Rule2022-19344
Repayment of Candidate Loans
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
September 8, 2022
Effective
November 30, 2022
Issuing agencies
Federal Election Commission
Abstract
The Federal Election Commission ("Commission") is removing regulatory restrictions on authorized committees' repayment of candidate personal loans. The Commission is taking this action in light of the Supreme Court's recent decision in Federal Election Commission v. Ted Cruz for Senate, which held that the statutory provision implemented by those regulations is unconstitutional. The Commission is accepting comments on these revisions to its regulations.
Full Text
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<title>Federal Register, Volume 87 Issue 173 (Thursday, September 8, 2022)</title>
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[Federal Register Volume 87, Number 173 (Thursday, September 8, 2022)]
[Rules and Regulations]
[Pages 54862-54863]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2022-19344]
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FEDERAL ELECTION COMMISSION
11 CFR Parts 110 and 116
[Notice 2022-17]
Repayment of Candidate Loans
AGENCY: Federal Election Commission.
ACTION: Interim final rule.
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SUMMARY: The Federal Election Commission (``Commission'') is removing
regulatory restrictions on authorized committees' repayment of
candidate personal loans. The Commission is taking this action in light
of the Supreme Court's recent decision in Federal Election Commission
v. Ted Cruz for Senate, which held that the statutory provision
implemented by those regulations is unconstitutional. The Commission is
accepting comments on these revisions to its regulations.
DATES: The effective date is November 30, 2022. Comments must be
received on or before October 11, 2022.
ADDRESSES: All comments must be in writing. Commenters are encouraged
to submit comments electronically via the Commission's website at
<a href="https://sers.fec.gov/fosers/">https://sers.fec.gov/fosers/</a>, reference REG 2022-01. Alternatively,
commenters may submit comments in paper form, addressed to the Federal
Election Commission, Attn.: Mr. Robert M. Knop, Assistant General
Counsel, 1050 First Street NE, Washington, DC 20463.
Each commenter must provide, at a minimum, his or her first name,
last name, city, and state. All properly submitted comments, including
attachments, will become part of the public record, and the Commission
will make comments available for public viewing on the Commission's
website and in the Commission's Public Records Office. Accordingly,
commenters should not provide in their comments any information that
they do not wish to make public, such as a home street address,
personal email address, date of birth, phone number, social security
number, or driver's license number, or any information that is
restricted from disclosure, such as trade secrets or commercial or
financial information that is privileged or confidential.
FOR FURTHER INFORMATION CONTACT: Mr. Robert M. Knop, Assistant General
Counsel, or Mr. Joseph P. Wenzinger, Attorney, 1050 First Street NE,
Washington, DC 20463, (202) 694-1650 or (800) 424-9530.
SUPPLEMENTARY INFORMATION:
Background
On May 16, 2022, the Supreme Court of the United States ruled in
Federal Election Commission v. Ted Cruz for Senate that section 304 of
the Bipartisan Campaign Reform Act of 2002 (``BCRA'') violates the Free
Speech Clause of the First Amendment of the United States Constitution.
142 S.Ct. 1638 (2022). The Supreme Court's ruling affirmed the same
holding of the U.S. District Court for the District of Columbia. Ted
Cruz for Senate v. Federal Election Commission, 542 F. Supp. 3d 1
(D.D.C. 2021). The Commission is now removing the regulations
implementing this unconstitutional statute.
The Commission is taking this action without advance notice and
comment because it falls under the ``good cause'' exception of the
Administrative Procedure Act (``APA''), 5 U.S.C. 553(b)(B). The
revisions set forth herein are necessary to conform the Commission's
regulations to the Supreme Court's holding that the statutory
restrictions on authorized committees' repayment of candidate personal
loans are unconstitutional. Ted Cruz for Senate, 142 S.Ct. at 1656.
Because this action does not involve any Commission discretion or
policy judgments, notice and comment are unnecessary. 5 U.S.C.
553(b)(B), (d)(3). A pre-publication notice and comment period would
also be contrary to the public interest because the 2022 election
campaigns for Federal office are ongoing, and so the delay that would
result in such a notice and comment period might cause confusion among
Federal candidates and the public as to the enforceability of the
regulations addressed below. Id.
Moreover, because this interim final rule is exempt from the APA's
notice and comment procedure under 5 U.S.C. 553(b), the Commission is
not required to conduct a regulatory flexibility analysis under 5
U.S.C. 603 or 604. See 5 U.S.C. 601(a), 604(a).
Transmission of Final Rules to Congress
Before final promulgation of any rules or regulations to carry out
the provisions of the Federal Election Campaign Act (``the Act''), the
Commission transmits the rules or regulations to the Speaker of the
House of Representatives and the President of the Senate for a thirty-
legislative-day review period. 52 U.S.C. 30111(d). The effective date
of this final rule is November 30, 2022.
Explanation and Justification
The Act provides two methods for the funding of Federal campaigns.
First, funding may come from individual contributions to the campaign,
which are subject to a per-election limits. See 52 U.S.C.
30116(a)(1)(A) (placing limits on contributions from individuals to
candidates and their authorized political committees). Second,
candidates may self-finance their campaigns, with no limits on the
amount a candidate may contribute to his or her campaign committee. 11
CFR 110.10; see also Buckley v. Valeo, 424 U.S. 1, 51-54 (1976)
(holding that restriction on candidate's personal expenditures is
unconstitutional).
At the same time, however, section 304 of BCRA places limits on
candidates' ability to finance their campaigns through personal loans.
Under that statutory provision, a candidate's authorized committee may
repay all of a candidate's personal loans with contributions made
before or on the date of the election, but may repay only up to
$250,000 of a candidate's pre-election loans with post-election
[[Page 54863]]
contributions. 52 U.S.C. 30116(j). Under the Commission's implementing
regulations, for personal loan amounts that in the aggregate exceed
$250,000, a campaign ``[m]ay repay the entire amount of the personal
loans using contributions'' made before or on the date of the election,
11 CFR 116.1(b)(2), but ``it must do so within 20 days of the
election,'' 11 CFR 116.11(b)(1); (c)(1). If using post-election
contributions, a campaign may repay only up to $250,000 of the personal
loans. 11 CFR 116.11(b)(2); 11 CFR 116.12.
On May 16, 2022, the Supreme Court of the United States ruled that
section 304 of BCRA violates the Free Speech Clause of the First
Amendment of the United States Constitution. The Supreme Court's ruling
affirmed the same holding of the U.S. District Court for the District
of Columbia. Ted Cruz for Senate v. Federal Election Commission, 542 F.
Supp. 3d 1 (D.D.C. 2021). Accordingly, the Commission is removing the
regulations implementing this unconstitutional statutory provision.
I. Deletion of 11 CFR 110.1(b)(3)(ii)(C)--Contributions by Persons
Other Than Multicandidate Political Committees (52 U.S.C. 30116(a)(1))
Section 110.1(b)(3)(i) provides that contributions to a campaign
for a particular election after the election has taken place may be
made only to the extent that the contribution does not exceed a
committee's net debts outstanding from such election. 11 CFR
110.1(b)(3)(i). The following paragraph (ii) further provides how net
debts outstanding shall be determined, and it states that an authorized
committee must reduce its calculated net debts by any outstanding
candidate personal loan amounts more than $250,000. 11 CFR
110.1(b)(3)(ii)(C). The regulation that reduces the calculation of net
debts based on candidate personal loans exceeding $250,000 was issued
as a conforming edit to the regulations, 11 CFR 116.11 and 116.12 (see
below), that implemented the statutory limitation on an authorized
committee's repayment of candidate personal loans exceeding that
amount. Increased Contribution and Coordinated Party Expenditure Limits
for Candidates Opposing Self-Financed Candidates, 68 FR 3970, 3973
(Jan. 27, 2003). The Commission is removing 11 CFR 110.1(b)(3)(ii)(C)
and making technical edits to 11 CFR 110.1(b)(3)(ii)(A) and (B).
II. Deletion of 11 CFR 116.11--Restriction on an Authorized Committee's
Repayment of Personal Loans Exceeding $250,000 Made by the Candidate to
the Authorized Committee
Section 116.11 implements section 304 of BCRA and provides for
relevant limitations on the repayment of candidate personal loans
aggregating in excess of $250,000 by an authorized committee. 11 CFR
116.11. The Commission is removing Sec. 116.11 in its entirety.
III. Deletion of 11 CFR 116.12--Repayment of Candidate Loans of
$250,000 or Less
Section 116.12 provides that a campaign committee is authorized to
repay a candidate's personal loans less than $250,000 with
contributions made before, on, or after the date of the election. 11
CFR 116.2. The Commission is removing Sec. 116.12 in its entirety.
List of Subjects
11 CFR Part 110
Contribution and expenditure limitations and prohibitions.
11 CFR Part 116
Debts owed by candidates and political committees.
For the reasons set out in the preamble, the Federal Election
Commission amends 11 CFR chapter I as follows:
PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS
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1. The authority citation for part 110 continues to read as follows:
Authority: 52 U.S.C. 30101(8), 30101(9), 30102(c)(2) and (g),
30104(i)(3), 30111(a)(8), 30116, 30118, 30120, 30121, 30122, 30123,
30124, 36 U.S.C. 510.
Sec. 110.1 [Amended]
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2. Amend Sec. 110.1:
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a. In paragraph (b)(3)(ii)(A), by adding ``and'' after the semicolon at
the end of the paragraph;
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b. In paragraph (b)(3)(ii)(B), by removing ``; and'' and adding a
period in its place; and
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c. By removing paragraph (b)(3)(ii)(C).
PART 116--DEBTS OWED BY CANDIDATES AND POLITICAL COMMITTEES
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3. The authority citation for part 116 continues to read as follows:
Authority: 52 U.S.C. 30103(d), 30104(b)(8), 30111(a)(8), 30116,
30118, 30141.
Sec. Sec. 116.11 and 116.12 [Removed]
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4. Remove Sec. Sec. 116.11 and 116.12.
Dated: August 31, 2022.
On behalf of the Commission
Allen J. Dickerson,
Chairman, Federal Election Commission.
[FR Doc. 2022-19344 Filed 9-7-22; 8:45 am]
BILLING CODE 6715-01-P
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</html>Indexed from Federal Register on September 8, 2022.
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