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

49508

Vol. 70, No. 163

Wednesday, August 24, 2005

FEDERAL ELECTION COMMISSION 

11 CFR Part 100

[Notice 2005–20] 

Electioneering Communications

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

SUMMARY: The Federal Election 

Commission is seeking comment on 

proposed changes to its rule defining 

‘‘electioneering communications’’ under 

the Federal Election Campaign Act of 

1971, as amended (‘‘FECA’’). The 

proposed changes would modify the 

definition of ‘‘publicly distributed’’ and 

the exemptions to the definition of 

‘‘electioneering communications’’ 

consistent with the ruling of the U.S. 

District Court for the District of 

Columbia in Shays v. FEC, portions of 

which were affirmed by the U.S. Court 

of Appeals for the District of Columbia 

Circuit. With regard to possible 

exemptions, the Commission is 

considering a range of options, 

including: Retaining the section 

501(c)(3) organization exemption and 

the State candidate exemption; 

narrowing the section 501(c)(3) 

organization exemption; repealing the 

two current exemptions for section 

501(c)(3) organizations and State 

candidates; and replacing all of the 

current exemptions with a broad new 

exemption covering all communications 

that do not promote, support, attack or 

oppose a Federal candidate. 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 September 30, 2005. The 

Commission will hold a hearing on the 

proposed rules on October 19 and, if 

necessary, October 20, 2005 at 9:30 a.m. 

Anyone wishing to testify at the 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. Mai 

T. Dinh, Assistant General Counsel, and 

must be submitted in either email, 

facsimile, or paper form. Commenters 

are strongly encouraged to submit 

comments by email or facsimile to 

ensure timely receipt and consideration. 

Email comments must be sent to either 

ECdef@fec.gov or submitted through the 

Federal eRegulations Portal at 

www.regulations.gov. If the email 

comments include an attachment, the 

attachment must be in the Adobe 

Acrobat (.pdf) or Microsoft Word (.doc) 

format. Faxed comments must be sent to 

(202) 219–3923, with paper copy followup. 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 

website 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. 

Mai T. Dinh, Assistant General Counsel, 

Mr. J. Duane Pugh Jr., Senior Attorney, 

or Mr. Anthony T. Buckley, Attorney, 

999 E Street, NW., Washington, DC 

20463, (202) 694–1650 or (800) 424–

9530.

SUPPLEMENTARY INFORMATION: The 

Bipartisan Campaign Reform Act of 

2002 (‘‘BCRA’’), Pub. L. 107–155, 116 

Stat. 81 (2002), amended the Federal 

Election Campaign Act of 1971, as 

amended, 2 U.S.C. 431 et seq. (the 

‘‘Act’’), by adding a new category of 

communications, ‘‘electioneering 

communications,’’ to those already 

regulated by the Act. See 2 U.S.C. 

434(f)(3). Generally speaking, 

electioneering communications are 

broadcast, cable or satellite 

communications that refer to a clearly 

identified candidate for Federal office, 

are publicly distributed within 60 days 

before a general election or 30 days 

before a primary election, and are 

targeted to the relevant electorate. See 2 

U.S.C. 434(f)(3)(A)(i); 11 CFR 

100.29(a)(1) through (3). Electioneering 

communications carry certain reporting 

obligations and funding restrictions. See

2 U.S.C. 434(f)(1) and (2), and 441b(a) 

and (b)(2). 

BCRA exempts certain 

communications from the definition of 

‘‘electioneering communication,’’ 2 

U.S.C. 434(f)(3)(B)(i) to (iii), and 

specifically authorizes the Commission 

to promulgate regulations exempting 

other communications as long as the 

exempted communications do not 

promote, support, attack or oppose 

(‘‘PASO’’) a candidate, 2 U.S.C. 

434(f)(3)(B)(iv), citing 2 U.S.C. 

431(20)(A)(iii). 

On October 23, 2002, the Commission 

promulgated regulations to implement 

BCRA’s electioneering communications 

provisions. Final Rules and Explanation 

and Justification for Regulations on 

Electioneering Communications, 67 FR 

65190 (Oct. 23, 2002) (‘‘EC E&J’’). In 

Shays v. FEC, 337 F. Supp. 2d 28 

(D.D.C. 2004), aff’d, No. 04–5352, 2005 

WL 1653053 (D.C. Cir. July 15, 2005) 

(‘‘Shays’’), the District Court held that 

one regulation limiting electioneering 

communications to communications 

publicly distributed for a fee failed 

review under Chevron, U.S.A., Inc. v. 

Natural Resources Defense Council, 467 

U.S. 837 (1984) (‘‘Chevron’’), and one 

regulation exempting section 501(c)(3) 

organizations failed to satisfy the 

Administrative Procedure Act, 5 U.S.C. 

706(2) (‘‘APA’’). Shays, 337 F. Supp. 2d 

at 124–29. The District Court remanded 

the case for further action consistent 

with its decision. The U.S. Court of 

Appeals for the District of Columbia 

Circuit affirmed the District Court, 

holding that the ‘‘for a fee’’ regulation 

failed Chevron review. Shays v. FEC,

No. 04–5352, slip op. at 52–57, 2005 WL 

1653053, at *28–31 (D.C. Cir. July 15, 

2005). The Commission did not appeal 

the District Court’s decision regarding 

an exemption from the ‘‘electioneering 

communication’’ definition for section 

501(c)(3) organizations. The 

Commission is issuing this NPRM to 

comply with the District Court and 

Court of Appeals decisions with respect 

to both regulations. 

A. 11 CFR 100.29(b)(3)(i)—

Communications Publicly Distributed 

Without a Fee 

In 11 CFR 100.29(b)(3)(i), the 

Commission defined ‘‘publicly 

distributed’’ as ‘‘aired, broadcast, 

cablecast or otherwise disseminated for 

a fee through the facilities of a 

television station, radio station, cable 

television system, or satellite system’’ 

Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Proposed Rules 49509

1The District Court described the first step of the 

Chevron analysis, which courts use to review an 

agency’s regulations: ‘‘a court first asks ‘whether 

Congress has directly spoken to the precise question 

at issue. If the intent of Congress is clear, that is 

the end of the matter; for the court, as well as the 

agency, must give effect to the unambiguously 

expressed intent of Congress.’ ’’ See Shays, 337 F. 

Supp. 2d at 51 (quoting Chevron, 467 U.S. at 842–

43).

2The first step of the Chevron analysis is 

described in footnote 1 above. The second step of 

the Chevron analysis is whether the agency’s 

resolution of an issue not addressed in the statute 

is based on a permissible construction of the 

statute. See Shays, 337 F. Supp. 2d at 52 (citing 

Chevron).

(emphasis added). The Commission 

included the requirement that the 

communication be publicly distributed 

for a fee, in part, because ‘‘[m]uch of the 

legislative history and virtually all of 

the studies cited in legislative history 

and presented to the Commission in the 

course of this rulemaking focused on 

paid advertisements in considering 

what should be included within 

electioneering communications.’’ EC 

E&J at 65192 (citations to studies 

omitted). Both the District Court and the 

Court of Appeals in Shays determined 

that the ‘‘for a fee’’ language in the 

definition of ‘‘publicly distributed’’ 

operated much like an exemption to the 

definition of ‘‘electioneering 

communication.’’ Shays, 337 F. Supp. 

2d at 128–29; No. 04–5352, slip op. at 

55, 57, 2005 WL 1653053, at *30, 31. 

The District Court found that the 

exemption exceeded the Commission’s 

statutory authority to create exemptions 

because it could potentially include 

communications that PASO a Federal 

candidate. Shays, 337 F. Supp. 2d at 

128–29. Both the District Court and the 

Court of Appeals held that the ‘‘for a 

fee’’ provision is inconsistent with the 

plain text of BCRA and thus violated 

Chevron step one.1 Shays, 337 

F. Supp. 2d at 129; No. 04–5352, slip 

op. at 54, 2005 WL 1653053, at *29.

Additionally, the Court of Appeals 

observed that ‘‘excluding federal 

candidates from broadcasts promoting 

blood drives and other worthy causes 

for 90 days out of every two years (30 

days before the primary plus 60 days 

before the general election) would 

hardly seem unreasonable given that 

such broadcasts ‘could associate a 

Federal candidate with a public-spirited 

endeavor in an effort to promote or 

support a candidate’—a risk the FEC 

itself acknowledged in the very same 

rulemaking, in justifying its refusal to 

promulgate a general exemption for 

[public service announcements] 

(whether paid or unpaid).’’ Shays, No. 

04–5352, slip op. at 56, 2005 WL 

1653053, at *30 (citation omitted). Thus 

an exemption that is limited to nonPASO communications may, in practice, 

exempt comparatively few 

communications from the definition of 

‘‘electioneering communications.’’ 

Additionally, many other types of 

communications that would be covered 

by an exemption for communications 

that are not publicly distributed for a fee 

are also already exempt under the 

statutory press exemption, which 

exempts ‘‘a communication appearing 

in a news story, commentary, or 

editorial distributed through the 

facilities of any broadcasting station.’’ 2 

U.S.C. 434(f)(3)(B)(i). 

Consequently, the Commission 

proposes to eliminate the phrase ‘‘for a 

fee’’ from the definition of ‘‘publicly 

distributed’’ at 11 CFR 100.29(b)(3)(i). 

The Commission seeks comment on 

whether this approach of removing ‘‘for 

a fee’’ from the ‘‘electioneering 

communication’’ definition without 

exempting such communications would 

require extensive monitoring of radio 

and television programming to ensure 

that it either fits the statutory press 

exemption or otherwise avoids the reach 

of the ‘‘electioneering communication’’ 

rules. Would the Commission have to 

distinguish ‘‘commentary’’ from free 

time donated to political committees or 

candidates, which was approved in 

Advisory Opinions (‘‘AOs’’) 1982–44 

and 1998–17? 

The Commission is also considering 

another alternative that is not reflected 

in the proposed rules below. This 

alternative would include deleting ‘‘for 

a fee’’ from the definition of ‘‘publicly 

distributed’’ and would also include a 

new exemption for communications for 

which the broadcast, cable or satellite 

entity does not seek or obtain 

compensation for publicly distributing 

the communications, unless the 

communications promote, support, 

attack or oppose a Federal candidate. 

An important rationale that underlies 

this alternative proposal is that 

broadcasters donate airtime to 

organizations to broadcast 

communications in the public interest, 

such as public service announcements 

promoting a wide range of worthy 

endeavors. Subjecting these 

communications to the electioneering 

communication regulations may 

discourage broadcasters from 

performing an important public service 

in providing free airtime for these ads. 

An exemption that is limited to nonPASO communications may, in practice, 

exempt comparatively few 

communications from the definition of 

‘‘electioneering communications.’’ Must 

the Commission provide some 

definition of PASO for the exemption to 

be meaningful and explicable to the 

regulated community or is the PASO 

standard self-executing and 

understandable without further 

definition by the Commission? The 

Commission seeks comment on whether 

this alternative proposal is preferable to 

the proposed rules that would delete 

‘‘for a fee’’ from the definition of 

‘‘publicly distributed’’ without an 

exemption for unpaid advertisements 

that do not PASO Federal candidates. 

B. 11 CFR 100.29(c)(6)—Exemption for 

Section 501(c)(3) Organizations 

In 2002, the Commission exempted 

from the ‘‘electioneering 

communication’’ definition any 

communication that is paid for by any 

organization operating under section 

501(c)(3) of the Internal Revenue Code. 

See current 11 CFR 100.29(c)(6). The 

Commission explained that it ‘‘believes 

the purpose of BCRA is not served by 

discouraging such charitable 

organizations from participating in what 

the public considers highly desirable 

and beneficial activity, simply to 

foreclose a theoretical threat from 

organizations that has not been 

manifested, and which such 

organizations, by their very nature, do 

not do.’’ EC E&J at 65200. Under the 

Internal Revenue Code, organizations 

described in section 501(c)(3) may not 

‘‘participate in, or intervene in 

(including the publishing or distributing 

of statements), any political campaign 

on behalf of (or in opposition to) any 

candidate for public office.’’ See 26 

U.S.C. 501(c)(3). 

In considering a challenge to the 

exemption for section 501(c)(3) 

organizations, the Shays District Court 

examined whether the exemption 

complies with BCRA. The District Court 

found the record unclear as to whether 

the regulation’s reliance on the Internal 

Revenue Code prohibitions would 

impermissibly exempt advertisements 

that PASO Federal candidates. On this 

basis, the District Court held that it 

could not determine whether or not the 

regulation fails Chevron review.2 See 

Shays, 337 F. Supp. 2d at 127.

The District Court held that the 

exemption for section 501(c)(3) 

organizations violated the APA because 

the Explanation and Justification for 11 

CFR 100.29(c)(6) led the court to 

conclude that the Commission ‘‘failed to 

conduct a reasoned analysis.’’ See 

Shays, 337 F. Supp. 2d at 127–28. 

Specifically, the District Court found the 

EC E&J deficient because it did not 

address the ‘‘compatibility’’ of the 

Internal Revenue Service’s (‘‘IRS’s’’) 

enforcement of the section 501(c)(3) 

49510 Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Proposed Rules 

3Although the EC E&J states that the exemption 

for section 501(c)(3) organizations does not amount 

to a delegation of the enforcement of the 

electioneering communication provisions to the 

IRS, it also noted: ‘‘Should the Internal Revenue 

Service determine, under its own standards for 

enforcing the tax code, that an organization has 

acted outside its 501(c)(3) status, the organization 

would be open to complaints that it has violated or 

is violating Title II of BCRA.’’ 67 FR at 65200. The 

Shays District Court compared these two statements 

from the EC E&J and found it ‘‘clear * * * that a 

prerequisite to the FEC enforcing its exemption is 

the completion of enforcement action by the IRS 

pursuant to ‘its own standards for enforcing the tax 

code.’ ’’ Shays, 337 F. Supp. 2d at 127.

4See Comment submitted by Alliance for Justice 

and the Sierra Club Foundation (available at

http://www.fec.gov/pdf/nprm/

electioneering_comm/comments/

alliance_for_justice.pdf); see also Comment 

submitted by Independent Sector (stating that 

federal tax law prohibits section 501(c)(3) 

organizations from engaging in activity that would 

support or oppose any candidate) (available at 

http://www.fec.gov/pdf/nprm/

electioneering_comm/comments/

independent_sector.pdf). The Alliance for Justice 

describes itself as ‘‘a national association of 

environmental, civil rights, mental health, 

women’s, children’s, and consumer advocacy 

organizations.’’ The Independent Sector, which 

describes itself as ‘‘a coalition of corporate, 

foundation, and voluntary organization members 

which serves as a national forum to encourage 

giving, volunteering, and nonprofit initiatives,’’ 

submitted its comments on behalf of its 

membership and on behalf of seven specifically 

identified members.

5See Comment submitted by Southeastern Legal 

Foundation, Inc. (‘‘SLF’’) (available at www.fec.gov/

pdf/nprm/electioneering_comm/comments/

se_legal_foundation.pdf).

6Based on the timing of the article, it appears that 

this advertisement was publicly distributed more 

than 30 days before the 2000 primary election in 

Michigan. The Commission is unaware of whether 

the advertisement continued to run during the 30 

days prior to the primary or the 60 days prior to 

the general election.

prohibition on political activity and 

FECA’s requirements. The District Court 

identified three specific omissions from 

the EC E&J: (1) It did not discuss 

whether or not public communications 

that PASO a Federal candidate would be 

viewed by the IRS as political activity 

in which section 501(c)(3) organizations 

may not engage; (2) it did not discuss 

the risk, if any, that limited lobbying 

activity permitted for section 501(c)(3) 

organizations could give rise to 

advertisements that PASO a Federal 

candidate; and (3) it did not address the 

implications of allowing the IRS ‘‘to 

take the lead in campaign finance law 

enforcement.’’ 3 See Shays, 337 

F. Supp. 2d at 128. The District Court 

remanded this regulation to the 

Commission for further action 

consistent with its order. Id. at 130. 

Instead of appealing this aspect of the 

District Court decision, the Commission 

chose to initiate this rulemaking to 

address the three concerns expressed by 

the District Court. In addition to the 

District Court’s concerns, a welldeveloped administrative record will 

inform the Commission’s 

reconsideration of an exemption for 

section 501(c)(3) organizations.

1. PASO Communications as Political 

Activity 

The Shays District Court stated that 

‘‘the validity of the Commission’s 

regulation depends on whether or not 

the tax laws and regulations, as well as 

their enforcement, effectively prevent 

Section 501(c)(3) groups from issuing 

public communications that promote or 

oppose a candidate for federal office.’’ 

Shays, 337 F. Supp. 2d at 127. The 

District Court also specified that the EC 

E&J failed to discuss ‘‘whether or not 

the IRS viewed as political activity 

‘public communications’ that support or 

oppose a candidate as those concepts 

are understood under this nation’s 

campaign finance laws.’’ Id. at 128. 

Thus the task before the Commission, if 

it decides to retain current 11 CFR 

100.29(c)(6), is to make a finding based 

on a well-developed record that section 

501(c)(3) organizations cannot make 

PASO communications when acting 

lawfully within their tax-exempt status. 

In response to the 2002 NPRM 

concerning electioneering 

communications, Notice of Proposed 

Rulemaking on Electioneering 

Communications, 67 FR 51131 (Aug. 7, 

2002), several section 501(c)(3) 

organizations submitted comments and 

addressed the issue of whether these 

organizations pay for PASO 

communications. One commenter 

asserted that section ‘‘501(c)(3)[ ] 

[organizations] could never legally 

broadcast advertisements that contain 

even the slightest suggestion of support 

for or opposition to any candidates due 

to the substantial restrictions under 

federal law.’’ 4 The commenter said it 

knew of ‘‘no examples where 501(c)(3)s 

have broadcast the so-called ‘‘sham 

issue ads’’ that BCRA attempts to ban or 

regulate.’’ In contrast, another 

commenter stated that it does engage in 

issue advocacy that includes broadcast 

advertisements that refer to candidates 

and officeholders, and implied that 

these advertisements may well PASO a 

candidate.5

In addition, the record in Shays v. 

FEC includes press reports describing a 

radio ad run by a section 501(c)(3) 

organization, the Federation for 

American Immigration Reform 

(‘‘FAIR’’), that appears to attack or 

oppose a Federal candidate. See

Memorandum in Support of Plaintiffs’ 

Motion for Summary Judgment at 78 

n.138, Shays v. FEC, 337 F. Supp. 2d 28 

(D.D.C. 2004). The text of the ad 

reportedly included the following: 

‘‘This is an urgent message about our 

jobs. Senator Spence Abraham is again 

pushing a bill to import hundreds of 

thousands more foreign workers to take 

American jobs—our jobs. * * * 

Recently Abraham killed the 

requirement that employers hire 

Americans first. He clearly thinks it’s 

OK to favor foreign workers. Why treat 

Americans so badly? Money. Abraham 

has raised big political money from 

huge corporations that want cheap, 

foreign labor. And his newest bill gives 

them everything they want. Is your job 

next? Let’s try to convince Abraham not 

to sell our jobs. His bill could be voted 

on any day. So call now: 1–800–xxx–

xxxx. That’s 1–800–xxx–xxxx. Tell him 

you’ve had enough of his big foreign 

labor bills, like S. 2045. This message 

sponsored by the Federation for 

American Immigration Reform. Visit our 

website at fairUS.org.’’ 6

In a Technical Advice Memorandum 

the IRS ‘‘reluctantly conclude[d]’’ that 

television advertisements by a section 

501(c)(3) organization that would be 

generally understood to ‘‘support or 

oppose a candidate in an election 

campaign’’ did not constitute 

intervention in a political campaign 

because the communication was core to 

the organization’s mission. See

Technical Advice Memorandum 89–36–

002, 1989 WL 596078 (Sept. 8, 1989). 

While these statements and examples 

are helpful to the Commission in 

understanding the interaction between 

tax law and campaign finance law as 

they pertain to communications by 

section 501(c)(3) organizations, they 

provide a limited record for the 

Commission to exempt all section 

501(c)(3) organizations’ 

communications. For example, how 

should the Commission interpret the 

Technical Advice Memorandum, which 

does not have precedential authority? 

To the extent that section 501(c)(3) 

organizations pay for advertisements 

similar to the one by FAIR described 

above, do the section 501(c)(3) 

organizations broadcast their 

advertisements during the 30- and 60-

day electioneering communication 

windows? Is the FAIR advertisement 

typical of grass roots lobbying 

advertisements by section 501(c)(3) 

organizations or is it atypical? 

The Commission invites comments 

that would shed more light on these 

issues. Specifically, the Commission is 

seeking data as to whether section 

501(c)(3) organizations have a history of 

airing ads close to elections, particularly 

those that satisfy the definition of 

‘‘electioneering communication.’’ The 

Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Proposed Rules 49511

Commission is not aware that any of the 

advertisements addressed in the 

legislative history of BCRA, including 

those analyzed in the Brennan Center 

for Justice’s Buying Time: Television 

Advertising in the 2000 Federal (or 1998 

Congressional) Elections, or the record 

in McConnell v. FEC, 540 U.S. 93 

(2003), were made by section 501(c)(3) 

organizations, and seeks comment on 

whether there are, in fact, 

communications from section 501(c)(3) 

organizations in this record. 

Additionally, since the Commission 

promulgated the current 11 CFR 

100.29(c)(6), to what extent have section 

501(c)(3) organizations availed 

themselves of this exemption? If 

commenters are able to submit the texts 

of advertisements by section 501(c)(3) 

organizations that would meet the 

definition of ‘‘electioneering 

communications,’’ the Commission 

seeks comment on whether the 

advertisements would be consistent 

with the section 501(c)(3) organization’s 

tax-exempt status. 

In addition to reconsidering the 

adequacy of an administrative record 

that could support current 11 CFR 

100.29(c)(6), this NPRM also proposes 

an amendment to the current rule. 

Proposed section 100.29(c)(6) would 

provide an exemption for 

communications by section 501(c)(3) 

organizations subject to two limitations. 

First, the exemption would not apply to 

communications that PASO a Federal 

candidate. Second, the exemption 

would not apply to section 501(c)(3) 

organizations that are directly or 

indirectly established, financed, 

maintained or controlled by a Federal 

candidate or officeholder. Would 

limiting the exemption to non-PASO 

communications adequately address the 

District Court’s concerns because the 

exemption no longer turns on the IRS’s 

view on political activities? How 

common is it for Federal candidates to 

directly or indirectly establish, finance, 

maintain, or control a section 501(c)(3) 

organization? Is there a greater potential 

that section 501(c)(3) organizations that 

are established, financed, maintained, or 

controlled by Federal candidates would 

pay for communications that PASO 

Federal candidates?

The Commission is not proposing to 

define ‘‘PASO’’ in this rulemaking. In 

rejecting a vagueness challenge to the 

PASO standard, the Supreme Court in 

McConnell held that PASO provisions, 

at least with respect to political parties, 

‘‘provide explicit standards for those 

who apply them and give the person of 

ordinary intelligence a reasonable 

opportunity to know what is 

prohibited.’’ McConnell, 124 S. Ct. at 

675 n. 64. In light of the Supreme 

Court’s ruling in McConnell, is the 

PASO standard essentially selfexecuting and understandable without 

further definition by the Commission or, 

given that the proposed regulation 

would apply to entities beyond political 

parties, must the Commission provide 

some definition of PASO for the 

proposed regulation to be meaningful 

and explicable to broadcasters and the 

regulated community? 

The Commission has applied the 

PASO standard to an advertisement that 

was the subject of an advisory opinion, 

concluding that the advertisement did 

not PASO the Federal candidate who 

appeared in the advertisement. See AO 

2003–25, at 3. That advertisement 

presented a Federal candidate’s 

endorsement of a candidate for mayor, 

and the script read as follows:

Hi. I’m Evan Bayh. Over the past few years, 

I’ve come to know Jonathan Weinzapfel very 

well. We’ve worked together, and I’ve seen 

first-hand how committed he is to making 

Evansville a better city. From working to cut 

taxes, to passing a law that protects our kids 

from drugs, Jonathan Weinzapfel knows how 

to get the job done. He’s got a bipartisan, 

common-sense way of solving problems. He 

cares about what really matters to people. 

And he’s exactly the kind of Mayor 

Evansville needs.

AO 2003–25, at 2–3. The advertisement 

ran outside the electioneering 

communication window, so it did not 

meet the definition of ‘‘electioneering 

communication.’’ AO 2003–25, at 6. 

However, the Commission is seeking 

comment on whether the conclusion in 

AO 2003–25—i.e. a Federal candidate’s 

endorsement does not PASO that 

Federal candidate—was correct, and 

whether the conclusion can be applied 

in the context of communications by 

section 501(c)(3) organizations. For 

example, a section 501(c)(3) 

organization pays for a television 

advertisement that features a Federal 

candidate endorsing the section 

501(c)(3) organization and the 

advertisement satisfies the timing and 

targeting elements of the definition of 

‘‘electioneering communication.’’ 

Would this advertisement be exempt 

from the definition of ‘‘electioneering 

communication’’ under proposed 11 

CFR 100.29(c)(6), based on the premise 

that the Federal candidate’s 

endorsement of the section 501(c)(3) 

organization does not PASO that 

Federal candidate? Or should the 

Commission conclude that the 

endorsement does PASO the Federal 

candidate and would not be exempt 

under proposed section 100.29(c)(6)? 

Another example of a communication 

by a section 501(c)(3) organization that 

may illustrate the application of the 

PASO standard can be found in 

Advisory Opinion 2004–14. The script 

for one of the television advertisements 

read as follows:

Hi, I’m Congressman Tom Davis. Did you 

know that the Washington, DC metropolitan 

area has the highest prevalence of kidney 

disease in the nation? Nearly five thousand 

area residents are on dialysis and more than 

1,700 await a life-saving kidney transplant. 

But there’s something you can do to help. 

Join me and WUSA9 sports anchor Frank 

Herzog for the Fourth Annual Cadillac 

Invitational Golf Classic, benefiting the 

National Kidney Foundation. The 

tournament will take place on Monday, April 

26, at Lowes Island Club in Potomac Falls, 

Virginia. To find out more, call [omitted] or 

visit www.kidneywdc.org. Come out and 

support the National Kidney Foundation in 

its commitment to making lives better for 

Washington area kidney patients.

AO 2004–14, at 2. In Advisory Opinion 

2004–14, the Commission concluded 

that this advertisement was not an 

electioneering communication because 

it was not publicly distributed for a fee 

and it was not distributed within the 

electioneering communication 

windows. See AO 2004–14, at 4 (citing

11 CFR 100.29(a)(2) and (b)(3)(i)). 

However, the Commission offers this 

advertisement to solicit comment on 

whether this communication would be 

exempt under proposed 11 CFR 

100.29(c)(6) because it does not PASO 

Congressman Davis, if it otherwise met 

the definition of ‘‘electioneering 

communication.’’

The policy rationale behind the 

proposed rules is that, to the extent 

possible, the Commission does not want 

to discourage section 501(c)(3) 

organizations from performing a public 

service in pursuing their charitable 

endeavors. The Commission, however, 

is considering whether applying the 

PASO limitation would severely limit 

the benefit of such an exemption for 

section 501(c)(3) organizations. In Shays

v. FEC, the Court of Appeals suggested 

that public service announcements 

(‘‘PSAs’’) that associate a Federal 

candidate with a public-spirited 

endeavor could promote or support that 

candidate. Shays v. FEC, No. 04–5352, 

slip op. at 56, 2005 WL 1653053, at *30 

(D.C. Cir. July 15, 2005). Given that 

many broadcast advertisements by 

section 501(c)(3) organizations are PSAs 

that might be viewed as PASO 

communications, what utility does the 

proposed exemption have if the 

exemption does not include such PSAs? 

Additionally, many section 501(c)(3) 

organizations may lack familiarity with 

the nuances of campaign finance law. 

Would section 501(c)(3) organizations 

find the PASO standard confusing or 

49512 Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Proposed Rules 

7Certain section 501(c)(3) organizations may 

choose not to lobby at all, may lobby under section 

501(c)(3)’s ‘‘substantial part’’ test, or may lobby 

under a section 501(h) election. Section 501(h) of 

the Internal Revenue Code provides that certain 

section 501(c)(3) organizations may elect to have 

their lobbying activities governed by objective 

expenditure tests in lieu of being subject to the 

subjective ‘‘substantial part’’ test of section 

501(c)(3) of the Internal Revenue Code. Section 

501(h) of the Internal Revenue Code, which sets 

forth the objective test, establishes a sliding scale 

of permissible ‘‘lobbying nontaxable amounts’’ and 

‘‘grass roots nontaxable amounts.’’ The grass roots 

nontaxable amount ranges from a low of 5% of an 

organization’s exempt purpose expenditures (for 

organizations with up to $500,000 of exempt 

purpose expenditures) to a high of $250,000 (for 

organizations with exempt purpose expenditures in 

excess of $17,000,000). 26 U.S.C. 4911(c)(4). 

Expenditures for grass roots lobbying in excess of 

the nontaxable amount will be subject to a 25% tax. 

26 U.S.C. 4911(a)(1). Additionally, if lobbying 

expenditures are ‘‘normally’’ in excess of 150% of 

the nontaxable amounts for a four-year period, the 

organization may be subject to revocation of taxexempt status. 26 U.S.C. 501(h)(1)(B); 26 CFR 

1.501(h)–3(b) and (c)(7). Please note that the section 

501(c)(3) organization that received the IRS’s 

Technical Advice Memorandum 89–36–002 (Sept. 

8, 1989), which is discussed above, had elected to 

be subject to 26 U.S.C. 501(h).

8A copy of this report is available at http://

www.ombwatch.org/npadv/Final%20SNAP%

20Overview.ppt (last viewed on August 2, 2005).

9This document is available at http://

www.urban.org/Uploadedpdf/org_advocacy.pdf

(last viewed on August 3, 2005).

10See e.g., Comments submitted by Independent 

Sector and Alliance for Justice (available at

http://www.fec.gov/pdf/nprm/

electioneering_comm/comments/independent_

sector.pdf and http://www.fec.gov/pdf/nprm/

electioneering_comm/comments/alliance_

for_justice.pdf, respectively), and hearing testimony 

of Mr. Tim Mooney of Alliance for Justice (available 

at http://www.fec.gov/pdf/nprm/electioneering_

comm/20020828trans.pdf).

difficult to apply, making it less likely 

that they would avail themselves of the 

proposed exemption if the Commission 

were to adopt it? Finally, if a fuller 

record shows that section 501(c)(3) 

organizations make a significant number 

of PASO communications during the 30 

and 60 day windows, or if the record 

fails to resolve the issue one way or 

another, is there a substantial policy 

rationale for having a section 501(c)(3) 

exemption? 

2. Lobbying Activity That May Include 

PASO Communications 

The Shays District Court identified a 

second deficiency in the Commission’s 

promulgation of the 501(c)(3) 

exemption: ‘‘the FEC did not note that 

tax laws permit Section 501(c)(3) 

organizations to engage in limited 

lobbying activities, or discuss the risk, 

if any, that such activities could run 

afoul of 2 U.S.C. 434(f)(3)(B)(iv).’’ Shays,

337 F. Supp. 2d at 128 (citing 26 U.S.C. 

501(c)(3), (h)). The District Court refers 

to the requirement in section 501(c)(3) 

of the Internal Revenue Code that ‘‘no 

substantial part of the activities of [the 

organization] is carrying on propaganda, 

or otherwise attempting, to influence 

legislation.’’7

Under IRS regulations, the definition 

of ‘‘grass roots lobbying 

communications’’ as applied to section 

501(c)(3) organizations is ‘‘any attempt 

to influence any legislation through an 

attempt to affect the opinions of the 

general public or any segment thereof.’’ 

26 CFR 56.4911–2(b)(2)(i). An element 

of that definition is ‘‘encouraging 

recipients to take action’’ which 

includes a communication that ‘‘states 

that the recipient should contact a 

legislator’’ or that ‘‘specifically 

identifies one or more legislators who 

will vote on the legislation as: Opposing 

the communication’s view with respect 

to the legislation; being undecided with 

respect to the legislation; being the 

recipient’s representative in the 

legislature; or being a member of the 

legislative committee or subcommittee 

that will consider the legislation * * * 

[but] does not include naming the main 

sponsor(s) of the legislation for purposes 

of identifying the legislation.’’ Id. at 

56.4911–2(b)(2)(iii)(B) and (D) 

(specifying other types of 

communications that are considered as 

‘‘encouraging recipients to take action,’’ 

but that are not relevant to this issue). 

Given the IRS’s definition of ‘‘grass 

roots lobbying communications,’’ to 

what extent, if any, may the permitted 

grass roots lobbying communications 

result in some section 501(c)(3) 

organizations making communications 

that PASO a Federal candidate?

In order to consider the issues 

surrounding grass roots lobbying 

communications, the Commission seeks 

comment on how frequently section 

501(c)(3) organizations make grass roots 

lobbying communications. One research 

survey addressing this question entitled 

‘‘SNAP: Strengthening Nonprofit 

Advocacy Project’’ was submitted to the 

Commission in the 2002 rulemaking.8

This research project, conducted by 

Tufts University, OMB Watch and 

Charity Lobbying in the Public Interest, 

reports that it surveyed 2,735 randomly 

selected section 501(c)(3) organizations 

that file IRS Form 990, excluding 

hospitals, universities, religious 

organizations, and private foundations. 

Of the organizations surveyed, 63% 

responded. According to this report, 

78% of the organizations that responded 

engage in grassroots lobbying. As to the 

frequency of their grassroots lobbying, 

63% reported low (19%), very low 

(22%), or none (22%).

An analysis of data from the National 

Center for Charitable Statistics, which 

was drawn from reports filed with the 

IRS, found that 1.5% of section 501(c)(3) 

organizations (or 3,515 organizations) 

reported lobbying expenditures in 1998, 

and these organizations reported 

devoting only 1.2% of their total 

expenses to lobbying that year. Only 702 

organizations reported grass roots 

lobbying expenditures, although only 

organizations making the section 501(h) 

election are required to report that 

information disaggregated from total 

lobbying expenditures. In 1998, 43% of 

the section 501(c)(3) organizations that 

reported lobbying expenditures (or 

approximately 1,500 organizations) 

made the section 501(h) election. The 

median total lobbying expenditures was 

$8,000, and the median total grassroots 

lobbying expenditures was $4,246. See

Jeff Krehely, Assessing the Current Data 

on 501(c)(3) Advocacy: What IRS Form 

990 Can Tell Us, in Exploring 

Organizations and Advocacy: Strategies 

and Finances 37–50 (Elizabeth J. Reid 

and Maria D. Montilla eds., 2001).9

How should the Commission interpret 

these findings? Are there any other 

reports, studies, or evidence regarding 

lobbying by 501(c)(3) organizations that 

the Commission should consider? 

3. Reliance on IRS Enforcement 

The District Court in Shays held that 

the effect of the current exemption in 11 

CFR 100.29(c)(6), as explained in the EC 

E&J, is that ‘‘the FEC would do nothing 

until the IRS investigated and decided 

whether or not the organization violated 

the tax laws.’’ Shays, 337 F. Supp. 2d 

at 128. The District Court concluded 

that the Commission failed to consider 

the effectiveness of, and the problems 

presented by, adopting an enforcement 

policy that relies on the IRS’s 

enforcement of the tax code. Id.

In addressing the extent to which the 

Commission could or should rely on IRS 

enforcement of the tax code as a 

safeguard for ensuring that section 

501(c)(3) organizations do not make 

communications that would support or 

oppose a Federal candidate, the 

Commission is considering statements 

and testimony from several sources, 

including section 501(c)(3) 

organizations and the Government 

Accountability Office (‘‘GAO’’). Several 

section 501(c)(3) organizations, 

commenting on the 2002 NPRM, stated 

that the possibility of an IRS revocation 

of their 501(c)(3) status because of their 

political activities was a strong deterrent 

to their engaging in activity that may be 

viewed as supporting or opposing 

candidates.10 See EC E&J at 65199. One 

commenter stated that IRS’s 

enforcement is vigorous and noted that 

Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Proposed Rules 49513

11Although this report addressed section 

501(c)(3) organizations’ compliance with the tax 

code in general and not their political activities 

specifically, the GAO’s statements and conclusions 

about the IRS’s enforcement capabilities are useful 

to the discussion of the IRS’s enforcement of the 

prohibition on section 501(c)(3) organizations’ 

activities that are considered participating or 

intervening in a political campaign.

12The Commission has concluded that 

documentaries and educational programming that 

are aired, broadcast, or otherwise disseminated 

through radio, television, cable or satellite are 

covered by the exemption in section 100.29(c)(2) for 

a ‘‘news story, commentary, or editorial.’’ EC E&J

at 65197.

the ‘‘IRS has repeatedly stated and 

successfully argued in court that this 

prohibition [on participation or 

intervention in political campaigns] is a 

‘‘zero tolerance’’ rule.’’ Comment of 

Independent Sector.

A report by the GAO provides a 

different perspective, suggesting that the 

IRS lacks the resources for adequate 

oversight and enforcement. In 2002, the 

GAO issued a report noting that the IRS 

had little data on the compliance of 

section 501(c)(3) organizations, and 

recognizing the need for improved 

monitoring of compliance and for 

‘‘better understanding of the type and 

extent of compliance problems in the 

charitable community.’’ U.S. Gen. 

Accounting Office, Tax Exempt 

Organization: Improvements Possible in 

Public, IRS, and State Oversight of 

Charities, GAO 02–526 (Apr. 2002).11

The Commission seeks comments and 

other reports, documents or evidence 

that would shed light on the 

appropriateness of the current rule’s 

deference to IRS determinations and 

actions in this area and that would 

assist the Commission in deciding 

whether to retain the current rule.

This mix of views regarding IRS 

enforcement, along with the questions 

raised above concerning the interaction 

between PASO communications and 

lobbying, leave the Commission without 

a clear record at this time regarding 

whether or not section 501(c)(3) 

organizations make PASO 

communications. Consequently, under 

proposed 11 CFR 100.29(c)(6), the 

Commission would make its own 

judgment as to whether a 

communication PASOs a candidate, 

without regard for how the IRS may 

view the same communication, and 

without waiting for the IRS to consider 

enforcement action. Thus, the proposed 

rule would not delegate ‘‘the first 

response to potential violations to the 

IRS.’’ See Shays, 337 F. Supp. 2d at 128. 

The Commission seeks comment on 

whether the proposed rule adequately 

addresses the deficiencies identified by 

the District Court in Shays in relying on 

the IRS’s enforcement of the tax code 

applicable to section 501(c)(3) 

organizations. 

C. Eliminating All Regulatory 

Exemptions From the Electioneering 

Communications Restrictions 

As an alternative to the proposed 

modifications to the current section 

501(c)(3) exemption, the Commission 

also seeks comment on whether it 

should repeal both of the regulatory 

exemptions from the electioneering 

communications rules, 11 CFR 

100.29(c)(5) and (6), and instead rely 

solely on the exemptions that Congress 

established in BCRA. These regulatory 

exemptions include not only the section 

501(c)(3) exemption in current 11 CFR 

100.29(c)(6), but also an exemption for 

communications paid for by candidates 

for State or local office in connection 

with an election to State or local office 

that do not PASO any Federal 

candidates in current 11 CFR 

100.29(c)(5). The Commission is also 

considering the proposed revisions to 

the State candidate exemption in the 

proposed rules that follow. The 

proposed revisions seek to clarify the 

exemption and harmonize its structure 

with proposed 11 CFR 100.29(c)(6). 

BCRA establishes several exemptions 

from the electioneering communications 

provisions. Certain communications 

appearing in a news story, commentary, 

or editorial are exempt under 2 U.S.C. 

434(f)(3)(B)(i) and current 11 CFR 

100.29(c)(2). Communications that 

constitute a reportable expenditure or 

independent expenditure are exempt 

under 2 U.S.C. 434(f)(3)(B)(ii) and 

current 11 CFR 100.29(c)(3). Finally, 

candidate debates are exempt under 2 

U.S.C. 434(f)(3)(B)(iii) and current 11 

CFR 100.29(c)(4). Under this proposal, 

these statutory exemptions would 

remain in the regulations, while current 

11 CFR 100.29(c)(5) and (c)(6) would be 

repealed. 

D. Exempting All Communications That 

Do Not PASO a Federal Candidate 

The Commission is also considering 

exempting from the ‘‘electioneering 

communication’’ definition all 

communications that do not PASO a 

Federal candidate. This proposal, which 

is not reflected in the proposed rules 

that follow, would employ the 

exemption authority provided to the 

Commission by Congress in 2 U.S.C. 

434(f)(3)(B)(iv) to its full extent. The 

Commission seeks comments on 

whether this proposal’s broad view of 

the Commission exemption authority is 

consistent with Congressional intent. 

Such an exemption would focus on the 

content of the communication and treat 

all communicators equally, in contrast 

to current 11 CFR 100.29(c)(5) and 

(c)(6), which are limited to particular 

speakers. Does this equality of treatment 

help justify the exemption? What form 

would the administrative record need to 

take to support such an exemption? 

Would such an exemption be consistent 

with the standard in 2 U.S.C. 

434(f)(3)(A)(i)(I) that requires only a 

reference to a clearly identified 

candidate for Federal office? Would it 

effectively elevate the PASO standard as 

the primary determinant for 

electioneering communications? Must 

the Commission provide some 

definition of PASO for the exemption to 

be meaningful and explicable to the 

regulated community or is the PASO 

standard self-executing and 

understandable without further 

definition by the Commission? 

E. Petition for Rulemaking To Exempt 

Advertisements Promoting Films, Books 

and Plays 

On August 26, 2004, the Commission 

published a Notice of Availability 

seeking public comment on a Petition 

for Rulemaking (‘‘Petition’’) received by 

the Commission. The Petition requested 

the Commission revise its electioneering 

communications regulation by 

exempting the promotion and 

advertising of political documentary 

films, books, plays and similar means of 

expression that may otherwise meet the 

definition of an electioneering 

communication under 11 CFR 100.29. 

See Notice of Availability of Rulemaking 

Petition: Exception for the Promotion of 

Political Documentary Films from 

‘‘Electioneering Communications,’’ 69 

FR 52461 (Aug. 26, 2004) (‘‘Notice of 

Availability’’). The documentary films, 

books and plays at issue in the Petition 

are not themselves subject to the 

electioneering communication rules 

because these items are not broadcast or 

disseminated through a cable or satellite 

system, but appear in movie theaters or 

other non-broadcast environments.12

The premise for the Petition is that 

advertisements for such films, books, 

and plays would not be covered by the 

statutory exemption for 

communications ‘‘appearing in a news 

story, commentary, or editorial 

distributed through the facilities of any 

broadcast station.’’ 2 U.S.C. 434(f)(3)(B); 

see also 11 CFR 100.29(c)(2).

The comment period ended 

September 27, 2004. The Commission 

received seven comments, including a 

letter from the Internal Revenue Service 

49514 Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Proposed Rules 

indicating that it had ‘‘no comments.’’ 

These comments are available at

http://www.fec.gov/law/

law_rulemakings.shtml under 

‘‘Electioneering Communications 

Exception for Promotion of Political 

Documentaries.’’

The Petition and some commenters 

argued that political documentary films 

and books might often refer to clearly 

identified candidates for Federal office, 

and that applying the electioneering 

communication rules to the broadcast, 

cable or satellite TV and radio 

advertisement of such items could stifle 

free speech. The Petition suggested that 

the Commission should create a specific 

exemption in 11 CFR 100.29(c) for all 

advertisements and promotion of 

political documentary films, books, 

plays and ‘‘other forms of political 

expression that may involve references 

to Federal candidates.’’ See Notice of 

Availability at 52461. One commenter 

suggested a narrower exemption for 

advertising of such political 

documentaries except for the four weeks 

preceding an election, but would 

require disclosure of funding of all 

political documentaries. Another 

commenter noted that the Petition only 

sought an exemption for works deemed 

‘‘political,’’ and argued that a broader 

exemption for the promotion of 

documentary films, books and plays, 

regardless of whether the works are 

‘‘political’’ was appropriate.

Two commenters also raised 

questions as to whether these 

documentaries are already covered by 

the current press exemption in 11 CFR 

100.29(c)(2), and whether 

advertisements promoting them would 

also be covered by the press exemption. 

One of these commenters asserted that 

an additional rulemaking is unnecessary 

because the Commission has already 

stated that the press exemption in 

section 100.29(c)(2) applies to a 

documentary, and the commenter 

believes that by extension, the press 

exemption applies to the promotion of 

that documentary. See Reader’s Digest 

Ass’n v. FEC, 509 F. Supp. 1210, 1215 

(S.D.N.Y. 1981). The other commenter 

suggested a rulemaking was appropriate 

to revise section 100.29(c)(2) to specify 

that advertising for such documentary 

films falls within the scope of this press 

exemption. In contrast, other 

commenters were opposed to any 

specific exemption for advertising of 

documentary films as inconsistent with 

existing campaign finance law. 

After considering the Petition and the 

comments received, the Commission 

has decided to open a rulemaking on 

this issue, as part of its revision of the 

electioneering communication rules in 

response of the Shays court opinions. 

Proposed 11 CFR 100.29(c)(7) would 

exempt communications promoting 

movies, books or plays, as long as the 

communications are run within the 

ordinary course of business of the 

persons that pay for such 

communications, and the 

communications do not PASO a Federal 

candidate. As urged by one of the 

commenters, the proposed rules would 

expand the exemption beyond 

‘‘political’’ works to include advertising 

for any movie, book or play. 

While the proposed rule applies to 

‘‘movies’’ generally, the Commission 

seeks comment as to whether this 

reference should be understood to mean 

only movies appearing in theatres, or 

whether it should also apply to movies 

available for rental on DVD or video, or 

available on pay-per-view. Likewise, 

should the exemption apply only to 

printed books or should it also apply to 

books that are made available in audio 

and on-line formats? Furthermore, 

should the exemption be based on the 

actual or projected release date of the 

movie or book? For example, should the 

exemption only apply to movies that are 

shown during, or are being released 

within six months of, the electioneering 

communication window and to books 

that are in print during, or within six 

months of, the electioneering 

communications window? This sort of 

temporal limitation would be intended 

to prevent circumvention of the 

electioneering communication 

provisions by advertising a movie that 

either does not exist or is not intended 

for public distribution. Are any of these 

limitations necessary? Would they be 

sufficient to prevent circumvention? 

The proposed rule would limit the 

exemption to persons who promote 

movies, books or plays ‘‘within the[ir] 

ordinary course of business.’’ Should 

the Commission limit this exemption so 

that it applies only to persons who are 

the publisher of a book or the producer, 

distributor or promoter of a movie or 

play? Would this limitation unfairly 

exclude first-time distributors? Should 

the Commission extend the exemption 

to any person who promotes movies, 

books or plays without regard to 

whether such advertisements are in the 

ordinary course of business? Should the 

Commission limit the exemption to 

entities not directly or indirectly 

established, financed, maintained, or 

controlled by any Federal candidate, 

individual holding Federal office, or any 

political committee, including political 

party committees? Does the Commission 

have the statutory authority to 

promulgate the exemption without it 

being conditioned on the promotional 

communications not PASOing a Federal 

candidate? The Commission seeks 

comment on whether such 

communications in the past have in fact 

PASOed a Federal candidate. 

The Commission also seeks 

information as to whether any persons 

refrained from advertising movies, 

books or plays on television or radio 

during the 2003–2004 election cycle 

because of concerns that advertisements 

would violate electioneering 

communications rules. How significant 

a burden would it be for advertisements 

that run during the 30/60-day window 

to avoid clearly identifying a candidate? 

See MUR 5467, In the Matter of Michael 

Moore, et al. (where, in response to 

allegations that the Respondents 

intended to run advertisements 

promoting a film during the 

electioneering communications period 

that would contain references to clearly 

identified Federal candidates, the 

Respondents stated that the distributors 

of the film had decided prior to the 

filing of the complaint not to broadcast 

advertisements for the film during the 

electioneering communications period 

that would contain a reference to any 

clearly identified Federal candidate). 

Certification of No Effect Pursuant to 5 

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

Act) 

The Commission certifies that the 

attached proposed rule, if promulgated, 

would not have a significant economic 

impact on a substantial number of small 

entities. The basis for this certification 

is that the changes proposed in the 

electioneering communications 

regulation would only affect individuals 

and a small number of non-profit 

organizations. First, the proposed 

changes to the definition of ‘‘publicly 

distributed’’ would only affect the small 

number of advertisements that are run 

on broadcast, cable or satellite TV or 

radio where the airtime is donated 

without charge. To the extent this 

proposed rule affects media 

organizations donating the time or 

running their own programming, they 

do not fall within the definition of 

‘‘small business.’’ There are very few 

small businesses or organizations that 

receive donated time for advertising and 

might be affected by the proposed rule. 

Second, the proposed changes to the 

exemption for communications paid for 

by section 501(c)(3) non-profit 

organizations would not affect a 

substantial number of small 

organizations because these 

organizations may not be able to afford 

expensive radio and television 

advertising and, to the extent they can, 

they are already limited in what 

Federal Register / Vol. 70, No. 163 / Wednesday, August 24, 2005 / Proposed Rules 49515

campaign activity they may engage in 

under the Internal Revenue Code. The 

changes in this proposed rule affect only 

communications made by these 

organizations that promote, support, 

attack or oppose a Federal candidate 

within a limited window of time before 

a Federal election. There are not a 

substantial number of small 

organizations that make such 

communications. Therefore, the 

proposed rule will not affect a 

substantial number of small 

organizations.

List of Subjects in 11 CFR Part 100 

Elections.

For reasons set out in the preamble, 

Subchapter A of Chapter 1 of title 11 of 

the Code of Federal Regulations would 

be amended as follows:

PART 100—SCOPE AND DEFINITIONS 

(2 U.S.C. 431) 

1. The authority citation for 11 CFR 

part 100 would continue to read as 

follows:

Authority: 2 U.S.C. 431, 434, and 438(a)(8).

2. Section 100.29 would be amended 

by revising paragraph (b)(3)(i), the 

introductory text of paragraph (c), and 

paragraphs (c)(5) and (c)(6), and by 

adding new paragraph (c)(7), to read as 

follows:

§ 100.29 Electioneering communication (2 

U.S.C. 434(f)(3)).

* * * * *

(b) * * * 

(3)(i) Publicly distributed means aired, 

broadcast, cablecast or otherwise 

disseminated through the facilities of a 

television station, radio station, cable 

television system, or satellite system.

* * * * *

(c) The following communications are 

exempt from the definition of 

electioneering communication. Any 

communication that:

* * * * *

(5) Is paid for by a candidate for State 

or local office in connection with an 

election to State or local office, provided 

that the communication does not 

promote, support, attack or oppose any 

Federal candidate; 

(6) Is paid for by any organization 

operating under section 501(c)(3) of the 

Internal Revenue Code of 1986, 

provided that: 

(i) The communication does not 

promote, support, attack or oppose any 

Federal candidate; and 

(ii) The organization is not directly or 

indirectly established, financed, 

maintained, or controlled by one or 

more Federal candidates, or individuals 

holding Federal office. Nothing in this 

section shall be deemed to supersede 

the requirements of the Internal 

Revenue Code for securing or 

maintaining 501(c)(3) status; or 

(7) Promotes a movie, book, or play, 

provided that the communication is 

within the ordinary course of business 

of the person that pays for such 

communication, and such 

communication does not promote, 

support, attack or oppose any Federal 

candidate.

Dated: August 18, 2005. 

Scott E. Thomas, 

Chairman, Federal Election Commission.

[FR Doc. 05–16785 Filed 8–23–05; 8:45 am] 

BILLING CODE 6715–01–P

DEPARTMENT OF TRANSPORTATION

Federal Aviation Administration 

14 CFR Part 93 

[Docket No. FAA–2004–17005; Notice No. 

05–07] 

RIN 2120–AI17 

Washington, DC Metropolitan Area 

Special Flight Rules Area; Correction

AGENCY: Federal Aviation 

Administration, DOT.

ACTION: Notice of proposed rulemaking; 

correction. 

SUMMARY: This document corrects the 

docket number and an incorrect 

reference in the proposed rule, 

‘‘Washington, DC Metropolitan Area 

Special Flight Rules Area,’’ published in 

the Federal Register of August 4, 2005.

DATES: The comment period will close 

on November 2, 2005.

FOR FURTHER INFORMATION CONTACT:

Ellen Crum, Airspace and Rules, Office 

of System Operations and Safety; 

telephone (202–267–8783). 

Correction 

In FR Doc. 05–15375 beginning on 

page 45250 in the Federal Register of 

August 4, 2005, make the following 

corrections. 

1. On page 45250, in the first column, 

in the fourth line of the heading, 

‘‘Docket No. FAA–2003–17005’’ should 

have read, ‘‘Docket No. FAA–2004–

17005.’’ 

2. On page 45250, in the first column, 

in the ‘‘ADDRESSES’’ paragraph, in the 

third and fourth lines, ‘‘identified by 

Docket Number FAA–2003–17005’’ 

should have read, ‘‘identified by Docket 

Number FAA–2004–17005.’’ 

3. On page 45250, in the third 

column, under ‘‘Sensitive Security 

Information,’’ in the fourth and fifth 

lines, ‘‘(identified as docket number 

FAA–2003–17005)’’ should have read, 

‘‘(identified as docket number FAA–

2004–17005).’’

§ 93.43 [Corrected] 

4. On page 45261, in the center 

column, in § 93.43(a)(1), ‘‘49 U.S.C. 

1562 subpart A’’ should have read, ‘‘49 

CFR part 1562 subpart A.’’

Issued in Washington, DC, on August 19, 

2005. 

Anthony F. Fazio, 

Director, Office of Rulemaking.

[FR Doc. 05–16781 Filed 8–23–05; 8:45 am] 

BILLING CODE 4910–13–P

DEPARTMENT OF STATE

22 CFR Part 62 

[Public Notice 5162] 

RIN 1400–AC13 

Secondary School Student Exchange 

Programs; Correction

AGENCY: State Department.

ACTION: Proposed rule; correction.

SUMMARY: The Department of State 

published a document in the Federal 

Register of August 12, 2005, (70 FR 

47152) concerning a proposed rule on 

regulations for secondary school 

students in the Exchange Visitor 

Program set forth at 22 CFR 62.25. The 

document contained omitted 

information regarding the requirements 

of criminal background checks on all 

program sponsor officers, employees, 

representatives, agents, and volunteers 

under paragraph (d)(1) and student 

orientation requirements under 

paragraph (g)(1).

FOR FURTHER INFORMATION CONTACT:

Stanley S. Colvin, Office of Exchange 

Coordination, Bureau of Educational 

and Cultural Affairs, Department of 

State 202–203–5029; Fax 202–203–5087.

PART 62—[CORRECTED]

§ 62.25 [Corrected] 

Corrections 

1. In the Federal Register of August 

12, 2005, 70 FR 47152, Public Notice 

5155, correct § 62.25(d)(1) and (g)(1) to 

read as follows:

§ 62.25 Secondary school students.

* * * * *

(d) * * * 

(1) Are adequately trained and 

supervised and have successfully 

completed a criminal background check;

* * * * *