Regulations (continued from page 3)

or “convention-related activities.” These include physical site
expenses, staff salaries, printing costs, the costs of providing a trans-
portation system for persons attending the convention, and enter-
tainment activities which are part of “official convention activity
sponsored by the national committee.

Interest - Any interest earned by investment of the public subsidies
will count against the total public fund entitlement of the party.

Reports - Convention committees must file a financial statement
with the FEC within 60 days of the close of the convention, but
not later than 20 days prior to the general election.

PART 130 -134 -- Primary Matching Funds

Non-matchable Contributions - Contributions in the form of the
purchase price paid for an item of “significant intrinsic and enduring
value, such as a watch” and for chances to raffles, lotteries or
“similar drawings” are not matchable.

Entertainment - The price of admission to entertainment, such as a
concert or motion picture, is matchable only for the amount above
the ‘fair market value’ of the entertainment; the total admission
price to an “essentially political program,” such as “the traditional
political dinner or reception,” however, is fully matchable.

Disclosure Agreement - A candidate's failure to comply with the
reporting and disclosure requirements of the FECA, and of the
FEC proposed Disclosure Regulations, when adopted, may result
in suspension of certification of matching funds for him or her.

Published by
Office of Information Services

THE FEDERAL ELECTION COMMISSION
1325 K Street, N.W.
Washington, D.C. 20463.

Commissioners

Vernon W. Thomson, Chairman

Thomas E. Harris, Vice Chairman

Joan D. Aikens

William L. Springer

Neil Staebler

Robert O. Tiernan

Francis R. Valeo, Ex-Officio

Edmund L. Henshaw, Jr., Ex-Officio

Press Inquiries: (202) 382-4112

RECORD Inquiries: (202) 382-6462

Public Communications: (202) 382-4733
TOLL-FREE: (800) 424-9530

Continuation of Certification - After the date of candidate “ineligi-
bility,” matching payments may be made only to defray “net out-
standing campaign obligations” as of that date. If the candidate has
no outstanding campaign debts, he or she may receive no more
matching money.

PART 140 - 146 -- General Election Financing
Eligibility - Upon establishing eligibility, a general election candidate

will be certified in full for the entire amount provided by taw in
Federal subsidies.

Reimbursement - Candidates may be reimbursed for media and
Secret Service expenditures, such as airplane travel, initially incurred
by the campaign.

Winding-down Costs - Public funds only may be utilized by the
candidate receiving Federal subsidies up to 30 days after the date of
‘the general election. Private contributions may be received to pay
administrative expenses terminating the campaign committee incur-
red after the Federal cut-off date (30 days after the election), but
such contributions must be isolated from the campaign funds,
reported separately, and in no way commingled with the campaign
funds.

FEC FOOTNOTES

Matching Funds - As of August 5, 1976, the Commission has certi-
fied $23,500,677.73 in Federal primary matching funds for a total
of 15 Presidential candidates. In addition, $3,927,600.00 has been
certified in Presidential nominating convention payments to the
Democratic and Republican National Committees.

Democratic Party Presidential and Vice-Presidential candidates
Jimmy Carter and Walter F. Mondale were issued a “letter of credit”
from the Department of Treasury in the amount of $21,820,000.00,
following Commission certification of that amount. This figure
represents the full Federal entitlement available to each major party
Presidential candidate in the 1976 general election. A similar
amount will be available on request of the nominees of the Repu-
blican Party.

Materials Available - Two new publications are currently available
from FEC’s Public Communications Office: (1) a Compilation of
Federal Election Laws (full text of the The Federal Election Cam-
Paign Act as amended plus additional provisions of the U.S. Code
relevant to persons involved with Federal elections) with a special
index to the Title 2 provisions of the law; (2) the FEC Bookkeep-
ing and Reporting Manual, a guide prepared by the Commission
suggesting basic bookkeeping procedures that would be helpful in
complying with recordkeeping and reporting requirements of the

Act. GPO 906-732

FEDERAL ELECTION COMMISSION
1325 K STREET, NW
WASHINGTON, DC 20463

OFFICIAL BUSINESS

POSTAGE AND FEES PAID



THE FEDERAL ELECTION

COMMISSION

ECOR

1325 K Street N.W., Washington, D.G. 20463

Vol. 2, No. 7

August 16, 1976

Commission Sends Congress
Proposed FECA Regulations

The Federal Election Commission has approved, by a 6-0 vote, a set of proposed regulations governing all major areas of

the Federal election campaign laws.

The regulations, transmitted to Congress on August 3, are the result of intensive efforts on the part of the Commission to
provide workable guidelines to be followed by candidates, political committees and others interested in Federal elections.
Congress can review the proposed regulations for a maximum of thirty legislative days, after which, if they have not been
vetoed by either house, they may be officially promulgated by the Commission.

The proposed regulations cover Title 2, U.S. Code (disclosure and reporting requirements, as well as spending and contri-
bution limitations) and Title 26, U.S. Code (public financing provisions of the law).

FEC Chairman Vernon Thomson said, “It is the Commission’s hope that these regulations will provide persons subject to
this Act with a readable and practical guide for effective participation in the Federal election process. We trust they will assist
Persons subject to the Act, and the public in general, in going forward with the campaign process in a manner in which all

citizens may have confidence.”

Following are highlights of selected provisions of the proposed regulations which amplify the statutory text. The com-
plete text of the regulations will be printed in the Federal Register and reprints are available from the Commission’s Public

Communications Office.

PART 100 - General Definitions

Loan - A loan is a contribution “to the extent that the obligation
remains outstanding.”

Volunteer Activity - An individual can donate services to a campaign
without making a contribution or expenditure. However, an em-
ployee volunteering services during a “regular work period” must
make up or complete duties “within a reasonable period” to prevent
that time being considered an in-kind contribution from the em-
ployer.

Candidate’s Personal Expenses - A candidate's “routine living
expenses”, including food and residence, are not campaign expendi-
tures if paid by the candidate out of personal funds.

“Testing The Waters” - An individual is not deemed a “candidate”
by receiving money or making payments to determine whether to
become a “candidate”, such as taking a poll. However, upon
becoming a candidate, these preliminary transactions will be treated
a8 reportable contributions and expenditures subject to any cam-
paign limits,

Primaries - For independent or minor party candidates, the primary
election ends either (1) the last day under a State's law to qualify to
appear on that State's general election ballot, or (2) the date of the
last major party primary election, caucus or convention in that State,
or (3) the date of nomination by the party.

PART 101 - Candidate Status

Candidacy - The individual becoming a candidate must, within 30
days, file a Candidate Statement, or letter, designating a principal
ampaign committee and a national or State bank as a campaign
depository.

Waiver of Candidate Personal Reporting - A candidate is relieved of
the duty to file personal campaign reports if he or she agrees to turn
over to the principal campaign committee any contribution made
Personally to him or her and also to not make any unreimbursed
campaign expenditures (except from personal funds). This waiver
becomes effective when the regulations are promulgated by the FEC.

PART 102 - Committee Registration and Organization

State Party Committees - A State or local political party committee
supporting Federal and non-Federal candidates must either operate
as a single committee and insure that all contributions received by
the committee are lawful under Federal law or, in the alternative,
set up a separate Federal committee with a separate segregated
account,

Principal Campaign Committee - Every candidate's “principal cam-
paign committee” must register regardless of how much money the
committee has spent or received.

PART 103 - Campaign Depositories

Deposit of Contributions - A contribution must be deposited in the
campaign depository within 10 days of its receipt by the candidate
or the committee treasurer. (One or more accounts may be esta-
blished in a depository.) (Continued on page 2)



Regulations (continued from page 1)
PART 104 - Reports by Political Committees and Candidates

Waiver of Quarterly Reports - No quarterly finance report is requir-
ed of candidates or political committees in any quarter in which
they do not receive or spend more than $1,000 (except that during
the fourth quarter of an election year, a report must be filed if there
are debts outstanding), and in the case of candidates and their
authorized committees in non-election years in any quarter in which
they do not receive or spend a total of $5,000. However, they must
“notify the Commission in writing” the first time this reporting
exemption applies.

Itemized Contributions - Only contributions of more than $100
must be itemized in campaign finance reports. If a candidate or
committee chooses to itemize contributions of $100 or less, it must
be done on a list separate from the required larger contributions,
and the two categories may not be commingled in the report.

In-Kind Contributions - Each in-kind contribution shall be identified
as such and “shall be valued at the usual and normal charge on the
date received”.

PART 105 - Document Filing

Microfilm Copies - The Clerk of the House and the Secretary of the
Senate shall transmit to the Commission both a microfilm copy and
photocopy of each report filed initially with them for House and
Senate races,

PART 106 - Allocation

Travel Expenses - When a candidate's trips include both campaign
and noncampaign-related activities, the travel expenses to be report-
ed as campaign expenditures must be “calculated on the actual cost-
Per-mile of the means of transportation actually used.”

Campaign-Related Stop - A stop is campaign-related if a candidate
conducts any campaign-related activity, and the travel expenses
made must be reported. Travel expenses of a spouse or family mem-
ber are campaign expenditures only if the spouse.or family member
conducts campaign-related activities.

Among Candidates - Expenditures on behalf of more than one can-
didate shall be attributed to each candidate (and reported) in pro-
Portion to the benefit derived by each candidate.

PART 107+ Convention Reports

Reports - Each host committee, national party committee, State
Party committee or its subordinate committee which deals with a
Presidential Nominating Convention must file a convention report
of receipts and expenditures in connection with the Convention
within 60 days following the Convention’s last session, but not later
than 20 days before the general election.

PART 108 - States

Filing - Copies of reports required to be filed with State officers
must be “true and legible copies” of the original report filed in
Washington, and filed at the same time as the original report.

Preemption - Federal law preempts State law in Federal elections in
areas such as committee organization, registration and reporting,
and contribution and expenditure provisions, but does not preempt
State laws relating to the administration of elections, such as candi-
date qualifications, voter registration, conduct of elections, or elec-
tion fraud.

PART 109 - Independent Expenditures

Definition - " ‘independent expenditure’ means an expenditure by
a person for a communication expressly advocating the election or
defeat of a clearly identifiable candidate which is not made with the

cooperation or with the prior consent of, or in consultation with or
at the request or suggestion of a candidate or any agent or author-
ized committee of the candidat

“Cooperation and Consultation” - An expenditure is presumed not
to be independent of a candidate's campaign when it is made "based
‘on information about the candidate's plans, projects and needs,”
supplied by the campaign to the expending person “with a view
towards having an expenditure made.”

Agents - Similarly expenditures will not be presumed “independent”
if made by a person who has been authorized to raise or spend
money for the campaign, or who has been a campaign committee
officer, or who has been paid or reimbursed by the campaign.

Contribution In-kind - An expenditure not qualifying as an “‘inde-
Pendent expenditure” will be treated as a “contribution in-kind”
to a candidate subject to contribution limits, and must be reported
as an expenditure by the candidate.

Advertising - Any independent general public political advertising
must contain a statement that the communication is not authorized
by any candidate, and list who is responsible for it. This statement
shall be “on the face or front page of printed matter” and “at the
beginning or end of broadcast or telecast matter.”

PART 110 - Contribution and Expenditure Limitations

Single Contribution Limit for Affiliated Committees - All political
committees (including all affiliates, subsidiaries, locals, etc.) of a
corporation, union, or other group of persons are subject to a
single, combined contribution limit per candidate, per election.
Indicia of “maintenance or control” of committees by a group
which will bring them under this combined contribution rule
include power to hire or fire officers and members, ownership
or controlling interests, similar patterns of contributions, and
substantial transfers of funds between the different committees.

Party Committees - National and State political party committees
are entitled to separate contribution limits. Subordinate State
Party committees may have a contribution limit separate from the
State central party committee contribution limit if they do not
receive funds from, or make contribution decisions in coordination
with, any other political party unit. (Continued on page 3)

Regs Result of
Public Comments,
FEC Staff Work

Immediately following the reconstitution of the FEC on
May 21, 1976, the Commission published its draft of pro-
posed regulations in the Federal Register (May 26, 1976), beginning
an extensive public process that culminated in the final proposal
submitted to Congress on August 3.

The regulations published for public comment drew responses
from 190 people. Thirty witnesses offered testimony at hearings
June 7-10 on Title 2 and parts of Title 26. An additional eight
jesses testified at the July 7 hearing on the General Election
Financing regulations of Title 26,

Members of the General Counsel's office worked round-the-
clock to incorporate changes as the Commission met almost daily to
work on the regulations. Input was considered from Members of
Congress, candidates, political committees, public interest groups
and FEC staff members as well as from the general public,

Some sections of the regulations underwent 2s many as four
or five versions. For instance, Section 114, pertaining to the
separate segregated funds maintained by corporations, membership
associations and labor organizations, was the subject of lengthy
deliberation before the final version was adopted by the Commis-
sion,



Regulations (continued from page 2)

Spouses and Minors - Spouses are entitled to separate contribution
limits, but minor children can be independent of their parents and
make a separate contribution only if they own or control the
money, knowingly and voluntarily make the contribution, and have
not received the money for the purpose of the contribution.

Candidate’s Personal Funds - The personal funds a candidate may
spend in unfimited amounts in his or her own campaign must be
funds to which he or she has “legal and rightful title”, or “access
and control over’ prior to candidacy, and may include money from
income, dividends, trusts, awards and prizes or personal gifts.

Anonymous Contributions - The amount of any anonymous contri-
bution over $50 cannot be used in Federal elections, but may be
used for any other lawful purpose.

Presidential Expenditures - A State, county, city or Congressional
district party committee may spend up to $1,000 to further the
general election of its Presidential candidate provided the expendi-
ture is made to benefit the campaign of the party’s slate of
nominees.

Advertising Disclaimers - Statements of authorization required in
Political advertisements are not required for “small items upon
which the disclaimer cannot be conveniently printed,” such as
bumper strips, buttons and pens.

Contributions toward Independent Expenditures - Contribution
limits apply to contributions made to committees making indepen-
dent expenditures.

No Party Independent Expenditures - Political party committees
may not make independent expenditures in connection with the
general election campaigns of Federal candidates.

PART 111 - Complaint Procedures

Formal Complaint - \n addition to being signed, sworn-to, and
notarized, a complaint shall include the complainant's full name,
address, telephone number and a statement of the alleged acts
involved, and shall include any available documentation of the
allegations.

Commission Action - Action following the three stages of i
processing, investigation, and conciliation must be by affirmative
vote of four of the six members of the Commission.

Results - Public Disclosure will be made of any determination by the
Commission that no violation of the Act has occurred, and also of
the results of any conciliation attempt, including any conciliation
agreement entered into.

x Parte Communication - No interested person outside the FEC
may make (and no FEC Commissioner or compliance staff member
may receive) any ex parte communication relative to the factual
merits of any enforcement action.

PART 112 - Advisory Opinions

Advisory Opinion Requests - Requests must be in writing and con-
cern a “specific factual situation” involving the requestor, not
hypothetical questions.

Public Comment Period - Advisory opinion requests will be made
Public at the Commission, or through publication for a 15 day
written comment period.

PART 113 - Office Account Regulation

Office Account - An office account is “an account established for
the purposes of supporting the activities of a Federal or State office-
consisting of funds other than Government appropriations
holder's personal funds.

Reports - Reports of office accounts are due twice yearly, on
April 15 and October 15.

Campaign Use - Any contribution to or expenditure from an office
account for campaign purposes is subject to all campaign faw limita-
tions and prohibitions.

PART 114 - Corporations and Unions

Retired Employees - Former or retired employees are not included
in the category of “administrative or executive personnel” who can
be regularly solicited for a corporation's “political action commit-
tee.”

Partisan Activities - Partisan “internal communications” may be
made by a union to its members, or by a corporation to its “execu-
tive and administrative personnel” and stockholders. This communi-
cation may include distribution of internally-generated printed
material or operation of phone banks. The cost of communications
“expressly advocating the election or defeat of a clearly identified
candidate” must be reported when a corporation or labor organiza-
tion spends over $2,000 in all primary elections and over $2,000
in the general election.

Non-partisan Activities - Only non-partisan communications may be
made by a corporation or union to individuals outside its own class,
including allowing candidates or party representatives to address
employees so long as the same opportunities are made available to
all candidates and parties; aiding non-partisan voter registration and
voting drives conducted by a non-profit organization; and providing
non-partisan voter registration information.

Voluntary Contributions to PAC’s - Contributions to separate segre-
gated funds must be completely voluntary. A contributor can not be
compensated for a contribution, such as through a bonus or expense
account.

PAC Solicitation - The regulations include numerous technical pro-
visions concerning solicitations to separate segregated funds by
corporations and unions, by membership organizations, and by
trade associations.

Use of Facilities - Any individual using corporate or union facilities
for volunteer political activity must reimburse the corporation for
costs incurred (such as long-distance telephone calts).

Airplane - \f a candidate uses a corporate or union plane (except for
corporation licensed to provide commercial air travel), the candi-
date must pay for the service “in advance” at the first class air
fare rate for cities served by a regularly scheduled commercial
service, and at the usual charter rate for other cities.

Credit - Corporations may extend credit to political campaigns only
in a commercially reasonable manner, in a way similar to extension
of credit to non-political debtors of similar risk and size of obliga-
tion. A corporation must pursue its remedies to collect any political
debt in the same fashion and with the same intensity that it pursues
non-political debts.

PART 115 - Government Contracts

Government Contractors - Under the prohibition against contribu-
tions by Federal contractors,-a partnership which has a government
contract may not contribute to Federal candidates, although indivi-
dual partners or employees may make personal contributions. How-
ever, an individual or sole proprietor who has a Federal contract
may not make political contributions from either business or
Personal funds under his or her control.

PART 120 - 125 - Convention Financing

Expenses - Public funds for national political party conventions
may only be spent “for the purpose of conducting” the convention

(Continued on page 4)