[Federal Register Volume 63, Number 166 (Thursday, August 27, 1998)]
[Rules and Regulations]
[Pages 45679-45680]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 98-22967]
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FEDERAL ELECTION COMMISSION
11 CFR Parts 9003 and 9033
[Notice 1998-13]
Electronic Filing of Reports by Publicly Financed Presidential
Primary and General Election Candidates
AGENCY: Federal Election Commission.
ACTION: Final rule and transmittal of regulations to Congress.
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SUMMARY: The Commission is issuing regulations concerning the
electronic filing of reports by publicly financed Presidential primary
and general election candidates. The rules specify that if Presidential
candidates and their authorized committees have computerized their
campaign finance records, they must agree to participate in the
Commission's recently established electronic filing program as a
condition of voluntarily accepting federal funding. These regulations
implement the provisions of the Presidential Election Campaign Fund Act
(``Fund Act'') and the Presidential Primary Matching Payment Account
Act (``Matching Payment Act''), which establish eligibility
requirements for Presidential candidates seeking public financing, as
well as Public Law 104-79, which amended the reporting provisions of
the Federal Election Campaign Act of 1971 (``FECA''). Further
information is provided in the supplementary information which follows.
DATES: Further action, including the publication of a document in the
Federal Register announcing an effective date, will be taken after
these regulations have been before Congress for 30 legislative days
pursuant to 26 U.S.C. 9009(c) and 9039(c).
FOR FURTHER INFORMATION CONTACT: Ms. Susan E. Propper, Assistant
General Counsel, or Ms. Rosemary C. Smith, Senior Attorney, 999 E
Street, N.W., Washington, D.C. 20463, (202) 694-1650 or toll free (800)
424-9530.
SUPPLEMENTARY INFORMATION: The Commission is publishing today the final
text of revisions to its regulations at 11 CFR 9003.1(b)(11) and
9033.1(b)(13), which set forth conditions that Presidential candidates
agree to abide by in exchange for receiving public financing for their
campaigns. The amendments indicate that Presidential candidates and
their authorized committees must agree to file their campaign finance
reports electronically. On June 17, 1998, the Commission issued a
Notice of Proposed Rulemaking (NPRM) in which it sought comments on
proposed revisions to these regulations. 63 F.R. 33012 (June 17, 1998).
Written comments were received from the Internal Revenue Service and
Bob DeWeese of Seattle, Washington in response to the NPRM. Other
aspects of the public financing process for Presidential primary and
general elections will be addressed separately in a forthcoming Notice
of Proposed Rulemaking.
Since these rules are not major rules within the meaning of 5
U.S.C. 804(2), the Fund Act and Matching Payment Act control the
legislative review process. See 5 U.S.C. 801(a)(4), Small Business
Regulatory Reform Enforcement Fairness Act, Pub. L. No. 104-121,
section 251, 110 Stat. 857, 869 (1996). Section 9009(c) and 9039(c) of
Title 26, United States Code, require that any rules or regulations
prescribed by the Commission to carry out the provisions of Title 26 of
the United States Code be transmitted to the Speaker of the House of
Representatives and the President of the Senate 30 legislative days
before they are finally promulgated. These regulations were transmitted
to Congress on August 21, 1998.
Explanation and Justification
Sec. 9003.1 Candidate and committee agreements; and Sec. 9033.1
Candidate and committee agreements
Recently, the Federal Election Commission implemented a system
permitting political committees and other persons to file reports of
campaign finance activity via computer diskettes and direct
transmission of electronic data. See Explanation and Justification of
11 CFR 104.18, 61 F.R. 42371 (Aug. 15, 1996). The Commission was
required to make the electronic filing option available for all
``report[s], designation[s], or statement[s] required by this Act to be
filed with the Commission.'' Public Law 104-79, 109 Stat. 791 (1995)
(adding 2 U.S.C. 434(a)(11)). The goals of the new system include the
enhancement of on-line access to reports on file with the Commission,
the reduction of paper filing and manual processing, and the promotion
of more efficient and more cost-effective methods of operation for the
filers and for the Commission. While the Commission encourages all
political committees and other persons to file their reports
electronically, under Public Law 104-79, participation in the
Commission's electronic filing program is voluntary.
With the advent of the first Presidential election cycle since the
implementation of the new electronic filing system, the Commission
published a NPRM seeking comments on modifying its candidate agreement
regulations at 11 CFR 9003.1 and 9033.1 to provide that certain
Presidential committees must agree to file their campaign finance
reports electronically as a condition of voluntarily accepting public
funding.
Two comments were received in response to the NPRM. The Internal
Revenue Service stated that it does not anticipate that the changes to
the FEC's rules will conflict with the Internal Revenue Code or any
rules or regulations thereunder. The other comment strongly urged the
Commission to adopt the proposed changes to greatly improve the
Commission's ability to provide timely and useful disclosure data to
the public and to ensure ongoing campaign compliance by candidates
throughout the campaign. This commenter pointed out that when the House
of Representatives debated another portion of H.R. 2527 (Public Law
104-79), several members extolled the bill's elimination of the three
day delay for paper filings traveling from the Clerk of the House to
the Commission, thereby demonstrating the importance of timeliness in
the public availability of campaign finance reports. This commenter
also believed that change in the Commission's rules would enhance the
accuracy and usefulness of the information disclosed, improve the news
media's ability to file timely stories on candidates' finances, and
assist Commission staff in monitoring compliance with campaign finance
laws during the campaign.
The Commission has decided to proceed with the changes to the
candidate agreement regulations that were described in the NPRM.
[[Page 45680]]
Consequently, the final rules which follow establish electronic filing
as an additional prerequisite for the receipt of public funding. Please
note, however, this new language only applies to the authorized
committees of Presidential primary and general election candidates that
decide to rely upon a computer system to maintain and use their
campaign finance data. Currently, Presidential candidates whose
committees have computerized their financial records must agree to
produce magnetic tapes or diskettes of receipts, disbursements and
other data prior to the beginning of audit fieldwork. 11 CFR
9003.1(b)(4) and 9033.1(b)(5); see also, 11 CFR 9003.6, 9007.1(b)(1),
9033.12, and 9038.1(b)(1). Thus, the revised rules, like the current
rules, do not burden campaign committees with new requirements if they
are not computerized.
Electronic filing of Presidential committees' reports is intended
to save a substantial amount of time and Commission resources that
would otherwise be devoted to inputting these reports into the FEC's
database. Although the number of political committees affected by this
amendment to the regulations is relatively small, their reports can be
voluminous, given the substantial number of contributions and
expenditures listed in each report. Thus, these changes to the
candidate agreement rules are expected to speed the reporting of
campaign finance information and enhance public disclosure.
Previously, the Commission issued technical specifications for
reports filed electronically in its Electronic Filing Specification
Requirements (EFSR), which is available free of charge. The EFSR
contains technical specifications, including file requirements, for
reports filed by Presidential campaign committees. However, the
electronic filing software available from the FEC at no charge will not
generate the forms used by Presidential committees. On request, the
Commission's Data System Development Division will work with committees
to assist them in generating the proper output. Any additional costs
entailed may be treated and paid for like any other compliance cost
pursuant to 11 CFR 9003.3(a)(2)(i)(B) and (F) or 9035.1(c)(1) if
incurred after January 1, 1999. The NPRM noted that there are a number
of differences between the specifications contained in the EFSR and
those found in the Computerized Magnetic Media Requirements (CMMR) used
by publicly financed committees to submit financial data for the
Commission's audit and to submit digital images of contributions for
matching funds. These differences are necessitated, in part, by the
different purposes for which each of these databases are used. Neither
of the comments received suggested ways in which these two standards
could be better synchronized.
The revisions to the candidate agreement regulations do not require
electronic filing for statements of candidacy or statements of
organization. While Presidential candidates and their authorized
committees may file these statements electronically, if they wish,
these forms have not been included in the free software available from
the FEC. Also please note that the candidate agreements, themselves,
should not be submitted in electronic form under the changes to 11 CFR
9003.1 and 9033.1 which follow.
Congress intended the new system of electronic filing to be
voluntary. 141 Cong. Rec. H 12140-41 (daily ed. Nov. 13, 1995)
(statements of Reps. Thomas, Hoyer, Fazio and Livingston). The
Commission believes that a candidate's agreement to file campaign
finance reports electronically in exchange for public funding is a
voluntary decision materially indistinguishable from the candidate's
voluntary decision to abide by the spending limits in exchange for
federal funds. For this reason, it appears that the rules set forth
below are within the scope of the Commission's authority under the Fund
Act, the Matching Payment Act, the FECA, and Public Law 104-79.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) [Regulatory
Flexibility Act]
The attached final rules will not have a significant economic
impact on a substantial number of small entities. The basis for this
certification is that very few small entities will be affected by these
rules, and the cost is not expected to be significant. Further, any
small entities affected have voluntarily chosen to receive public
funding and to comply with the requirements of the Presidential
Election Campaign Fund Act or the Presidential Primary Matching Payment
Account Act.
List of Subjects in 11 CFR Parts 9003 and 9033
Campaign funds, Elections, Political candidates.
For the reasons set out in the preamble, Subchapters E and F of
Chapter I of Title 11 of the Code of Federal Regulations is amended as
follows:
PART 9003--ELIGIBILITY FOR PAYMENTS
1. The authority citation for 11 CFR Part 9003 continues to read as
follows:
Authority: 26 U.S.C. 9003 and 9009(b).
2. In Sec. 9003.1, the introductory text of paragraph (b) is
republished, and new paragraph (b)(11) is added to read as follows:
Sec. 9003.1 Candidate and committee agreements.
* * * * *
(b) Conditions. The candidates shall:
* * * * *
(11) Agree that they and their authorized committee(s) shall file
all reports with the Commission in an electronic format that meets the
requirements of 11 CFR 104.18 if the candidate or the candidate's
authorized committee(s) maintain or use computerized information
containing any of the information described in 11 CFR 104.3.
PART 9033--ELIGIBILITY FOR PAYMENTS
3. The authority citation for Part 9033 continues to read as
follows:
Authority: 26 U.S.C. 9003(e), 9033 and 9039(b).
4. In Sec. 9033.1, the introductory text of paragraph (b) is
republished, and new paragraph (b)(13) is added to read as follows:
Sec. 9033.1 Candidate and committee agreements.
* * * * *
(b) Conditions. The candidate shall agree that:
* * * * *
(13) The candidate and the candidate's authorized committee(s) will
file all reports with the Commission in an electronic format that meets
the requirements of 11 CFR 104.18 if the candidate or the candidate's
authorized committee(s) maintain or use computerized information
containing any of the information described in 11 CFR 104.3.
Dated: August 21, 1998.
Joan D. Aikens,
Chairman, Federal Election Commission.
[FR Doc. 98-22967 Filed 8-26-98; 8:45 am]
BILLING CODE 6715-01-P
