This section of the FEDERAL REGISTER

contains notices to the public of the proposed

issuance of rules and regulations. The

purpose of these notices is to give interested

persons an opportunity to participate in the

rule making prior to the adoption of the final

rules.

Proposed Rules Federal Register

66832

Vol. 62, No. 245

Monday, December 22, 1997

FEDERAL ELECTION COMMISSION

11 CFR Parts 100 and 114

[Notice 1997–20]

Definition of ‘‘Member’’ of a

Membership Association

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Commission is proposing

revisions to its rules governing who

qualifies as a ‘‘member’’ of a

membership association to reflect the

decision of the United States Court of

Appeals for the District of Columbia

Circuit in Chamber of Commerce of the

United States v. Federal Election

Commission. A membership association

can solicit contributions from its

members to a separate segregated fund

established by the association, and can

include express electoral advocacy in

communications to its members. The

proposed rules would describe a range

of financial and organizational

attachments that would be sufficient to

confer this status.

DATES: Comments must be received on

or before January 21, 1998. If the

Commission receives sufficient requests

to testify, it will hold a hearing in early

1998. The precise date and time of the

hearing will be announced in the

Federal Register. Persons wishing to

testify should so indicate in their

comments.

ADDRESSES: All comments should be

addressed to Susan E. Propper,

Assistant General Counsel, and must be

submitted in either written or electronic

form. Written comments should be sent

to the Federal Election Commission, 999

E Street, N.W., Washington, DC 20463.

Faxed comments should be sent to (202)

219–3923, with printed copy follow-up.

Electronic mail comments should be

sent to members@fec.gov. Commenters

sending comments by electronic mail

should include their full name and

postal service address within the text of

their comments. Comments that do not

contain the full name, electronic mail

address and postal service address of

the commenter will not be considered.

The hearing will be held in the

Commission’s ninth floor meeting room,

999 E Street N.W., Washington, D.C.

FOR FURTHER INFORMATION CONTACT: Ms.

Susan E. Propper, Assistant General

Counsel, or Ms. Rita A. Reimer,

Attorney, 999 E Street N.W.,

Washington, DC 20463, (202) 219–3690

or (800) 424–9530.

SUPPLEMENTARY INFORMATION: Although

the Federal Election Campaign Act of

1971 as amended (‘‘FECA’’ or ‘‘Act’’), 2

U.S.C. 431 et seq., prohibits direct

corporate contributions in connection

with federal campaigns, 2 U.S.C.

441b(a), it permits corporations,

including incorporated membership

associations, to solicit contributions

from their restricted class to a separate

segregated fund (’’SSF’’). In the case of

membership associations, the restricted

class consists of the members of each

association, their executive and

administrative personnel, and their

families. These contributions can be

used for federal political purposes. The

Act also allows membership

associations to communicate with their

members on any subject, including

communications that include express

electoral advocacy. 2 U.S.C.

441b(b)(2)(A), 441b(b)(4)(C). The

Commission’s implementing regulations

defining who is a ‘‘member’’ of a

membership association are found at 11

CFR 100.8(b)(4)(iv) and 11 CFR 114.1(e).

The Commission’s original ‘‘member’’

rules, which had been adopted in 1977,

were the subject of a 1982 United States

Supreme Court decision, FEC v.

National Right to Work Committee

(‘‘NRWC’’), 459 U.S. 196 (1982). In 1993,

following a series of advisory opinions

in this area, the Commission revised the

text of the rules to reflect that decision.

58 FR 45770 (Aug. 30, 1993), effective

Nov. 10, 1993. 58 FR 59640. The revised

rules were held to be unduly restrictive

by the United States Court of Appeals

for the District of Columbia Circuit in

Chamber of Commerce of the United

States (‘‘Chamber’’) v. FEC, 69 F.3d 600

(D.C.Cir. 1995), amended on denial of

rehearing, 76 F.3d 1234 (D.C. Cir. 1996).

On February 24, 1997, the

Commission received a Petition for

Rulemaking from James Bopp, Jr., on

behalf of the National Right to Life

Committee, Inc. The Petition urged the

Commission to revise its member rules

to reflect the Chamber decision. The

Commission published a Notice of

Availability (‘‘NOA’’) in the Federal

Register on March 29, 1997. 62 FR

13355. The Commission received two

comments in response to the NOA.

On July 31, 1997, the Commission

published in the Federal Register an

Advance Notice of Proposed

Rulemaking (‘‘ANPRM’’) addressing

these rules. 62 FR 40982. Because the

Chamber decision, the petition for

rulemaking, and the comments received

in response to the NOA provided few

specific suggestions as to how the rules

should be amended to comport with the

decision, the Commission did not

propose specific amendments to the

rules. Rather, it sought general guidance

on the factors to be considered in

determining the existence of this

relationship.

The Commission received 14

comments in response to the ANPRM.

Commenters included the American

Association of Meat Processors

(‘‘AAMP’’); the American Dental

Association (‘‘ADA’’); the American

Federation of State, County and

Municipal Employees, AFL–CIO

(‘‘AFSCME’’); the American Society of

Association Executives (‘‘ASAE’’); the

Chicago Board of Trade; the Chicago

Mercantile Exchange; the Connecticut

Veterinary Medical Association; the

Metropolitan Kansas City Board of

Realtors; the National Association of

Realtors; the National Citizens Legal

Network; the National Right to Life

Committee, Inc.; Michael A.

Schoenfield; the United States Chamber

of Commerce; and the WholesalerDistributor Political Action Committee

(‘‘WDPAC’’). After reviewing these

comments, the Commission is now

seeking further comment on the specific

amendments to the member rules

described below.

Background

In its NRWC decision, the Supreme

Court rejected an argument by a

nonprofit, noncapital stock corporation,

whose articles of incorporation stated

that it had no members, that it should

be able to treat as members individuals

who had at one time responded, not

necessarily financially, to an NRWC

advertisement, mailing, or personal

contact. The Supreme Court rejected

this definition of ‘‘member,’’ saying that

to accept it ‘‘would virtually excise from
Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Proposed Rules 66833

the statute the restriction of solicitation

to ‘members.’ ’’ Id. at 203. The Court

determined that ‘‘members’’ of nonstock

corporations should be defined, at least

in part, by analogy to stockholders of

business corporations and members of

labor unions. Viewing the question from

this perspective meant that ‘‘some

relatively enduring and independently

significant financial or organizational

attachment is required to be a

’member’ ’’ for these purposes. Id. at

204. The NRWC’s asserted members did

not qualify under this standard because

they played no part in the operation or

administration of the corporation,

elected no corporate officials, attended

no membership meetings, and exercised

no control over the expenditure of their

contributions. Id. at 206. The 1993

revisions to the Commission’s rules

were intended to incorporate this

standard.

The current rules provide that either

a significant financial attachment to the

membership association (not merely the

payment of dues) or the right to vote

directly for all members of the

association’s highest governing body is

sufficient in and of itself to confer

membership rights. However, in most

instances a combination of regularlyassessed dues and the right to vote

directly or indirectly for at least one

member of the association’s highest

governing body is required. The term

‘‘membership association’’ includes

membership organizations, trade

associations, cooperatives, corporations

without capital stock, and local,

national and international labor

organizations that meet the

requirements set forth in these rules.

The United States District Court for

the District of Columbia held that the

current rules were not arbitrary,

capricious or manifestly contrary to the

statutory language, and therefore

deferred to what the court found to be

a valid exercise of the Commission’s

regulatory authority. Chamber of

Commerce of the United States v. FEC,

Civil Action No. 94–2184 (D.D.C. Oct.

28, 1994)(1994 WL 615786). However,

the D.C. Circuit Court of Appeals

reversed this ruling.

The case was jointly brought by the

Chamber of Commerce and the

American Medical Association

(‘‘AMA’’), two associations that do not

provide their asserted ‘‘members’’ with

the voting rights necessary to confer this

status under the current rules. The

circuit court held that the ties between

these members and the Chamber and the

AMA are nonetheless sufficient to

comply with the Supreme Court’s

NRWC criteria, and therefore concluded

that the Commission’s rules are invalid

because they define the term ‘‘member’’

in an unduly restrictive fashion. 69 F.3d

at 604.

The Chamber is a nonprofit

corporation whose members include

3,000 state and local chambers of

commerce, 1,250 trade and professional

groups, and 215,000 ‘‘direct business

members.’’ The members pay annual

dues ranging from $65 to $100,000 and

may participate on any of 59 policy

committees that determine the

Chamber’s position on various issues.

However, the Chamber’s Board of

Directors is self-perpetuating (that is,

Board members elect their successors);

so no member entities have either direct

or indirect voting rights for any

members of the Board.

The AMA challenged the exclusion

from the definition of member 44,500

‘‘direct’’ members, those who do not

belong to a state medical association.

Direct members pay annual dues

ranging from $20 to $420; receive

various AMA publications; and

participate in professional programs put

on by the AMA. They are also bound by

and subject to discipline under the

AMA’s Principles of Medical Ethics.

However, since state medical

associations elect members of the

AMA’s House of Delegates, that

organization’s highest governing body,

direct members do not satisfy the voting

criteria set forth in the current rules.

The Chamber court, in an Addendum

to the original decision, noted that the

Commission ‘‘still has a good deal of

latitude in interpreting’’ the term

‘‘member.’’ 76 F.3d at 1235. However, in

its original decision, the court held the

rules to be arbitrary and capricious as

applied to the Chamber, since under the

current rules even those paying

$100,000 in annual dues cannot qualify

as members. As for the AMA, the rule

excludes members who pay up to $420

in annual dues and, among other

organizational attachments, are subject

to sanctions under the Principles of

Medical Ethics. The court explained

that this latter attachment ‘‘might be

thought, [] for a professional, [to be] the

most significant organizational

attachment.’’ 69 F.3d at 605 (emphasis

in original).

The current rules provide a ‘‘safe

harbor’’ for membership associations,

since those who meet the requirements

set forth in these rules clearly enjoy

‘‘member’’ status. Associations can also

seek advisory opinions pursuant to 2

U.S.C. 437f to determine how the rules,

as interpreted in the Chamber of

Commerce decision, apply to their

particular situations. In addition, the

Commission believes it is appropriate to

include in the text of the rules more

guidance consistent with the Chamber

decision. The effect of the proposed

rules should be to expand the class of

persons considered as ‘‘members.’’

Proposed Revisions

General Considerations

One commenter argued that, since the

NRWC decision involved an entity

whose by-laws specifically stated that it

had no members, the Supreme Court’s

reasoning in that decision applies only

to similar entities. That commenter

urged the Commission to reinstate its

original definition of ‘‘member,’’ which

included ‘‘all persons who are currently

satisfying the requirements for

membership in a membership

organization.’’

However, the Court’s discussion

makes clear that the NRWC’s failure to

provide for members in its by-laws was

not the main focus of its reasoning. It

was not until after the Court noted that

the NRWC’s asserted ‘‘members’’ had no

governance rights or significant other

attachments to the organization, supra,

that it reiterated an earlier statement

that the ‘‘NRWC’s own articles of

incorporation and other publicly filed

documents explicitly disclaimed the

existence of members.’’ 459 U.S. at 558–

59. The Commission believes that the

lack of financial or organizational

attachments, as well as the failure to

provide for members in its bylaws, led

to the Court’s conclusion that the

asserted members did not so qualify.

One commenter, noting that it is

possible to buy a single share of stock

over the telephone, and sell it later that

same day, argued that the analogy to

stock ownership did not necessarily

imply a strong bond. However,

ownership of even a single share of

stock permits the owner to attend

stockholder meetings and thereby

participate in the governance of the

corporation during whatever time

period the stock is held.

Some commenters argued that the

Commission should look to the laws of

the individual states where membership

associations are incorporated to

determine who qualifies as their

members. The NRWC Court assumed,

‘‘since there is no body of federal law of

corporations, [] Congress intended at

least some reference to the laws of the

various states dealing with nonprofit

corporations.’’ Id. at 558 (citation

omitted). However, that statement was

in response to the argument that the

Commission should have acted without

reference to state law. The Court

explained that, ‘‘[g]iven the wide variety

of treatment of the subject of

membership in state incorporation laws,
66834 Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Proposed Rules

and the focus of the Commission’s

regulation on the corporation’s own

standards, we think it was entirely

permissible for the Commission in this

case to look to NRWC’s corporate

charter under the laws of Virginia and

the bylaws adopted in accordance with

that charter.’’ Id. Far from requiring the

Commission to take that action, the

Court merely said this was a permissible

option under the former ‘‘member’’

definition.

The Commission is now proposing to

revise this definition, to provide greater

guidance to the regulated community in

light of the NRWC decision. While

under that decision the Commission

may choose to examine state law in

connection with a particular situation, it

does not believe this is an appropriate

standard to include in the regulatory

language.

Overview

The current rules set out three

preliminary requirements that an entity

must meet before it qualifies as a

‘‘membership association’’ for purposes

of these rules: It must expressly provide

for ‘‘members’’ in its articles and bylaws; it must expressly solicit members;

and it must expressly acknowledge the

acceptance of membership, such as by

sending a membership card or including

the member on a membership

newsletter list. 11 CFR

100.8(b)(4)(iv)(A), 114.1(e)(1). These

three requirements were not challenged

in the litigation and the Commission is

not proposing any changes to this

language.

The current rules also recognize as

members those who have a stronger

financial interest in an association than

paying dues (for example, the

ownership of a stock exchange seat). 11

CFR 100.8(b)(4)(iv)(B)(1), 114.1(e)(2)(i).

The Commission is not proposing that

these rules be changed. However, it is

proposing three alternatives

(Alternatives A, B, and C) to the other

requirements contained in the current

rules.

Preliminary Requirements

The Chamber of Commerce and some

of the commenters argued that the three

general requirements should in and of

themselves be sufficient to confer

membership status. However, the

Commission questions whether these

attachments, standing alone, are

sufficient to meet the ‘‘relatively

enduring and independently significant

financial or organizational attachment’’

standard articulated by the NRWC

Court. While that Court did not discuss

what it considered to be a significant

financial attachment, these three

requirements contain no financial

attachment. With reference to

organizational attachments, the Court

cited such attachments as the right to

play some part in the operation or

administration of the corporation; the

right to elect corporate officers; and the

right of members to exercise control

over the expenditure of their

contributions. 459 U.S. at 558. The three

requirements fall far short of any such

attachments. For this reason none of the

alternatives would provide that these

three requirements, standing alone, be

sufficient to confer membership status.

Financial Attachments

All three alternatives would also

retain the current rule recognizing as

members persons who have a stronger

financial interest in an association than

the payment of annual dues, such as

those owning seats on stock exchanges

or boards of trade. 11 CFR

100.8(b)(4)(iv)(B)(1); 114.1(e)(2)(i).

While in most instances such persons

would qualify under the other proposed

requirements, the Commission believes

it is appropriate to retain this separate

category.

On May 16, 1997, the Commission

determined in Advisory Opinion

(‘‘AO’’) 1997–5 that, based on the facts

presented, both owners and lessees of

seats on the Chicago Mercantile

Exchange could be considered

‘‘members’’ of the CME for purposes of

these rules. The member-owners, by

virtue of their ownership stake, qualify

as members under 11 CFR

100.8(b)(4)(iv)(B)(1) and 114.1(e)(2)(i).

In addition, the Commission found,

member-lessees have sufficient rights

and obligations to also qualify as

members. These attachments include

substantial financial obligations to the

CME, the right to serve on policyformulating committees, and the

possibility of sanctions by the CME that

would impact on their professional

status. AO 1997–5 overruled AO 1988–

39 and 1987–31 (in part), which had

concluded that, because only one seat

was involved, only one membership in

the Exchange existed with respect to

each leased membership.

The Commission sought comments in

the ANPRM on whether to include the

holding of AO 1997–5 in the regulatory

text. While both the Chicago Board of

Trade and the Chicago Mercantile

Exchange urged the Commission to do

this, the Commission has determined

that this is unnecessary, since the

proposed rules would so clearly cover

both owned and leased memberships.

Further, AO 1997–5 remains in effect,

should the regulated community require

additional guidance on this point.

Therefore, the Commission has not

included language to this effect in the

text of the proposed rules.

Dues

The ANPRM suggested that a certain

level of annual dues might be

considered in and of itself sufficient to

establish membership. Those who paid

this amount would be considered

members regardless of whether they had

any organizational attachments to the

association. The ANPRM suggested that

any amount of annual dues set by an

association might be a sufficient

financial attachment, regardless of

amount; or, alternatively, that $200 per

year might be an appropriate cut-off

point, since $200 is the amount that

Congress has decided is such a

significant attachment to a political

committee that itemized disclosure is

required for contributions to a political

committee.

Some commenters supported the

proposal that any amount of dues set by

an association would be sufficient to

confer membership; while others

suggested that a nominal amount, such

as $5 per year, should be sufficient. No

commenter who addressed this part of

the ANPRM agreed with the proposed

$200 per year figure.

The Chamber of Commerce stated that

a $200 cut-off would exclude

approximately 58% of its members, who

pay annual dues ranging from $65

through tens of thousands of dollars.

ASAE pointed out that an association

may charge an initial rate for the first

person who joins from an organization,

and a reduced rate for subsequent

joiners. AAMP noted that membership

associations sometimes offer a reduced

rate for the first year of membership, in

hopes of attracting members who will

continue their membership

notwithstanding the higher dues for

subsequent years.

The three alternatives take different

approaches to this question. Alternative

A would set this level at $50 per year;

Alternative B would retain the $200

level proposed in the ANPRM for those

entities not formed to further business

or economic interests; while under

Alternative C any amount of annual

dues set by the association would be

sufficient.

Alternative A, which proposes that

$50 in annual dues be sufficient to

confer membership status, if no

organizational attachments exist other

than the three preliminary

requirements, reflects the Supreme

Court’s language in the NRWC decision

making it clear that more than a token

commitment is required to qualify as a

significant financial attachment. The
Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Proposed Rules 66835

Commission notes that it is also likely

that many persons with lesser dues

obligations would qualify as members

through the organizational attachments

discussed below.

Alternative B would distinguish

between the types of organizations

addressed by the Chamber of Commerce

decision and ideological, social welfare,

and political organizations. The first

category would include organizations

formed to further business or economic

interests or to implement a system of

self-discipline or self-regulation within

a line of commerce, such as business

leagues, trade associations, labor

organizations, and self-regulating

professional associations. These types of

organizations clearly provide, as

enunciated by the Supreme Court in the

NRWC case, ‘‘some relatively enduring

and independently significant financial

or organizational attachment.’’ 459 U.S.

at 204. Persons paying regular dues of

any amount could be treated as

members of these organizations without

doing violence to the intent of the

statute. Such persons join to foster their

business or economic interests and,

thus, create an attachment that is

independent of any political

attachment. This is in contrast to

persons who join ideological, social

welfare, or political organizations. In the

latter case, there is a far greater risk that

‘‘dues’’ are nothing more than political

support indistinguishable from such

support from the general public. In

other words, there is a far greater risk

that the Commission would ‘‘open the

door to all but unlimited corporate

solicitation and thereby render

meaningless the statutory limitation to

members.’’ NRWC, 459 U.S. at 204.

For organizations that do not fall in

the categories of ‘‘business leagues,

trade associations, labor organizations,

or self-regulating professional

associations,’’ this alternative would

provide that a dues payment obligation

by itself would suffice as an indication

of ‘‘relatively enduring and

independently significant financial or

organizational attachment’’ if it exceeds

$200 per year. This is the amount

Congress chose as the associational level

of significance for donor disclosure.

Also, although this ‘‘$200 dues alone’’

provision for organizations other than

business leagues, trade associations,

labor organizations, and self-regulating

professional associations would be more

restrictive than Alternative A, it still

would be more forgiving than the

current rule whereunder there is no

allowance for ‘‘member’’ status based

solely on a dues obligation.

Alternative C would provide that an

organization that qualified as a

membership association could consider

as ‘‘members’’ all persons who paid the

amount of annual dues set by the

association, regardless of amount. This

alternative would not distinguish

between economic and ideological

associations, reasoning that, for

example, an emotional commitment to

an organization such as Mothers Against

Drunk Driving (‘‘MADD’’) is as

significant to their members as the

economic attachments discussed with

regard to Alternative B, supra. Also, a

number of organizations that clearly

qualify as membership associations,

including the American Association of

Retired Persons (‘‘AARP’’), have annual

dues of less than $50 and provide none

of the organizational attachments

discussed below.

Organizational Attachments

The ANPRM proposed that, for a

lesser dues obligation than that which

would automatically confer

membership, the rules might specify

other factors the Commission would

consider per se sufficient to provide the

required organizational attachment,

provided that some level of dues was

also required. Suggested factors

included such attachments as the voting

rights contained in the current rule; the

right to serve on policy-making boards

and/or vote on policy issues; eligibility

to be elected to governing positions in

the organization; and whether the

member could be subject to disciplinary

action by the association. The right to

vote directly for all members of the

highest governing body, contained in

current 11 CFR 100.8(b)(4)(A)(3) and

114(e)(1)(iii), was not included in this

listing because the other proposed

attachments would cover this situation.

No commenter suggested additional

attachments for inclusion in this list.

Alternative A proposes that,

consistent with the NRWC decision,

certain organizational attachments be

considered per se sufficient for

membership, even where the association

charges no dues. Of the above listing,

this alternative would provide that the

right to vote on policy matters, taken

alone, does not provide the significant

attachment envisioned by the NRWC

Court. However, each of the other

organizational attachments would be

sufficient to confer membership status

even where no dues are required. As

noted, under this alternative, payment

of less than $50 per year in

predetermined annual dues, coupled

with a lesser organizational attachment,

such as the right to vote on policy issues

of interest to the membership

association, also would be sufficient to

confer membership status.

Under Alternative B, persons

affiliated with ideological, social

welfare, or political organizations who

paid less than $200 per year in annual

dues would be considered members for

purposes of these rules if they had some

right to participate in the governance of

the organization. Such rights would

include a right to vote for at least one

individual on the highest governing

body or for the officers of the

organization; a right to vote on policy

questions where the highest governing

body is obligated to abide by the results

(a binding referendum, for example,

rather than a mere informational survey)

or to approve or disapprove the results

(a resolution that must be acted upon,

for example); a right to join (not just the

opportunity to be selected for) a

committee, board, or section within the

organization that can make policy

recommendations which the highest

governing body must approve or

disapprove (a resolution that must be

acted upon, for example); or (if the

opportunity to be selected for such a

committee, board, or section is

involved) the right to participate on

such committee, board or section

because of being selected. To round out

the rules, this alternative would provide

that even without any dues obligation,

persons could be considered ‘‘members’’

if they have the right to vote for at least

a majority of the individuals on the

highest governing body.

These ‘‘dues plus governance rights’’

provisions, although not as loose as

Alternative A, would be more forgiving

than the current rule because several

options other than voting for at least one

member of the highest governing body

would suffice. The ‘‘vote for a majority

alone’’ rule would be more forgiving

than the current rule because voting for

all persons on the highest governing

body would not be required.

The standards proposed in Alternative

B would permit virtually all the

organizations represented by the

commenters to treat those they consider

members as ‘‘members’’ under federal

election law. At the same time, they

would screen out ideological/social

welfare/political organizations that are

not willing to provide for a dues

requirement and minimal governance

rights. These organizations must be held

to a standard that clearly demonstrates

that members have a ‘‘relatively

enduring and independently significant

financial or organizational attachment.’’

Alternative C does not address the

situation where persons pay no dues but

have significant organizational

attachments to an association.
66836 Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Proposed Rules

Case by Case Determinations

The current rules at 11 CFR

100.8(b)(4)(iv)(C) and 114.1(e)(3)

provide that persons who do not meet

the precise membership requirements

set out elsewhere in the rules may

nevertheless be considered members on

a case by case basis. The examples given

include student members who pay a

lower amount of dues while in school

or long term dues paying members who

qualify for lifetime membership status

with little or no dues obligation.

However, the current rules require that

such persons may qualify as members

only if they retain voting rights in the

association. Consistent with the

Chamber decision, the Commission is

proposing that this voting requirement

be dropped. The language would also be

modified to refer to an organizational or

financial attachment, rather than an

organizational and financial attachment.

This approach is included only in

Alternatives A and B, as it would not be

needed if Alternative C were adopted.

Multi-tiered Associations

The current rules at 11 CFR

100.8(b)(4)(iv)(B) and 114.1(e)(2) that

require both a financial and an

organizational attachment for members

of most membership associations clearly

include two-tiered associations, such as

those in which members vote for

delegates to a convention, and those

delegates elect those who serve on the

association’s highest governing body. At

the time of the 1993 amendment, the

Commission explained that multi-tiered

associations could solicit across all tiers,

as long as the various tiers met the same

criteria that govern solicitations by twotiered associations. Explanation and

Justification for Regulations on the

Definition of ‘‘Member’’ of a

Membership Association, 58 FR 45770

(1993). In addition, the Commission

authorized farm cooperatives as defined

in the Agricultural Marketing Act of

1929 (12 U.S.C. 1141j) and those entities

eligible for assistance under the Rural

Electrical Act of 1936 as amended (7

U.S.C. 901–950aa–1) to solicit across all

tiers even though the precise

attachments set forth at 11 CFR

100.8(b)(4)(iv)(B) and 114.1(e)(2) might

not always be present. 11 CFR

114.7(k)(1). Federations of trade

associations had earlier been given this

same right, 11 CFR 114.8(g), as had

labor organizations, 11 CFR 114.1(e)(4).

The Chamber of Commerce court, in

discussing the AMA’s organizational

attachments, cited these exceptions as

another basis for its ruling that the AMA

should be able to cross-solicit across

multiple tiers even where no voting

rights were present. 69 F.3d at 606.

If the Commission expands the

membership definition, many multitiered associations that do not presently

qualify for cross-tier solicitation would

likely be able to do so. In addition, all

three alternatives would provide that

direct membership in any level of a

multi-tiered association be construed as

membership in all tiers of the

association for purposes of these rules.

ASAE, in recommending this approach,

noted that a person who joins one tier

of a multi-tiered association clearly

demonstrates an intention to associate

with the entire organization. This

approach would also make enforcement

easier and prevent what could otherwise

be a large number of requests for

advisory opinions from multi-tiered

associations.

The Commission is therefore

proposing that new general language for

this purpose replace that currently

found at 11 CFR 100.8(b)(4)(iv)(D) and

114.1(e)(4). Current 11 CFR 114.7(k) and

114.8(g) would be repealed. However,

Alternative B would in addition retain

the Commission’s long-standing

regulations regarding federations of

labor organizations. See 11 CFR

100.8(b)(4)(iv)(D) and 114.1(e)(4). Those

rules relate to a situation where the

federation is not affiliated with the

member organizations (i.e., according to

explicit legislative history, the PACs of

the federation do not have to share

contribution limits with the PACs of the

member unions, just as the PACs of a

business league or trade association do

not have to share limits with the PACs

of member corporations, yet the

federation is allowed to solicit the

members of the member organizations).

See, e.g., H.R. Rep. 917, 94th Cong., 2d

Sess. 8 (1976); FEC v. Sailors’ Union of

the Pacific Political Fund, 624 F.Supp.

492, 495 (N.D. Cal. 1986), aff’d 828 F.2d

502 (9th Cir. 1987). This rule for labor

federations is needed to preserve a

balance with trade associations which

are given explicit allowances to solicit

persons associated with member

corporations.

AO 1991–24 addressed the efforts of

the Credit Union National Association,

Inc. (‘‘CUNA’’) and the Wisconsin

Credit Union League to make partisan

communications across multiple tiers of

the organization. While the Commission

approved the proposed procedures,

these draft rules would increase the

options available to these and

comparably-situated multi-tiered

organizations. In AO 1993–24, the

Commission determined that certain

persons were not members of the

National Rifle Association for purposes

of the current rules because they did not

have the required voting rights. The

draft rules, if approved, would

supersede that portion of the AO that

requires voting rights to establish

membership.

The Commission also welcomes

comments on any related topic.

Certification of No Effect Pursuant to 5

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

Act)

These proposed rules would not, if

promulgated, have a significant

economic impact on a substantial

number of small entities. The basis for

this certification is that the rules would

broaden the current definition of who

qualifies as a member of a membership

association, thus expanding the

opportunity for such associations to

send electoral advocacy

communications and solicit

contributions to their separate

segregated funds, but do not require any

expenditure of funds. Therefore, no

significant impact would result for

purposes of this requirement.

List of Subjects

11 CFR Part 100

Elections.

11 CFR Part 114

Business and industry, Elections,

Labor.

For the reasons set out in the

preamble, it is proposed to amend

Subchapter A, Chapter I of Title 11 of

the Code of Federal Regulations as

follows:

PART 100—SCOPE AND DEFINITIONS

(2 U.S.C. 431)

1. The authority citation for Part 100

would continue to read as follows:

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

2. Section 100.8 would be amended

by revising paragraph (b)(4)(iv) to read

as follows:

§ 100.8 Expenditure (2 U.S.C. 431(9))

* * * * *

(b) * * *

(4) * * *

(iv) (A) For purposes of paragraph

(b)(4) of this section membership

association means a membership

organization, trade association,

cooperative, corporation without capital

stock, or a local, national, or

international labor organization that:

(1) Expressly provides for ‘‘members’’

in its articles and by-laws;

(2) Expressly solicits members; and

(3) Expressly acknowledges the

acceptance of membership, such as by
Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Proposed Rules 66837

sending a membership card or inclusion

on a membership newsletter list.

(B) For purposes of paragraph (b)(4) of

this section, the term members includes

all persons who are currently satisfying

the requirements for membership in a

membership association, affirmatively

accept the membership association’s

invitation to become a member, and

either:

(1) Have some significant financial

attachment to the membership

association, such as a significant

investment or ownership stake (but not

merely the payment of dues);

Alternative A for paragraphs

(b)(4)(iv)(B)(2)–(4).

(2) Are required to pay on a regular

basis a specific amount of dues of at

least $50 per year that are

predetermined by the association;

(3) Have a significant organizational

attachment to the membership

association. Such attachments include

the right to vote directly either for at

least one member who has full

participatory and voting rights on the

highest governing body of the

membership association, or for those

who select at least one member of those

on the highest governing body of the

membership association; the right to

serve on policy-making boards of the

membership association; eligibility to be

elected to governing positions in the

membership association; and the

possibility of disciplinary action against

the member by the membership

association; or

(4) Are required to pay on a regular

basis a specific amount of dues of less

than $50 per year that are

predetermined by the association and

who have a lesser organizational

attachment to the membership

association than those set forth in

paragraph (b)(iv)(B)(3) of this section,

such as the right to vote on policy issues

of interest to the association.

Alternative B for paragraphs

(b)(4)(iv)(B)(2)–(4).

(2) Are required to pay on a regular

basis a specific amount of dues of at

least $200 per year that are

predetermined by the membership

association;

(3) Are required to pay on a regular

basis a specific amount of dues less than

$200 per year that are predetermined by

the membership association and either

the association is a business league,

trade association, labor organization, or

self-regulating professional association

or such persons also have:

(a) A right to vote for at least one

individual on the highest governing

body of, or for the officers of, the

membership association;

(b) A right to vote on policy questions

where the highest governing body of the

membership association is obligated to

abide by the results (a binding

referendum, for example, rather than a

mere informational survey) or to

approve or disapprove the results (a

resolution that must be acted upon, for

example);

(c) A right to join (not just the

opportunity to be selected for) a

committee, board, or section within the

membership association that can make

policy recommendations which the

highest governing body must approve or

disapprove (a resolution that must be

acted upon, for example); or

(d) A right to participate by virtue of

being selected to serve on a committee,

board, or section within the

membership association that can make

policy recommendations which the

highest governing body must approve or

disapprove (a resolution that must be

acted upon, for example); or

(4) Have the right to vote for at least

a majority of the individuals on the

highest governing body.

Alternative C for paragraph

(b)(4)(iv)(B)(2).

(2) Are required to pay on a regular

basis a specific amount of annual dues

that are predetermined by the

association.

Alternatives A and B for paragraph

(b)(4)(iv)(C).

(C) Notwithstanding the requirements

of paragraph (b)(4)(iv)(B) of this section,

the Commission may determine, on a

case by case basis, that persons seeking

to be considered members of a

membership association for purposes of

this section have a significant

organizational or financial attachment to

the association under circumstances

that do not precisely meet the

requirements of the general rule. For

example, student members who pay a

lower amount of dues while in school

or long term dues paying members who

qualify for lifetime membership status

with little or no dues obligation may be

considered members.

Alternatives A, B and C for paragraph

(b)(4)(iv)(D).

(D) In the case of a membership

association which has a national

federation structure or has several

levels, including, for example, national,

state, regional and/or local affiliates, a

person who qualifies as a member of

any entity within the federation or of

any affiliate by meeting the

requirements of paragraphs

(b)(4)(iv)(B)(1), (2), (3) or (4) of this

section shall also qualify as a member

of all affiliates for purposes of paragraph

(b)(4)(iv) of this section. The factors set

forth at 11 CFR 100.5(g)(4) shall be used

to determine whether entities are

affiliated for purposes of this paragraph.

* * * * *

Alternative B for paragraph

(b)(4)(iv)(E).

(E) Notwithstanding the requirements

of paragraphs (b)(4)(iv)(B)(1) through (4)

of this section, members of a local union

are considered to be members of any

national or international union of which

the local union is a part and of any

federation with which the local,

national, or international union is

affiliated.

* * * * *

PART 114—CORPORATE AND LABOR

UNION ACTIVITY

3. The authority citation for Part 114

would continue to read as follows:

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

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

4. Section 114.1 would be amended

by revising paragraph 114.7(e) to read as

follows:

§ 114.1 Definitions.

* * * * *

(e) (1) Membership association means

a membership organization, trade

association, cooperative, corporation

without capital stock, or a local,

national, or international labor

organization that:

(i) Expressly provides for ‘‘members’’

in its articles and by-laws;

(ii) Expressly solicits members; and

(iii) Expressly acknowledges the

acceptance of membership, such as by

sending a membership card or inclusion

on a membership newsletter list.

(2) The term members includes all

persons who are currently satisfying the

requirements for membership in a

membership association, affirmatively

accept the membership association’s

invitation to become a member, and

either:

(i) Have some significant financial

attachment to the membership

association, such as a significant

investment or ownership stake (but not

merely the payment of dues);

Alternative A for paragraphs (e)(2)(ii)–

(iv).

(ii) Are required to pay on a regular

basis a specific amount of dues of at

least $50 per year that are

predetermined by the association;

(iii) Have a significant organizational

attachment to the membership

association. Such attachments include

the right to vote directly either for at

least one member who has full

participatory and voting rights on the

highest governing body of the

membership association, or for those
66838 Federal Register / Vol. 62, No. 245 / Monday, December 22, 1997 / Proposed Rules

who select at least one member of those

on the highest governing body of the

membership association; the right to

serve on policy-making boards or vote

on policy issues of interest to the

membership association; eligibility to be

elected to governing positions in the

membership association; and the

possibility of disciplinary action against

the member by the membership

association; or

(iv) Are required to pay on a regular

basis a specific amount of dues of less

than $50 per year that are

predetermined by the association and

who have a lesser organizational

attachment to the membership

association than those set forth in

paragraph (e)(2)(iii) of this section, such

as the right to vote on policy issues of

interest to the association.

Alternative B for paragraphs (e)(2)(ii)–

(iv).

(ii) Are required to pay on a regular

basis a specific amount of dues of at

least $200 per year that are

predetermined by the membership

association;

(iii) Are required to pay on a regular

basis a specific amount of dues less than

$200 per year that are predetermined by

the membership association and either

the association is a business league,

trade association, labor organization, or

self-regulating professional association

or such persons also have:

(A) A right to vote for at least one

individual on the highest governing

body of, or for the officers of, the

membership association;

(B) A right to vote on policy questions

where the highest governing body of the

membership association is obligated to

abide by the results (a binding

referendum, for example, rather than a

mere informational survey) or to

approve or disapprove the results (a

resolution that must be acted upon, for

example);

(C) A right to join (not just the

opportunity to be selected for) a

committee, board, or section within the

membership association that can make

policy recommendations which the

highest governing body must approve or

disapprove (a resolution that must be

acted upon, for example); or

(D) A right to participate by virtue of

being selected to serve on a committee,

board, or section within the

membership association that can make

policy recommendations which the

highest governing body must approve or

disapprove (a resolution that must be

acted upon, for example); or

(iv) Have the right to vote for at least

a majority of the members on the

highest governing body.

Alternatives A and B for paragraph

(e)(3).

(3) Notwithstanding the requirements

of paragraph (e)(2) of this section, the

Commission may determine, on a case

by case basis, that persons seeking to be

considered members of a membership

association for purposes of this section

have a significant organizational or

financial attachment to the association

under circumstances that do not

precisely meet the requirements of the

general rule. For example, student

members who pay a lower amount of

dues while in school or long term dues

paying members who qualify for

lifetime membership status with little or

no dues obligation may be considered

members.

Alternatives A, B and C for paragraph

(e)(4).

(4) In the case of a membership

association which has a national

federation structure or has several

affiliated levels, including, for example,

national, state, regional and/or local

affiliates, a person who qualifies as a

member of any entity within the

federation or of any affiliate by meeting

the requirements of paragraphs (e)(2)(i),

(ii), (iii) or (iv) of this section shall

qualify as a member of all affiliates for

purposes of paragraph (e)(1) of this

section. The factors set forth at 11 CFR

100.5(g)(4) shall be used to determine

whether entities are affiliated for

purposes of this paragraph.

* * * * *

Alternative B for paragraph (e)(5).

(5) Notwithstanding the requirements

of paragraphs (e)(2)(i) through (iv) of

this section, members of a local union

are considered to be members of any

national or international union of which

the local union is a part and of any

federation with which the local,

national or international union is

affiliated.

* * * * *

§ 114.7 [Amended]

5. In Section 114.7, paragraph (k)

would be removed.

§ 114.8 [Amended]

6. In section 114.8, paragraph (g)

would be removed and reserved.

Dated: December 17, 1997.

John Warren McGarry,

Chairman, Federal Election Commission.

[FR Doc. 97–33305 Filed 12–19–97; 8:45 am]

BILLING CODE 6715–01–U

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration

14 CFR Part 71

[Airspace Docket No. 97–AGL–61]

Proposed Modification of Class D

Airspace; Minot AFB, ND; and Class E

Airspace; Minot, ND

AGENCY: Federal Aviation

Administration (FAA), DOT.

ACTION: Notice of proposed rulemaking.

SUMMARY: This notice proposes to

modify Class D airspace at Minot Air

Force Base (AFB), ND, and Class E

airspace at Minot, ND. A review of the

Instrument Landing System (ILS) 1 or

Tactical Air Navigation (TACAN)

Runway 29 Standard Instrument

Approach Procedure (SIAP), the

Instrument Landing System/Distance

Measuring Equipment (ILS/DME) 2

Runway 29 SIAP, the ILS/DME Runway

11 SIAP, and the TACAN Runway 11

SIAP for Minot AFB necessitates these

modifications. Controlled airspace

extending upward from the surface,

controlled airspace extending upward

from 700 feet above ground level (AGL),

and controlled airspace extending

upward from 1,200 feet AGL is needed

to contain aircraft executing these

approaches. This proposal would

increase the radius and remove the

extensions to the Class D airspace for

Minot AFB, ND, and would increase the

radius and add a northwest extension to

that portion of the Minot, ND, Class E

airspace associated with Minot AFB,

ND.

DATES: Comments must be received on

or before January 26, 1998.

ADDRESSES: Comments: Send comments

on the proposal in triplicate to: Federal

Aviation Administration, Office of the

Assistant Chief Counsel, AGL–7, Rules

Docket No. 97–AGL–61, 2300 East

Devon Avenue, Des Plaines, Illinois

60018.

Docket: The official docket may be

examined in the Office of the Assistant

Chief Counsel, Federal Aviation

Administration, 2300 East Devon

Avenue, Des Plaines, Illinois. An

informal docket may also be examined

during normal business hours at the Air

Traffic Division, Operations Branch,

Federal Aviation Administration, 2300

East Devon Avenue, Des Plaines,

Illinois.

FOR FURTHER INFORMATION CONTACT:

Michelle M. Behm, Air Traffic Division,

Airspace Branch, AGL–520, Federal

Aviation Administration, 2300 East

Devon Avenue, Des Plaines, Illinois

60018, telephone (847) 294–7568.