursuant to proposed 

section 102.54, it would be able to 

transfer the surplus $25,000 to its 

Federal account if it had at least $25,000 

cash-on-hand in its possession at the 

time it became a political committee. If 

the political committee, however, had 

only $10,000 of cash-on-hand in its 

possession when it became a political 

committee, it would be able to transfer 

only $10,000 from its non-Federal 

account to its Federal account. If the 

political committee had zero cash-onhand in its possession when it became 

a political committee, it would not be 

permitted to transfer any funds to its 

Federal account. 

The Commission seeks comment 

regarding whether it is appropriate for 

the proposed rules to allow this surplus 

amount to be transferred to a political 

committee’s Federal account. Would it 

be preferable to limit the conversion 

procedures only to the amount needed 

by the political committee to satisfy the 

debt owed by its Federal account? If it 

is advisable for the Commission to allow 

political committees to convert as much 

of their federally permissible funds into 

Federal funds as possible, and to 

transfer any surplus to their Federal 

account, should the rule limit the 

amount transferred to the amount of 

cash-on-hand in the possession of the 

political committee when it became a 

political committee? 

G. Proposed 11 CFR 102.56 

Proposed section 102.56 would set 

forth the initial reporting requirements 

for political committees that would be 

subject to proposed subpart A. Under 

proposed section 102.56, political 

committees that would be subject to 

proposed subpart A would be required 

to report certain information along with 

other required information in the 

political committee’s first report due 

under 11 CFR 104.5. Thus, political 

committees that are subject to proposed 

subpart A are also subject to the 

reporting requirements of 11 CFR part 

104, which apply to all political 

committees. Proposed section 102.56 

would merely require a political 

committee that would be subject to 

proposed subpart A to report certain 

additional information related to its 

compliance with proposed subpart A. 

The additional subpart A information 

would be due whenever the political 

committee’s first financial disclosure 

report is due under 11 CFR part 104. 

Under proposed paragraph (a) a 

political committee that would be 

subject to proposed subpart A would be 

required to report the amount of 

expenditures and allocable expenditures 

and disbursements made by the political 

committee during its covered period. 

This figure would reflect the amount of 

debt the political committee’s Federal 

account owes to its non-Federal account 

pursuant to proposed section 102.53(a). 

Under proposed paragraph (b), a 

political committee that would be 

subject to subpart A would be required 

to report the amount of any federally 

permissible funds converted to Federal 

funds under proposed 11 CFR 102.54. 

This figure would reflect the amount of 

converted Federal funds that are 

available for the political committee to 

satisfy the debt owed by its Federal 

account and, possibly, the amount of 

surplus converted Federal funds that the 

political committee may transfer to its 

Federal account pursuant to proposed 

11 CFR 102.55(b).

Proposed paragraph (c) would require 

a political committee that is subject to 

proposed subpart A to report the 

identifying information required under 

11 CFR 104.3(a)(4)(i). This is the 

contributor information that all political 

committees must report to the 

Commission when they receive 

contributions. This proposed provision 

is designed to require political 

committees that would be subject to 

subpart A to report this information for 

any donation of federally permissible 

funds that is converted to Federal funds. 

Proposed paragraph (d) would require 

a political committee to report the 

difference between the amount reported 

under proposed paragraph (a), which is 

the amount of debt owed by the political 

committee’s Federal account under 

proposed 11 CFR 102.53(a), and the 

amount reported under proposed 

paragraph (b), which is the amount of 

federally permissible funds converted to 

Federal funds under proposed 11 CFR 

102.54. Consequently, the amount 

reported pursuant to proposed 

paragraph (d) would reflect whether the 

political committee has converted a 

sufficient amount of federally 

permissible funds to Federal funds to 

allow it to satisfy the debt owed by its 

Federal account. If not, the deficiency 

would be required to be reported as a 

debt owed by the Federal account. It 

would also reflect whether the political 

committee has converted an amount of 

federally permissible funds to Federal 

funds in excess of the amount of debt 

owed by the Federal account, thereby 

possibly permitting the political 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11753

committee to transfer some or all of the 

surplus funds to its Federal account 

pursuant to proposed 11 CFR 102.55(b). 

Proposed paragraph (e) would require 

a political committee that would be 

subject to proposed subpart A to report 

the amount and date of any transfers to 

its Federal account made pursuant to 

proposed 11 CFR 102.55(b). This would 

permit the Commission to assess 

whether the political committee 

complied with the transfer requirements 

under proposed paragraph 102.55(b). 

The Commission seeks comment 

regarding these additional reporting 

requirements that would apply to 

political committees that would be 

subject to proposed subpart A. Are any 

of these reporting requirements 

unnecessary or unduly burdensome? 

Are there additional reporting 

requirements that the Commission 

should include in the proposed rules? 

V. Proposed 11 CFR 106.6—Allocation 

Alternative 1–B includes proposed 

changes to the allocation rules to reflect 

other changes proposed in Alternative 

1–B and for other purposes. The 

Commission has not determined that 

any changes to its allocation rules are 

appropriate, and is thus seeking 

comment to determine what, if any, 

changes are advisable. Although BCRA 

invalidated the Commission’s allocation 

regime for national party committees 

and substituted a different allocation 

regime for other political party 

committees, it did not address the 

Commission’s allocation regulations for 

separate segregated funds and 

nonconnected committees. Although 

McConnell criticized aspects of the 

Commission’s allocation regulations 

regarding political party committees, 

allocation by nonconnected committees 

and separate segregated funds was not 

before the Supreme Court. McConnell,

124 S.Ct. at 660 and 661. Accordingly, 

the Commission seeks comments on 

whether either BCRA or McConnell

requires, permits, or prohibits changes 

to the allocation regulations for separate 

segregated funds and nonconnected 

committees. Does either provide any 

guidance as to how the Commission 

should exercise any discretion it may 

have in this regard? Given McConnell’s

criticism of the Commission’s prior 

allocation rules for political parties, is it 

appropriate for the regulations to allow 

political committees to have nonFederal accounts and to allocate their 

disbursements between their Federal 

and non-Federal accounts? If an 

organization’s major purpose is to 

influence Federal elections, should the 

organization be required to pay for all of 

its disbursements out of Federal funds 

and therefore be prohibited from 

allocating any of its disbursements? 

Should any changes to the allocation 

regulations be effective immediately, or 

should their effective date be January 1, 

2005, which is the first day of the year 

following the completion of the current 

election cycle? Does the Commission 

have a legal basis for delaying the 

effective date of any final rules it 

adopts? 

Under the proposed rules in 

Alternative 1–B, separate segregated 

funds and nonconnected committees 

would be permitted to allocate expenses 

for partisan voter drives and for 

communications that promote or oppose 

a political party between Federal and 

non-Federal accounts according to the 

‘‘funds expended’’ method, which is 

consistent with the requirements of 

current section 106.6(c) for 

administrative expenses and generic 

voter drives. The proposal would add a 

minimum Federal percentage to the 

‘‘funds expended’’ method, and would 

also clarify the ratio in the ‘‘funds 

expended’’ method by further 

describing the Federal component of 

that ratio. Finally, the proposal would 

specify an allocation method for 

communications that promote both 

candidates and political parties. 

A. Partisan Voter Drives 

The proposal would replace the 

references to ‘‘generic voter drives’’ in 

current 11 CFR 106.6(b)(1)(iii) and 

(2)(iii) with references to ‘‘partisan voter 

drives’’ as defined in proposed 11 CFR 

100.34. Political committees are 

currently required to allocate the costs 

for ‘‘generic voter drives,’’ which 

include voter drives that urge the 

general public to support candidates of 

a particular party or associated with a 

particular issue, without mentioning a 

specific candidate. Under Alternative 1–

B, most ‘‘generic voter drives’’ would be 

considered an allocable expenditure as 

a ‘‘partisan voter drive’’ under proposed 

11 CFR 100.34 and 106.6(b)(1)(iii), 

(2)(iii), and (c). Voter drives that urge 

the general public to register, vote or 

support candidates associated with a 

particular issue would continue to be 

allocable under proposed 11 CFR 

106.6(b)(1)(iii), (b)(2)(iii), and (c).

Partisan voter drives that include any 

communication that promotes, supports, 

attacks, opposes, or expressly advocates 

a clearly identified Federal candidate 

are expenditures subject to allocation 

under current 11 CFR 106.1, or, if the 

communication also promotes or 

opposes a political party, the partisan 

voter drive would be allocated under 

proposed 11 CFR 106.6(f), which is 

described below. In all other instances, 

expenditures for partisan voter drives 

would be allocable under the ‘‘funds 

expended’’ method of proposed 11 CFR 

106.6(c). Because ‘‘partisan voter 

drives’’ would be defined as 

‘‘expenditures’’ under proposed 11 CFR 

100.34 and 100.115, the 

communications involved would not be 

limited to those that meet the definition 

of ‘‘public communication’’ in current 

11 CFR 100.26 through 100.28. 

Current 11 CFR 106.1(a)(1) provides 

that the allocation methods in that 

section shall be used to allocate 

payments involving both expenditures 

on behalf of one or more clearly 

identified Federal candidates and 

disbursements on behalf of one or more 

clearly identified non-Federal 

candidates. Proposed section 106.6(f), 

which is described below, would 

provide an allocation method similar in 

some respects to the ‘‘expected benefit’’

method under current section 106.1. 

Proposed section 106.6(g) would specify 

that public communications that 

promote, support, attack or oppose a 

clearly identified Federal candidate, 

without also promoting or opposing a 

political party, would be allocable 

under section 106.1 as expenditures or 

disbursements on behalf of the clearly 

identified Federal or non-Federal 

candidates. Under this approach, the 

Commission is not proposing any 

changes to 11 CFR 106.1(a)(1) and 

instead would rely on the limitations in 

proposed section 106.6(b), (c), (f) and (g) 

to ensure that all partisan voter drives 

except those that promote, support, 

attack, oppose, or expressly advocate a 

clearly identified Federal candidate 

would be subject to allocation under 

section 106.6(c). Comments are sought 

on this approach. 

B. Public Communications That 

Promote or Support a Political Party 

The proposal would also require 

nonconnected committees and separate 

segregated funds to allocate costs of 

public communications that promote or 

oppose a political party, which would 

be expenditures under proposed 11 CFR 

100.116(b), under the ‘‘funds expended’’

method in proposed 11 CFR 106.6(c). If 

such a communication also promotes, 

supports, attacks, or opposes a clearly 

identified Federal candidate, it would 

be allocable under proposed 11 CFR 

106.6(f), described below. Nonpartisan 

voter drives that include a public 

communication would be subject to the 

same allocation regime. A public 

communication that promotes or 

opposes a political party, but that does 

not also promote, support, attack or 

oppose a clearly identified Federal 

candidate, would be allocable under 

11754 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

proposed 11 CFR 106.6(c), without 

regard to references to Federal 

candidates or even express advocacy of 

candidates for State office. Thus, a 

communication that, for example, 

promotes the Republican Party and the 

Governor of New York’s reelection 

would be allocable under proposed 11 

CFR 106.6(c). 

The charts below illustrate the 

allocation methods that would be 

required under Alternative 1–B. 

Allocation for Nonconnected 

Committees and Separate Segregated 

Funds of Partisan Voter Drives That 

Include a Communication 

In the communication,

How is the Federal Candidate Depicted? Does it promote or oppose a political party? Does it clearly identify a Non-Federal Candidate? Allocation: citation and method 

None NO NO 106.6(c) fund expended. 

YES 106.6(c) fund expended. 

YES NO 106.6(c) fund expended. 

YES 106.6(c) fund expended. 

Clearly ID’d Candidate NO NO 106.6(c) fund expended. 

YES 106.6(c) fund expended. 

YES NO 106.6(c) fund expended. 

YES 106.6(c) fund expended. 

PASO’d or Express Advocacy NO NO 106.1 = time/space (100% Fed). 

YES 106.1 = time/space. 

YES NO 106.6(f) time/space & fund exp. 

YES 106.6(f) time/space & fund exp. 

Allocation for Nonconnected 

Committees and Separate Segregated 

Funds of Public Communications and 

Non-Partisan Voter Drives That Include 

a Public Communication 

In the communication,

How is the Federal Candidate Depicted? Does it promote or oppose 

a political party? 

Does it clearly identify a Non-Federal Candidate? Allocation: citation and method 

None NO NO N/A 

YES 106.1 = time/space (100% NF) 

YES—See partisan voter drive allocation chart. 

Clearly ID’d candidate NO NO N/A 

YES 106.1 = time/space 

YES—See partisan voter drive allocation chart. 

PASO’d or Express Advocacy See partisan voter drive allocation chart. 

C. Minimum Federal percentage 

The proposal would add a minimum 

Federal percentage to the ‘‘funds 

expended’’ allocation method. This 

minimum would be the same percentage 

that is applicable to State, district, and 

local political party committees’

allocation of voter drives under current 

11 CFR 106.7(d)(3). It varies with the 

Federal offices that appear on a 

particular State’s ballot, ranging from 

15%, in election years in which a State 

votes for candidates for the United 

States House of Representatives only, to 

36%, in election years in which a State 

votes for president and a senator as 

well. See current 11 CFR 106.7(d)(3)(i) 

through (iv). Related changes to 

reporting requirements are also 

proposed for 11 CFR 104.10. 

For nonconnected committees and 

separate segregated funds that conduct 

partisan voter drives, or engage in other 

activities subject to the ‘‘funds 

expended’’ allocation method, in more 

than one State, two alternative proposed 

rules are presented. Alternative 3–A 

would require such committees to use 

the greatest percentage applicable to any 

of the States in which the committee 

conducted such activities for all its 

disbursements allocable under proposed 

11 CFR 106.6(c). Alternative 3–B would 

permit such committees to allocate such 

costs on a State-by-State basis according 

to the percentage applicable in each 

State. Under Alternative 3–B, a 

committee could choose to simplify its 

allocation by using the highest 

applicable percentage to avoid the 

complications of a State-by-State 

allocation.

The Commission is considering other 

minimum Federal percentages as 

alternatives to those presented in the 

proposed rules. Should the rules in 11 

CFR 106.6 apply different minimum 

Federal percentages than those for State, 

district and local political party 

committees? Should the Commission 

adopt a fixed minimum Federal 

percentage? Should it select a higher 

minimum for committees that conduct 

activities in several States? For example, 

the allocation rule could specify that 

nonconnected committees and separate 

segregated funds that conduct activities 

in fewer than 10 States must use a 

minimum Federal percentage of 25 

percent, while those that do so in 10 or 

more States would face a minimum 

Federal percentage of 50 percent. The 25 

percent figure was chosen as the average 

of the four percentages in current 11 

CFR 106.7(d)(3), and the 50 percent 

figure was chosen to reflect the broader 

scope of activities and as a slight 

reduction to the 60 percent or 65 

percent applicable to national party 

committees under previous 11 CFR 

106.5(b)(2), prior to its sunset on 

December 31, 2002. See 11 CFR 

106.5(h)(2003). If the final rule should 

take such an approach, what should the 

minimum Federal percentages be? 

D. Clarifying the Ratio in the ‘‘Funds 

Expended’’ Method 

The ‘‘funds expended’’ allocation 

method provides that expenses are 

allocated between the Federal and nonVerDate jul<14>2003 19:22 Mar 10, 2004 Jkt 203001 PO 00000 Frm 00020 Fmt 4701 Sfmt 4702 E:\FR\FM\11MRP2.SGM 11MRP2
Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11755

Federal accounts of a nonconnected 

committee or a separate segregated fund 

based on the ratio of Federal 

expenditures to total Federal and nonFederal disbursements made by the 

committee during the two-year Federal 

election cycle. Current section 

106.6(c)(1) specifies that: ‘‘In calculating 

its federal expenditures, the committee 

shall include only amounts contributed 

to or otherwise spent on behalf of 

specific federal candidates.’’ The 

proposal would clarify that ‘‘amounts 

* * * spent on behalf of specific 

Federal candidates’’ includes 

independent expenditures and amounts 

spent on public communications that 

promote, support, attack, support, or 

oppose a clearly identified Federal 

candidate. See proposed 11 CFR 

106.6(c)(1)(i). This proposal reflects the 

Commission’s application of current 

regulations in a recent Advisory 

Opinion. See AO 2003–37, at 4 n.5. The 

Commission seeks comment on whether 

the conclusion in this Advisory Opinion 

should be expressly stated in proposed 

11 CFR 106.6(c)(1)(i). 

E. Public Communications That 

Promote a Political Party and a Federal 

Candidate 

Proposed section 106.6(f) would 

specify an allocation method for public 

communications that promote or oppose 

a political party and promote, support, 

attack or oppose a clearly identified 

Federal candidate. This method would 

apply to this communication whether or 

not the communications also clearly 

identify a non-Federal candidate. 

Proposed section 106.6(f) would 

provide an allocation method that 

combines the ‘‘time and space’’ method 

and the ‘‘funds expended’’ method for 

communications that support Federal 

candidates and a political party. The 

communication would first be subject to 

a ‘‘time and space’’ analysis to split the 

communication among the candidates 

and the political party. The portions 

attributed to candidates would be 

allocated to either the Federal or nonFederal accounts based on the 

candidates’ status. The portion 

attributed to the political party would 

be allocated under the ‘‘funds 

expended’’ method in proposed 11 CFR 

106.6(c). 

This approach would be consistent 

with the Commission’s analysis and 

conclusions based on the application of 

current regulations in a recent Advisory 

Opinion. See AO 2003–37, at 12. Should 

the Commission expressly incorporate 

this result in its allocation regulations? 

F. Public Communications That 

Promote a Federal Candidate, Without 

Promoting or Opposing a Political Party 

Proposed section 106.6(g) would 

specify that public communications that 

promote, support, attack or oppose a 

clearly identified Federal candidate 

without promoting or opposing a 

political party by a nonconnected 

committee or separate segregated fund 

would be allocable under current 

section 106.1. Nonpartisan voter drives 

that include a public communication 

with similar content would be subject to 

the same allocation requirements. The 

only other expenditures or 

disbursements by a nonconnected 

committee or separate segregated fund 

for a public communication or voter 

drive that would be allocable under 

current section 106.1 would involve 

communications that clearly identify 

non-Federal candidates, but do not 

promote, support, attack, oppose, or 

expressly advocate a Federal candidate. 

Certification of No Effect Pursuant to 5 

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

Act) 

When an agency issues certain 

rulemaking proposals, the Regulatory 

Flexibility Act (‘‘RFA’’) requires the 

agency to ‘‘prepare and make available 

for public comment an initial regulatory 

flexibility analysis’’ which will describe 

the impact of the proposed rule on small 

entities. 5 U.S.C. 603(a). Section 605 of 

the RFA allows an agency to certify a 

rule, in lieu of preparing an initial 

regulatory flexibility analysis, if the 

proposed rulemaking is not expected to 

have a significant economic impact on 

a substantial number of small entities. 

Political Committees 

One part of the proposed rule would 

amend the Commission’s definition of 

‘‘political committee.’’ Under the 

Federal Election Campaign Act of 1971, 

as amended, and the Commission’s 

regulations, political committees have 

certain reporting obligations that do not 

apply to non-political committees. 

Moreover, there are restrictions and 

limitations on the receipt of funds by 

political committees that do not apply 

to non-political committees. This part of 

the proposed rule would directly affect 

only those organizations that are not 

currently political committees, but 

would fall within the amended 

definition of ‘‘political committee’’ in 

the proposed rule, if the Commission 

decides to amend the definition. 

It is difficult for the Commission to 

estimate the number of organizations 

that may be affected by the proposed 

change in the definition of political 

committee. The Commission believes, 

however, that most of the organizations 

that would be affected by the proposed 

rule are ‘‘political organizations’’

organized under section 527 of the 

Internal Revenue Code. Under the North 

American Industry Classification 

System (‘‘NAICS’’), political 

organizations are considered to be 

‘‘small entities’’ if they have less than $6 

million in average annual receipts. The 

Commission estimates that all but a few 

of the 527 organizations that may be 

affected by the proposed rules, if 

adopted, have less than $6 million in 

average annual receipts and, therefore, 

qualify as small entities under the 

NAICS.

The Commission notes that a number 

of these political organizations are 

already registered with the Commission 

as political committees and therefore, 

would not be affected by the proposed 

change to the definition of political 

committee. The proposed rule also 

includes various exceptions. For 

example, the proposed rule would only 

affect those political organizations that: 

(1) Meet the ‘‘major purpose’’ test set 

forth in proposed section 100.5(a)(2) of 

the proposed rule; and (2) exceed the 

$1,000 expenditure and disbursement 

thresholds set forth in proposed section 

100.5(a)(1) of the proposed rule. 

Moreover, the proposed rule would 

exempt from political committee status 

those political organizations that are 

involved primarily in state, as opposed 

to Federal, political activity. 

Consequently, while it is difficult for 

the Commission to estimate precisely 

the number of organizations that would 

be affected by the proposed rule, the 

Commission believes that, as a result of 

the exceptions described above, the 

proposed rule would not have an 

economic effect on a substantial number 

of the small entities. 

Furthermore, the Commission does 

not believe that the proposed rule, if 

adopted, will have a significant 

economic impact on those small entities 

that would be affected. As stated above, 

the effect of the proposed rule would be 

to impose certain reporting 

requirements and restrictions on 

funding certain activities upon those 

political organizations that would 

become political committees under the 

amended definition of ‘‘political 

committee.’’

The reporting requirements, however, 

are not complicated and would not be 

costly to complete. For the most part, 

the reports would be filed 

electronically, using free software 

provided by the Commission. The 

Commission also provides free technical 

support and free access to the 

11756 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

Commission’s Information Specialists to 

assist political committees in submitting 

the reports. It is highly unlikely that a 

political committee would need to hire 

additional staff or retain professional 

services to comply with the reporting 

requirements. 

The Commission also notes that the 

Act and the Commission’s regulations 

do not place any limit on the amount of 

funds that a political committee would 

be permitted to spend. The proposed 

rule would merely limit the types of 

funds that may be used to pay for 

certain activities, which are essentially 

those activities that fall within the 

definition of ‘‘expenditure.’’ Political 

committees are, and will remain, free to 

spend unlimited funds on those 

activities that do not fall within the 

definition of expenditure. Moreover, the 

Commission is considering alternatives 

that would have even less of an impact 

than those described above, including 

the possibility of not making any 

changes to the definition of ‘‘political 

committee.’’

Expenditures and Allocation 

The proposed rule would also amend 

the Commission’s definition of 

‘‘expenditure’’ to include payments for 

activities that are not expressly included 

in the Commission’s existing definition 

of expenditure. Whether a disbursement 

qualifies as an ‘‘expenditure’’

determines whether the disbursement 

must be paid for with Federal funds or 

may be paid for with non-Federal funds. 

It also impacts whether an organization 

satisfies the $1,000 expenditure 

threshold for political committee status. 

The proposed rule would also revise the 

Commission’s rules regarding the 

allocation of certain disbursements 

between a political committee’s Federal 

account and non-Federal account. 

Consequently, these parts of the 

proposed rule could impact any 

organization or individual that engages 

in activities in connection with a 

Federal election. 

As explained above with respect to 

the proposed amendment of the 

definition of ‘‘political committee,’’ the 

proposed changes are unlikely to have 

a significant economic impact on small 

entities. Neither the proposed change in 

the definition of ‘‘expenditure’’ nor the 

proposed change in the allocation rules 

would limit the amount of money that 

may be raised or spent on electoral 

activity. The proposed rules would 

merely require that only funds raised in 

accordance with the Act may be spent 

in connection with Federal elections. 

Moreover, the Commission is 

considering alternatives that would 

have even less of an impact than those 

described above, including the 

possibility of not making any changes to 

the definition of ‘‘expenditure’’ and the 

allocation rules. 

Certification 

For the foregoing reasons, the 

Commission hereby certifies that this 

proposed rule would not have a 

significant economic impact on a 

substantial number of small entities. 

The Commission invites comment from 

members of the public who believe that 

the proposed rule will have a significant 

economic impact on a substantial 

number of small entities.

List of Subjects 

11 CFR Part 100

Elections. 

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 106

Campaign funds, Reporting and 

recordkeeping requirements. 

11 CFR Part 114

Business and industry, Elections, 

Labor.

For the reasons set out in the 

preamble, it is proposed to amend 

subchapter A of chapter I of title 11 of 

the Code of Federal Regulations as 

follows:

PART 100—SCOPE AND DEFINITIONS 

(2 U.S.C. 431) 

1. The authority citation for part 100 

would continue to read as follows:

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

2. Section 100.5 would be amended 

by revising the introductory paragraph 

and paragraph (a) to read as follows:

§ 100.5 Political committee (2 U.S.C. 431 

(4), (5), (6)). 

Political Committee means any group 

meeting the conditions set forth in 

paragraph (a), (b), (c), (d) or (e) of this 

section. 

(a)(1) Except as provided in 

paragraphs (b), (c), (d), (e)(1), and (e)(3) 

of this section, political committee

means any committee, club, association, 

or other group of persons: 

(i) That receives contributions 

aggregating in excess of $1,000 or that 

makes expenditures aggregating in 

excess of $1,000 during a calendar year; 

and 

(ii) For which the nomination or 

election of one or more Federal 

candidates is a major purpose. 

Alternative 1–A 

(iii) For purposes of paragraph (a)(1)(i) 

of this section only, the term 

expenditure shall include payments for 

Federal election activities described in 

11 CFR 100.24(b)(1) through (b)(3) and 

payments for all or any part of an 

electioneering communication as 

defined in 11 CFR 100.29. 

End of Alternative 1–A. For 

Alternative 1–B, see 11 CFR 100.34 to 

114.4. 

(2) For purposes of paragraph (a)(1) of 

this section, a committee, club, 

association or group of persons has the 

nomination or election of a candidate or 

candidates as a major purpose if it 

satisfies the conditions set forth in 

paragraph (a)(2)(i), (a)(2)(ii), (a)(2)(iii), or 

(a)(2)(iv) of this section. 

(i) The organizational documents, 

solicitations, advertising, other similar 

written materials, public 

pronouncements, or any other 

communication of the committee, club, 

association or group of persons 

demonstrate that its major purpose is to 

nominate, elect, defeat, promote, 

support, attack or oppose a clearly 

identified candidate or candidates for 

Federal office or the Federal candidates 

of a clearly identified political party; 

and during the current calendar year or 

during any of the previous four calendar 

years, the committee, club, association 

or group of persons makes more than 

$10,000 total disbursements composed 

of any combination of the following: 

(A) Contributions; 

(B) Expenditures (including 

independent expenditures); 

(C) Payments for Federal election 

activities described in 11 CFR 

100.24(b)(1) through (b)(3); and 

(D) Payments for all or any part of an 

electioneering communication as 

defined in 11 CFR 100.29. 

(ii) More than 50 percent of the 

committee’s, club’s association’s or 

group’s total annual disbursements 

during any of the previous four calendar 

years are composed of any combination 

of the following: 

(A) Contributions; 

(B) Expenditures (including 

independent expenditures); 

(C) Payments for Federal election 

activities described in 11 CFR 

100.24(b)(1) through (b)(3); and 

(D) Payments for all or any part of an 

electioneering communication as 

defined in 11 CFR 100.29. 

(iii) During the current calendar year 

or during any of the previous four 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11757

calendar years, the committee, club, 

association or group of persons makes 

more than $50,000 in total 

disbursements composed of any 

combination of the following: 

(A) Contributions; 

(B) Expenditures (including 

independent expenditures); 

(C) Payments for Federal election 

activities described in 11 CFR 

100.24(b)(1) through (b)(3); and 

(D) Payments for all or any part of an 

electioneering communication as 

defined in 11 CFR 100.29. 

Alternative 2–A 

(iv) The committee, club, association 

or group of persons is organized under 

Section 527 of the Internal Revenue 

Code, 26 U.S.C. 527, except that this 

paragraph (a)(2)(iv) shall not apply to: 

(A) The campaign organization of an 

individual seeking nomination, election, 

appointment or selection to a nonFederal office; 

(B) A committee, club, association or 

group of persons that is organized solely 

for the purpose of promoting the 

nomination or election of a candidate or 

candidates to a non-Federal office; 

(C) A committee, club, association or 

group of persons whose election or 

nomination activities relate solely to 

elections where no candidate for 

Federal office appears on the ballot; 

(D) A committee, club, association, or 

group of persons that operates solely 

within one State and, pursuant to State 

law, must file financial disclosure 

reports with one or more branches, 

departments or agencies of that State’s 

government, showing all its activities in 

that State; or 

(E) A committee, club, association, or 

group of persons that is organized solely 

for the purpose of influencing the 

nomination or appointment of 

individuals to a non-elected office, or 

the nomination, election, or selection of 

individuals to leadership positions 

within a political party.

Alternative 2–B 

(iv) The committee, club, association 

or group of persons is organized under 

Section 527 of the Internal Revenue 

Code, 26 U.S.C. 527.

* * * * *

Alternative 1–B 

3. Section 100.34 would be added to 

read as follows:

§ 100.34 Partisan voter drives. 

Partisan voter drive means any or all 

of the following: 

(a) Voter registration activity as 

described in 11 CFR 100.24(a)(2) and 

(b)(1), except for voter registration 

activity described in 11 CFR 100.133; 

(b) Voter identification as described in 

11 CFR 100.24(a)(1), (a)(4), and (b)(2)(i), 

except for voter identification when no 

effort has been or will be made to 

determine or record the party or 

candidate preference of individuals on 

the voter list; and 

(c) Get-out-the-vote activity as 

described in 11 CFR 100.24(a)(1), (a)(3), 

and (b)(2)(iii), except for get-out-thevote activity described in 11 CFR 

100.133. 

4. Section 100.57 would be added to 

subpart B to read as follows:

§ 100.57 Solicitations with express 

advocacy. 

A gift, subscription, loan, advance, or 

deposit of money or anything of value 

made by any person in response to any 

communication that includes material 

expressly advocating, as defined in 11 

CFR 100.22, a clearly identified Federal 

candidate is a contribution to the person 

making the communication. 

5. Section 100.115 would be added to 

subpart D to read as follows:

§ 100.115 Partisan voter drives. 

A payment, distribution, loan, 

advance, or deposit of money or 

anything of value made by, or on behalf 

of any person for partisan voter drives, 

as described in 11 CFR 100.34, is an 

expenditure, except Levin funds, as 

defined in 11 CFR 300.2(i), that are 

disbursed for partisan voter drives are 

not expenditures. 

6. Section 100.116 would be added to 

subpart D to read as follows:

§ 100.116 Certain public communications. 

A payment, distribution, loan, 

advance, or deposit of money or 

anything of value made by, or on behalf 

of any person for a public 

communication, as defined in 11 CFR 

100.26, is an expenditure if the public 

communication: 

(a) Refers to a clearly identified 

candidate for Federal office, and 

promotes or supports, or attacks or 

opposes any candidate for Federal 

office; or 

(b) Promotes or opposes any political 

party. 

7. Section 100.133 would be revised 

to read as follows:

§ 100.133 Nonpartisan voter registration 

and get-out-the-vote activities. 

Any cost incurred for activity 

designed to encourage individuals to 

register to vote or to vote is not an 

expenditure if: 

(a) It does not include a 

communication that promotes, supports, 

attacks, or opposes a Federal or nonFederal candidate or that promotes or 

opposes a political party; 

(b) No effort is or has been made to 

determine the party or candidate 

preference of individuals before 

encouraging them to register to vote or 

to vote; and 

(c) Information concerning likely 

party or candidate preference has not 

been used to determine which 

individuals to encourage to register to 

vote or to vote. 

(d) Corporations and labor 

organizations that engage in such 

activity shall comply with the 

additional requirements set forth in 11 

CFR 114.4(c) and (d). See also 11 CFR 

114.3(c)(4). 

8. Section 100.149 would be amended 

by revising the introductory paragraph 

to read as follows:

§ 100.149 Voter registration and get-outthe-vote activities for Presidential 

candidates (‘‘coattails’’ exception). 

Notwithstanding 11 CFR 100.115, the 

payment by a State or local committee 

of a political party of the costs of voter 

registration and get-out-the-vote 

activities conducted by such committee 

on behalf of the Presidential and Vice 

Presidential nominee(s) of that party is 

not an expenditure for the purpose of 

influencing the election of such 

candidate(s) provided that the following 

conditions are met:

* * * * *

9. Section 100.155 would be added to 

read as follows:

§ 100.155 Allocated amounts. 

Notwithstanding 11 CFR 100.115 or 

100.116, any non-Federal funds 

disbursed by a separate segregated fund 

pursuant to 11 CFR 106.6(b)(1)(iii) 

through (vi) or by a nonconnected 

committee pursuant to 11 CFR 

106.6(b)(2)(iii) through (vi) are not 

expenditures.

PART 102—REGISTRATION, 

ORGANIZATION, AND 

RECORDKEEPING BY POLITICAL 

COMMITTEES (2 U.S.C. 433) 

10. The authority citation for part 102 

would continue to read as follows:

Authority: 2 U.S.C. 432, 433, 434(a)(11), 

438(a)(8), 441d.

11. Sections 102.18 through 102.49 

would be added and reserved. 

12. Subpart A would be added to read 

as follows:

Subpart A—Conversion Rules 

Sec. 

102.50 What are the definitions for this 

subpart A? 

102.51 To which organizations does this 

subpart A apply? 

102.52 What must a committee, club, 

association, or other group of persons do 

11758 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

upon becoming a political committee 

under 11 CFR 100.5(a)? 

102.53 How must a new political committee 

treat the amount of contributions, 

expenditures, independent expenditures 

and allocable expenditures that it made 

during the covered period (before it 

became a political committee)? 

102.54 How can a political committee 

convert its Federally permissible funds 

to Federal funds? 

102.55 What if the political committee is 

able to convert an amount of Federally 

permissible funds to Federal funds that 

is greater than the amount of 

contributions, expenditures, 

independent expenditures and allocable 

expenditures that it made during the 

covered period? 

102.56 What are the initial reporting 

requirements?

Subpart A—Conversion Rules

§ 102.50 What are the definitions for this 

subpart A? 

For purposes of this subpart A, the 

following terms are defined as follows: 

Allocable expenditures mean 

expenditures that are allocable under 11 

CFR 106.1 or 106.6.

Covered period means the period of 

time beginning on January 1 of the 

calendar year immediately preceding 

the calendar year in which a committee, 

club, association, or other group of 

persons first satisfies the definition of 

‘‘political committee’’ in 11 CFR 

100.5(a) and ending on the date that the 

committee, club, association, or other 

group of persons first satisfies the 

definition of ‘‘political committee’’ in 11 

CFR 100.5(a). 

Federal funds has the same meaning 

as in 11 CFR 300.2(g). 

Federally permissible funds mean 

funds that comply with the amount 

limitations and source prohibitions of 

the Act and were received during the 

covered period by the committee, club, 

association, or other group of persons 

that becomes a political committee.

§ 102.51 To which organizations does this 

subpart A apply? 

This subpart A applies to a 

committee, club, association, or other 

group of persons that satisfies the 

definition of ‘‘political committee’’

under 11 CFR 100.5(a) and that made 

contributions, expenditures, 

independent expenditures, or allocable 

expenditures during the covered period.

§ 102.52 What must a committee, club, 

association, or other group of persons do 

upon becoming a political committee under 

11 CFR 100.5? 

The committee, club, association, or 

other group of persons, upon becoming 

a political committee shall: 

(a) File a Statement of Organization 

pursuant to 11 CFR 102.1(d); 

(b) Establish a campaign depository 

pursuant to 11 CFR 103.2; 

(c) Determine the amount of 

contributions, expenditures, 

independent expenditures and allocable 

expenditures that it made during the 

covered period; 

(d) Determine the amount of federally 

permissible funds that it received; and 

(e) File financial disclosure reports 

with the Commission in accordance 

with 11 CFR part 104 and 11 CFR 

102.56.

§ 102.53 How must a new political 

committee treat the amount of 

contributions, expenditures, independent 

expenditures and allocable expenditures 

that it made during the covered period 

(before it became a political committee)? 

(a) A political committee must treat 

the amount of contributions, 

expenditures, independent 

expenditures, and allocable 

expenditures that it made during the 

covered period as a debt owed by its 

Federal account to its non-Federal 

account. 

(b) The political committee may not 

make any additional contributions, 

expenditures, independent expenditures 

or allocable expenditures until this debt 

is satisfied. 

(c) The political committee may 

satisfy this debt by: 

(1) Converting some or all of its 

Federally permissible funds to Federal 

funds pursuant to this subpart A; 

(2) Raising new Federal funds and 

transferring the Federal funds to the 

non-Federal account; or 

(3) A combination of paragraphs (c)(1) 

and (c)(2) of this section.

§ 102.54 How can a political committee 

convert its Federally permissible funds to 

Federal funds? 

A political committee may convert its 

Federally permissible funds to Federal 

funds only in accordance with this 

section. To convert Federally 

permissible funds to Federal funds, the 

political committee shall: 

(a) Send a written notification to the 

donor(s) of the Federally permissible 

funds that the political committee seeks 

to convert to Federal funds. The written 

notification must: 

(1) Inform the donor(s) that the 

political committee has registered with 

the Commission as a Federal political 

committee; 

(2) Make all disclaimers required by 

11 CFR 110.11; 

(3) Inform the donor(s) of the amount 

of their donation that the political 

committee seeks to convert to Federal 

funds and request that the donor(s) 

grant written consent for the political 

committee to use that amount of their 

donation for the purpose of influencing 

Federal elections; 

(4) Advise the donor(s) that they may 

grant written consent for an amount less 

than the amount the political committee 

seeks to convert to Federal funds and 

that they may refuse to grant consent to 

convert any of the funds; and 

(5) Advise the donor(s) that, by 

granting written consent, the donor(s) 

will be considered to have made a 

contribution to the political committee, 

that the contribution will be subject to 

the amount limitations in 2 U.S.C. 

441a(a), and that the contribution will 

be considered made on the date that the 

written consent is signed by the 

donor(s); and 

(b) Receive the written consent 

described in paragraph (a) of this 

section within 60 days after first 

satisfying the definition of ‘‘political 

committee’’ in 11 CFR 100.5(a).

§ 102.55 What if the political committee is 

able to convert an amount of Federally 

permissible funds to Federal funds that is 

greater than the amount of contributions, 

expenditures, independent expenditures 

and allocable expenditures that it made 

during the covered period? 

If the political committee is able to 

convert an amount of Federally 

permissible funds to Federal funds that 

is greater than the amount of 

contributions, expenditures, 

independent expenditures, and 

allocable expenditures that it made 

during the covered period, the political 

committee: 

(a) Must use the converted Federal 

funds to satisfy the debt described in 11 

CFR 102.53; and 

(b) May, but is not required to, 

transfer to its Federal account the 

remaining converted Federal funds. The 

amount of converted Federal funds 

transferred to the political committee’s 

Federal account under this section, 

however, may not exceed the total 

amount of funds the political committee 

had cash-on-hand on the date that it 

first satisfied the definition of political 

committee under 11 CFR 100.5(a).

§ 102.56 What are the initial reporting 

requirements? 

In addition to filing its Statement of 

Organization under 11 CFR 102.2, the 

political committee shall include the 

following information along with other 

required information in the first report 

due under 11 CFR 104.5: 

(a) All contributions, expenditures, 

independent expenditures and allocable 

expenditures it made during the covered 

period; 

(b) The amount of any Federally 

permissible funds that have been 

Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 11759

converted to Federal funds pursuant to 

11 CFR 102.54; 

(c) The information required in 11 

CFR 104.3(a)(4)(i) for each donor who 

provided written consent under 11 CFR 

102.54;

(d) The amount described in 

paragraph (a) of this section minus the 

amount described in paragraph (b) of 

this section as a debt owed by the 

Federal account to the non-Federal 

account; and 

(e) The amount and date of any 

transfers made under 11 CFR 102.55.

PART 104—REPORTS BY POLITICAL 

COMMITTEES (2 U.S.C. 434) 

13. The authority citation for part 104 

would continue to read as follows:

Authority: 2 U.S.C. 431(1), 431(8), 431(9), 

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

14. Section 104.10 would be amended 

by revising the introductory text in 

paragraph (b), the heading in (b)(1), and 

paragraph (b)(1)(i) and the introductory 

text in paragraph (b)(1)(ii) to read as 

follows:

§ 104.10 Reporting by separate segregated 

funds and nonconnected committees of 

expenses allocated among candidates and 

activities.

* * * * *

(b) Expenses allocated among 

activities. A political committee that is 

a separate segregated fund or a 

nonconnected committee and that has 

established separate Federal and nonFederal accounts under 11 CFR 

102.5(a)(1)(i) shall allocate between 

those accounts its administrative 

expenses and its costs for fundraising 

and partisan voter drives according to 

11 CFR 106.6, and shall report those 

allocations according to paragraphs 

(b)(1) through (5) of this section, as 

follows: 

(1) Reporting of allocation of 

administrative expenses and costs of 

partisan voter drives.

(i) In the first report in a calendar year 

disclosing a disbursement for 

administrative expenses or partisan 

voter drives, as described in 11 CFR 

106.6(b), the committee shall state the 

allocation ratio to be applied to these 

categories of activity according to 11 

CFR 106.6(c), (f), or (g), as applicable, 

and the manner in which it was derived. 

The committee shall also state whether 

the calculated ratio or the minimum 

Federal percentage required by 11 CFR 

106.6(c)(1)(ii) will be used. 

(ii) In each subsequent report in the 

calendar year itemizing an allocated 

disbursement for administrative 

expenses or partisan voter drives:

* * * * *

PART 106—ALLOCATIONS OF 

CANDIDATE AND COMMITTEE 

ACTIVITIES 

15. The authority citation for part 106 

would continue to read as follows:

Authority: 2 U.S.C. 438(a)(8), 441a(b), 

441a(g).

16. Section 106.6 would be amended 

by: 

a. Removing the words ‘‘(c) and (d)’’

from paragraph (a) and adding in their 

place the words ‘‘(c), (d), (f) and (g)’’; 

and 

b. Revising the introductory text in 

paragraph (c) and paragraphs (b)(1)(iii), 

(b)(2)(iii), (c)(1), and (e)(2)(ii)(B) and 

adding paragraphs (b)(1)(iv), (b)(1)(v), 

(b)(1)(vi), (b)(2)(iv), (b)(2)(v), (b)(2)(vi), 

(f) and (g) to read as follows:

§ 106.6 Allocation of expenses between 

Federal and non-Federal activities by 

separate segregated funds and 

nonconnected committees.

* * * * *

(b) * * *

(1) * * *

(iii) Partisan voter drives as described 

in 11 CFR 100.34 or any other activities 

that urge the general public to register, 

vote or support candidates of a 

particular party or associated with a 

particular issue, without including a 

public communication that is described 

in paragraph (b)(1)(iv), (v), or (vi) of this 

section; 

(iv) Public communications that 

promote or oppose a political party, as 

described in 11 CFR 100.116(b), but do 

not promote, support, attack, or oppose 

a clearly identified Federal candidate, as 

described in 11 CFR 100.116(a); 

(v) Public communications that 

promote, support, attack, or oppose a 

clearly identified Federal candidate, as 

described in 11 CFR 100.116(a), and that 

promote or oppose a political party, as 

described in 11 CFR 100.116(b); and 

(vi) Public communications that 

promote, support, attack, or oppose a 

clearly identified Federal candidate, as 

described in 11 CFR 100.116(a), but that 

do not promote or oppose a political 

party, as described in 11 CFR 

100.116(b). 

(2) * * *

(iii) Partisan voter drives as described 

in 11 CFR 100.34 or any other activities 

that urge the general public to register, 

vote or support candidates of a 

particular party or associated with a 

particular issue, without including a 

public communication that is described 

in paragraph (b)(2)(iv), (v), or (vi) of this 

section; 

(iv) Public communications that 

promote or oppose a political party, as 

described in 11 CFR 100.116(b), but do 

not promote, support, attack, or oppose 

a clearly identified Federal candidate, as 

described in 11 CFR 100.116(a); 

(v) Public communications that 

promote, support, attack, or oppose a 

clearly identified Federal candidate, as 

described in 11 CFR 100.116(a), and that 

promote or oppose a political party, as 

described in 11 CFR 100.116(b); and 

(vi) Public communications that 

promote, support, attack, or oppose a 

clearly identified Federal candidate, as 

described in 11 CFR 100.116(a), but that 

do not promote or oppose a political 

party, as described in 11 CFR 

100.116(b). 

(c) Method for allocating 

administrative expenses, costs of 

partisan voter drives, and certain public 

communications. Nonconnected 

committees and separate segregated 

funds shall allocate their administrative 

expenses, costs of partisan voter drives, 

and costs of public communications that 

promote or support any political party 

as described in paragraph (b)(1)(i) 

through (iv) or (b)(2)(i) through (iv) of 

this section, according to the funds 

expended method, described in 

paragraphs (c)(1) and (2) as follows: 

(1)(i) Under this method, expenses 

shall be allocated based on the ratio of 

Federal expenditures to total Federal 

and non-Federal disbursements made by 

the committee during the two-year 

Federal election cycle, subject to the 

minimum Federal percentage described 

in paragraph (c)(1)(ii) of this section. 

This ratio shall be estimated and 

reported at the beginning of each 

Federal election cycle, based upon the 

committee’s Federal and non-Federal 

disbursements in a prior comparable 

Federal election cycle or upon the 

committee’s reasonable prediction of its 

disbursements for the coming two years. 

In calculating its Federal expenditures, 

the committee shall include only 

amounts contributed to or otherwise 

spent on behalf of specific Federal 

candidates, including independent 

expenditures and amounts spent on 

public communications that promote, 

attack, support, or oppose clearly 

identified Federal candidates. 

Calculation of total Federal and nonFederal disbursements shall also be 

limited to disbursements for specific 

candidates, and shall not include 

overhead or other generic costs. 

(ii) Minimum Federal percentage for 

administrative expenses, partisan voter 

drives, and certain public 

communications. The minimum Federal 

percentage for any costs allocable under 

paragraph (c) of this section is as 

follows:

(A) For a nonconnected committee or 

a separate segregated fund that conducts 

11760 Federal Register / Vol. 69, No. 48 / Thursday, March 11, 2004 / Proposed Rules 

partisan voter drives in or distributes 

public communications subject to 

allocation under paragraph (c) of this 

section to only one State, the minimum 

Federal percentage shall be the 

percentage in 11 CFR 106.7(d)(3)(i), (ii), 

(iii), or (iv) that is applicable to the 

Federal elections in that State. 

Alternative 3–A 

(B) For a nonconnected committee or 

a separate segregated fund that conducts 

partisan voter drives in or distributes 

public communications subject to 

allocation under paragraph (c) of this 

section to more than one State, the 

minimum Federal percentage shall be 

the greatest percentage in 11 CFR 

106.7(d)(3)(i), (ii), (iii), or (iv) that is 

applicable to any of the Federal 

elections in any of the States in which 

the nonconnected committee or separate 

segregated fund conducts activities 

allocable under paragraph (c) of this 

section. 

Alternative 3–B 

(B) For a nonconnected committee or 

a separate segregated fund that conducts 

partisan voter drives in or distributes 

public communications subject to 

allocation under paragraph (c) of this 

section to more than one State, the 

minimum Federal percentage for each 

State in which the nonconnected 

committee or separate segregated fund 

conducts activities allocable under 

paragraph (c) of this section shall be the 

percentage in 11 CFR 106.7(d)(3)(i), (ii), 

(iii), or (iv) that is applicable to the 

Federal elections in that State.

* * * * *

(e) * * *

(2) * * *

(ii) * * *

(B) Except as provided in paragraph 

(d)(2) of this section or in 11 CFR part 

102, subpart A, such funds may not be 

transferred more than 10 days before or 

more than 60 days after the payments 

for which they are designated are made.

* * * * *

(f) Method for allocating public 

communications that promote, support, 

attack or oppose a clearly identified 

Federal candidate, and promote or 

oppose a political party. Nonconnected 

committees and separate segregated 

funds shall allocate public 

communications described in 

paragraphs (b)(1)(v) or (b)(2)(v) of this 

section as follows: 

(1) The public communication shall 

be attributed according to the 

proportion of space and time devoted to 

each candidate and political party as 

compared to the total space and time 

devoted to all candidates and political 

party; 

(2) The portion of the public 

communication that is attributed to the 

Federal candidate(s) shall be allocated 

to the nonconnected committee’s or 

separate segregated fund’s Federal 

account; 

(3) The portion of the public 

communication that is attributed to the 

political party shall be allocated in 

accordance with paragraph (c) of this 

section; and 

(4) The portion of the public 

communication that is attributed to 

clearly identified non-Federal 

candidate(s), if any, may be allocated to 

either the Federal or non-Federal 

account. 

(g) Method for allocating public 

communications that promote, support, 

attack or oppose a clearly identified 

Federal candidate, without promoting or 

opposing a political party.

Nonconnected committees and separate 

segregated funds shall allocate public 

communications described in 

paragraphs (b)(1)(vi) and (b)(2)(vi) of 

this section under 11 CFR 106.1 as 

expenditures or disbursements on 

behalf of the clearly identified 

candidates.

PART 114—CORPORATE AND LABOR 

ORGANIZATION ACTIVITY 

17. The authority citation for part 114 

would continue to read as follows:

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

432, 434, 437d(a)(8), 438(a)(8), 441b.

18. Section 114.4 would be amended 

by revising paragraphs (c)(2), (c)(3), and 

the introductory text of paragraph (d) to 

read as follows:

§ 114.4 Disbursements for 

communications beyond the restricted 

class in connection with a Federal election.

* * * * *

(c) * * *

(2) Registration and voting 

communications. A corporation or labor 

organization may make registration and 

get-out-the-vote communications to the 

general public, only to the extent 

permitted by 11 CFR 100.133, and 

provided that the communications do 

not expressly advocate the election or 

defeat of any clearly identified 

candidate(s) or candidates of a clearly 

identified political party. The 

preparation and distribution of 

registration and get-out-the-vote 

communications shall not be 

coordinated with any candidate(s) or 

political party. A corporation or labor 

organization may make communications 

permitted under this section through 

posters, billboards, broadcasting media, 

newspapers, newsletter, brochures, or 

similar means of communication with 

the general public. 

(3) Official registration and voting 

information. A corporation or labor 

organization may engage in the 

activities described in paragraphs 

(c)(3)(i) through (iii) of this section only 

to the extent permitted by 11 CFR 

100.133.

* * * * *

(d) Registration and get-out-the-vote 

drives. A corporation or labor 

organization may support or conduct 

voter registration and get-out-the-vote 

drives that are aimed at employees 

outside its restricted class and the 

general public in accordance with the 

conditions set forth in paragraphs (d)(1) 

through (d)(6) of this section and only 

to the extent permitted by 11 CFR 

100.133. Registration and get-out-thevote drives include providing 

transportation to the polls or to the 

place of registration.

* * * * *

Dated: March 4, 2004. 

Bradley A. Smith, 

Chairman, Federal Election Commission.

[FR Doc. 04–5290 Filed 3–10–04; 8:45 am] 

BILLING CODE 6715–01–P

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 2 

Political Committee Status, Definition of Contribution, and Allocation for Separate 

Segregated Funds and Nonconnented Committees (Nov. 23, 2004).
68056 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

Parent: Department of Transportation 

Components 

Federal Aviation Administration 

Federal Highway Administration 

Federal Motor Carrier Safety Administration 

(effective January 30, 2003) 

Federal Railroad Administration

Federal Transit Administration 

Maritime Administration 

National Highway Traffic Safety 

Administration 

Saint Lawrence Seaway Development 

Corporation 

Surface Transportation Board (effective May 

16, 1997) 

Transportation Security Administration 

(effective January 30, 2003, expiring 

February 22, 2005.) 

United States Coast Guard (expiring February 

22, 2005.) 

Parent: Department of the Treasury 

Components 

Alcohol and Tobacco Tax and Trade Bureau 

(effective November 23, 2004.) 

Bureau of Alcohol, Tobacco and Firearms 

(expiring February 22, 2005.) 

Bureau of Engraving and Printing 

Bureau of the Mint 

Bureau of the Public Debt 

Comptroller of the Currency 

Federal Law Enforcement Training Center 

(expiring February 22, 2005.) 

Financial Crimes Enforcement Network 

(FinCEN) (effective January 30, 2003) 

Financial Management Service 

Internal Revenue Service 

Office of Thrift Supervision 

United States Custom Service (expiring 

February 22, 2005.) 

United States Secret Service (expiring 

February 22, 2005.)

■ 3. Effective February 22, 2005, 

appendix B to part 2641 is further 

amended by:

■ A. Removing the Immigration and 

Naturalization Service from the listing 

for the Department of Justice;

■ B. Removing the Transportation 

Security Agency and the United States 

Coast Guard from the listing for the 

Department of Transportation; and

■ C. Removing the Bureau of Alcohol, 

Tobacco and Firearms, the Federal Law 

Enforcement Training Center, the United 

States Custom Service and the United 

States Secret Service from the listing for 

the Department of the Treasury.

[FR Doc. 04–25897 Filed 11–22–04; 8:45 am] 

BILLING CODE 6345–02–P

FEDERAL ELECTION COMMISSION

11 CFR Parts 100, 102, 104, and 106 

[Notice 2004–15] 

Political Committee Status, Definition 

of Contribution, and Allocation for 

Separate Segregated Funds and 

Nonconnected Committees

AGENCY: Federal Election Commission.

ACTION: Final rules and transmittal of 

regulations to Congress. 

SUMMARY: The Federal Election 

Commission (‘‘Commission’’) is revising 

portions of its regulations regarding the 

definition of ‘‘contribution’’ and the 

allocation of certain costs and expenses 

by separate segregated funds (‘‘SSFs’’) 

and nonconnected committees. A new 

rule explains when funds received in 

response to certain communications by 

any person must be treated as 

‘‘contributions.’’ In the allocation 

regulations, the final rules eliminate the 

previous allocation formula under 

which SSFs and nonconnected 

committees used the ‘‘funds expended’’

method to calculate a ratio for use of 

Federal and non-Federal funds for 

administrative and generic voter drive 

expenses, replacing it with a flat 50% 

minimum. These rules also spell out 

how SSFs and nonconnected 

committees must pay for voter drives 

and certain public communications. 

Other changes proposed previously 

regarding the definitions of ‘‘political 

committee’’ and ‘‘expenditure’’ are not 

being adopted. Further information is 

provided in the supplementary 

information that follows.

DATES: Effective January 1, 2005.

FOR FURTHER INFORMATION CONTACT: Ms. 

Mai T. Dinh, Assistant General Counsel, 

Mr. J. Duane Pugh Jr., Senior Attorney, 

Mr. Richard T. Ewell, Attorney, Mr. 

Robert M. Knop, Attorney, or Ms. 

Margaret G. Perl, Attorney, 999 E Street, 

NW., Washington, DC 20463, (202) 694–

1650 or (800) 424–9530.

SUPPLEMENTARY INFORMATION: The 

Commission published a Notice of 

Proposed Rulemaking on March 11, 

2004. See Notice of Proposed 

Rulemaking on Political Committee 

Status, 69 FR 11736 (Mar. 11, 2004) 

(‘‘NPRM’’). Written comments were due 

by April 5, 2004 for those commenters 

who wished to testify at the 

Commission hearing on these proposed 

rules, and by April 9, 2004 for 

commenters who did not wish to testify. 

The NPRM addressed a number of 

proposed changes to 11 CFR parts 100, 

102, 104, 106 and 114. The Commission 

received over 100,000 comments from 

the public with regard to the various 

issues raised in the NPRM. The 

comments are available at http://

www.fec.gov/register.htm under 

‘‘Political Committee Status.’’ The 

Commission held a public hearing on 

April 14 and 15, 2004, at which 31 

witnesses testified. A transcript of the 

public hearing is also available at

http://www.fec.gov/register.htm under 

‘‘Political Committee Status.’’ For the 

purposes of this document, the terms 

‘‘comment’’ and ‘‘commenter’’ apply to 

both written comments and oral 

testimony at the public hearing. 

Under the Administrative Procedure 

Act, 5 U.S.C. 553(d), and the 

Congressional Review of Agency 

Rulemaking Act, 5 U.S.C. 801(a)(1), 

agencies must submit final rules to the 

Speaker of the House of Representatives 

and the President of the Senate and 

publish them in the Federal Register at 

least 30 calendar days before they take 

effect. The final rules that follows were 

transmitted to Congress on November 

18, 2004. 

Explanation and Justification 

Solicitations 

The Commission is adopting one 

addition to the regulatory definition of 

‘‘contribution’’ in 11 CFR part 100, 

subpart B. This addition comports with 

the statutory standard for 

‘‘contribution’’ by reaching payments 

‘‘made * * * for the purpose of 

influencing any election for Federal 

office.’’ 2 U.S.C. 431(8)(A)(i); 11 CFR 

100.51 and 100.52. This addition has 

several exceptions to avoid sweeping 

too broadly. 

11 CFR 100.57—Funds Received in 

Response to Solicitations 

Section 100.57 is a new rule that 

explains when funds received in 

response to certain communications by 

any person must be treated as 

‘‘contributions’’ under FECA. Paragraph 

(a) sets out the general rule, paragraphs 

(b) and (c) create two specific 

exceptions: Paragraph (b) addresses 

certain allocable solicitations, and 

paragraph (c) addresses joint 

fundraisers. These rules in new 11 CFR 

100.57 apply to all political committees, 

corporations, labor organizations, 

partnerships, organizations and other 

entities that are ‘‘persons’’ under the 

Federal Election Campaign Act of 1971, 

as amended (‘‘FECA’’). See 2 U.S.C. 

431(11). The rules apply without regard 

to tax status, so they reach all FECA 

‘‘persons,’’ including, for example, 

entities described in or operating under 

section 501(c)(3), 501(c)(4), and 527 of 

the Internal Revenue Code. 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68057

1. 11 CFR 100.57(a)—Treatment as 

Contributions 

New section 100.57(a) classifies all 

funds provided in response to a 

communication as contributions under 

the FECA if the communication 

indicates that any portion of the funds 

received will be used to support or 

oppose the election of a clearly 

identified Federal candidate. 

Most political committees and other 

organizations pay careful attention to 

communications with potential donors. 

These communications are commonly 

the cornerstone of the relationship 

between a group and its donors, and 

their effectiveness is vital to almost all 

organizations. Many groups’ fundraising 

solicitations will say nothing of an 

electoral objective regarding the use of 

funds (i.e., that any funds provided in 

response to the solicitation will be used 

to support or oppose the election of 

clearly identified Federal candidates). 

Communications that do so, however, 

plainly seek funds ‘‘for the purpose of 

influencing Federal elections.’’ Thus, 

the new rule appropriately concludes 

that such funds are ‘‘contributions’’

under FECA. 

The standard in new section 100.57 

draws support from a 1995 decision of 

the United States Court of Appeals for 

the Second Circuit. FEC v. Survival 

Education Fund, Inc., 65 F.3d 285 (2d 

Cir. 1995). In the Second Circuit case, 

the court found that a July 1984 letter 

from two nonprofit issue advocacy 

groups solicited ‘‘contributions’’ under 

FECA because it included a statement 

‘‘[t]hat * * * leaves no doubt that the 

funds contributed would be used to 

advocate President Reagan’s defeat at 

the polls, not simply to criticize his 

policies during the election year.’’ Id. at 

295. According to the court, the critical 

statement from the mailing was: ‘‘your 

special election-year contribution today 

will help us communicate your views to 

hundreds of thousands of members of 

the voting public, letting them know 

why Ronald Reagan and his anti-people 

policies must be stopped.’’ Id. at 289 

and 295 (first emphasis added by court, 

second in original). The mailing 

described in FEC v. Survival Education 

Fund, if used following the effective 

date of these rules and modified to 

identify clearly a current Federal 

candidate, would trigger new section 

100.57(a) and would require the group 

issuing the mailing to treat all the funds 

received in response to the mailing as 

‘‘contributions’’ under FECA. 

The following are examples of 

solicitations based on the one that 

Survival Education Fund used that 

illustrate how a variation in the text of 

a solicitation would change the result of 

whether a solicitation is subject to new 

section 100.57. A solicitation might 

state the following:

• The President wants to cut taxes again. Our 

group has been fighting for lower taxes since 

1960, and we will fight for the President’s tax 

cuts. Send us money for our important 

work.’’

Because this solicitation does not 

indicate that any funds received will be 

used to support or oppose the election 

of any candidates, any funds received in 

response are not subject to new section 

100.57. 

In contrast, a solicitation that would 

trigger the new rule might read as 

follows:

• The President wants to cut taxes again. Our 

group has been fighting for lower taxes since 

1960, and we will fight to give the President 

four more years to fight for lower taxes. Send 

us money for our important work.’’

Because this solicitation indicates that 

the funds received will be used to 

support the election of a Federal 

candidate (‘‘give the President four more 

years’’), any funds received in response 

to this solicitation are ‘‘contributions’’

under the new rule. 

The rule’s focus on the planned use 

of funds leaves the group issuing the 

communication with complete control 

over whether its communications will 

trigger new section 100.57. After 

determining that a clearly identified 

candidate is mentioned, new section 

100.57 requires an examination of only 

the text of a communication. The 

regulation turns on the plain meaning of 

the words used in the communication 

and does not encompass implied 

meanings or understandings. It does not 

depend on reference to external events, 

such as the timing or targeting of a 

solicitation, nor is it limited to 

solicitations that use specific words or 

phrases that are similar to a list of 

illustrative phrases. 

It is important to note that if a 

solicitation indicates that any portion of 

the funds received will be used to 

support or oppose the election of a 

clearly identified candidate, new 

section 100.57(a) applies even if the 

solicitation states that funds received 

would be used for other purposes too, 

subject to the exceptions in new 11 CFR 

100.57(b)(2) and (c), discussed below. In 

addition, a disclaimer stating that any 

funds received that cannot be treated as 

contributions, or that cannot be 

accepted by a political committee or 

cannot be deposited in a committee’s 

Federal account, will be deposited in 

the organization’s non-Federal account 

does not negate the application of new 

section 100.57(a). Thus, an organization 

that sends out a solicitation that is 

subject to new section 100.57(a) or (b)(1) 

with a disclaimer similar to the one 

described above cannot accept any 

funds that are not Federal funds (funds 

that comply with the amount 

limitations, source prohibitions and 

reporting requirements of FECA) in 

response to that solicitation unless it 

satisfies one of the exceptions in new 

section 100.57(b)(2) or (c), discussed 

below. 

Further examples of communications 

that solicit contributions under new 

section 100.57(a) are: 

1. ‘‘Electing Joe Smith is crucial to our 

efforts to preserve the environment. 

Please send money to us so that we can 

be successful in this cause.’’

2. ‘‘Our group strives to preserve 

Social Security, and Representative 

Jones has a great plan to protect this 

vital program. The Congressman needs 

our help to stay in Washington and 

implement his plan to save Social 

Security. Give now to help us fight to 

save Social Security.’’

3. ‘‘Senator Jane Doe voted against a 

tax package that would have helped 

working families. Your generous gift 

will enable us to make sure Californians 

remember in November.’’

Because the italicized language in 

each of these solicitations indicates that 

the funds received will be used to 

support the election or defeat of a 

Federal candidate, any funds received 

in response to these solicitations are 

‘‘contributions’’ under the new rule. 

In the NPRM, the proposed regulation 

text for section 100.57 took a different 

approach. See NPRM at 11757. 

However, new section 100.57(a) is 

similar to an approach that the 

Commission sought comment on in the 

narrative of the NPRM. See NPRM at 

11743. The commenters did not address 

the approach discussed in the NPRM’s 

narrative, but some addressed the 

proposed regulation text for this 

provision. Those commenters raised 

objections to proposed section 100.57 

based on some of the exemptions from 

the ‘‘expenditure’’ definition for certain 

communications, as discussed below. 

The exemption from the ‘‘expenditure’’

definition for the costs of internal 

communications by corporations, labor 

organizations and membership 

organizations in 2 U.S.C. 431(9)(B)(iii) 

and 11 CFR 100.134 is not affected by 

the Commission’s promulgation of new 

section 100.57. 

New section 100.57 does not address 

when the costs of communications are 

expenditures under FECA. Instead, it 

specifies when funds received in 

response to certain communications 

must be treated as contributions under 

68058 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

FECA. Thus, a corporation, labor 

organization or membership 

organization that issues an internal 

communication of the type described in 

new section 100.57 may consider the 

costs of the communication to be 

disbursements not subject to FECA 

requirements under section 100.134, but 

it must treat any funds received in 

response as FECA contributions under 

new section 100.57. If the corporation, 

labor organization, or membership 

organization maintains a separate 

segregated fund (‘‘SSF’’), treating the 

funds received in response to the 

communication as contributions to the 

SSF will satisfy new section 100.57. 

Section 100.141 exempts from the 

‘‘expenditure’’ definition any payments 

made by corporations or labor 

organizations that are permissible under 

11 CFR part 114. Part 114 authorizes the 

use of non-Federal funds for the costs of 

various corporate, labor organization, 

and membership organization 

communications under certain 

conditions. See, e.g., 11 CFR 114.3 to 

114.8; 2 U.S.C. 441b(b)(2)(A), (b)(2)(B), 

(b)(4)(B). New section 100.57 does not 

make the costs of these communications 

expenditures; instead, it concerns the 

treatment of funds received in response 

to certain communications without 

regard to how the costs of those 

communications were paid.

One commenter argued that its status 

as an MCFL-type corporation (a 

qualified nonprofit corporation allowed 

to make independent expenditures 

pursuant to 11 CFR 114.10) means its 

communications that inform potential 

contributors of the organization’s ability 

to advocate in connection with a 

Federal election must be immune from 

FECA consequences. The Supreme 

Court holding in FEC v. Massachusetts 

Citizens for Life, 479 U.S. 238 (1986) 

(‘‘MCFL’’), is not so broad. Indeed, the 

Court twice has recognized that an 

MCFL-type corporation’s independent 

spending can have FECA consequences. 

See id. at 262 (noting: ‘‘should MCFL’s 

independent spending become so 

extensive that the organization’s major 

purpose may be regarded as campaign 

activity, the corporation would be 

classified as a political committee’’); see 

also FEC v. Beaumont, 539 U.S. 146, 

149 (2003) (holding that the ban on 

corporate contributions directly to 

Federal candidates applies to MCFLtype corporations). Independent 

expenditures were the core of the MCFL

holding, yet the opinion expressly notes 

that the independent expenditures can 

trigger political committee status. 

Nonetheless, the commenter claims that 

an MCFL corporation’s ability to explain 

to potential contributors that it will 

make independent expenditures on 

behalf of particular Federal candidates 

must be immune from consequences 

under new section 100.57. Just as an 

MCFL corporation’s independent 

expenditures can make it a political 

committee, an MCFL corporation’s 

solicitations can make it the recipient of 

contributions under the FECA. These 

contributions will not transform an 

MCFL corporation into a political 

committee unless its expenditures and 

contributions become so extensive as to 

lead to a conclusion that the 

organization’s major purpose is 

campaign activity. Therefore, new 

section 100.57 is not inconsistent with 

MCFL.

Some commenters addressed the 

interplay between this regulation and 

other proposed rules that the 

Commission is not adopting, which 

renders these comments moot. 

New section 100.57 provides one 

example of communications that can 

generate contributions; it is not an 

exhaustive list. The rule addresses 

communications that indicate that the 

funds received in response will be used 

to support or oppose the election of a 

clearly identified Federal candidate. 

Other communications that do not 

include such an indication may also 

generate contributions under FECA. A 

solicitation that states that the funds 

received will be used to influence 

Federal elections will generate FECA 

contributions, see 11 CFR 102.5(a)(2)(ii), 

even though such a communication 

would not be subject to new section 

100.57 because it does not mention a 

clearly identified Federal candidate. 

Any funds that are ‘‘contributions’’ by 

operation of new section 100.57 are 

contributions for purposes of the 

‘‘political committee’’ definition in 2 

U.S.C. 431(4)(A) and 11 CFR 100.5(a), 

which defines a ‘‘political committee’’

as any group that makes $1,000 of 

expenditures or receives $1,000 of 

contributions during a calendar year. In 

Buckley v. Valeo, 424 U.S. 1, 79 (1976), 

the Supreme Court narrowed the 

‘‘political committee’’ definition with a 

‘‘major purpose’’ test, which is 

discussed further below. The ‘‘major 

purpose’’ test applies in the same way 

to groups that make or receive $1,000 of 

contributions and groups that make 

$1,000 of expenditures. 

2. 11 CFR 100.57(b)—Certain Allocable 

Solicitations 

a. 11 CFR 100.57(b)(1) 

New section 100.57(b)(1) states that a 

solicitation that meets section 100.57(a) 

and refers to a political party so that its 

costs are allocable under 11 CFR 106.6 

or 106.7 is nonetheless subject to the 

rule that all of its proceeds are 

‘‘contributions’’ under FECA. This 

approach is consistent with the 

‘‘candidate-driven’’ approach in the 

revised allocation rules, discussed 

below. See, e.g., Explanation and 

Justification for new 11 CFR 106.6(f)(1). 

b. 11 CFR 100.57(b)(2) 

New section 100.57(b)(2) provides 

that where the costs of a solicitation are 

allocable under 11 CFR 106.1, 106.6 or 

106.7, if the solicitation also refers to at 

least one clearly identified non-Federal 

candidate, at least fifty percent of the 

proceeds of the solicitation must be 

treated as contributions under FECA. 

See new 11 CFR 100.57(b)(2). The funds 

that satisfy the requirement that fifty 

percent of the funds received must be 

contributions under the FECA under 

new section 100.57(b)(2) must also 

comply with FECA’s amount limitations 

and source prohibitions and must be 

reported as contributions if the recipient 

is a political committee. Thus, if such a 

solicitation does not yield at least fifty 

percent in funds that meet the FECA’s 

amount limitations and source 

prohibitions, then the organization must 

refund some of the donations to comply 

with new section 100.57. For example, 

a political committee might raise a total 

of $30,000 for its Federal and nonFederal accounts with a fundraising 

event where the invitation includes a 

solicitation that is subject to both new 

section 100.57 and allocation under 

section 106.6(d). Under new section 

100.57(b)(2), the political committee 

must consider at least fifty percent of 

the proceeds to be contributions. If the 

$30,000 total receipts include only 

$12,000 that are in compliance with 

FECA’s limitations and prohibitions, 

then the committee may retain only 

$12,000 in non-Federal funds. The 

political committee must then refund 

$6,000 of donations so that fifty percent 

of the proceeds from this solicitation are 

contributions.

New section 100.57 does not change 

the allocation of direct costs of 

fundraising under current 11 CFR 

106.6(d) or 106.7(d)(4). These costs are 

subject to allocation according to the 

funds received method. New section 

100.57, however, does affect the nature 

of the funds received from a solicitation 

and requires that either 100% or at least 

50% of the funds received must be 

contributions. The amount of 

contributions received, in turn, impacts 

how the funds received method operates 

when the fundraising includes a 

solicitation that is subject to new 

section 100.57. For example, consider 

again the situation described above 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68059

where a political committee raised 

$30,000 for its Federal and non-Federal 

accounts and spent $2,000 in direct 

costs of fundraising. After the $6,000 

refund, the funds received from that 

event were 50% Federal and 50% nonFederal, so the political committee must 

use at least $1,000 in Federal funds to 

pay for direct costs of fundraising under 

section 106.6(d). In accordance with 11 

CFR 106.6(d)(2), the final allocation of 

the direct costs of fundraising must 

result in the Committee using at least 

$1,000 of Federal funds to pay those 

costs, and prior payments based on an 

estimated allocation ratio under section 

106.6(d)(1) must be adjusted to match 

the final allocation ratio. 

3. 11 CFR 100.57(c)—Joint Fundraisers 

New section 100.57(c) concerns joint 

fundraising. It provides that funds 

received in response to solicitations 

conducted between or among the 

authorized committees of Federal and 

non-Federal candidates are excepted 

from being treated entirely as 

contributions under the new rule in 

section 100.57. Nevertheless, when a 

Federal candidate’s authorized 

committee participates in a joint 

fundraiser, all funds solicited are 

subject to restrictions imposed on 

Federal candidates by BCRA. See 2 

U.S.C. 441i(e)(1) and either 11 CFR 

300.61 or 300.62. When a Federal 

candidate conducts a joint fundraiser 

with a State candidate, the candidates 

must divide the receipts according to 

the written joint fundraising agreement 

under 11 CFR 102.17. All funds raised 

for the Federal candidate are subject to 

11 CFR 300.61 and all funds raised for 

the State candidate are subject to 11 

CFR 300.62 because of the Federal 

candidate’s participation in the joint 

fundraiser. 

All other joint fundraising pursuant to 

section 102.17 is subject to new section 

100.57(a) and (b). Thus, section 100.57 

applies to solicitations for joint 

fundraisers involving unauthorized 

political committees or other 

organizations that are not political 

committees where the solicitations 

indicate that any portion of the funds 

received will be used to support or 

oppose the election of a clearly 

identified Federal candidate. If the 

communication is subject to new 

section 100.57(a) or (b)(1), then the 

entire amount of the proceeds of the 

joint fundraiser must be treated as 

contributions. Alternatively, if the 

solicitation is subject to new section 

100.57(b)(2) (includes at least one 

clearly identified Federal candidate and 

at least one clearly identified nonFederal candidate), then at least fifty 

percent of the proceeds must be treated 

as FECA contributions, without regard 

to which entity receives those 

contributions. Any joint fundraising 

agreement must reflect the appropriate 

division of proceeds and costs in order 

for the joint fundraising entities to 

comply with new section 100.57 and in 

11 CFR 102.17. 

For example, two political 

committees, called A and B, each with 

a Federal and non-Federal account, sign 

a joint fundraising agreement stating 

that A will receive 75% of the proceeds 

and B will receive 25% of the proceeds. 

In accordance with the agreement, they 

jointly raise $100,000 with a solicitation 

subject to new section 100.57(b)(2), with 

A receiving $75,000 and B receiving 

$25,000. The $100,00 raised by the two 

committees must be distributed among 

their Federal and non-Federal accounts 

in any way that results in at least 50% 

of the $100,000 total proceeds being 

deposited in the Federal accounts. For 

example, A may deposit one third of its 

$75,000 in proceeds ($25,000) in its 

Federal account and the remaining two 

thirds ($50,000) in its non-Federal 

account. B would then treat all of its 

$25,000 in proceeds as Federal funds, 

deposit $25,000 in its Federal account, 

and nothing in its non-Federal account. 

All funds deposited in Federal accounts 

must comply with the amount 

limitations, source prohibitions, and 

reporting requirements of the Act. 

Furthermore, at least 50% of the direct 

costs of fundraising must be paid for 

with Federal funds. 

Allocation 

The Commission is adopting final 

rules at 11 CFR 106.6 to change the 

allocation regime for SSFs and 

nonconnected committees. These final 

rules establish a simpler bright-line rule 

providing that administrative expenses, 

generic voter drives, and certain public 

communications that refer to a political 

party must be paid for with at least 50% 

Federal funds. Under the previous 

regulations, SSFs and nonconnected 

committees applied a complex ‘‘funds 

expended’’ formula to arrive at a ratio of 

Federal funds to total Federal and nonFederal disbursements and then paid for 

these expenses with allocated amounts 

from Federal and non-Federal accounts. 

The previous rules were a source of 

confusion for some SSFs and 

nonconnected committees and resulted 

in time-consuming reporting.

These final rules also establish 

candidate-driven allocation rules for 

voter drives and public communications 

that refer to clearly identified Federal or 

non-Federal candidates regardless of 

whether the voter drive or public 

communication refers to a political 

party. When the voter drive or public 

communication refers to clearly 

identified Federal candidates, but no 

clearly identified non-Federal 

candidates, the costs must be paid for 

with 100% Federal funds. Similarly, 

when the voter drive or public 

communication refers to clearly 

identified non-Federal candidates, but 

no clearly identified Federal candidates, 

the costs may be paid 100% from a nonFederal account. Any voter drives or 

public communications that refer to 

both clearly identified Federal and nonFederal candidates are subject to the 

time/space method of allocation under 

11 CFR 106.1. The final rules do not 

change the allocation methods in 11 

CFR 106.1, which are based on the 

benefit reasonably expected to be 

derived by each candidate. Minor 

changes are being made in 11 CFR 102.5 

and 104.10 to conform to the changes in 

11 CFR 106.6. 

11 CFR 102.5—Organizations Financing 

Political Activity in Connection With 

Federal and Non-Federal Elections, 

Other Than Through Transfers and Joint 

Fundraisers: Accounts and Accounting 

Section 102.5(a)(1)(i) regulates how 

political committees, other than 

national committees, that finance 

political activity in connection with 

both Federal and non-Federal elections 

set up accounts and transfer monies 

between Federal and non-Federal 

accounts to pay for these activities. As 

explained below in the Explanation and 

Justification for revised 11 CFR 106.6, 

the Commission is revising the rules for 

SSFs and nonconnected committees 

regarding allocation of administrative 

and generic voter drive expenses, and 

adding rules regarding the payment of 

costs of certain voter drives and public 

communications. In order to conform to 

revised 11 CFR 106.6, the Commission 

is revising section 102.5(a)(1)(i) to add 

references to sections 106.6(c) and 

106.6(f), which govern transfers from 

non-Federal to Federal accounts under 

11 CFR 102.5(a) to pay for allocable 

activities. 

11 CFR 104.10—Reporting by Separate 

Segregated Funds and Nonconnected 

Committees of Expenses Allocated 

Amount Candidates and Activities 

Section 104.10 specifies how SSFs 

and nonconnected committees must 

report expenses allocated among 

candidates and activities pursuant to 11 

CFR 106.1 and 106.6. Previously, 

section 104.10(b)(1) established the 

reporting requirements for allocation of 

administrative and generic voter drive 

expenses under the former ‘‘funds 

68060 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

expended’’ method in section 106.6. As 

explained in greater detail below (see 

Explanation and Justification for revised 

11 CFR 106.6), the Commission is 

revising the rules for SSFs and 

nonconnected committees and removing 

the ‘‘funds expended’’ method of 

allocation. In order to conform to the 

revised 11 CFR 106.6, the Commission 

is deleting the requirements for 

reporting allocated expenditures and 

disbursements under the ‘‘funds 

expended’’ method in section 

104.10(b)(1). Instead, revised paragraph 

(b)(1) states that in each report 

disclosing a disbursement for 

administrative expenses, generic voter 

drives, or public communications that 

refer to a political party, but do not refer 

to any clearly identified candidates, the 

committee shall state the allocation ratio 

used for these categories of expenses 

under revised 11 CFR 106.6(c). The 

committee must report whether it is 

using the 50% minimum Federal funds 

required under section 106.6(c) or 

another percentage of Federal funds 

(greater than 50%). Because of the 

simplified approach under the revised 

allocation provisions of section 106.6 

explained below, the reporting 

obligations for SSFs and nonconnected 

committees should be easier to meet 

than the obligations under former 

section 104.10. 

11 CFR 106.6—Payment for 

Administrative Expenses, Voter Drives 

and Certain Public Communications 

This section specifies how SSFs and 

nonconnected committees must pay for 

certain activities that are in connection 

with Federal elections, non-Federal 

elections, or both, using Federal and 

non-Federal accounts established 

pursuant to 11 CFR 102.5. As noted in 

section 106.6(a), political committees 

required to allocate under this section 

do not include party committees and the 

authorized committees of any candidate 

for Federal election. The NPRM 

included several proposals to amend the 

allocation provisions in 11 CFR 106.6, 

which are discussed in greater detail 

below. NPRM at 11753–55 and 11759–

60. Approximately ten commenters 

provided substantive comments 

regarding these proposals. In general, 

the commenters were divided as to the 

impact of the U.S. Supreme Court 

decision in McConnell v. FEC, 540 U.S. 

93 (2003), on the allocation rules for 

SSFs and nonconnected committees. 

One commenter argued that McConnell

reaffirmed that allocation between 

Federal and non-Federal accounts is 

appropriate for SSFs and nonconnected 

committees. Other commenters believed 

that McConnell’s statements regarding 

the circumvention of the FECA 

permitted under the former party 

committee allocation rules could just as 

easily be said of the allocation regime 

for SSFs and nonconnected committees.

After carefully considering these 

public comments and examining 

information regarding how the 

allocation system under former 11 CFR 

106.6 has worked over the past ten 

years, the Commission adopts the 

following amendments to 11 CFR 106.6: 

(1) Deleting the ‘‘funds expended’’ ratio 

from 11 CFR 106.6(c) and replacing it 

with a 50% flat minimum Federal 

percentage; (2) applying this new 50% 

Federal minimum to administrative and 

generic voter drive expenses, as well as 

to a newly added category of allocable 

expenses—public communications that 

refer to a political party but do not refer 

to any clearly identified Federal or nonFederal candidates; (3) providing for 

allocation of certain voter drives and 

public communications that may refer 

to political parties and do refer to 

clearly identified candidates, based 

upon whether the candidates are 

Federal, non-Federal, or both; and (4) 

directing SSFs and nonconnected 

committees to use the time/space 

allocation method for certain voter 

drives and public communications that 

refer to at least one clearly identified 

Federal candidate, and to at least one 

clearly identified non-Federal 

candidate, regardless of whether there is 

a reference to a political party. Through 

these final rules, the Commission seeks 

to enhance compliance with the FECA, 

to simplify the allocation system, and to 

make it easier for SSFs and 

nonconnected committees to 

comprehend and for the Commission to 

administer these requirements. 

1. 11 CFR 106.6(b)—Payments for 

Administrative Expenses, Voter Drives 

and Certain Public Communications 

Previous 11 CFR 106.6(b)(1) listed 

disbursements that must be allocated by 

SSFs, and previous 11 CFR 106.6(b)(2) 

listed disbursements that must be 

allocated by nonconnected committees. 

Because the allocation method is very 

similar for both SSFs and nonconnected 

committees, it is unnecessary to create 

separate lists for them. Rather, the 

distinction in the final rules concerning 

allocation is between the types of 

disbursements that are subject to 

allocation and the types of 

disbursements that are not. Thus, 

revised 11 CFR 106.6(b)(1) lists the 

disbursements that SSFs and 

nonconnected committees must allocate 

in accordance to revised 11 CFR 

106.6(c). Revised 11 CFR 106.6(b)(2) 

lists the disbursements that are not 

subject to allocation but must be paid 

for in accordance with new 11 CFR 

106.6(f). 

Proposed 11 CFR 106.6(b)(1) would 

have applied the allocation rules to 

public communications that promote or 

support a political party or promote, 

support, attack or oppose a clearly 

identified candidate. NPRM at 11759. 

The final rules do not adopt this 

approach. Rather, revised section 

106.6(b) lists public communications 

that refer to a political party or a clearly 

identified candidate. The Commission is 

adopting the standard in the final rules 

because it is an objective standard that 

is easy to administer. 

A. 11 CFR 106.6(b)(1)—Costs To Be 

Allocated 

The four types of disbursements in 

revised 11 CFR 106.6(b)(1) that are 

subject to allocation are: administrative 

expenses, direct costs of fundraising, 

generic voter drives and public 

communications that refer to a political 

party. The final rules retain the former 

descriptions of administrative expenses, 

direct costs of fundraising, and generic 

voter drives in new paragraphs (b)(1)(i), 

(ii) and (iii) in section 106.6, 

respectively. New paragraphs (b)(1)(i) 

and (ii) still make clear that SSFs may 

have the costs of administrative 

expenses and fundraising programs paid 

by their connected organization. 

‘‘Generic voter drives’’ is a defined term 

used prior to BCRA and goes beyond the 

limited activities defined under 

‘‘Federal election activity.’’ For 

example, a television ad urging the 

general public to vote for candidates 

associated with a particular issue, 

without mentioning a specific 

candidate, would be considered 

allocable as a generic voter drive 

activity under 11 CFR 106.6(b)(1)(iii). 

The final rules add a fourth type of 

disbursement that must be allocated—

public communications, as defined in 

11 CFR 100.26, that refer to a political 

party but do not refer to any Federal or 

non-Federal candidate. See 11 CFR 

106.6(b)(1)(iv). To illustrate, public 

communications that use phrases such 

as ‘‘the Democratic team,’’ ‘‘the 

Minnesota Democratic Committee,’’

‘‘the GOP,’’ ‘‘Democrats,’’ and 

‘‘Republicans in Congress,’’ would fall 

under new paragraph (b)(1)(iv) of 

section 106.6 because they refer to a 

political party. See also 11 CFR 

106.6.(b)(2)(iii) and (iv) discussed 

below. 

B. 11 CFR 106.6(b)(2)—Costs Not 

Subject to Allocation 

Revised 11 CFR 106.6(b)(2) lists the 

four types of disbursements that are not 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68061

1For example, a written instruction to the 

employees or volunteers that states ‘‘do not mention 

or refer to Candidate Y’’ would not by itself be 

covered by paragraphs (b)(2)(i) or (ii) of section 

106.6.

subject to allocation between Federal 

and non-Federal accounts, but are 

subject to the payment requirements in 

new paragraph (f) of section 106.6. Two 

of the four types of disbursements 

concern voter drives and the other two 

types concern public communications. 

The Commission recognizes that the 

allocation regulation for generic voter 

drives in new 11 CFR 106.6(b)(1)(iii) 

does not apply to voter drives that 

mention a specific Federal or nonFederal candidate. Without an 

additional regulatory clarification, some 

voter drive activity may have fallen into 

the gap between the regulation of 

generic voter drives in 11 CFR 

106.6(b)(1)(iii) and the candidatespecific public communications 

provisions in new 11 CFR 

106.6(b)(2)(iii) and (iv), discussed 

below. To prevent such a gap, the 

Commission is issuing new rules for 

voter drives that refer to a clearly 

identified Federal or non-Federal 

candidate.

New paragraph (b)(2)(i) of section 

106.6 describes voter drives in which 

the printed materials or scripted 

messages refer to one or more clearly 

identified Federal candidate, or any 

voter drives which include written 

instructions that direct the committee’s 

employee or volunteer to refer to a 

clearly identified Federal candidate 

(including voter drives that also 

generally refer to candidates of a 

particular party or those associated with 

a particular issue), but do not refer to 

any clearly identified non-Federal 

candidates. New paragraph (b)(2)(ii) also 

addresses voter drives that similarly 

refer to one or more clearly identified 

non-Federal candidates, including voter 

drives that generally refer to candidates 

of a particular party or candidates 

associated with a particular issue, but 

do not refer to any clearly identified 

Federal candidates. 

In both paragraphs, the reference to 

the clearly identified candidate must be 

contained in printed materials, scripted 

messages, or written instructions. Only 

written instructions that direct the 

employee or volunteer to refer to a 

clearly identified Federal or non-Federal 

candidate will satisfy these paragraphs.1

The Commission included these 

limitations to avoid converting an 

allocable generic voter drive into an 

unallocable candidate-specific voter 

drive based solely upon ‘‘off script’’ or 

unauthorized oral comments by an 

employee or volunteer. The regulation 

seeks to capture only authorized 

statements; an SSF or nonconnected 

committee is not required to treat an 

otherwise generic voter drive as a 

candidate-specific one based on 

unauthorized comments by committee 

employees or volunteers. SSFs and 

nonconnected committees should be 

maintaining sufficient control over their 

printed materials, scripts and written 

instructions to be on notice whether or 

not the voter drive would qualify as a 

candidate-specific voter drive in new 

paragraphs (b)(2)(i) or (ii) of section 

106.6.

Revised 11 CFR 106.6(b)(2) also 

includes two types of public 

communications, as defined in 11 CFR 

100.26. First, paragraph (b)(2)(iii) 

describes public communications that 

refer to one or more clearly identified 

Federal candidates, regardless of 

whether there is reference to a political 

party, but do not refer to any clearly 

identified non-Federal candidates. 

Second, paragraph (b)(2)(iv) of section 

106.6 describes public communications 

that refer to a political party and one or 

more clearly identified non-Federal 

candidates, but do not refer to any 

clearly identified Federal candidates. 

References to clearly identified Federal 

or non-Federal candidates that come 

within new 11 CFR 106.6(b)(2)(iii) and 

(iv) include ‘‘the President,’’ ‘‘your 

Senators,’’ and ‘‘the Republican 

candidate for Senate in the State of 

Georgia.’’ See also 11 CFR 100.17 

(definition of ‘‘clearly identified’’). 

2. 11 CFR 106.6(c)—Method for 

Allocating Administrative Expenses, 

Costs of Voter Drives and Certain Public 

Communications 

A. Proposals in the NPRM 

In the NPRM, the Commission set 

forth several proposals to amend the 

allocation regulations in 11 CFR 106.6 

that apply to SSFs and nonconnected 

committees other than state and local 

party committees. Those included a 

number of proposals where minimum 

Federal percentages would be added to 

the funds expended method. One 

alternative in the proposed rules would 

have required SSFs and nonconnected 

committees to use the greatest 

percentage applicable in any of the 

States in which the committee 

conducted its activities as the minimum 

Federal percentage applied to all 

allocations under the funds expended 

method. See NPRM at 11754. A 

competing alternative would have 

allowed committees to choose between 

allocating costs on a State-by-State basis 

according to the percentage applicable 

in each State, or using the highest 

applicable percentage across the board. 

See id.

The NPRM also discussed other 

possible minimums including a ‘‘two 

tier’’ system where SSFs and 

nonconnected committees that operate 

in fewer than 10 States would have used 

a lower minimum Federal percentage 

(such as 25%), while any committees 

operating in more than 10 States would 

have been subject to a higher percentage 

(such as 50%). See id. The NPRM also 

proposed the alternative of a fixed 

minimum Federal percentage as a 

replacement for the ‘‘funds expended’’

method. Finally, the NPRM also sought 

comment on eliminating the allocation 

scheme and requiring SSFs and 

nonconnected committees to use 100% 

Federal funds for partisan voter drives 

and public communications listed in 

proposed 11 CFR 106.6(b). 

B. Comments on Allocation Proposals 

Little attention was focused on 

allocation issues during the public 

comment period. Fewer than 10 

comments provided a substantive 

response to the allocation issues raised 

in the NPRM. One commenter wanted to 

eliminate allocation altogether and 

require 100% Federal funds for almost 

all activities, and two commenters 

recommended revamping the allocation 

scheme by eliminating the funds 

expended method. 

The commenters differed regarding 

whether it was appropriate to add a 

Federal minimum percentage into the 

‘‘funds expended’’ method in former 

section 106.6(c). One commenter 

supported revision of the section 106.6 

allocation scheme to avoid ‘‘absurd 

results’’ under the former system by 

requiring a ‘‘significant minimum hard 

money share’’ for allocated expenses. 

Another commenter noted that the new 

bookkeeping, reporting, and 

calculations required for the proposed 

‘‘funds expended method plus a 

minimum percentage’’ approach in the 

NPRM would be burdensome for 

political committees. Some commenters 

supported 100% Federal funds for 

certain expenditures, others supported a 

State-by-State approach, one supported 

a modified ‘‘two tier’’ approach to 

minimums, and others expressed 

concern that any number chosen as a 

minimum would be arbitrary. 

The commenters also differed with 

regard to the proposals for allocation of 

public communications and voter 

drives. One commenter noted that if a 

communication promotes, supports, 

68062 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

2 ‘‘PASO’’ has emerged as a convenient acronym 

for ‘‘promote, support, attack or oppose.’’

attacks, or opposes (‘‘PASOs’’) 2 a 

Federal candidate, then it should be 

paid for with 100% Federal funds. 

Likewise, this commenter noted that if 

a communication only includes nonFederal candidates, then the committee 

should be allowed to use 100% nonFederal funds to pay its costs. Some 

commenters supported a minimum 

Federal percentage for both PASO 

communications and partisan voter 

drives. One commenter asserted that 

allocation based on the PASO standard 

would be vague. Another commenter 

argued that adding PASO 

communications to the ‘‘funds 

expended’’ ratio would be 

unenforceable, arbitrary, and 

unbalanced. In addition, some 

commenters suggested also revising 11 

CFR 106.1 to include a minimum 

Federal percentage under the time/space 

methodology of allocation. The 

Commission is not able to adopt this 

latter suggestion because the NPRM did 

not seek public comment on amending 

section 106.1.

C. Final Rules 

In examining public disclosure 

reports filed by SSFs and nonconnected 

committees over the past ten years, the 

Commission discovered that very few 

committees chose to allocate their 

administrative and generic voter drive 

expenses under former section 106.6(c). 

Anecdotal evidence suggested that 

many committees, including those that 

allocated, were confused as to how the 

funds expended ratio should be 

calculated and adjusted throughout the 

two-year election cycle. Committees 

have consistently requested guidance on 

the proper application of the allocation 

methods under former section 106.6 at 

various Commission conferences, 

roundtables and education events. 

Audit experience has also shown that 

some committees were not properly 

allocating under the complicated funds 

expended method. See Final Report of 

the Audit Division on Volunteer PAC 

(Sept. 21, 2004) (improper application 

of flat state ballot composition ratio 

instead of calculating ratio under funds 

expended method in section 106.6) and 

Final Report of the Audit Division on 

Republicans for Choice PAC (Dec. 2, 

1999) (apparent confusion between 

calculation of funds received ratio and 

funds expended ratio in section 106.6). 

In addition, calculating and adjusting 

the funds expended ratio may have 

posed an administrative burden to some 

committees, particularly those with 

limited resources, because compliance 

required committees to monitor their 

Federal expenditures and non-Federal 

disbursements, compare their current 

spending to the ratio reported at the 

start of the election cycle, and then 

adjust the ratio to reflect their actual 

behavior. The confusion and 

administrative burden associated with 

the funds expended method may at least 

partly explain why, historically, SSFs 

and nonconnected committees have not 

adjusted their allocation ratios during 

an election cycle, or from one election 

cycle to the next election cycle. 

Given the complexity of former 

section 106.6(c), the confusion regarding 

the proper application of this rule 

exhibited by some SSFs and 

nonconnected committees, and the 

administrative burden of compliance, 

the Commission seeks to simplify, not 

further complicate, the allocation 

system. Thus, the Commission is not 

retaining the funds expended method in 

any form. 

A flat minimum percentage makes the 

allocation scheme easier to understand 

and apply, while preserving the overall 

rationale underlying allocation. The flat 

minimum percentage eliminates the 

requirement—and, thus, the 

accompanying burdens—of calculating 

the ratio and monitoring it continuously 

for accuracy. Furthermore, the 

Commission’s recent experience with 

State and local party allocation ratios in 

11 CFR 106.7 and 300.33 indicates that 

flat minimum allocation ratios are easier 

for committees to understand and for 

the Commission to administer. A flat 

minimum Federal percentage will also 

result in less complex, less intrusive, 

and speedier enforcement actions, 

thereby enhancing compliance with the 

law. Finally, SSFs and nonconnected 

committees will retain the flexibility to 

allocate more than the flat minimum 

percentage of these expenses to their 

Federal account if they wish to do so. 

Accordingly, the Commission has 

decided to replace the funds expended 

method of allocation with a flat 

minimum allocation percentage. 

Neither FECA nor any court decision 

dictates how the Commission should 

determine appropriate allocation ratios. 

In fact, at least one court has recognized 

that the Commission has the discretion 

to establish the Federal funds 

percentage it deems best for 

administrative and generic voter drive 

expenses. See Common Cause v. FEC,

692 F. Supp. 1391, 1396 (D.D.C. 1987). 

A flat 50% allocation minimum 

recognizes that SSFs and nonconnected 

committees can be ‘‘dual purpose’’ in 

that they engage in both Federal and 

non-Federal election activities. These 

committees have registered as Federal

political committees with the FEC; 

consistent with that status, political 

committees should not be permitted to 

pay for administrative expenses, generic 

voter drives and public communications 

that refer to a political party with a 

greater amount of non-Federal funds 

than Federal funds. However, the 50% 

figure also recognizes that some Federal 

SSFs and nonconnected committees 

conduct a significant amount of nonFederal activity in addition to their 

Federal spending. The Commission has 

concluded that this approach is 

preferable to importing percentages 

used in other contexts for dissimilar 

entities, such as the former national 

party committee ratios repealed by 

BCRA or the current ratios applicable to 

State and local party committees, as 

suggested in the NPRM. 

Public communications that refer to a 

political party without referring to any 

clearly identified Federal or non-Federal 

candidates are subject to the new 50% 

flat minimum percentage in revised 11 

CFR 106.6(c). Like the administrative 

expenses and generic voter drives 

(which may refer to a political party), 

which are also allocated under section 

106.6(c), these references solely to a 

political party inherently influence both 

Federal and non-Federal elections. 

Therefore, the 50% Federal funds 

requirement reflects the dual nature of 

the communication. As with other 

expenses under revised section 106.6(c), 

an SSF or nonconnected committee may 

choose to allocate more than 50% of the 

costs of any such public communication 

to its Federal account, if it wishes to do 

so.

The past decade of reports filed with 

the FEC indicate that most SSFs and 

nonconnected committees do not 

allocate under section 106.6(c). In fact, 

fewer than 2% of all registered nonparty political committees filed H1 and 

H4 schedules allocating administrative 

and generic voter drive expenses under 

former section 106.6(c) in each election 

cycle since these regulations were made 

effective in 1991. Any SSF or 

nonconnected committee that was not 

allocating under section 106.6 was 

presumably already using 100% Federal 

funds for these expenses, except where 

those expenses were paid by other 

entities in accordance with the Act and 

Commission regulations, such as an 

SSF’s connected organization paying its 

administrative expenses. Thus, 

removing the funds expended method 

and replacing it with a flat minimum 

percentage in section 106.6 should only 

affect a small fraction of all SSFs and 

nonconnected committees. 

Even for those SSFs and 

nonconnected committees that were 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68063

3Because section 106.6 of the Commission’s 

regulations applies only to separate segregated 

funds and non-connected committees, the final 

rules do not apply to the activities of other types 

of political committees, including state and local 

party committees, which are subject to separate 

allocation rules. See 11 CFR 300.30 to 300.33 

(establishing allocation rules for state and local 

party committees).

4The Commission notes that State law may also 

govern communications referring to non-Federal 

candidates.

allocating, the impact of the final rules 

should not be substantial. A review of 

past reports filed with the FEC shows 

that almost half of these committees 

were already paying for these expenses 

with at least 50% Federal funds under 

the former system. These committees 

will not need to adjust their payments 

under the 50% flat percentage method 

in revised 11 CFR 106.6(c). Moreover, 

the actual dollar amounts of nonFederal funds that were spent in past 

cycles on administrative and generic 

voter drive expenses under former 

section 106.6(c), and which will have to 

be partially replaced with Federal funds 

under the final rules, is relatively low. 

With the exception of one or two 

committees per election cycle whose 

spending was out of line with other 

SSFs and nonconnected committees, the 

final rules affect each committee by 

requiring only a minimal increase in 

Federal funds expended. Additionally, 

these amounts were not high compared 

to total disbursements from these 

committees’ Federal accounts in an 

election cycle (and would have been 

even smaller if disbursements from nonFederal accounts were taken into 

consideration). Thus, revised 11 CFR 

106.6(c) should not impose a significant 

fundraising burden on these 

committees. 

3. 11 CFR 106.6(f)—Payments for Public 

Communications and Voter Drives That 

Refer to One or More Clearly Identified 

Federal or Non-Federal Candidates 

The final rules add new paragraph (f) 

to 11 CFR 106.6 to address payments for 

voter drives that refer to clearly 

identified Federal or non-Federal 

candidates, as described in new 11 CFR 

106.6(b)(2)(i) and (ii), and public 

communications that refer to clearly 

identified Federal or non-Federal 

candidates, with or without a reference 

to a political party, as described in new 

11 CFR 106.6(b)(2)(iii) and (iv). The 

final rules also direct SSFs and 

nonconnected committees to use the 

time/space allocation method for voter 

drives and public communications that 

refer to at least one clearly identified 

Federal candidate and to at least one 

clearly identified non-Federal 

candidate, without regard to any 

references to a political party. 

The Commission views voter drives 

and public communications that refer to 

a political party and either Federal or 

non-Federal candidates, but not both, as 

‘‘candidate-driven.’’ The Federal or nonFederal nature of the political party 

reference is determined by whether the 

clearly identified candidates in the 

communication are Federal or nonFederal. Thus, voter drives and public 

communications that refer to a political 

party and also refer only to clearly 

identified Federal candidates must be 

paid for with 100% Federal funds from 

the Federal account under new 11 CFR 

106.6(f)(1). Permitting these voter drives 

and communications to be paid for with 

some non-Federal funds based on a 

cursory reference to a political party 

would invite circumvention of the 

intent of the allocation scheme. Voter 

drives and public communications that 

refer to clearly identified Federal 

candidates, without any reference to 

political parties or non-Federal 

candidates, similarly must be paid for 

with 100% Federal funds from the 

Federal account.3

On the other hand, voter drives and 

public communications that refer to a 

political party and also refer only to 

clearly identified non-Federal 

candidates may be paid for entirely by 

the non-Federal account under new 11 

CFR 106.6(f)(2). SSFs and nonconnected 

committees may pay for these 

communications referring to nonFederal candidates partly or entirely 

with Federal funds, but are not required 

to do so. Finally, voter drives and public 

communications that refer to both 

Federal and non-Federal candidates, 

regardless of whether there is also a 

reference to a political party are subject 

to a time/space allocation method in 

new 11 CFR 106.6(f)(3), which is similar 

to the method outlined in 11 CFR 106.1. 

See new 11 CFR 106.6(f)(3).4 SSFs and 

nonconnected committees must comply 

with section 106.6(f) when allocating 

public communications and voter drive 

activities, but must comply with 11 CFR 

106.1 for allocation of any other 

expenditures made on behalf of more 

than one clearly identified Federal 

candidate.

The final rules are simpler than the 

approach taken in Advisory Opinion 

2003–37 and proposed in the NPRM at 

proposed 11 CFR 106.6(f) and (g). These 

required a combined application of the 

time/space allocation method under 11 

CFR 106.1 and the funds expended 

method under former 11 CFR 106.6 for 

public communications that refer to a 

party and to specific Federal candidates. 

Advisory Opinion 2003–37 is hereby 

superseded. The candidate-driven 

approach for these voter drives and 

public communications, coupled with 

the removal of the funds expended 

method in favor of a flat percentage 

method, reduces the amount of 

recordkeeping, tracking, and calculating 

that SSFs and nonconnected committees 

must do to allocate properly 

administrative expenses, and to pay 

properly for voter drives, and public 

communication costs under 11 CFR 

106.6. 

The revised 11 CFR 106.6 allocation 

regulations should reduce the burden of 

compliance on SSFs and nonconnected 

committees. Incorporation of certain 

voter drives and public communications 

into 11 CFR 106.6 provides more 

specific guidance to committees that 

conduct such activity. The Commission 

believes that these final rules best 

resolve the problems with the former 

allocation scheme revealed through 

reviewing past FEC reports and the 

issues raised by the commenters on the 

NPRM. 

Effective Date 

Many commenters on the NPRM 

argued that any changes made effective 

before the general election on November 

2, 2004 would cause great disruption to 

political committees and other 

organizations. Taking into account the 

statutorily mandated waiting period 

before a regulation may be effective 

under the Administrative Procedure 

Act, these regulations could not be 

effective until after the November 2, 

2004 general election. To provide an 

orderly phase-in of the new rules and 

transition from one election cycle to the 

next election cycle, the Commission is 

establishing January 1, 2005 as the 

effective date for all amendments and 

additions to 11 CFR parts 100, 102, 104 

and 106. This effective date allows 

affected political committees to ‘‘close 

out’’ the 2003–2004 election cycle by 

making final adjustments to their 

section 106.6(c) ratios and any final 

transfers of money between Federal, 

non-Federal, and allocation accounts. It 

also provides sufficient time for all 

those affected to make whatever internal 

changes necessary to comply with the 

new rules. 

Other Proposals 

The NPRM proposed several 

additional new and revised rules, 

including changes to the definitions of 

‘‘political committee’’ and 

‘‘expenditure.’’ Other than the Final 

Rules that follow, the Commission is not 

promulgating any of the proposed rules. 

The NPRM also raised many issues in 

the narrative describing the proposed 

rules. The Commission cautions that no 

68064 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

inferences should be made as to the 

Commission’s position on any of the 

issues that are not discussed in this 

document or on any of the proposed 

rules that are not adopted as final rules. 

Discussed below are some of the 

proposals from the NPRM that the 

Commission did not adopt. As noted 

above, the Commission received many 

comments on the NPRM. The comments 

related to proposed rules that the 

Commission did not adopt are not 

specifically described and addressed in 

this document.

Proposed 11 CFR 100.5—Political 

Committee (2 U.S.C. 431(4), (5), (6)) 

Under current law, any committee, 

club, association, or other group of 

persons that receives contributions 

aggregating in excess of $1,000 or which 

makes expenditures aggregating in 

excess of $1,000 during a calendar year 

is a political committee. See 2 U.S.C. 

431(4)(A); 11 CFR 100.5(a). Nearly three 

decades ago, the Supreme Court 

narrowed the Act’s references to 

‘‘political committee’’ in order to 

prevent their ‘‘reach [to] groups engaged 

purely in issue discussion.’’ Buckley v. 

Valeo, 424 U.S. 1, 79 (1976). The Court 

concluded that ‘‘[t]o fulfill the purpose 

of the Act [the words ‘‘political 

committee’] need only encompass 

organizations that are under the control 

of a candidate or the major purpose of 

which is the nomination or election of 

a candidate.’’ Id.

The NPRM proposed four alternatives 

for revisions to the definition of a 

‘‘political committee’’ in 11 CFR 

100.5(a). NPRM at 11743–49 and 11756–

57. The proposed alternatives differed 

mainly in whether, and if so, how, the 

definition of ‘‘political committee’’

should include a test to determine an 

organization’s ‘‘major purpose.’’

The Commission received tens of 

thousands of comments addressing 

these proposals and the various 

individual components of the proposed 

‘‘major purpose’’ tests. Many 

commenters supported the idea of 

incorporating a major purpose test into 

the definition of ‘‘political committee’’

and offered a variety of alternatives for 

what the test should be. In contrast, 

many other commenters opposed all of 

the proposals set forth in the NPRM and 

expressed concerns about the potential 

impact of the proposed rules on nonelectoral speech. Several provisions in 

BCRA, such as those barring the use of 

corporate funds for electioneering 

communications but permitting the use 

of unlimited individual funds for that 

purpose, were cited for the proposition 

that an overly broad rule defining 

‘‘political committee’’ would conflict 

with the structure Congress established 

in BCRA. 

Many commenters questioned 

whether new rules were necessary or 

appropriate at this time and suggested 

that Buckley’s ‘‘major purpose’’

language might be better addressed by 

Congress or the Supreme Court. A joint 

comment from hundreds of 501(c) 

organizations contended that the 

Commission has not obtained access to 

the types of comprehensive reports that 

Congress has at its disposal, and the 

Commission is therefore poorly 

positioned at this time to assess 

properly the operations of the variety of 

organizations that might be affected by 

new regulations. 

Some observed that Congress did not 

address political committee status in 

BCRA even though Congress appeared 

to be fully aware that some groups were 

operating outside FECA’s registration 

and reporting requirements as well as its 

limitations and prohibitions. These 

commenters found it significant that 

Congress had recently focused on 527 

organizations in 2000 and 2002 when it 

added and revised IRS-based reporting 

requirements for many of these 

organizations. According to the 

commenters, Congress consciously did 

not require 527 organizations to register 

with the Commission as political 

committees. 

There were additional concerns raised 

about the constitutional and practical 

issues relating to the ‘‘major purpose’’

test. Some commenters noted that the 

‘‘major purpose’’ test is not a statutory 

trigger for political committee status, 

but rather a court-created protection to 

avoid over-reach of the triggers for 

political committee status actually 

contained in the FECA. Many 

commenters argued that a ‘‘major 

purpose’’ test would chill 

constitutionally protected speech, some 

expressing the view that the boundaries 

of the test would be inherently vague 

and thus force organizations to curtail 

permissible activities. Other 

commenters expressed concern about 

the practical difficulties they perceived 

in implementing a test intended to 

ascertain a group’s ‘‘purpose.’’ For 

instance, a number of commenters 

similarly expressed concern that the 

‘‘major purpose’’ test set out in the 

NPRM might unfairly categorize 

organizations as political committees 

based on a few statements or 

organizational documents where those 

statements and documents might not 

accurately convey the actual purpose of 

the organization. Other commenters also 

asserted that the Commission’s 

determinations of an organization’s 

purpose would often result in intrusive 

investigations into the private internal 

workings of an organization. Another 

commenter feared that any definition of 

‘‘political committee’’ potentially 

encompassing nonprofit organizations 

would force them to choose between 

accepting foundation funds or corporate 

donations and advocating ballot 

questions as a part of the organization’s 

overall activity. 

In addition, arguments were made 

that the Commission would be in a 

better position to address the issue of 

political committee status after 

monitoring the behavior of various 

organizations during at least one 

election cycle following the enactment 

of BCRA. A number of commenters 

asserted that it would be improper for 

the Commission to add a new ‘‘major 

purpose’’ test without sufficient data 

demonstrating the existence of 

corruption or the appearance of 

corruption to justify the new 

regulations. 

After evaluating these comments, the 

Commission considered two separate 

draft Final Rule approaches that would 

have revised the definition of ‘‘political 

committee.’’ Each of these approaches 

incorporated modified portions of the 

rules proposed in the NPRM. Each 

approach included a ‘‘major purpose’’

test, but the tests were different in 

purpose and operation. See draft 11 CFR 

100.5(a), Agenda Document 04–75, at 

37–41, and draft 11 CFR 100.5(a), 

Agenda Document 04–75–A, at 2–3 

(Aug. 19, 2004 meeting).

The draft Final Rules in Agenda 

Document 04–75 would have 

incorporated one construction of the 

Buckley test into the definition of 

‘‘political committee’’ in 11 CFR 

100.5(a) by requiring an organization to 

have ‘‘as its major purpose the 

nomination or election of one or more 

candidates for Federal office.’’ See draft 

11 CFR 100.5(a)(1)(ii) of Agenda 

Document 04–75 (emphasis added); see 

also Buckley, 424 U.S. at 79. Draft 

paragraph (a)(2) presented three ways in 

which any organization could have 

satisfied that test: (1) By publicly 

declaring that the purpose of the group 

is to influence Federal elections; (2) by 

spending more than 50% of its funds on 

certain specified activities; or (3) by 

receiving more than 50% of its funding 

through ‘‘contributions,’’ as defined in 2 

U.S.C. 431(8) and 11 CFR Part 100, 

Subpart B. These draft Final Rules 

would have also established an 

additional test whereby 527 

organizations could satisfy the ‘‘major 

purpose’’ test through the application of 

a broader 50% disbursements test. 

The other set of draft Final Rules that 

the Commission considered, but did not 

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68065

adopt, would have incorporated a 

different construction of Buckley’s

major purpose test into the definition of 

‘‘political committee’’ in 11 CFR 

100.5(a). This test would have focused 

on whether an organization’s major 

purpose was the ‘‘election of one or 

more Federal or non-Federal

candidates.’’ See draft 11 CFR 

100.5(a)(1)(ii) of Agenda Document 04–

75–A (emphasis added). Coupled with 

the Commission rule allowing a 

political committee to report only its 

Federal activity, this was designed to 

prevent groups from avoiding political 

committee status altogether because a 

majority of the campaign activity is nonFederal. The major purpose test would 

have been satisfied in one of two ways. 

Under draft 11 CFR 100.5(a)(2), an 

organization described in section 527 of 

the Internal Revenue Code (a ‘‘527 

organization’’) would have satisfied the 

‘‘major purpose’’ test just by virtue of its 

having registered with the Internal 

Revenue Service under 26 U.S.C. 527, 

unless covered by one of five 

enumerated exceptions. All other 

organizations would have been subject 

to the previously existing standards for 

determining their major purpose. See

draft 11 CFR 100.5(a)(4) of Agenda 

Document 04–75–A. 

The comments raise valid concerns 

that lead the Commission to conclude 

that incorporating a ‘‘major purpose’’

test into the definition of ‘‘political 

committee’’ may be inadvisable. Thus, 

the Commission has decided not to 

adopt any of the foregoing proposals to 

revise the definition of ‘‘political 

committee.’’ As a number of 

commenters noted, the proposed rules 

might have affected hundreds or 

thousands of groups engaged in nonprofit activity in ways that were both 

far-reaching and difficult to predict, and 

would have entailed a degree of 

regulation that Congress did not elect to 

undertake itself when it increased the 

reporting obligations of 527 groups in 

2000 and 2002 and when it substantially 

transformed campaign finance laws 

through BCRA. Furthermore, no change 

through regulation of the definition of 

‘‘political committee’’ is mandated by 

BCRA or the Supreme Court’s decision 

in McConnell. The ‘‘major purpose’’ test 

is a judicial construct that limits the 

reach of the statutory triggers in FECA 

for political committee status. The 

Commission has been applying this 

construct for many years without 

additional regulatory definitions, and it 

will continue to do so in the future.

Proposed 11 CFR 100.34, 100.115, 

100.133, 100.149, 114.4—Voter Drive 

Provisions 

The NPRM proposed to define a new 

term, ‘‘partisan voter drive,’’ in 

proposed 11 CFR 100.34, to revise the 

exemption from the ‘‘expenditure’’

definition for nonpartisan voter drives 

in proposed 11 CFR 100.133, and to 

specify that the costs for partisan voter 

drives are ‘‘expenditures’’ in proposed 

11 CFR 100.115. Corresponding changes 

were also proposed for 11 CFR 100.149 

and 114.4. See NPRM at 11740–41, 

11757, and 11760. 

In its consideration of Final Rules, the 

Commission considered a different 

version of these rules. Under this 

proposal, draft 11 CFR 100.115 would 

have specified that costs for certain 

Federal election activities would have 

been ‘‘expenditures’’ when incurred by 

political committees or a 527 

organization. See draft 11 CFR 100.115, 

Agenda Document No. 04–75–A, at 4 

(Aug. 19, 2004 meeting). The exemption 

from the ‘‘expenditure’’ definition for 

nonpartisan voter drives also would 

have been revised to state that voter 

drives that PASO a Federal candidate, a 

non-Federal candidate, or a political 

party can not be considered 

‘‘nonpartisan’’ exempt voter drives. See

draft 11 CFR 100.133, Agenda 

Document No. 04–75–A, at 4–5 (Aug. 

19, 2004 meeting). The Commission 

rejected a motion to approve draft 11 

CFR 100.115 and revisions to current 11 

CFR 100.133. The Commission 

determined that the changes and 

additions to the allocation rules in 11 

CFR 106.6 related to voter drives that 

are described above sufficiently address 

these issues at this time, and therefore 

the new and revised voter drive rules in 

proposed sections 100.34, 100.115, 

100.133, 100.149, and 114.4 are not 

needed. 

Proposed 11 CFR 100.116—Certain 

Public Communications 

FECA defines ‘‘expenditure’’ to 

include a payment for a communication 

that is ‘‘made * * * for the purpose of 

influencing any election for Federal 

office.’’ 2 U.S.C. 431(9)(A)(i). The NPRM 

proposed to include in the definition of 

‘‘expenditure’’ payments for 

communications that PASO any 

candidate for Federal office or that 

promote or oppose any political party. 

See proposed 11 CFR 100.116, NPRM at 

11741–42 and 11757. 

In its consideration of Final Rules, the 

Commission considered and rejected 

two different versions of this rule. One 

version of this rule would have applied 

to public communications that PASO a 

clearly identified candidate for Federal 

office or that PASO a political party, but 

only when made by a political 

committee or 527 organizations. See

draft 11 CFR 100.116, Agenda 

Document No. 04–75–A, at 4 (Aug. 19, 

2004 meeting). The second version of 

this rule would have been limited to 

communications that PASO a clearly 

identified candidate, but only when 

made by Federal political committees 

and unregistered groups that meet 

Buckley’s ‘‘major purpose’’ test, which 

was the subject of another draft rule 

discussed above. See draft 11 CFR 

100.115, Agenda Document No. 04–75, 

at 19–23 and 42 (Aug. 19, 2004 

meeting). 

The Commission did not adopt a rule 

addressing this subject. Without the 

‘‘major purpose’’ rules, the rules 

addressing PASO communications 

could not have been adopted in the 

forms considered by the Commission.

Proposed 11 CFR 100.155—Allocated 

Amounts 

The NPRM proposed a new regulation 

that would have specifically stated that 

when costs are properly allocable 

between a Federal account and a nonFederal account, the costs that must be 

paid by a Federal account are 

‘‘expenditures’’ under FECA, and the 

costs that may and in fact are paid by 

a non-Federal account are not 

‘‘expenditures’’ under FECA. The 

proposed regulation was linked to 

proposed 11 CFR 100.115 and 100.116 

regarding PASO communications and 

voter drives. See NPRM at 11757. The 

Commission considered a version of this 

regulation that was broader than the 

version in the NPRM, in that it would 

have extended this principle to any nonFederal funds disbursed pursuant to 

allocation rules at 11 CFR 106.1, 106.6, 

106.7, or 300.33. See draft 11 CFR 

100.155, Agenda Document No. 04–75–

A, at 5 (Aug. 19, 2004 meeting). For the 

reasons that the Commission did not 

adopt draft 11 CFR 100.115 and 100.116 

in Agenda Document No. 04–75–A, it 

also did not adopt draft 11 CFR 100.155. 

Proposed 11 CFR Part 102, Subpart A—

Conversion Rules 

The NPRM included proposed rules 

to address how organizations that 

become political committees after 

operating for some time as non-political 

committee organizations would 

demonstrate that they used Federally 

permissible funds to pay for 

expenditures made before becoming 

political committees. The proposed 

rules would have included a new 

subpart A in 11 CFR part 102. See

NPRM at 11749–53, 11757–59. The 

68066 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

proposed rules would have required a 

new political committee to convert 

funds received during the two years 

prior to the time the organization 

became a political committee into 

Federal funds in an amount equal to the 

amount of its expenditures during the 

same time period. To do so, the new 

political committee would have been 

required to contact recent donors, make 

certain disclosures, and seek the donors’

consent to use the funds for the purpose 

of influencing Federal elections. See

NPRM at 11757–59. 

The Commission received numerous 

comments in response to these proposed 

changes. Although one commenter 

supported the proposed rules, most 

commenters who addressed this topic 

expressed broad opposition to the 

proposals. Several commenters 

especially disagreed with the proposed 

rules that would have required political 

committees to look back at past activity 

and repay debts of Federal money for 

activities completed up to two years 

before the organizations became 

political committees. Some commenters 

also opposed the specific two-step 

conversion process in the proposed 

rules, including the requirement to 

contact and obtain permission from past 

donors and the 60-day deadline for 

converting funds to Federal funds. 

In response to these comments and 

the Commission’s further consideration 

of the issued raised by the proposed 

rules, the Commission has decided not 

to promulgate final rules establishing 

subpart A of 11 CFR part 102. 

Certification of No Effect Pursuant to 5 

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

Act) 

The Commission certifies that the 

final rules do not have a significant 

economic impact on a substantial 

number of small entities. 

The final rules amend the 

Commission’s definition of 

‘‘contribution’’ to include funds 

received in response to certain 

communications that are not expressly 

included in the Commission’s prior 

definition of ‘‘contribution.’’ For 

political committees, whether a receipt 

qualifies as a ‘‘contribution’’ determines 

whether it is subject to amount 

limitations and source prohibitions for 

Federal funds imposed by FECA. For 

organizations that are not political 

committees, whether a receipt is a 

‘‘contribution’’ may affect whether the 

organization is a political committee. 

New section 100.57 does not, however, 

limit the overall amount of money that 

may be raised or spent on electoral 

activity. The rule in new section 100.57 

is carefully tailored to reach 

communications that seek funds ‘‘for 

the purpose of influencing Federal 

elections,’’ and includes a limited 

exception for communications that refer 

to a non-Federal candidate, and a 

complete exception for joint fundraising 

efforts between or among authorized 

committees of Federal and non-Federal 

candidates. Therefore, any economic 

impact on Federal and non-Federal 

candidate committees, some of which 

might qualify as small entities, is not 

significant. 

The final rules also revise the 

Commission’s rules regarding the 

allocation of certain disbursements 

between a political committee’s Federal 

account and non-Federal account. Thus, 

these revisions affect only some 

political committees. As discussed in 

the Explanation and Justification for 

revised 11 CFR 106.6(c), a review of the 

past ten years of public disclosure 

reports filed with the FEC revealed that 

few current political committees 

allocate their administrative expenses 

and generic voter drives under former 

11 CFR 106.6, and among those political 

committees, many already use 50% or 

more as their Federal allocation ratio. 

Although the new section 106.6(f) 

requires Federal funds be used for 

certain public communications and 

voter drive activities by political 

committees, the final rule does not limit 

the overall amount of money that 

political committees may raise and 

spend on such activity. Consequently, 

the final rules’ changes are unlikely to 

have a significant economic impact on 

substantial number of small entities.

List of Subjects 

11 CFR Part 100 

Elections. 

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 106 

Campaign funds, Political committees 

and parties, Reporting and 

recordkeeping requirements.

■ For the reasons set out in the preamble, 

the Federal Election Commission 

amends subchapter A of chapter 1 of title 

11 of the Code of Federal Regulations as 

follows:

PART 100—SCOPE AND DEFINITIONS 

(2 U.S.C. 431)

■ 1. The authority citation for part 100 

continues to read as follows:

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

■ 2. Section 100.57 is added to subpart 

B to read as follows:

§ 100.57 Funds received in response to 

solicitations. 

(a) Treatment as contributions. A gift, 

subscription, loan, advance, or deposit 

of money or anything of value made by 

any person in response to any 

communication is a contribution to the 

person making the communication if the 

communication indicates that any 

portion of the funds received will be 

used to support or oppose the election 

of a clearly identified Federal candidate. 

(b) Certain allocable solicitations. If 

the costs of a solicitation described in 

paragraph (a) of this section are 

allocable under 11 CFR 106.1, 106.6 or 

106.7 (consistent with 11 CFR 

300.33(c)(3)) as a direct cost of 

fundraising, the funds received in 

response to the solicitation shall be 

contributions as follows: 

(1) If the solicitation does not refer to 

any clearly identified non-Federal 

candidates, but does refer to a political 

party, in addition to the clearly 

identified Federal candidate described 

in paragraph (a) of this section, one 

hundred percent (100%) of the total 

funds received are contributions. 

(2) If the solicitation refers to one or 

more clearly identified non-Federal 

candidates, in addition to the clearly 

identified Federal candidate described 

in paragraph (a) of this section, at least 

fifty percent (50%) of the total funds 

received are contributions, whether or 

not the solicitation refers to a political 

party. 

(c) Joint fundraisers. Joint fundraising 

conducted under 11 CFR 102.17 shall 

comply with the requirements of 

paragraphs (a) and (b) of this section 

except that joint fundraising between or 

among authorized committees of 

Federal candidates and campaign 

organizations of non-Federal candidates 

is not subject to paragraph (a) or (b) of 

this section.

PART 102—REGISTRATION, 

ORGANIZATION AND 

RECORDKEEPING BY POLITICAL 

COMMITEES (2 U.S.C. 433)

■ 3. The authority citation for part 102 

continues to read as follows:

Authority: 2 U.S.C. 432, 433, 434(a)(11), 

438(a)(8), 441d.

Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 68067

■ 4. Section 102.5 is amended by 

revising paragraph (a)(1)(i) to read as 

follows:

§ 102.5 Organizations financing political 

activity in connection with Federal and nonFederal elections, other than through 

transfers and joint fundraisers: Accounts 

and Accounting. 

(a) * * * 

(1) * * * 

(i) Establish a separate Federal 

account in a depository in accordance 

with 11 CFR part 103. Such account 

shall be treated as a separate Federal 

political committee that must comply 

with the requirements of the Act 

including the registration and reporting 

requirements of 11 CFR parts 102 and 

104. Only funds subject to the 

prohibitions and limitations of the Act 

shall be deposited in such separate 

Federal account. See 11 CFR 103.3. All 

disbursements, contributions, 

expenditures, and transfers by the 

committee in connection with any 

Federal election shall be made from its 

Federal account, except as otherwise 

permitted for State, district and local 

party committees by 11 CFR part 300 

and paragraph (a)(5) of this section. No 

transfers may be made to such Federal 

account from any other account(s) 

maintained by such organization for the 

purpose of financing activity in 

connection with non-Federal elections, 

except as provided by 11 CFR 300.33, 

300.34, 106.6(c), 106.6(f), and 106.7(f). 

Administrative expenses for political 

committees other than party committees 

shall be allocated pursuant to 11 CFR 

106.6(c) between such Federal account 

and any other account maintained by 

such committee for the purpose for 

financing activity in connection with 

non-Federal elections. Administrative 

expenses for State, district, and local 

party committees are subject to 11 CFR 

106.7 and 11 CFR part 300; or

* * * * *

PART 104—REPORTS BY POLITICAL 

COMMITTEES AND OTHER PERSONS 

(2 U.S.C. 434)

■ 5. 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), 439a, 441a, and 

36 U.S.C. 510.

■ 6. Section 104.10 is amended by 

revising the introductory text in 

paragraph (b) and paragraph (b)(1) to 

read as follows:

§ 104.10 Reporting by separate segregated 

funds and nonconnected committees of 

expenses allocated among candidates and 

activities.

* * * * *

(b) Expenses allocated among 

activities. A political committee that is 

a separate segregated fund or a 

nonconnected committee and that has 

established separate Federal and nonFederal accounts under 11 CFR 

102.5(a)(1)(i) shall allocate between 

those accounts its administrative 

expenses and its costs for fundraising, 

generic voter drives, and certain public 

communications according to 11 CFR 

106.6, and shall report those allocations 

according to paragraphs (b)(1) through 

(5) of this section, as follows: 

(1) Reporting of allocation of 

administrative expenses and costs of 

generic voter drives and public 

communications that refer to any 

political party. In each report disclosing 

a disbursement for administrative 

expenses, generic voter drives, or public 

communications that refer to any 

political party, but do not refer to any 

clearly identified candidates, as 

described in 11 CFR 106.6(b)(1)(i), 

(b)(1)(iii) and (b)(1)(iv), as applicable, 

the committee shall state the allocation 

ratio to be applied to each category of 

activity according to 11 CFR 106.6(c).

* * * * *

PART 106—ALLOCATIONS OF 

CANDIDATE AND COMMITTEE 

ACTIVITIES

■ 7. The authority citation for part 106 

continues to read as follows:

Authority: 2 U.S.C. 438(a)(8), 441a(b), 

441a(g).

■ 8. Section 106.6 is amended by:

■ a. Removing the words ‘‘(c) and (d)’’

from paragraph (a) and adding in their 

place the words ‘‘(c), (d), and (f)’’;

■ b. Removing the words ‘‘or (b)(1)(i)’’

from paragraphs (a) and (e) introductory 

text;

■ c. Removing the citation 

‘‘102.5(b)(1)(ii)’’ from paragraph (a) and 

adding in its place the citation 

‘‘102.5(a)(1)(ii)’’; and

■ d. Revising paragraphs (b) and (c) and 

adding paragraph (f) to read as follows:

§ 106.6 Allocation of expenses between 

federal and non-federal activities by 

separate segregated funds and 

nonconnected committees.

* * * * *

(b) Payments for administrative 

expenses, voter drives and certain 

public communications.

(1) Costs to be allocated. Separate 

segregated funds and nonconnected 

committees that make disbursements in 

connection with Federal and nonFederal elections shall allocate expenses 

for the following categories of activity in 

accordance with paragraphs (c) or (d) of 

this section: 

(i) Administrative expenses including 

rent, utilities, office supplies, and 

salaries not attributable to a clearly 

identified candidate, except that for a 

separate segregated fund such expenses 

may be paid instead by its connected 

organization; 

(ii) The direct costs of a fundraising 

program or event including 

disbursements for solicitation of funds 

and for planning and administration of 

actual fundraising events, where Federal 

and non-Federal funds are collected 

through such program or event, except 

that for a separate segregated fund such 

expenses may be paid instead by its 

connected organization; 

(iii) Generic voter drives including 

voter identification, voter registration, 

and get-out-the-vote drives, or any other 

activities that urge the general public to 

register, vote or support candidates of a 

particular party or associated with a 

particular issue, without mentioning a 

specific candidate; and 

(iv) Public communications that refer 

to a political party, but do not refer to 

any clearly identified Federal or nonFederal candidate; 

(2) Costs not subject to allocation.

Separate segregated funds and 

nonconnected committees that make 

disbursements for the following 

categories of activity shall pay for those 

activities in accordance with paragraph 

(f) of this section: 

(i) Voter drives, including voter 

identification, voter registration, and 

get-out-the-vote drives, in which the 

printed materials or scripted messages 

refer to, or the written instructions 

direct the separate segregated fund’s or 

nonconnected committee’s employee or 

volunteer to refer to: 

(A) One or more clearly identified 

Federal candidates, but do not refer to 

any clearly identified non-Federal 

candidates; or 

(B) One or more clearly identified 

Federal candidates and also refer to 

candidates of a particular party or 

associated with a particular issue, but 

do not refer to any clearly identified 

non-Federal candidates; 

(ii) Voter drives, including voter 

identification, voter registration, and 

get-out-the-vote drives, in which the 

printed materials or scripted messages 

refer to, or the written instructions 

direct the separate segregated fund’s or 

nonconnected committee’s employee or 

volunteer to refer to: 

(A) One or more clearly identified 

non-Federal candidates, but do not refer 

68068 Federal Register / Vol. 69, No. 225 / Tuesday, November 23, 2004 / Rules and Regulations 

to any clearly identified Federal 

candidates; or 

(B) One or more clearly identified 

non-Federal candidates and also refer to 

candidates of a particular party or 

associated with a particular issue, but 

do not refer to any clearly identified 

Federal candidates; 

(iii) Public communications that refer 

to one or more clearly identified Federal 

candidates, regardless of whether there 

is reference to a political party, but do 

not refer to any clearly identified nonFederal candidates; and

(iv) Public communications that refer 

to a political party, and refer to one or 

more clearly identified non-Federal 

candidates, but do not refer to any 

clearly identified Federal candidates. 

(c) Method for allocating 

administrative expenses, costs of 

generic voter drives, and certain public 

communications. Nonconnected 

committees and separate segregated 

funds shall pay their administrative 

expenses, costs of generic voter drives, 

and costs of public communications that 

refer to any political party, as described 

in paragraphs (b)(1)(i), (b)(1)(iii) or 

(b)(1)(iv) of this section, with at least 50 

percent Federal funds, as defined in 11 

CFR 300.2(g).

* * * * *

(f) Payments for public 

communications and voter drives that 

refer to one or more clearly identified 

Federal or non-Federal candidates.

Nonconnected committees and separate 

segregated funds shall pay for the costs 

of all public communications that refer 

to one or more clearly identified 

candidates, and voter drives that refer to 

one or more clearly identified 

candidates, as described in paragraphs 

(b)(2)(i) and (b)(2)(ii) of this section, as 

follows: 

(1) The following shall be paid 100 

percent from the Federal account of the 

nonconnected committee or separate 

segregated fund: 

(i) Public communications that refer 

to one or more clearly identified Federal 

candidates, regardless of whether there 

is reference to a political party, but do 

not refer to any clearly identified nonFederal candidates, as described in 

paragraph (b)(2)(iii) of this section; and 

(ii) Voter drives described in 

paragraph (b)(2)(i) of this section. 

(2) The following may be paid 100 

percent from the non-Federal account of 

the nonconnected committee or separate 

segregated fund: 

(i) Public communications that refer 

to a political party and one or more 

clearly identified non-Federal 

candidates, but do not refer to any 

clearly identified Federal candidates, as 

described in paragraph (b)(2)(iv) of this 

section; and 

(ii) Voter drives described in 

paragraph (b)(2)(ii) of this section. 

(3) Notwithstanding 11 CFR 

106.1(a)(i), public communications and 

voter drives that refer to one or more 

clearly identified Federal candidates 

and one or more clearly identified nonFederal candidates, regardless of 

whether there is a reference to a 

political party, including those that are 

expenditures, independent expenditures 

or in-kind contributions, shall be 

allocated as follows: 

(i) Public communications and voter 

drives, other than phone banks, shall be 

allocated based on the proportion of 

space or time devoted to each clearly 

identified Federal candidate as 

compared to the total space or time 

devoted to all clearly identified 

candidates, or 

(ii) Public communications and voter 

drives that are conducted through 

phone banks shall be allocated based on 

the number of questions or statements 

devoted to each clearly identified 

Federal candidate as compared to the 

total number of questions or statements 

devoted to all clearly identified 

candidates.

Dated: November 18, 2004. 

Bradley A. Smith, 

Chairman, Federal Election Commission.

[FR Doc. 04–25946 Filed 11–22–04; 8:45 am] 

BILLING CODE 6715–01–P

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 327 

RIN 3064–AC84 

Deposit Insurance Assessments—

Certified Statements

AGENCY: Federal Deposit Insurance 

Corporation.

ACTION: Final rule.

SUMMARY: The Federal Deposit 

Insurance Corporation (FDIC) is 

modernizing and simplifying its deposit 

insurance assessment regulations 

governing certified statements, to 

provide regulatory burden relief to 

insured depository institutions. Under 

the final rule, insured institutions will 

obtain their certified statements on the 

Internet via the FDIC’s transaction-based 

e-business Web site, FDICconnect. 

Correct certified statements will no 

longer be signed by insured institutions 

or returned to the FDIC, and the 

semiannual certified statement process 

will be synchronized with the quarterly 

invoice process. Two quarterly certified 

statement invoices will comprise the 

semiannual certified statement and 

reflect the semiannual assessment 

amount. If an insured institution agrees 

with its quarterly certified statement 

invoice, it will simply pay the assessed 

amount and retain the invoice in its 

own files. If it disagrees with the 

quarterly certified statement invoice, it 

will either amend its report of condition 

or similar report (to correct data errors) 

or amend its quarterly certified 

statement invoice (to correct calculation 

errors). The FDIC will automatically 

treat either as the insured institution’s 

request for revision of its assessment 

computation, eliminating the 

requirement of a separate filing. In 

addition, the FDIC will provide e-mail 

notification each quarter to let 

depository institutions know when their 

quarterly certified statement invoices 

are available on FDICconnect. An 

institution that lacks Internet access will 

be able request from the FDIC a one-year 

renewable exemption from the use of 

FDICconnect, during which it will 

continue to receive quarterly certified 

statement invoices by mail. With these 

amendments, the time and effort 

required to comply with the certified 

statement process will be reduced, a 

result of the FDIC’s ongoing program 

under the Economic Growth and 

Regulatory Paperwork Reduction Act 

(EGRPRA) to provide regulatory burden 

relief to insured depository institutions.

DATES: This final rule will become 

effective on March 1, 2005.

FOR FURTHER INFORMATION CONTACT:

Steve Wagoner, Senior Assessment 

Specialist, Division of Finance, (202) 

416–7152; Linda A. Abood, Supervisory 

IT Specialist, Division of Information 

Resources Management, (703) 516–1202; 

or Christopher Bellotto, Counsel, Legal 

Division, (202) 898–3801, Federal 

Deposit Insurance Corporation, 550 17th 

Street, NW., Washington, DC 20429.

SUPPLEMENTARY INFORMATION: 

I. Background 

On June 8, 2004, the FDIC published 

in the Federal Register, for a 60-day 

comment period, a notice of proposed 

rulemaking with request for comment 

on the proposed amendments to section 

327.2, the certified statement regulation. 

(69 FR 31922). The comment period 

closed on August 9, 2004. The FDIC 

received 22 comment letters, one from 

a trade organization (Independent 

Community Bankers of America) and 21 

from depository institutions. Seventeen 

of the commenters generally supported 

the proposal and the remaining five 

generally opposed, although in varying 

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 3 

FEC Committee Summary Report, EMILY’s List 2003–2004 Reported Activity, 

available at http://herndon1.sdrdc.com/cgi-bin/cancomsrs/?_04+C00193433.
FEC Committee Summary Reports - Committee ID C00193433

Presented by the Federal Election Commission - 

2003-2004 Cycle

TRY A: NEW SEARCH RETURN TO: FEC HOME PAGE

EMILY'S LIST

C00193433 Non-Party Qualified District of Columbia

Total Receipts: $33,780,318

Transfers From Authorized: $40,778

Individual Contributions: $25,652,289

Other Committee Contributions: $77,020

Other Loans: $0

Non-Federal Transfers: $6,477,228

Total Disbursements: $33,066,486

Transfers To Authorized: $0

Contributions To Other Committees: $1,007,334

Independent Expenditures: $837,982

Coordinated Expenditures: $0

Individual Refunds: $0

Other Committee Refunds: $0

Other Loan Repayments: $0

Non-Federal Expenditures: $8,036,363

Beginning Cash: $448,541

Latest Cash On Hand: $1,162,374

Debts Owed By: $0

Through: 11/22/2004

TRY A: NEW SEARCH RETURN TO: FEC HOME PAGE

http://herndon1.sdrdc.com/cgi-bin/cancomsrs/?_04+C00193433 [1/21/2005 1:17:52 PM]
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 4 

Sidoti, Liz, “Bush, Kerry to Pull Ads on Friday,” 

Associated Press Newswires, June 7, 2004.
6/7/04 APWIRES 22:43:08 Page 1

6/7/04 Associated Press (AP) Newswires 22:43:08

Associated Press Newswires

c) 2004. The Associated Press. All Rights Reserved.

Monday, June 7, 2004

 Bush, Kerry to Pull Ads on Friday

By LIZ SIDOTI

Associated Press Writer

WASHINGTON (AP) - President Bush and Democratic rival John Kerry will pull their 

campaign ads Friday, the day of former President Reagan's funeral. The two 

campaigns are trying to avoid overt politicking during a time of national mourning. 

The Kerry campaign said Sunday that the candidate would take a week off the campaign 

trail. The Bush campaign announced Monday that Vice President Dick Cheney's trip to 

Springfield, Mo., for a rally had been canceled in honor of Reagan. 

The Bush campaign also plans to stop airing a hard-hitting television commercial 

this week that assails Kerry on the Patriot Act. The spot had been widely criticized 

for taking liberties with Kerry's position on the legislation that expanded the 

government's surveillance and detention powers following the Sept. 11, 2001, 

terrorist attacks. 

Instead of that ad, Bush will run a commercial that trumpets recent job growth under 

his administration and that jabs Kerry, calling him a pessimist on the economic 

turnaround. 

The ad, which is far less critical of Kerry than other commercials, started running 

Monday on national cable networks but also will air in media markets in 19 

battleground states. 

The funeral for Reagan will be held Friday at Washington's National Cathedral. 

------ 

A group that supports Democratic women candidates asked federal election officials 

Monday to reconsider a ruling that could scale back its ability to use unlimited 

"soft money" donations. 

EMILY's List raises millions of dollars to recruit and support Democratic women 

candidates at all levels of government who favor abortion rights. It collects 

limited donations known as hard money for use in congressional races and unlimited 

soft money to help cover operating costs and other election expenses. Some spending 

requires a mix of hard and soft money. 

The group contends a recent Federal Election Commission decision has left it unclear 

what expenses can be paid for with soft money and has thrown into doubt the ratio of 

hard money needed when both types of donations can be used. 

EMILY's List also argues that the rules shouldn't change in an election year. It 

wants the FEC to throw out the parts of the decision covering the shares of hard and 

soft money groups can use. 

The ruling, issued as advice to a pro-Republican organization, could require groups 

to use only hard money to finance voter drives and other activities that promote, 

support, attack or oppose only federal candidates. 

The FEC considered going a step further and making new hard and soft money 

allocation requirements part of its official rules, but decided against that last 

month. EMILY's List said that move throws the earlier decision into question. 

© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
6/7/04 APWIRES 22:43:08 Page 2

EMILY's list is No. 1 among federal political action committees in fund raising, 

with more than $20 million in hard money this election cycle. It has raised at least 

$3 million in soft money. 

"EMILY's List is the biggest PAC, which means we have the most hard money, so it's 

not an issue of not having it," president Ellen Malcolm said. Instead, the group 

wants the FEC to make it clear what the rules are, she said. 

The commission had no immediate comment. 

------ 

Two gun control groups launched an advertising campaign Monday asking Bush to 

pressure Congress to renew the federal ban on assault weapons. 

The Brady Campaign to Prevent Gun Violence and the Million Mom March started running 

their first TV ad on cable networks in Washington. The 10-year-old law, which 

prohibits military style assault weapons from being manufactured, will expire in 

September unless Congress renews it. 

The 30-second ad asks: "President Bush, are you going to let the assault weapons ban 

die? Why in this day and age would you put these weapons back on the street? Tell 

Speaker (Dennis) Hastert you want Congress to ban assault weapons." 

The Brady Campaign is led by James Brady, who as President Reagan's press secretary 

was shot and permanently disabled by John W. Hinckley Jr. during the assassination 

attempt on Reagan in March 1981. 

------ 

Associated Press Writer Sharon Theimer contributed to this report. 

------ 

On the Net: 

Bush campaign: http://www.georgewbush.com 

Kerry campaign: http://www.johnkerry.com 

Brady Campaign to Prevent Gun Violence: http://bradycampaign.org 

Million Mom March: http://www.millionmommarch.com/ 

Federal Election Commission: http://www.fec.gov 

EMILY's List: http://www.emilyslist.org 

TABULAR OR GRAPHIC MATERIAL SET FORTH IN THIS DOCUMENT IS NOT DISPLAYABLE

image 

---- INDEX REFERENCES ----

NEWS SUBJECT: (Advertising (C32); Domestic Politics (GPOL); Executive Branch 

(GVEXE); National/Presidential Elections (GVOTE1); Marketing (C31); 

Corporate/Industrial News (CCAT); Political/General News (GCAT); 

Politics/International Relations (GPIR); Government Bodies (GVBOD); Elections 

(GVOTE))

© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
6/7/04 APWIRES 22:43:08 Page 3

REGION: (United States (USA); North American Countries (NAMZ))

Language: EN

OTHER INDEXING: Elections/Politics; Campaign Ads; D832EUV80; tagpf1apon; sel-----

; catp; 1131

Word Count: 743

6/7/04 APWIRES 22:43:08

END OF DOCUMENT

© 2005 Thomson/West. No Claim to Orig. U.S. Govt. Works.
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 5 

FEC Notice, dated April 7, 2004, available at

http://www.fec.gov/press/press2004/20040407advisory.html. 
News Releases, Deadline Extended for Comments on Political Committee Status Rulemaking

HOME / PRESS OFFICE

Notice

The deadline for comments on the Federal Election Commission’s 

rulemaking on political committees is April 9, 2004.

No comments received after that date will be considered in the 

rulemaking process. Comments sent to the email account after 

that date will be automatically rejected. Comments received by 

fax, mail, or hand delivery after that date will be returned.

# # #

http://www.fec.gov/press/press2004/20040407advisory.html [1/21/2005 3:27:15 PM]
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 6 

Disclosure Reports, Year End Form H1s filed by 

EMILY’s List with FEC (1998-2004). 



UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 7 

Disclosure Reports, Year End Form H1 filed by 

EMILY’s List with FEC (1995-1996).

UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 8 

Transcript of Public Hearing on Political 

Committee Status, April 14, 2004. 













UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 9 

Transcript of Public Hearing on 

Political Committee Status, April 15, 2004. 















UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 10 

Comments of Senators McCain and Feingold, Representatives 

Shays and Meehan (April 9, 2004). 





UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 11 

Comments of the United States Chamber of Commerce (April 5, 2004). 




UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 12 

Comments of Public Citizen (April 5, 2004). 









UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 13 

Comments of America Coming Together (April 5, 2004). 





UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 14 

Comments of Republican National Committee (April 5, 2004). 




UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 15 

Comments of Democracy 21, Campaign Legal Center, and 

Center for Responsive Politics (April 5, 2004). 







UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 16 

Comments of the Media Fund (April 5, 2004). 


UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 17 

EMILY’s List Website, Where We Come From, available at

http://www.emilyslist.org/about/where-from.html. 
About - Where We Come From

E-list Sign Up

 

● About EMILY's List

● Support EMILY's List

● Candidates

● Team EMILY 

● Campaign Corps

● What's Happening at EMILY's 

List

● What We Do

● Newsroom

● E-Cards

● Home

Where We Come From

EMILY's List has helped elect 11 

Democratic women senators, 60 

congresswomen, and eight governors. 

Nineteen Years of Progress... 

In 1985, 25 women, rolodexes in hand, 

gathered in Ellen Malcolm's basement to 

send letters to their friends about a network 

they were forming to raise money for prochoice Democratic women candidates. 

These "founding mothers" pioneered a new 

concept in fundraising: a donor network that 

would provide its members with information 

about candidates and encourage them to 

write checks directly to the candidates they 

choose.

At that time, no Democratic woman had 

been elected to the U.S. Senate in her own 

right, no woman had been elected governor 

of a large state, and the number of 

http://www.emilyslist.org/about/where-from.html (1 of 8) [1/23/2005 12:26:53 PM]
About - Where We Come From

Democratic women in the U.S. House of 

Representatives had declined. Frustrated 

by the barriers that prevented women from 

making it to the top political offices, these 

women founded EMILY’s List to elect more 

women to the House and Senate, and as 

governors.

Since that day, EMILY's List has grown to 

over 100,000 members, raised millions of 

dollars, and helped elect record numbers of 

women to office. An acronym for "Early 

Money Is Like Yeast" (it makes the dough 

rise...), EMILY's List has become the 

nation's biggest political action committee. 

Here is a sketch of 20 years of progress.

1986

EMILY's List raised over $350,000 for two 

Senate candidates. Barbara Mikulski of 

Maryland became the first Democratic 

woman elected to the Senate in her own 

right. Membership in EMILY's List was at 

1,155.

http://www.emilyslist.org/about/where-from.html (2 of 8) [1/23/2005 12:26:53 PM]
About - Where We Come From

1988

Nita Lowey (NY) and Jolene Unsoeld (WA) 

reversed a 14-year decline in the number of 

Democratic women in the U.S. House, 

raising it to 14. EMILY's List recommended 

nine congressional candidates to more than 

2,000 members and raised $650,000.

1990

EMILY's List broke the million-dollar mark. 

Members contributed $1.5 million to 14 

candidates and helped elect two governors 

and seven members of Congress. 

Membership exceeded 3,500.

1992

In what was called "The Year of the 

Woman," EMILY's List helped elect four 

new pro-choice Democratic women 

senators and 20 new congresswomen. 

Membership grew more than 600 percent. 

More than 23,000 members contributed 

over $6.2 million to recommended 

http://www.emilyslist.org/about/where-from.html (3 of 8) [1/23/2005 12:26:53 PM]
About - Where We Come From

candidates.

1994

EMILY's List became a full-service political 

organization that raises money for women 

candidates, helps them build strong 

campaigns, and mobilizes women voters. 

Members helped elect four new Democratic 

congresswomen and return Dianne 

Feinstein to the U.S. Senate. The first 

WOMEN VOTE!® project was launched in 

California, where women voters provided 

the margin of victory for Feinstein and other 

Democrats. Members contributed $8 million 

to recommended candidates and 

membership grew to 33,156.

1996

45,000 EMILY's List members contributed 

$6.5 million to women candidates, $2 

million to build winning campaigns, and $3 

million for EMILY's List WOMEN VOTE!®. 

EMILY's List helped 31 states conduct 

WOMEN VOTE!® projects, which targeted 

http://www.emilyslist.org/about/where-from.html (4 of 8) [1/23/2005 12:26:53 PM]
About - Where We Come From

2.7 million women voters with 7.5 million 

pieces of mail and 500,000 phone calls 

urging them to vote. EMILY's List helped 

elect a pro-choice Democratic woman 

senator, nine congresswomen, and one 

governor. The EMILY's List Women’s 

Monitor, a national survey of women voters, 

provided a barometer of women voters' 

attitudes to the press and public.

1998

50,000 members contributed $7.5 million to 

elect a pro-choice Democratic woman 

senator and seven new congresswomen, 

bringing the total to a record high of 56 

women in Congress. WOMEN VOTE!® 

projects in 26 states targeted 3.4 million 

women with nearly 8 million pieces of mail 

and over 2 million phone calls.

2000

In the 2000 election, 68,000 members of 

EMILY's List contributed $9.3 million to 

candidates, helping to bring four new prohttp://www.emilyslist.org/about/where-from.html (5 of 8) [1/23/2005 12:26:53 PM]
About - Where We Come From

choice Democratic women to the Senate 

and four to the House. Democratic women 

reached an all time high of 10 in the Senate 

and 41 in the House. In addition, New 

Hampshire Gov. Jeanne Shaheen won a 

third term, and Ruth Ann Minner became 

the first woman governor of Delaware. 

EMILY's List raised and contributed $10.8 

million for WOMEN VOTE!® projects to 

mobilize women voters in key battleground 

states. In 2001, EMILY's List created the 

Political Opporutnity Program which 

recruits, trains, and supports pro-choice 

Democratic women running for state 

legislative, constitutional and key local 

offices.

2002

In the 2002 elections, EMILY’s List and its 

almost 73,000 members contributed nearly 

$9.7 million to pro-choice Democratic 

women candidates; members contributed 

$23 million to fund EMILY’s List operations 

and political program, including the 

nationwide WOMEN VOTE!® project to 

http://www.emilyslist.org/about/where-from.html (6 of 8) [1/23/2005 12:26:53 PM]
About - Where We Come From

mobilize women voters on behalf of 

Democrats. In 2002, EMILY's List 

developed Campaign Corps, a competitive 

program that trains a select group of recent 

college graduates to work in targeted 

progressive Democratic campaigns for the 

three months leading up to election day.

2004

In the 2004 election, more than 100,000 

members of EMILY's List contributed $10.1 

million to candidates, adding five new 

women to the U.S. House - the most since 

1998. Every single EMILY's List incumbent 

seeking reelection won, including Sens. 

Barbara Boxer (CA), Patty Murray (WA), 

Barbara Mikulski (MD) and Governor Ruth 

Ann Minner (DE). In addition, EMILY's List 

helped elect 141 women to state and local 

offices across the country with support from 

our Political Opporutniy Program. These 

victories at the state level helped 

Democrats regain control of legislative 

bodies in 6 states where women will serve 

in leadership positions.

http://www.emilyslist.org/about/where-from.html (7 of 8) [1/23/2005 12:26:53 PM]
About - Where We Come From

EMILY's List developed the "Air EMILY" 

project, which trained and mobilized 1300 

activists to get out the vote on election day 

in Florida and launched a new web site for 

our online activist community, Team 

EMILY.

Privacy Statement print this page 

email this page 

Search

Contributions or gifts to 

EMILY's List are not tax 

deductible. Copyright 

2004 all rights reserved. 

EMILY's List, Early Money 

Is Like Yeast and the 

EMILY's List logo are all 

trademarks of EMILY's 

List.

Paid for by EMILY's List, 

www.emilyslist.org, and not 

authorized by any candidate or 

candidate's committee.

http://www.emilyslist.org/about/where-from.html (8 of 8) [1/23/2005 12:26:53 PM]
UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 18 

EMILY’s List Website, Welcome from Ellen R. Malcolm, available at

http://www.emilyslist.org/about/welcome.html. 
About - Welcome from Ellen R. Malcolm

E-list Sign Up

 

● About EMILY's List

● Support EMILY's List

● Candidates

● Team EMILY 

● Campaign Corps

● What's Happening at EMILY's 

List

● What We Do

● Newsroom

● E-Cards

● Home

Welcome from Ellen R. Malcolm

Welcome to EMILY’s List! 

EMILY’s List, the nation’s largest grassroots 

political network, is dedicated to electing 

pro-choice Democratic women to federal, 

state, and local office. 

We are a network 

of more than 100,000 

men and women -- from 

all across the country 

and all walks of life -- 

committed to recruiting and funding viable 

women candidates; helping them build and 

run effective campaign organizations; and 

mobilizing women voters to help elect 

progressive candidates across the nation. 

This web site is yours. It is here to provide 

the information you need to become a more 

effective, powerful, and politically savvy 

individual. It is here to gather your ideas 

and suggestions -- and to link you with the 

tens of thousands of women and men in our 

http://www.emilyslist.org/about/welcome.html (1 of 3) [1/23/2005 12:30:49 PM]
About - Welcome from Ellen R. Malcolm

network who want to turn back the rightwing Bush Republican agenda and build a 

progressive America.

Make us your home on the Internet and, 

working together, we can elect pro-choice 

Democratic women to office across the 

nation and use the power of women voters 

to defeat George W. Bush and other rightwing Republicans. We can make our voices 

heard -- and change the face of American 

politics. 

Warmest regards,

Ellen R. Malcolm 

President, EMILY's List

 

 

 

 

 

 

http://www.emilyslist.org/about/welcome.html (2 of 3) [1/23/2005 12:30:49 PM]
About - Welcome from Ellen R. Malcolm

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UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

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 Plaintiff, ) Civ. No. 05-0049 (CKK) 

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FEDERAL ELECTION COMMISSION, ) EXHIBIT 

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EXHIBIT 19 

Wisconsin Right to Life, Inc. v. FEC, Civ. No. 04-1260 (DBS, RWR, RLJ) 

 (D.D.C. Aug. 17, 2004), slip op. 












UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

) 

FEDERAL ELECTION COMMISSION, ) EXHIBIT 

) 

 Defendant. ) 

EXHIBIT 20 

Disclosure Report (excerpt) filed by EMILY’s List (July, 24, 2002). 




UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF COLUMBIA 

EMILY’S LIST, ) 

) 

 Plaintiff, ) Civ. No. 05-0049 (CKK) 

 ) 

 v. ) 

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FEDERAL ELECTION COMMISSION, ) EXHIBIT 

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 Defendant. ) 

EXHIBIT 21 

ACT Website, About ACT, available at

http://www.actforvictory.org/act.php/home/content/about. 
About ACT | America Coming Together (ACT)

ACT Home » 

● 

● 

● 

About ACT

ACT is the largest and most sophisticated voter mobilization project in American history. 

Unprecedented in scale and strategy, ACT is laying the groundwork for Democratic victories 

in the 17 states that will determine America’s future in the 2004 election.

With thousands of paid and volunteer canvassers, ACT is already at work empowering people 

to speak the truth about Republican policies by focusing on the issues that matter most in their 

state. Person-to-person, neighbor-to-neighbor, and friend-to-friend, ACT will help voters 

understand the power they have to change this nation for the better and then get them to the 

polls on Election Day.

Close elections are always won on the ground, and ACT is the only organization exclusively 

focused on the mobilization of new and persuadable voters in 17 states. ACT is also a 

founding member of America Votes, an extraordinary new partnership between 30 national 

issue groups and unions created to ensure that resources in those states are spent strategically 

and efficiently.

America Coming Together (ACT) is dedicated to energizing the electorate to achieve crucial 

changes – the mobilization of millions of people to register and vote around the critical issues 

facing our country, the defeat of George W. Bush and his Republican allies, and the election of 

progressives in vitally important state, local, and federal contests. We are outraged at the 

policies and abuses of the past four years: the jobs lost, lives wasted, health care denied, air 

and water fouled, and rights abridged.

And we are organizing to make a change.

In seventeen battleground states America Coming Together (ACT) 

● will listen to voters’ concerns about issues that affect them and their families;

● will communicate with voters about those issues, highlighting the extremist positions of 

the Bush Republican agenda and discussing positive, progressive alternatives

● will partner with progressive organizations so we will all be more effective and 

efficient, working together to mobilize millions of voters who will say NO to the 

Republican agenda by voting to defeat George W. Bush and elect progressives at all 

http://www.actforvictory.org/act.php/home/content/about (1 of 3) [1/24/2005 4:40:51 PM]
About ACT | America Coming Together (ACT)

levels of government.

ACT is a unique alliance of committed people like you working together to defeat Republican 

reactionaries in races up and down the ticket. ACT is a proud member of America Votes, a 

historic coalition of progressive membership-based groups.

Together, we will create the largest turnout of voters in history, voters who will go to the polls 

in November and elect progressive candidates from the school boards to the White House.

ACT founders include Ellen Malcolm and Steve Rosenthal,veterans in the fight against rightwing extremism. Now people from all over the country are pitching in too—people who care, 

are committed and are prepared to take the fight to the grassroots.

Our ACTion Plan will help elect progressive candidate in vitally important state, local and 

federal contests—we know there is nothing more powerful than America Coming Together to 

create change in 2004.

More on ACT founders

See our Plan for Victory in 2004.

Join Our Struggle – Donate Now to ACT.

We are ready to fight back and defeat Bush in 2004. We are ready to defeat right-wing 

Republicans and elect progressive Democrats across the country. We are ready for America 

Coming Together.

Any portion of a contribution to America Coming Together in excess of the federal election 

limit ($5,000 per year), or not permitted under federal regulations, will be placed in the 

America Coming Together non-federal account. We cannot accept funds from minors due to 

campaign finance laws. Contributions placed in the federal account will be used in connection 

with federal elections.

Contributions to America Coming Together are not deductible for federal income tax 

purposes.

Our Founders

Grassroots and political leaders who share a vision of a progressive America and are 

committed to help defeat George W. Bush, elect progressives up and down the ticket, and 

mobilize millions of people to register and vote around the critical issues facing our country 

started America Coming Together (ACT).

http://www.actforvictory.org/act.php/home/content/about (2 of 3) [1/24/2005 4:40:51 PM]
About ACT | America Coming Together (ACT)

Ellen R. Malcolm, President of ACT, is the founder and president of EMILY’s List – a 

political action committee that supports pro-choice Democratic women candidates. Under her 

leadership, EMILY’s List – an acronym for “Early Money is Like Yeast” because it “makes 

the dough rise” – has grown to be the largest political action committee in the country. Since 

its founding, EMILY’s List has help send 11 pro-choice Democratic women to the U.S. 

Senate, 55 to the U.S. House of Representatives, and to elect seven governors. Malcolm will 

lead the effort to build ACT’s membership and raise $95 million to support ACT’s voter 

contact program.

Steve Rosenthal , Chief Executive Officer of ACT, was Political Director of the AFL-CIO 

from 1996-2002, where he developed a groundbreaking voter contact program that increased 

voter turnout of union members by 4.8 million during a time when nonunion turnout decreased 

by 15 million. During the first three years of the Clinton Administration, Rosenthal served as 

Associate Deputy Secretary of the U.S. Department of Labor where he acted as formerSecretary Robert Reich’s chief advisor on union matters. Before that he was Deputy Political 

Director for the Democratic National Committee under Chairman Ron Brown and Political 

Director Paul Tully. Rosenthal will design and execute ACT’s voter contact program.

Minyon Moore heads Dewey Square’s state and local practice. She was formerly Chief 

Operations Officer of the Democratic National Committee and before that Assistant to the 

President of the United States and Director of White House Political Affairs.

Gina Glantz has a distinguished 30-year career in campaigns and grassroots organizing. She 

was National Campaign Manager for the Bill Bradley for President campaign.

Carl Pope, Treasurer, is Executive Director of the Sierra Club, an organization of 700,000 

environmental activists. Pope has spent 30 years in the environmental trenches, and worked to 

enact such statutes as the Clean Air and Clean Water Acts, the Superfund and California 

Desert Protection Act.

Cecile Richards is President of America Votes, a coalition of almost 30 national organizations 

working together to educate and mobilize voters in the 2004 elections on a broad range of 

issues including the environment, civil and human rights, women’s rights, choice, education 

and labor.

© 2004 | ABOUT US | CONTACT US | JOBS | PRIVACY POLICY

Contributions to ACT are not deductible for federal income tax purposes.

Paid for by America Coming Together (888 16th Street, NW, Suite 450, Washington, DC 20006),

and not authorized by any candidate or candidate's committee.

http://www.actforvictory.org/act.php/home/content/about (3 of 3) [1/24/2005 4:40:51 PM]