[Federal Register Volume 89, Number 31 (Wednesday, February 14, 2024)]
[Proposed Rules]
[Pages 11227-11228]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-03045]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

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.

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Federal Register / Vol. 89, No. 31 / Wednesday, February 14, 2024 / 
Proposed Rules

[[Page 11227]]



FEDERAL ELECTION COMMISSION

11 CFR Parts 102, 104, 106, 109, 110, 9008, and 9012

[NOTICE 2024-05]


Party Segregated Accounts

AGENCY: Federal Election Commission.

ACTION: Inquiry notification.

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SUMMARY: The Commission is considering whether to initiate a rulemaking 
in response to two petitions that asked the Commission to issue new 
rules and to revise its existing rules regarding the segregated 
accounts of national party committees. To assist in its consideration, 
the Commission invites comments on the issues raised in the petitions 
and this document. The Commission particularly requests comments from 
national party committees with experience administering party 
segregated accounts. The Commission has made no final decisions 
regarding the issues discussed in this document and may ultimately 
decide not to initiate a rulemaking in response to either petition. 
Further information is provided in the SUPPLEMENTARY INFORMATION that 
follows.

DATES: Comments must be submitted on or before March 15, 2024.

ADDRESSES: All comments should be addressed to Ms. Amy L. Rothstein, 
Assistant General Counsel, and must be submitted in either written or 
electronic form. Commenters are encouraged to submit comments 
electronically via the Commission's website at http://sers.fec.gov/fosers, reference REG 2014-10 and REG 2019-04. Alternatively, comments 
may be submitted in paper form addressed to the Federal Election 
Commission, Attn.: Ms. Amy L. Rothstein, Assistant General Counsel, 
1050 First Street NE, Washington, DC.
    Each commenter must provide, at a minimum, the commenter's first 
name, last name, city, and state. All properly submitted comments, 
including attachments, will become part of the public record, and the 
Commission will make comments available for public viewing on the 
Commission's website and in the Commission's Public Records Office. 
Accordingly, commenters should not provide in their comments any 
information that they do not wish to make public, such as a home street 
address, personal email address, date of birth, phone number, social 
security number, or driver's license number, or any information that is 
restricted from disclosure, such as trade secrets or commercial or 
financial information that is privileged or confidential.

FOR FURTHER INFORMATION CONTACT: Amy L. Rothstein, Assistant General 
Counsel; Tony Buckley, Attorney; or Scarlett Rufener, Attorney; 1050 
First Street NE, Washington, DC, (202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Consolidated and Further Continuing 
Appropriations Act of 2015 (the ``Appropriations Act'') \1\ amended the 
Federal Election Campaign Act, 52 U.S.C. 30101-45 (``FECA''), by 
authorizing separate limits on contributions to three types of 
segregated accounts established by national party committees 
(collectively, ``party segregated accounts''). Under the Appropriations 
Act, national party committees may receive up to three times the usual 
amount of contributions into segregated accounts to defray expenses 
incurred with respect to (1) presidential nominating conventions; \2\ 
(2) party headquarters buildings; \3\ and (3) election recounts or 
contests and other legal proceedings.\4\ These party segregated 
accounts are in addition to any other Federal accounts that the 
committees may lawfully maintain.\5\
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    \1\ 2015, Public Law 113-235, 128 Stat. 2130, 2772 (2014).
    \2\ Under the Appropriations Act, a national party committee may 
use its presidential nominating convention account ``solely to 
defray expenses incurred with respect to a presidential nominating 
convention (including the payment of deposits) or to repay loans the 
proceeds of which were used to defray such expenses, except that the 
aggregate amount of expenditures the national committee of a 
political party may make from such account may not exceed 
$20,000,000 with respect to any single convention.'' 52 U.S.C. 
30116(a)(9)(A).
    \3\ A national party committee may use its party headquarters 
building account ``solely to defray expenses incurred with respect 
to the construction, purchase, renovation, operation, and furnishing 
of one or more headquarters buildings of the party or to repay loans 
the proceeds of which were used to defray such expenses, or 
otherwise to restore funds used to defray such expenses.'' Id. 
30116(a)(9)(B).
    \4\ A national party committee may use its election recounts or 
contests and other legal proceedings account to ``defray expenses 
incurred with respect to the preparation for and the conduct of 
election recounts and contests and other legal proceedings.'' Id. 
30116(a)(9)(C).
    \5\ Id. 30116(a)(9).
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REG 2014-10 (Party Contribution Limits)

    On January 8, 2016, the Commission received a Petition for 
Rulemaking from the Perkins Coie LLP Political Law Group (``Perkins 
Coie Petition'').\6\ The Perkins Coie Petition asked the Commission to 
adopt new regulations and to revise its existing regulations to 
implement the Appropriations Act's amendments to FECA. The Perkins Coie 
Petition asked the Commission to adopt a ``new regulatory framework'' 
for each type of party segregated account and to amend current 
regulations or adopt new regulations for all such accounts.
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    \6\ See Petition for Rulemaking (Nov. 8, 2016) (``Perkins Coie 
Petition''), REG 2014-10 (Party Contribution Limits).
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    The Perkins Coie Petition also addressed convention committees. In 
2014, Congress had passed legislation to terminate the public funding 
of presidential nominating conventions.\7\ Previously, national party 
committees could receive public funds to defray the costs of their 
presidential nominating conventions,\8\ and Commission regulations had 
established convention committees ``as a necessary requirement in order 
to enable the Commission to know who has initial responsibility for 
handling public funds and incurring expenditures.'' \9\ The Perkins 
Coie Petition asked the Commission, in part, to remove regulations that 
had been rendered obsolete by the termination of public funds.
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    \7\ See Gabriella Miller Kids First Research Act, Public Law 
113-94, 128 Stat. 1085 (2014).
    \8\ See 26 U.S.C. 9001-9013 (2012); 11 CFR part 9008.
    \9\ Presidential Election Campaign Fund and Federal Financing of 
Presidential Nominating Conventions, 44 FR 63036, 63038 (Nov. 1, 
1979).
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    The Commission published a Notice of Availability for the Perkins 
Coie Petition on October 27, 2016.\10\ The Commission received four 
timely, substantive comments in response: two comments from national 
party committees opposed initiating a rulemaking with respect to party

[[Page 11228]]

segregated accounts, while supporting the removal of regulations 
rendered obsolete by Congress's termination of public funding for 
national party committees' presidential nominating conventions; \11\ 
and two comments from advocacy organizations supported initiating a 
rulemaking on party segregated accounts, without separately addressing 
the termination of public funds for presidential nominating 
conventions.\12\
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    \10\ Implementing the Consolidated and Further Continuing 
Appropriations Act, 2015, 81 FR 69722 (Oct. 7, 2016).
    \11\ Comment by Republican National Committee; Comment by NRSC 
and NRCC.
    \12\ Comment by Center for Competitive Politics; Comment by 
Campaign Legal Center and Democracy 21.
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REG 2019-04 (Reporting Party Segregated Accounts)

    On August 5, 2019, the Commission received a Petition for 
Rulemaking from Campaign Legal Center and Center for Responsive 
Politics (``CLC/CRP Petition'').\13\ The CLC/CRP Petition asked the 
Commission to ``promulgate rules and forms requiring national party 
committees to delineate within their reports the individual and 
aggregate transactions involving'' the accounts created by the 
Appropriations Act.\14\
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    \13\ See Petition to Promulgate Rules on Reporting of 
``Cromnibus'' Accounts (Aug. 5, 2019), (``CLC/CRP Petition''), REG 
2019-04 (Reporting Party Segregated Accounts), https://sers.fec.gov/fosers/showpdf.htm?docid=408347.
    \14\ Id. at 6.
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    FECA and Commission regulations require a political committee to 
report its receipts and disbursements.\15\ On February 13, 2015, the 
Commission issued interim guidance on how national party committees 
should report the activities of their party segregated accounts.\16\ 
The Commission noted that ``[a]lthough party committees normally 
disclose their contributions on Form 3X, Line 11(a), the Commission['s] 
forms currently do not provide a clear way to distinguish between 
contributions deposited into the committees' separate accounts.'' The 
Commission instructed committees to report contributions to their party 
segregated accounts on Line 17 of Form 3X titled ``Other Federal 
Receipts.'' When itemizing contributions in excess of $200 on Schedule 
A, the committees were instructed to enter ``Convention Account,'' 
``Headquarters Account,'' or ``Recount Account,'' as appropriate, in 
the description field. The Commission instructed committees to report 
administrative or operating expenses paid from the accounts on Line 
21(b) of Form 3X titled ``Other Federal Operating Expenditures'' (for 
expenses paid from a convention or headquarters account) and Line 29 of 
Form 3X titled ``Other Disbursements'' (for expenses paid from a 
recount account). When itemizing disbursements on Schedule B, the 
committees were instructed to enter ``Convention Account,'' 
``Headquarters Account,'' or ``Recount Account,'' as appropriate, in 
the Purpose of Disbursement field along with the required purpose of 
the disbursement.
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    \15\ 52 U.S.C. 30104(a); 11 CFR 104.3(a) (reporting of 
receipts), (b) (reporting of disbursements).
    \16\ See https://www.fec.gov/updates/fec-issues-interim-reporting-guidance-for-national-party-committee-accounts/.
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    Notwithstanding this guidance, the CLC/CRP Petition asserted that 
``there is no consistent location or terminology that committees use to 
denote transactions involving'' party segregated accounts.\17\ The CLC/
CRP Petition claimed that ``it is effectively impossible for the public 
to track the large quantities of funds flowing into and out of the 
[party segregated] accounts'' under current Commission regulations.\18\
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    \17\ CLC/CRP Petition at 2-3.
    \18\ Id. at 2.
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    On August 28, 2019, the Commission published a Notice of 
Availability for the CLC/CRP Petition.\19\ The Commission received six 
timely, substantive comments in response. One comment opposed the 
petition; \20\ three comments, including one from the petitioners, 
supported the petition; \21\ and one comment, from the petitioner in 
REG 2014-10 (Party Contribution Limits), urged the Commission to engage 
in a comprehensive rulemaking and not to address the CLC/CRP Petition 
before acting on the Perkins Coie Petition.\22\ No national party 
committees commented on the CLC/CRP Petition.
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    \19\ Requiring Reporting of Party Segregated Accounts, 84 FR 
45117 (Aug. 28, 2019).
    \20\ Comment from David Himes.
    \21\ Comment from Campaign Legal Center and Center for 
Responsive Politics; Comment from Democracy 21; Comment from Public 
Citizen.
    \22\ Comment from Perkins Coie LLP Political Law Group.
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Request for Comments

    The Commission is continuing to consider whether to initiate a 
rulemaking on the issues raised in the Perkins Coie Petition and the 
CLC/CRP Petition (collectively, the ``Petitions''). Given the 
relatively small number of comments received and the party committees' 
and the public's additional experience in administering and 
interpreting the information about party segregated accounts, the 
Commission invites comments on the Petitions and any other issues 
pertaining to party segregated accounts. Have commenters' or 
petitioners' additional experiences with party segregated accounts 
resulted in further development of their positions? Have the national 
party committees or the public encountered any further challenges 
during election cycles that a rulemaking on party segregated accounts 
could help to resolve?
    If the Commission decides to initiate a rulemaking, are there any 
issues not reflected in the Petitions that the Commission should 
nonetheless address? Should the Commission consider prioritizing 
certain issues over others and, if so, which ones? The Commission 
welcomes comments on any other matter that could affect its 
consideration of whether to engage in a rulemaking.

    Dated: February 8, 2024.

    On behalf of the Commission,
Sean J. Cooksey,
Chairman, Federal Election Commission.
[FR Doc. 2024-03045 Filed 2-13-24; 8:45 am]
BILLING CODE 6715-01-P