14662 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 

extensively to the stabilization of 

producer prices, which prior to 1980 

experienced wide fluctuations from 

year-to-year. National Agricultural 

Statistics Service records show that the 

average price paid for both classes of 

spearmint oil ranged from $4.00 per 

pound to $11.10 per pound during the 

period between 1968 and 1980. Prices 

have been consistently more stable since 

the marketing order’s inception in 1980, 

with an average price for the period 

from 1980 to 2005 of $12.72 per pound 

for Scotch spearmint oil and $9.84 per 

pound for Native spearmint oil. 

During the period of 1998 through 

2005, however, large production and 

carry-in inventories have contributed to 

prices below the 26-year average, 

despite the Committee’s efforts to 

balance available supplies with 

demand. Prices have ranged from $8.00 

to $11.00 per pound for Scotch 

spearmint oil and between $9.10 and 

$10.00 per pound for Native spearmint 

oil. The 2005 Native price exceeded the 

26-year average by $0.16. Producers 

stated, however, that fuel cost increases 

more than offset the price increase. 

According to the Committee, the 

recommended salable quantities and 

allotment percentages are expected to 

achieve the goals of market and price 

stability. 

As previously stated, annual salable 

quantities and allotment percentages 

have been issued for both classes of 

spearmint oil since the order’s 

inception. Accordingly, this action will 

not impose any additional reporting or 

recordkeeping requirements on either 

small or large spearmint oil producers 

or handlers. As with all Federal 

marketing order programs, reports and 

forms are periodically reviewed to 

reduce information requirements and 

duplication by industry and public 

sector agencies. 

The AMS is committed to complying 

with the E-Government Act, to promote 

the use of the Internet and other 

information technologies to provide 

increased opportunities for citizen 

access to Government information and 

services, and for other purposes. 

As noted in the initial regulatory 

flexibility analysis, USDA has not 

identified any relevant Federal rules 

that duplicate, overlap, or conflict with 

this final rule. 

In addition, the Committee’s meeting 

was widely publicized throughout the 

spearmint oil industry and all interested 

persons were invited to attend the 

meeting and participate in Committee 

deliberations on all issues. Like all 

Committee meetings, the October 4, 

2006, meeting was a public meeting and 

all entities, both large and small, were 

able to express views on this issue. 

A proposed rule concerning this 

action was published in the Federal 

Register on January 22, 2007 (71 FR 

2639). Copies of the rule were provided 

to Committee staff, which in turn made 

it available to spearmint oil producers, 

handlers, and other interested person. 

Finally, the rule was made available 

through the Internet by the Office of the 

Federal Register and USDA. A 30-day 

comment period ending February 21, 

2007, was provided to allow interested 

persons to respond to the proposal. No 

comments were received. 

A small business guide on complying 

with fruit, vegetable, and specialty crop 

marketing agreements and orders may 

be viewed at: http://www.ams.usda.gov/ 

fv/moab.html. Any questions about the 

compliance guide should be sent to Jay 

Guerber at the previously mentioned 

address in the FOR FURTHER INFORMATION

CONTACT section. 

After consideration of all relevant 

matter presented, including the 

information and recommendation 

submitted by the Committee and other 

available information, it is hereby found 

that this rule, as hereinafter set forth, 

will tend to effectuate the declared 

policy of the Act. 

List of Subjects in 7 CFR Part 985 

Marketing agreements, Oils and fats, 

Reporting and recordkeeping 

requirements, Spearmint oil. 

■ For the reasons set forth in the 

preamble, 7 CFR part 985 is amended as 

follows: 

PART 985—MARKETING ORDER 

REGULATING THE HANDLING OF 

SPEARMINT OIL PRODUCED IN THE 

FAR WEST 

■ 1. The authority citation for 7 CFR 

part 985 continues to read as follows: 

Authority: 7 U.S.C. 601–674. 

■ 2. A new § 985.226 is added to read 

as follows: 

Note: This section will not appear in the 

Code of Federal Regulations. 

§ 985.226 Salable quantities and allotment 

percentages—2007–2008 marketing year. 

The salable quantity and allotment 

percentage for each class of spearmint 

oil during the marketing year beginning 

on June 1, 2007, shall be as follows: 

(a) Class 1 (Scotch) oil—a salable 

quantity of 886,667 pounds and an 

allotment percentage of 45 percent. 

(b) Class 3 (Native) oil—a salable 

quantity of 1,062,336 pounds and an 

allotment percentage of 48 percent. 

Dated: March 23, 2007. 

Lloyd C. Day, 

Administrator, Agricultural Marketing 

Service. 

[FR Doc. E7–5811 Filed 3–28–07; 8:45 am] 

BILLING CODE 3410–02–P 

FEDERAL ELECTION COMMISSION 

11 CFR Part 111 

[Notice 2007–7] 

Best Efforts in Administrative Fines 

Challenges 

AGENCY: Federal Election Commission. 

ACTION: Final Rules and Transmittal of 

Rules to Congress. 

SUMMARY: The Federal Election 

Commission is revising its regulations to 

amend four aspects of its Administrative 

Fines Program (‘‘AFP’’), a streamlined 

process through which the Commission 

assesses civil money penalties for late 

filers and non-filers under the Federal 

Election Campaign Act of 1971, as 

amended (‘‘FECA’’). First, the 

Commission is revising its rules 

regarding the permissible grounds for 

challenging a proposed civil money 

penalty by clarifying the scope of the 

defense based on factual errors. Second, 

the Commission is incorporating a 

defense for political committees that 

demonstrate that they used their best 

efforts to file reports timely. Third, the 

Commission is revising its rules 

regarding its final determinations to 

clarify when the Commission finds that 

no violation has occurred. Lastly, the 

rules are being amended to explain that 

the Commission’s statement of reasons 

for its final decision in an AFP matter 

usually consists of the reasons set forth 

by the Commission’s reviewing officer 

as adopted by the Commission. The 

supplementary information that follows 

provides further information. 

EFFECTIVE DATE: April 30, 2007. 

FOR FURTHER INFORMATION CONTACT: Mr. 

J. Duane Pugh Jr., Acting Assistant 

General Counsel, or Ms. Margaret G. 

Perl, Attorney, 999 E Street, NW., 

Washington, DC 20463, (202) 694–1650 

or (800) 424–9530. 

SUPPLEMENTARY INFORMATION: Through 

the AFP, the Commission may assess a 

civil money penalty for a violation of 

the reporting requirements of 2 U.S.C. 

434(a) (such as not filing or filing late) 

without using the traditional 

enforcement procedures reserved for 

more serious violations under 2 U.S.C. 


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Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 14663 

1The AFP applies to violations of the reporting 

requirements by political committees and their 

treasurers. See 11 CFR 111.30. 

2The AFP is set to expire on December 31, 2008. 

See Pub. L. No. 109–115, sec. 721, 119 Stat. 2396, 

2493–94 (2005); Final Rule on Extension of 

Administrative Fines Program, 70 FR 75717 (Dec. 

21, 2005) (extending the sunset date in 11 CFR 

111.30 to Dec. 31, 2008). 

3The Commission had long interpreted the ‘‘best 

efforts’’ safe harbor to be limited to political 

committees’ obligation to report certain substantive 

information that may be beyond the control of the 

committees to obtain. See 11 CFR 104.7 (defining 

‘‘best efforts’’ for purposes of obtaining and 

submitting contributor information). The 

Commission is currently considering in a separate 

proceeding whether to revise its application of this 

provision in enforcement matters outside the scope 

of the AFP. See Proposed Statement of Policy 

Regarding Treasurer’s Best Efforts to Obtain, 

Maintain, and Submit Information as Required by 

the Federal Election Campaign Act, 71 FR 71084 

(Dec. 8, 2006). The Commission anticipates issuing 

a final policy statement this year. 

4The Internal Revenue Service did not comment 

on the NPRM. 

5The revisions to section 111.35(a) did not alter 

the basic timing requirement that a respondent 

must file a challenge with the Commission within 

forty (40) days of when the Commission issues its 

reason to believe finding. See revised 111.35(a); 

Admin Fines E&J, 65 FR at 31789. 

437g. See 2 U.S.C. 437g(a)(4)(C).1

Congress intended the Commission to 

process these straightforward violations 

through a ‘‘simplified procedure’’ that 

would ease the enforcement burden on 

the Commission. See H.R. Rep. No. 106–

295, at 11–12 (1999). The rules 

governing the AFP create a streamlined 

procedure that balances the 

respondent’s rights to notice and 

opportunity to be heard with the need 

to operate the AFP in an expeditious 

manner without undue administrative 

burden. See Explanation and 

Justification for Final Rule on 

Administrative Fines, 65 FR 31787, 

31788 (May 19, 2000) (‘‘Admin Fines 

E&J’’).2

When the Commission finds reason to 

believe (‘‘RTB’’) that a political 

committee and its treasurer 

(‘‘respondents’’) violated the reporting 

requirements, the respondents may 

challenge the finding and the proposed 

civil money penalty only for certain 

specified reasons. See revised 11 CFR 

111.35. The Commission’s reviewing 

officer considers the challenge and 

forwards a recommendation to the 

Commission. See 11 CFR 111.36(e). 

After considering the challenge, the 

reviewing officer’s recommendation, 

and any subsequent comments from the 

respondent regarding the 

recommendation, the Commission 

makes a final determination. See revised 

11 CFR 111.37. The Commission 

assesses civil money penalties based on 

published penalty schedules set forth in 

11 CFR 111.43. Respondents may 

challenge the Commission’s final 

determination in U.S. District Court. See 

2 U.S.C. 437g(a)(4)(C)(iii); 11 CFR 

111.38. 

In Lovely v. FEC, 307 F. Supp. 2d 294 

(D. Mass. 2004), a political committee 

challenged a civil money penalty 

assessed by the Commission through the 

AFP. The political committee argued 

that it had used its best efforts to file the 

report in question and that this 

constituted a valid and complete 

defense under FECA’s ‘‘best efforts’’

provision in 2 U.S.C. 432(i). See Lovely, 

307 F. Supp. 2d at 299. Section 432(i) 

provides that ‘‘[w]hen the treasurer of a 

political committee shows that best 

efforts have been used to obtain, 

maintain, and submit the information 

required by this Act for the political 

committee, any report or any records of 

such committee shall be considered in 

compliance with [FECA].’’ 2 U.S.C. 

432(i).3 The Lovely court concluded that 

the plain language of FECA requires the 

Commission to consider the ‘‘best 

efforts’’ defense in the AFP, and that the 

record in the Lovely case did not 

establish whether the Commission had 

considered that defense. See Lovely, 307 

F. Supp. 2d at 300–01. The court 

remanded the case to the Commission 

for further proceedings. See id. at 301. 

On remand, the Commission 

determined that the political committee 

had failed to show it used best efforts to 

file timely and confirmed the earlier 

imposition of the civil money penalty. 

See Statement of Reasons in 

Administrative Fines Case 549 (Oct. 4, 

2005), available at http://www.fec.gov/ 

law/law_rulemakings.shtml under the 

heading ‘‘Best Efforts in Administrative 

Fines Challenges.’’

Although the Lovely decision did not 

directly challenge the AFP rules, and 

did not affect the validity of 11 CFR 

111.35 or the Commission’s 

consideration of any other AFP matters, 

the Commission opted to open a 

rulemaking by publishing a Notice of 

Proposed Rulemaking on December 8, 

2006, to seek public comment on 

proposed revisions to the AFP based on 

the court’s concerns. See Notice of 

Proposed Rulemaking for Best Efforts in 

Administrative Fines Challenges, 71 FR 

71093 (Dec. 8, 2006) (‘‘NPRM’’). The 

Commission received two comments, 

which are available at http:// 

www.fec.gov/law/ 

law_rulemakings.shtml under the 

heading ‘‘Best Efforts in Administrative 

Fines Challenges.’’4 One comment made 

several recommendations as to how the 

Commission could further clarify the 

‘‘best efforts’’ defense by incorporating 

the business management concept of 

‘‘best practices’’ regarding corporate 

operation, financial controls, risk 

prevention and risk assessment, while 

the other comment was not relevant to 

this rulemaking. 

After consideration of the relevant 

comment, the Commission has decided 

to revise its rules governing the AFP in 

four ways, as described below: (1) 

Clarifying the scope of the ‘‘factual 

errors’’ defense; (2) incorporating a 

‘‘best efforts’’ defense for challenges to 

RTB findings; (3) clarifying when the 

Commission may find that no violation 

has occurred in an AFP matter; and (4) 

explaining the procedure for issuing 

Commission statements of reasons for 

AFP final determinations. These 

changes address the concerns raised by 

the Lovely court and provide greater 

clarity regarding permissible grounds 

for challenging an RTB finding. The 

revisions are substantially similar to 

those proposed in the NPRM. 

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 follow were 

transmitted to Congress on March 23, 

2007. 

Explanation And Justification 

I. Revised 11 CFR 111.35—Respondent 

Challenges to Reason To Believe 

Finding or Proposed Civil Money 

Penalty 

Revised section 111.35 sets forth the 

requirements for AFP respondents’

challenges to RTB findings and 

proposed civil money penalties. Revised 

section 111.35(a) is clarified so that it 

applies only to respondents that seek to 

challenge an RTB finding or proposed 

civil money penalty.5 The Commission 

is reorganizing and clarifying section 

111.35 so that respondents may easily 

identify the basis for challenges in the 

AFP. See revised 11 CFR 111.35(b). 

A. Revised 11 CFR 111.35(b)(1)— 

Changes to the ‘‘Factual Errors’’ Defense 

The NPRM sought comment on 

proposed clarifications to the ‘‘factual 

errors’’ defense and asked whether the 

regulation should include examples of 

the types of factual errors that would 

suffice as grounds for challenging an 

RTB finding. See NPRM, 71 FR at 71094. 

The comment did not address this issue. 

The Commission has decided to revise 


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14664 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 

6See Statement of Reasons in Administrative 

Fines Case 549 (Oct. 4, 2005). 

the rule regarding the ‘‘factual errors’’

defense as proposed in the NPRM, 

except for stylistic changes. The revised 

rule states that the facts alleged to be in 

error must be facts upon which the 

Commission relied in its RTB finding. 

See revised 11 CFR 111.35(b)(1). Thus, 

a respondent may not challenge an RTB 

finding based on factual errors that are 

irrelevant to the Commission’s actual 

RTB finding, such as errors in the RTB 

finding regarding individual names or 

titles of committee staff. 

The revised rule provides two 

examples of the type of factual errors 

that would properly support a 

challenge: the respondent was not 

required to file the report in question, 

and the respondent did in fact timely 

file as described in 11 CFR 100.19. See 

revised 11 CFR 111.35(b)(1). For 

example, a political committee that is 

not subject to electronic filing 

requirements could challenge an RTB 

finding and proposed civil money 

penalty under section 111.35(b)(1) by 

showing that the paper copy was filed 

on time and the Commission relied on 

the factual error that the committee was 

required instead to file electronically. 

See 11 CFR 104.18(a). As referenced in 

the rule’s second example, Commission 

rules currently state that certain reports 

are ‘‘timely filed’’ if they are deposited 

as registered or certified mail with the 

U.S. Post Office, as Priority Mail or 

Express Mail through the U.S. Post 

Office, or with an overnight delivery 

service to be delivered the next business 

day with a postmark no later than 11:59 

p.m. EST on the filing date. See 11 CFR 

100.19(b). Thus, a respondent who is 

not required to file electronically could 

challenge an RTB finding based on 

evidence that it deposited the report in 

the proper manner pursuant to section 

100.19(b) on the filing date, even if the 

Commission did not receive the report 

because of a delivery failure by the U.S. 

Post Office or other delivery service. 

The Commission emphasizes that the 

revisions to section 111.35(b)(1) do not 

create any new ‘‘factual errors’’

defenses, but simply recognize the types 

of errors that the Commission has 

accepted previously as a defense in the 

AFP. 

B. Revised 11 CFR 111.35(b)(3)—‘‘Best 

Efforts’’ Defense 

The NPRM also sought comment on 

whether to replace the ‘‘extraordinary 

circumstances’’ defense in the prior rule 

with a ‘‘best efforts’’ defense for 

challenging an RTB finding based upon 

2 U.S.C. 432(i). See NPRM, 71 FR at 

71094–95 and former 11 CFR 

111.35(b)(1)(iii). The comment generally 

supported the idea of a ‘‘best efforts’’

defense. The Commission has decided 

to adopt the Lovely court’s 

interpretation of 2 U.S.C. 432(i) and to 

incorporate a ‘‘best efforts’’ defense into 

the AFP. It appears in revised 11 CFR 

111.35(b)(3) and is the same as the 

proposed rule, except for the changes 

noted below. The ‘‘best efforts’’ defense 

in the revised rule completely replaces 

the prior ‘‘extraordinary circumstances’’

defense because the two defenses are 

largely coextensive. The Commission 

reiterates its policy determination, as 

stated in the initial rulemaking for the 

AFP, that respondents’ defenses in the 

AFP should be limited because the 

complete and timely disclosure of the 

political committee’s financial activity 

is a ‘‘cornerstone of campaign finance 

law.’’ See Admin Fines E&J, 65 FR at 

31789. 

The Lovely court recognized that the 

Commission could ‘‘refine by regulation 

what best efforts means in the context 

of submitting a report.’’ Lovely, 307 F. 

Supp. 2d at 300. In exercising its 

authority to interpret how to incorporate 

a ‘‘best efforts’’ defense into the AFP 

rules, the Commission is mindful of the 

statutory terms chosen by Congress. As 

also explained by the Commission in its 

statement of reasons in the Lovely case 

after remand, section 432(i) creates a 

safe harbor for treasurers who 

demonstrate that best efforts have been 

used to submit reports required by 

FECA. ‘‘Best’’ is an adjective of the 

superlative degree. Therefore, best 

efforts requires more than ‘‘some’’ or 

‘‘good’’ efforts. Section 432(i)’s use of 

the phrase ‘‘best efforts,’’ instead of a 

‘‘good faith’’ standard, means that an 

AFP respondent cannot rely upon the 

state of mind of the committee’s 

treasurer or staff to claim this defense.6

Instead, the Commission’s revised rule 

at 11 CFR 111.35(b)(3), which sets forth 

the ‘‘best efforts’’ defense, focuses on 

actions taken by the respondent 

committee or treasurer to comply with 

reporting deadlines. 

The ‘‘best efforts’’ defense is 

described in the revised rule as a twopart test. The AFP respondent must 

demonstrate that: (1) The respondent 

was prevented from filing in a timely 

manner by ‘‘reasonably unforeseen 

circumstances that were beyond the 

control’’ of the respondent; and (2) the 

respondent filed the report in question 

no later than 24 hours after the end of 

the reasonably unforeseen 

circumstances preventing the timely 

filing. See revised 11 CFR 111.35(b)(3). 

The Commission believes this test is 

straightforward and should be easy for 

respondents to understand and 

document in their written responses. 

The final rule differs slightly from the 

proposed rule, which would have stated 

that the respondent must be prevented 

from filing in a timely manner by 

‘‘unforeseen’’ circumstances. The 

Commission is making this change to 

emphasize that the ‘‘best efforts’’

defense is an objective test, which uses 

a reasonable person standard and does 

not depend upon the committee’s 

treasurer or staff’s subjective ability to 

foresee a particular circumstance. The 

examples included in the rule in 11 CFR 

111.35(c) and (d), described below, 

illustrate how this defense operates as 

an objective test. 

Under the first part of the defense, the 

respondent bears the burden of showing 

that the reasonably unforeseen 

circumstances in fact prevented the 

timely and proper filing of the required 

report. The NPRM requested public 

comment regarding whether the 

Commission should apply a ‘‘but for’’ or 

‘‘contributing factor’’ test for 

determining whether a respondent was 

prevented from timely filing under the 

rule. See NPRM, 71 FR at 71095. The 

comment did not address this issue. The 

Commission has decided that this rule 

requires a strict causal relationship 

between the circumstances described in 

the challenge (such as a natural disaster) 

and the respondent’s inability to file the 

report timely. It is not sufficient for 

reasonably unforeseen circumstances to 

make it merely more difficult than usual 

for the respondent to file on time. The 

circumstance must cause the respondent 

to be unable to file in a timely and 

proper manner, despite the respondent 

attempting to use all available methods 

of filing. ‘‘Best efforts’’ is a high 

standard set by FECA, and the 

Commission reminds respondents that 

there are multiple ways for a committee 

to file required reports properly and 

timely. See, e.g., 11 CFR 100.19(b) 

(political committees not required to file 

electronically may file on paper by hand 

delivery, first class, registered, certified, 

Priority or Express U.S. Mail, or 

overnight delivery service); 11 CFR 

104.18 (mandatory electronic filings 

accepted through the Commission’s 

filing system via internet, modem, or by 

submission of diskette or CD). If the 

respondent is prevented from using one 

method of filing by a problem (such as 

a technical problem with the 

Commission’s modems), the respondent 

cannot claim the ‘‘best efforts’’ defense 

if it did not attempt to use other 

available methods to file timely (such as 


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Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 14665 

7The Commission’s guidance and instructions to 

political committees required to file electronically 

makes clear that if a report is successfully uploaded 

and accepted by the Commission, a confirmation 

receipt (including a validation number) is 

immediately sent to the committee via e-mail, fax 

or both. If a committee does not receive such a 

receipt, the committee should not assume the filing 

was received and should contact the Commission’s 

technical support personnel. See, e.g., ‘‘Frequently 

Asked Questions About Electronic Filing,’’

available at http://www.fec.gov/support/ 

faq_filing.shtml (last visited Mar. 16, 2007); 

‘‘Common Electronic Filing Mistakes,’’ available at 

http://www.fec.gov/elecfil/mistakes.shtml (last 

visited Mar. 16, 2007). 

8 In order to satisfy the prior ‘‘extraordinary 

circumstances’’ defense, the failure of Commission 

computers had to last at least 48 hours. See former 

11 CFR 111.35(b)(1)(iii). The new ‘‘best efforts’’

defense does not contain any minimum time period 

for the ‘‘reasonably unforeseen circumstances that 

were beyond the control’’ of the respondent. See 

revised 11 CFR 111.35(b)(3). 

9The Commission’s electronic filing manuals 

detail step-by-step instructions for the various 

methods of acceptable electronic filing via the 

Internet, modem, or by saving the report to a 

diskette or CD. See, e.g., ‘‘FECFile User Manual for 

Candidate Committees,’’ available at http:// 

www.fec.gov/elecfil/authorized_manual/ 

manual.shtml (last visited Mar. 16, 2007). 

submission on a diskette or CD).7

Therefore, to satisfy the ‘‘best efforts’’

defense, a respondent must demonstrate 

that it attempted to use all available 

methods to file, but that timely filing by 

each method was prevented by the 

reasonably unforeseen circumstances 

beyond the control of the respondent. 

The direct causal link between the 

reasonably unforeseen circumstances 

and the ability of the respondent to file 

the report also underlies the second part 

of the test for the ‘‘best efforts’’ defense. 

A respondent must show that the report 

was properly filed no later than 24 

hours after the resolution of the 

circumstances preventing the timely 

filing. When the situation (such as a 

problem with Commission computers) 

is resolved, the Act’s high standard of 

‘‘best efforts’’ requires that the 

respondent file the report within a 

reasonably short period of time. The 

NPRM requested public comment 

regarding whether the 24-hour period in 

the proposed rule was appropriate for 

the ‘‘best efforts’’ defense. See NPRM, 71 

FR at 71095. The comment did not 

address this issue. The Commission has 

determined that a 24-hour period best 

serves the interest in disclosure of the 

information as soon as practicable after 

the circumstances preventing the timely 

disclosure are resolved. 

C. Examples of Circumstances Under 

the ‘‘Best Efforts’’ Defense 

To provide further guidance to 

respondents regarding the scope of the 

‘‘best efforts’’ defense, the revised rule 

includes examples of circumstances that 

will be considered ‘‘reasonably 

unforeseen and beyond the control of 

the respondent,’’ and examples of 

circumstances that will not be 

considered ‘‘reasonably unforeseen and 

beyond the control of the respondent.’’

See revised 11 CFR 111.35(c) and (d). 

The comment argued that the rule 

should not be limited to examples of 

defenses that would be unacceptable 

under the new ‘‘best efforts’’ defense, 

but should also include examples of 

defenses that would meet the new 

defense to provide guidance to 

committees and treasurers. The revised 

rule provides such illustrations. The 

examples of defenses in the revised rule 

are the same as proposed in the NPRM, 

except as noted otherwise below. Both 

sets of examples in revised section 

111.35(c) and (d) are non-exhaustive 

lists and should not be read to override 

the general requirements of the defense 

in revised section 111.35(b)(3) as 

discussed above. 

1. Revised 11 CFR 111.35(c)—

Reasonably Unforeseen Circumstances 

Beyond Respondents’ Control 

Revised section 111.35(c) provides 

three examples of circumstances that 

the Commission will consider 

‘‘reasonably unforeseen and beyond the 

control’’ of the respondent under a ‘‘best 

efforts’’ defense. The first example is 

that a failure of Commission computers 

or Commission-provided software, 

despite the respondent seeking 

technical assistance, caused the 

respondent’s untimely electronic filing. 

See revised 11 CFR 111.35(c)(1). This 

example is similar to the example in the 

prior rules, in which a failure of 

Commission computers satisfied the 

‘‘extraordinary circumstances’’ defense. 

See former 11 CFR 111.35(b)(4)(iv); 

Admin Fines E&J, 65 FR at 31790 (‘‘Any 

failure of the Commission’s system that 

prevents committees from filing their 

reports when due would be recognized 

as an extraordinary circumstance 

beyond the respondents’ control.’’).8

The revised rule differs from the 

proposed rule by including the 

respondent’s seeking technical 

assistance as part of the example. 

Consistent with the prior defense based 

on Commission computer failures, the 

revised example clarifies that political 

committees must use all Commission 

resources available to aid with 

electronic filing, such as technical 

support manuals and personnel, before 

a respondent will be considered 

‘‘prevented’’ from timely filing by 

Commission computer or software 

failures. Thus, any failure of 

Commission computers, servers, filing 

system or Commission-provided 

software of sufficient severity that it 

results in a respondent being unable to 

file, despite the respondent seeking 

assistance from the Commission’s 

technical support personnel, is a 

reasonably unforeseen circumstance 

beyond the respondent’s control. 

The second example in revised 

section 111.35(c)(2) is a ‘‘widespread 

disruption of information transmissions 

over the Internet not caused by any 

failure of the Commission’s or 

respondent’s computer systems or 

Internet service provider.’’ This example 

covers circumstances in which 

technological problems at a third-party 

hub or information transfer location, 

rather than the Commission’s or 

respondent’s computer systems, caused 

widespread communication failures on 

the Internet that left the respondent 

unable to send, or the Commission 

unable to receive, an electronically filed 

report. This failure to transmit 

information must occur irrespective of 

any failures of the Commission’s or 

respondent’s computer systems or 

Internet service providers. If a 

respondent demonstrates such a 

widespread disruption of information 

transmissions occurred, the Commission 

will consider it ‘‘reasonably unforeseen 

circumstances that were beyond the 

control’’ of the respondent. As with all 

the examples in revised section 

111.35(c)(2), the respondent bears the 

burden of showing that these reasonably 

unforeseen circumstances in fact 

prevented the respondent from filing 

timely, despite attempts to file by any 

available alternative methods permitted 

under Commission regulations.9 This 

example has been refined from the 

proposed rule to clarify the types of 

transmission failures contemplated. 

The final example in the rule states 

that a ‘‘[s]evere weather or other 

disaster-related incident’’ is a 

reasonably unforeseen circumstance 

beyond the control of the respondent. 

See revised 11 CFR 111.35(c)(3). Under 

the prior rule, the Commission deemed 

certain weather conditions (lasting more 

than 48 hours) met the ‘‘extraordinary 

circumstances’’ test, explaining that 

‘‘natural disasters where a committee’s 

office is located in the disaster area and 

the committee cannot timely file a 

report because of lack of electricity or 

flooding or destruction of committee 

records’’ would satisfy the defense. See 

previous 11 CFR 111.35(b)(1)(iii); 

Admin Fines E&J, 65 FR at 31790. The 

revised rule permits such severe 

weather-related events occurring at the 

respondent’s or Commission’s location 


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14666 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 

10See Admin Fines E&J, 65 FR at 31790 (stating 

that political committees should be aware of their 

reporting duties and noting that the Commission 

makes efforts to send reminders of deadlines and 

political committees have ample time from the end 

of the reporting period to the filing deadline to 

prepare and file reports). 

11The Commission considers affidavits more 

persuasive evidence than unsworn statements 

submitted in support of the respondent’s challenge. 

12These revisions do not affect any statements of 

reasons the Commissioners may issue in 

enforcement matters under review. 

to form the basis for a ‘‘best efforts’’

defense. The Commission is not 

defining with specificity the level of 

severity for weather or other disasterrelated incidents in revised section 

111.35(c)(3) because a respondent’s 

challenge must show that the weather or 

disaster-related incident in fact 

prevented the respondent from filing 

timely. Given that the effects upon the 

respondent of each weather or disasterrelated incident will vary, the 

Commission will evaluate the particular 

facts contained in individual challenges, 

instead of mandating such details in a 

rule of general application. 

2. Revised 11 CFR 111.35(d)—

Circumstances That Are Not Reasonably 

Unforeseen or Beyond Respondents’

Control 

Revised section 111.35(d) includes a 

non-exhaustive list of circumstances 

that are not considered ‘‘reasonably 

unforeseen and beyond the control’’ of 

the respondent, and will not support a 

‘‘best efforts’’ finding. See revised 11 

CFR 111.35(d)(1) through (6). All but 

two of these examples are drawn from 

the list of events that did not constitute 

‘‘extraordinary circumstances’’ under 

the Commission’s prior rule: 

Negligence; delays caused by committee 

vendors or contractors; illness, 

inexperience or unavailability 

(including death) of the treasurer or 

other staff; and committee computer, 

software or Internet service provider 

failures. Compare revised 11 CFR 

111.35(d)(1) through (4) with former 11 

CFR 111.35(b)(4). One example 

concerns Internet service provider 

failures. See revised 11 CFR 

111.35(d)(4). The proposed rule 

described this example as failures of 

committee computers or software. The 

final rule also includes Internet service 

provider failures. Because many Internet 

service providers are available, a failure 

limited to one provider is not a defense 

for late filing or not filing. The revised 

rule adds two examples to this list based 

upon the Commission’s experience with 

respondent challenges in the AFP: A 

failure to know filing dates and a failure 

to use Commission software properly. 

See revised 11 CFR 111.35(d)(5) and (6). 

Under the revised rule, a respondent’s 

challenge will not succeed if its ‘‘best 

efforts’’ defense is based on any of these 

circumstances as the cause of the failure 

to file timely. The Commission notes 

that the examples in revised section 

111.35(d) are not exhaustive, but are 

illustrative of the types of situations that 

are not reasonably unforeseen and 

beyond the respondent’s control. The 

Commission strongly encourages all 

political committees to name assistant 

treasurers and have additional staff 

available so that their ability to file 

reports on time will not be 

compromised due to the unavailability 

or inexperience of the treasurer or other 

staff. See Final Rules on Administrative 

Fines, 68 FR 12572, 12573 (Mar. 17, 

2003) (adding staff ‘‘inexperience’’ and 

‘‘unavailability’’ as examples of 

circumstances that will not be 

considered ‘‘extraordinary’’ under 

former 11 CFR 111.35(b)(4)(iii)). 

The Commission’s implementation of 

the ‘‘best efforts’’ defense set forth in 

this revised rule serves as a proxy for 

the factual investigation of a 

respondent’s internal practices 

regarding filing of reports that would 

ordinarily be necessary to determine 

whether such practices were sufficient 

to constitute best efforts. The comment 

argued that the Commission should 

conduct a full examination of the 

business models and management 

procedures of each committee to 

determine whether the committee 

implemented proper back-up systems 

and other measures reflecting 

management ‘‘best practices’’ in the 

relevant industry to reduce the risk of a 

late filing. However, such an 

investigation would be resourceintensive for the Commission, 

burdensome for the respondent, and 

inappropriate in the AFP, which is a 

streamlined procedure created by 

Congress to alleviate the Commission’s 

enforcement burden for routine and 

minor filing violations. Absent 

reasonably unforeseen circumstances 

that were beyond the control of the 

respondent, the Commission sees no 

reason why political committees cannot 

file reports on time.10 Thus, the 

Commission’s implementation of the 

‘‘best efforts’’ defense appropriately 

incorporates a statutory ‘‘best efforts’’

standard, while taking into account the 

unique streamlined nature of the AFP. 

D. Revised 11 CFR 111.35(e)—Factual 

Basis for Challenge 

The Commission is adding paragraph 

(e) to 11 CFR 111.35 to require that the 

respondent’s written response must 

detail the factual basis supporting its 

challenge. Furthermore, respondents 

must provide supporting documentation 

for their challenges. The comment did 

not address this provision, which is 

identical to the proposed rule. 

The three defenses specified in 

sections 111.35(b)(1) through (3) (factual 

error, miscalculation of civil money 

penalty, and best efforts) are the only 

permissible grounds for challenging the 

Commission’s RTB finding or proposed 

civil money penalty, and a respondent’s 

written response must be based on one 

of these grounds to be considered by the 

reviewing officer and the Commission. 

Respondents bear the burden of 

showing that a permissible defense is 

satisfied.11

II. Revised 11 CFR 111.37—

Commission Review of Respondent’s 

Challenge and Reviewing Officer’s 

Recommendation 

A. Revised 11 CFR 111.37(b)—

Commission Finding That No Violation 

Has Occurred 

Revised section 111.37 sets forth 

procedures regarding the Commission’s 

final determination for AFP matters 

upon receipt of the respondent’s 

challenge and the reviewing officer’s 

recommendation. See revised 11 CFR 

111.37(a) through (d). The NPRM sought 

comment on proposed revisions to 

section 111.37(b) regarding Commission 

determinations that no violation has 

occurred where the RTB finding is 

based on a factual error, and where the 

respondent demonstrated it used best 

efforts to file timely. See NPRM, 71 FR 

at 71095. The comment did not address 

these rules. The Commission is revising 

section 111.37(b) to clarify that the 

existence of factual errors or a finding 

of best efforts are complete defenses. 

Thus, if one of these defenses is 

satisfied, the Commission will conclude 

that no violation of FECA has occurred. 

Please note that the defense based on an 

incorrect basis for calculating the civil 

money penalty (section 111.35(b)(2)) is 

a defense only as to the amount of the 

civil money penalty and does not serve 

as a basis for a finding of no violation 

under the AFP. 

B. Revised 11 CFR 111.37(d)—

Commission Statement of Reasons in 

AFP Final Determinations 

The NPRM sought comment on 

proposed revisions to section 111.37(d) 

to make clear that the reasons for the 

reviewing officer’s recommendation 

regarding the challenge, unless modified 

or rejected by the Commission, will 

serve as the Commission’s statement of 

reasons regarding the final 

determination in the AFP matter.12 See 

NPRM, 71 FR at 71095. This proposed 


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Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 14667 

revision addresses the Lovely court’s 

concerns that it was unclear what 

constituted the statement of reasons for 

the Commission’s final determination in 

that matter. The comment did not 

address this issue. 

The Commission is revising section 

111.37(d) to indicate that, unless 

otherwise indicated by the Commission, 

the statement of reasons for the 

Commission’s final determination in an 

AFP matter consists of the reasons 

provided by the reviewing officer for the 

recommendation, if approved by the 

Commission. See Lovely, 307 F. Supp. 

2d at 301 (stating that the Commission’s 

‘‘adoption of a reviewing officer’s 

recommendation may suffice in some 

circumstances’’). Statements setting 

forth additional or different reasons may 

also be issued. The revised rule also 

recognizes that the Commission may 

modify or reject the reviewing officer’s 

recommendation in whole or in part. 

See 11 CFR 111.37(d). In such cases, the 

Commission will indicate the grounds 

for its action and it or individual 

Commissioners may issue one or more 

statements of reasons. 

Former section 111.37(d) provided 

that the Commission could determine 

that a violation of 2 U.S.C. 434(a) had 

occurred, but waive the civil money 

penalty because the respondent 

demonstrated the existence of 

‘‘extraordinary circumstances’’ under 

former section 111.35(b)(1)(iii). See 

former 11 CFR 111.37(d). As discussed 

above, the Commission is removing the 

‘‘extraordinary circumstances’’ defense 

and replacing it with a ‘‘best efforts’’

defense in revised section 111.35(b)(3). 

Under 2 U.S.C. 432(i), if the 

Commission determines that the 

treasurer used best efforts in compliance 

with this rule, there is no violation of 

FECA and the Commission will so 

notify the respondent pursuant to 

revised section 111.37(b). See revised 11 

CFR 111.37(b). Therefore, the 

Commission need not retain the former 

section 111.37(d). 

Certification of No Effect Pursuant to 5 

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

Act) 

The Commission certifies that the 

attached final rules will not have a 

significant economic impact on a 

substantial number of small entities. 

The basis for this certification is that 

any individuals and not-for-profit 

entities affected by these rules are not 

‘‘small entities’’ under 5 U.S.C. 601(6). 

The definition of ‘‘small entity’’ does 

not include individuals, and classifies a 

not-for-profit enterprise as a ‘‘small 

organization’’ if it is independently 

owned and operated and not dominant 

in its field. 5 U.S.C. 601(4). The rules 

apply to all types of political 

committees and their treasurers. State 

political party committees are not 

independently owned and operated 

because they are not financed and 

controlled by a small identifiable group 

of individuals, and they are affiliated 

with the larger national political party 

organizations. In addition, the State 

political party committees representing 

the Democratic and Republican parties 

have a major controlling influence 

within the political arena of their State 

and are thus dominant in their field. 

District and local party committees are 

generally considered affiliated with the 

State committees and need not be 

considered separately. To the extent that 

any State party committees representing 

minor political parties or any other 

political committees might be 

considered ‘‘small organizations,’’ the 

number that would be affected by this 

rule is not substantial. 

Furthermore, any separate segregated 

funds affected by these rules are not-forprofit political committees that do not 

meet the definition of ‘‘small 

organization’’ because they are financed 

by a combination of individual 

contributions and financial support for 

certain expenses from corporations, 

labor organizations, membership 

organizations, or trade associations, and 

therefore are not independently owned 

and operated. Most of the other political 

committees affected by these rules are 

not-for-profit committees that do not 

meet the definition of ‘‘small 

organization.’’ Most political 

committees are not independently 

owned and operated because they are 

not financed by a small identifiable 

group of individuals. Most political 

committees rely on contributions from a 

large number of individuals to fund the 

committees’ operations and activities. 

The final rules also do not impose any 

additional restrictions or increase the 

costs of compliance for respondents 

within the AFP. Instead, the final rules 

provide additional defenses available to 

political committees and their 

treasurers, thereby potentially 

increasing the number of situations in 

which the Commission assesses no civil 

money penalty. Moreover, these rules 

apply only in the AFP, where penalties 

are proportionate to the amount of a 

political committee’s financial activity. 

Any political committee meeting the 

definition of ‘‘small entity’’ would be 

subject to lower fines than larger 

committees with more financial activity. 

Therefore, the final rules will not have 

a significant economic impact on a 

substantial number of small entities. 

List of Subjects in 11 CFR Part 111 

Administrative practice and 

procedures, Elections, Law enforcement. 

■ For the reasons set out in the 

preamble, the Federal Election 

Commission is amending subchapter A 

of chapter I of Title 11 of the Code of 

Federal Regulations as follows: 

PART 111—COMPLIANCE 

PROCEDURE (2 U.S.C. 437g, 437d(a)) 

■ 1. The authority citation for part 111 

is revised to read as follows: 

Authority: 2 U.S.C. 432(i), 437g, 437d(a), 

438(a)(8); 28 U.S.C. 2461 nt. 

■ 2. Section 111.35 is revised to read as 

follows: 

§ 111.35 If the respondent decides to 

challenge the alleged violation or proposed 

civil money penalty, what should the 

respondent do? 

(a) To challenge a reason to believe 

finding or proposed civil money 

penalty, the respondent must submit a 

written response to the Commission 

within forty (40) days of the 

Commission’s reason to believe finding. 

(b) The respondent’s written response 

must assert at least one of the following 

grounds for challenging the reason to 

believe finding or proposed civil money 

penalty: 

(1) The Commission’s reason to 

believe finding is based on a factual 

error including, but not limited to, the 

committee was not required to file the 

report, or the committee timely filed the 

report in accordance with 11 CFR 

100.19; 

(2) The Commission improperly 

calculated the civil money penalty; or 

(3) The respondent used best efforts to 

file in a timely manner in that: 

(i) The respondent was prevented 

from filing in a timely manner by 

reasonably unforeseen circumstances 

that were beyond the control of the 

respondent; and 

(ii) The respondent filed no later than 

24 hours after the end of these 

circumstances. 

(c) Circumstances that will be 

considered reasonably unforeseen and 

beyond the control of respondent 

include, but are not limited to: 

(1) A failure of Commission 

computers or Commission-provided 

software despite the respondent seeking 

technical assistance from Commission 

personnel and resources; 

(2) A widespread disruption of 

information transmissions over the 

Internet not caused by any failure of the 

Commission’s or respondent’s computer 

systems or Internet service provider; 

and 


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14668 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 

(3) Severe weather or other disasterrelated incident. 

(d) Circumstances that will not be 

considered reasonably unforeseen and 

beyond the control of respondent 

include, but are not limited to: 

(1) Negligence; 

(2) Delays caused by committee 

vendors or contractors; 

(3) Illness, inexperience, or 

unavailability of the treasurer or other 

staff; 

(4) Committee computer, software or 

Internet service provider failures; 

(5) A committee’s failure to know 

filing dates; and 

(6) A committee’s failure to use filing 

software properly. 

(e) Respondent’s written response 

must detail the factual basis supporting 

its challenge and include supporting 

documentation. 

■ 3. In section 111.37, paragraphs (b) 

and (d) are revised to read as follows: 

§ 111.37 What will the Commission do 

once it receives the respondent’s written 

response and the reviewing officer’s 

recommendation? 

* * * * * 

(b) If the Commission, after reviewing 

the reason to believe finding, the 

respondent’s written response, and the 

reviewing officer’s written 

recommendation, determines by an 

affirmative vote of at least four (4) of its 

members, that no violation has occurred 

(either because the Commission had 

based its reason to believe finding on a 

factual error or because the respondent 

used best efforts to file in a timely 

manner) or otherwise terminates its 

proceedings, the Commission shall 

authorize the reviewing officer to notify 

the respondent by letter of its final 

determination. 

* * * * * 

(d) When the Commission makes a 

final determination under this section, 

the statement of reasons for the 

Commission action will, unless 

otherwise indicated by the Commission, 

consist of the reasons provided by the 

reviewing officer for the 

recommendation, if approved by the 

Commission, although statements 

setting forth additional or different 

reasons may also be issued. If the 

reviewing officer’s recommendation is 

modified or not approved, the 

Commission will indicate the grounds 

for its action and one or more 

statements of reasons may be issued. 

Dated: March 22, 2007. 

Robert D. Lenhard, 

Chairman, Federal Election Commission. 

[FR Doc. E7–5730 Filed 3–28–07; 8:45 am] 

BILLING CODE 6715–01–P 

DEPARTMENT OF TRANSPORTATION 

Federal Aviation Administration 

14 CFR Part 13 

[Docket No. FAA–2006–26477] 

FAA Civil Penalty Adjudication Web 

Site 

AGENCY: Federal Aviation 

Administration (FAA), DOT. 

ACTION: Final rule; technical 

amendment. 

SUMMARY: The FAA has a Web site that 

provides access to many documents 

relating to the agency’s administrative 

adjudication of civil penalty cases. 

Currently, the address provided in the 

regulations for the civil penalty 

adjudication Web site is incorrect. In 

this rulemaking, we are amending the 

regulations to substitute the correct Web 

site address. 

DATES: This rule is effective on March 

29, 2007. 

FOR FURTHER INFORMATION CONTACT: 

Sheila Skojec, Office of the Chief 

Counsel, Adjudication Branch, 800 

Independence Avenue, SW., 

Washington, DC, 20591; telephone 202/ 

385–8228. 

SUPPLEMENTARY INFORMATION: 

Background 

The FAA assesses civil penalties for 

violations of certain provisions of the 

Federal aviation statute and the Federal 

hazardous materials transportation 

statute. The rules of practice in 14 CFR 

13.16 and 14 CFR part 13, subpart G (14 

CFR 13.201–13.235) govern these 

proceedings involving the adjudication 

of civil penalties. 

The agency has a Web site containing 

documents relating to the agency’s 

adjudication of civil penalties. These 

documents include decisions and orders 

issued by the Administrator, indexes of 

decisions, contact information for the 

Hearing Docket and the administrative 

law judges, the rules of practice, and 

other information. 

We recently discovered that the 

address for the Web site set forth in 14 

CFR 13.210 is incorrect. As a result, we 

are amending the rules to correct this 

problem. 

This Rulemaking 

FAA Civil Penalty Adjudication Web 

Site. We are amending section 13.210 to 

correct the Web site address for the FAA 

civil penalty adjudication Web site. The 

correct address is: http://www.faa.gov/ 

about/office_org/headquarters_offices/ 

agc/pol_adjudication/AGC400/ 

Civil_Penalty. 

Procedural Matters 

In general, under the Administrative 

Procedure Act (APA), 5 U.S.C. 553, 

agencies must publish regulations for 

public comment and give the public at 

least 30 days notice before adopting 

regulations. There is an exception to 

these requirements if the agency for 

good cause finds that notice and public 

comment are impracticable, 

unnecessary, or contrary to the public 

interest. In this case, the FAA finds that 

notice and comment requirements are 

unnecessary due to the administrative 

nature of the change. It is in the public 

interest for the Rules of Practice to 

provide the correct address for the civil 

penalty adjudication Web site as soon as 

possible. 

List of Subjects in 14 CFR Part 13 

Administrative practice and 

procedure, Air transportation, Aviation 

safety, Hazardous materials 

transportation, Investigations, Law 

enforcement, Penalties. 

The Amendments 

■ Accordingly, the Federal Aviation 

Administration amends part 13 of the 

Federal Aviation Regulations as follows: 

PART 13—INVESTIGATIVE AND 

ENFORCEMENT PROCEDURES 

■ 1. The authority section for part 13 

continues to read as follows: 

Authority: 18 U.S.C. 6002; 28 U.S.C. 2461 

(note); 49 U.S.C. 106(g), 5121–5128, 40113–

40114, 44103–44106, 44702–44703, 44709–

44710, 44713, 46101–46111, 46301, 46302 

(for a violation of 49 U.S.C. 46504), 46304–

46316, 46318, 46501–46502, 46504–46507, 

47106, 47107, 47111, 47122, 47306, 47531–

47532; 49 CFR 1.47. 

■ 2. Amend § 13.210 by revising 

paragraphs (e)(2) to read as follows: 

§ 13.210 Filing of documents. 

* * * * * 

(e) * * * 

(1) * * * 

(2) Decisions and orders issued by the 

Administrator in civil penalty cases, 

indexes of decisions, contact 

information for the FAA Hearing Docket 

and the administrative law judges, the 

rules of practice, and other information 

are available on the FAA civil penalty 

adjudication Web site at: http:// 

www.faa.gov/about/office_org/ 

headquarters_offices/agc/ 

pol_adjudication/AGC400/ 

Civil_Penalty. 


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