[Federal Register Volume 72, Number 90 (Thursday, May 10, 2007)]
[Proposed Rules]
[Pages 26569-26576]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E7-8956]


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FEDERAL ELECTION COMMISSION

11 CFR Part 106

[Notice 2007-10]


Hybrid Communications

AGENCY: Federal Election Commission.

ACTION: Notice of Proposed Rulemaking.

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SUMMARY: The Federal Election Commission requests comments on a 
proposed rule to attribute the disbursements for a public communication 
made by a political party that refers to a clearly identified Federal 
candidate and that also generically refers to other candidates of a 
political party without clearly identifying them. Several alternatives 
are presented, including an alternative to include public 
communications that refer to multiple Federal candidates. The 
Commission has made no final decision on the issues presented in this 
rulemaking. Further information is provided in the supplementary 
information that follows.

DATES: Comments must be received on or before June 11, 2007. The 
Commission will hold a hearing on the proposed rules on July 11, 2007 
at 10 a.m. Anyone wishing to testify at the

[[Page 26570]]

hearing must file written comments by the due date and must include a 
request to testify in the written comments.

ADDRESSES: All comments must be in writing, must be addressed to Ms. 
Amy L. Rothstein, Assistant General Counsel, and must be submitted in 
either e-mail, facsimile, or paper copy form. Commenters are strongly 
encouraged to submit comments by e-mail to ensure timely receipt and 
consideration. E-mail comments must be sent to <a href="/cdn-cgi/l/email-protection#b1d9c8d3c3d8d5d0d5c2f1d7d4d29fd6dec7"><span class="__cf_email__" data-cfemail="f79f8e95859e93969384b7919294d9909881">[email protected]</span></a>. If e-
mail comments include an attachment, the attachment must be in either 
Adobe Acrobat (.pdf) or Microsoft Word (.doc) format. Faxed comments 
must be sent to (202) 219-3923, with paper copy follow-up. Paper 
comments and paper copy follow-up of faxed comments must be sent to the 
Federal Election Commission, 999 E Street, NW., Washington, DC 20463. 
All comments must include the full name and postal service address of 
the commenter or they will not be considered. The Commission will post 
comments on its Web site after the comment period ends. The hearing 
will be held in the Commission's ninth-floor meeting room, 999 E 
Street, NW., Washington, DC.

FOR FURTHER INFORMATION CONTACT: Ms. Amy L. Rothstein, Assistant 
General Counsel, Ms. Esa L. Sferra, Attorney, or Mr. Robert M. Knop, 
Attorney, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or 
(800) 424-9530.

SUPPLEMENTARY INFORMATION: Through this rulemaking, the Commission 
seeks to establish how political party committees attribute 
disbursements for ``hybrid communications''--communications that refer 
both to one or more clearly identified Federal candidates and 
generically to candidates of a political party (``generic party 
reference'').
    The Federal Election Campaign Act of 1971, as amended (``the 
Act''), and current Commission regulations do not explicitly provide 
for the attribution of disbursements for hybrid communications, except 
for those communications distributed by means of a telephone bank. See 
11 CFR 106.8 (requiring disbursements to be attributed equally between 
the Federal candidate clearly identified in the communication and the 
political party committee making the communication). Recently, the 
Commission considered the attribution of disbursements for hybrid 
communications made by a political party committee through two other 
types of public communication: Hybrid communications by means of mass 
mailings and hybrid communications by means of broadcast television and 
radio. See Advisory Opinion 2006-11 (Washington Democratic State 
Central Committee) (mass mailings); \1\ Report of the Audit Division on 
Bush-Cheney '04, Inc. and the Bush-Cheney '04 Compliance Committee, 
Inc. (approved March 22, 2007) (``Final Audit Report'') (television and 
radio advertisements).\2\ The proposed rule discussed below presents 
alternative methods for attributing the disbursements for various forms 
of hybrid communications made by political party committees, and would 
supersede and replace current 11 CFR 106.8.
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    \1\ Available at www.fec.gov/law/law.shtml.
    \2\ Available at www.fec.gov/audits/audit_reports_pres.shtml.
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I. Background

    The general rule for attributing disbursements for a communication 
made on behalf of more than one Federal candidate clearly identified in 
the communication is based on the ``benefit reasonably expected to be 
derived'' by the candidates. See 11 CFR 106.1(a). Under Sec.  106.1(a), 
that benefit is determined by the proportion of space or time, or 
number of questions or statements, devoted to each clearly identified 
Federal candidate as compared to the total space or time, or number of 
questions or statements, devoted to all clearly identified Federal 
candidates. The percentage reflecting the relative proportion of space 
or time devoted to a clearly identified Federal candidate is the 
percentage of the disbursements for the communication attributed to 
that candidate (``space or time attribution''). The terms of this rule 
are limited to communications that refer to two or more clearly 
identified Federal candidates, and do not provide a method for a 
political party to attribute a portion of the communication to itself, 
through a generic party reference.
    Current section 106.8 does permit attribution of the benefit 
reasonably expected to be derived from a generic party reference in 
hybrid communications made by a political party, but only when the 
communication is made by means of a telephone bank. See 11 CFR 106.8; 
Final Rules and Explanation and Justification for Party Committee 
Telephone Banks, 68 FR 64517 (Nov. 14, 2003) (``Telephone Bank Final 
Rules''). Currently, section 106.8 requires disbursements for the 
communication to be attributed equally to the clearly identified 
Federal candidate and the political party making the communication.
    Recently, the Commission was asked to address the attribution of 
disbursements for a hybrid communication by means of a mass mailing 
paid for by a State committee of a political party. In Advisory Opinion 
2006-11 (Washington Democratic State Central Committee), the Commission 
noted that ``[n]either the Act nor Commission regulations definitively 
address the appropriate allocation of payments for'' a mass mailing 
that referred to one clearly identified Federal candidate and contained 
a generic party reference. Advisory Opinion 2006-11. ``Section 106.1(a) 
provides the general rule that expenditures made on behalf of more than 
one clearly identified candidate `shall be attributed to each such 
candidate according to the benefit reasonably expected to be derived.' 
'' Id. ``Commission regulations at 11 CFR 106.8 (which apply only to 
phone banks conducted by a party committee) do address the attribution 
required for a communication that possesses the same attributes as the 
mass mailings described in [the] request (i.e., reference to only one 
clearly identified Federal candidate along with a generic reference to 
other party candidates; and no solicitation of funds).'' Id. The 
Commission nonetheless concluded that at least 50 percent of the 
disbursements should be attributed to the clearly identified Federal 
candidate. If the space devoted to that Federal candidate exceeds the 
amount of space devoted to the generic party reference, the 
disbursement must be attributed to the Federal candidate based on an 
analysis of the space or time devoted to the Federal candidate, as 
compared to the space or time devoted to the generic party reference, 
pursuant to guidance in 11 CFR 106.1(a).
    Most recently, the Commission was presented with the issue of 
attributing disbursements for hybrid communications by means of 
broadcast television and radio paid for in part by a publicly funded 
presidential candidate and in part by a national committee of a 
political party. See Final Audit Report. The national committee 
attributed 50 percent of the disbursements for the hybrid 
communications to its publicly funded presidential candidate clearly 
identified in the communications, and 50 percent to the political party 
committee. In the Final Audit Report, the Commission considered the 
extent to which, if any, 11 CFR 106.1 and 106.8 provided guidance for 
attributing the

[[Page 26571]]

disbursements for the communications, but did not make a finding.\3\ 
Id.
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    \3\ Statements of Reasons issued by Commissioners on the Final 
Audit Report are available at http://www.fec.gov.
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    The Commission is proposing to amend current 11 CFR 106.8 to 
address the attribution of disbursements for hybrid communications made 
through all types of ``public communication'' as defined in 11 CFR 
100.26. Proposed section 106.8 would be divided into paragraph (a) 
setting out the scope of the proposed rule, paragraph (b) setting out 
the attribution formulas, and paragraph (c) describing the reporting of 
disbursements attributed under the proposed rule. The discussion below 
explains each paragraph separately and also seeks comment on the 
proposed rule.

II. Proposed 11 CFR 106.8(a)--Scope

    Proposed 11 CFR 106.8 would apply to any ``public communication,'' 
as defined in 11 CFR 100.26, which includes broadcast, cable, and 
satellite communications; newspapers and magazines; outdoor advertising 
facilities; mass mailings; telephone banks; and Internet communications 
placed for a fee on another person's Web site. See 2 U.S.C. 431(22); 11 
CFR 100.26. Proposed 11 CFR 106.8 would address the attribution of 
disbursements for a public communication made by any national, State, 
district, or local party committee, including national congressional 
campaign committees and convention committees, see 11 CFR 9008.3(a)(2), 
that contains a generic party reference and also refers to only one 
clearly identified Federal candidate, such as ``Show your support for 
Senator X and our other great Democratic candidates.'' As discussed 
below, proposed 11 CFR 106.8 would also address the attribution of 
disbursements for a public communication that refers to two or more 
clearly identified Federal candidates, provided that those candidates 
are running for the same Federal office.\4\ An additional proposed 
alternative would further address the attribution of disbursements for 
a public communication that refers to two or more clearly identified 
Federal candidates running for different Federal offices. Neither the 
proposed rule nor any of the alternatives presented would apply to 
disbursements for public communications that are independent 
expenditures.
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    \4\ For purposes of this section, the Commission would consider 
a reference to a clearly indentified presidential and vice 
presidential candidate of the same political party as a reference to 
one clearly identified candidate.
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    The Commission seeks comment on all aspects of the scope of 
proposed 11 CFR 106.8. Should the Commission apply a uniform 
attribution rule to all types of public communication? In 2003, the 
Commission ``decided to limit the scope of new section 106.8 to phone 
banks * * * because each type of communication presents different 
issues that need to be considered in further detail before establishing 
new rules.'' Telephone Bank Final Rules, 68 FR at 64518. Are there 
communication-specific considerations that counsel against adoption of 
a uniform approach?

A. Proposed 11 CFR 106.8(a)(1)(i) and (ii)--Reference to a Clearly 
Identified Federal Candidate

1. Proposed 11 CFR 106.8(a)(1)(i)(A) and (B)
    The proposed rule would extend to two types of public 
communications. The first type refers to only one clearly identified 
Federal candidate and does not refer to any other clearly identified 
Federal or non-Federal candidate. The clearly identified Federal 
candidate could be either a candidate of the political party making the 
communication, or an opposing candidate. The Commission requests 
comment on this approach.
    The second type of public communication covered by the proposed 
rule refers to two or more clearly identified Federal candidates 
running for the same Federal office, only one of whom is a candidate of 
the political party making the public communication, provided the 
communication does not clearly identify any other Federal or non-
Federal candidate. This portion of the proposed rule is intended to 
reach communications that compare or contrast the political party's own 
clearly identified Federal candidate with other clearly identified 
candidates not supported by the political party. The Commission 
requests comment on this approach.
    For purposes of the proposed rule, a Federal candidate of a 
political party would include both a Federal candidate seeking the 
nomination of that political party and a candidate who has already 
obtained that political party's nomination.
2. Proposed Alternative 11 CFR 106.8(a)(1)(i)(C)--Multiple Federal 
Candidate Reference
    Proposed 11 CFR 106.8(a)(1)(i)(C) would extend the rule to a third 
type of public communication, namely a public communication that refers 
to multiple clearly identified Federal candidates of the same political 
party who are seeking different Federal offices. This portion of the 
proposed rule is intended to reach communications that promote a 
``slate'' of a political party's candidates, along with the party 
itself. For example, proposed 11 CFR 106.8(a)(1)(i)(C) would permit 
attribution of a public communication that refers to a political 
party's candidates for both U.S. Senate and U.S. House of 
Representatives.
    The Commission seeks comment on this approach. Are such 
communications quantitatively different from communications clearly 
identifying Federal candidates for the same Federal office only? Is the 
value of the generic party reference in a hybrid communication diluted 
by the inclusion of more clearly identified candidates? The Commission 
seeks comments on such an approach and possible methods for attributing 
disbursements for a communication clearly identifying multiple Federal 
candidates of the same political party seeking different Federal 
offices between those candidates and the political party making the 
communication. If the Commission were to adopt this approach, should it 
exclude public communications that include a reference to a clearly 
identified non-Federal candidate? What would be the consequences of 
including such a reference?

B. Proposed 11 CFR 106.8(a)(1)(iii)--Generic Party Reference

    Proposed 11 CFR 106.8(a)(1)(iii) would define a generic party 
reference in a public communication as a reference to other Federal or 
non-Federal candidates that does not clearly identify those candidates.
    The proposed rule presents two alternative descriptions of a 
generic party reference. The first alternative would require the 
generic party reference to refer to the other candidates as candidates 
of a political party by using the name or nickname of the political 
party, such as ``our wonderful Democratic team,'' or ``the great 
Republican ticket.'' The Commission seeks comment on this proposed 
alternative. Under this approach, the generic reference must refer to 
candidates of a political party, rather than simply refer to a 
political party. For example, in the statement ``Candidate Y and the 
Republican Party,'' the reference to the Republican Party would not be 
a generic reference to other Republican candidates and, therefore, 
would not be a hybrid communication. Should general references to party 
members without reference to their status as candidates, such as ``the 
Democratic leaders'' or

[[Page 26572]]

``Republicans in Congress,'' be treated as generic party references 
under this alternative? Should an unambiguous reference to a political 
party that does not use the political party's formal name also be a 
generic party reference?
    The second proposed alternative for 11 CFR 106.8(a)(1)(iii) would 
retain the language of current 11 CFR 106.8, which requires a generic 
reference to candidates without clearly identifying them, but does not 
require the candidates to be identified as candidates of a political 
party, or that the political party be clearly identified. The 
Commission seeks comment on this second alternative. For example, 
should a reference to ``Liberals in Congress'' or ``Leaders in 
Congress'' be treated as a generic party reference under this 
alternative?

C. Proposed 11 CFR 106.8(a)(1)(iv) and (v)--Other Requirements

    Proposed 11 CFR 106.8, like current 11 CFR 106.8, would not apply 
to hybrid communications that solicit contributions, donations, or 
other funds. The Commission seeks comment on whether proposed section 
106.8(a)(1)(iv), containing the solicitation exemption, is necessary. 
Should the proposed rule apply to hybrid communications regardless of 
whether they contain a solicitation?
    Proposed 11 CFR 106.8 would not apply to any hybrid communications 
where the costs are otherwise exempt from the definitions of 
``contribution'' and ``expenditure'' under 11 CFR part 100, subpart C 
or E. Disbursements that do not constitute ``contributions'' or 
``expenditures'' under 11 CFR part 100 need not be attributed to any 
candidate in order to determine the permissibility of contributions or 
to report expenditures. The Commission seeks comment on this approach.

D. Proposed 11 CFR 106.8(a)(2)--Exclusion of Certain Multiple Candidate 
Hybrid Communications

    Proposed 11 CFR 106.8(a)(2) would exclude from the proposed rule 
any hybrid communication made by a political party that refers to two 
or more clearly identified Federal candidates, other than candidates 
running for the same Federal office. For example, a communication that 
states ``Vote for Senate Candidate X, House Candidate Y, and the rest 
of the great Party ticket'' would not be covered by the proposed rule. 
The proposed rule would also exclude hybrid communications that refer 
to one or more clearly identified non-Federal candidates. These 
communication would remain subject to attribution solely between the 
candidates who are clearly identified in the public communication under 
11 CFR 106.1(a). The Commission seeks comment on this approach.
    A proposed alternative version of 11 CFR 106.8(a)(2) would exclude 
from the proposed rule hybrid communications that refer to multiple 
clearly identified Federal candidates who are seeking different Federal 
offices, but are not candidates of the political party making the 
communication. The proposed alternative version would also exclude 
hybrid communications that refer to one or more clearly identified non-
Federal candidates. These communications would remain subject to 
attribution solely between the candidates who are clearly identified in 
the public communication under 11 CFR 106.1(a). The Commission seeks 
comment on this approach.
    Under either approach, is attribution of excluded public 
communications pursuant to 106.1(a) appropriate? Should the Commission 
conclude that a generic party reference benefits a political party 
committee in only certain prescribed circumstances?

E. Proposed 11 CFR 106.8(a)(3)--Exclusion of Independent Expenditures

    Proposed 11 CFR 106.8(a)(3) would exclude from the proposed rule 
any disbursement that is an independent expenditure under 11 CFR 
100.16, even if such a communication contains a generic party 
reference. Under 11 CFR 104.4 and 104.3(b)(3)(vii), the entire amount 
of such independent expenditures must be reported as either in support 
of, or in opposition to, a particular candidate, without regard to any 
generic reference to other candidates. Independent expenditures are not 
contributions to any candidate. Under 11 CFR part 300, such independent 
expenditures must be made entirely with Federal funds.

III. Proposed 11 CFR 106.8(b)--Attribution

    Although current 11 CFR 106.8 attributes a fixed 50 percent of the 
disbursements for a hybrid communication through a telephone bank to 
the Federal candidate clearly identified in the communication, the 
Commission is revisiting both the attribution method and the 
attribution percentage appropriate for all hybrid communications 
covered by the proposed rule.
    Consistent with the general rule that disbursements for a 
communication should be attributed to a candidate based on the benefit 
reasonably expected to be derived by that candidate, proposed 11 CFR 
106.8(b) would attribute a disbursement for a hybrid communication 
between the political party making the hybrid communication and the 
political party's own Federal candidate.
    Proposed 11 CFR 106.8(b) would attribute disbursements for hybrid 
communications as follows:
    <bullet> If the candidate of the political party making the 
communication is the only clearly identified Federal candidate in the 
hybrid communication, then the proposed rule would attribute the 
disbursements for the communication between the clearly identified 
Federal candidate and the political party making the communication.
    <bullet> If the only clearly identified Federal candidate in the 
hybrid communication is the opponent of the candidate of the political 
party making the communication, then the proposed rule would attribute 
the disbursements for the communication between the political party 
making the communication and the candidate of that political party who 
is running for the same Federal office as the clearly identified 
Federal candidate.
    <bullet> If the hybrid communication clearly identifies at least 
two Federal candidates running for the same Federal office, only one of 
whom is a candidate of the political party making the communication, 
then the proposed rule would attribute the disbursements for the 
communication between the political party making the communication and 
the clearly identified Federal candidate of that political party.
    Additionally, under the proposed multiple Federal candidate 
reference alternative:
    <bullet> If the hybrid communication clearly identifies at least 
two Federal candidates of the same political party running for 
different Federal offices, the proposed rule would attribute the 
disbursements for the communication among the political party making 
the communication and the clearly identified Federal candidates of that 
political party.
    The Commission seeks comment on this approach. Are there data or 
other evidence that support a down-ticket benefit from ads that 
reference a clearly identified candidate and also contain a generic 
reference?
    Hybrid communications that are made prior to a primary election and 
clearly identify a candidate of a political party other than the party 
making the communication present an additional issue, because the 
political party making the communication could have several of its own 
candidates seeking

[[Page 26573]]

nomination for the same Federal office as the Federal candidate clearly 
identified in the communication. The Commission seeks comment on how 
the proposed rule should attribute disbursements between the political 
party making the communication and its various candidates seeking the 
political party's nomination for the same Federal office as the 
candidate clearly identified in the communication.
    Proposed 11 CFR 106.8(b) presents three alternative attribution 
formulas: (1) A fixed percentage (proposed at 25 percent, 50 percent, 
or 75 percent); (2) a fixed percentage of 100 percent, requiring the 
entire amount of each disbursement for the communication to be 
attributed to the Federal candidate of the political party making the 
communication; and (3) the greater of either a fixed percentage 
(proposed at 25 percent, 50 percent, or 75 percent), or a percentage 
based on space or time attribution. The Commission seeks comment on 
these three alternative attribution formulas and whether a single 
formula should apply to all hybrid communications, regardless of the 
office sought by the Federal candidate who is clearly identified in the 
communication. Additionally, if the Commission were to adopt the 
proposed multiple Federal candidate reference alternative at proposed 
11 CFR 106.8(a)(1)(i)(C), what attribution formula or method would be 
most appropriate?
    The Commission also invites comment on whether there are other 
factors that the Commission should consider to be relevant to 
determining the relative benefit reasonably expected to be derived from 
the hybrid communication by a Federal candidate and by the political 
party making the communication. Must the hybrid communication be 
disseminated or distributed in the jurisdiction in which the clearly 
identified Federal candidate is running? Should different attribution 
percentages apply to House, Senate or Presidential candidates? Should a 
different attribution formula apply for publicly funded presidential 
candidates? Should a different fixed percentage apply if the clearly 
identified Federal candidate is in a highly contested race? Should a 
different fixed percentage apply for a presidential candidate if the 
hybrid communication is disseminated or distributed in a battleground 
state? Lastly, should the percentage attributed to the clearly 
identified Federal candidate change based on timing, i.e., the 
proximity to the election of the hybrid communication's dissemination 
or distribution?

A. Attribution Alternative 1--Fixed Percentage (Proposed at 25% or 50% 
or 75%)

    Attribution Alternative 1 would require a fixed percentage of the 
disbursements for a public communication to be attributed to the 
Federal candidate of the political party making the communication. This 
candidate would be either clearly identified in the public 
communication, or (in the case of negative advertisements) a candidate 
for the same Federal office as the only Federal candidate clearly 
identified in the public communication. The remaining percentage of the 
disbursements would not be attributable to any other Federal or non-
Federal candidate and could be treated as political party committee 
operating expenses.
    Attribution Alternative 1 is based on current 11 CFR 106.8, which 
requires 50 percent of the disbursements for hybrid communications made 
via telephone banks to be attributed to the clearly identified Federal 
candidate and prohibits the remaining 50 percent of the disbursements 
from being attributed to any other Federal or non-Federal candidate. 
Attribution Alternative 1 proposes three alternative percentages: (1) 
25 percent, (2) 50 percent, and (3) 75 percent, as discussed below.
    The Commission seeks comment on Attribution Alternative 1, 
including which, if any, of the three alternative percentages should be 
adopted, or whether a different fixed percentage should be adopted. The 
Commission seeks comment on whether the percentage should be fixed or a 
minimum. The Commission also seeks comment on whether the attribution 
percentages should differ depending on the type of public communication 
or on other factors. In addition to opinion and suggestion, the 
Commission invites the submission of empirical evidence and other 
analysis that would justify the use of a particular percentage method.
1. 25 Percent
    The first alternative would require that 25 percent of the 
disbursements for a public communication be attributed to the Federal 
candidate of the political party making the public communication, with 
the remaining 75 percent of the disbursements not attributed to any 
other Federal or non-Federal candidate. This alternative is based on 
the proposition that the Federal candidate of the political party 
making the public communication could reasonably expect to derive 
significantly less benefit from the communication than the political 
party making the communication. The Commission seeks comment on this 
alternative.
2. 50 Percent
    The second alternative, like current 11 CFR 106.8, would require 50 
percent of the disbursements for a public communication to be 
attributed to the Federal candidate of the political party making the 
communication, with the remaining 50 percent of the disbursements not 
attributed to any other Federal or non-Federal candidate. This 
alternative is based on the proposition that the Federal candidate of 
the political party making the public communication could reasonably 
expect to derive roughly the same benefit from the communication as the 
political party making the communication. The Commission seeks comment 
on this alternative.
3. 75 Percent
    Under the third alternative, 75 percent of the disbursements for a 
public communication would be attributed to the Federal candidate of 
the political party making the communication, and the remaining 25 
percent of the disbursements would not be attributable to any other 
Federal or non-Federal candidate. This alterative is based on the 
proposition that the Federal candidate of the political party making 
the communication could reasonably expect to derive the most benefit 
from a public communication, while recognizing that a generic party 
reference does provide some benefit to the political party making the 
communication. The Commission seeks comment on this alternative.

B. Attribution Alternative 2--Fixed Percentage (100%)

    Under Attribution Alternative 2, all of the disbursements for a 
public communication would be attributed to the Federal candidate of 
the political party making the communication. This candidate would be 
either clearly identified in the public communication, or a candidate 
for the same Federal office as the only Federal candidate clearly 
identified in the public communication. This alternative would be 
similar to the allocation rules for separate segregated funds and 
nonconnected committees in 11 CFR 106.6(f).\5\ This alternative is 
based on

[[Page 26574]]

the proposition that a generic party reference could be reasonably 
expected to provide at most an insignificant benefit to the political 
party making the public communication, and that the Federal candidate 
of the political party making the communication could reasonably expect 
to derive all of the benefit from the communication. The Commission 
seeks comment on Attribution Alternative 2. In 2003, the Commission did 
not adopt a 100% candidate attribution alternative for phone bank 
communications. Does evidence or experience indicate that the 
Commission should reconsider this conclusion?
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    \5\ Under Sec.  106.6(f), the disbursements for a public 
communication are allocated between Federal and non-Federal accounts 
based solely on the candidates clearly identified in the 
communication, without regard to any generic party reference. See 
also Final Rules and Explanation and Justification for Political 
Committee Status, Definition of Contribution, and Allocation for 
Separate Segregated Funds and Nonconnected Committees, 69 FR 68056, 
68063 (Nov. 23, 2004).
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C. Attribution Alternative 3--The Greater of a Fixed Percentage 
(Proposed at 25% or 50% or 75%) or a Space or Time Attribution

    Attribution Alternative 3 would require the disbursements for a 
public communication to be attributed to the Federal candidate of the 
political party making the communication who is either clearly 
identified in the public communication or a candidate for the same 
Federal office as the only Federal candidate clearly identified in the 
public communication, based on either a given attribution percentage, 
or based on a space or time attribution percentage, whichever is 
greater. The space or time attribution percentage would be calculated 
as a ratio of the public communication's space or time devoted to all 
clearly identified Federal candidates compared to the communication's 
space or time devoted to all clearly identified Federal candidates and 
all generic party references. The disbursements not attributed to the 
Federal candidate of the political party paying for the communication 
would not be attributed to any other Federal or non-Federal candidate.
    Attribution Alternative 3 is based on the attribution formula in 
Advisory Opinion 2006-11 (Washington Democratic State Central 
Committee). In Advisory Opinion 2006-11, the Commission concluded that 
at least 50 percent of the disbursements for the mass mailing must be 
attributed to the clearly identified Federal candidate, even if the 
space attributable to that candidate is less than the space 
attributable to the generically referenced candidates. However, the 
Commission concluded that if the amount of space in the mailing devoted 
to the clearly identified Federal candidate exceeds the space devoted 
to the generically referenced candidates, then the disbursements 
attributed to the clearly identified Federal candidate must exceed 50 
percent and ``reflect at least the relative proportion of the space 
devoted to that candidate,'' similar to the space or time attribution 
under 11 CFR 106.1(a). Although the Commission determined that 50 
percent was the minimum percentage to be attributed to the clearly 
identified Federal candidate under the facts of Advisory Opinion 2006-
11, Attribution Alternative 3 presents three alternative minimum 
percentages: (1) 25 percent, (2) 50 percent, and (3) 75 percent.
    The Commission seeks comment on Attribution Alternative 3, 
including which, if any, of the alternative minimum percentages should 
apply to all types of ``public communication,'' or whether the minimum 
percentage should depend on the specific type of public communication. 
The Commission invites comment on whether a space or time attribution, 
or some other method of attribution, is appropriate for all types of 
public communication. The Commission also seeks comment on whether the 
space or time devoted to a clearly identified Federal candidate in any 
general or ``stand by your ad'' disclaimer required by the Act and 
Commission regulations should be considered when calculating a space or 
time analysis under Attribution Alternative 3. See 2 U.S.C. 441d(a) and 
11 CFR 110.11(a)(1), (b)(1) and (2) (general disclaimer requirement); 
see also 2 U.S.C. 441d(d) and 11 CFR 110.11(c)(3) (the ``stand-by-your-
ad'' provisions).

IV. Proposed 11 CFR 106.8(c)--Treatment

    Proposed 11 CFR 106.8(c) would permit a political party making a 
hybrid communication to treat disbursements attributed to a Federal 
candidate under proposed 11 CFR 106.8(b) as an in-kind contribution to 
that candidate subject to the limitations of 11 CFR 110.1 and 110.2 or 
a party coordinated expenditure on behalf of that candidate under 11 
CFR part 109, subpart D. Proposed 11 CFR 106.8(c) would also allow the 
Federal candidate or the candidate's authorized committee to reimburse 
the political party for the costs attributed to the candidate. The 
Commission notes that such a reimbursement would have to be made within 
a reasonable time. See, e.g., Advisory Opinion 2004-37 (Waters) 
(reimbursement by Federal candidates' authorized committees for 
disbursements for a printed communication would not constitute a 
contribution to another Federal candidate's authorized committee if the 
reimbursements were made within a ``reasonable time''). The Commission 
invites comment on whether the proposed rule should require prepayment 
of shared hybrid communication costs, or whether it should include a 
time limit for reimbursement, such as 30 or 60 days, or some other time 
period.
    The Commission notes that the proposed rule would permit a hybrid 
communication that is coordinated with a Federal candidate to be 
treated as a combination of an in-kind contribution, a party 
coordinated expenditure, and/or a reimbursement. The Commission seeks 
comment on this approach and the general treatment of these 
disbursements under the proposed rule.

V. Alternative Proposal--Amend 11 CFR 106.1

    As an alternative to adopting proposed 11 CFR 106.8, should the 
Commission instead amend 11 CFR 106.1 to also include expenditures that 
contain generic party references, and require that such expenditures be 
attributed (1) to each clearly identified Federal candidate and 
political party according to the benefit each may reasonably expect to 
derive, or (2) according to a ratio based on the number of candidates 
referenced, including the generic party reference? For example, under 
the latter alternative, a communication encouraging viewers to support 
``Senator Smith, Representative Jones, and all the great candidates of 
the Democratic Party'' would be attributed equally between the three 
references (i.e., one-third to Smith, one-third to Jones, and one-third 
to the political party making the communication). The Commission seeks 
comment on all aspects of this alternative.

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

    The Commission certifies that the attached proposed rule would not, 
if promulgated, 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 that would be affected by the 
proposed rule are not ``small entities'' under 5 U.S.C. 601. The 
definition of ``small entity'' does not include individuals, but 
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

[[Page 26575]]

proposed rule would affect political party committees, including 
national, State, district, and local party committees, and other 
organizations of a political party, which are not independently owned 
and operated because they are not financed and controlled by a small 
identifiable group of individuals. Political party committees are 
financed by contributions from a large number of individuals and are 
controlled by the political party officials and political party 
employees and volunteers. In addition, the political party committees 
and organizations representing the Democratic and Republican parties 
have a major controlling influence within the national, State, and 
local political arenas and are thus dominant in their field. District 
and local party committees, and other organizations of a political 
party that are considered affiliated with the State committees need not 
be considered separately. To the extent that any political party 
committees might be considered ``small organizations,'' the number that 
would be affected by this proposed rule is not substantial. Therefore, 
the attached proposed rule, if promulgated, would not have a 
significant economic impact on a substantial number of small entities.

List of Subjects in 11 CFR Part 106

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

PART 106--ALLOCATIONS OF CANDIDATE AND COMMITTEE ACTIVITIES

    For the reasons set out in the preamble, the Federal Election 
Commission proposes to amend Subchapter A of Chapter I of Title 11 of 
the Code of Federal Regulations as follows:
    1. The authority citation for part 106 would continue to read as 
follows:

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

    2. Section 106.8 would be revised to read as follows:


Sec.  106.8  Attribution of expenses for political party committee 
hybrid communications.

    (a) Scope and definition. (1) This section applies to any public 
communication, as defined in 11 CFR 100.26, made by a national, State, 
district, or local committee or organization of a political party, 
that--

Paragraph (a)(1)(i) and (ii)--Alternative 1 (Candidate References)

    (i) Refers to either:
    (A) Only one clearly identified Federal candidate; or
    (B) Two or more clearly identified Federal candidates for the same 
Federal office, only one of whom is the candidate of the political 
party making the public communication;
    (ii) Does not refer to any other clearly identified Federal or non-
Federal candidate;

Paragraph (a)(1)(i) and (ii)--Alternative 2 (Multiple Federal Candidate 
Reference)

    (i) Refers to either:
    (A) Only one clearly identified Federal candidate;
    (B) Two or more clearly identified Federal candidates for the same 
Federal office, only one of whom is the candidate of the political 
party making the public communication; or
    (C) Two or more clearly identified Federal candidates for different 
Federal offices, all of whom are candidates of the political party 
making the public communication.
    (ii) Does not refer to any other clearly identified Federal or non-
Federal candidate;

Paragraph (a)(1)(iii)--Alternative 1 (Generic Party Reference)

    (iii) Generically refers to other Federal or non-Federal candidates 
of a political party by using the name or nickname of the political 
party, but without clearly identifying the candidates;

Paragraph (a)(1)(iii)--Alternative 2 (Generic Party Reference)

    (iii) Generically refers to other Federal or non-Federal candidates 
without clearly identifying the candidates;
    (iv) Does not solicit a contribution, donation, or any other funds 
from any person; and
    (v) Is not exempt from the definition of contribution or 
expenditure under 11 CFR part 100, subpart C or E.

Paragraph (a)(2)--Alternative 1 (Certain Hybrid Communications 
Excluded)

    (2) This section does not apply to a public communication that 
refers to two or more clearly identified Federal candidates for 
different Federal offices, or one or more clearly identified non-
Federal candidates, and generically refers to other Federal or non-
Federal candidates as described in paragraph (a)(1)(iii) of this 
section. Disbursements for such public communications must be 
attributed solely to the clearly identified candidates under 11 CFR 
106.1(a).

Paragraph (a)(2)--Alternative 2 (Certain Hybrid Communications 
Excluded)

    (2) This section does not apply to a public communication that 
refers to two or more clearly identified Federal candidates for 
different Federal offices who are not candidates of the political party 
making the communication, or to one or more clearly identified non-
Federal candidates, and generically refers to other Federal or non-
Federal candidates as described in paragraph (a)(1)(iii) of this 
section. Disbursements for such public communications must be 
attributed solely to the clearly identified candidates under 11 CFR 
106.1(a).
    (3) This section does not apply to independent expenditures, as 
defined in 11 CFR 100.16, for a public communication described in 
paragraph (a)(1) of this section. Under 11 CFR 104.4 and 
104.3(b)(3)(vii), the entire amount of such independent expenditures 
must be reported as either in support of, or in opposition to, a 
particular candidate, without regard to the generic reference to other 
candidates. Under 11 CFR part 300, such independent expenditures must 
be made entirely with Federal funds.

Paragraph (b)--Alternative 1 (Fixed Percentage (25% or 50% or 75%) 
Attribution)

    (b) Attribution. Each disbursement for a public communication 
described in paragraph (a) of this section must be made entirely with 
Federal funds and must be attributed as follows:
    (1) 25 or 50 or 75 percent of the disbursement is attributed to the 
Federal candidate of the political party making the public 
communication who is either:
    (i) Clearly identified in the public communication; or
    (ii) A candidate for the same Federal office as the only Federal 
candidate clearly identified in the public communication.
    (2) The portion of each disbursement not attributed to the Federal 
candidate described in paragraph (b)(1) of this section is not 
attributable to any other Federal or non-Federal candidate.

Paragraph (b)--Alternative 2 (Fixed Percentage (100%) Attribution)

    (b) Attribution. The entire amount of each disbursement for a 
public communication described in paragraph (a) of this section must be 
attributed to the Federal candidate of the political party making the 
public communication

[[Page 26576]]

who is either clearly identified in the public communication or a 
candidate for the same Federal office as the only Federal candidate 
clearly identified in the public communication, and must be made 
entirely with Federal funds.

Paragraph (b)--Alternative 3 (The Greater of a Fixed Percentage or a 
Space or Time Attribution)

    (b) Attribution. Each disbursement for a public communication 
described in paragraph (a) of this section must be made entirely with 
Federal funds and must be attributed as follows:
    (1) Each disbursement must be attributed to the Federal candidate 
of the political party making the public communication who is either 
clearly identified in the public communication or a candidate for the 
same Federal office as the only Federal candidate clearly identified in 
the public communication, based on the proportion of the space or time, 
or number of questions or statements, devoted to all clearly identified 
Federal candidates as compared to the total space or time, or number of 
questions or statements, devoted to all clearly identified Federal 
candidates and all generic references to other candidates, but at least 
25 or 50 or 75 percent of each disbursement must be attributed to the 
Federal candidate of the political party making the public 
communication; and
    (2) The portion of each disbursement not attributed to the Federal 
candidate described in paragraph (b)(1) of this section is not 
attributable to any other Federal or non-Federal candidate.
    (c) Treatment of disbursements. The disbursement described in 
paragraph (b)(1) of this section may be one or a combination of the 
following:
    (1) An in-kind contribution, subject to the limitations of 11 CFR 
110.1 or 110.2;
    (2) A party coordinated expenditure, subject to the limitations, 
restrictions, and requirements of 11 CFR part 109, subpart D; or
    (3) Reimbursed by the Federal candidate described in paragraph 
(b)(1) of this section or the authorized committee of such candidate.

    Dated: May 3, 2007.
Robert D. Lenhard,
Chairman, Federal Election Commission.
 [FR Doc. E7-8956 Filed 5-9-07; 8:45 am]
BILLING CODE 6715-01-P


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