Public hearing on proposed rules (definition of FEA)

On August 4, 2005, the Commission held public hearings to receive testimony on proposed rules regarding the definition of “Federal Election Activity” (FEA) and state, district and local party committee (state committee) payments for the salaries and wages of employees who spend 25 percent or less of their compensated time during a month on activities in connection with a federal election or FEA. The proposed rules respond to the district court decision in Shays v. FEC, which invalidated several Commission regulations that were found to be inconsistent with the intent of Congress or improperly promulgated.* Of the six individuals who testified, three generally supported the Commission’s proposed rules as proper interpretations of the statute, while the others expressed concerns over the proposals’ practical implications.

Definition of FEA

Background

As part of its decision in Shays, the district court invalidated portions of the definition of FEA that describe voter registration activity, get-out-the-vote activity (GOTV) and voter identification. With regard to voter registration and GOTV, the court found the definitions were improperly promulgated because the initial NPRM did not indicate that the definitions would be limited to activities that “assist” individuals in registering or voting. The court also invalidated the portion of the current definition of GOTV that excludes communications by associations or similar groups of state or local candidates and/or officeholders that refer only to state or local candidates. With regard to the current definition of voter identification, the court found that the exclusion of voter list acquisition and of the activities of groups of state and local candidates/officeholders runs contrary to Congress’s expressed intent. The Commission subsequently proposed rules to conform to the court’s ruling.

Hearing testimony

Larry Noble, representing the Center for Responsive Politics, and Paul Ryan, representing the Campaign Legal Center, testified in favor of proposed rules that, among other things, expand the definitions of voter registration and GOTV to include “efforts to encourage” individuals to register and to vote and eliminate an exemption for associations of state and local candidates. They argued that such changes were required by the statute and that, while local party committees could be adversely affected by the rules, possible harm to local committees should not outweigh the statute’s requirements.

Mr. Ryan further argued that making such changes would not overwhelm the Commission from an administrative standpoint because any additional activities that would be captured by the proposed definitions of FEA are already regulated by other provisions of the campaign finance law that require allocation of certain federal/nonfederal activities.

Donald Simon, from Democracy 21, agreed. He additionally suggested that unless the rules were changed to include “efforts to encourage” voterregistration or GOTV, there could be no guarantee that a court would find the rules consistent with Congressional intent.

Joseph Sandler, of Sandler, Reiff & Young P.C., argued, to the contrary, that the Commission should retain its current voter registration activity rules, suggesting that more encompassing rules might negatively affect voter registration levels. Mark Brewer, representing the Association of State Democratic Chairs, agreed and argued that many of the proposed changes to the regulations might make it harder, and thus less likely, for state and local party committees to undertake grassroots political activity. For example, Mr. Brewer noted that, under the proposed rules, a local party committee’s placement of voter registration forms in the reception area of its office, or even an employee’s answers to a caller’s question about voter registration procedures, might be considered FEA. According to Mr. Brewer, many local party committees chose not to undertake any activities that could be considered FEA during the last election because they found the federal campaign finance laws too complex.

Brian Svoboda, representing the Democratic Legislative Campaign Committee, encouraged the Commission to retain the FEA exemption for communications by associations or similar groups of state or local candidates and/or officeholders that refer only to state or local candidates. He discussed how state-level legislative caucuses are fundamentally different from other groups regulated by the FEC, and noted that recent congressional action regarding legislation currently under congressional consideration suggests that Congress recognizes this distinction.

With regard to the current definition voter identification, Mr. Simon and Mr. Ryan suggested that, if a mailing list is used in connection with a federal election, then the costs of its purchase or maintenance should be considered FEA even if it was purchased or enhanced outside of the FEA time period. Others, however, drew a distinction between the purchase or enhancement of a list and regular list maintenance, suggesting that under this proposed rule all list activity would eventually become FEA.

Salary payments

Background

Under the current regulation, state committees may use any funds that comply with the requirements of state law to pay the salaries and wages of employees who spend 25 percent or less of their compensated time in a month on activity in connection with a federal election or FEA. However, the district court in Shays ruled that this regulation compromised the Congress’s purpose of stemming the flow of nonfederal money into activities that impact federal elections by permitting state committees to divide their federal-related workload among multiple employees. The court of appeals in Shays found that the Commission had not adequately justified the regulation and for that reason upheld the district court’s invalidation of the regulation.

Hearing testimony

Mr. Simon and Mr. Ryan supported the Commission’s proposal to require state and local party committees to allocate salary payments for employees who spend 25 percent or less of their compensated time on federal activities. Mr. Simon stressed the possibility for circumvention of the law if party committees were to divide federal activities among several employees working on such activities for only 25 percent of their time each month.

Mr. Brewer, on the other hand, argued that state committees lack the resources to allocate their workload among employees in this way. He suggested that the Commission retain the current rule with a new explanation and justification. Barring that, he suggested allowing salaries for employees who spend 25 percent or less of their time on federal activities to be allocated as an administrative expense. Mr. Sandler agreed and additionally suggested that the Commission allow for payroll accounts that would function similarly to allocation accounts for the payment of salaries. He argued that such accounts would aid committees that might not know until the end of each month what type of funds could be used to pay each employee’s salary.

Extended comment period

At the request of one of the witnesses, the Commission has extended the comment period for this rulemaking until mid-September. Additional information is available on the FEC website at http://www.fec.gov/law/law_rulemakings.shtml, including the proposed rules and instructions for submitting comments, written comments and a transcript of this hearing. See also the June 2005 Record, pages 1 and 3.

* On July 15, 2005, the U.S. Court of Appeals for the District of Columbia upheld the appealed portion of the district court’s decision. See the related article.