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Proposed Rule2024-16841

Administrative Fines Program Expansion

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Published

August 1, 2024

Issuing agencies

Federal Election Commission

Abstract

Since the inception of the Federal Election Commission's Administrative Fines Program in 2000, the Commission has been assessing civil monetary penalties for certain violations of the reporting requirements of the Federal Election Campaign Act of 1971, as amended. In 2013, Congress authorized the Commission to expand the Administrative Fines Program to include violations for reporting requirements not currently covered. Accordingly, the Commission proposes to extend its Administrative Fines Program to include violations in the timely filing of 24-Hour Reports of Independent Expenditures, 48-Hour Reports of Independent Expenditures, and 24-Hour Notices of Electioneering Communications. This proposal will allow more efficient and predictive adjudication of these filing violations. The Commission invites public comment on the proposed regulatory amendments.

Full Text

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<title>Federal Register, Volume 89 Issue 148 (Thursday, August 1, 2024)</title>
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[Federal Register Volume 89, Number 148 (Thursday, August 1, 2024)]
[Proposed Rules]
[Pages 62673-62678]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2024-16841]

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FEDERAL ELECTION COMMISSION

11 CFR Part 111

[NOTICE 2024--16]

Administrative Fines Program Expansion

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Since the inception of the Federal Election Commission's
Administrative Fines Program in 2000, the Commission has been assessing
civil monetary penalties for certain violations of the reporting
requirements of the Federal Election Campaign Act of 1971, as amended.
In 2013, Congress authorized the Commission to expand the
Administrative Fines Program to include violations for reporting
requirements not currently covered. Accordingly, the Commission
proposes to extend its Administrative Fines Program to include
violations in the timely filing of 24-Hour Reports of Independent
Expenditures, 48-Hour Reports of Independent Expenditures, and 24-Hour
Notices of Electioneering Communications. This proposal will allow more
efficient and predictive adjudication of these filing violations. The
Commission invites public comment on the proposed regulatory
amendments.

DATES: Comments must be received on or before September 3, 2024. The
Commission may hold a public hearing on this rulemaking. Commenters
wishing to testify at a hearing must so indicate in their comments. If
a hearing is to be held, the Commission will publish a notification in
the Federal Register announcing the date and time of the hearing.

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 2013-06. Alternatively,
comments may be submitted in paper form addressed to the Federal
Election Commission, Attn.: Mr. Robert M. Knop, Assistant General
Counsel for Policy, 1050 First Street NE, Washington, DC 20463 (for
U.S. Postal Service) or 20002 (for all other delivery services).
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: Robert M. Knop, Assistant General
Counsel for Policy, Cheryl Hemsley, Attorney, or Lindsay Bird,
Attorney, 1050 First Street NE, Washington, DC 20463 (for U.S. Postal
Service) or 20002 (for all other delivery services), (202) 694-1650 or
(800) 424-9530.

SUPPLEMENTARY INFORMATION:

I. Background

Under the Commission's Administrative Fines Program (``AFP''),\1\
the Commission may utilize a streamlined process to assess civil
monetary penalties for certain violations of the reporting requirements
of the Federal Election Campaign Act of 1971, as amended (``FECA'').
Currently, the Commission assesses civil penalties through the AFP when
a political committee fails to file timely reports as required by 52
U.S.C. 30104(a) (requiring political committee treasurers to report
receipts and disbursements within certain time periods).
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\1\ See 52 U.S.C. 30109(4); 11 CFR part 111, subpart B.
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In 2013, Congress authorized the Commission to expand the scope of
the

[[Page 62674]]

AFP to encompass violations for reports filed under 52 U.S.C. 30104(c)
(certain independent expenditures), 52 U.S.C. 30104(e) (certain Federal
election activity reports), 52 U.S.C. 30104(f) (notices of
electioneering communications), 52 U.S.C. 30104(g) (24- and 48-hour
reports of independent expenditures), 52 U.S.C. 30104(i) (bundled
contribution reports), and 52 U.S.C. 30105 (certain convention
reports).\2\
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\2\ See 52 U.S.C. 30109(4)(C)(iv).
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On March 30, 2015, the Commission published a Notice of
Availability seeking public comment on a Petition for Rulemaking (the
``Petition'') that asked the Commission to expand the scope of the AFP
to encompass the additional categories of reporting violations included
in the 2013 statutory expansion.\3\ The Commission received two
substantive comments. One comment agreed with the Petition that the
proposed changes ``would advance the goals of statutory compliance,
enforcement and sound legal administration.'' The other comment asked
the Commission to be ``lenient on small organizations'' in
administering the AFP.\4\
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\3\ Rulemaking Petition Administrative Fines Program and
Commission Forms, 80 FR 16594 (Mar. 30, 2015).
\4\ See Comments, Reg 2015-01 Administrative Fines and Forms,
<a href="https://sers.fec.gov/fosers/">https://sers.fec.gov/fosers/</a>.
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After reviewing these comments and engaging in additional
deliberation, the Commission is now proposing the changes described in
this document. The Commission seeks comments on these proposals.

II. Background of the Administrative Fines Program and the Scope of
Proposed Regulations: What reporting violations are covered in the
proposed expansion?

Since its implementation, the AFP's streamlined process has aimed
to efficiently address applicable reporting violations based on a pre-
existing penalty formula, providing transparency to affected persons
while conserving Commission resources.
In 2000, the Commission set out the penalty formulas for most
violations using four factors to calculate fines: (1) the election
sensitivity of the report, (2) whether the report is considered late or
not filed, (3) the level of activity (or estimated level of activity)
on the report, and (4) the committee's number of prior violations.
These factors are incorporated into penalty tables at 11 CFR 111.43.
The Commission uses a different formula to calculate civil
penalties when principal campaign committees fail to timely file 48-
hour notices of contributions. Unlike other regularly scheduled
reports, these notices are required within 48 hours of the date an
authorized committee receives a contribution of $1,000 or more received
after the 20th day, but more than 48 hours before, any election.\5\ The
Commission explained that ``because of the unique nature and timing of
[the 48-hour notice] reporting requirement . . . failure to file these
48-hour notices in a timely manner is tantamount to failing to file
them at all. Thus, the proposed schedule of penalties [for 48-hour
notices of contributions] does not make a distinction between late
filers and non-filers for the violations [of 52 U.S.C. 30104(a)(6)].''
\6\
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\5\ 52 U.S.C. 30104(a)(6); 11 CFR 104.5(f).
\6\ Administrative Fines, 65 FR 16534, 16537 (Mar. 29, 2000).
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Accordingly, under 11 CFR 111.44, the calculation of fines for
committees that fail to file timely 48-hour notices is $178 (base
amount) \7\ for each untimely notice plus 10% of the amount in
violation (dollar amount of the contributions not timely reported). The
fine increases by 25% for each time a prior fine was assessed under the
AFP during the current and previous two-year election cycles.
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\7\ As required by the Federal Civil Penalties Inflation
Adjustment Act of 1990 (codified at 28 U.S.C. 2461), the base amount
is adjusted annually for inflation.
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The Commission intends to expand the AFP so that its procedures can
be extended to additional reporting violations. To maintain the AFP's
efficiency and further conserve resources, the Commission intends to
limit the expansion to violations that can be quickly and objectively
identified and do not involve complex legal issues or factual
determinations.
Therefore, the Commission is proposing to expand the AFP to include
violations resulting from the failure of persons to file, or to timely
file, three types of filings: (1) 24-hour reports of independent
expenditures, (2) 48-hour reports of independent expenditures, and (3)
24-hour notices of electioneering communications.
24-hour reports of independent expenditures are required when a
``person'' makes or contracts to make independent expenditures
aggregating $1,000 or more after the 20th date, but more than 24 hours,
before the date of an election.\8\
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\8\ 52 U.S.C. 30104(g)(1); see also 11 CFR 100.16 (defining
independent expenditure); 11 CFR 104.4 (reporting requirements for
independent expenditures by political committees); 11 CFR 109.10
(reporting requirements for independent expenditures by political
committees and other persons).
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48-hour reports of independent expenditures are required when a
``person'' makes or contracts to make independent expenditures
aggregating $10,000 or more at any time up to and including the 20th
date before the date of an election.\9\
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\9\ 52 U.S.C. 30104(g)(2); see also 11 CFR 100.16 (defining
independent expenditure); 11 CFR 104.4 (Independent expenditures by
political committees); 11 CFR 109.10 (How do political committees
and other persons report independent expenditures?).
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24-hour notices of electioneering communications are required when
a ``person'' makes a disbursement for the direct costs of producing and
airing electioneering communications in an aggregate amount in excess
of $10,000 during any calendar year.\10\
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\10\ 52 U.S.C. 30104(f); see also 11 CFR 100.29 (defining
electioneering communication); 11 CFR 104.20 (reporting
electioneering communications).
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The AFP currently applies only to violations committed by political
committees. However, by authorizing the Commission to expand the scope
of the AFP to cover reports of independent expenditures and notices of
electioneering communications, Congress granted the Commission the
authority to cover all ``persons'' required to file such reports and
notices. The term ``person'' includes an individual, partnership,
committee, association, corporation, labor organization, and any other
organization, or group of persons.\11\ Thus, the proposed rules would
broaden the AFP's scope beyond violations committed by political
committees.
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\11\ 52 U.S.C. 30101(11); 11 CFR 100.10.
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Currently, violations committed by any person resulting from their
failure to file, or to timely file, reports of independent expenditures
and notices of electioneering communications are adjudicated through
the Commission's traditional enforcement process. The proposed rules
would allow the Commission to shift the adjudication of applicable
reporting violations from its traditional enforcement process to the
AFP. This shift would provide filers with a more efficient and
predictable resolution while allowing the Commission to ensure
consistent enforcement of similar violations.

III. Proposed Rules

1. Proposed Amendment to 11 CFR 111.35(d)

Current paragraph (d) of Sec. 111.35 provides a list of
circumstances that are not considered valid defenses for untimely
filing because they are not considered reasonably unforeseen and beyond
the control of the respondent. Paragraph (d)(5) provides that a

[[Page 62675]]

respondent's failure to know the filing dates is not reasonably
unforeseeable. The Commission proposes to amend paragraph (d)(5) to
include failure to know ``reporting periods, deadlines, and reporting
instructions'' as circumstances that would not serve as valid defenses.
The Commission is proposing this change because such circumstances are
similarly foreseeable and as within the control of the respondent as
``filing dates'' in current paragraph (d)(5). The Commission requests
comments on the proposed change.

2. Proposed Amendment to 11 CFR 111.44

Currently, Sec. 111.44 applies only to violations of 48-hour
notices of contributions, which is unclear from the title of this
section. Because the Commission proposes to expand the AFP to cover
untimely filed 48-hour independent expenditure reports, the Commission
proposes to amend the heading to Sec. 111.44 by changing ``notices''
to ``notices of contributions.'' This section would continue to apply
penalties to untimely filed or non-filed notices of contributions,
while new Sec. 111.45, discussed below, would impose new penalties for
untimely filed or non-filed 48-hour independent expenditure reports.

3. Proposed new 11 CFR 111.45

The Commission proposes replacing currently reserved Sec. 111.45
with new regulations that would implement administrative fines for
untimely filings of 24- and 48-hour reports of independent expenditures
and 24-hour notices of electioneering communications.
Paragraphs (a), (b), and (c) propose formulas for calculating civil
penalties for violations in timely filing the 24-hour reports of
independent expenditures, 48-hour reports of independent expenditures,
and 24-hour notices of electioneering communications, respectively,
with each paragraph proposing two alternative formulas for calculating
penalties for that type of violation. The Commission is not limiting
its consideration of formulas to the two alternatives proposed for each
of these paragraphs and ultimately may adopt other formulas. Proposed
paragraph (d) would add 25% to each civil penalty calculated for each
prior violation, where ``prior violation'' would mean a civil penalty
assessed against the respondent under the AFP in the current two-year
election cycle or the previous two-year election cycle. This would
mirror the provision currently in use for 48-hour notices of
contributions under Sec. 111.44(a)(2).
The proposed penalty calculation formulas for violations in timely
filing reports of independent expenditures and notices of
electioneering communications are similar to the penalty calculation
formula for 48-hour notices of contributions violations by principal
campaign committees under the current AFP. Because the 48-hour notice
reporting requirement must be met within 48 hours of the predicate
event (the receipt of a covered contribution), the penalty formulas for
48-hour notices of contributions under the current AFP do not
distinguish between late or non-filing or between election-sensitive
and non-election sensitive reports, unlike formulas for other types of
reporting violations covered under 11 CFR 111.43. Similarly, because
24- and 48-hour reports of independent expenditures and 24-hour notices
of electioneering communications requirements must be met within 24 or
48 hours of the predicate event (contracting for or making payment for
a covered independent expenditure or distribution of a covered
electioneering communication), the proposed penalty formulas for these
filings also would not distinguish between late or non-filing or
between election-sensitive and non-election sensitive reports.
A. Civil Penalty Formulas for violations in timely filing 24- and
48-hour reports of independent expenditures.
Proposed Civil Penalty Formula A--Aligned With Current 11 CFR 111.44
As discussed above, the formula for determining civil penalties for
failing to timely file 48-hour notices of contributions received by
principal campaign committees is $178 (``base amount'') + (10% x AIV).
Proposed Alternatives A under paragraphs (a) and (b) would use the same
formula for failing to timely file 24- and 48-hour reports of
independent expenditures. Using the same formula that the Commission
has applied to similar reporting violations for over 20 years would be
consistent with prior Commission administrative fines practice and
promote fairness in the application of the law. It would also be easy
to administer, minimizing the burden on Commission staff. Are there any
reasons that the Commission should not use this formula to calculate
civil penalties for violations in timely filing 24- and 48-hour reports
of independent expenditures? Are the reports included in the proposed
expansion commensurate in amount and election sensitivity?
Proposed Civil Penalty Formula B--Approximating Recent Violation
Amounts
Proposed Alternative B under paragraphs (a) and (b) would use the
same base amount--$178--but lower multipliers. The formula for 24-hour
reports of independent expenditures in paragraph (a) would be $178 +
(7.5% x AIV), and the formula for 48-hour reports of independent
expenditures in paragraph (b) would be $178 + (5% x AIV).
Alternative B formulas would result in fines similar to those the
Commission has approved for these types of violations through its
traditional enforcement process. Thus, the formulas under Alternative B
would also be consistent with prior Commission practice and promote
fairness in the application of the law. Specifically, during the last
two two-year election cycles, the Commission approved civil penalties
for untimely filed 24-hour reports of independent expenditures at
approximately 7.61% of AIV. For 48-hour reports of independent
expenditures over the same period, the Commission approved penalties at
approximately 6.31% of AIV. The proposed civil penalties under
Alternative B would apply this recent historical data as the measure of
an appropriate penalty amount. Is this percentage approximation
appropriate or should the Commission consider using different
percentages as approximation? Should the Commission consider data from
a longer time period or other additional data in calculating the
average penalty amounts used to determine an appropriate penalty
formula?
The Commission notes that Alternative B would use a higher
multiplier for untimely filed 24-hour reports of independent
expenditures than for 48-hour reports of independent expenditures,
which would result in higher penalties being assessed for 24-hour
reports than 48-hour reports. In the Commission's view, this would be
appropriate because 24-hour reports of independent expenditures are due
closer to the date of the election and therefore failure to timely file
those reports has a more significant electoral impact. This would be
consistent with the final civil penalties the Commission has
historically approved through its enforcement of similar violations.
Should the Commission instead use the same multiplier for both 24- and
48-hour reports of independent expenditures and, if so, why?

[[Page 62676]]

Of the two proposed alternative formulas, which one would be most
appropriate to determine civil penalties for violations of timely
filing these reports of independent expenditures, and why? Should the
Commission consider any other formulas? Does the inherently time-
sensitive nature of independent expenditure reports warrant a higher
penalty formula than the Commission has historically applied in AFP
matters?
B. Civil Penalty Formulas for violations in timely filing 24-hour
notices of electioneering communications.
Each alternative in proposed paragraph (c) of Sec. 111.45 would
provide a formula for calculating civil penalties for violations for
failure to timely file 24-hour notices of electioneering
communications. The Commission proposes the same two alternative
formulas for 24-hour notices of electioneering communications as for
24-hour reports of independent expenditures.
Civil Penalty Formula Alternative A--Aligned With Current 11 CFR 111.44
As with both 24- and 48-hour reports of independent expenditures,
and for the same reasons, the Commission proposes in Alternative A:
$178 + (10% x AIV) to align with the current formula used in 11 CFR
111.44.
Civil Penalty Formula Alternative B--Aligned With Proposed Alternative
B for 24-Hour Reports of Independent Expenditures.
Proposed Alternative B for 24-hour notices of electioneering
communications is the same as the proposed Alternative B for 24-hour
reports of independent expenditures, discussed above: ($178 + (7.5% x
AIV)).\12\ In the Commission's view, this is appropriate because both
reports are due within 24-hours of the predicate event and relatively
close to the election date, which makes them similarly election
sensitive.
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\12\ Unlike with 24-hour reports of independent expenditures,
the Commission does not have a body of data for violations in timely
filing 24-hour notices of electioneering communications from the
recent past on which to propose a formula.
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Should the Commission instead apply a different formula for 24-hour
notices of electioneering communications than 24-hour reports of
independent expenditures? For instance, does the fact that 24-hour
notices of electioneering communications and 24-hour reports of
independent expenditures have slight differences in time period and
more significant differences in amount threshold justify applying a
different penalty formula and, if so, what would the appropriate
formula be? The Commission notes that the requirement to file 24-hour
notices of electioneering communications is triggered on the disclosure
date of an electioneering communication, which, by definition, would
fall within 30 days of a primary or 60 days of a general election, when
the person making the electioneering communication has spent or
contracted to spend more than $10,000 within the calendar year on the
communication. In contrast, the requirement to file a 24-hour report of
independent expenditures is triggered when the person making the
independent expenditure has publicly distributed/disseminated or
contracted to make an independent expenditure that costs $1,000 or more
after the 20th day, but more than 24 hours before an election. Are
these differences sufficient to justify using a different formula and,
if so, what would be the appropriate formula?
For proposed formulas under Alternative B in paragraphs (a), (b),
and (c), the Commission would set the multiplier based on the actual
civil penalty amounts that the Commission negotiated with respondents
for violations of timely filing 24- and 48-hour reports of independent
expenditures via the traditional enforcement from July 1, 2020 through
December 31, 2023. Would this provide an appropriate base for
comparison? If not, how many years' data should the Commission use?
C. Proposed increase in civil penalty for each previous violation.
Proposed paragraph (d) of Sec. 111.45(d) would apply to penalties
calculated under paragraphs (a), (b), and (c), and would include a 25%
increase in civil penalty for each previous violation, in parity with
current 11 CFR 111.44.
The penalty formula for untimely 48-hour notices of contributions
under 11 CFR 111.44 adds 25% to each civil penalty for each prior
violation. Under Sec. 111.44, ``prior violation'' means ``a final
civil money penalty that has been assessed against the respondent
under'' the same section of the rule ``in the current two-year election
cycle or the prior two-year election cycle.'' \13\ The Commission is
proposing to include this same requirement in proposed Sec. 111.45(d)
regarding the civil penalties for violations in timely filing the
reports covered by this proposed expansion. The Commission seeks
comments on this proposal.
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\13\ 11 CFR 111.44(b).
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D. Calculating civil penalties for each report vs. calculating
civil penalties for multiple reports as one violation.
In addition to using formulas to calculate civil penalties for
violations in proposed 11 CFR 111.45(a), (b), and (c), the Commission
is considering whether to treat each report the respondent has failed
to timely file as a separate violation, or whether all reports that the
respondent has failed to timely file within a certain time period
should be treated as a single violation.
For example, under Alternative A (10% multiplier), if Person A
makes independent expenditures of $1,000 eighteen days before the
election, and $3,000 fifteen days before the election, triggering the
24-hour reporting requirement for each independent expenditure but
filing no reports, should the penalties be calculated for each report
that was required to be filed: $178 + $178 + (.10 x $4,000) =$756? Or
should the Commission instead treat this as one violation: $178 + (.10
x $4,000) = $578?
Treating multiple reports the respondent has failed to timely file
as a single violation would be easier to administer, but it may
unfairly treat such filers the same as those who failed to timely file
one report. For example, it would treat Filer A, who made two
independent expenditures in the 18 days before an election, the same as
Filer B, who made one independent expenditure 12 days before the
election. If the Commission were to take the single violation approach,
should it adjust the formula to account for the more significant
violation of Filer A vis-[agrave]-vis Filer B?
E. Other considerations
Finally, should the Commission consider different enhancements or
reductions in the civil penalty formula? For example, should the
Commission consider whether the person failing to timely file is a
political committee, a small organization, or an individual?

III. Proposed Conforming Amendments

A. Adding Statutory Citations of Reports Proposed for the Expanded AFP

To accommodate the expansion, the Commission is proposing to make a
technical and conforming amendment in 11 CFR 111.30, 111.31, 111.32,
111.37, and 111.40 by adding cites to paragraphs (f) and (g) of 52
U.S.C. 30104, as appropriate, to each instance of the cite covering the
reports currently included in the Administrative Fines Program.

[[Page 62677]]

B. Conforming Amendments To Clarify That the Proposed Expansion of AFP
Would Apply Not Only to Political Committees But to Any Person Failing
To Timely File Reports Subject to the AFP

Under the proposed expansion of AFP, 24- and 48-hour reports of
independent expenditures and 24-hour notices of electioneering
communications must be filed by any ``person'' who meets the filing
requirements as discussed in section II of this document.
To accommodate the proposed expansion of the AFP from reporting
violations committed only by political committees to violations
committed by persons filing the reports included in the proposed
expansion, the Commission proposes in 11 CFR 111.30 to replace the
phrase, ``political committees and their treasurers'' with ``any
person.'' Additionally, the Commission proposes to replace the word
``committee'' with ``respondent'' in 11 CFR 111.35(b)(2) and throughout
paragraph (d) of that section.
Current Sec. 111.46 requires that if a respondent has not filed a
designation of counsel, all notifications and other communications to a
respondent as part of the AFP will be sent to the committee at the
address on file with the Commission from the committee's most recent
Statement of Organization, or amendment thereto, filed with the
Commission in accordance with 11 CFR 102.2.
The Commission proposes to make conforming edits to the second
sentence of Sec. 111.46 to state that all notifications and
communications will be sent the respondent, and if the respondent is a
political committee, communications will be sent to the political
committee and its treasurer at the political committee's address as
listed in the most recent Statement of Organization, or amendment
thereto, filed with the Commission in accordance with 11 CFR 102.2.

C. Further Conforming Amendments Not Required by the Proposed AFP
Expansion

The Commission proposes to make two further conforming amending in
11 CFR 111.30 and 111.37, addressed above that do not relate to the
proposed AFP expansion.
In 11 CFR 111.30, the Commission proposes two changes to update the
regulation by removing outdated information. First, the Commission
proposes removing the beginning and statutory end date of the AFP in
the first sentence. Further, the Commission proposes removing the last
sentence announcing a gap in the applicability of the AFP for reports
relating to reporting periods that ended between January 1, and January
21, 2014.\14\ This information is now outdated, and the statute of
limitations has expired on any violations for that time period.
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\14\ See Extension of Administrative Fines Program, Final Rule,
79 FR 3302 (Jan. 21, 2014).
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In 11 CFR 111.37(a), the Commission proposes to add ``determines''
before ``the amount of the civil money penalty'' to conform the
language of this provision with the language used in Sec. 111.40(a).
Each of these sections require a Commission determination as to the
amount of the civil penalty before further Commission action, albeit
under differing circumstances.
Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
The Commission certifies that the attached proposed rules would
not, if promulgated, have a significant economic impact on a
substantial number of small entities.
The proposed rules do not create any new recordkeeping, reporting,
or financial obligations. Any small entities that would be subject to
the proposed rules are already liable for civil penalties if they
violate the applicable reporting requirements. These violations are
currently adjudicated through the traditional enforcement process. The
proposed rules will allow the Commission to shift the adjudication of
applicable reporting violations from its traditional enforcement
process to the more efficient AFP.
The proposed rules would result in published penalty schedules for
the applicable reporting violations, providing clarity and certainty to
respondents navigating the compliance process. The AFP's streamlined
process and clear penalty schedules make it less likely that a small
entity would need to hire additional staff or retain professional
services to address and remedy reporting violations.
Moreover, the penalty formulas that the Commission is considering
will take into account the amount of the disbursements or expenditures
that were not timely reported. Thus, civil penalties will be scaled so
that respondents who spend less on disbursements for electioneering
communications or independent expenditures will be subject to lower
fines.
Therefore, the attached proposed rules, if promulgated, will not
have a significant economic impact on a substantial number of small
entities.

List of Subjects in 11 CFR Part 111

Administrative practice and procedures, Elections, Law enforcement,
Penalties.

For reasons set out in the preamble, the Federal Election
Commission proposes to amend 11 CFR part 111 as follows:

PART 111--COMPLIANCE PROCEDURES (2 U.S.C. 30109, 30107(a))

0
1. The authority citation for part 111 is revised to read as follows:

Authority: 2 U.S.C. 30102(i), 30109, 30107(a), 30111(a)(8); 28
U.S.C. 2461 note.

0
2. Revise Sec. 111.30 to read as follows:

Sec. 111.30 When will this subpart apply?

This subpart applies to violations of the reporting requirements of
52 U.S.C. 30104(a), (f), and (g).
0
3. Amend Sec. 111.31 by revising paragraph (b) to read as follows:

Sec. 111.31 Does this subpart replace subpart A of this part for
violations of the reporting requirements of 52 U.S.C. 30104(a)?

* * * * *
(b) This subpart will apply to compliance matters resulting from a
complaint filed pursuant to Sec. Sec. 111.4 through 111.7 if the
complaint alleges a violation of 52 U.S.C. 30104(a), (f), or (g). If
the complaint alleges violations of any other provision of any statute
or regulation over which the Commission has jurisdiction, subpart A of
this part will apply to the alleged violations of these other
provisions.
0
4. Amend Sec. 111.32 by revising the introductory text and paragraph
(d) to read as follows:

Sec. 111.32 How will the Commission notify respondents of a reason to
believe finding and a proposed civil money penalty?

If the Commission determines, by an affirmative vote of at least
four (4) of its members, that it has reason to believe that a
respondent has violated 52 U.S.C. 30104(a), (f), or (g), the Chairman
or Vice-Chairman shall notify such respondent of the Commission's
finding. The written notification shall set forth the following:
* * * * *
(d) The amount of the proposed civil money penalty based on the
schedules of penalties set forth in Sec. 111.43, Sec. 111.44, or
Sec. 111.45; and
* * * * *
0
5. Amend Sec. 111.35 by revising paragraphs (b)(1) and (d)(2), (3),
(5), and (6) to read as follows:

[[Page 62678]]

Sec. 111.35 If the respondent decides to challenge the alleged
violation or proposed civil money penalty, what should the respondent
do?

* * * * *
(b) * * *
(1) The Commission's reason to believe finding is based on a
factual error including, but not limited to, the respondent was not
required to file the report, or the respondent timely filed the report
in accordance with 11 CFR 100.19;
* * * * *
(d) * * *
(2) Delays caused by respondent's vendors or contractors;
(3) Illness, inexperience, or unavailability of the respondent or
respondent's treasurer or other staff;
* * * * *
(5) A respondent's failure to know filing requirements, including
reporting periods, deadlines, and reporting instructions; and
(6) A respondent's failure to use filing software properly.
* * * * *
0
6. Amend Sec. 111.37 by revising paragraph (a) to read as follows:

Sec. 111.37 What will the Commission do once it receives the
respondent's written response and the reviewing officer's
recommendation?

(a) If the Commission, after having found reason to believe and
after reviewing the respondent's written response and the reviewing
officer's recommendation, determines by an affirmative vote of at least
four (4) of its members, that the respondent has violated 52 U.S.C.
30104(a), (f), or (g) and determines the amount of the civil money
penalty, the Commission shall authorize the reviewing officer to notify
the respondent in writing of its final determination.
* * * * *
0
7. Amend Sec. 111.40 by revising paragraph (a) to read as follows:

Sec. 111.40 What happens if the respondent does not pay the civil
money penalty pursuant to 11 CFR 111.34 and does not submit a written
response to the reason to believe finding pursuant to 11 CFR 111.35?

(a) If the Commission, after the respondent has failed to pay the
civil money penalty and has failed to submit a written response,
determines by an affirmative vote of at least four (4) of its members
that the respondent has violated 52 U.S.C. 30104(a), (f), or (g), and
determines the amount of the civil money penalty, the respondent shall
be notified in writing of its final determination.
* * * * *
0
8. Amend Sec. 111.44 by revising the section heading to read as
follows:

Sec. 111.44 What is the schedule of penalties for the 48-hour notices
of contributions not filed or are filed late?

* * * * *
0
9. Add Sec. 111.45 to read as follows:

Sec. 111.45 What is the schedule of penalties for 24- and 48-hour
reports of independent expenditures and for 24-hour notices of
electioneering communications not filed or filed late?

Alternative A to Paragraph (a)

(a) 24-hour reports of independent expenditures. If the respondent
fails to file timely a 24-hour report of independent expenditures as
required under 52 U.S.C. 30104(g)(1), (3), and (4), the civil money
penalty will be calculated as follows: Civil money penalty = $178 +
(.10 x amount of expenditures not timely reported).

Alternative B to Paragraph (a)

Alternative A to Paragraph (b)

(b) 48-hour reports of independent expenditures. If the respondent
fails to file timely a 48-hour report of independent expenditures as
required under 52 U.S.C. 30104(g)(2), (3), and (4) the civil money
penalty will be calculated as follows: Civil money penalty = $178 +
(.10 x amount of expenditures not timely reported).

Alternative B to Paragraph (b)

(b) 48-hour reports of independent expenditures. If the respondent
fails to file timely a 48-hour report of independent expenditures as
required under 52 U.S.C. 30104(g)(2), (3), and (4), the civil money
penalty will be calculated as follows: Civil money penalty = $178 +
(.05 x amount of expenditures not timely reported).

Alternative A to Paragraph (c)

Alternative B to Paragraph (c)

(c) 24-hour notices of electioneering communications. If the
respondent fails to file timely a 24-hour notice of electioneering
communications as required under 52 U.S.C. 30104(f), the civil money
penalty will be calculated as follows: Civil money penalty = $178 +
(.075 x amount of expenditures not timely reported).
(d) Increase in civil money penalties for prior violations. The
civil money penalties calculated in paragraphs (a), (b), and (c) of
this section shall be increased by twenty five percent (25%) for each
prior violation. For purposes of this section, prior violation means a
final civil money penalty that has been assessed against the respondent
under this subpart in the current two-year election cycle or the prior
two-year election cycle.
0
10. Revise Sec. 111.46 to read as follows:

Sec. 111.46 How will the respondent be notified of actions taken by
the Commission and the reviewing officer?

If a statement designating counsel has been filed in accordance
with Sec. 111.23, all notifications and other communications to a
respondent provided for in this subpart will be sent to designated
counsel. If a statement designating counsel has not been filed, all
notifications and other communications to a respondent provided for in
this subpart will be sent to respondent. If the respondent is a
political committee, communications will be sent to the political
committee and its treasurer at the political committee's address as
listed in the most recent Statement of Organization, or amendment
thereto, filed with the Commission in accordance with 11 CFR 102.2.

Dated: July 25, 2024.

On behalf of the Commission,
Sean J. Cooksey,
Chairman, Federal Election Commission.
[FR Doc. 2024-16841 Filed 7-31-24; 8:45 am]
BILLING CODE 6715-01-P

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