Final rules: electioneering communications

On December 15, 2005, the Commission voted to modify its regulations governing electioneering communications (EC) to comply with the court decisions in Shays v. FEC that invalidated certain portions of those rules. The revised rules, which took effect on January 20, 2006, redefine “publicly distributed” and eliminate an exemption included in the Commission’s original regulations.

Background

Introduced as part of the Bipartisan Campaign Reform Act of 2002 (BCRA), the EC provisions place funding restrictions and reporting requirements on certain communications that mention a federal candidate and are aired before the relevant electorate in close proximity to the candidate’s election. The statute includes some exemptions from these restrictions and authorizes the Commission to create others, so long as the exempted communications do not promote, attack, support or oppose (PASO) a federal candidate.

In Shays v. FEC, the U.S. District Court for the District of Columbia invalidated two of the Commission’s EC regulations. One regulation exempted communications paid for by any 501(c)(3) non-profit organizations. The court stated that, although Internal Revenue Code (IRC) prohibits 501(c)(3) organizations from participating or intervening in political campaigns, the Commission, in creating its exemption, had not explained why it felt the Internal Revenue Service (IRS) restriction was sufficient.

The court also ruled that the Commission exceeded its statutory authority when it limited the definition of “publicly distributed” to communications aired “for a fee.” The U.S. Court of Appeals for the District of Columbia Circuit affirmed the District Court’s holding regarding the “for a fee” provision. The Commission issued a Notice of Proposed Rulemaking to modify the EC regulations to comply with the District Court’s ruling and address other related concerns. See the October 2005 Record, page 6.

Final rules

In creating its final rules, the Commission took into account public comments and testimony from a public hearing on the proposed rules.

501(c)(3) organizations

In response to the court’s concerns, the Commission found that the record in this rulemaking did not demonstrate that the IRC and the Act are perfectly compatible. In the final rules, the Commission eliminated the 501(c)(3) exemption, effectively subjecting those organizations to the ban on corporate-financed ECs.

“For a fee”

In order to qualify as an EC a communication must be “publicly distributed.” The Commission had defined “publicly distributed” as “aired, broadcast, cablecast or otherwise disseminated for a fee” 11 CFR 100.29(b)(3)(i) (emphasis added). The District Court said that this provision was either inconsistent with the statute or it exceeded the Commission’s exemption authority. In its final rules, the Commission removed “for a fee” from the regulatory definition, so that any communication “aired, broadcast, cablecast or otherwise disseminated through the facilities of a television station, radio station, cable television system or satellite system,” if not otherwise exempted, is subject to the EC regulations.

Some commenters were concerned that removing the “for a fee” provision could dissuade 501(c)(3) organizations from distributing Public Service Announcements (PSA) that include federal candidates, which may be aired during EC periods: 30 days before a primary election and 60 days before a general election. These commenters noted that 501(c)(3) organizations have little or no control over when their PSAs will air; therefore, a PSA featuring a federal candidate could be broadcast during the EC periods.

In response to this concern, the Commission encourages organizations to provide broadcasters with an expiration date or some indication that the PSAs which include federal candidates should not be run during the EC periods. Additionally, broadcasters should check PSAs which include federal candidates to ensure that they are not publicly distributed during those periods.

State and local candidates.

In its initial EC rulemaking, the Commission created another limited exemption for communications by state and local candidates. The Commission decided to retain this exemption, but clarified the regulation.

Films, books and plays

The Commission decided not to take action at this time on a Petition for Rulemaking that requested an exemption from the EC regulations for the promotion and advertising of “political documentary films, books, plays and similar means of expression.” The Commission will address this issue after it has completed all Rulemakings required by the Shays decision.

Additional information

The revised EC regulations were promulgated in the December 21, 2005 Federal Register (70 FR 75713) and are available on the FEC website.