Notice of proposed rulemaking on repeal of Millionaires' Amendment regulations
On October 2, 2008, the Commission approved a Notice of Proposed Rulemaking (NPRM) that would implement the Supreme Court's decision in Davis v. Federal Election Commission (Davis). The NPRM proposes deleting the Commission's regulations implementing the Millionaires' Amendment. Additionally, the Commission proposes to revise several regulations to conform to the Davis decision and retain others that were not affected by the Supreme Court’s ruling. Comments on the NPRM must be received by the Commission on or before November 21, 2008.
Background
On June 26, 2008, the Supreme Court ruled in Davis that the Millionaires' Amendment provisions of the Bipartisan Campaign Reform Act (BCRA) relating to House of Representatives elections unconstitutionally burden the First Amendment rights of self-financed candidates. Under the Millionaires’ Amendment, Senate and House candidates facing opponents who spent personal funds above certain threshold amounts were eligible for increased contribution and coordinated party expenditure limits.
On July 25, 2008, the Commission issued a public statement announcing that the Davis decision precluded the enforcement of the House provision and effectively precluded the enforcement of the Senate provision. The statement noted that, as of June 26, 2008, the increased contribution limits and reporting requirements of the Millionaires' Amendment were no longer in effect, and political party committees were no longer permitted to make increased coordinated party expenditures under these provisions. See https://www.fec.gov/updates/commission-statement-on-davis-v-fec/.
Proposed removal of 11 CFR Part 400 – increased limits for candidates opposing self-financed candidates
Part 400 of FEC regulations implements the statutory provisions of the Millionaires' Amendment. The Supreme Court’s decision in Davis invalidated the entire BCRA section 319 relating to House elections, including the increased limits in 319(a) and its companion disclosure requirements in 319(b). While the Davis decision struck down only the BCRA sections 319(a) and (b) governing House elections, the Commission believes that the Supreme Court’s analysis in Davis also precludes enforcement of the parallel provisions applicable to Senate elections. Therefore, the Commission proposes to delete regulations currently found at 11 CFR Part 400 in their entirety.
Proposed amendments to other provisions. The proposed deletion of current 11 CFR Part 400 affects several other Commission regulations, as noted below.
Definition of File, Filed or Filing. Section 100.19 specifies when a document is considered timely filed. The Commission proposes to delete paragraph (g), which describes the candidate's notification of expenditures of personal funds under 400.21 and 400.22.
Definition of Personal Funds. The term "personal funds" found in section 100.33 contains a crossreference to section 400.2. The Commission proposes deleting the cross-reference, while retaining the remaining language of section 100.33.
Candidate Designations. On the Statement of Candidacy (FEC Form 2), candidates are required by section 101.1(a) to disclose the amount by which the candidate intends to spend personal funds in excess of the threshold amount, as defined in 400.9. The Commission proposes to delete the sentence within paragraph (a) referencing this disclosure.
Statement of Organization. Section 102.2(a)(1)(viii) requires principal campaign committees of House and Senate candidates to provide an e-mail address and fax number on their Statement of Organization (FEC Form 1). This regulation was promulgated to aid with the expedited notifications required by the Millionaires’ Amendment under Part 400. The Commission wishes to retain the requirement that these committees provide e-mail addresses, because it facilitates the exchange of information between the Commission and committees for other purposes under the Act. However, because the Commission does not routinely communicate with committees via facsimile, the NPRM proposes that the requirement for committees to provide fax numbers be deleted from paragraph (a)(1)(viii).
Calculation of "Gross Receipts Advantage." Section 104.19 requires the principal campaign committees of House and Senate candidates to report information used to calculate their "gross receipts advantage." This calculation is then used to determine the "opposition personal funds amount" under 400.10. With the Commission's proposal to delete Part 400, the reporting under section 104.19 would no longer be required. As such, the Commission proposes the deletion of section 104.19.
Biennial Limit. Section 110.5(b)(2) states that contributions to candidates made by individuals under the increased limits provided in the rules at Part 400 are not subject to the individual biennial limit. With the proposed removal of Part 400, this exception would no longer exist, therefore the Commission proposes that paragraph (b)(2) be deleted from section 110.
Proposed retention of certain other regulations
Repayment of candidates' personal loans. The BCRA added a new provision limiting to $250,000 the amount of contributions collected after the date of the election that can be used to repay loans made by the candidate to the campaign. When promulgating regulations to enforce this statutory provision, the Commission added new sections 116.11 and 116.12 to the regulations rather than including them in Part 400 with the other Millionaires’ Amendment provisions. Unlike other aspects of the Millionaires’ Amendment, this statutory provision applies equally to all federal candidates, including Presidential candidates. The personal loan repayment provision was not challenged in Davis, nor did the Supreme Court’s decision address the validity of this provision. Therefore, the Commission proposes to retain sections 116.11 and 116.12 and seeks comment on this proposal.(1)
Net debts outstanding calculation. Section 110.1(b)(1)(i) states that candidates and their committees cannot accept contributions after the election unless the candidate still has net debts outstanding from that election and only up to the amount of that net debts calculation. This rule was in place before BCRA added the loan repayment restriction. However, to conform with the fundraising constraints put in place with the BCRA by section 116.11, the Commission added language to 110.1(b)(3)(ii) to exclude the amount of personal loans that exceed $250,000 from the definition of net debts outstanding. For the same reasons stated above, the Commission proposes to retain paragraph (b)(3)(ii)(C).
Expenditure Limitations. Limitations on expenditures from personal or family funds when a candidate has accepted matching funds in a Presidential primary election is outlined in section 9035.2(c). As part of the rulemaking implementing the Millionaires’ Amendment, the Commission changed the definition of personal funds applicable to FECA and moved it to current section 100.33. At that time, the Commission felt it appropriate to change the cross-reference in section 9035.2(c) to the definition of personal funds in section 9003.2(c), which applies to Title 26 regulations. The Commission continues to believe this cross-reference is appropriate and therefore should be retained.
Additional information
The full text of the NPRM was published in the October 20, 2008, Federal Register and is available on the FEC web site at http://sers.fec.gov/fosers/showpdf.htm?docid=11941. All comments must be submitted in writing and addressed to Mr. Robert M. Knop, Assistant General Counsel, by November 21, 2008. Comments must be submitted via email, facsimile or paper copy form. Comments by e-mail must be sent to millionairerepeal@fec.gov. If e-mail comments include an attachment, the attachment must be in either Adobe Acrobat (.pdf) or Microsoft Word (.doc) format. Faxed comments must be sent to (202) 219-3923, with paper copy follow-up. Paper comments and paper copy follow-up of faxed comments must be sent to the Federal Election Commission, 999 E Street, NW, Washington, D.C. 20463. All comments (including those by e-mail) 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 web site after the comment period ends.
(1)The proposal to retain sections 116.11 and 116.12 is consistent with the approach the Commission took in AO 2008-9, issued after the Millionaires' Amendment was invalidated by the Davis decision