[Federal Register: October 23, 2007 (Volume 72, Number 204)] [Proposed Rules] [Page 59953-59967] From the Federal Register Online via GPO Access [wais.access.gpo.gov] [DOCID:fr23oc07-10] ======================================================================== Proposed Rules Federal Register ________________________________________________________________________ This section of the FEDERAL REGISTER contains notices to the public of the proposed issuance of rules and regulations. The purpose of these notices is to give interested persons an opportunity to participate in the rule making prior to the adoption of the final rules. ======================================================================== [[Page 59953]] FEDERAL ELECTION COMMISSION 11 CFR Parts 100, 113, 9004 and 9034 [Notice 2007-20] Candidate Travel AGENCY: Federal Election Commission. ACTION: Notice of proposed rulemaking. ----------------------------------------------------------------------- SUMMARY: The Federal Election Commission requests comments on proposed changes to its rules implementing new statutory provisions governing the rates and timing of payment for non-commercial campaign travel on aircraft, and a proposed definition of ``Leadership PAC.'' These proposed changes, consistent with the new statutory provisions, would restrict and in some cases prohibit Federal candidates and their political committees from expending campaign funds for non-commercial air travel. The proposed rules would apply to all Federal candidates, including publicly funded presidential candidates. No final decisions have been made by the Commission on any of the proposed revisions in this Notice. Further information is provided in the supplementary information that follows. DATES: Comments must be received on or before November 13, 2007. The Commission will hold a hearing on these proposed rules on November 15, 2007, at 10 a.m. Commenters wishing to testify at the hearing must so indicate in their written or electronic comments. Anyone seeking to testify at the hearing must file written comments by the due date and must include a request to testify in the written comments. ADDRESSES: All comments must be in writing, must be addressed to Ms. Amy L. Rothstein, Assistant General Counsel, and must be submitted in e-mail, facsimile, or paper copy form. Commenters are strongly encouraged to submit comments by e-mail or fax to ensure timely receipt and consideration. E-mail comments must be sent to travel07@fec.gov. If e-mail comments include an attachment, the attachment must be in Adobe Acrobat (.pdf) or Microsoft Word (.doc) format. Faxed comments must be sent to (202) 219-3923, with paper copy follow-up. Paper comments and paper copy follow-up of faxed comments must be sent to the Federal Election Commission, 999 E Street, NW., Washington, DC 20463. All comments must include the full name and postal service address of the commenter or they will not be considered. The Commission will post comments on its Web site after the comment period ends. The Commission hearing on this rulemaking will be held in the Commission's ninth floor meeting room, 999 E Street, NW., Washington, DC. FOR FURTHER INFORMATION CONTACT: Ms. Amy L. Rothstein, Assistant General Counsel, Mr. Joshua S. Blume, Attorney, or Mr. Richard Ewell, Attorney, 999 E Street, NW., Washington, DC 20463, (202) 694-1650 or (800) 424-9530. SUPPLEMENTARY INFORMATION: The Commission is proposing changes to its rules to implement section 601 of Pub. L. 110-81, 121 Stat. 735, the ``Honest Leadership and Open Government Act of 2007,'' signed September 14, 2007. The new law amended the Federal Election Campaign Act of 1971, as amended (2 U.S.C. 431 et seq.) (``the Act'') by restricting, and in some cases prohibiting, the expenditure of campaign funds by candidates for Federal office for non-commercial travel aboard aircraft. See 2 U.S.C. 439a(c) (henceforth referred to as ``new 2 U.S.C. 439a(c)'' or ``the new law''). The Commission proposes to implement these new provisions by adding new section 11 CFR 113.5 to Part 113, which governs the expenditure of campaign funds by candidates for Federal office and their authorized political committees. In addition, the Commission is proposing conforming revisions to 11 CFR 100.93, which provides an exception to the definition of ``contribution'' for non-commercial travel aboard aircraft by, or on behalf of, Federal candidates and political committees, if the candidates and political committees reimburse the service providers at specified rates. With respect to the scope of the proposed changes, the Commission presents two alternatives. Under Alternative 1, the proposed changes would also affect travel by other persons, such as a staff member of a political party committee, separate segregated fund (``SSF''), or nonconnected political committee, if they are not traveling on behalf of a specific candidate. Under Alternative 2, the proposed changes would affect only candidates for Federal office and those traveling on behalf of a candidate for Federal office and his or her authorized committee. The proposed changes would not alter the Commission's treatment of travel by means of transportation other than aircraft, or on travel aboard commercial airliners or charter flights. In addition, Congress defined the term ``Leadership PAC'' in section 204(8)(B) of Public Law 110-81. This type of political committee is subject to certain restrictions under the provisions of new 2 U.S.C. 439a(c), and is also subject to certain requirements set forth in another section of Public Law 110-81 pertaining to the practice of ``bundling'' contributions. See section 204 of Public Law 110-81. The Commission is therefore proposing that the term be defined in the Commission's regulations at 11 CFR 100.5(e) (examples of ``political committees'').\1\ --------------------------------------------------------------------------- \1\ The Commission is initiating a separate rulemaking to address the bundling provisions of the new law and intends to issue a Notice of Proposed Rulemaking shortly. --------------------------------------------------------------------------- I. Background A. The Current Statutory and Regulatory Framework The Act defines a ``contribution'' to include ``any gift, subscription, loan, advance, or deposit of money or anything of value made by any person for the purpose of influencing any election for Federal office.'' 2 U.S.C. 431(8)(A)(i); see also 11 CFR 100.52(a). The phrase ``anything of value'' encompasses ``the provision of any goods or services without charge or at a charge that is less than the usual and normal charge for such goods or services.'' 11 CFR 100.52(d)(1). When goods or services are provided at less than the usual and normal charge, ``the amount of the in-kind contribution is the difference between the usual and normal charge for the goods or services at the time of the contribution and the amount charged the political committee.'' Id. As a result, candidates who travel aboard a commercial airliner or other conveyance for which a fee is normally [[Page 59954]] charged must pay the normal and usual charge for that service in order to avoid receiving an in-kind contribution from the person providing the travel service. Such in-kind contributions would be prohibited if provided by certain entities, including corporations, labor organizations, Federal contractors, and foreign nationals. See 2 U.S.C. 441b, 441c, and 441e; 11 CFR 110.20, 114.2(b), and 115.2. Even where the in-kind contributions are not prohibited, they would be subject to the contribution limits in the Act and Commission regulations. See 2 U.S.C. 441a through 441k; 11 CFR Parts 110, 114 and 115. 1. Current 11 CFR 100.93--Payment for Non-Commercial Travel The normal and usual charge for travel aboard a commercial airliner is the publicly available price for a ticket, and the normal and usual charge for a chartered jet is the publicly available charter or lease rate. The normal and usual charge for travel aboard a non-commercial flight, however, may not be as apparent. For example, there is generally not a ticket price for a seat aboard a corporate jet that is operated exclusively for the private travel of the corporation's executives and their guests. Because candidates for Federal office have traveled in the past on these privately operated flights, the Commission has provided specific guidance in its regulations regarding the rate of reimbursement that candidates and others must pay to avoid receiving an in-kind contribution for travel aboard such flights. On December 15, 2003, the Commission promulgated final rules adding 11 CFR 100.93. See Final Rules and Explanation and Justification for Travel on Behalf of Candidates and Political Committees, 68 FR 69,583 (Dec. 15, 2003) (``2003 E&J''). Those final rules established an exception from the definition of contribution for payments at specified rates for non-commercial travel in connection with a Federal election. The payment required for non-commercial air travel by ``campaign travelers''--a term that includes individuals traveling in connection with elections for Federal office on behalf of candidates or political committees, and members of the news media traveling with a candidate-- depends on whether the travel is between cities served by regularly scheduled commercial airline service, and whether that service is available at a first-class or coach rate. See 11 CFR 100.93(a)(3)(i) and 100.93(c). If travel between the origin and destination cities is regularly served by commercial first-class airline service, then a first-class rate applies. 11 CFR 100.93(c)(1). If such travel is served at both origin and destination by coach-class commercial service and the origin city is not served by first-class service, then a coach- class rate applies. 11 CFR 100.93(c)(2). If either the origin or the destination city is not served by commercial airline service, then the rate is the normal and usual charter fare for a comparable airplane sufficient in size to accommodate all campaign travelers. 11 CFR 100.93(c)(3). The same rates apply to travel on an airplane provided by a government entity, unless the travel is to or from a military base or other relatively publicly inaccessible location.\2\ The candidate or political committee responsible for the reimbursement must pay the service provider within seven business days of the trip. 11 CFR 100.93(c). --------------------------------------------------------------------------- \2\ If such is the case, then a first-class rate applies, drawn from the closest city with regular first-class commercial service. 11 CFR 100.93(e)(1). --------------------------------------------------------------------------- 2. Current 11 CFR 9004.7 and 9034.7--Travel by Presidential and Vice- Presidential Candidates Accepting Public Funds Candidates for President of the United States may elect to receive matching funds from the Federal government to contest their primary elections and presidential nominees may elect to receive public funding to contest the general election. In both cases, the candidates must agree, among other things, to use the public funds they receive solely for ``qualified campaign expenses'' and not to exceed specified expenditure limits. 2 U.S.C. 441a(b)(1)(A) and (B), 26 U.S.C. 9004(c)(1), 9038(b)(2). The Commission has promulgated separate regulations at 11 CFR 9004.7(b)(5)(i) and (v), (b)(8), and 9034.7(b)(5)(i) and (v) and (b)(8), setting forth the appropriate reimbursement rates that publicly funded candidates must use for campaign-related travel on non- commercial transportation. While 11 CFR 100.93 is focused on the potential underpayment for travel resulting in a contribution, 11 CFR 9004.7 and 9034.7 are focused on the appropriate use of public funds, and thus on whether, and to what extent, expenses for campaign-related travel constitute qualified campaign expenses for which the candidate may use public funds. The rates and recordkeeping requirements for presidential and vice-presidential candidates accepting public funds are the same as those in 11 CFR 100.93 and are mainly set forth through cross-references to 11 CFR 100.93. II. Revisions to 2 U.S.C. 439a--Use of Campaign Funds New 2 U.S.C. 439a(c) prohibits House, Senate, and presidential candidates from making any expenditure for non-commercial travel on aircraft except at specified rates and subject to certain conditions. An ``expenditure'' includes any payment by any person ``made for the purpose of influencing any election for Federal office.'' 2 U.S.C. 431(9)(A)(i). Like the current regulations at 11 CFR 100.93, the new law focuses on the appropriate reimbursement rates for non-commercial travel. Travel on commercial flights is still governed by the current requirements for reimbursement at the normal and usual charge. The new law, however, directly limits expenditures by a candidate, candidate's authorized committee, or a leadership PAC, rather than merely specifying how to avoid the receipt of an in-kind contribution as in 11 CFR 100.93. The new law's rates and conditions under which candidates may spend campaign funds for aircraft travel differ depending on the office sought. Presidential and Senate candidates may pay for their pro rata share of the fair market value of a flight, which is determined by dividing the fair market value of the normal and usual charter fare or rental charge for a comparable plane of comparable size by the number of candidates on board the plane. 2 U.S.C. 439a(c)(1). The authorized committees and leadership PACs of House candidates are, however, generally prohibited from using any campaign funds to pay for non- commercial flights, except for flights on aircraft operated by a Federal or State government entity. 2 U.S.C. 439a(c)(2). Aircraft owned by candidates or their immediate family members are exempt from the prohibitions and rate requirements described above. 2 U.S.C. 439a(c)(3). III. Proposed 11 CFR 100.5(e)(6)--Definition of ``Leadership PAC'' The term ``Leadership PAC'' is defined in section 204(a) of Public Law 110-81 (2 U.S.C. 434(i)(8)(B)) as ``a political committee that is directly or indirectly established, financed, maintained or controlled by [a] candidate [for Federal office] or [an] individual [holding Federal office] but which is not an authorized committee of the candidate or individual and which is not affiliated with an authorized committee of the candidate or individual, except that such term does not include a political committee of a political party.'' The term ``PAC'' is an [[Page 59955]] acronym for ``political action committee,'' which is a term generally used to refer to all political committees other than authorized committees and committees of a political party.\3\ --------------------------------------------------------------------------- \3\ The term ``PAC'' has not been a term of art in the law or in Commission regulations. PACs sponsored by a corporation or a labor organization are generally described in the Commission's regulations as separate segregated funds (``SSFs''). See 2 U.S.C. 441b(b)(2)(C); 11 CFR 100.5(b). PACs that lack corporate or labor sponsorship are referred to in the regulations as ``nonconnected committees.'' See, e.g., 11 CFR 104.10 and 106.6(a). --------------------------------------------------------------------------- The new definition of leadership PAC is relevant to two areas of the new law that fall within the Commission's purview: (1) The new restrictions on candidate travel that would be implemented through both proposed sections 11 CFR 100.93 and 113.5, and (2) the disclosure requirements in Section 204 of the new law for contributions bundled by lobbyists. In the provision relevant to this rulemaking, the new law generally prohibits ``candidates for election for the office of Representative in, or Delegate or Resident Commissioner to, the Congress, an authorized committee and a leadership PAC'' from making expenditures for non-commercial air travel. Public Law 110-81, section 601(a) (codified at 2 U.S.C 439a(c)(2)) (emphasis added). The Commission proposes to incorporate a definition of ``leadership PAC'' into 11 CFR 100.5, which is the general definition of ``political committee.'' Specifically, ``leadership PAC'' would be added to the list of different types of political committees in 11 CFR 100.5(e), with the new term added at 11 CFR 100.5(e)(6). The proposed definition mirrors the definition in the new law. The Commission proposes to incorporate the definition of ``leadership PAC'' into the general definition section in 11 CFR Part 100, rather than within the travel rules themselves, to promote consistency and economy within the structure of its regulations. The definition will impact several sections of the Commission's regulations, including proposed 11 CFR 100.93, 11 CFR 113.5, and the new bundling regulations the Commission intends to promulgate in a separate rulemaking. The Commission seeks comments on the content and placement of this new definition. IV. Proposed Revisions to 11 CFR 100.93--Payment for Travel Aboard Aircraft and Other Means of Transportation The majority of the Commission's current guidance regarding non- commercial air travel is provided in 11 CFR 100.93, which provides an exception to the definition of ``contribution'' for non-commercial travel if the service provider is reimbursed for the travel at the specified rates. Several of the reimbursement rates permitted under current 11 CFR 100.93 are inconsistent with the new statutory requirements. For example, the statute requires a candidate for President or U.S. Senate to reimburse the service provider at the comparable charter rate, whereas current 11 CFR 100.93 allows reimbursement at the rate of the first class or coach airfare for campaign travel between two cities served by regularly scheduled commercial airline service. Therefore, the Commission is proposing conforming changes and clarifications in 11 CFR 100.93. The Commission wishes to clarify that, although it is proposing changes to only some of the provisions in 11 CFR 100.93, it may make further revisions to this section in its final rules, in response to any public comments and additional information that it may receive regarding the proposed rules. The Commission therefore invites comments on the entirety of 11 CFR 100.93 and is opening the entire section for comments through this Notice of Proposed Rulemaking. Commenters favoring retention of current provisions of 11 CFR 100.93 should submit comments to that effect. Conversely, those preferring additional changes to 11 CFR 100.93 beyond those proposed should submit comments to that effect. In particular, the Commission seeks comments on the extent to which new 2 U.S.C. 439a(c) should be implemented solely through revisions to 11 CFR 100.93, rather than through the addition of 11 CFR 113.5. a. General Scope of Rule--Travel on Behalf of Candidates New 2 U.S.C. 439a specifies that ``a candidate for election for Federal office * * * or any authorized committee of such a candidate, may not make any expenditure for a flight on an aircraft unless--* * *'' 2 U.S.C. 439a(c)(1) (emphasis added). Given the inclusion of authorized committees in this language, the proposed rule, consistent with the current rule, would apply to the same range of individuals covered by the term ``campaign traveler'' in the current rule. Campaign traveler is defined in part as ``any individual traveling in connection with an election for Federal office on behalf of a candidate.'' 11 CFR 100.93(3)(i)(A). In other words, the proposed rule would apply to travel by candidates themselves, and also those traveling on behalf of candidates or their authorized committees, such as campaign staff. See proposed 11 CFR 100.93(c)(1). This interpretation is also consistent with the personal use prohibitions set out by Congress in 2 U.S.C. 439a(b) and the Commission's regulatory interpretation of that section, which apply to personal use by ``any person.'' See, e.g., 11 CFR 113.1(g) (defining personal use as ``any use of funds in a campaign account of a present or former candidate to fulfill a commitment, obligation or expense of any person that would exist irrespective of the candidate's campaign or duties as a Federal officeholder'') (emphasis added); see also Explanation and Justification for final rules regarding Expenditures; Reports by Political Committees; Personal Use of Campaign Funds, 60 FR 7862, 7864 (Feb. 9, 1995) (``Section 439a states that no campaign funds `may be converted by any person to any personal use.' ''). Thus, any use of campaign funds that would exist irrespective of the campaign or the duties of a Federal officeholder is personal use under current Commission regulations, regardless of whether the beneficiary is the candidate, a family member of the candidate, or some other person. Moreover, the Commission notes that Congress, in its amendments to the Senate rules, set out an approach to reimbursement for non-campaign travel that includes all Congressional staff, not just the Federal officeholders themselves. That amendment requires reimbursement for non-commercial travel aboard aircraft at the normal and usual charter rate for a comparable aircraft of comparable size, ``as determined by dividing such cost by the number of Members, officers, or employees of Congress on the flight.'' Public Law 110-81, Section 544(c)(1), amending Paragraph 1(c)(1) of rule XXXV of the Standing Rules of the Senate (emphasis added). The Commission seeks comments on this proposed interpretation of the new law. Is there any evidence that suggests that Congress intended to exclude campaign staff, or others traveling on the candidate's behalf, from the general scope of the rule? A. Proposed 100.93(a)--Scope and Definitions 1. Proposed 11 CFR 100.93(a)(3)(i)--Definition of ``Campaign Traveler'' A ``campaign traveler'' is defined as ``[a]ny individual traveling in connection with an election for Federal office on behalf of a candidate or political committee'' and ``[a]ny member of the news media traveling with a [[Page 59956]] candidate.'' 11 CFR 100.93(a)(3)(i). The Commission proposes to add ``Any candidate for Federal office or'' at the beginning of that definition to clarify that a candidate himself or herself would be included within the definition of ``campaign traveler.'' The Commission seeks comments on this proposed clarification and whether any additional changes to the definition would be appropriate. 2. Proposed 11 CFR 100.93(a)(3)(iv) and (v)--Definitions of ``Commercial Travel'' and ``Non-Commercial Travel'' The Commission's current regulations distinguish between commercial and non-commercial air travel based on the certification system of the Federal Aviation Administration (FAA). Specifically, the Commission's rules in 11 CFR 100.93 apply to all airplanes not licensed by the FAA to operate for compensation or hire under 14 CFR parts 121, 129, or 135. 11 CFR 100.93(a)(1)(i). The new law's restrictions on expenditures for air travel by presidential and U.S. Senate candidates are focused on the FAA's certification and safety requirements, but do not reference specific FAA regulatory provisions. In order to simplify and align the Commission's regulations with the new statutory language, the Commission is proposing to replace its reliance on specific FAA regulatory provisions with the new terms ``commercial travel'' and ``non-commercial travel.'' The definition of ``commercial travel'' would follow the new statutory language: travel aboard an aircraft ``operated by an air carrier or commercial operator certificated by the Federal Aviation Administration if the flight is required to be conducted under air carrier safety rules, or, in the case of travel which is abroad, by an air carrier or commercial operator certificated by an appropriate foreign civil aviation authority if the flight is required to be conducted under air carrier safety rules.'' Proposed 11 CFR 100.93(a)(3)(iv). Conversely, the proposed definition of ``non- commercial air travel'' would encompass travel not included in the definition of ``commercial travel.'' Proposed 11 CFR 100.93(a)(3)(v). The Commission seeks comments on these proposed definitions. Is there any difference between the universe of aircraft encompassed by the new term ``non-commercial travel'' and the aircraft included in current 11 CFR 100.93(c) (``an airplane not licensed by the Federal Aviation Administration to operate for compensation or hire under 14 CFR parts 121, 129, or 135'')? Would additional guidance in the form of references to FAA regulatory provisions be helpful in discerning what aircraft qualify as ``non-commercial travel,'' or is the proposed language sufficiently clear? In addition, the Commission seeks comments on whether additional explanation should be provided to address flights conducted in foreign countries and, if so, what it should be. The Commission also seeks comments on whether the definitions of ``commercial travel'' and ``non-commercial travel'' should specifically address more complex multiple ownership or leasing arrangements, such as arrangements in which some of the owners of an aircraft are commercial operators certificated by the FAA but others are not. B. Proposed 11 CFR 100.93(c)(1)--Non-Commercial Air Travel by Candidates for President, Vice-President, and U.S. Senate New 2 U.S.C. 439a(c)(1)(B) requires candidates for President, Vice President, and U.S. Senate to pay their ``pro rata share of the fair market value'' of non-commercial flights aboard aircraft. The pro rata share is ``determined by dividing the fair market value of the normal and usual charter fare or rental charge for a comparable plane of comparable size by the number of candidates on the flight.'' Id. Because the statutory language is specific that the ``number of candidates on the flight'' determines the ``pro rata share,'' the Commission proposes to define ``pro rata share of the fair market value of a flight'' based solely on the number of candidates on the flight, regardless of whether there are other campaign travelers or passengers aboard. Moreover, because the statutory language applies to expenditures made not only by candidates, but also by authorized committees, the Commission proposes to define ``pro rata share'' based on the number of candidates represented on a flight. See proposed 11 CFR 100.93(c)(1) and (3). A candidate is represented on a flight if a person is traveling on behalf of that candidate, the candidate's authorized committee, or the candidate's leadership PAC.\4\ See proposed 11 CFR 100.93(c)(1). This reimbursement rate does not apply to travel aboard government aircraft or aircraft owned by a candidate or a member of candidate's immediate family, which are covered under proposed section 100.93(e) and (g), respectively, and discussed below. See subsections F and G of this section. This reimbursement rate also would not apply when a candidate or representative of the candidate is traveling on behalf of another committee (such as a political party committee), rather than on behalf of the candidate's own campaign. Reimbursement for a candidate's travel on behalf of another committee is the responsibility of the committee on whose behalf the travel occurs, at the appropriate reimbursement rate for that committee as set forth in proposed 11 CFR 100.93(c). --------------------------------------------------------------------------- \4\ See discussion of leadership PACs in subsection E.4 of this section. --------------------------------------------------------------------------- 1. Application of Proposed Rule Candidate A, Candidate B, and Candidate B's campaign manager travel on a plane on behalf of their respective campaigns, along with PAC Representative P traveling on behalf of the PAC. The pro rata share of the fair market value of the flight would be determined by dividing the normal and usual charter rate for the plane by two because there are two candidates represented on the flight (Candidate A and B). Each candidate, or the candidate's authorized committee, would therefore be required to pay 50% of the charter rate to avoid receiving an in-kind contribution from the non-commercial aircraft's owner. Because the full costs of the flight would be reimbursed by the candidate travelers (i.e., Candidate A and Candidate B), and the candidate committees would fully compensate the aircraft's owner for the costs of the flight, PAC Representative P's travel would not need to be reimbursed. The Commission invites comment on whether this result--PAC Representative P traveling without paying fair market value for the cost associated with her travel--should be treated as an in-kind contribution to the PAC from one or more of the candidates paying for the cost of the flight. If so, what would the value be? If the value of the travel by a non- candidate traveler is a reportable expenditure by one or more of the candidates when the non-candidate traveler is the representative of a political committee, should the expenditure also be a reportable expenditure if the non-candidate traveler is not a political committee representative? Does it matter whether the non-candidate traveler is traveling at the invitation of one of the candidates or at the invitation of the service provider? Repayment under the proposed rule would not vary based on the number of non-campaign travelers on the plane. For example, Candidate A, Candidate B, Candidate B's campaign manager and PAC Representative P travel on a twenty-seat plane with six other [[Page 59957]] passengers that are not campaign travelers. Candidate A and Candidate B would still be required to pay 50% each of the entire normal and usual charter fare or rental charge for a ``comparable plane'' seating twenty passengers. Because the candidate committees would fully compensate the aircraft's owner for the costs of the flight, PAC Representative P and the six additional travelers would not be required to provide reimbursement. 2. Per Represented Committee Alternative As an alternative, the Commission proposes requiring reimbursement based on the number of represented committees of any type, rather than the number of represented candidates or candidate committees. The Commission proposes two variations of this alternative. (a) For example, Candidate A, Candidate B, and Candidate B's campaign manager travel on a plane on behalf of their respective campaigns, along with PAC Representative P traveling on behalf of the PAC. The pro rata share of the fair market value of the flight would be determined by dividing the normal and usual charter rate for the plane by three because there are three represented committees on the flight (Candidate A, Candidate B, and PAC). Each committee would be required to pay 33% of the charter rate to avoid receiving an in-kind contribution from the aircraft's owner. (b) Using the same hypothetical situation set forth above, PAC Representative P would then have the option of paying either 33% of the calculated charter rate, or the amount that would be required under current 11 CFR 100.93. 3. Per Passenger Alternative As an alternative, the Commission proposes requiring reimbursement only for the portion of the normal and usual charter rate that reflects the number of candidate representatives as a percentage of all passengers on the aircraft. For example, Candidate A, Candidate B, and Candidate B's campaign manager travel on a plane on behalf of their respective campaigns, along with PAC Representative P traveling on behalf of the PAC. The pro rata share of the fair market value of the flight would be determined by dividing the normal and usual charter rate for the plane by four because there are four passengers on the flight. Each passenger would therefore be required to pay \1/4\, or 25%, of the charter rate to avoid receiving a contribution. Candidate A and PAC, with one passenger each, would pay 25% each, while Candidate B, with two passengers would be responsible for 50% of the charter rate. Under this alternative, the repayment would also vary based on the number of non-campaign travelers on the plane. For example, Candidate A, Candidate B, Candidate B's campaign manager, and PAC Representative P travel on a twenty-seat plane with six other passengers who are not candidates or are not traveling on behalf of candidates. Because Candidate A was only one passenger among ten, Candidate A would be required to pay 10% of the normal and usual charter fare or rental charge for a ``comparable plane'' seating twenty passengers. Candidate B, with two passengers, would pay 20%, and PAC, with one passenger, would pay 10%. 4. Comparable Aircraft Alternative As a further alternative, the Commission proposes to follow the approach in its current regulations and permit reimbursement at the normal and usual charter rate or rental charge for an aircraft of sufficient size to carry the campaign travelers. See current 11 CFR 100.93(c)(3) (requiring reimbursement of ``the normal and usual charter fare or rental charge for a comparable commercial airplane of sufficient size to accommodate all campaign travelers''). Under this approach, the campaign committee would be responsible for paying the normal and usual charter rate for a plane of sufficient size to seat its campaign travelers, rather than the rate for a plane comparable (in terms of seating capacity) to the one flown. For example, Candidate A, Candidate B, Candidate B's campaign manager, and PAC Representative P travel on a twenty-seat plane with six other passengers who are not candidates and are not traveling on behalf of candidates. Under this approach, Candidate A, Candidate B, Candidate B's campaign manager, and PAC Representative P would collectively be responsible for reimbursing the aircraft's owner an amount equivalent to the normal and usual charter fare or rental charge for a ``comparable plane'' that could seat four passengers. Each candidate or committee must pay its pro rata share of that amount. Under a variation of this alternative, each campaign traveler would be required to pay the normal and usual charter fare or rental charge for a ``comparable plane'' able to accommodate only himself and those traveling on his behalf. Thus, Candidate A would be required to pay the normal and usual cost of a ``comparable plane'' that can seat one passenger. Similarly, Candidate B would be required to pay the normal and usual cost of a ``comparable plane'' that can seat two passengers. The Commission seeks comments on this approach and the presented alternatives. In addition, the Commission seeks comments on any other calculations that might be more appropriate. C. Proposed 11 CFR 100.93(c)(2)--Non-Commercial Air Travel by Candidates for the House of Representatives New 2 U.S.C. 439a(c)(2) states that ``in the case of a candidate for election for the office of Representative in, or Delegate or Resident Commissioner to, the Congress [hereinafter ``House candidates''], an authorized committee and a leadership PAC of the candidate may not make any expenditure'' for non-commercial air travel, with exceptions for travel on government airplanes and aircraft owned by the candidate or members of the candidate's immediate family. Both exceptions are discussed below. The effect of this provision is generally to prohibit travel by House candidates on non-commercial aircraft. Proposed 11 CFR 100.93(c)(2)(i) would reflect new 2 U.S.C. 439a(c)(2) by prohibiting expenditures by House candidates for non- commercial travel on behalf of that candidate, the candidate's authorized committee, or the candidate's leadership PAC. The new law expressly applies to expenditures by authorized committees and leadership PACs of House candidates, including expenditures made by the candidates themselves on behalf of their authorized committees. Proposed 11 CFR 100.93(c)(2) would apply not only to House candidates, but also to persons traveling on behalf of such candidate, the candidate's authorized committee, or the candidate's leadership PAC. This prohibition does not apply when the travel would not be considered an expenditure by the candidate, candidate's authorized committee, or candidate's leadership PAC. For example, travel by a House candidate on behalf of a non-House candidate, party committee, or non-candidate committee would be required to be reimbursed by such other committee at the respective rate set forth for travel on behalf of that candidate or committee. The Commission seeks comment on this approach. The Commission seeks comments on the treatment of House candidate travel in proposed 11 CFR 100.93(c)(2). Should House candidates be permitted to travel on non-commercial aircraft on [[Page 59958]] behalf of their own campaigns if the cost of the travel is provided as a permissible in-kind contribution? For example, if the travel was provided by a permissible source and the costs of the travel were below the contribution limit, should a non-candidate committee be able to reimburse the travel costs as an in-kind contribution to the candidate? The proposed expenditure regulations, discussed below, prohibit such in-kind contributions. See proposed 11 CFR 113.5(b). If in-kind contributions are allowed, at what rate should their value be calculated for reimbursement and reporting purposes? D. Proposed 11 CFR 100.93(c)(3)--Non-Commercial Air Travel by Other Campaign Travelers The Commission proposes two alternatives with respect to non- commercial air travel by non-candidate campaign travelers. Alternative 1 The Commission notes that the non-candidate reimbursement rate is not addressed in new 2 U.S.C. 439a(c).\5\ These proposed changes are intended to promote uniformity and simplicity in the regulation, and make the regulation easier to understand. The Commission's long- standing travel regulations addressed travel only by candidates or on behalf of candidates. See former 11 CFR 114.9(e). In 2003, the Commission extended its travel regulations to cover all travel in connection with a Federal election, stating, ``By establishing a single rate for travel reimbursement, the new rules will promote greater uniformity among all individuals traveling in connection with a Federal election on behalf of a political committee.'' --------------------------------------------------------------------------- \5\ The statute does address payments by political committees other than authorized committees in describing the reimbursement rate for Senate, Vice Presidential, and Presidential candidates. See 2 U.S.C. 439a(c)(1)(B) (``the candidate, the authorized committee, or other political committee pays * * *'') (emphasis added). --------------------------------------------------------------------------- Against this background, as one alternative, the Commission is proposing changes to the current reimbursement rate for campaign travelers who are not traveling on behalf of candidates. For example, this rate would apply to individuals traveling on behalf of a political party committee, SSF, or nonconnected committee. Under the proposed rule, the provider must be reimbursed at the pro rata share of the fair market value of such travel. Proposed 11 CFR 100.93(c)(3). The pro rata share is based on the number of different committees represented on the flight, and is calculated in the same manner as reimbursement for travel on behalf of Senate, Vice Presidential, or Presidential candidates under proposed 11 CFR 100.93(c)(1). For example, if a non- commercial flight carried two PAC A campaign travelers and one PAC B campaign traveler, each PAC would be responsible for 50% of the fair market value of the flight. This rate does not apply when the travel is shared with a candidate or person traveling on behalf of a candidate. The Commission is proposing this alternative to avoid permitting outside organizations to subsidize a candidate's travel. Travel on an aircraft that includes a campaign traveler flying on behalf of a candidate, candidate's authorized committee, or candidate's leadership PAC, must be fully reimbursed by that candidate, candidate's committee or, when permissible, the candidate's leadership PAC. No reimbursement would be required by the non-candidate travelers. See proposed 11 CFR 100.93(c)(3). For example, if a non-commercial flight carried two PAC A campaign travelers, one PAC B campaign traveler, and Senator A, traveling on behalf of his or her campaign, Senator A or Senator A's campaign committee would be responsible for the full fair market value of the flight. PAC A and PAC B would not have to reimburse for the flight costs. The Commission invites comment on whether this result should be treated as an in-kind contribution to the PACs from Senator A. Does it matter whether or not the non-candidate travelers are representatives of political committees? If the value of the travel by the non- candidate travelers is a reportable expenditure by Senator A when the non-candidate travelers are political committee representatives, should the expenditure also be a reportable expenditure if the non-candidate travelers are not political committee representatives? Does it matter whether the non-candidate travelers are traveling at the invitation of Senator A or at the invitation of the service provider? Alternative 2 Under this alternative, the Commission proposes to retain the existing reimbursement rate structure for non-candidate travel. Because non-candidate travel is not addressed in the new law, the existing rate structure would remain the same for all campaign travelers not traveling on behalf of a candidate or that candidate's authorized committee (i.e., campaign travelers traveling on behalf of political party committees, SSFs, and other non-authorized committees). The Commission notes that this might result in the service provider being paid more than the fair market value of the flight. Does the possibility of such ``overcompensation'' to the service provider represent a concern under FECA? And, if so, in what way? The Commission seeks comment on this approach. Should the Commission interpret the fact that new 2 U.S.C. 439a(c) does not address non-candidate travel as a form of legislative acquiescence to the Commission's current regulations on non-candidate travel reimbursement? Do the first class and coach air fare rates reflect the fair market value of the services provided? Should the Commission adopt a different reimbursement rate for non-candidate travel, such as the per committee or per passenger alternatives discussed above? E. Additional Proposed Revisions to 11 CFR 100.93 1. Members of the Media and Security Personnel Members of the news media ``traveling with a candidate'' for Federal office are expressly included within the definition of ``campaign traveler'' in the Commission's current rules. See 11 CFR 100.93(a)(3)(i)(B). The Commission is not proposing changes to this definition. Under the current rules, when a member of the media is traveling with a candidate, that candidate's committee is ultimately responsible for paying the service provider for the full costs of the travel, but may seek reimbursement from the media for the media's portion of the travel expenses.\6\ The Commission proposes to revise 11 CFR 100.93(b)(1)(iii) to ensure that members of the media would not be permitted to relieve the candidates with whom they travel from responsibility for paying the service provider the full normal and usual charter rate or rental charge for travel on an aircraft, pursuant to proposed 11 CFR 100.93(c)(1). Members of the media would still be permitted to reimburse the service provider for travel on conveyances other than aircraft. The Commission seeks comments on this approach. Should the Commission instead continue to allow reimbursement from members of the [[Page 59959]] media for travel on aircraft? At what rate should this reimbursement take place, for example, should it be calculated at a portion of the charter rate or at a first class rate? --------------------------------------------------------------------------- \6\ ``If a member of the news media elects to have the candidate's authorized committee pay for the media's travel rather than paying the service provider directly, he or she may do so and the candidate's authorized committee is permitted to seek reimbursement from the media. Ultimately it is the candidate's responsibility to ensure that the service provider is reimbursed for the value of the transportation provided to all persons traveling with the candidate.'' 2003 E&J at 69586. See also 11 CFR 9004.6 and 9034.6. --------------------------------------------------------------------------- Security personnel are treated differently under the Commission's current rules. Under the current rules, security personnel are not necessarily considered ``campaign travelers,'' but could qualify as such depending on the nature of any additional services that they provide a candidate. Compare 11 CFR 100.93(a)(3)(i)(A) with 100.93(c)(3) and (d). For example, if Secret Service personnel travel with a candidate for Federal office to the candidate's fundraiser aboard a government airplane, the candidate's authorized committee would not be required to pay for the Secret Service member's travel under the current rules unless the Secret Service agent otherwise qualified as a campaign traveler or the flight was required to be reimbursed at the usual charter rate. See current 11 CFR 100.93(c)(3) (calculation of the usual charter rate requires ``comparable commercial conveyance of sufficient size to accommodate all campaign travelers * * * and security personnel'') (emphasis added) and 11 CFR 100.93(e)(1)(ii). Committees can then seek reimbursement from the Secret Service for their portion of the travel expenses. See, e.g., Advisory Opinion 1992-38 (Clinton/Gore) (loan proposal premised on reimbursement from the Secret Service); see also 11 CFR 9004.6 and 9034.6. Under the proposed rules, when security personnel travel with a candidate or person traveling on behalf of a candidate, that candidate's committee would be responsible for the full costs of the travel. See proposed 11 CFR 100.93(c)(1). However, if the travel occurs on a government aircraft, the security personnel would not be included in the calculation. See proposed 11 CFR 100.93(e)(1). Should the Commission allow reimbursement from security personnel for travel on non-commercial, non-governmental aircraft? At what rate should this reimbursement take place, for example, should it be calculated at a portion of the charter rate or at a first class rate? Under current regulations, how and under what circumstances do committees seek reimbursement for travel expenses from the U.S. Secret Service? 2. ``Comparable Plane of Comparable Size'' New 2 U.S.C. 439a(c)(1)(B) requires that the candidate or the candidate's authorized committee use the fair market value of a ``comparable plane of comparable size'' for purposes of calculating the appropriate charter rate. The Commission interprets ``comparable size'' as an aircraft with similar physical dimensions that is able to carry a similar number of passengers.\7\ --------------------------------------------------------------------------- \7\ The Commission's current rules at 11 CFR 100.93 distinguish between travel aboard an ``airplane'' and travel aboard all other conveyances, including helicopters. See 11 CFR 100.93(a)(3)(ii) (definition of ``service provider'' focuses on ``person who makes the airplane or other conveyance available''), 11 CFR 100.93(c) (``travel by airplane'') and 11 CFR 100.93(d) (``other means of transportation'' includes ``any other means of transportation'' and specifically lists helicopters). For internal consistency and to promote uniformity within its regulations and avoid confusion, the Commission proposes to replace all references to ``airplanes'' in 11 CFR 100.93 with ``aircraft.'' The primary impact would be that travel aboard a helicopter would be reimbursed at the pro rata share of the fair market value of the flight. --------------------------------------------------------------------------- The Commission interprets ``comparable plane'' as an aircraft of similar make and model as the airplane that actually makes the trip, with the same amenities as that airplane. This interpretation is consistent with the Commission's current interpretation of a similar term, ``comparable commercial airplane,'' in the current rules. See 11 CFR 100.93(c)(3); see also proposed 11 CFR 100.93(c)(3)(iii). As explained in the 2003 E&J: a ``comparable commercial airplane'' means an airplane of similar make and model as the airplane that actually makes the trip, and with the same amenities as that airplane. For example, in Advisory Opinion 1984-48, the Commission interpreted a comparable airplane as being ``of the same type (e.g., jet aircraft versus prop plane) and services offered (e.g., plane with dining service or lavatory versus one without)'' as the plane actually used. The Commission further explained that when a candidate used a twin engine prop jet, a single engine, prop aircraft would not be a comparable aircraft. The term ``comparable commercial airplane'' is intended to require these distinctions as well as other differences such as when a plane is chartered with a crew or without, or with or without fuel. 2003 E&J at 69588-69589. The Commission seeks comments on this approach. 3. Presidential and Vice-Presidential Candidates Accepting Public Financing The Commission proposes to continue its policy of promoting equal treatment of travel by publicly financed candidates and presidential or vice-presidential candidates who have not accepted public funds. Therefore, proposed 11 CFR 100.93(c)(1) would apply directly to presidential and vice-presidential candidates who have not accepted public funds, while the proposed revisions to 11 CFR 9004.7 and 9034.7, discussed below, would continue to incorporate the section 100.93 rates by reference and thereby indicate that they also apply to candidates who have accepted public funds. One important distinction, however, is that a presidential candidate accepting public funds for the general election is prohibited from receiving any in-kind contribution from any person, which would include an in-kind contribution of non-commercial air travel. The Commission seeks comments on the proposed application of the new rules to publicly financed presidential and vice-presidential candidates. 4. Travel on Behalf of Leadership PACs of Senate, Presidential, and Vice-Presidential Candidates Under new 2 U.S.C. 439a(c), payments by leadership PACs of House candidates are subject to the same restrictions as payments by authorized committees of House candidates. See 2 U.S.C. 439a(c)(2). In contrast, new 2 U.S.C. 439a(c) is silent with respect to leadership PACs of Senate candidates and Federal officeholders with leadership PACs who are also presidential or vice-presidential candidates. The Commission proposes to apply the new reimbursement rates to travel on behalf of a Senate candidate's leadership PAC. See 11 CFR 100.93(c)(1). The Commission seeks comment on this approach. Alternatively, should the Commission decline to extend the new reimbursement rate structure to travel on behalf of a Senate candidate's leadership PAC because the new law does not explicitly do so? 5. Commercially Reasonable Time Frame Candidates for President, Vice-President, and the U.S. Senate must pay their pro rata share of non-commercial travel on aircraft ``within a commercially reasonable time frame after the date on which the flight is taken.'' 2 U.S.C. 439a(c)(1)(B). Proposed 11 CFR 100.93(c) would define the statutory ``commercially reasonable time frame'' as a seven- day time frame beginning on the first day of the flight. The proposed approach would be located in the introductory clause of 11 CFR 100.93(c) and thus would be applicable to all payments required under that paragraph. The Commission seeks comment on this approach. Is seven days a ``commercially reasonable time frame'' for reimbursement or is it too short a period? Would another time period for [[Page 59960]] reimbursement be more appropriate or reasonable? Should the Commission instead establish the seven-day period (or some other period) as a safe harbor, and consider longer periods on a case-by-case basis to determine if the ``commercially reasonable time frame'' requirement was satisfied? F. Proposed 11 CFR 100.93(e)--Government Conveyances The Commission's current rules at 11 CFR 100.93(e) require reimbursement for travel aboard airplanes owned by the Federal