[Federal Register Volume 59, Number 124 (Wednesday, June 29, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-15710]
[[Page Unknown]]
[Federal Register: June 29, 1994]
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Part V
Federal Election Commission
_______________________________________________________________________
11 CFR Part 107 et al.
Presidential Election Campaign Fund and Federal Financing of
Presidential Nominating Conventions; Rule
FEDERAL ELECTION COMMISSION
11 CFR Parts 107, 114, and 9008
[Notice 1994-9]
Presidential Election Campaign Fund and Federal Financing of
Presidential Nominating Conventions
agency: Federal Election Commission.
action: Final rules; transmittal of regulations to Congress.
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summary: The Federal Election Commission is revising its regulations
governing publicly-financed Presidential nominating conventions. These
regulations implement the Federal Election Campaign Act of 1971, as
amended (FECA or the Act), and the Presidential Election Campaign Fund
Act (Fund Act). The revisions update the provisions governing the audit
and repayment process, and address vendor discounts, items provided for
promotional consideration, legal and accounting expenses, civil
penalties, and donations to host committees and municipalities. The
changes also reorganize these rules and make them more consistent with
the rules governing other publicly-financed committees.
dates: Further action, including the announcement of an effective date,
will be taken after these regulations have been before Congress for 30
legislative days pursuant to 2 U.S.C. 438(d) and 26 U.S.C. 9009(c). A
document announcing the effective date will be published in the Federal
Register.
for further information contact: Ms. Susan E. Propper, Assistant
General Counsel, 999 E Street NW., Washington, DC 20463, (202) 219-3690
or (800) 424-9530.
supplementary information: The Commission is publishing today the final
text of revisions to its regulations at 11 CFR part 107, section 114.1,
and part 9008, which concern the public financing of Presidential
nominating conventions. The Commission had earlier sought comments on a
previous attempt to revise the convention regulations by publishing a
Notice of Proposed Rulemaking (1990 NPRM) on August 22, 1990. See
Notice of Proposed Rulemaking, 55 FR 34267 (Aug. 22, 1990). Written
comments were received from the Republican National Committee and the
Democratic National Committee in response to the 1990 NPRM.
Subsequently, the Commission decided to take no further action on that
rulemaking until after the 1992 conventions had been held. See
Suspension of Rulemaking, 56 FR 14319 (April 9, 1991).
On August 12, 1993, the Commission issued a new Notice of Proposed
Rulemaking (NPRM), thereby initiating a new rulemaking and again
seeking comments on potential revisions to the convention regulations.
58 FR 43046 (Aug. 12, 1993). This NPRM differed significantly from the
1990 NPRM, as the Commission sought to take into account additional
issues, including some derived from the 1988 and 1992 party
conventions, and altered some of the proposals contained in the 1990
NPRM. Comments were received from the Republican National Committee,
the Democratic National Committee, Jan Witold Baran, Common Cause, and
the Internal Revenue Service. In response to a written request, a
public hearing was held on October 27, 1993. Two witnesses presented
testimony on behalf of the Republican National Committee, and two
witnesses presented testimony on behalf of the Democratic National
Committee.
Section 438(d) of title 2, United States Code and 26 U.S.C. 9009(c)
require that any rules or regulations prescribed by the Commission to
carry out the provisions of titles 2 and 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 June 23,
1994.
Explanation and Justification
Part 107--Presidential Nominating Convention, Registration and Reports
There are no substantive changes in this part. However, it has been
reorganized so that reporting by convention committees is covered in
Sec. 107.1, and host committee reporting is addressed in Sec. 107.2.
Part 114--Corporate and Labor Organization Activity
Section 114.1 Definitions
In paragraph 114.1(a)(2)(viii), the citations to the convention
rules have been amended to correspond to the proposed reorganization of
11 CFR Part 9008.
Part 9008--Federal Financing of Presidential Nominating Conventions
The Commission has revised and reorganized its rules governing
public financing of Presidential nominating conventions to address
several issues that have arisen, and to make the convention regulations
more consistent with the rules applying to publicly-financed
Presidential campaign committees. The reorganization of 11 CFR Part
9008 separates the rules concerning convention committees from those
addressing host committee and local government activity. Thus, Subpart
A of Part 9008 covers only convention committees and Subpart B contains
the rules regarding host committees and local government activity.
Subpart A--Expenditures By National Committees and Convention
Committees
Under the reorganization of Part 9008, Subpart A sets forth the
rules relating to convention committees set up by the national party
committees to make arrangements for the party's presidential nominating
convention. Within Subpart A, the sequence of Secs. 9008.1 through
9008.12 has been rearranged to follow the progression of convention
activity from registration through use of funds and sources of
contributions to, finally, audits and repayments. New Secs. 9008.13
through 9008.16 have been added to follow similar provisions for
publicly-financed Presidential candidates.
Section 9008.1 Scope
Section 9008.1 continues to explain the scope of the convention
rules found in 11 CFR Part 9008. However, the provisions in previous
paragraph Sec. 9008.1(b) regarding reporting by host committees,
government agencies and local municipalities have been deleted because
they duplicate portions of new Sec. 9008.51.
Section 9008.2 Definitions
This section generally follows former 11 CFR 9008.2.
Section 9008.3 Eligibility for Payments; Registration and Reporting
Paragraph 9008.3(a) now sets forth the eligibility requirements for
receiving public financing, which were previously located in 11 CFR
9008.8(b). Paragraph (a) of Sec. 9008.3 also reflects several changes
in the agreements convention committees must submit as a condition of
eligibility to receive public funding. First, the revised rules
eliminate the requirement in previous paragraph Sec. 9008.8(b)(4)(iv)
that convention committees agree to establish a separate account for
handling private contributions. One commenter supported the elimination
of this requirement. If a convention committee were to accept private
funds, either due to a decision not to accept its full entitlement of
federal funds or due to a deficiency in the Presidential Election
Campaign Fund, the new rules provide the option of either setting up a
separate account or depositing private contributions with payments
received from the Fund. See, paragraph Sec. 9008.6(a)(3). This approach
is consistent with the rules governing Presidential candidates who
accept public financing for the general election.
Second, a new provision has also been added at paragraph
Sec. 9008.3(a)(4) requiring convention committees to agree to comply
with the relevant provisions of title 2, United States Code, and the
Commission's regulations implementing those provisions. This new
condition parallels the candidate agreements for publicly-financed
primary and general election Presidential candidates.
New language in the convention agreement provisions in paragraph
Sec. 9008.3(a)(4)(v) pertains to the production of computerized
information on magnetic tapes or diskettes under new paragraph
Sec. 9008.10(h). This new language follows similar requirements set
forth in 11 CFR 9003.1 and 9033.1 governing candidate agreements.
Language has also been added to paragraph (a)(4)(v) of Sec. 9008.3
to indicate that the convention committee shall agree to provide the
Commission, upon request, with copies of contracts with its vendors,
and documentation regarding reductions, discounts, and items received
in exchange for promotional consideration. The Commission received a
wide range of comments on this requirement. One witness indicated a
preference for including in the reports certain information on items
provided at no charge, and supplying contracts during the Commission's
audit, instead of attaching the contracts to the publicly-filed
reports. Others saw no reason to provide or disclose documentation of
discounts, deductions, and free items because, in their view, these are
not contributions or expenditures and are not subject to convention
spending limits. In contrast, one commenter urged the Commission to
reverse its policy of permitting private in-kind contributions to host
committees and convention committees because public funds were meant to
replace large contributions from corporations, labor unions and wealthy
individuals, which would, in the commenter's view, otherwise undermine
the intent of the Federal Election Campaign Act and the integrity of
public financing.
The Commission has concluded that its long-standing approach
regarding vendor contracts is consistent with Congressional intent, and
should be explicitly reflected in the regulations. Accordingly, the new
language follows the Commission's current practice of requesting
contracts, when necessary, during the audit process. The provision of
vendor contracts helps the Commission ensure that corporations are
following their ordinary course of business in their transactions with
political committees. Under revisions to paragraph Sec. 9008.9,
however, copies of vendor contracts need not be attached to convention
committees' reports. Instead, paragraph Sec. 9008.9(b) specifies the
information to be reported by the convention committee when commercial
vendors provide goods or services in exchange for promotional
consideration arrangements.
The new rules at paragraph Sec. 9008.3(a)(4)(v) follow previous 11
CFR 9008.8(b) by requiring convention committees to provide the
Commission with copies of their contracts with host committees and
municipalities upon request. The NPRM had proposed requiring convention
committees to attach copies of these contracts to their regular
reports.
The comments generally opposed additional reporting requirements,
arguing that host committees do not utilize public funds, that the
current requirement that contracts be made available upon request
during Commission audits is sufficient, and that host committees are
motivated by economic (not political) considerations. One commenter
suggested that it would be onerous to require both the contract between
the host committee and the convention committee, and documentation of
vendor's contracts or discounts. The final rules in this section and
section 9008.9 reduce the amount of documentation to be provided by
convention committees with respect to vendor transactions and contracts
with cities and host committees.
Paragraph Sec. 9008.3(b) sets forth the registration and reporting
requirements for convention committees previously found in 11 CFR
9008.12(b). The revised rules delete language in previous paragraph
Sec. 9008.12(b)(1)(ii) which had indicated that other committees and
organizations representing political parties in making convention
arrangements must register and report as political committees. This
language is not necessary because these entities are already clearly
subject to the registration and reporting requirements of the FECA. The
reporting requirements have also been revised to track the reporting
dates for political committees filing quarterly reports under Title 2.
See, 11 CFR 104.5.
The NPRM proposed requiring that convention committees file their
first quarterly report following either the quarter in which they
receive their first payment from the Fund or when they begin receiving
funds or making disbursements for convention activity, whichever is
earlier. These committees are able to obtain loans and begin making
convention-related disbursements well before they receive their first
public financing payment. However, this activity is not disclosed until
three months after that payment is received. Earlier disclosure was
suggested to provide a more contemporaneous picture of convention
committee activity and to ease the burden of filing a comprehensive
first report covering as much as a year's disbursements. When this
change was suggested in the 1990 NPRM, one commenter indicated that it
already files reports for the first quarter after beginning to make
disbursements for the convention, and did not object to the earlier
filing requirements. However, in its response in the current
rulemaking, the commenter objected to earlier reporting where no public
funds have been transferred to the convention committee. In contrast,
another commenter supported the earlier reporting requirement, and
suggested a threshold of no less than $5,000 to trigger the filing
requirements.
The final rules have been revised to follow the previous rules to
reduce the number of reports that must be filed by convention
committees.
Section 9008.4 Entitlement to Payments from the Fund
Section 9008.4 has been reorganized so that paragraphs (a) and (b)
incorporate the rules previously found in Sec. 9008.3 concerning
entitlements to payments from the Fund. Paragraph (c) of Sec. 9008.4
contains the provisions concerning the limitation on payments, which
were previously located at 11 CFR 9008.5.
Section 9008.5 Adjustment of Entitlements
The provisions entitled ``Adjustment of entitlement'' have been
moved to Sec. 9008.5 from previous Sec. 9008.4. With regard to the
income from the investment of public funds, previous paragraph (b) of
Sec. 9008.4 has been removed and replaced with new 11 CFR
9008.12(b)(6). The new provision more closely follows the approach
taken in the rules governing Presidential candidates who accept public
funding. See 11 CFR 9007.2(b)(4) and 9038.2(b)(4).
Section 9008.6 Payment and Certification Procedures
Section 9008.6, ``Payment and certification procedures'', has been
moved from 11 CFR 9008.8 of the previous rules. In addition, paragraph
(a)(2) has been revised by combining the rules for major and minor
parties on when they may accept private contributions for convention
expenses, and by addressing the possibility of a deficiency in the
Fund. Unless there is a deficiency in the Fund, or the national
committee does not accept all the public financing to which it is
entitled, contributions cannot be accepted because they would cause the
convention committee to exceed its spending limits, unless the
committee had surplus funds left over. The Commission notes that under
new section 116.5, payments by committee staff for convention expenses
are treated as advances, and therefore as contributions, until
reimbursed. Thus, the question has arisen as to the maximum amount a
convention committee can accept in staff advances if it provides
reimbursement and accepts full public funding. Given that the
convention committee is established, financed, maintained and
controlled by the national committee, and is therefore affiliated with
the national committee, it shares the national committee's $20,000
contribution limit. The NPRM sought comment on including in the
convention regulations language to this effect.
The witnesses at the hearing agreed that convention committees are
affiliated with the national party committees, and believed the
existing rules and exceptions regarding staff advances that apply to
political committees should control. While one thought additional
language was unnecessary, the other witness suggested specifically
stating that the maximum amount an individual may contribute to the
convention committee per year is $20,000, and that a convention
committee may accept up to $20,000 in staff advances if it provides
reimbursement and accepts full public funding. Further, this witness
suggested amending proposed paragraph Sec. 9008.12(c) to indicate that
the convention committee is not obligated to repay a staff advance to
the U.S. Treasury if it has made full reimbursement to the staff member
and has not utilized the private contribution (even to the extent of
the permissible $20,000) to defray convention expenses.
The Commission agrees with this commenter's views, but does not
believe additional language is needed in the regulations. While the
Commission has reached this conclusion to accommodate the practice of
staff advances, it should be noted that other private contributions may
be received only in accordance with paragraph (a) of this section.
As noted in the earlier discussion of Sec. 9008.3, paragraph (a)(3)
of 11 CFR 9008.6 offers convention committees the choice of setting up
a separate account for private contributions or depositing them in the
account used for payments from the Fund. This approach parallels that
provided for publicly-financed general election candidates in 11 CFR
9005.2(c). Thus, convention committees' accounts must be maintained at
depository institutions insured by the Federal Deposit Insurance
Corporation. The 1979 amendments to the FECA also permitted political
committees to establish campaign depositories at institutions insured
by the National Credit Union Administration. However, the Commission
has not made this option available to Presidential candidates or
convention committees choosing to receive public funding because credit
unions do not return canceled checks, thus preventing committees from
providing adequate documentation for disbursements drawn upon credit
union accounts. See, e.g., 11 CFR 9005.2(c). In the final version of
paragraph (a)(3), the references to accounts insured by the Federal
Savings and Loan Insurance Corporation have been deleted because these
accounts are now insured by the Federal Deposit Insurance Corporation.
Finally, this section continues to permit the receipt of federal
funds either in one lump sum or in a series of payments if the
convention committee so requests.
Section 9008.7 Uses of Funds
With some minor changes for clarity, Sec. 9008.7, ``Use of funds,''
follows previous 11 CFR 9008.6.
The NPRM sought comments on whether a revision to this section is
warranted to clarify the distinction between items which are convention
expenses and must be defrayed with public funds (and count against the
convention committee's expenditure limit) and expenses which are
related to ongoing business of the national committee and are not
properly paid for with public funds. Given that the convention not only
serves as the vehicle for nominating the party's Presidential
candidate, but is also used to conduct ongoing party business, the line
between convention expenses and party expenses can be a fine one.
However, the Commission has encountered instances in which the national
committee has sought to pay for expenses that are clearly convention-
related, particularly if the convention is close to the expenditure
limit. The Commission also wishes to ensure that public funds are used
solely for running the nominating convention, and not for expenses
related to party business.
The NPRM did not propose creating a presumption that expenses are
convention-related if they are incurred by the convention committee or
national committee around the time of the convention or within the
convention city's locale (a suggestion which had been included in the
1990 NPRM). Comments on the 1990 NPRM opposed the creation of such a
presumption, citing situations where they believed it could improperly
result in the use of federal funds for party business.
The NPRM in this rulemaking indicated that the Commission had
decided not to include such a presumption in the convention
regulations. However, additional comments were sought on whether to
amend the list of permissible convention expenses to exclude part or
all of the salary and travel costs for those whose primary role is to
conduct ongoing party business while at the convention. In particular,
the Commission welcomed comments on how to allocate salary and travel
costs for those who may split their time between party business and
convention-related duties.
Subsequently, two commenters repeated their previous views that the
convention regulations should provide assurances that public funds are
spent on legitimate convention expenses, but that ultimately any
attempt to spell out convention expenses would be both subjective and
unworkable. Instead, they argued that the determination of what is
considered a convention expense should be made on a case-by-case basis.
The Commission heard testimony that it should not judge how committees
spent their money, that increased regulation could infringe on First
Amendment freedoms, and that convention committees should be allowed to
allocate employees' salaries and expenses between the convention and
the national committee on a reasonable basis, subject to review during
the convention committee audit. A key criterion would be the amount of
time spent on each function, and would require the committee to prorate
the amount of time spent on each set of responsibilities. In contrast,
another commenter opposed changing the current regulation, arguing that
any additional formula is unnecessary. The comment urged adoption of a
presumption that the national committee staff is working on national
committee business and not convention business.
The Commission has decided to continue its previous approach of
listing in the rules the types of expenses that are convention-related,
and thus subject to the convention spending limits. Adopting a
completely case-by-case approach to this area would provide no guidance
to committees trying to properly attribute their expenses. Accordingly,
new Sec. 9008.7 follows previous Sec. 9008.6 by setting out the general
principle that convention expenses include all expenses incurred by or
on behalf of the national party committee or the convention committee
with respect to, and for the purpose of conducting, the convention or
convention-related activity. This includes all national committee
activity in the convention city except for events clearly separate from
the convention, such as fund raising events for the party committees,
and meetings of the national committee unrelated to the convention.
New language has also been included in paragraph
Sec. 9008.7(a)(4)(xii) to reflect the Commission's policy that the
convention committee may defray the costs of gifts or monetary bonuses
for committee staff and convention officials for convention-related
services, as long as the bonuses or gifts do not exceed $150 per
individual and $20,000 total. Another new provision, paragraph
Sec. 9008.7(a)(4)(xiii), clarifies that the production costs of a
biographical film or similar materials about a Presidential or Vice
Presidential candidate may be paid for by the convention committee.
However, if part or all of the film, or similar materials, is
previously or subsequently aired or otherwise distributed by the
candidate's primary or general election campaign committee or by a
party committee, or is used in connection with fundraising, the
campaign committee or party committee must pay the convention committee
for the reasonably allocated costs of the films or materials used.
Paragraph (a)(5) of Sec. 9008.7 has been modified so that it
follows the Commission's past practice of seeking a repayment of
interest earned on the investment of public funds, less any tax paid on
the interest earned. This change is consistent with 11 CFR 9004.5,
which governs interest earned by publicly-funded Presidential
candidates.
Another issue raised in the NPRM concerns the sources of funds used
to pay civil or criminal penalties pursuant to 2 U.S.C. 437g. Both
previous paragraph Sec. 9008.6(b)(3) and new paragraph 9008.7(b)(3)
indicate that such funds are subject to the prohibitions of 11 CFR
110.4 and Parts 114 and 115. Comments were sought as to whether these
funds should also be subject to the contribution limits set forth in 11
CFR Part 110. One commenter urged the Commission to continue to permit
convention committees to pay civil and criminal penalties with funds
subject to the prohibitions, but not the limitations set forth in the
Act, and not to treat amounts received or expended to pay such
penalties as contributions or expenditures. The commenter pointed out
that Congressional candidate committees and party committees are
permitted to pay civil and criminal penalties with funds that do not
meet the limitations or prohibitions of FECA, while publicly-financed
primary and general election presidential candidates may pay penalties
from funds not meeting the FECA's contribution limits. Another
commenter noted that public funds may not be used to pay these
penalties, and restrictions on private funds would deter violators from
paying their fines, given that fines are levied months or years after
the convention. A third commenter opposed both limiting the sources of
penalty payments and subjecting penalty payments to contribution
limits, arguing that penalties are not paid for the purpose of
influencing federal elections, and thus, are not contributions under
FECA.
The Commission views civil and criminal penalties as an outgrowth
of election activities, and therefore properly subject to the Act's
prohibitions, even if the funds received and expended are not
contributions or expenditures. Consequently, paragraph
Sec. 9008.7(b)(3) generally follows the previous provision. However,
the Commission is continuing to consider possible changes to the
present approach in the ongoing rulemaking regarding its compliance
regulations at 11 CFR part 111. See Notice of Proposed Rulemaking, 58
FR 36764 (July 8, 1993).
Section 9008.8 Limitation of Expenditures
Section 9008.8 generally follows previous Sec. 9008.7 by setting
out the expenditure limits for convention committees and an explanation
of the categories exempted from application to that limit. Former
Sec. 9008.7 had also included rules pertaining to activities by state
and local governments and host committees. As part of the
reorganization of Part 9008, the substantive provisions governing
contributions to and expenditures by host committees and local
governments have been moved to new Secs. 9008.52 and 9008.53. New
language in paragraph Sec. 9008.8(b)(3) provides some examples of the
types of candidate expenses that may not be paid from the convention
committee's public funds, including the costs of the candidate's
transportation, meals and lodging.
Paragraphs (b)(1) and (b)(2) of Sec. 9008.8 follow previous
paragraph Sec. 9008.7(d)(4) by indicating that expenditures made by
government agencies and municipal corporations, or by host committees,
will not count against the convention committee's expenditure limit if
the funds are spent in accordance with the provisions of proposed
Secs. 9008.52 and 9008.53. Consequently, there may be situations in
which host committees make impermissible expenditures which count
against the convention committee's spending limits. As noted below,
such situations could also be resolved through enforcement actions
under 2 U.S.C. 437g.
In addition, the Commission sought comments on revised language in
paragraph 9008.8(b)(4)(ii) restating the current policy that payments
made by the national committee for legal and accounting expenses count
against the convention spending limits if these expenses are incurred
in connection with the convention or convention-related activities. As
an alternative, comments were welcomed on exempting payments by the
national party committee for legal and accounting expenses solely for
complying with the FECA and the Fund Act, provided that such funds are
raised in accordance with the limits and prohibitions of the Act. Under
this alternative, such amounts would be reported, and need not be
placed in a separate account.
Two commenters and witnesses generally urged that convention legal
and compliance costs should be exempt from the spending limits. The
reasons they advanced included the following: similar expenses are
exempt for publicly-financed presidential candidates; such a policy
would encourage compliance; and it would not be appropriate to spend
public funds on noncompliance legal costs tangentially-related to the
convention, such as a slip-and-fall case or litigation over vendors'
contracts.
In light of the comments and testimony, the Commission has decided
to change the provisions governing legal and accounting costs.
Accordingly, revised paragraph Sec. 9008.8(b)(4) creates a narrow
exception to the convention spending limits for legal and accounting
costs incurred in complying with the FECA and the Fund Act, so long as
the contributions raised for this purpose comply with the contribution
limits and prohibitions. Thus, these contributions will be counted
against the annual limit on contributions to the political committees
established and maintained by the national political party of $20,000
per person, and $15,000 per multicandidate political committee. These
contributions and payments must be reported by the convention committee
on separate schedules of receipts and disbursements. This rule does
not, however, prohibit the use of public funds to pay compliance
expenses.
New paragraph (b)(5) has been added to section 9008.8 to indicate
that the costs of complying with the technical requirements for
submission of computerized records are not treated as convention
committee expenditures, and therefore, are not subject to the
expenditure limits set out in section 9008.8. This was suggested in
response to the 1990 NPRM, which included provisions on computerized
information in paragraph 9008.10(h). Although the comments reflected
disagreement as to whether or not convention committees should be
required to comply with the computerized magnetic media requirements
(CMMR), they generally favored exempting the costs of producing,
delivering and explaining the computerized information from the
convention committee's spending limits. Another suggestion was that
funds raised to pay the costs involved should not be considered
contributions, and should not be subject to the contribution limits and
prohibitions of the FECA.
The Commission has concluded that the costs of providing
computerized information are similar to the costs of providing legal
and accounting services. Therefore, the revised rules adopt the same
approach for funds raised to pay CMMR expenses as for funds raised to
pay legal and accounting costs.
Section 9008.9 Receipt of Goods and Services from Commercial Vendors
Section 9008.9 specifies the circumstances under which different
types of businesses may make in-kind donations to convention
committees. It has been substantially revised from previous 11 CFR
9008.7(c), and it resolves several questions that have arisen
concerning in-kind donations.
(1) Terminology. This rulemaking presented the issue of the
different terms used in different portions of the previous regulations
to describe the kinds of businesses that may donate funds or make in-
kind donations. For example, ``retail businesses'' were able to provide
reductions or discounts to convention committees. See previous 11 CFR
9008.7(c)(1). ``Local businesses'' were able to donate promotional
items of nominal value to convention attendees, and to donate funds and
in-kind contributions to host committees to promote the convention city
and its commerce. See previous 11 CFR 9008.7 (c)(2) and (d)(2). ``Local
retail businesses'' were able to donate funds to the host committee to
be used to defray convention expenses. See previous 11 CFR
9008.7(d)(3). Finally, under AO 1988-25, businesses of any type were
permitted to seek official provider status, which would enable them to
provide certain items at no charge, in exchange for being designated an
official provider, or for other promotional consideration.
The NPRM questioned whether a basis continues to exist for these
distinctions. The Commission considered whether to require that all
businesses qualify as ``local'' to help ensure that their goal in
offering goods and services is commercial rather than political. In the
alternative, the Commission has considered whether these complex
distinctions further the Commission's objectives of ensuring that
corporations do not make prohibited contributions to political
committees. The proposed rules would have retained the current
distinctions, while clarifying the distinction between ``retail'' and
``wholesale'' businesses, and explaining when businesses qualify as
``local'' businesses under the Office of Management and Budget's
Revised Standards for Defining Metropolitan Areas in the 1990's, 55 FR
12154 (March 30, 1990). In Advisory Opinion 1975-1, the Commission
recognized two situations which would not violate 18 U.S.C. 610 (the
predecessor to 2 U.S.C. 441b): volume discounts on goods or services
purchased by the convention committee and donations to a group
organized to promote the convention city. The rationale underlying
these exceptions was that they reflected a commercial, rather than
political, purpose by the business so involved.
The comments on the NPRM reflected no consensus on this issue. Some
favored retaining the approach adopted in the current rules and
Advisory Opinion 1988-25, while taking into account legitimate
commercial interests of franchisees, branches and dealers affiliated
with national corporations.
Some urged the Commission to apply these provisions to all
businesses because the criteria for ``local'' and ``retail'' are
confusing, the distinctions do not further the Commission's objectives,
or because all businesses in a Metropolitan Area benefit from a
successful convention. Others supported the retention of the present
distinction between ``retail,'' ``local,'' and ``other business,'' and
advocated changing the definition of ``local business'' so that it
includes any company doing a sufficient level of business within the
Metropolitan Area, whether or not the company has a physical presence
there. This approach would not provide a workable standard that would
enable either the Commission or businesses to know whether they are
considered ``local.''
The Commission has decided to revise Sec. 9008.9 to do away with
the complex distinctions between businesses that are ``local,''
``retail,'' ``local retail,'' and ``official providers.'' Instead, the
term ``commercial vendor'' is used to define the types of businesses
that may provide goods or services to convention committees at reduced
or discounted rates, or for promotional consideration, or at no charge.
``Commercial vendor'' is defined in 11 CFR 116.1(c) to mean persons
providing goods or services to a candidate or political committee,
whose usual and normal business involves the sale, rental, lease or
provision of those goods or services. Please note that donations of
funds to host committees are covered by new Secs. 9008.52 and 9008.53.
Thus, the revised rules build upon the Commission's decisions in AO
1975-1 and AO 1988-25.
(2) Standard commercial vendor reductions and discounts; goods or
services provided for promotional consideration. A related question
involves the determination that reductions and discounts offered to the
convention committee are in the ordinary course of business, or are
commercially reasonable. Language was proposed during the previous
rulemaking to explain the documentation that must be provided to the
convention committee to demonstrate that a reduction or discount, such
as a volume discount on hotel rooms, is within the vendor's ordinary
course of business. Although concerns were raised that these
documentation requirements were burdensome and impractical, others
urged the Commission to adopt that approach.
The NPRM also focused on the practice of offering free items to the
convention, such as pianos or cars. Proposed language in Sec. 9008.9
sought to incorporate the approach taken in Advisory Opinion 1988-25 by
permitting businesses to provide products and services at no charge if
it is in the ordinary course of that vendor's business to provide
products or services in an equivalent amount and on similar terms, such
as in return for recognition as an ``official provider'' of such
products or services, to non-political groups or events. The Commission
had previously proposed incorporating in the regulations the conclusion
reached in Advisory Opinion 1988-25, and had considered whether the
approach taken in that advisory opinion should be modified to require
that products or services be provided at no less than the vendor's
cost, notwithstanding the fact that the same business provides items at
no charge to non-political clients. Compare AO 1975-1. Comments were
also sought as to whether to establish exemptions for certain types of
official providers, or those that provide products or services of less
than a specified dollar amount. The NPRM also included proposed rules
to ensure that in-kind donations are only made consistently with the
provisions of the Act. Thus, the NPRM would have required that the
vendor provide the committee with a description of what is provided,
the terms of the reduction or discount, and a signed affirmation that
this is in the ordinary course of business. It contemplated that
vendors who do not have established practices of offering such
discounts would be able to offer reductions or discounts that are
consistent with established practices in their trade or industry.
Comments were sought on whether certain types of retail businesses,
such as restaurants, should be excluded from these documentation
requirements. The Commission also requested comments on whether retail
businesses providing less than a certain dollar amount of goods and
services, or providing less than a certain percentage discount should
also be exempt from the documentation requirements, and if so, what the
appropriate amount or percentage would be.
One commenter urged the Commission to completely reverse its policy
of permitting corporations to enter promotional consideration
arrangements in connection with publicly financed conventions. However,
several other commenters opposed modifying the result of AO 9188-25,
arguing that official providers offer discounts to gain publicity and
increased sales for their product, and questioning whether any
instances of abuse existed. Consequently, one witness suggested that
the Commission establish a presumption that local business involvement
in convention activity is motivated by economic interests and not
political involvement. These commenters opposed requiring vendors to
sign affirmations that they are acting in the ordinary course of their
businesses. One argued that affirmations would go far beyond the
Commission's established policy, and would deter vendor involvement
because vendors would be reluctant to sign affirmations that include
terms such as ``established,'' ``promotional,'' or ``commercial
benefit.'' Thus, one comment viewed the proposal as an attempt to
second guess the business judgment of the vendor, and noted that it is
sometimes difficult to value goods or services. Two comments urged the
Commission to issue less burdensome rules, arguing that the additional
documentation requirements are unnecessary because vendors offer
discounts to obtain profitable business, not to influence federal
elections. The witnesses at the hearing stated that the requirement
that the in-kind donation not exceed the value of the commercial
benefit was a subjective, hard to define standard. Instead of providing
an affirmation, they preferred disclosing information on in-kind
donations in their reports, such as the vendor's name, and the nature
and value of the goods or services provided, if this could be done in a
non-burdensome manner.
The final rules regarding items provided for promotional
consideration have been modified in several respects. First, the final
rules indicate that discounts, reductions and free items may be offered
by all commercial vendors, and are not restricted to local or retail
businesses. These transactions must be in the ordinary course of
business. The rules further define ordinary course of business. In
addition, the proposed vendor affirmation requirement has been dropped
from the final rules. Instead, the revised rules require the convention
committee to maintain certain documentation of promotional
consideration arrangements and to disclose in its reports a general
description of the goods or services provided, together with the name
and address of the provider. This disclosure requirement is designed to
be non-burdensome, yet sufficient to facilitate enforcement of the
statutory prohibitions and limits by subjecting promotional
consideration arrangements to public scrutiny.
One comment suggested that proposed paragraph Sec. 9008.9(a)(2) be
clarified to emphasize that ``official provider'' status is not the
only form of promotional consideration since a convention committee may
not want to provide exclusive rights to a particular vendor with
respect to certain categories of goods or services. The Commission
notes that Sec. 9008.9 covers commercial vendors wishing to enter into
a variety of promotional arrangements, and is not narrowly limited to
``official providers.''
The new rules generally continue the current policy of permitting
commercial vendors to provide items of de minimis value, such as maps,
pens, pencils or other similar items included in tote bags for those
attending the convention. See previous 11 CFR 9008.7(c)(2). Finally,
paragraph (d) of revised Sec. 9008.9 specifies that goods and services
received in accordance with this section do not count against the
convention committee's spending limits.
(3) Reporting. Another issue raised during this rulemaking was
whether convention committees should be required to report their
receipt of reductions, discounts, and items provided for promotional
consideration from businesses, including a statement of what was
provided and its value, or whether the contracts themselves should be
placed on the public record. There was little, if any, consensus among
the commenters regarding these proposals. One comment noted that since
issuing AO 1988-25, the Commission has required committees to
demonstrate that donations or discounts were in the ordinary course of
a vendor's business, but believed that it would be extraordinary for
the Commission to require the disclosure of the actual contract or to
require that the contract state that the vendor is following its
ordinary course of business. One witness favored reporting items
received at no charge, but opposed reporting discounts given in the
ordinary course of business, or attaching contracts to reports. The
witness noted that the Commission's long-standing policy has been that
items provided in the ordinary course of business are not
``contributions'' to the committee. Finally, one comment opposed
reporting in-kind donations because in-kind donations frequently take
forms that are difficult to quantify, and the value of donations
fluctuates according to changes in the market.
The final rules in section 9008.9 do not require convention
committees to routinely report the receipt of standard volume
discounts, or reduced rates normally made available to certain types of
customers, although they do require reporting of promotional
consideration arrangements. The rules also continue the previous policy
that items of de minimis value, such as maps, pens, and tote bags, need
not be reported. The new rules also do not require committees to file
copies of vendor contracts with their reports. Instead, the contracts
must be provided upon request during the audit. At any time, the
Commission may seek additional information regarding transactions with
commercial vendors, particularly if questions are raised as to whether
a transaction is in the ordinary course of business, or results in the
making and acceptance of a contribution.
Section 9008.10 Documentation of Disbursements; Net Outstanding
Convention Expenses
Under the previous regulations at 11 CFR 9008.8(b)(4)(v),
committees were required to restate in the convention committee
agreement all the documentation requirements for proving that expenses
are convention-related. The revisions to these rules now follow the
format of the regulations for publicly financed Presidential candidates
by only stating in the convention committee agreement that the
committee agrees to comply with the documentation requirements (see
paragraph Sec. 9008.3(a)(4)(iv)), and setting forth the actual
documentation provisions in a separate section. Thus, Sec. 9008.10 now
contains the substantive rules regarding the production of evidence of
convention expenses.
In addition, Sec. 9008.10 has been redrafted to conform to the
documentation requirements for publicly financed candidates. See, 11
CFR 9003.5 and 9033.11. For example, the term ``particulars'' has been
changed to ``purpose of the disbursement.'' Also, the language in
paragraph Sec. 9008.10(a)(4) regarding documentation of disbursements
has been modified to indicate that pre-established written committee
policies may include daily travel expense policies, but do not include
general per diem policies which cover a longer time period or which
include a broader range of expenses. This change is consistent with the
approach the Commission took in revising the primary and general
election rules for publicly funded candidates. See, 11 CFR
9003.5(b)(1)(iv) and 9033.11(b)(1)(iv). One commenter urged that
convention committees be allowed to provide staff with fixed per diems
in lieu of reimbursing actual expenses. Such an approach would be
acceptable if it is reasonably calculated to cover the individual's
actual expenses for transportation, lodging and meals, but not other
expenses.
The Commission has added three new paragraphs to Sec. 9008.10. New
paragraph (f) clarifies that convention committees must retain records
regarding their disbursements and receipts and present them for
Commission review. The records retained by the committee should also
reflect its compliance with 11 CFR 104.14. Paragraph (g) requires
convention committees to provide a statement of net outstanding
convention expenses no later than 60 days after the last day of the
convention, which should reflect its financial position as of 45 days
after the convention. The statement must also be updated to reflect the
committee's financial position as of nine months after the last day of
the convention. The statement must be filed 30 days thereafter, which
is also the date for the interim repayment of unspent funds under 11
CFR 9008.12(b)(5). This provision parallels the requirements for
publicly financed Presidential candidates. See, 11 CFR 9003.5(d),
9004.9, 9033.11(d) and 9034.5. Such statements are intended to enable
the audit process to be completed more expeditiously.
Finally, new paragraph (h) applies the Computerized Magnetic Media
Requirements (CMMR) to publicly financed convention committees. The
purpose of the CMMR is to establish uniform standards for producing
computerized records maintained by publicly financed committees at the
time of the Commission's audit. Rules applying the CMMR to publicly
financed Presidential candidates became effective on October 3, 1990.
See 55 FR 40377 (Oct. 3, 1990); see also, 57 FR 4453 (Feb. 5, 1992)
(updating the requirements and broadening certain technical standards).
During that rulemaking, the Commission noted its intention to include
parallel requirements in the convention regulations. See Explanation
and Justification, 55 FR 26392 (June 27, 1990). The basic rationale and
explanation offered in the June 27, 1990 Explanation and Justification
applies equally to convention committees. Id. The categories of
computerized records sought from convention committees are fewer,
however, in view of the conventions' narrower focus.
Several comments were opposed to these proposals, due to the
perceived financial costs associated with altering their existing
accounting systems and converting their data to a new format. One urged
that any costs involved should be exempt from spending limits. Given
that the Commission has not encountered problems in the past with
computerized records maintained and used by the national parties'
convention committees, few if any, changes in these systems should be
necessitated under the CMMR. As noted in the previous discussion of
section 9008.8, the costs of complying with the CMMR are not
expenditures by the convention committees, and are not subject to the
national committees' spending limits for the convention.
Section 9008.11 Examinations and Audits
Section 9008.11 now contains the provisions on examinations and
audits which were previously found at 11 CFR 9008.9. Also included is a
new sentence signaling the Commission's intention to follow the same
procedures during audits of convention committees as it now does when
auditing the committees of publicly financed Presidential candidates.
Please note that the December 31st time frame for conducting the audit,
which is specified in this section and 26 U.S.C. 9008.8(g), refers to
the time period in which the Commission will commence the audit.
The Commission has deleted from the convention rules previous
paragraph Sec. 9008.11(e), regarding judicial review of Commission
repayment determinations because judicial review procedures are spelled
out in 26 U.S.C. 9010 and 9011.
Section 9008.12 Repayments
Section 9008.12 includes the bases for Commission repayment
determinations, previously found in 11 CFR 9008.10. The repayment
determination procedures previously set out in 11 CFR 9008.11 have been
replaced by new language indicating the Commission's intention to
follow the same procedures and offer the same opportunities to
convention committees as are provided for publicly financed candidates
during the repayment process. See 11 CFR 9007.2 and 9038.2. If in the
future the Commission makes changes to the repayment rules applicable
to Presidential candidates, corresponding changes would be made for the
convention regulations.
In addition, paragraph Sec. 9008.12(b)(5)(ii) continues the current
requirement that convention committees make an interim repayment of
unspent funds, but changes the time frame to 30 days after the end of
the ninth month after the last day of the convention. A final repayment
of unspent funds must be made no later than 24 months after the end of
the convention, both under previous paragraph Sec. 9008.10(e)(3) and
new paragraph Sec. 9008.12(b)(5)(iii).
One commenter argued that the current requirement of an interim
repayment six months after the convention should be eliminated because
six months is an insufficient amount of time to determine the amount
needed to satisfy remaining bills, claims, and disputes. Instead, the
commenter supported an 18 month or 24 month overall time frame for
making repayments.
As noted above, the final rules extend the time period for the
interim repayment and retain the 24 month deadline for the final
repayment. The provisions in paragraph Sec. 9008.12(b)(5)(ii)
adequately address the commenter's concerns by allowing for the
certification of payments to the convention committee of amounts needed
to defray additional convention expenses, where the convention
committee has already made an interim repayment.
With regard to the income from the investment of public funds, new
11 CFR 9008.12(b)(6) replaces previous paragraph Sec. 9008.4(b). The
new provision more closely follows the approach taken in the rules
governing Presidential candidates who accept public funding. See 11 CFR
9007.2(b)(4) and 9038.2(b)(4).
The NPRM sought comments on how to address situations where a host
committee receives contributions from impermissible sources, such as
nonlocal businesses, which are than used to defray convention expenses
or for other permissible purposes. In some cases, it may be appropriate
to count these amounts against the convention committee's spending
limits, although there may be situations where enforcement actions are
warranted.
Several commenters argued that it would be more effective to handle
these situations through enforcement than by imposing oversight
responsibility and liability on the convention committees, because
convention committees, host committees, and municipalities have
different agendas. Several commenters and witnesses indicated that it
may be appropriate to pursue the convention committee if it acts with
knowledge, consent, or acquiescence in an unlawful act, but it would be
unfair to impose accountability on convention committees when they are
unaware of, or do not consent to, the unlawful actions of a host
committee or city. Two witnesses testified that host committees conduct
fundraising autonomously from the convention committees, although the
two entities have an on-going daily relationship during the convention
planning process.
In response to the concerns raised, the Commission notes that
neither the current nor the revised rules in Sec. 9008.12(b)(7) impose
strict or vicarious liability on convention committees for the actions
taken by cities or host committees. Instead, convention committees are
accountable for the actions of cities or host committees when they
knowingly help or assist or participate in conducting impermissible
activities, including initiating or instigating the activity. Thus, the
rules preserve the Commission's ability to proceed in the manner
appropriate to a particular case, such as through the repayment process
or enforcement.
Section 9008.13 Additional Audits
The Commission's authority to conduct other audits or
investigations of a committee in an appropriate case is set forth in
new Sec. 9008.13. It follows similar provisions for publicly financed
Presidential candidates. See 11 CFR 9007.4 and 9039.3.
Section 9008.14 Petitions for Rehearing; Stays of Repayment
Determinations
This new section governs petitions for rehearing after the
Commission's final repayment determination, and stays of repayment
determinations pending appeal. It indicates that the Commission expects
to follow the same procedures regarding rehearings and stays requested
by convention committees as it uses for publicly funded Presidential
candidates. See 11 CFR 9007.5 and 9038.5.
Section 9008.15 Extensions of Time
Section 9008.15 governs committee requests for extensions of time
under Part 9008. This new provision conforms to the Commission's
established policies concerning extensions of time. See 11 CFR 9007.3
and 9038.4.
Section 9008.16 Stale-Dated Committee Checks
Section 9008.16 has been added to provide procedures for handling
stale-dated committee checks, and is based on similar provisions
applicable to Presidential candidates accepting public funding. See 11
CFR 9007.6 and 9038.6. A minor change from the wording contained in the
NPRM reflects that this provision applies to all stale-dated checks,
not just those made out to creditors or contributors.
Subpart B--Host Committees Representing a Convention City;
Convention Expenditures by Government Agencies and Municipal
Corporations
This subpart has been created to separate the rules governing host
committees, government agencies and local municipalities from the
regulations on publicly financed convention committees. As explained
below, it includes portions of previous Secs. 9008.1, 9008.7, 9008.9
and 9008.12.
Section 9008.50 Scope
This new scope section alerts host committees, government agencies
and municipalities to the registration and reporting requirements, and
generally describes the areas covered by Subpart B. It follows previous
paragraph 9008.1(b) by indicating that the reporting requirements do
not apply to unsuccessful efforts to attract a convention.
Section 9008.51 Registration and Reports
This section contains the registration and reporting requirements
applicable to host committees, which were previously located in 11 CFR
9008.12. It also includes new provisions regarding reporting by
municipal corporations and other government agencies.
(1) Host committee reports. Paragraphs (a) and (b) of Sec. 9008.51
contain the rules governing host committee registration and reporting
found at former 11 CFR 9008.12(a). The NPRM had proposed requiring host
committee to file reports beginning in the first quarter of the
presidential election year, rather than with the post-convention
report. Another proposal would have required host committees to itemize
their receipts and disbursements to the extent required by 11 CFR Part
104. One comment argued against the dual burden of earlier disclosure
deadlines and itemization of receipts, in the absence of a demonstrated
defect in the current regulations. The Commission notes that section
437 of the FECA does not discuss pre-convention reporting by host
committees. Consequently, 11 CFR 9008.51 (a) and (b) now follow the
approach set out in previous Sec. 9008.12(a), except that the deadline
for filing quarterly reports was changed to correspond to the filing
deadline for quarterly reports filed under Title 2.
(2) Reporting by municipalities. New paragraph 9008.51(c) addresses
reporting by municipal corporations and other local government
agencies. This provision implements 2 U.S.C. 437(1) by requiring
reporting by committees or organizations representing ``a State, or a
political subdivision thereof, or any group of persons, in dealing with
officials of a national political party'' on matters relating to a
national nominating convention to be held in that State or political
subdivision. This statutory language can be read to require reporting
by an entity established by a state or local government, other than a
host committee, to receive funds and make disbursements for a
convention in that locality, although in the past these entities have
not had to register and report. Consequently, the Commission considered
specific disclosure requirements for municipalities and other
government agencies providing services and facilities to a national
nominating convention. Expenditures by these entities are largely for
the same purposes as those permitted by the regulations for host
committees. See, Secs. 9008.52 and 9008.53. Advisory Opinions 1982-27
and 1983-29 permit the acceptance of private donations by these
entities to defray convention expenses. See discussion of 11 CFR
9008.53. For these reasons, the Commission believes that reporting by
these entities will serve an important disclosure function.
The opponents of new reporting rules suggested instead that
municipalities file copies of written contracts between the national
committees and the cities they select. In the NPRM, the Commission
indicated that it was considering whether to require municipalities to
file reports which include copies of these contracts. Although this
approach would result in public disclosure of amounts specified in the
contracts, it would fail to publicly disclose the amount actually spent
or the amount raised from private funds. Accordingly, the Commission
also considered alternative reporting provisions in light of the
increased roles municipalities have played in recent conventions. The
reporting proposals included in the NPRM were designed to accomplish
meaningful disclosure with as little burden on municipalities as
possible.
Four comments responded to the issues raised in the NPRM, and the
proposed language in paragraph Sec. 9008.51(c). One commenter endorsed
the suggestion that municipalities be required to report the source of
funds received for hosting the convention. However, three other
comments opposed the reporting provision for various reasons. Some
thought the Commission has misinterpreted the meaning of 2 U.S.C.
437(1) by seeking to apply it to municipalities and government
agencies, instead of continuing to interpret the term ``represent'' a
state, political subdivision or any group of persons to only apply to a
host committee or other organization which deals with officials of a
national party. One argued that this approach would be inconsistent
with, and would undermine, Advisory Opinions 1982-27 and 1983-29. Some
believed that the Commission has not demonstrated a change of
circumstances to merit changing its policy, and that cities already
make various kinds of reports regarding receipts and expenditures of
their funds. Another concern was that disclosure would be costly and
deter municipalities from hosting conventions. The commenters and
witnesses indicated that municipalities host political conventions to
showcase their cities, hoping to attract other events of economic
benefit, such as the Olympics or the Super Bowl.
The Commission has concluded that changes in the way convention
financing operates, which have occurred since AOs 1982-27 and 1983-29
were issued, have made it necessary to add new reporting provisions to
ensure adequate public disclosure in the future. The new rules at
paragraph Sec. 9008.51(c) reflect a permissible interpretation of the
statutory wording. In formulating new reporting requirements, the
Commission has sought to ensure that adequate public disclosure is
accomplished without imposing unduly burdensome requirements on
municipalities and other governmental entities.
Under new paragraph Sec. 9008.51(c), municipal corporations and
government agencies must file a statement with the Commission listing
general categories of convention-related facilities and services it
provided to the convention, the total cost of providing such facilities
and services, the total amount of general revenues and the total amount
of private funds donated to a separate account to pay for these
activities. The new rules also include a list of broad categories of
expenses, to assist municipalities in providing the general information
needed.
Section 9008.52 Receipts and Disbursements of Host Committees
The description of host committees has been moved from previous 11
CFR 9008.7(d)(1) to new paragraph Sec. 9008.52(a). One commenter
opposed the creation and use of host committees because they receive
funds from sources that public funds were meant to replace, but favored
earlier reporting by host committees.
Paragraph (b) of new Sec. 9008.52 recognizes that host committees
may accept goods and services from commercial vendors at reduced or
discounted rates, as well as items provided in exchange for official
provider status, subject to the requirements of Sec. 9008.9, including
reporting. One commenter argued that there should be a presumption that
local businesses are motivated by commercial, not political gain;
therefore, they should be exempt from additional documentation
requirements when making these types of donations to host committees or
municipalities. The elimination of the vendor affirmations, which is
discussed above, addresses this concern.
Paragraph (c) of this section, and a cross-reference in new
Sec. 9008.53, indicate that both host committees and government
agencies and municipalities may accept monetary and in-kind donations
from local businesses and other local organizations and individuals to
defray a variety of expenses for promoting the convention city and
paying for convention-related facilities and services. Section
9008.52(c) is based on previous 11 CFR 9008.7 (b) and (d)(3). Please
note that the revised rules do not permit host committees or
municipalities to pay salaries of those working for the convention
committee or the national party, or to pay the convention committee's
or the national party's overhead and administrative expenses related to
the convention.
The term ``local'' is also explained in paragraph (c) of this
section. Revised language has also been included to clarify that banks
do not qualify as local businesses under this section.
Section 9008.53 Receipts and Disbursements of Government Agencies and
Municipal Corporations
New Sec. 9008.53 sets forth rules on special municipal funds
established by municipal corporations and government agencies for the
purposes enumerated in 11 CFR 9008.52 relating to the promotion of the
convention city and paying certain convention expenses. Section 9008.53
parallels Sec. 9008.52 with regard to transactions with commercial
vendors and the definition of local businesses that may make monetary
or in-kind donations for certain purposes.
The Commission sought comment on proposed language in paragraph
(a)(2) intended to incorporate the conclusions reached in Advisory
Opinions 1982-27 and 1983-29. Under these advisory opinions, convention
cities were permitted to establish a municipal fund to receive
donations and make disbursements in connection with a nominating
convention, provided certain conditions were met. First, the fund must
have been created to attract conventions and other events to the
locality on a broad scale, and cannot have been established for the
sole purpose of providing services and facilities to the nominating
convention. Second, donations to the fund must be unrestricted and may
not be designated for any particular use, including the nominating
convention. One question was whether the creation of such a fund must
be necessitated by a prohibition under local law against the use of
general tax revenue for these purposes. Concerns were raised that this
would be inconsistent with Advisory Opinion 1983-29. Consequently, the
Commission has not included a requirement restricting the creation of
such municipal funds to situations where local law prohibits using tax
revenues for convention purposes.
New paragraph Sec. 9008.53(b) also clarifies that banks do not
qualify as local businesses under this section. All bank loans must
meet the requirements of 11 CFR 100.7(b)(11). The revised rules also
remove the previous requirements that only retail businesses can donate
funds.
Finally, the revised rules no longer include the requirement that
the amount of the donation be proportionate to the commercial return
reasonably expected during the life of the convention. In response to
questions raised in the NPRM, one comment objected to applying this
criterion to donations from businesses, particularly if the commercial
return is measured only during the life of the convention. Accordingly,
the new rules recognize that local businesses and organizations that
donate to municipal funds are motivated by commercial and civic
reasons, rather than election-influencing purposes.
Section 9008.54 Examinations and Audits
New Sec. 9008.54 sets out the basic rule regarding Commission
audits of host committees, which was previously set forth at 11 CFR
9008.9. Consistent with the rules applicable to convention committees,
Sec. 9008.54 includes a sentence indicating the Commission's intention
to follow the same procedures during audits of host committees that it
uses when auditing committees of publicly-financed Presidential
candidates. In the case of host committees, however, the Commission
does not make any repayment calculations because host committees do not
receive public funds. Please note that the December 31st time frame for
conducting the audit refers to the time period in which the Commission
will commence the audit.
Additional Issues
The NPRM indicated that questions had been raised as to whether
Title VI of the Civil Rights Act of 1964 is applicable to the selection
of delegates to the federally funded national nominating conventions.
Under Title VI, ``[n]o person in the United States shall, on the ground
of race, color, or national origin, be excluded from participation in,
be denied the benefits of, or be subjected to discrimination under any
program or activity receiving federal financial assistance.'' 42 U.S.C.
2000d. The U.S. District Court for the District of Columbia ordered the
Commission to promulgate rules under Title VI governing the selection
and allocation of delegates to the federally-funded nominating
conventions. Freedom Republicans Inc. v. Federal Election Commission,
788 F. Supp. 600, 601 (D.D.C. 1992). However, on appeal the D.C.
Circuit vacated the district court's decision on jurisdictional
grounds. Freedom Republicans Inc. v. Federal Election Commission, No.
92-5214, slip op. at 2, 15 (D.C. Cir. Jan. 18, 1994). While awaiting
the decision of the Court of Appeals, the Commission welcomed public
comments on what impact, if any, Title VI may have on federally-funded
national nominating conventions. One of the witnesses stated that it
was inappropriate to comment because this particular rulemaking does
not address the issue. Another witness indicated that his party would
meet any foreseeable delegate selection standard the Commission might
adopt, and therefore had no opinion on the issue. In view of the D.C.
Circuit decision, the Commission has decided not to issue regulations
under Title VI regarding delegate selection at this time.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) [Regulatory
Flexibility Act]
The attached final rules will not, if promulgated, have a
significant economic impact on a substantial number of small entities.
The basis for this certification is that few, if any, small entities
will be affected by these rules.
List of Subjects
11 CFR Part 107
Political committees and parties, Reporting requirements.
11 CFR Part 114
Business and industry, Elections.
11 CFR Part 9008
Campaign funds, Political committees and parties, Reporting
requirements.
For the reasons set out in the preamble, Subchapters A and E,
Chapter I of Title 11 of the Code of Federal Regulations are amended as
follows:
1. 11 CFR Part 107 is revised to read as follows:
PART 107--PRESIDENTIAL NOMINATING CONVENTION, REGISTRATION AND
REPORTS
Sec.
107.1 Registration and Reports by Political Parties.
107.2 Registration and Reports by Host Committees, and Committees,
Organizations or Other Groups Representing a State, City or Other
Local Government Agency.
Authority: 2 U.S.C. 437, 438(a)(8).
Sec. 107.1 Registration and reports by political parties.
Each convention committee established under 11 CFR 9008.3(a)(2) by
a national committee of a political party and each committee or other
organization, including a national committee, which represents a
political party in making arrangements for that party's convention held
to nominate a presidential or vice presidential candidate shall
register and report in accordance with 11 CFR 9008.3(b).
Sec. 107.2 Registration and reports by host committees, and
committees, organizations or other groups representing a state, city or
other local government agency.
Each host committee, and each committee or other organization or
group of persons which represents a State, municipality, local
government agency or other political subdivision in dealing with
officials of a national political party with respect to matters
involving a presidential nominating convention, shall register and
report in accordance with 11 CFR 9008.51.
PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY
2. The authority citation for Part 114 continues to read as
follows:
Authority: 2 U.S.C. 431(8)(B), 431(9)(B), 432, 437d(a)(8),
438(a)(8), and 441b.
3. Section 114.1 is amended by revising paragraph (a)(2)(viii) to
read as follows:
Sec. 114.1 Definitions.
(a) * * *
(2) * * *
(viii) Activity permitted under 11 CFR 9008.9, 9008.52 and 9008.53
with respect to a presidential nominating convention;
* * * * *
4. 11 CFR Part 9008 is revised to read as follows:
PART 9008--FEDERAL FINANCING OF PRESIDENTIAL NOMINATING CONVENTIONS
Subpart A--Expenditures by National Committees and Convention
Committees
Sec.
9008.1 Scope.
9008.2 Definitions.
9008.3 Eligibility for payments; registration and reporting.
9008.4 Entitlement to payments from the fund.
9008.5 Adjustment of entitlement.
9008.6 Payment and certification procedures.
9008.7 Use or funds.
9008.8 Limitation of expenditures.
9008.9 Receipt of goods and services from commercial vendors.
9008.10 Documentation of disbursements; net outstanding convention
expenses.
9008.11 Examinations and audits.
9008.12 Repayments.
9008.13 Additional audits.
9008.14 Petitions for rehearing: Stays of repayment determinations.
9008.15 Extensions of time.
9008.16 Stale-dated committee checks.
Subpart B--Host Committees Representing a Convention City; Convention
Expenditures by Government Agencies and Municipal Corporations
Sec.
9008.50 Scope.
9008.51 Registration and reports.
9008.52 Receipts and disbursements of host committees.
9008.53 Receipts and disbursements of government agencies and
municipal corporations.
9008.54 Examinations and audits.
Authority: 2 U.S.C. 437, 438(a)(8); 26 U.S.C. 9008, 9009(b).
Subpart A--Expenditures by National Committees and Convention
Committees
Sec. 9008.1 Scope.
(a) This Part interprets 2 U.S.C. 437 and 26 U.S.C. 9008. Under 26
U.S.C. 9008(b), the national committees of both major and minor parties
are entitled to public funds to defray expenses incurred with respect
to a Presidential Nominating convention. Under 26 U.S.C. 9008(d),
expenditures with regard to such a convention by a national committee
receiving public funds are limited to $4,000,000, as adjusted by the
Consumer Price Index. New parties are not entitled to receive any
public funds to defray convention expenses.
(b) Under 2 U.S.C. 437, each committee or organization which
represents a national party in making arrangements for that party's
presidential nominating convention is required to file disclosure
reports. This reporting obligation extends to all such committees or
organizations, regardless of whether or not public funds are used or
available to defray convention expenses.
Sec. 9008.2 Definitions.
(a) Commission means the Federal Election Commission, 999 E Street,
NW., Washington, DC 20463.
(b) Fund means the Presidential Election Campaign Fund established
by 26 U.S.C. 9006(a).
(c) Major party means, with respect to any presidential election, a
political party whose candidate for the office of President in the
preceding presidential election received, as the candidate of such
party, 25 percent or more of the total number of popular votes received
by all candidates for such office.
(d) Minor party means, with respect to any presidential election, a
political party whose candidate for the office of President in the
preceding presidential election received, as the candidate of such
party, 5 percent or more, but less than 25 percent, of the total number
of popular votes received by all candidates for such office.
(e) National committee means the organization which, by virtue of
the by-laws of the political party, is responsible for the day to day
operation of that party at the national level.
(f) New party means, with respect to any presidential election, a
political party which is neither a major party nor a minor party.
(g) Nominating convention means a convention, caucus or other
meeting which is held by a political party at the national level and
which chooses the presidential nominee of the party through selection
by delegates to that convention or through other similar means.
(h) Secretary means the Secretary of the Treasury of the United
States.
Sec. 9008.3 Eligibility for payments; registration and reporting.
(a) Eligibility requirements. (1) To qualify for entitlement under
11 CFR 9008.4 and 9008.5, the national committee of a major or minor
political party shall establish a convention committee pursuant to
paragraph (a)(2) of this section and shall file an application
statement pursuant to paragraph (a)(3) of this section. The convention
committee, in conjunction with the national committee, shall file an
agreement to comply with the conditions set forth at paragraph (a)(4)
of this section.
(2) The national committee shall establish a convention committee
which shall be responsible for conducting the day to day arrangements
and operations of that party's presidential nominating convention. The
convention committee shall register with the Commission as a political
committee pursuant to 11 CFR Part 102. The convention committee shall
receive all public funds to which the national committee is entitled
under 11 CFR 9008.4 and 9008.5 and all private contributions made for
the purpose of defraying convention expenses. All expenditures on
behalf of the national committee for convention expenses shall be made
by the convention committee.
(3) The national committee shall file with the Commission an
application statement. Any changes in the information provided in the
application statement must be reported to the Commission within 10 days
following the change. The application statement shall include:
(i) The name and address of the national committee;
(ii) The name and address of the convention committee and of the
officers of that committee;
(iii) The name of the city where the convention is to be held and
the approximate dates;
(iv) The name, address, and position of the convention committee
officers designated by the national committee to sign requests for
payments; and
(v) The name and address of the depository of the convention
committee.
(4) The convention committee shall, by letter to the Commission,
agree to the conditions set forth in paragraph (a)(4) (i) through
(viii) of this section. This agreement shall also be binding upon the
national committee.
(i) The convention committee shall agree to comply with the
applicable expenditure limitation set forth at 11 CFR 9008.8.
(ii) The convention committee shall agree to file convention
reports as required under 2 U.S.C. 437 and 11 CFR 9008.3(b).
(iii) The convention committee shall agree to establish one or more
accounts into which all public funds received under 11 CFR 9008.4 and
9008.5 must be deposited and from which all expenditures for convention
expenses must be made. Such account(s) shall contain only public funds
except as provided in 11 CFR 9008.6(a)(3).
(iv) The convention committee shall agree to keep and furnish to
the Commission all documentation of convention disbursements made by
the committee as required under 11 CFR 9008.10. The convention
committee has the burden of proving that disbursements by the
convention committee were for purposes of defraying convention expenses
as set forth at 11 CFR 9008.7(a)(4).
(v) The convention committee shall agree to furnish to the
Commission any books, records (including bank records for all
accounts), a copy of any contract which the national committee enters
into with a host committee or convention city or vendor, a copy of
documentation provided by commercial vendors in accordance with 11 CFR
9008.9(b), and any other information that the Commission may request.
If the convention committee maintains or uses computerized information
containing any of the categories of data listed in 11 CFR 9008.10(h)(1)
(i) through (iv), the convention committee will provide computerized
magnetic media, such as magnetic tapes or magnetic diskettes,
containing the computerized information at the times specified in 11
CFR 9008.10(h)(2) that meet the requirements of 11 CFR 102.9 and
9008.10 (a) and (b). Upon request, documentation explaining the
computer system's software capabilities shall be provided, and such
personnel as are necessary to explain the operation of the computer
system's software and the computerized information prepared or
maintained by the convention committee shall also be made available.
(vi) The convention committee shall agree to permit an audit and
examination pursuant to 26 U.S.C. 9008(g) and 11 CFR 9008.11 of all
convention expenses; to facilitate such audit by making available
office space, records, and such personnel as is necessary to the
conduct of the audit and examination; and to pay any amounts required
to be paid under 26 U.S.C. 9008(h) and 11 CFR 9008.12.
(vii) The convention committee shall agree to comply with the
applicable requirements of 2 U.S.C. 431 et seq., 26 U.S.C. 9008, and
the Commission's regulations at 11 CFR Parts 100-116 and 9008.
(viii) The convention committee shall pay any civil penalties
included in a conciliation agreement or imposed under 2 U.S.C. 437g.
(5) The application statement and agreement may be filed at any
time after June 1 of the calendar year preceding the year in which a
Presidential nominating convention of the political party is held, but
no later than the first day of the convention.
(b) Registration and reports by political parties.
(1) Registration. (i) Each convention committee established by a
national committee under paragraph (a)(2) of this section shall
register with the Commission on FEC Form 1 as a political committee
pursuant to 11 CFR Part 102 and shall file reports with the Commission
as required at paragraph (b)(2) of this section. Each report filed by
the committee shall contain the information required by 11 CFR Part
104.
(ii) A State party committee or a subordinate committee of a State
party committee which only assists delegates and alternates to the
convention from that State with travel expenses and arrangements, or
which sponsors caucuses, receptions, and similar activities at the
convention site, need not register or report under this section.
(2) Quarterly and post convention reports; content and time of
filing. Each committee required to register under paragraph (b)(1) of
this section shall file reports as follows:
(i) The first quarterly report shall be filed on FEC Form 4 no
later than 15 days following the end of the calendar quarter in which
the committee either receives payment under 11 CFR 9008.6, or for
parties which do not accept public funds, no later than 15 days after
the calendar quarter in which the committee receives contributions or
makes expenditures to defray convention expenses. The committee shall
continue to file reports on a quarterly basis no later than the 15th
day following the close of each calendar quarter, except that the
report for the final calendar quarter of the year shall be filed on
January 31 of the following calendar year. Quarterly reports shall be
completed as of the close of the quarter and shall continue to be filed
until the committee ceases activity in connection with that party's
presidential nominating convention.
(ii) Any quarterly report due within 20 days before or after the
convention shall be suspended and the committee shall in lieu of such
quarterly report file a post convention report. The post convention
report shall be filed on the earlier of: 60 days following the last day
the convention is officially in session; or 20 days prior to the
presidential general election. The post convention report shall be
complete as of 15 days prior to the date on which the report must be
filed.
(c) Cessation of activity. A convention committee which has
received payments under 11 CFR 9008.6 shall cease activity no later
than 24 months after the convention, unless the committee has been
granted an extension of time. The Commission may grant any extension of
time it deems appropriate upon request of the committee at least 30
days prior to the close of the 24 month period.
Sec. 9008.4 Entitlement to payments from the fund.
(a) Major parties. Subject to the provisions of this Part, the
national committee of a major party shall be entitled to receive
payments under 11 CFR 9008.6 with respect to any presidential
nominating convention, in amounts which, in the aggregate, shall not
exceed $4 million, as adjusted by the Consumer Price Index under 11 CFR
9008.5(a).
(b) Minor parties. Subject to the provisions of this Part, the
national committee of a minor party shall be entitled to payments under
11 CFR 9008.6 with respect to any presidential nominating convention in
amounts which, in the aggregate, shall not exceed an amount which bears
the same ratio to the amount which the national committee of a major
party is entitled to receive under 11 CFR 9008.5 as the number of
popular votes received in the preceding presidential election by that
minor party's presidential candidate bears to the average number of
popular votes received in the preceding presidential election by all of
the major party presidential candidates.
(c) Limitation on payments. Payments to the national committee of a
major party or a minor party under 11 CFR 9008.6 from the account
designated for such committee shall be limited to the amounts in such
account at the time of payment.
Sec. 9008.5 Adjustment of entitlement.
(a) The entitlements established by 11 CFR 9008.4 shall be adjusted
on the basis of the Consumer Price Index pursuant to the provisions of
2 U.S.C. 441a(c).
(b) The entitlements established by 11 CFR 9008.4 shall be adjusted
so as not to exceed the difference between the expenditure limitations
of 11 CFR 9008.8(a) and the amount of private contributions received
under 11 CFR 9008.6(a) by the national committee of a political party.
Except as provided in 11 CFR 9008.12(b)(7), in calculating these
adjustments, amounts expended by Government agencies and municipal
corporations in accordance with 11 CFR 9008.53; in-kind donations by
businesses to the national committee or convention committee in
accordance with 11 CFR 9008.9; expenditures by host committees in
accordance with 11 CFR 9008.52; expenditures to participate in or
attend the convention under 11 CFR 9008.8(b)(2); and legal and
accounting services rendered in accordance with 11 CFR 9008.8(b)(4)
will not be considered private contributions or expenditures counting
against the limitation.
Sec. 9008.6 Payment and certification procedures.
(a) Optional payments; private contributions. (1) The national
committee of a major or minor party may elect to receive all, part, or
none of the amounts to which it is entitled under 11 CFR 9008.4 and
9008.5.
(2) If a national committee of a major or minor party elects to
receive part of the amounts to which it is entitled under 11 CFR 9008.4
and 9008.5, or if the Secretary determines there is a deficiency in the
Fund under 26 U.S.C. 9008(b)(4), the national committee may receive and
use private contributions, so long as the sum of the contributions
which are used to defray convention expenses and the amount of
entitlements elected to be received does not exceed the total
expenditure limitation under 11 CFR 9008.8.
(3) All private contributions received by the national committee to
defray convention expenses shall be subject to all reporting
requirements, limitations and prohibitions of Title 2, United States
Code. The convention committee may establish a separate account for
private contributions or may deposit such contributions with payments
received from the Fund pursuant to paragraph (d) of this section. The
account(s) shall be maintained at a State bank, federally chartered
depository institution or other depository institution, the deposits or
accounts of which are insured by the Federal Deposit Insurance
Corporation.
(b) Increase in certified amount. If the application statement is
filed before it is possible to determine the cost of living increase
for the year preceding the convention, that amount determined by the
increase shall be paid to the national committee promptly after the
increase has been determined.
(c) Availability of payments. The national committee of a major or
minor party may receive payments under this section beginning on July 1
of the calendar year immediately preceding the calendar year in which a
Presidential nominating convention of the political party involved is
held.
(d) Certification of payment. After a national committee has
properly submitted its application statement and agreement as required
under 11 CFR 9008.3(a) (3) and (4), and upon receipt of a written
request, payment of the committee's entitlement will be certified by
the Commission to the Secretary of the Treasury.
Sec. 9008.7 Use of funds.
(a) Permissible uses. Any payment made under 11 CFR 9008.6 shall be
used only for the following purposes:
(1) Such payment may be used to defray convention expenses
(including the payment of deposits) incurred by or on behalf of the
national committee receiving such payments; or
(2) Such payment may be used to repay the principal and interest,
at a commercially reasonable rate, on loans the proceeds of which were
used to defray convention expenses; or
(3) Such payment may be used to restore funds (including advances
from the national committee to the convention committee), other than
contributions to the committee for the purpose of defraying convention
expenses, where such funds were used to defray convention expenses.
(4) ``Convention expenses'' include all expenses incurred by or on
behalf of a political party's national committee or convention
committee with respect to and for the purpose of conducting a
presidential nominating convention or convention-related activities.
Such expenses include, but are not limited to:
(i) Expenses for preparing, maintaining, and dismantling the
physical site of the convention, including rental of the hall,
platforms and seating, decorations, telephones, security, convention
hall utilities, and other related costs;
(ii) Salaries and expenses of convention committee employees,
volunteers and similar personnel, whose responsibilities involve
planning, management or otherwise conducting the convention;
(iii) Salary or portion of the salary of any national committee
employee for any period of time during which, as a major
responsibility, that employee performs services related to the
convention;
(iv) Expenses of national committee employees, volunteers or other
similar personnel if those expenses were incurred in the performance of
services for the convention in addition to the services normally
rendered to the national committee by such personnel;
(v) Expenses for conducting meetings of or related to committees
dealing with the conduct and operation of the convention, such as
rules, credentials, platform, site, contests, call, arrangements and
permanent organization committees, including printing materials and
rental costs for meeting space.
(vi) Expenses incurred in securing a convention city and facility;
(vii) Expenses incurred in providing a transportation system in the
convention city for use by delegates and other persons attending or
otherwise connected with the convention;
(viii) Expenses for entertainment activities which are part of the
official convention activity sponsored by the national committee,
including but not limited to dinners, concerts, and receptions; except
that expenses for the following activities are excluded:
(A) Entertainment activities sponsored by or on behalf of
candidates for nomination to the office of President or Vice President,
or State delegations;
(B) Entertainment activities sponsored by the national committee if
the purpose of the activity is primarily for national committee
business, such as fund-raising events, or selection of new national
committee officers;
(C) Entertainment activities sponsored by persons other than the
national committee; and
(D) Entertainment activities prohibited by law;
(ix) Expenses for printing convention programs, a journal of
proceedings, agendas, tickets, badges, passes, and other similar
publications;
(x) Administrative and office expenses for conducting the
convention, including stationery, office supplies, office machines, and
telephone charges; but excluded from these expenses are the cost of any
services supplied by the national committee at its headquarters or
principal office if such services are incidental to the convention and
not utilized primarily for the convention;
(xi) Payment of the principal and interest, at a commercially
reasonable rate, on loans the proceeds of which were used to defray
convention expenses;
(xii) Expenses for gifts or monetary bonuses for national committee
or convention committee employees, volunteers and convention officials
in recognition for convention-related activities or services, provided
that the gifts and bonuses do not exceed $150 total per individual, and
the total for all gifts and bonuses does not exceed $20,000; and
(xiii) Expenses for producing biographical films, or similar
materials, for use at the convention, about candidates for nomination
or election to the office of President or Vice President, but any other
political committee(s) that use part or all of the biographical films
or materials shall pay the convention committee for the reasonably
allocated cost of the biographical films or materials used.
(5) Any investment of public funds or any other use of public funds
to generate income is permissible only if the income so generated is
used to defray convention expenses. Such income, less any tax paid on
it, shall be repaid to the United States Treasury as provided under 11
CFR 9008.12(b)(6).
(b) Prohibited uses. (1) No part of any payment made under 11 CFR
9008.6 shall be used to defray the expenses of any candidate, delegate,
or alternate delegate who is participating in any presidential
nominating convention except that the expenses of a person
participating in the convention as official personnel of the national
party may be defrayed with public funds even though that person is
simultaneously participating as a delegate or candidate to the
convention. This Part shall not prohibit candidates, delegates or
alternate delegates who are participating in a presidential nominating
convention from attending official party convention activities
including but not limited to dinners, concerts and receptions, where
such activities are paid for with public funds.
(2) Public funds shall not be used to defray any expense the
incurring or payment of which violates any law of the United States or
any law of the State in which such expense is incurred or paid, or any
regulation prescribed under federal or State laws.
(3) Public funds shall not be used to pay civil or criminal
penalties required or agreed to be paid pursuant to 2 U.S.C. 437g. Any
amounts received or expended by the national committee or convention
committee of a political party to pay such penalties shall not be
considered contributions or expenditures, except that such amounts
shall be reported in accordance with 11 CFR Part 104 and shall be
subject to the prohibitions of 11 CFR 110.4 and Parts 114 and 115.
Sec. 9008.8 Limitation of expenditures.
(a) National party limitations. (1) Major parties. Except as
provided by paragraph (a)(3) of this section, the national committee of
a major party may not incur convention expenses with respect to a
Presidential nominating convention which, in the aggregate, exceed the
amount to which such committee is entitled under 11 CFR 9008.4 and
9008.5.
(2) Minor parties. Except as provided by paragraph (a)(3) of this
section, the national committee of a minor party may not incur
convention expenses with respect to a Presidential nominating
convention which, in the aggregate, exceed the amount to which the
national committee of a major party is entitled under 11 CFR 9008.4 and
9008.5.
(3) Authorization to exceed limitation. The Commission may
authorize the national committee of a major party or minor party to
make expenditures for convention expenses, which expenditures exceed
the limitation established by paragraph (a) (1) or (2) of this section.
This authorization shall be based upon a determination by the
Commission that, due to extraordinary and unforeseen circumstances, the
expenditures are necessary to assure the effective operation of the
Presidential nominating convention by the committee. Examples of
``extraordinary and unforeseen circumstances'' include, but are not
limited to, a natural disaster or a catastrophic occurrence at the
convention site. In no case, however, will such authorization entitle a
national committee to receive public funds greater than the entitlement
specified under 11 CFR 9008.4 and 9008.5. All private contributions
received to defray expenditures under this paragraph shall be subject
to all reporting requirements, limitations (except for limitations
imposed by paragraphs (a)(1) and (2) of this section) and prohibitions
of the Federal Election Campaign Act (2 U.S.C. 431 et seq.).
(b) Payments not subject to limit. (1) Host committee expenditures.
Expenditures made by the host committee shall not be considered
expenditures by the national committee and shall not count against the
expenditure limitations of this section provided the funds are spent in
accordance with 11 CFR 9008.52.
(2) Expenditures by government agencies and municipal corporations.
Expenditures made by government agencies and municipal corporations
shall not be considered expenditures by the national committee and
shall not count against the expenditure limitations of this section if
the funds are spent in accordance with the requirements of 11 CFR
9008.53.
(3) Expenditures to participate in or attend convention.
Expenditures made by presidential candidates from campaign accounts, by
delegates, or by any other individual from his or her personal funds
for the purpose of attending or participating in the convention or
convention related activities, including, but not limited to the costs
of transportation, lodging and meals, or by State or local committees
of a political party on behalf of such delegates or individuals shall
not be considered expenditures made by or on behalf of the national
party, and shall therefore not be subject to the overall expenditure
limitations of this section.
(4) Legal and accounting services. (i) The payment of compensation
to an individual by his or her regular employer for legal and
accounting services rendered to or on behalf of the national committee
shall not be considered an expenditure and shall not count against the
expenditure limitations of this section.
(ii) The payment by the national committee of compensation to any
individual for legal and accounting services rendered to or on behalf
of the national committee in connection with the presidential
nominating convention or convention-related activities shall not be
considered an expenditure and shall not count against the expenditure
limitations of this section provided that:
(A) The legal and accounting services relate solely to compliance
with the Federal Election Campaign Act (2 U.S.C. 431, et seq.) and the
Presidential Election Campaign Fund Act (26 U.S.C. Chapter 95); and
(B) The contributions raised to pay for the legal and accounting
services comply with the limitations and prohibitions of 11 CFR Parts
110, 114 and 115. These contributions, when aggregated with other
contributions from the same contributor to the political committees
established and maintained by the national political party, shall not
exceed $20,000 per person, and $15,000 per multicandidate political
committee in any calendar year.
(iii) The convention committee shall report contributions received
to pay for legal and accounting services on a separate Schedule A, and
shall report payments for legal and accounting services on a separate
Schedule B, attached to its reports.
(5) Computerized information. Payments to defray the costs of
producing, delivering and explaining the computerized information and
materials provided pursuant to 11 CFR 9008.10(h), and explaining the
operation of the computer system's software, shall not be considered
expenditures and shall not count against the expenditure limitations of
this section, provided that the contributions raised to pay these
expenses comply with the limitations and prohibitions of 11 CFR Parts
110, 114 and 115.
Sec. 9008.9 Receipt of goods and services from commercial vendors.
Commercial vendors may sell, lease, rent or provide their goods or
services to the national committee with respect to a presidential
nominating convention at reduced or discounted rates, or at no charge,
provided that the requirements of either paragraph (a), paragraph (b),
or paragraph (c) of this section are met. For purposes of this section,
commercial vendor shall have the same meaning as provided in 11 CFR
116.1(c).
(a) Standard reductions or discounts. A commercial vendor may
provide reductions or discounts in the ordinary course of business. A
reduction or discount shall be considered in the ordinary course of
business if the commercial vendor has an established practice of
providing the same reductions or discounts for the same amount of its
goods or services to non-political clients, or if the reduction or
discount is consistent with established practice in the commercial
vendor's trade or industry. Examples of reductions or discounts made in
the ordinary course of business include standard volume discounts and
reduced rates for corporate, governmental or preferred customers.
Reductions or discounts provided under paragraph (a) of this section
need not be reported.
(b) Items provided for promotional consideration.
(1) A commercial vendor may provide goods or services in exchange
for promotional consideration provided that doing so is in the ordinary
course of business.
(2) The provision of goods or services shall be considered in the
ordinary course of business under this paragraph:
(i) If the commercial vendor has an established practice of
providing goods or services on a similar scale and on similar terms to
non-political clients, or
(ii) If the terms and conditions under which the goods or services
are provided are consistent with established practice in the commercial
vendor's trade or industry in similar circumstances.
(3) In all cases, the value of the goods or services provided shall
not exceed the commercial benefit reasonably expected to be derived
from the unique promotional opportunity presented by the national
nominating convention.
(4) The convention committee shall maintain documentation showing:
the goods or services provided; the date(s) on which the goods or
services were provided, the terms and conditions of the arrangement;
and what promotional consideration was provided. In addition, the
convention committee shall disclose in its report covering the period
the goods or services are received, in a memo entry, a description of
the goods or services provided for promotional consideration, the name
and address of the commercial vendor, and the dates on which the goods
or services were provided (e.g., ``Generic Motor Co., Detroit,
Michigan--ten automobiles for use 7/15-7/20, received on 7/14'', or
``Workers Inc., New York, New York--five temporary secretarial
assistants for use 8/1-8/30, received on 8/1'').
(c) Items of de minimis value. Commercial vendors (including banks)
may sell at nominal cost, or provide at no charge, items of de minimis
value, such as samples, discount coupons, maps, pens, pencils, or other
items included in tote bags for those attending the convention. The
items of de minimis value may be distributed by or with the help of
persons employed by the commercial vendor, or employed by or
volunteering for the national party or a host committee. The value of
the items of de minimis value provided under this paragraph need not be
reported.
(d) Expenditure Limits. The value of goods or services provided
pursuant to this section will not count toward the national party's
expenditure limitation under 11 CFR 9008.8(a).
Sec. 9008.10 Documentation of disbursements; net outstanding
convention expenses.
The convention committee must include as part of the evidence of
convention expenses the following documentation:
(a) For disbursements in excess of $200 to a payee, either:
(1) A receipted bill from the payee that states the purpose of the
disbursement; or
(2) If such a receipted bill is not available, the following
documents;
(i) A canceled check negotiated by the payee; plus
(ii) One of the following documents generated by the payee--a bill,
invoice, voucher or contemporaneous memorandum that states the purpose
of the disbursement;
(iii) Where the documents specified at paragraph (a)(2)(ii) of this
section are not available, a voucher or contemporaneous memorandum from
the committee that states the purpose of the disbursement;
(3) If neither a receipted bill nor the supporting documentation
specified in paragraph (a)(2) (ii) or (iii) of this section is
available, a canceled check negotiated by the payee that states the
purpose of the disbursement.
(4) Where the supporting documentation required above is not
available, the committee may present a canceled check and collateral
evidence to document the convention expense. Such collateral evidence
may include but is not limited to:
(i) Evidence demonstrating that the disbursement is part of an
identifiable program or project which is otherwise sufficiently
documented, such as a disbursement which is one of a number of
documented disbursements relating to the operation of a committee
office;
(ii) Evidence that the disbursement is covered by a preestablished
written committee policy, such as a daily travel expense policy.
(b) For all other disbursements:
(1) If from the petty cash fund, a record that states the full name
and mailing address of the payee and the amount, date and purpose of
the disbursement; or
(2) A canceled check which has been negotiated by the payee and
states the identification of the payee, and the amount and date of the
disbursement.
(c) For purposes of this section, ``payee'' means the person who
provides the goods or services to the committee in return for the
disbursement, except that an individual will be considered a payee
under this section if he or she receives $2,000 or less advanced for
travel and/or subsistence and if he or she is the recipient of the
goods or services purchased.
(d) For purposes of this section, the term ``purpose'' means the
full name and mailing address of the payee, the date and amount of the
disbursement, and a brief description of the goods or services
purchased.
(e) Upon the request of the Commission the convention committee
shall supply an explanation of the connection between the disbursement
and the convention.
(f) The committee shall retain records with respect to each
disbursement and receipt, including bank records, vouchers, worksheets,
receipts, bills and accounts, journals, ledgers, fundraising
solicitation material, accounting systems documentation, and any
related material documenting campaign receipts and disbursements, for a
period of three years pursuant to 11 CFR 102.9(c), and shall present
these records to the Commission on request.
(g) Net outstanding convention expenses. A convention committee
that is eligible to receive payments under 11 CFR 9008.3 shall file, no
later than sixty days after the last day of the convention, a statement
of that committee's net outstanding convention expenses. The convention
committee shall file a revised statement of net outstanding convention
expenses which shall reflect the financial position of the convention
committee as of the end of the ninth month following the last day of
the convention. The revised statement shall be filed no later than 30
calendar days after the end of the ninth month following the last day
of the convention, and shall be accompanied by the interim repayment,
if required under 11 CFR 9008.12(b)(5)(ii). The committee's net
outstanding convention expenses under this section equal the difference
between paragraphs (g) (1) and (2) of this section:
(1) The total of:
(i) All outstanding obligations for convention expenses as of 45
days after the last day of the convention; plus
(ii) An estimate of the amount of convention expenses that will be
incurred after the 45th day and before the end of the ninth month
following the last day of the convention; plus
(iii) An estimate of necessary winding down costs; less
(2) The total of:
(i) Cash on hand as of 45 days after the last day of the
convention, including: all receipts dated on or before that date;
currency; balances on deposit in banks, savings and loan institutions,
and other depository institutions; traveler's checks; certificates of
deposit; treasury bills; and any other committee investments valued at
fair market value;
(ii) The fair market value of capital assets and other assets on
hand; and
(iii) Amounts owed to the committee in the form of credits, refunds
of deposits, returns, receivables, or rebates of convention expenses;
or a commercially reasonable amount based on the collectibility of
those credits, returns, receivables or rebates.
(3) The amount submitted as the total of outstanding convention
obligations under paragraph (g)(1) of this section shall not include
any accounts payable for non-convention expenses nor any amounts
determined or anticipated to be required as a repayment under 11 CFR
9008.12 or any amounts paid to secure a surety bond under 11 CFR
9008.14(c).
(4) Capital assets. For purposes of this section, the term
``capital asset'' means any property used in the operation of the
convention whose purchase price exceeded $2000 when acquired by the
committee. Property that must be valued as capital assets under this
section includes, but is not limited to, office equipment, furniture,
vehicles and fixtures acquired for use in the operation of the
convention, but does not include property defined as ``other assets''
under 11 CFR 9008.10(g)(5). A list of all capital assets shall be
maintained by the committee, which shall include a brief description of
each capital asset, the purchase price, the date it was acquired, the
method of disposition and the amount received in disposition. The fair
market value of capital assets may be considered to be the total
original cost of such items when acquired less 40%, to account for
depreciation. If the committee wishes to claim a higher depreciation
percentage for an item, it must list that capital asset on the
statement separately and demonstrate, through documentation, the fair
market value of each such asset.
(5) Other assets. The term ``other assets'' means any property
acquired by the committee for use in raising funds or as collateral for
loans. ``Other assets'' must be included on the committee's statement
of net outstanding convention expenses if the aggregate value of such
assets exceeds $5000. The value of ``other assets'' shall be determined
by the fair market value of each item as of 45 days after the last day
of the convention, unless the item is acquired after this date, in
which case the item shall be valued on the date it is acquired. A list
of other assets shall be maintained by the committee, which shall
include a brief description of each such asset, the fair market value
of each asset, the method of disposition and the amount received in
disposition.
(6) Collectibility of accounts receivable. If the committee
determines that an account receivable of $500 or more, including any
credit, refund, return or rebate, is not collectible in whole or in
part, the committee shall demonstrate through documentation that the
determination was commercially reasonable. The documentation shall
include records showing the original amount of the account receivable,
copies of correspondence and memoranda of communications with the
debtor showing attempts to collect the amount due, and an explanation
of how the lesser amount or full write-off was determined.
(7) Winding down costs. The term ``winding down costs'' means:
(i) Costs associated with the termination of the convention such as
complying with the post-convention requirements of the Act and other
necessary administrative costs associated with winding down the
convention, including office space rental, staff salaries and office
supplies; and
(ii) Costs incurred by the convention committee prior to 45 days
after the last day of the convention for which written arrangements or
commitment was made on or before that date.
(8) Review of convention committee statement. The Commission will
review the statement filed by each convention committee under this
section. The Commission may request further information with respect to
statements filed pursuant to 11 CFR 9008.10 during the audit of that
committee under 11 CFR 9008.11.
(h) Production of computer information. (1) Categories of
computerized information to be provided. If the convention committee
maintains or uses computerized information containing any of the
categories of data listed in paragraphs (h)(1)(i) through (h)(1)(iv) of
this section, the committee shall provide computerized magnetic media,
such as magnetic tapes or magnetic diskettes, containing the
computerized information at the times specified in paragraph (h)(2) of
this section:
(i) Information required by law to be maintained regarding the
committee's receipts or disbursements;
(ii) Records used to reconcile bank statements;
(iii) Records relating to the acquisition, use and disposition of
capital assets; and
(iv) Any other information that may be used during the Commission's
audit to review the committee's receipts, disbursements, loans, debts,
obligations, or bank reconciliations.
(2) Time for Production. If the committee maintains or uses
computerized information containing any of the data listed in paragraph
(h)(1) of this section, the Commission generally will request such
information prior to commencement of audit fieldwork. Such request will
be made in writing. The committee shall produce the computerized
information no later than 15 calendar days after service of such
request. During or after audit fieldwork, the Commission may request
additional or updated computerized information which expands the
coverage dates of computerized information previously provided. During
or after audit fieldwork, the Commission may also request additional
computerized information which was created by or becomes available to
the committee that is of assistance in the Commission's audit. The
committee shall produce the additional or updated computerized
information no later than 15 calendar days after service of the
Commission's request.
(3) Organization of computerized information and technical
specifications. The computerized magnetic media shall be prepared and
delivered at the committee's expense and shall conform to the technical
specifications, including file requirements, described in the Federal
Election Commission's Computerized Magnetic Media Requirements for
Title 26 Candidates/Committees Receiving Federal Funding. The data
contained in the computerized magnetic media provided to the Commission
shall be organized in the order specified by the Computerized Magnetic
Media Requirements.
(4) Additional materials and assistance. Upon request, the
committee shall produce documentation explaining the computer system's
software capabilities, such as user guides, technical manuals, formats,
layouts and other materials for processing and analyzing the
information request. Upon request, the committee shall also make
available such personnel as are necessary to explain the operation of
the computer system's software and the computerized information
prepared or maintained by the committee.
Sec. 9008.11 Examinations and audits.
The Commission shall conduct an examination and audit of the
convention committee no later than December 31 of the calendar year of
the convention and may at any time conduct other examinations and
audits as it deems necessary. The Commission will follow the same
procedures during the audit, and will afford the committee the same
right to respond, as are provided for audits of publicly funded
candidates under 11 CFR 9007.1 and 9038.1.
Sec. 9008.12 Repayments.
(a) General.
(1) A national committee that has received payments from the Fund
under 11 CFR Part 9008 shall pay the United States Treasury any amounts
which the Commission determines to be repayable under this section. In
making repayment determinations under this section, the Commission may
utilize information obtained from audits and examinations conducted
pursuant to 11 CFR 9008.11 or otherwise obtained by the Commission in
carrying out its responsibilities under this subchapter.
(2) The Commission will notify the committee of any repayment
determinations made under this section as soon as possible, but not
later than 3 years after the last day of the Presidential nominating
convention. The Commission's issuance of an interim audit report to the
committee will constitute notification for purposes of the three year
period.
(3) Once the committee receives notice of the Commission's final
repayment determination under this section, the committee should give
preference to the repayment over all other outstanding obligations of
the committee, except for any federal taxes owed by the committee.
(b) Bases for repayment. The Commission may determine that the
national committee of a political party that has received payments from
the Fund must repay the United States Treasury under any of the
circumstances described below.
(1) Excess payments. If the Commission determines that any portion
of the payments to the national committee or convention committee under
11 CFR 9008.6(b) was in excess of the aggregate payments to which the
national committee was entitled under 11 CFR 9008.4 and 9008.5, it
shall so notify the national committee, and the national committee
shall pay to the Secretary an amount equal to such portion.
(2) Excessive expenditures. If the Commission determines that the
national committee or convention committee incurred convention expenses
in excess of the limitations under 11 CFR 9008.8(a), it shall notify
the national committee of the amount of such excessive expenditures,
and the national committee shall pay to the Secretary an amount equal
to the amount specified.
(3) Excessive contributions. If the Commission determines that the
national committee accepted contributions to defray convention expenses
which, when added to the amount of payments received, exceeds the
expenditure limitation of such party, it shall notify the national
committee of the amount of the contributions so accepted, and the
national committee shall pay to the Secretary an amount equal to the
amount specified.
(4) Improper usage or documentation. If the Commission determines
that any amount of any payment to the national committee or convention
committee under 11 CFR 9008.6(b) was used for any purposes other than
the purposes authorized at 11 CFR 9008.7 or was not documented in
accordance with 11 CFR 9008.10, it shall notify the national committee
of the amount improperly used or documented and the national committee
shall pay to the Secretary an amount equal to the amount specified.
(5) Unspent funds. (i) If any portion of the payment under 11 CFR
9008.4 remains unspent after all convention expenses have been paid,
that portion shall be returned to the Secretary of the Treasury.
(ii) The national committee or convention committee shall make an
interim repayment of unspent funds based on the financial position of
the committee as of the end of the ninth month following the last day
of the convention, allowing for a reasonable amount as determined by
the Commission to be withheld for unanticipated contingencies. The
interim repayment shall be made no later than 30 calendar days after
the end of the ninth month following the last day of the convention.
If, after written request by the national committee or convention
committee, the Commission determines, upon review of evidence presented
by either committee, that amounts previously refunded are needed to
defray convention expenses, the Commission shall certify such amount
for payment.
(iii) All unspent funds shall be repaid to the U.S. Treasury no
later than 24 months after the last day of the convention, unless the
national committee has been granted an extension of time. The
Commission may grant any extension of time it deems appropriate upon
request of the national committee.
(6) Income on investments of payments from the Fund. If the
Commission determines that the national committee or the convention
committee received any income as a result of investment or other use of
payments from the Fund pursuant to 11 CFR 9008.7(a)(5), it shall so
notify the committee and the committee shall pay to the United States
Treasury an amount equal to the amount determined to be income, less
any Federal, State or local taxes on such income.
(7) The Commission may seek repayment, or may initiate an
enforcement action, if the convention committee knowingly helps,
assists or participates in the making of a convention expenditure by
the host committee, government agency or municipal corporation which is
not in accordance with 11 CFR 9008.52 or 9008.53, or the acceptance of
a contribution by the host committee or government agency or municipal
corporation from an impermissible source, such as a nonlocal business.
(c) Repayment determination procedures. The Commission will follow
the same repayment determination procedures, and the committee has the
same rights and obligations as are provided for repayment
determinations involving publicly funded candidates under 11 CFR 9007.2
(c) through (h).
Sec. 9008.13 Additional audits.
In accordance with 11 CFR 104.16(c), the Commission, pursuant to 11
CFR 111.10, may upon affirmative vote of four members conduct an audit
and field investigation of any committee in any case in which the
Commission finds reason to believe that a violation of a statute or
regulation over which the Commission has jurisdiction has occurred or
is about to occur.
Sec. 9008.14 Petitions for rehearing: stays of repayment
determinations.
Petitions for rehearing following the Commission's final repayment
determination and requests for stays of repayment determinations will
be governed by the procedures set forth at 11 CFR 9007.5 and 9038.5.
The Commission will afford convention committees the same rights as are
provided to publicly funded candidates under 11 CFR 9007.5 and 9038.5.
Sec. 9008.15 Extensions of time.
(a) It is the policy of the Commission that extensions of time
under 11 CFR Part 9008 will not be routinely granted.
(b) Whenever a committee has a right or is required to take action
within a period of time prescribed by 11 CFR Part 9008 or by notice
given thereunder, the committee may apply in writing to the Commission
for an extension of time in which to exercise such right or take such
action. The committee shall demonstrate in the application for
extension that good cause exists for its request.
(c) An application for extension of time shall be made at least 7
calendar days prior to the expiration of the time period for which the
extension is sought. The Commission may, upon a showing of good cause,
grant an extension of time to a committee that has applied for such
extension in a timely manner. The length of time of any extension
granted hereunder shall be decided by the Commission and may be less
than the amount of time sought by the committee in its application.
(d) If a committee fails to seek an extension of time, exercise a
right or take a required action prior to the expiration of a time
period prescribed by 11 CFR Part 9008, the Commission may, on the
committee's showing of excusable neglect:
(1) Permit such committee to exercise its right(s), or take such
required action(s) after the expiration of the prescribed time period;
and
(2) Take into consideration any information obtained in connection
with the exercise of any such right or taking of any such action before
making decisions or determinations under 11 CFR Part 9008.
Sec. 9008.16 Stale-dated committee checks.
If the committee has checks outstanding that have not been cashed,
the committee shall notify the Commission. The committee shall inform
the Commission of its efforts to locate the payees, if such efforts
have been necessary, and its efforts to encourage the payees to cash
the outstanding checks. The committee shall also submit a check for the
total amount of such outstanding checks, payable to the United States
Treasury.
Subpart B--Host Committees Representing a Convention City;
Convention Expenditures by Government Agencies and Municipal
Corporations
Sec. 9008.50 Scope.
Subpart B governs registration and reporting by host committees
representing convention cities and by government agencies and
municipalities. Unsuccessful efforts to attract a convention need not
be reported by any city, committee or other organization. Subpart B
also describes permissible sources of funds and other permissible
donations to host committees, government agencies and municipal
corporations. In addition, Subpart B describes permissible expenditures
by government agencies, municipal corporations and host committees to
defray convention expenses and to promote the convention city and its
commerce.
Sec. 9008.51 Registration and reports.
(a) Registration by host committees. (1) Each committee, including
a host committee, other organization or group of persons which
represents a State, municipality, local government agency or other
political subdivision in dealing with officials of a national political
party with respect to matters involving a presidential nominating
convention shall register with the Commission on the Convention
Registration Form within 10 days of the date on which such party
chooses the convention city. The following information shall be
required of the registrant: the name and address; the name and address
of its officers; and a list of the activities which the registering
entity plans to undertake in connection with the convention.
(2) Any such committee, organization or group which is unsuccessful
in its efforts to attract the convention to a city need not register
under this section.
(b) Post-convention and quarterly reports by host committees;
content and time of filing. (1) Each committee, organization or group
required to register under this section shall file a post convention
report with the Commission on FEC Form 4. The report shall be filed on
the earlier of: 60 days following the last day the convention is
officially in session; or 20 days prior to the presidential general
election. This report shall disclose all receipts and disbursements,
including in-kind contributions, made with respect to a presidential
nominating convention.
(2) If such committee, organization or group has receipts or makes
disbursements after the completion date of the post convention report,
it shall begin to file quarterly reports no later than 15 days after
the end of the following calendar quarter. This report shall disclose
all transactions completed as of the close of that calendar quarter.
Quarterly reports shall be filed thereafter until the committee,
organization or group ceases all activity which must be reported under
this section.
(3) Such committee, organization or group shall file a final report
with the Commission not later than 10 days after it ceases activity
which must be reported under this section, unless such status is
reflected in either the post convention report or a quarterly report.
(c) Registration and post-convention statements by municipalities
and local government agencies. Each organization or group of persons
which represents a State, municipality, local government agency or
other political subdivision in dealing with officials of a national
political party with respect to matters involving a presidential
nominating convention shall file, by letter, a statement with the
Commission reporting the total amount spent to provide facilities and
services for the convention under 11 CFR 9008.53(c), a list of the
categories of facilities and services the municipality or government
agency provided for the convention, the total amount spent for each
category of facilities and services provided, the total amount defrayed
from general revenues, and the total amount of all private donations
received to defray these expenses. This statement shall be filed on the
earlier of: 60 days following the last day the convention is officially
in session; or 20 days prior to the presidential general election.
Categories of facilities and services may include construction,
security, communications, transportation, utilities, clean up, meeting
rooms and accommodations.
Sec. 9008.52 Receipts and disbursements of host committees.
(a) Definition of host committee. A host committee includes any
local organization, such as a local civic association, business league,
chamber of commerce, real estate board, board of trade, or convention
bureau: Which is not organized for profit; whose net earnings do not
inure to the benefit of any private shareholder or individual; and
whose principal objective is the encouragement of commerce in the
convention city, as well as the projection of a favorable image of the
city to convention attendees. A host committee must register in
accordance with 11 CFR 9008.51.
(b) Receipt of goods or services from commercial vendors. Host
committees may accept goods or services from commercial vendors under
the same terms and conditions (including reporting requirements) set
forth at 11 CFR 9008.9 for convention committees.
(c) Receipt of donations from local businesses and organizations.
(1) Local businesses (excluding banks), local labor organizations, and
other local organizations or individuals may donate funds or make in-
kind donations to a host committee to be used for the following
purposes:
(i) To defray those expenses incurred for the purpose of promoting
the suitability of the city as a convention site;
(ii) To defray those expenses incurred for welcoming the convention
attendees to the city, such as expenses for information booths,
receptions, and tours;
(iii) To defray those expenses incurred in facilitating commerce,
such as providing the convention and attendees with shopping and
entertainment guides and distributing the samples and promotional
material specified in 11 CFR 9008.9(c);
(iv) To defray the administrative expenses incurred by the host
committee, such as salaries, rent, travel, and liability insurance;
(v) To provide the national committee use of an auditorium or
convention center and to provide construction and convention related
services for that location such as: construction of podiums; press
tables; false floors, camera platforms; additional seating; lighting,
electrical, air conditioning and loudspeaker systems; offices; office
equipment; and decorations;
(vi) To defray the costs of various local transportation services,
including the provision of buses and automobiles;
(vii) To defray the costs of law enforcement services necessary to
assure orderly conventions;
(viii) To defray the cost of using convention bureau personnel to
provide central housing and reservation services;
(ix) To provide hotel rooms at no charge or a reduced rate on the
basis of the number of rooms actually booked for the convention;
(x) To provide accommodations and hospitality for committees of the
parties responsible for choosing the sites of the conventions; and
(xi) To provide other similar convention-related facilities and
services.
(2) For purposes of this section, any business (including a branch
of a national or regional chain, a franchise, or a licensed dealer) or
labor organization or other organization with offices or facilities
located within the Metropolitan Area (MA) of the convention city shall
be considered local. There shall be a rebuttable presumption that any
such entity located outside the MA is not local. This presumption may
be rebutted by a showing that the volume of business or activity in an
area lying outside the MA would be directly affected by the presence of
the convention.
Sec. 9008.53 Receipts and disbursements of government agencies and
municipal corporations.
(a) Receipt of goods and services provided by commercial vendors.
Government agencies and municipal corporations may accept goods or
services from commercial vendors for convention uses under the same
terms and conditions (except reporting requirements) set forth at 11
CFR 9008.9 for convention committees.
(b) Receipt of donations to a separate fund or account.
(1) Local businesses (excluding banks), local labor organizations,
and other local organizations or individuals may donate funds or make
in-kind donations to a separate fund or account of a government agency
or municipality to pay for expenses listed in 11 CFR 9008.52(c),
provided that:
(i) The fund or account is not restricted to use in connection with
any particular convention; and
(ii) Donations to the fund or account are unrestricted and are not
solicited or designated for use in connection with any particular
convention, event or activity.
(2) For purposes of this section, any business (including a branch
of a national or regional chain, a franchise, or a licensed dealer) or
labor organization or other organization with offices or facilities
located within the Metropolitan Area (MA) of the convention city shall
be considered local. There shall be a rebuttable presumption that any
such entity located outside the MA is not local. This presumption may
be rebutted by a showing that the volume of business of activity in an
area lying outside the MA would be directly affected by the presence of
the convention.
Sec. 9008.54 Examinations and audits.
The Commission shall conduct an examination and audit of each host
committee registered under 11 CFR 9008.51. The Commission will follow
the same procedures during the audit, and will afford the committee the
same right to respond, as are provided for audits of publicly funded
candidates under 11 CFR 9007.1 and 9038.1, except that the Commission
will not make any repayment calculations under this section.
Dated: June 23, 1994.
Trevor Potter,
Chairman.
[FR Doc. 94-15710 Filed 6-28-94; 8:45 am]
BILLING CODE 6715-01-M