Candidate Salaries, 5-14 [2023-27906]
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Rules and Regulations
Federal Register
Vol. 89, No. 1
Tuesday, January 2, 2024
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public), and 3) the latest advances since
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[FR Doc. 2023–28797 Filed 12–29–23; 8:45 am]
BILLING CODE 7590–01–P
FEDERAL ELECTION COMMISSION
11 CFR Part 113
[Notice 2023–19]
Candidate Salaries
Federal Election Commission.
Final rule.
AGENCY:
ACTION:
The Commission is revising
its regulations concerning the use of
campaign funds by a candidate’s
principal campaign committee to pay
compensation to the candidate. The
Commission is issuing these rules in
response to a Petition for Rulemaking
filed by a former candidate for the
United States House of Representatives.
DATES: The effective date is March 1,
2024.
SUMMARY:
FOR FURTHER INFORMATION CONTACT:
Amy L. Rothstein, Assistant General
Counsel for Policy, Joseph P.
Wenzinger, Attorney, or Cheryl A.
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Federal Register / Vol. 89, No. 1 / Tuesday, January 2, 2024 / Rules and Regulations
Hemsley, Attorney, 1050 First Street NE,
Washington, DC 20463, (202) 694–1650
or (800) 424–9530.
SUPPLEMENTARY INFORMATION: The
Commission is revising its regulations at
11 CFR part 113 concerning the use of
campaign funds by a candidate’s
principal campaign committee to pay
compensation to the candidate.
Specifically, the Commission is revising
the criteria for determining whether a
candidate is eligible to receive
compensation from campaign funds, the
maximum amount of compensation that
a candidate may receive from campaign
funds, and the period during which a
candidate may receive compensation
from campaign funds. The Commission
is also making miscellaneous changes to
its regulations on candidate
compensation for purposes of
continuity, clarity, and administration.
The Commission is not, at this time,
addressing the use of campaign funds to
pay a candidate’s health insurance
premiums and dependent care costs.
The Commission’s advisory opinions
addressing the use of campaign funds to
pay a candidate’s dependent care costs
remain in effect. Members of the public
may also submit requests for additional
advisory opinions on those subjects.
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Transmitting Final Rules to Congress
Before promulgating rules or
regulations to carry out the provisions of
the Federal Election Campaign Act of
1971, as amended (the ‘‘Act’’),1 the
Commission transmits the rules or
regulations to the Speaker of the House
of Representatives and the President of
the Senate for a thirty-legislative-day
review period.2 The effective date of
this final rule is March 1, 2024.
I. Background
The Act prohibits a candidate’s
authorized committee from converting
campaign funds to ‘‘personal use.’’ 3
‘‘Personal use’’ is defined as the use of
campaign funds ‘‘to fulfill any
commitment, obligation, or expense of a
person that would exist irrespective of
the candidate’s election campaign or
individual’s duties as a holder of
Federal office.’’ 4 The Act and
Commission regulations provide a nonexhaustive list of expenses that, when
paid using campaign funds, constitute
per se conversion of those funds to
personal use.5 The Commission
determines on a case-by-case basis
1 52
U.S.C. 30101–45.
30111(d).
3 Id. 30114(b).
4 Id. 30114(b)(2); see also 11 CFR 113.1(g)
(defining ‘‘personal use’’).
5 See 52 U.S.C. 30114(b)(2); 11 CFR 113.1(g)(1)(i).
2 Id.
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whether the use of campaign funds to
pay expenses other than those listed
would be a prohibited conversion of the
funds to personal use.6
A. Candidates’ Salaries
The Act does not identify the use of
campaign funds to pay candidate
salaries as per se personal use. In
Advisory Opinion 1999–01 (Greene),
however, the Commission concluded
that the Act would prohibit a federal
candidate from using campaign funds to
pay himself a salary because the
candidate would indirectly use the
funds to pay his mortgage, utilities,
groceries, and clothing—all of which are
per se personal use.7
In 2002, the Commission proposed to
codify this conclusion in a regulation.8
The proposed regulation would have
prohibited candidates ‘‘from using
campaign funds to pay themselves
salaries or otherwise compensate
themselves in any way for income lost
as a result of campaigning for Federal
office.’’ 9 The Commission received
several public comments opposing this
proposal, and no public comments
supporting it. Comments argued that the
use of campaign funds to pay
candidates’ salaries would not fulfill a
commitment, obligation, or expense that
would exist irrespective of the
campaign, and therefore satisfies the
Act’s ‘‘irrespective’’ test because, ‘‘were
it not for their campaign
responsibilities, candidates would not
have to leave their jobs and give up their
salaries.’’ 10
The Commission ‘‘agree[d] with the
commenters that the payment of a salary
to a candidate is not a prohibited
personal use as defined under
Commission regulations.’’ 11 The
Commission explained that this use of
campaign funds satisfied the
‘‘irrespective’’ test because, ‘‘but for the
candidacy, the candidate would be paid
a salary in exchange for services
rendered to an employer.’’ 12 Moreover,
the Commission stated, a ‘‘salary paid to
a candidate would be in return for the
6 See
11 CFR 113.1(g)(1)(ii) (providing nonexhaustive list of expenses to be determined for
personal use on a case-by-case basis).
7 Advisory Opinion 1999–01 (Greene) at 4.
8 Disclaimers, Fraudulent Solicitation, Civil
Penalties, and Personal Use of Campaign Funds
(‘‘2002 Proposed Rule’’), 67 FR 55348 (Aug. 29,
2002), https://www.govinfo.gov/content/pkg/FR2002-08-29/pdf/02-21893.pdf.
9 Id. at 55353.
10 Disclaimers, Fraudulent Solicitation, Civil
Penalties, and Personal Use of Campaign Funds
(‘‘2002 Final Rule’’), 67 FR 76962, 76971 (Dec. 13,
2002), https://sers.fec.gov/fosers/
showpdf.htm?docid=8982#page=10.
11 Id.
12 Id.
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candidate’s services provided to the
campaign and the necessity of that
salary would not exist irrespective of
the candidacy.’’ 13
The Commission included in the final
regulation various safeguards against
abuse. To be a permissible use of
campaign funds, the salary paid to a
candidate must not exceed the lesser of
the minimum salary paid to a ‘‘Federal
officeholder holding the Federal office
that the candidate seeks’’ or the earned
income received by the candidate the
year before becoming a candidate.14
Further, any earned income that a
candidate receives from salary or wages
from any source other than campaign
funds counts against the minimum
salary paid to a federal officeholder as
described in the regulation.15 In
addition, candidates must provide
income tax records for the relevant years
and other evidence of earned income
upon the Commission’s request.16 The
regulation also provides that campaign
funds cannot be used to pay a
candidate’s salary before the filing
deadline for access to the primary
election ballot for the federal office that
the candidate seeks, as determined by
state law, or January 1 of each evennumbered year in states that do not
conduct primaries.17 Finally, the
regulation requires salary payments to
be computed on a pro-rata basis and
prohibits candidates who are also
federal officeholders from receiving
salary payments from campaign funds.18
B. Candidates’ Childcare Expenses
The Act and Commission regulations
do not include the use of campaign
funds to pay candidates’ childcare
expenses as a per se personal use. The
Commission has addressed this use of
campaign funds in several advisory
opinions, and has approved the use of
campaign funds to pay candidates’
overnight childcare expenses incurred
when the candidates travel for their own
13 Id.
14 11
CFR 113.1(g)(1)(i)(I).
15 Id.
16 Id.
17 Id. Under this regulation, if the candidate wins
the primary election, his or her principal campaign
committee may pay him or her a salary from
campaign funds through the date of the general
election, up to and including the date of any general
election runoff. If the candidate loses the primary,
withdraws from the race, or otherwise ceases to be
a candidate, no salary payments may be paid
beyond the date he or she is no longer a candidate.
In odd-numbered years in which a special election
for a federal office occurs, the principal campaign
committee for that office may pay the candidate a
salary from campaign funds starting on the date the
special election is set and ending on the day of the
special election.
18 Id.
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campaigns,19 and to pay caregiver
expenses and full-time daycare when
candidates’ campaign responsibilities
and activities prevented them from
caring for their children themselves.20
In each of these advisory opinions, the
Commission concluded that the
candidate could use campaign funds to
pay the candidate’s childcare expenses
to the extent that the expenses were a
‘‘direct result of campaign activity,’’
because such expenses would not have
existed irrespective of the candidate’s
campaign.21
C. Candidates’ Medical Insurance
Premiums
The Act and Commission regulations
do not include the use of campaign
funds to pay candidates’ medical
insurance premiums as a per se personal
use, and the Commission has not
addressed this issue in advisory
opinions.22 The Commission has,
however, addressed the use of campaign
funds to pay health insurance premiums
in an enforcement matter. In MUR 7068
(Mowrer for Iowa), the Commission
found reason to believe that a
congressional candidate and his
campaign committee had improperly
converted campaign funds to personal
use by using funds from the candidate’s
principal campaign committee to
reimburse the candidate for payment of
his health insurance premiums.
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D. Petition for Rulemaking
On March 23, 2021, the Commission
received a Petition for Rulemaking from
Ms. Nabilah Islam, a former candidate
for the United States House of
Representatives in Georgia.23 The
19 Advisory Opinion 2022–07 (Swalwell);
Advisory Opinion 1995–42 (McCrery).
20 Advisory Opinion 2018–06 (Liuba for
Congress); Advisory Opinion 2019–13 (MJ for
Texas).
21 Advisory Opinion 2022–07 (Swalwell) at 3–4;
Advisory Opinion 2019–13 (MJ for Texas) at 3;
Advisory Opinion 2018–07 (Liuba for Congress) at
3; Advisory Opinion 1995–42 (McCrery) at 2; c.f.
Advisory Opinion 2005–09 (Dodd) at 3 (approving
proposed use of campaign funds to pay travel
expenses for candidate’s children to accompany
their parents ‘‘provided that the parents are
traveling to participate in a function directly
connected to the Senator’s bona fide official
responsibilities’’); Advisory Opinion 1995–20
(Roemer) at 2 (approving proposed use of campaign
funds to pay travel expenses of candidate’s young
children when they travel with candidate and his
wife for campaign events, where such travel is
‘‘only required because of the campaign’’).
22 The petitioner had previously requested an
advisory opinion to clarify whether a candidate’s
health insurance premiums were a permissible
campaign expense, see Advisory Opinion Request
2020–01 (Nabilah for Georgia), but her request
became moot when she stopped being a candidate.
23 Petition for Rulemaking to Improve Candidate
Salary Rules (‘‘Petition’’) (Mar. 23, 2021), https://
sers.fec.//showpdf.htm?docid=413694.
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Petition asked the Commission to
amend Section 113.1(g) of its
regulations to expand the category of
candidates eligible to receive
compensation from their authorized
committees and the duration of their
eligibility, and to authorize the use of
campaign funds to pay candidates’
health insurance premiums.24
The Petition asserted that ballot
access deadlines for state primaries,
which ‘‘vary wildly based on state
law,’’ 25 leave many candidates with
short periods for receiving a salary
under the Commission’s regulation.26
Moreover, the Petition alleged that the
current maximum salary limitation
‘‘leaves candidates who are full time
caretakers or who have had gaps in
employment out in the cold,’’ 27 and that
rising health insurance costs act as a
barrier to the prospective candidacies of
‘‘working class people.’’ 28
The Petition asked the Commission to
‘‘lower the barriers for working
Americans to run for Federal office’’ by
amending its personal use regulations at
11 CFR 113.1(g) to:
(1) Extend the date on which a
candidate may begin drawing a
campaign salary to at least 180 days
before the primary election; 29
(2) Establish a minimum candidate
salary of no less than the annualized
salary of $15 per hour; 30 and
(3) Expressly permit a candidate to
use campaign funds to pay the costs of
any health benefit plan already
provided to other campaign employees
beginning on the date the candidate is
eligible to receive a campaign salary.31
E. Public Comments on the Petition
On May 23, 2021, the Commission
published a Notification of Availability
(‘‘NOA’’) seeking public comment on
the Petition.32 The Commission
received 22 comments in response, 14 of
which supported initiating a
rulemaking, agreeing generally that the
Petition’s proposals would make it
easier for individuals of modest means
who are not already federal
officeholders to run for federal office.33
24 Id.
at 4–5.
at 3–4.
26 Id. at 4 (noting, for example, that in
Pennsylvania in 2018, Congressional candidates
were eligible to receive a salary for only 56 days).
27 Id. at 4–5.
28 Id. at 5.
29 Id. at 4, 6.
30 Id. at 4–5.
31 Id. at 5.
32 Rulemaking Petition: Candidate Salaries,
Notification of Availability (‘‘NOA’’), 86 FR 23300
(May 3, 2021), https://sers.fec.gov/fosers/
showpdf.htm?docid=413869.
33 The comments are available on the
Commission’s website at https://sers.fec.gov/fosers/
, referencing REG 2021–01 (Candidate Salaries).
25 Id.
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Several comments noted that the current
candidate salary regulation offers little
assistance to full-time caregivers or
those who have experienced a recent
financial hardship because candidate
salaries cannot currently exceed the
amount of income earned in the year
before their candidacy. Comments also
indicated that the period during which
a candidate is eligible to receive a salary
is too short and does not reflect the
financial costs and other demands of
campaigning today. These comments
generally agreed that a candidate’s
campaign committee should be able to
use campaign funds to pay the
candidate’s health insurance premiums.
Five comments opposed initiating a
rulemaking.
F. Notice of Proposed Rulemaking
On December 12, 2022, the
Commission published a Notice of
Proposed Rulemaking (‘‘NPRM’’) in the
Federal Register, proposing to amend
its regulations regarding the use of
campaign funds to pay candidates’
compensation, including salaries, health
insurance premiums, and dependent
care costs.34
In the NPRM, the Commission
proposed several changes to its personal
use regulations, including a
reorganization of the Commission’s
current regulations at 11 CFR 113.1(g)(1)
through (8) addressing personal use, and
the candidate salary regulation at 11
CFR 113.1(g)(1)(i)(I). The Commission
proposed to remove, reserve, and
redesignate several paragraphs 35 and
add new paragraph (g)(6) to address
candidate compensation.
The Commission proposed the new
paragraph 11 CFR 113.1(g)(6) to have
seven subparagraphs as follows, each of
which is explained further below:
• New 11 CFR 113.1(g)(6)(i), to
prohibit federal officeholders from
receiving compensation as candidates
from campaign funds. This prohibition
already appears in the Commission’s
regulation.36 The Commission is
adopting this proposal.
• New 11 CFR 113.1(g)(6)(ii), to limit
the amount of compensation that a
candidate could receive from campaign
funds. The Commission proposed six
alternative compensation caps, each of
which would have enabled principal
campaign committees to compensate
34 Candidate Salaries, Notice of Proposed
Rulemaking (‘‘NPRM’’), 87 FR 75945 (Dec. 12,
2022), https://sers.fec.gov/fosers/
showpdf.htm?docid=421006.
35 The Commission proposed to remove and
reserve 11 CFR 113.1(g)(1)(i)(I) and redesignate
current paragraphs (g)(6), (g)(7), and (g)(8) as (g)(7),
(g)(8), and (g)(9), respectively.
36 See 11 CFR 113.1(g)(1)(i)(I).
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candidates even if they had not earned
income the year prior to becoming a
candidate. The Commission is adopting
a modified version of these proposals.
• New 11 CFR 113.1(g)(6)(iii), to
define ‘‘compensation’’ for purposes of
the regulation. This definition does not
currently appear in Commission
regulations. The Commission proposed
three alternative definitions, each of
which would have defined
compensation to include direct
payments to the candidate and
payments for at least some other
employee-related benefits, such as
health insurance premiums or
dependent care costs. The Commission
is adopting a modified version of these
proposals.
• New 11 CFR 113.1(g)(6)(iv), to
require a candidate’s committee to
reduce the maximum amount of
compensation that the candidate could
receive from campaign funds by the
amount of any earned income the
candidate received while also receiving
compensation from campaign funds.
This provision would have revised a
requirement already in the
Commission’s regulation.37 The
Commission is adopting a modified
version of this proposal.
• New 11 CFR 113.1(g)(6)(v), to
establish the period during which a
candidate would be eligible to receive
compensation from campaign funds.
This provision would have increased
the length of the eligibility period
already in Commission regulations.38
The Commission is adopting a modified
version of this proposal.
• New 11 CFR 113.1(g)(6)(vi), to
prohibit a candidate’s principal
campaign committee that seeks to settle
debts for less than their full value from
paying compensation to the candidate
or satisfying a debt to the candidate for
compensation, and to prohibit any debt
settlement plan created under 11 CFR
116.7 from providing for the payment of
compensation to the candidate before all
other creditors are paid. These
prohibitions do not currently appear in
the Commission’s regulations. The
Commission is adopting a modified
version of this proposal.
• New 11 CFR 113.1(g)(6)(vii), to
require a candidate who receives
compensation from campaign funds to
provide evidence of prior earned
income upon the request of the
Commission in certain circumstances,
and to require a candidate to maintain
and preserve such evidence for three
years, pursuant to the Commission’s
regulations on the preservation of
37 See
38 See
id.
id.
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records. This provision would have
revised a requirement currently
appearing in the Commission’s
regulation.39 The Commission is
adopting this proposal.
G. Public Comments on the NPRM
The Commission received 62 written
comments in response to the NPRM.
Ten comments were submitted by or on
behalf of 15 organizations, 3 were
submitted by former candidates for
federal office, and 49 were from other
individuals.
As explained further below, these
comments unanimously supported some
version of the Commission’s proposals
to permit principal campaign
committees to compensate candidates
who did not receive income in the year
prior to becoming a candidate, although
the comments varied widely in the
alternatives they supported. These
comments echoed the Petition and
comments on the Petition in pointing
out that the current regulation does not
allow full-time caregivers, or those who
have had a recent gap in employment,
to receive compensation from campaign
funds. The comments also supported
allowing candidates to obtain
compensation from campaign funds at
the start of their campaigns. These
comments cited, as did the Petitioner
and comments on the Petition, the wide
disparity among state ballot access
deadlines and the demands that modern
campaigns place on candidates as early
as the start of their campaigns. The
comments also supported allowing
winning candidates to accept
compensation from campaign funds
until they are sworn into office; some
comments additionally urged the
Commission to extend the eligibility
period for losing candidates by allowing
them to continue accepting campaign
funds for a short period after the end of
their candidacies to wind down their
campaign committees. The comments
also generally agreed that a candidate’s
campaign committee should be able to
use campaign funds to pay the
candidate’s health insurance premiums
or dependent care costs.
H. Public Hearing
On March 22, 2023, the Commission
held a public hearing on Candidate
Salaries. The Commission heard
testimony from 11 witnesses, all but one
of whom supported making changes to
the Commission’s regulations on
candidate compensation. The witnesses
included one Member of Congress, five
former congressional candidates, a legal
academic, and representatives from four
39 See
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organizations: a national labor
organization, a national party
committee, and two public interest
organizations that advocate for
campaign finance reform. After the
hearing, four witnesses submitted
additional information to the
Commission.
As explained further below, the
Member of Congress and former
congressional candidates testified to the
hardships they faced in running for
federal office, due to the limited time
period that candidates are eligible to
receive compensation from campaign
funds under the current regulation.
These witnesses also expressed support
for many of the Commission’s
proposals. The legal academic and most
of the witnesses representing
organizations generally argued that the
cap on candidate compensation should
be untethered from previous earnings,
that the date of eligibility should be
moved to the start of candidacy, and
that candidates should be able to receive
benefits from campaign funds.
One witness argued that the payment
of any candidate compensation violates
the Act’s ‘‘irrespective’’ test because it
allows candidates to pay indirectly for
personal living expenses. The witness
suggested that the Commission should
either repeal the current regulation or
not increase the ability of candidates to
receive compensation under it.
II. Revised 11 CFR Part 113.1—
Definitions
Considering the issues raised in the
Petition, public comments, and witness
testimony,40 the Commission is
amending its regulations regarding the
use of campaign funds for compensation
to candidates, as described below. The
Commission has previously concluded
that ‘‘the payment of a salary to the
candidate is not a prohibited personal
use as defined under the Commission
regulations since, but for the candidacy,
the candidate would be paid a salary in
exchange for services rendered to an
employer.’’ 41 Nothing has occurred to
change the Commission’s conclusion in
this regard. Instead, the Commission
intends to revise its regulations to
reflect more accurately the appropriate
amount of campaign funds that may be
used to ‘‘compensate candidates for lost
income that is forgone due to becoming
a candidate.’’ 42
As proposed in the NPRM, the
Commission is also reorganizing its
40 For purposes of this document, ‘‘comment’’
applies to both written comments and supplemental
information and oral testimony at the public
hearing.
41 2002 Final Rule, 67 FR at 76972.
42 Id.
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current regulations at 11 CFR 113.1(g)(1)
through (8) addressing personal use 43
and adding new paragraph (g)(6) to
address candidate compensation. This
reorganization is being made for
purposes of clarity and to accommodate
the regulatory revisions set out in this
Notice.
A. New 11 CFR 113.1(g)(6)(i)—Federal
Officeholders
The Commission’s current regulations
prohibit a federal officeholder who is
also a federal candidate from receiving
a salary from campaign funds.44 The
Commission explained that, in the
absence of this prohibition, ‘‘an
incumbent officeholder would be
receiving two salaries, one from his or
her campaign and one for his or her
official duties.’’ 45
In the NPRM, the Commission
proposed to maintain this prohibition at
11 CFR 113.1(g)(6)(i) by providing that
a federal officeholder may not receive
compensation as a candidate from
campaign funds. The Commission
received no comments on this proposal.
The Commission is maintaining this
prohibition and moving it to new 11
CFR 113.1(g)(6)(i).
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B. New 11 CFR 113.1(g)(6)(ii)—
Candidate Compensation Cap
Under the current regulation, salary
payments from campaign funds to a
candidate are limited to the lesser of the
minimum salary for the federal office
that the candidate seeks, or the earned
income that the candidate received
during the year prior to becoming a
candidate.46 Accordingly, candidates
may receive salary payments from
campaign funds only if they earned
income the year prior to becoming a
candidate.
In the NPRM, the Commission
proposed six alternatives (Proposed
Compensation Cap Alternatives A
through F) for revising the cap on the
amount of compensation a candidate
may receive from campaign funds. The
Commission proposed these alternatives
because, as indicated in the Petition and
comments on the Petition, the current
regulation does not adequately address
‘‘income that is forgone due to becoming
a candidate,’’ 47 especially by
individuals who had a gap in
43 Specifically, the Commission is removing and
reserving 11 CFR 113.1(g)(1)(i)(I); redesignating
current paragraphs (g)(6), (g)(7), and (g)(8) as (g)(7),
(g)(8), and (g)(9), respectively; and adding new
paragraph (g)(6) to address candidate compensation.
44 11 CFR 113.1(g)(1)(i)(I). The term ‘‘federal
officeholder’’ is defined at 11 CFR 113.1(c).
45 2002 Final Rule, 67 FR at 76972.
46 11 CFR 113.1(g)(1)(i)(I).
47 NPRM, 87 FR at 75948 (quoting 2002 Final
Rule, 67 FR at 76972).
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9
employment or an unusually low level
of income the year before becoming a
candidate. The Commission sought
comment on whether it should adopt
any of the proposals or a combination of
aspects of the proposals.
For each alternative, the Commission
proposed to require principal campaign
committees to calculate the
compensation and cap at the daily rate,
rounded to the nearest dollar. Under
this approach, the compensation and
cap would be allocated based on the
number of days per year that the
candidate spent campaigning.
In addition to comments on specific
alternatives as described below, the
comments supporting the NPRM’s
proposals agreed that the Commission
should expand the pool of candidates
eligible to receive compensation from
campaign funds to include people who
otherwise might be prevented from
campaigning due to a lack of funds,
such as students, caregivers, and those
who lost jobs before becoming a
candidate. Several comments also
agreed that no candidate should be able
to accept compensation from campaign
funds exceeding the salary for the
federal office sought by the candidate.
minimum wage than the federal
minimum wage could use the state
minimum wage. Three comments
opposed Alternative B, arguing that the
annualized hourly minimum wage was
too low to provide a living wage to
candidates, not objectively justifiable,
and neither compensated candidates for
the services demanded by a modern
campaign nor reasonably accounted for
their opportunity costs incurred in
running for office. No comments
supported this alternative.
Proposed Compensation Cap
Alternative C ($15 per hour approach)
would have capped candidate
compensation based on the amount an
individual receiving $15 per hour
would earn by working 40 hours per
week for 52 weeks—calculated at the
daily rate—rather than the federal or
state minimum wage. Three comments
opposed Alternative C, arguing that this
alternative was too low to provide a
living wage to candidates, not
objectively justifiable, and would
neither compensate candidates for their
services to a campaign nor reasonably
account for their opportunity costs
incurred in running for office. No
comments supported this alternative.
Proposed Alternatives A, B, and C
Proposed Compensation Cap
Alternatives A, B, and C did not
consider a candidate’s prior earned
income in setting a cap on the amount
of compensation the candidate could
receive from campaign funds.
Proposed Compensation Cap
Alternative A (50% minimum
officeholder salary approach) would
have capped the amount of campaign
funds that a candidate’s principal
campaign committee could use to pay
compensation to the candidate at 50%
of the minimum salary for the federal
office sought. This cap would have
applied to all candidates for the same
office, regardless of the amount of
income they earned the year before
becoming a candidate. Five comments
generally supported the approach taken
in Alternative A, but differed as to
whether the cap should be set at 50%
or 100% of the salary for the office
sought by the candidate.
Proposed Compensation Cap
Alternative B (hourly minimum wage
approach) would have capped a
candidate’s compensation from
campaign funds at the daily rate of the
annualized hourly minimum wage.
Annualized hourly minimum wage was
defined as the amount an individual
receiving the federal minimum wage
would earn by working 40 hours a week
for 52 weeks, except that an individual
residing in a state with a higher
Proposed Alternatives D, E, and F
Proposed Compensation Cap
Alternatives D, E, and F, like the current
regulation, would have considered the
candidate’s previous earned income, but
in different ways.
Proposed Compensation Cap
Alternative D (prior 12-month income
approach) would have capped a
candidate’s compensation from
campaign funds at the candidate’s
earned income in the 12-month period
before becoming a candidate or the
annualized hourly minimum wage,
whichever was greater, but not to
exceed the minimum annual salary for
the office sought by the candidate. One
comment supported Alternative D,
because it would ensure that all
candidates could receive at least the
annualized minimum wage and enable
candidates who had earned more during
the relevant period to receive
commensurately more compensation
from campaign funds.
Proposed Compensation Cap
Alternative E (three-year income
approach) would have enabled a
candidate to receive compensation from
campaign funds up to the average
annual income that the candidate had
earned during the most recent three
calendar years in which the candidate
earned income prior to becoming a
candidate, capped by the salary for the
office sought by the candidate. No
comments supported this alternative.
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Proposed Compensation Cap
Alternative F (three-year income with
minimum wage approach) would have
been the same as Alternative E, while
also offering candidate committees the
option of paying candidates up to the
annualized minimum wage if the
minimum wage was greater than the
candidate’s prior average earned
income. Two comments supported
Alternative F with modifications and
two comments opposed it.
Final Rule
After considering the comments, the
Commission is adopting a variation of
Proposed Compensation Cap Alternative
E. Under new 11 CFR 113.1(g)(6)(ii), the
use of campaign funds by a candidate’s
principal campaign committee to pay
compensation to the candidate is not
personal use, provided that the
compensation does not exceed the lesser
of 50% of the minimum annual salary
paid to a Member of the U.S. House of
Representatives (regardless of the
specific office sought), and the average
annual income that the candidate
earned during the most recent five
calendar years in which the candidate
earned income prior to becoming a
candidate. The new regulation requires
the average annual income and 50% of
the minimum House Member salary to
be calculated at the daily rate, rounded
to the nearest dollar.
Example 1: Candidate A earned an
average annual income of $35,000 in the
most recent five calendar years in which
Candidate A earned income prior to
becoming a candidate, which means the
daily rate is $96 for purposes of the
compensation cap ($35,000/365,
rounded to the nearest dollar). The
minimum annual House Member salary
is $174,000, which means the daily rate
is $238 (($174,000 × 50%)/365, rounded
to the nearest dollar). Under these facts,
Candidate A’s compensation is capped
at $96 per day because the daily rate of
the candidate’s 5-year average earned
income is less than the daily rate of 50%
of the minimum House Member salary.
Example 2: Candidate B earned an
average annual income of $100,000 in
the most recent five calendar years in
which Candidate B earned income prior
to becoming a candidate, which means
the daily rate is $274 ($100,000/365).
The minimum annual House Member
salary is $174,000, which means the
daily rate is $238 (($174,000 × 50%)/
365), rounded to the nearest dollar).
Under these facts, Candidate B’s
compensation is capped at $238 per day
because the daily rate of 50% of the
minimum House Member salary is less
than the daily rate of Candidate B’s 5year average earned income.
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Example 3: Candidate C becomes a
candidate in 2023. Candidate C earned
income averaging $60,000 per year in
2021, 2019, 2018, 2017, and 2016, but
did not earn any income in 2022 or
2020. Because Candidate C’s 5-year
average earned income in the five most
recent calendar years in which
Candidate C earned income was
$60,000, which is less than 50% of the
minimum House Member salary of
$174,000 in 2023, Candidate C would be
entitled to receive $164 per day
($60,000/365) in compensation from
campaign funds in 2023.
Like Proposed Compensation Cap
Alternative E and the current regulation,
the revised compensation cap allows a
candidate’s principal campaign
committee to use campaign funds to pay
the candidate compensation up to the
lesser of the candidate’s pre-candidacy
earned income and a percentage of the
minimum annual salary paid to a
federal officeholder. The revised cap,
however, allows the principal campaign
committee to consider the candidate’s
prior earned income over a period of
five years, instead of three years as
proposed in the NPRM and one year as
in the current regulation. The
Commission intends this longer lookback to provide a more realistic estimate
of the income a candidate forgoes in
running for office; averaging income
earned over a longer period is intended
to moderate any aberrations in the
candidate’s prior annual earnings.
The Commission’s revised regulation
also differs from Proposed
Compensation Cap Alternative E and
the Commission’s current regulation in
that it places an upper-level cap at 50%
of the minimum annual salary paid to
a Member of the U.S. House of
Representatives, rather than 100% of the
minimum annual salary paid to a
federal officeholder holding the office
that the candidate seeks. These changes
are intended to better reflect substantial
differences between running for federal
office and holding federal office,
especially in a higher-level position
such as the presidency or a leadership
position in Congress. Officeholders have
significant duties under the
Constitution, and their salaries are set
by the political branches subject to
Constitutional restraints.48
Officeholders must continue to execute
the duties of their offices while
campaigning and they accordingly
receive their full salaries while
campaigning. Candidates who do not
hold office may also choose to continue
their employment while running for
office, but should they decide otherwise
48 See
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and prefer to campaign full-time, the
Commission notes that half of the
minimum congressional salary exceeds
the current median household income
in the United States.49 Limiting
candidate compensation in this way
helps protect against personal
enrichment from one’s candidacy and is
tailored to real financial need.
Moreover, the record before the
Commission does not establish the need
for salaries exceeding this amount, with
near-universal agreement in comments
that changes to the Commission’s
regulations were needed to allow
individuals of modest means to run for
office.
The Commission is not adopting the
other alternative cap proposals
presented in the NPRM or comments.
Although several comments presented
policy arguments in favor of the other
proposals (such as the desirability of
providing a fair living wage, enhancing
the diversity of candidates, and
reducing bias that favors incumbents),
these proposals would have enabled
candidates to receive an amount of
compensation from campaign funds that
was divorced from the candidate’s prior
earnings history, and therefore did not
reflect the candidate’s demonstrated
earning potential and income forgone by
running for office. As the Commission
has stated previously, the payment of
campaign funds to a candidate is not
personal use when it ‘‘compensate[s]
candidates for lost income that is
forgone due to becoming a
candidate.’’ 50
In the Commission’s view, a
candidate’s earned income history over
the most recent five years that the
candidate earned income, capped by
50% of the minimum House Member
salary, provides a better picture of the
income forgone by a candidate running
for office.
C. New 11 CFR 113.1(g)(6)(iii)—
Definition of ‘‘Compensation’’
As explained above, the Act does not
specifically address compensation to
candidates in its provisions on the
personal use of campaign funds. While
the Commission’s current regulations
permit the use of campaign funds to pay
a ‘‘salary’’ to a candidate in certain
circumstances, the regulations do not
define ‘‘salary’’ or explicitly address the
use of campaign funds to pay such
49 In 2022, half of the annual salary for Members
of the House of Representatives under 2 U.S.C.
4501(1)(A) was $87,000, while the real median
household income was $74,580. Income in the
United States: 2022, United States Census Bureau,
Sept. 12, 2023, https://www.census.gov/library/
publications/2023/demo/p60-279.html.
50 2002 Final Rule, 67 FR at 76972.
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employment-related benefits as health
insurance premiums or dependent care
costs. Nor do the Commission’s current
regulations define ‘‘compensation’’ in
this context.
In the NPRM, the Commission
proposed three alternative definitions of
‘‘compensation,’’ each of which
included ‘‘direct payments to the
candidate,’’ as well as payments for at
least some other employment-related
benefits. Several comments on the
NPRM generally supported these
proposals. One comment was concerned
that the proposed definitions could be
read to encompass payments to
candidates for non-compensation
purposes, such as campaign expense
reimbursements and loan repayments.
The Commission agrees with this
concern. The term ‘‘compensation’’ is
intended to include only payments to a
candidate to make up for salary forgone
by becoming a candidate and is not
intended to make otherwise permissible
payments, such as candidate expense
reimbursements and candidate loan
repayments, subject to the
compensation cap. Accordingly, new 11
CFR 113.1(g)(6)(iii) defines
‘‘compensation’’ as ‘‘direct payments to
the candidate unless the payments are
otherwise permitted by law, such as
candidate expense reimbursements and
candidate loan repayments under 11
CFR part 116.’’
The Commission is not addressing the
payment of a candidate’s health
insurance premiums and dependent
care costs in these final rules. Although
several comments supported including
payments for these benefits in the
definition of ‘‘compensation,’’ arguing
that such benefits are inextricably
linked to employment and requiring
candidates to forgo those benefits while
campaigning could prevent some
individuals from running for federal
office, the advisory opinion process is
better suited to addressing this use of
campaign funds. Determining whether
an impermissible conversion of
campaign funds to personal use would
result from a campaign committee’s
payment of a candidate’s health
insurance premiums or dependent care
costs is a fact-specific inquiry.51
51 For example, in Advisory Opinion 2022–07
(Swalwell), the Commission concluded that an
officeholder could use campaign funds to pay
overnight childcare expenses that he incurred when
traveling for his own campaign but did not approve
a response to the question whether the officeholder
could use campaign funds to pay childcare
expenses incurred when he campaigned for others.
In Advisory Opinion 2019–13 (MJ for Texas), the
Commission concluded that a candidate who left
her job to work full-time on her campaign could use
campaign funds to pay for full-time daycare for her
children, where she would spend the ‘‘vast
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Accordingly, the Commission has
decided to continue its current practice
of addressing this issue on a case-bycase basis through the advisory opinion
process.52 The Commission’s advisory
opinions addressing the use of
campaign funds to pay a candidate’s or
officeholder’s dependent care costs
remain in effect. Any person whose
factual circumstances differ materially
from those described in these advisory
opinions may request an advisory
opinion.
D. New 11 CFR 113.1(g)(6)(iv)—Outside
Earned Income
As noted above, the Commission’s
current regulation caps the amount of
campaign funds that a candidate may
receive in salary from the candidate’s
principal campaign committee at either
(1) the amount of income earned by the
candidate in the 12-month period
immediately preceding candidacy, or (2)
the minimum annual salary for the
federal office that the candidate seeks,
whichever amount is lower. For
purposes of this calculation, the current
regulation further requires the minimum
salary of the office that the candidate
seeks to be reduced by the amount of
any earned income that the candidate
receives from salaries or wages from any
source other than the candidate’s
principal campaign committee.53 The
Commission has explained that it
requires campaign committees to count
any outside earned income received by
a candidate against the officeholder
salary limit to ‘‘prevent candidates from
paying themselves a salary from
campaign funds on top of other earned
income that they receive from other
sources, such as from private sector
employment, to the extent that such
combined payments exceed the
minimum annual salary for the Federal
majority’’ of her time away from her family on
campaign activities and would reimburse the
campaign for childcare costs incurred when not
campaigning. In Advisory Opinion 2018–06 (Liuba
for Congress), the Commission concluded that a
candidate who had given up her in-home
consulting work to campaign and hired a caregiver
for her children could use campaign funds to pay
childcare expenses when her campaign
responsibilities prevented her from caring for the
children herself.
52 See, e.g., Advisory Opinion 2022–07
(Swalwell) at 4 (approving use of campaign funds
to pay candidate’s childcare expenses to extent
expenses are the ‘‘direct result of campaign
activity’’); Advisory Opinion 2019–13 (MJ for
Texas) at 3 (same); Advisory Opinion 2018–07
(Liuba for Congress) at 3 (same); see also Advisory
Opinion 1995–42 (McCrery) at 2 (approving use of
campaign funds to pay childcare expenses when
Congressman and spouse attend campaign events,
where expenses result only from campaign activity
and otherwise would not exist).
53 11 CFR 113.1(g)(1)(i)(I).
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11
office that the candidate is seeking.’’ 54
The current regulation does not,
however, require a campaign committee
to count outside income earned by a
candidate against the limit set by the
amount of pre-candidacy income earned
by a candidate.
In the NPRM, the Commission
proposed new 11 CFR 113.1(g)(6)(iv) to
rectify the apparent imbalance in the
salary cap reduction by requiring the
amount earned by a candidate from
other sources to count against the
maximum amount of compensation that
a candidate can receive from campaign
funds, rather than counting against only
the minimum annual salary for the
office sought by the candidate. Although
these final rules incorporate a standard
tied to the minimum House Member
salary even if the candidate is not
seeking that office, the NPRM’s proposal
regarding the reduction for outside
earned income remains otherwise
unchanged.
Three comments supported the
proposed regulation. They indicated
that it would enhance oversight of
candidates receiving compensation from
campaign funds and was particularly
apt considering the Commission’s
proposed expansion of candidates’
ability to accept compensation from
campaign funds and the period during
which they may do so. No comment
opposed the proposal.
The Commission agrees that earned
income a candidate receives from noncampaign sources should count against
the maximum amount of compensation
that the candidate can receive from
campaign funds. If a candidate earns
income from outside sources while
campaigning for federal office, that
income has not been lost to
campaigning, and the Commission
discerns no reason for treating outside
earned income differently based on
whether the applicable compensation
cap is set by the candidate’s precandidacy earned income or the
minimum House Member salary.
Therefore, the Commission is adopting
the proposal at new 11 CFR
113.1(g)(6)(iv) to require a candidate’s
principal campaign committee to reduce
the maximum amount of permissible
candidate compensation from campaign
funds by the amount of income earned
by the candidate from other sources
after the candidate files a Statement of
Candidacy.55
54 2002
Final Rule, 67 FR at 76972.
final rule differs from the proposed rule in
one additional respect. The proposed rule would
have reduced the maximum amount of
compensation that a candidate could receive from
campaign funds if the candidate earned income
55 The
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Example 1: Candidate A earned an
annual average of $60,000 during the
most recent five calendar years in which
Candidate A earned income before
becoming a candidate, and the
minimum House Member salary is
$174,000 per year. Because $60,000 is
less than half of the minimum House
Member salary ($87,000), Candidate A
could receive up to $164/day ($60,000/
365). But, if Candidate A earns $30,000
in income from outside sources after
filing a Statement of Candidacy with the
Commission, the maximum amount that
Candidate A may receive as
compensation from campaign funds
must be reduced by $30,000, meaning
that the total compensation paid to the
candidate may not exceed $82/day
(($60,000¥$30,000)/365).
Example 2: Candidate B earned an
annual average of $100,000 during the
most recent five calendar years in which
Candidate B earned income before
becoming a candidate, and the
minimum annual House Member salary
is $174,000 per year. Because half of the
Minimum Officeholder Salary ($87,000)
is less than $100,000, Candidate B could
receive up to $238/day. But, if
Candidate B earns $30,000 in income
from outside sources while also
receiving compensation from campaign
funds, the maximum amount that
Candidate B may receive as
compensation from campaign funds
must be reduced by $30,000, meaning
that the total compensation paid to the
candidate may not exceed $156/day
(($87,000¥$30,000)/365).
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E. New 11 CFR 113.1(g)(6)(v)—Eligibility
Period
The Commission’s current regulation
prohibits the use of campaign funds to
pay a candidate’s salary before the filing
deadline for access to the primary
election ballot for the federal office that
the candidate seeks, as determined by
state law, or January 1 of each evennumbered year in states that do not
conduct primaries.56
In the NPRM, the Commission
proposed to allow candidates to begin
receiving compensation from campaign
funds on the date the candidate’s
principal campaign committee files a
from outside sources ‘‘while the candidate receives
compensation from campaign funds.’’ In response
to a comment, the final rule provides, instead, that
the maximum amount of compensation a candidate
can receive from campaign funds must be reduced
if the candidate earns income from outside sources
‘‘after the candidate files a Statement of Candidacy
under 11 CFR 101.3(a).’’ This revision is intended
to avoid the impression that the compensation cap
will be affected only if the candidate earns income
from outside sources simultaneously with the
receipt of compensation from campaign funds.
56 11 CFR 113.1(g)(1)(i)(I).
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Statement of Organization with the
Commission, regardless of when the
candidate is required to file for ballot
access under state law. This proposal
was intended to reflect more accurately
when a candidate may start to forgo
salary because of the campaign, and to
apply uniform criteria for when
candidates’ principal campaign
committees may start using campaign
funds to compensate the candidate.
The comments generally supported
this proposal. Echoing the Petition,
several comments argued that ballot
access deadlines are an inaccurate
means of determining when a candidate
begins losing income due to
campaigning, and the lack of uniformity
in state ballot access deadlines militates
against using those deadlines to trigger
candidates’ eligibility to receive
compensation from campaign funds.
The comments largely agreed with the
Commission’s proposal to allow
candidates to begin drawing
compensation from campaign funds on
the date that their principal campaign
committee files a Statement of
Organization with the Commission, but
two comments suggested that the
eligibility period should begin when the
candidate files the Statement of
Candidacy.
The Commission is adopting new 11
CFR 113.1(g)(6)(v) to allow candidates
to begin receiving compensation from
campaign funds on the date they file
their Statement of Candidacy, rather
than on the date of the state’s filing
deadline for ballot access as under the
current regulation or when a principal
campaign committee files a Statement of
Organization with the Commission as
proposed. The comments indicate that
campaigns often start well before the
state’s filing deadline for ballot access
under state law. Moreover, under the
Act and Commission regulations, each
candidate must file a new Statement of
Candidacy with the Commission for
each election in which the candidate
runs for office, but a principal campaign
committee is not required to file a new
Statement of Organization for each
election. The Statement of Candidacy is
the first document that a campaign must
file with the Commission.57 Therefore,
the Commission has determined that the
filing of a Statement of Candidacy will
serve as a more accurate standard than
the state’s deadline for filing for ballot
access or a Statement of Organization
for determining when a campaign
57 A candidate must file a Statement of Candidacy
within 15 days after becoming a candidate, 11 CFR
101(a), and a principal campaign committee must
file a Statement of Organization within 10 days after
the candidate’s Statement of Candidacy, 11 CFR
102.1(a).
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begins and when a candidate becomes
eligible to receive compensation from
campaign funds in each election.
Moreover, the new regulation will help
promote uniformity in determining the
start of the eligibility period.58
The current regulation prohibits the
use of campaign funds to pay a
candidate’s salary after the date the
candidate loses the primary election,
withdraws from the race, or otherwise
ceases to be a candidate or, if the
candidate wins the primary, after the
date of the general election or general
election runoff.59 For special elections
occurring in odd-numbered years, the
eligibility period runs until the date of
the special election.
In the NPRM, the Commission
proposed to extend the eligibility period
for candidates who win the general
election, general election runoff, special
election, or special election runoff by
allowing them to continue receiving
compensation from campaign funds up
to the date they are sworn into office,
rather than on the date of the election
as under the current regulation. For
losing candidates and any other
individual who ceases to be a candidate,
such as by withdrawing from the race,
the Commission proposed to continue
the approach under the current
regulation and prohibit compensation
from being paid beyond the date of
losing the election or otherwise ceasing
to be a candidate.60
Many of the comments supported the
Commission’s proposal to permit
winning candidates to receive
compensation from campaign funds up
to the date they are sworn into office,
rather than the date of the election, and
two suggested lengthening the period
for losing candidates as well. One
comment argued that losing candidates
should be permitted to receive
compensation for a reasonable period,
such as 60 days after the election, and
another organization suggested 1 or 2
58 The final rules differ from the proposed rules
in one additional respect. In the NPRM, the
Commission proposed to provide that, in the case
of a special election, a candidate’s principal
campaign committee could pay the candidate
compensation starting on the date the special
election is set. The Commission received no
comments on this proposal and as noted above,
received ample comments supporting the notion
that a candidate should be eligible to receive
compensation upon filing a Statement of
Candidacy. The Commission discerns no reason to
differentiate special elections from other types of
elections in this respect. Therefore, under these
final rules, candidates, whether in special elections
or regularly scheduled elections, may begin
receiving compensation from campaign funds upon
filing their Statement of Candidacy with the
Commission.
59 11 CFR 113.1(g)(1)(i)(I).
60 Id.
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months, so that the candidates may
wind down their campaigns.
The Commission is adopting new 11
CFR 113.1(g)(6)(B) to enable all
candidates to accept compensation from
campaign funds for 20 calendar days
after winning or losing the election or
otherwise ceasing to become a
candidate. As the comments pointed
out, all candidates must spend time
after a campaign winding down their
campaigns, and a 20-day period reflects
the timelines of reportable activity for
post-general election reports.61 The
Commission is extending the same
rationale to candidates who lose
primary elections or otherwise drop out
of the race to maintain consistency
between candidates who do and do not
advance to the general election.
F. New 11 CFR 113.1(g)(6)(vi)—Debts
and Debt Settlement
To prevent candidates from enriching
themselves at the expense of other
campaign creditors, the Commission
proposed in the NPRM to prohibit any
principal campaign committee seeking
to settle debts for less than full value
from paying compensation to the
candidate or satisfying a debt to the
candidate for compensation. In
addition, under the proposal, any debt
settlement plan created under 11 CFR
116.7 would be prohibited from
providing for the payment of
compensation to the candidate before all
other creditors are paid.
The Commission received two
comments supporting this proposal, at
least in part. One comment said the
proposed revision is necessary for
sufficient oversight of candidates
receiving compensation from campaign
funds. The other agreed that a principal
campaign committee’s debt to a
candidate for compensation should be
subordinated to debts owed to the
committee’s other creditors in any debt
settlement plan, but suggested that
committees seeking to settle debts for
less than the full value should also be
permitted to settle a debt for
compensation with the candidate.
The Commission does not agree with
the latter comment’s suggestion. New 11
CFR 113.1(g)(6)(vi) is intended to
prevent a principal campaign committee
from paying compensation to a
candidate at the expense of the
committee’s other creditors. When a
principal campaign committee seeks to
settle debts for less than the full amount
owed, any campaign funds that the
committee pays to the candidate for
compensation are funds that could have
been, but are not being, paid to help
61 See
id. 104.5(a)(2)(ii)(B).
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make other creditors whole.
Accordingly, new 11 CFR 113.1(g)(6)(vi)
prohibits a principal campaign
committee from settling or satisfying a
debt for compensation to the candidate,
or otherwise paying compensation to
the candidate, when seeking to settle
debts to others for less than the full
amount owed.
G. New 11 CFR 113.1(g)(6)(vii)—
Evidence of Earned Income
The Commission’s current regulations
require any candidate receiving a salary
from campaign funds to provide income
tax records and other evidence of earned
income upon request of the
Commission.62 In the NPRM, the
Commission proposed in Proposed
Compensation Cap Alternatives D, E,
and F to maintain this requirement at
new 11 CFR 113.1(g)(6)(vii). The
Commission received one comment
supporting the proposal as necessary for
sufficient oversight of candidates
receiving compensation from campaign
funds. The Commission agrees. Because
income earned by a candidate during
certain time periods is a material
consideration in determining the
maximum compensation that the
candidate may receive from campaign
funds, new 11 CFR 113.1(g)(6)(vii)
maintains the current requirement that
candidates who receive compensation
from campaign funds must provide
income tax records or other evidence of
earned income upon request of the
Commission.
The Commission is also adopting a
proposal from the NPRM to require
candidates to maintain and preserve
evidence of earned income for three
years after their principal campaign
committees file reports disclosing the
payment of compensation to the
candidates, pursuant to 11 CFR 102.9
and 104.14(b). The Commission
received no comments on this proposal.
Sections 102.9 and 104.14(b) already
require political committees and their
authorized agents to keep certain
records of committee disbursements 63
and to maintain those records for three
years after filing a report to which such
records relate.64 New 11 CFR
113.1(g)(6)(vii) clarifies that this record
retention requirement applies to
evidence of a candidate’s earned
income, as well.
62 Id.
113.1(g)(1)(i)(I).
102.9(b). Such records include bank
records, vouchers, worksheets, receipts, bills, and
accounts. Id. 104.14(b)(1).
64 Id. 102.9(c).
63 Id.
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13
Certification of No Effect Pursuant to 5
U.S.C. 605(b) (Regulatory Flexibility
Act)
The Commission certifies that the
final rules do not have a significant
economic impact on a substantial
number of small entities. The final rules
provide flexibility to principal
campaign committees that choose to use
campaign funds to pay their candidates
compensation. Any final rule that could
be construed as placing an obligation on
a principal campaign committee would
apply only to campaigns that choose to
pay their candidates compensation. The
final rules would not impose any new
recordkeeping, reporting, or financial
obligations on principal campaign
committees that do not choose to pay
their candidates compensation, and any
such new obligations that are imposed
on principal campaign committees that
do choose to pay compensation to their
candidates would be minimal. Thus, to
the extent that any entities affected by
these final rules might fall within the
definition of ‘‘small businesses’’ or
‘‘small organizations,’’ the economic
impact of complying with these rules is
not significant.
List of Subjects in 11 CFR Part 113
Campaign funds.
For the reasons set out in the
preamble, the Federal Election
Commission amends 11 CFR chapter 1
as follows:
PART 113—PERMITTED AND
PROHIBITED USES OF CAMPAIGN
ACCOUNTS
1. The authority citation for part 113
continues to read as follows:
■
Authority: 52 U.S.C. 30102(h), 30111(a)(8),
30114, and 30116.
§ 113.1
[Amended]
2. In § 113.1:
a. Remove and reserve paragraph
(g)(1)(i)(I);
■ b. Redesignate paragraphs (g)(6)
through (g)(8) as paragraphs (g)(7)
through (g)(9);
■ c. Add new paragraph (g)(6).
The addition reads as follows:
(6) Candidate compensation. (i) A
Federal officeholder, as defined in
paragraph (c) of this section, must not
receive compensation as a candidate
from campaign funds.
(ii) The use of campaign funds by a
candidate’s principal campaign
committee to pay compensation to the
candidate is not personal use, provided
that the compensation does not exceed
the lesser of: 50% of the minimum
annual salary paid to a Member of the
■
■
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Federal Register / Vol. 89, No. 1 / Tuesday, January 2, 2024 / Rules and Regulations
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United States House of Representatives
under 2 U.S.C. 4501, and the average
annual income that the candidate
earned during the most recent five
calendar years in which the candidate
earned income prior to becoming a
candidate. The committee must
calculate compensation, minimum
annual salary, and average annual
income at the daily rate, rounded to the
nearest dollar.
(iii) For the purposes of this
paragraph, compensation means direct
payments to the candidate unless the
payments are otherwise permitted by
law, such as candidate expense
reimbursements and candidate loan
repayments under 11 CFR part 116.
(iv) The candidate’s principal
campaign committee must reduce the
maximum amount of candidate
compensation permissible under this
paragraph (g)(6) by the amount of any
earned income the candidate receives
from any other source after filing a
Statement of Candidacy under 11 CFR
101.1(a).
(v)(A) Compensation shall not accrue
or be paid to a candidate before the date
the candidate files a Statement of
Candidacy with the Commission. See 11
CFR 101.1(a).
(B) A candidate’s principal campaign
committee may pay the candidate
compensation from campaign funds up
to 20 days after the candidate wins the
general election, general election runoff,
special election, or special election
runoff, or otherwise ceases to be a
candidate, such as by losing an election
or withdrawing from the race.
(vi) Any principal campaign
committee seeking to settle debts for
less than the full value may not pay
compensation to the candidate or settle
or satisfy a debt to a candidate for
compensation.
(vii) The candidate must provide
evidence of earned income from the
relevant years upon the request of the
Commission. Any such evidence of
earned income must be maintained and
preserved for three years after the report
disclosing the disbursement is filed,
pursuant to 11 CFR 102.9 and 104.14(b).
Dated: December 14, 2023.
On behalf of the Commission,
Dara S. Lindenbaum,
Chair, Federal Election Commission.
[FR Doc. 2023–27906 Filed 12–29–23; 8:45 am]
BILLING CODE 6715–01–P
VerDate Sep<11>2014
14:37 Dec 29, 2023
Jkt 262001
[Docket No. FAA–2023–1706; Project
Identifier MCAI–2023–00039–T; Amendment
39–22625; AD 2023–24–08]
regulations.gov under Docket No. FAA–
2023–1706.
FOR FURTHER INFORMATION CONTACT:
Gabriel Kim, Aviation Safety Engineer,
FAA, 1600 Stewart Avenue, Suite 410,
Westbury, NY 11590; telephone 516–
228–7300; email 9-avs-nyaco-cos@
faa.gov.
RIN 2120–AA64
SUPPLEMENTARY INFORMATION:
Airworthiness Directives; Bombardier,
Inc., Airplanes
Background
DEPARTMENT OF TRANSPORTATION
Federal Aviation Administration
14 CFR Part 39
Federal Aviation
Administration (FAA), DOT.
ACTION: Final rule.
AGENCY:
The FAA is adopting a new
airworthiness directive (AD) for certain
Bombardier, Inc., Model BD–700–1A10
and BD–700–1A11 airplanes. This AD
was prompted by reports that the nose
wheel steering selector valve (SSV) can
be slow to deactivate under low
temperature conditions. This AD
requires replacing the affected SSV with
a re-designed SSV that has an improved
response time. The FAA is issuing this
AD to address the unsafe condition on
these products.
DATES: This AD is effective February 6,
2024.
The Director of the Federal Register
approved the incorporation by reference
of certain publications listed in this AD
as of February 6, 2024.
ADDRESSES:
AD Docket: You may examine the AD
docket at regulations.gov under Docket
No. FAA–2023–1706; or in person at
Docket Operations between 9 a.m. and
5 p.m., Monday through Friday, except
Federal holidays. The AD docket
contains this final rule, the mandatory
continuing airworthiness information
(MCAI), any comments received, and
other information. The address for
Docket Operations is U.S. Department of
Transportation, Docket Operations, M–
30, West Building Ground Floor, Room
W12–140, 1200 New Jersey Avenue SE,
Washington, DC 20590.
Material Incorporated by Reference:
• For service information identified
in this final rule, contact Bombardier
Business Aircraft Customer Response
Center, 400 Coˆte-Vertu Road West,
Dorval, Que´bec H4S 1Y9, Canada;
telephone 514–855–2999; email ac.yul@
aero.bombardier.com; website
bombardier.com.
• You may view this service
information at the FAA, Airworthiness
Products Section, Operational Safety
Branch, 2200 South 216th St., Des
Moines, WA. For information on the
availability of this material at the FAA,
call 206–231–3195. It is also available at
SUMMARY:
PO 00000
Frm 00010
Fmt 4700
Sfmt 4700
The FAA issued a notice of proposed
rulemaking (NPRM) to amend 14 CFR
part 39 by adding an AD that would
apply to certain Bombardier, Inc., Model
BD–700–1A10 and BD–700–1A11
airplanes. The NPRM published in the
Federal Register on August 9, 2023 (88
FR 53823). The NPRM was prompted by
AD CF–2023–02, dated January 11,
2023, issued by Transport Canada,
which is the aviation authority for
Canada (referred to after this as the
MCAI). The MCAI states that following
a runway excursion on a different
model, an investigation revealed that
the nose wheel SSV can be slow to
deactivate under low temperature
conditions. A similar SSV is installed
on the airplanes to which this AD is
applicable. In the event of an uncommanded steering input, a slow SSV
deactivation could lead to a delayed
transition to free caster mode and result
in an aircraft runway excursion.
In the NPRM, the FAA proposed to
require replacing the affected SSV with
a re-designed SSV that has an improved
response time. The FAA is issuing this
AD to address the unsafe condition on
these products.
You may examine the MCAI in the
AD docket at regulations.gov under
Docket No. FAA–2023–1706.
Discussion of Final Airworthiness
Directive
Comments
The FAA received a comment from
NetJets. The following presents the
comment received on the NPRM and the
FAA’s response.
Request To Add Bombardier Part
Numbers
NetJets suggested adding Bombardier
part numbers GW415–6275–1 &
GW415–6275–3 to paragraph (g) of the
proposed AD, in addition to Safran part
numbers, as stated in SB 700–32–6021,
paragraph 3., MATERIAL
INFORMATION. NetJets stated that, at
new aircraft delivery, the Bombardier
part numbers are provided in the
documentation of the aircraft. The FAA
infers that NetJets would like to ensure
the proper identification of the parts.
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]]>Agencies
[Federal Register Volume 89, Number 1 (Tuesday, January 2, 2024)]
[Rules and Regulations]
[Pages 5-14]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-27906]
=======================================================================
-----------------------------------------------------------------------
FEDERAL ELECTION COMMISSION
11 CFR Part 113
[Notice 2023-19]
Candidate Salaries
AGENCY: Federal Election Commission.
ACTION: Final rule.
-----------------------------------------------------------------------
SUMMARY: The Commission is revising its regulations concerning the use
of campaign funds by a candidate's principal campaign committee to pay
compensation to the candidate. The Commission is issuing these rules in
response to a Petition for Rulemaking filed by a former candidate for
the United States House of Representatives.
DATES: The effective date is March 1, 2024.
FOR FURTHER INFORMATION CONTACT: Amy L. Rothstein, Assistant General
Counsel for Policy, Joseph P. Wenzinger, Attorney, or Cheryl A.
[[Page 6]]
Hemsley, Attorney, 1050 First Street NE, Washington, DC 20463, (202)
694-1650 or (800) 424-9530.
SUPPLEMENTARY INFORMATION: The Commission is revising its regulations
at 11 CFR part 113 concerning the use of campaign funds by a
candidate's principal campaign committee to pay compensation to the
candidate. Specifically, the Commission is revising the criteria for
determining whether a candidate is eligible to receive compensation
from campaign funds, the maximum amount of compensation that a
candidate may receive from campaign funds, and the period during which
a candidate may receive compensation from campaign funds. The
Commission is also making miscellaneous changes to its regulations on
candidate compensation for purposes of continuity, clarity, and
administration. The Commission is not, at this time, addressing the use
of campaign funds to pay a candidate's health insurance premiums and
dependent care costs. The Commission's advisory opinions addressing the
use of campaign funds to pay a candidate's dependent care costs remain
in effect. Members of the public may also submit requests for
additional advisory opinions on those subjects.
Transmitting Final Rules to Congress
Before promulgating rules or regulations to carry out the
provisions of the Federal Election Campaign Act of 1971, as amended
(the ``Act''),\1\ the Commission transmits the rules or regulations to
the Speaker of the House of Representatives and the President of the
Senate for a thirty-legislative-day review period.\2\ The effective
date of this final rule is March 1, 2024.
---------------------------------------------------------------------------
\1\ 52 U.S.C. 30101-45.
\2\ Id. 30111(d).
---------------------------------------------------------------------------
I. Background
The Act prohibits a candidate's authorized committee from
converting campaign funds to ``personal use.'' \3\ ``Personal use'' is
defined as the use of campaign funds ``to fulfill any commitment,
obligation, or expense of a person that would exist irrespective of the
candidate's election campaign or individual's duties as a holder of
Federal office.'' \4\ The Act and Commission regulations provide a non-
exhaustive list of expenses that, when paid using campaign funds,
constitute per se conversion of those funds to personal use.\5\ The
Commission determines on a case-by-case basis whether the use of
campaign funds to pay expenses other than those listed would be a
prohibited conversion of the funds to personal use.\6\
---------------------------------------------------------------------------
\3\ Id. 30114(b).
\4\ Id. 30114(b)(2); see also 11 CFR 113.1(g) (defining
``personal use'').
\5\ See 52 U.S.C. 30114(b)(2); 11 CFR 113.1(g)(1)(i).
\6\ See 11 CFR 113.1(g)(1)(ii) (providing non-exhaustive list of
expenses to be determined for personal use on a case-by-case basis).
---------------------------------------------------------------------------
A. Candidates' Salaries
The Act does not identify the use of campaign funds to pay
candidate salaries as per se personal use. In Advisory Opinion 1999-01
(Greene), however, the Commission concluded that the Act would prohibit
a federal candidate from using campaign funds to pay himself a salary
because the candidate would indirectly use the funds to pay his
mortgage, utilities, groceries, and clothing--all of which are per se
personal use.\7\
---------------------------------------------------------------------------
\7\ Advisory Opinion 1999-01 (Greene) at 4.
---------------------------------------------------------------------------
In 2002, the Commission proposed to codify this conclusion in a
regulation.\8\ The proposed regulation would have prohibited candidates
``from using campaign funds to pay themselves salaries or otherwise
compensate themselves in any way for income lost as a result of
campaigning for Federal office.'' \9\ The Commission received several
public comments opposing this proposal, and no public comments
supporting it. Comments argued that the use of campaign funds to pay
candidates' salaries would not fulfill a commitment, obligation, or
expense that would exist irrespective of the campaign, and therefore
satisfies the Act's ``irrespective'' test because, ``were it not for
their campaign responsibilities, candidates would not have to leave
their jobs and give up their salaries.'' \10\
---------------------------------------------------------------------------
\8\ Disclaimers, Fraudulent Solicitation, Civil Penalties, and
Personal Use of Campaign Funds (``2002 Proposed Rule''), 67 FR 55348
(Aug. 29, 2002), https://www.govinfo.gov/content/pkg/FR-2002-08-29/pdf/02-21893.pdf.
\9\ Id. at 55353.
\10\ Disclaimers, Fraudulent Solicitation, Civil Penalties, and
Personal Use of Campaign Funds (``2002 Final Rule''), 67 FR 76962,
76971 (Dec. 13, 2002), https://sers.fec.gov/fosers/
showpdf.htm?docid=8982#page=10.
---------------------------------------------------------------------------
The Commission ``agree[d] with the commenters that the payment of a
salary to a candidate is not a prohibited personal use as defined under
Commission regulations.'' \11\ The Commission explained that this use
of campaign funds satisfied the ``irrespective'' test because, ``but
for the candidacy, the candidate would be paid a salary in exchange for
services rendered to an employer.'' \12\ Moreover, the Commission
stated, a ``salary paid to a candidate would be in return for the
candidate's services provided to the campaign and the necessity of that
salary would not exist irrespective of the candidacy.'' \13\
---------------------------------------------------------------------------
\11\ Id.
\12\ Id.
\13\ Id.
---------------------------------------------------------------------------
The Commission included in the final regulation various safeguards
against abuse. To be a permissible use of campaign funds, the salary
paid to a candidate must not exceed the lesser of the minimum salary
paid to a ``Federal officeholder holding the Federal office that the
candidate seeks'' or the earned income received by the candidate the
year before becoming a candidate.\14\ Further, any earned income that a
candidate receives from salary or wages from any source other than
campaign funds counts against the minimum salary paid to a federal
officeholder as described in the regulation.\15\ In addition,
candidates must provide income tax records for the relevant years and
other evidence of earned income upon the Commission's request.\16\ The
regulation also provides that campaign funds cannot be used to pay a
candidate's salary before the filing deadline for access to the primary
election ballot for the federal office that the candidate seeks, as
determined by state law, or January 1 of each even-numbered year in
states that do not conduct primaries.\17\ Finally, the regulation
requires salary payments to be computed on a pro-rata basis and
prohibits candidates who are also federal officeholders from receiving
salary payments from campaign funds.\18\
---------------------------------------------------------------------------
\14\ 11 CFR 113.1(g)(1)(i)(I).
\15\ Id.
\16\ Id.
\17\ Id. Under this regulation, if the candidate wins the
primary election, his or her principal campaign committee may pay
him or her a salary from campaign funds through the date of the
general election, up to and including the date of any general
election runoff. If the candidate loses the primary, withdraws from
the race, or otherwise ceases to be a candidate, no salary payments
may be paid beyond the date he or she is no longer a candidate. In
odd-numbered years in which a special election for a federal office
occurs, the principal campaign committee for that office may pay the
candidate a salary from campaign funds starting on the date the
special election is set and ending on the day of the special
election.
\18\ Id.
---------------------------------------------------------------------------
B. Candidates' Childcare Expenses
The Act and Commission regulations do not include the use of
campaign funds to pay candidates' childcare expenses as a per se
personal use. The Commission has addressed this use of campaign funds
in several advisory opinions, and has approved the use of campaign
funds to pay candidates' overnight childcare expenses incurred when the
candidates travel for their own
[[Page 7]]
campaigns,\19\ and to pay caregiver expenses and full-time daycare when
candidates' campaign responsibilities and activities prevented them
from caring for their children themselves.\20\ In each of these
advisory opinions, the Commission concluded that the candidate could
use campaign funds to pay the candidate's childcare expenses to the
extent that the expenses were a ``direct result of campaign activity,''
because such expenses would not have existed irrespective of the
candidate's campaign.\21\
---------------------------------------------------------------------------
\19\ Advisory Opinion 2022-07 (Swalwell); Advisory Opinion 1995-
42 (McCrery).
\20\ Advisory Opinion 2018-06 (Liuba for Congress); Advisory
Opinion 2019-13 (MJ for Texas).
\21\ Advisory Opinion 2022-07 (Swalwell) at 3-4; Advisory
Opinion 2019-13 (MJ for Texas) at 3; Advisory Opinion 2018-07 (Liuba
for Congress) at 3; Advisory Opinion 1995-42 (McCrery) at 2; c.f.
Advisory Opinion 2005-09 (Dodd) at 3 (approving proposed use of
campaign funds to pay travel expenses for candidate's children to
accompany their parents ``provided that the parents are traveling to
participate in a function directly connected to the Senator's bona
fide official responsibilities''); Advisory Opinion 1995-20 (Roemer)
at 2 (approving proposed use of campaign funds to pay travel
expenses of candidate's young children when they travel with
candidate and his wife for campaign events, where such travel is
``only required because of the campaign'').
---------------------------------------------------------------------------
C. Candidates' Medical Insurance Premiums
The Act and Commission regulations do not include the use of
campaign funds to pay candidates' medical insurance premiums as a per
se personal use, and the Commission has not addressed this issue in
advisory opinions.\22\ The Commission has, however, addressed the use
of campaign funds to pay health insurance premiums in an enforcement
matter. In MUR 7068 (Mowrer for Iowa), the Commission found reason to
believe that a congressional candidate and his campaign committee had
improperly converted campaign funds to personal use by using funds from
the candidate's principal campaign committee to reimburse the candidate
for payment of his health insurance premiums.
---------------------------------------------------------------------------
\22\ The petitioner had previously requested an advisory opinion
to clarify whether a candidate's health insurance premiums were a
permissible campaign expense, see Advisory Opinion Request 2020-01
(Nabilah for Georgia), but her request became moot when she stopped
being a candidate.
---------------------------------------------------------------------------
D. Petition for Rulemaking
On March 23, 2021, the Commission received a Petition for
Rulemaking from Ms. Nabilah Islam, a former candidate for the United
States House of Representatives in Georgia.\23\ The Petition asked the
Commission to amend Section 113.1(g) of its regulations to expand the
category of candidates eligible to receive compensation from their
authorized committees and the duration of their eligibility, and to
authorize the use of campaign funds to pay candidates' health insurance
premiums.\24\
---------------------------------------------------------------------------
\23\ Petition for Rulemaking to Improve Candidate Salary Rules
(``Petition'') (Mar. 23, 2021), https://sers.fec.//
showpdf.htm?docid=413694.
\24\ Id. at 4-5.
---------------------------------------------------------------------------
The Petition asserted that ballot access deadlines for state
primaries, which ``vary wildly based on state law,'' \25\ leave many
candidates with short periods for receiving a salary under the
Commission's regulation.\26\ Moreover, the Petition alleged that the
current maximum salary limitation ``leaves candidates who are full time
caretakers or who have had gaps in employment out in the cold,'' \27\
and that rising health insurance costs act as a barrier to the
prospective candidacies of ``working class people.'' \28\
---------------------------------------------------------------------------
\25\ Id. at 3-4.
\26\ Id. at 4 (noting, for example, that in Pennsylvania in
2018, Congressional candidates were eligible to receive a salary for
only 56 days).
\27\ Id. at 4-5.
\28\ Id. at 5.
---------------------------------------------------------------------------
The Petition asked the Commission to ``lower the barriers for
working Americans to run for Federal office'' by amending its personal
use regulations at 11 CFR 113.1(g) to:
(1) Extend the date on which a candidate may begin drawing a
campaign salary to at least 180 days before the primary election; \29\
---------------------------------------------------------------------------
\29\ Id. at 4, 6.
---------------------------------------------------------------------------
(2) Establish a minimum candidate salary of no less than the
annualized salary of $15 per hour; \30\ and
---------------------------------------------------------------------------
\30\ Id. at 4-5.
---------------------------------------------------------------------------
(3) Expressly permit a candidate to use campaign funds to pay the
costs of any health benefit plan already provided to other campaign
employees beginning on the date the candidate is eligible to receive a
campaign salary.\31\
---------------------------------------------------------------------------
\31\ Id. at 5.
---------------------------------------------------------------------------
E. Public Comments on the Petition
On May 23, 2021, the Commission published a Notification of
Availability (``NOA'') seeking public comment on the Petition.\32\ The
Commission received 22 comments in response, 14 of which supported
initiating a rulemaking, agreeing generally that the Petition's
proposals would make it easier for individuals of modest means who are
not already federal officeholders to run for federal office.\33\
Several comments noted that the current candidate salary regulation
offers little assistance to full-time caregivers or those who have
experienced a recent financial hardship because candidate salaries
cannot currently exceed the amount of income earned in the year before
their candidacy. Comments also indicated that the period during which a
candidate is eligible to receive a salary is too short and does not
reflect the financial costs and other demands of campaigning today.
These comments generally agreed that a candidate's campaign committee
should be able to use campaign funds to pay the candidate's health
insurance premiums. Five comments opposed initiating a rulemaking.
---------------------------------------------------------------------------
\32\ Rulemaking Petition: Candidate Salaries, Notification of
Availability (``NOA''), 86 FR 23300 (May 3, 2021), https://sers.fec.gov/fosers/showpdf.htm?docid=413869.
\33\ The comments are available on the Commission's website at
https://sers.fec.gov/fosers/, referencing REG 2021-01 (Candidate
Salaries).
---------------------------------------------------------------------------
F. Notice of Proposed Rulemaking
On December 12, 2022, the Commission published a Notice of Proposed
Rulemaking (``NPRM'') in the Federal Register, proposing to amend its
regulations regarding the use of campaign funds to pay candidates'
compensation, including salaries, health insurance premiums, and
dependent care costs.\34\
---------------------------------------------------------------------------
\34\ Candidate Salaries, Notice of Proposed Rulemaking
(``NPRM''), 87 FR 75945 (Dec. 12, 2022), https://sers.fec.gov/
fosers/showpdf.htm?docid=421006.
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In the NPRM, the Commission proposed several changes to its
personal use regulations, including a reorganization of the
Commission's current regulations at 11 CFR 113.1(g)(1) through (8)
addressing personal use, and the candidate salary regulation at 11 CFR
113.1(g)(1)(i)(I). The Commission proposed to remove, reserve, and
redesignate several paragraphs \35\ and add new paragraph (g)(6) to
address candidate compensation.
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\35\ The Commission proposed to remove and reserve 11 CFR
113.1(g)(1)(i)(I) and redesignate current paragraphs (g)(6), (g)(7),
and (g)(8) as (g)(7), (g)(8), and (g)(9), respectively.
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The Commission proposed the new paragraph 11 CFR 113.1(g)(6) to
have seven subparagraphs as follows, each of which is explained further
below:
New 11 CFR 113.1(g)(6)(i), to prohibit federal
officeholders from receiving compensation as candidates from campaign
funds. This prohibition already appears in the Commission's
regulation.\36\ The Commission is adopting this proposal.
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\36\ See 11 CFR 113.1(g)(1)(i)(I).
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New 11 CFR 113.1(g)(6)(ii), to limit the amount of
compensation that a candidate could receive from campaign funds. The
Commission proposed six alternative compensation caps, each of which
would have enabled principal campaign committees to compensate
[[Page 8]]
candidates even if they had not earned income the year prior to
becoming a candidate. The Commission is adopting a modified version of
these proposals.
New 11 CFR 113.1(g)(6)(iii), to define ``compensation''
for purposes of the regulation. This definition does not currently
appear in Commission regulations. The Commission proposed three
alternative definitions, each of which would have defined compensation
to include direct payments to the candidate and payments for at least
some other employee-related benefits, such as health insurance premiums
or dependent care costs. The Commission is adopting a modified version
of these proposals.
New 11 CFR 113.1(g)(6)(iv), to require a candidate's
committee to reduce the maximum amount of compensation that the
candidate could receive from campaign funds by the amount of any earned
income the candidate received while also receiving compensation from
campaign funds. This provision would have revised a requirement already
in the Commission's regulation.\37\ The Commission is adopting a
modified version of this proposal.
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\37\ See id.
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New 11 CFR 113.1(g)(6)(v), to establish the period during
which a candidate would be eligible to receive compensation from
campaign funds. This provision would have increased the length of the
eligibility period already in Commission regulations.\38\ The
Commission is adopting a modified version of this proposal.
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\38\ See id.
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New 11 CFR 113.1(g)(6)(vi), to prohibit a candidate's
principal campaign committee that seeks to settle debts for less than
their full value from paying compensation to the candidate or
satisfying a debt to the candidate for compensation, and to prohibit
any debt settlement plan created under 11 CFR 116.7 from providing for
the payment of compensation to the candidate before all other creditors
are paid. These prohibitions do not currently appear in the
Commission's regulations. The Commission is adopting a modified version
of this proposal.
New 11 CFR 113.1(g)(6)(vii), to require a candidate who
receives compensation from campaign funds to provide evidence of prior
earned income upon the request of the Commission in certain
circumstances, and to require a candidate to maintain and preserve such
evidence for three years, pursuant to the Commission's regulations on
the preservation of records. This provision would have revised a
requirement currently appearing in the Commission's regulation.\39\ The
Commission is adopting this proposal.
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\39\ See id.
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G. Public Comments on the NPRM
The Commission received 62 written comments in response to the
NPRM. Ten comments were submitted by or on behalf of 15 organizations,
3 were submitted by former candidates for federal office, and 49 were
from other individuals.
As explained further below, these comments unanimously supported
some version of the Commission's proposals to permit principal campaign
committees to compensate candidates who did not receive income in the
year prior to becoming a candidate, although the comments varied widely
in the alternatives they supported. These comments echoed the Petition
and comments on the Petition in pointing out that the current
regulation does not allow full-time caregivers, or those who have had a
recent gap in employment, to receive compensation from campaign funds.
The comments also supported allowing candidates to obtain compensation
from campaign funds at the start of their campaigns. These comments
cited, as did the Petitioner and comments on the Petition, the wide
disparity among state ballot access deadlines and the demands that
modern campaigns place on candidates as early as the start of their
campaigns. The comments also supported allowing winning candidates to
accept compensation from campaign funds until they are sworn into
office; some comments additionally urged the Commission to extend the
eligibility period for losing candidates by allowing them to continue
accepting campaign funds for a short period after the end of their
candidacies to wind down their campaign committees. The comments also
generally agreed that a candidate's campaign committee should be able
to use campaign funds to pay the candidate's health insurance premiums
or dependent care costs.
H. Public Hearing
On March 22, 2023, the Commission held a public hearing on
Candidate Salaries. The Commission heard testimony from 11 witnesses,
all but one of whom supported making changes to the Commission's
regulations on candidate compensation. The witnesses included one
Member of Congress, five former congressional candidates, a legal
academic, and representatives from four organizations: a national labor
organization, a national party committee, and two public interest
organizations that advocate for campaign finance reform. After the
hearing, four witnesses submitted additional information to the
Commission.
As explained further below, the Member of Congress and former
congressional candidates testified to the hardships they faced in
running for federal office, due to the limited time period that
candidates are eligible to receive compensation from campaign funds
under the current regulation. These witnesses also expressed support
for many of the Commission's proposals. The legal academic and most of
the witnesses representing organizations generally argued that the cap
on candidate compensation should be untethered from previous earnings,
that the date of eligibility should be moved to the start of candidacy,
and that candidates should be able to receive benefits from campaign
funds.
One witness argued that the payment of any candidate compensation
violates the Act's ``irrespective'' test because it allows candidates
to pay indirectly for personal living expenses. The witness suggested
that the Commission should either repeal the current regulation or not
increase the ability of candidates to receive compensation under it.
II. Revised 11 CFR Part 113.1--Definitions
Considering the issues raised in the Petition, public comments, and
witness testimony,\40\ the Commission is amending its regulations
regarding the use of campaign funds for compensation to candidates, as
described below. The Commission has previously concluded that ``the
payment of a salary to the candidate is not a prohibited personal use
as defined under the Commission regulations since, but for the
candidacy, the candidate would be paid a salary in exchange for
services rendered to an employer.'' \41\ Nothing has occurred to change
the Commission's conclusion in this regard. Instead, the Commission
intends to revise its regulations to reflect more accurately the
appropriate amount of campaign funds that may be used to ``compensate
candidates for lost income that is forgone due to becoming a
candidate.'' \42\
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\40\ For purposes of this document, ``comment'' applies to both
written comments and supplemental information and oral testimony at
the public hearing.
\41\ 2002 Final Rule, 67 FR at 76972.
\42\ Id.
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As proposed in the NPRM, the Commission is also reorganizing its
[[Page 9]]
current regulations at 11 CFR 113.1(g)(1) through (8) addressing
personal use \43\ and adding new paragraph (g)(6) to address candidate
compensation. This reorganization is being made for purposes of clarity
and to accommodate the regulatory revisions set out in this Notice.
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\43\ Specifically, the Commission is removing and reserving 11
CFR 113.1(g)(1)(i)(I); redesignating current paragraphs (g)(6),
(g)(7), and (g)(8) as (g)(7), (g)(8), and (g)(9), respectively; and
adding new paragraph (g)(6) to address candidate compensation.
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A. New 11 CFR 113.1(g)(6)(i)--Federal Officeholders
The Commission's current regulations prohibit a federal
officeholder who is also a federal candidate from receiving a salary
from campaign funds.\44\ The Commission explained that, in the absence
of this prohibition, ``an incumbent officeholder would be receiving two
salaries, one from his or her campaign and one for his or her official
duties.'' \45\
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\44\ 11 CFR 113.1(g)(1)(i)(I). The term ``federal officeholder''
is defined at 11 CFR 113.1(c).
\45\ 2002 Final Rule, 67 FR at 76972.
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In the NPRM, the Commission proposed to maintain this prohibition
at 11 CFR 113.1(g)(6)(i) by providing that a federal officeholder may
not receive compensation as a candidate from campaign funds. The
Commission received no comments on this proposal. The Commission is
maintaining this prohibition and moving it to new 11 CFR
113.1(g)(6)(i).
B. New 11 CFR 113.1(g)(6)(ii)--Candidate Compensation Cap
Under the current regulation, salary payments from campaign funds
to a candidate are limited to the lesser of the minimum salary for the
federal office that the candidate seeks, or the earned income that the
candidate received during the year prior to becoming a candidate.\46\
Accordingly, candidates may receive salary payments from campaign funds
only if they earned income the year prior to becoming a candidate.
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\46\ 11 CFR 113.1(g)(1)(i)(I).
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In the NPRM, the Commission proposed six alternatives (Proposed
Compensation Cap Alternatives A through F) for revising the cap on the
amount of compensation a candidate may receive from campaign funds. The
Commission proposed these alternatives because, as indicated in the
Petition and comments on the Petition, the current regulation does not
adequately address ``income that is forgone due to becoming a
candidate,'' \47\ especially by individuals who had a gap in employment
or an unusually low level of income the year before becoming a
candidate. The Commission sought comment on whether it should adopt any
of the proposals or a combination of aspects of the proposals.
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\47\ NPRM, 87 FR at 75948 (quoting 2002 Final Rule, 67 FR at
76972).
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For each alternative, the Commission proposed to require principal
campaign committees to calculate the compensation and cap at the daily
rate, rounded to the nearest dollar. Under this approach, the
compensation and cap would be allocated based on the number of days per
year that the candidate spent campaigning.
In addition to comments on specific alternatives as described
below, the comments supporting the NPRM's proposals agreed that the
Commission should expand the pool of candidates eligible to receive
compensation from campaign funds to include people who otherwise might
be prevented from campaigning due to a lack of funds, such as students,
caregivers, and those who lost jobs before becoming a candidate.
Several comments also agreed that no candidate should be able to accept
compensation from campaign funds exceeding the salary for the federal
office sought by the candidate.
Proposed Alternatives A, B, and C
Proposed Compensation Cap Alternatives A, B, and C did not consider
a candidate's prior earned income in setting a cap on the amount of
compensation the candidate could receive from campaign funds.
Proposed Compensation Cap Alternative A (50% minimum officeholder
salary approach) would have capped the amount of campaign funds that a
candidate's principal campaign committee could use to pay compensation
to the candidate at 50% of the minimum salary for the federal office
sought. This cap would have applied to all candidates for the same
office, regardless of the amount of income they earned the year before
becoming a candidate. Five comments generally supported the approach
taken in Alternative A, but differed as to whether the cap should be
set at 50% or 100% of the salary for the office sought by the
candidate.
Proposed Compensation Cap Alternative B (hourly minimum wage
approach) would have capped a candidate's compensation from campaign
funds at the daily rate of the annualized hourly minimum wage.
Annualized hourly minimum wage was defined as the amount an individual
receiving the federal minimum wage would earn by working 40 hours a
week for 52 weeks, except that an individual residing in a state with a
higher minimum wage than the federal minimum wage could use the state
minimum wage. Three comments opposed Alternative B, arguing that the
annualized hourly minimum wage was too low to provide a living wage to
candidates, not objectively justifiable, and neither compensated
candidates for the services demanded by a modern campaign nor
reasonably accounted for their opportunity costs incurred in running
for office. No comments supported this alternative.
Proposed Compensation Cap Alternative C ($15 per hour approach)
would have capped candidate compensation based on the amount an
individual receiving $15 per hour would earn by working 40 hours per
week for 52 weeks--calculated at the daily rate--rather than the
federal or state minimum wage. Three comments opposed Alternative C,
arguing that this alternative was too low to provide a living wage to
candidates, not objectively justifiable, and would neither compensate
candidates for their services to a campaign nor reasonably account for
their opportunity costs incurred in running for office. No comments
supported this alternative.
Proposed Alternatives D, E, and F
Proposed Compensation Cap Alternatives D, E, and F, like the
current regulation, would have considered the candidate's previous
earned income, but in different ways.
Proposed Compensation Cap Alternative D (prior 12-month income
approach) would have capped a candidate's compensation from campaign
funds at the candidate's earned income in the 12-month period before
becoming a candidate or the annualized hourly minimum wage, whichever
was greater, but not to exceed the minimum annual salary for the office
sought by the candidate. One comment supported Alternative D, because
it would ensure that all candidates could receive at least the
annualized minimum wage and enable candidates who had earned more
during the relevant period to receive commensurately more compensation
from campaign funds.
Proposed Compensation Cap Alternative E (three-year income
approach) would have enabled a candidate to receive compensation from
campaign funds up to the average annual income that the candidate had
earned during the most recent three calendar years in which the
candidate earned income prior to becoming a candidate, capped by the
salary for the office sought by the candidate. No comments supported
this alternative.
[[Page 10]]
Proposed Compensation Cap Alternative F (three-year income with
minimum wage approach) would have been the same as Alternative E, while
also offering candidate committees the option of paying candidates up
to the annualized minimum wage if the minimum wage was greater than the
candidate's prior average earned income. Two comments supported
Alternative F with modifications and two comments opposed it.
Final Rule
After considering the comments, the Commission is adopting a
variation of Proposed Compensation Cap Alternative E. Under new 11 CFR
113.1(g)(6)(ii), the use of campaign funds by a candidate's principal
campaign committee to pay compensation to the candidate is not personal
use, provided that the compensation does not exceed the lesser of 50%
of the minimum annual salary paid to a Member of the U.S. House of
Representatives (regardless of the specific office sought), and the
average annual income that the candidate earned during the most recent
five calendar years in which the candidate earned income prior to
becoming a candidate. The new regulation requires the average annual
income and 50% of the minimum House Member salary to be calculated at
the daily rate, rounded to the nearest dollar.
Example 1: Candidate A earned an average annual income of $35,000
in the most recent five calendar years in which Candidate A earned
income prior to becoming a candidate, which means the daily rate is $96
for purposes of the compensation cap ($35,000/365, rounded to the
nearest dollar). The minimum annual House Member salary is $174,000,
which means the daily rate is $238 (($174,000 x 50%)/365, rounded to
the nearest dollar). Under these facts, Candidate A's compensation is
capped at $96 per day because the daily rate of the candidate's 5-year
average earned income is less than the daily rate of 50% of the minimum
House Member salary.
Example 2: Candidate B earned an average annual income of $100,000
in the most recent five calendar years in which Candidate B earned
income prior to becoming a candidate, which means the daily rate is
$274 ($100,000/365). The minimum annual House Member salary is
$174,000, which means the daily rate is $238 (($174,000 x 50%)/365),
rounded to the nearest dollar). Under these facts, Candidate B's
compensation is capped at $238 per day because the daily rate of 50% of
the minimum House Member salary is less than the daily rate of
Candidate B's 5-year average earned income.
Example 3: Candidate C becomes a candidate in 2023. Candidate C
earned income averaging $60,000 per year in 2021, 2019, 2018, 2017, and
2016, but did not earn any income in 2022 or 2020. Because Candidate
C's 5-year average earned income in the five most recent calendar years
in which Candidate C earned income was $60,000, which is less than 50%
of the minimum House Member salary of $174,000 in 2023, Candidate C
would be entitled to receive $164 per day ($60,000/365) in compensation
from campaign funds in 2023.
Like Proposed Compensation Cap Alternative E and the current
regulation, the revised compensation cap allows a candidate's principal
campaign committee to use campaign funds to pay the candidate
compensation up to the lesser of the candidate's pre-candidacy earned
income and a percentage of the minimum annual salary paid to a federal
officeholder. The revised cap, however, allows the principal campaign
committee to consider the candidate's prior earned income over a period
of five years, instead of three years as proposed in the NPRM and one
year as in the current regulation. The Commission intends this longer
look-back to provide a more realistic estimate of the income a
candidate forgoes in running for office; averaging income earned over a
longer period is intended to moderate any aberrations in the
candidate's prior annual earnings.
The Commission's revised regulation also differs from Proposed
Compensation Cap Alternative E and the Commission's current regulation
in that it places an upper-level cap at 50% of the minimum annual
salary paid to a Member of the U.S. House of Representatives, rather
than 100% of the minimum annual salary paid to a federal officeholder
holding the office that the candidate seeks. These changes are intended
to better reflect substantial differences between running for federal
office and holding federal office, especially in a higher-level
position such as the presidency or a leadership position in Congress.
Officeholders have significant duties under the Constitution, and their
salaries are set by the political branches subject to Constitutional
restraints.\48\ Officeholders must continue to execute the duties of
their offices while campaigning and they accordingly receive their full
salaries while campaigning. Candidates who do not hold office may also
choose to continue their employment while running for office, but
should they decide otherwise and prefer to campaign full-time, the
Commission notes that half of the minimum congressional salary exceeds
the current median household income in the United States.\49\ Limiting
candidate compensation in this way helps protect against personal
enrichment from one's candidacy and is tailored to real financial need.
Moreover, the record before the Commission does not establish the need
for salaries exceeding this amount, with near-universal agreement in
comments that changes to the Commission's regulations were needed to
allow individuals of modest means to run for office.
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\48\ See U.S. Const. amend. XXVII.
\49\ In 2022, half of the annual salary for Members of the House
of Representatives under 2 U.S.C. 4501(1)(A) was $87,000, while the
real median household income was $74,580. Income in the United
States: 2022, United States Census Bureau, Sept. 12, 2023, https://www.census.gov/library/publications/2023/demo/p60-279.html.
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The Commission is not adopting the other alternative cap proposals
presented in the NPRM or comments. Although several comments presented
policy arguments in favor of the other proposals (such as the
desirability of providing a fair living wage, enhancing the diversity
of candidates, and reducing bias that favors incumbents), these
proposals would have enabled candidates to receive an amount of
compensation from campaign funds that was divorced from the candidate's
prior earnings history, and therefore did not reflect the candidate's
demonstrated earning potential and income forgone by running for
office. As the Commission has stated previously, the payment of
campaign funds to a candidate is not personal use when it
``compensate[s] candidates for lost income that is forgone due to
becoming a candidate.'' \50\
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\50\ 2002 Final Rule, 67 FR at 76972.
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In the Commission's view, a candidate's earned income history over
the most recent five years that the candidate earned income, capped by
50% of the minimum House Member salary, provides a better picture of
the income forgone by a candidate running for office.
C. New 11 CFR 113.1(g)(6)(iii)--Definition of ``Compensation''
As explained above, the Act does not specifically address
compensation to candidates in its provisions on the personal use of
campaign funds. While the Commission's current regulations permit the
use of campaign funds to pay a ``salary'' to a candidate in certain
circumstances, the regulations do not define ``salary'' or explicitly
address the use of campaign funds to pay such
[[Page 11]]
employment-related benefits as health insurance premiums or dependent
care costs. Nor do the Commission's current regulations define
``compensation'' in this context.
In the NPRM, the Commission proposed three alternative definitions
of ``compensation,'' each of which included ``direct payments to the
candidate,'' as well as payments for at least some other employment-
related benefits. Several comments on the NPRM generally supported
these proposals. One comment was concerned that the proposed
definitions could be read to encompass payments to candidates for non-
compensation purposes, such as campaign expense reimbursements and loan
repayments.
The Commission agrees with this concern. The term ``compensation''
is intended to include only payments to a candidate to make up for
salary forgone by becoming a candidate and is not intended to make
otherwise permissible payments, such as candidate expense
reimbursements and candidate loan repayments, subject to the
compensation cap. Accordingly, new 11 CFR 113.1(g)(6)(iii) defines
``compensation'' as ``direct payments to the candidate unless the
payments are otherwise permitted by law, such as candidate expense
reimbursements and candidate loan repayments under 11 CFR part 116.''
The Commission is not addressing the payment of a candidate's
health insurance premiums and dependent care costs in these final
rules. Although several comments supported including payments for these
benefits in the definition of ``compensation,'' arguing that such
benefits are inextricably linked to employment and requiring candidates
to forgo those benefits while campaigning could prevent some
individuals from running for federal office, the advisory opinion
process is better suited to addressing this use of campaign funds.
Determining whether an impermissible conversion of campaign funds to
personal use would result from a campaign committee's payment of a
candidate's health insurance premiums or dependent care costs is a
fact-specific inquiry.\51\ Accordingly, the Commission has decided to
continue its current practice of addressing this issue on a case-by-
case basis through the advisory opinion process.\52\ The Commission's
advisory opinions addressing the use of campaign funds to pay a
candidate's or officeholder's dependent care costs remain in effect.
Any person whose factual circumstances differ materially from those
described in these advisory opinions may request an advisory opinion.
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\51\ For example, in Advisory Opinion 2022-07 (Swalwell), the
Commission concluded that an officeholder could use campaign funds
to pay overnight childcare expenses that he incurred when traveling
for his own campaign but did not approve a response to the question
whether the officeholder could use campaign funds to pay childcare
expenses incurred when he campaigned for others. In Advisory Opinion
2019-13 (MJ for Texas), the Commission concluded that a candidate
who left her job to work full-time on her campaign could use
campaign funds to pay for full-time daycare for her children, where
she would spend the ``vast majority'' of her time away from her
family on campaign activities and would reimburse the campaign for
childcare costs incurred when not campaigning. In Advisory Opinion
2018-06 (Liuba for Congress), the Commission concluded that a
candidate who had given up her in-home consulting work to campaign
and hired a caregiver for her children could use campaign funds to
pay childcare expenses when her campaign responsibilities prevented
her from caring for the children herself.
\52\ See, e.g., Advisory Opinion 2022-07 (Swalwell) at 4
(approving use of campaign funds to pay candidate's childcare
expenses to extent expenses are the ``direct result of campaign
activity''); Advisory Opinion 2019-13 (MJ for Texas) at 3 (same);
Advisory Opinion 2018-07 (Liuba for Congress) at 3 (same); see also
Advisory Opinion 1995-42 (McCrery) at 2 (approving use of campaign
funds to pay childcare expenses when Congressman and spouse attend
campaign events, where expenses result only from campaign activity
and otherwise would not exist).
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D. New 11 CFR 113.1(g)(6)(iv)--Outside Earned Income
As noted above, the Commission's current regulation caps the amount
of campaign funds that a candidate may receive in salary from the
candidate's principal campaign committee at either (1) the amount of
income earned by the candidate in the 12-month period immediately
preceding candidacy, or (2) the minimum annual salary for the federal
office that the candidate seeks, whichever amount is lower. For
purposes of this calculation, the current regulation further requires
the minimum salary of the office that the candidate seeks to be reduced
by the amount of any earned income that the candidate receives from
salaries or wages from any source other than the candidate's principal
campaign committee.\53\ The Commission has explained that it requires
campaign committees to count any outside earned income received by a
candidate against the officeholder salary limit to ``prevent candidates
from paying themselves a salary from campaign funds on top of other
earned income that they receive from other sources, such as from
private sector employment, to the extent that such combined payments
exceed the minimum annual salary for the Federal office that the
candidate is seeking.'' \54\ The current regulation does not, however,
require a campaign committee to count outside income earned by a
candidate against the limit set by the amount of pre-candidacy income
earned by a candidate.
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\53\ 11 CFR 113.1(g)(1)(i)(I).
\54\ 2002 Final Rule, 67 FR at 76972.
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In the NPRM, the Commission proposed new 11 CFR 113.1(g)(6)(iv) to
rectify the apparent imbalance in the salary cap reduction by requiring
the amount earned by a candidate from other sources to count against
the maximum amount of compensation that a candidate can receive from
campaign funds, rather than counting against only the minimum annual
salary for the office sought by the candidate. Although these final
rules incorporate a standard tied to the minimum House Member salary
even if the candidate is not seeking that office, the NPRM's proposal
regarding the reduction for outside earned income remains otherwise
unchanged.
Three comments supported the proposed regulation. They indicated
that it would enhance oversight of candidates receiving compensation
from campaign funds and was particularly apt considering the
Commission's proposed expansion of candidates' ability to accept
compensation from campaign funds and the period during which they may
do so. No comment opposed the proposal.
The Commission agrees that earned income a candidate receives from
non-campaign sources should count against the maximum amount of
compensation that the candidate can receive from campaign funds. If a
candidate earns income from outside sources while campaigning for
federal office, that income has not been lost to campaigning, and the
Commission discerns no reason for treating outside earned income
differently based on whether the applicable compensation cap is set by
the candidate's pre-candidacy earned income or the minimum House Member
salary. Therefore, the Commission is adopting the proposal at new 11
CFR 113.1(g)(6)(iv) to require a candidate's principal campaign
committee to reduce the maximum amount of permissible candidate
compensation from campaign funds by the amount of income earned by the
candidate from other sources after the candidate files a Statement of
Candidacy.\55\
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\55\ The final rule differs from the proposed rule in one
additional respect. The proposed rule would have reduced the maximum
amount of compensation that a candidate could receive from campaign
funds if the candidate earned income from outside sources ``while
the candidate receives compensation from campaign funds.'' In
response to a comment, the final rule provides, instead, that the
maximum amount of compensation a candidate can receive from campaign
funds must be reduced if the candidate earns income from outside
sources ``after the candidate files a Statement of Candidacy under
11 CFR 101.3(a).'' This revision is intended to avoid the impression
that the compensation cap will be affected only if the candidate
earns income from outside sources simultaneously with the receipt of
compensation from campaign funds.
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[[Page 12]]
Example 1: Candidate A earned an annual average of $60,000 during
the most recent five calendar years in which Candidate A earned income
before becoming a candidate, and the minimum House Member salary is
$174,000 per year. Because $60,000 is less than half of the minimum
House Member salary ($87,000), Candidate A could receive up to $164/day
($60,000/365). But, if Candidate A earns $30,000 in income from outside
sources after filing a Statement of Candidacy with the Commission, the
maximum amount that Candidate A may receive as compensation from
campaign funds must be reduced by $30,000, meaning that the total
compensation paid to the candidate may not exceed $82/day (($60,000-
$30,000)/365).
Example 2: Candidate B earned an annual average of $100,000 during
the most recent five calendar years in which Candidate B earned income
before becoming a candidate, and the minimum annual House Member salary
is $174,000 per year. Because half of the Minimum Officeholder Salary
($87,000) is less than $100,000, Candidate B could receive up to $238/
day. But, if Candidate B earns $30,000 in income from outside sources
while also receiving compensation from campaign funds, the maximum
amount that Candidate B may receive as compensation from campaign funds
must be reduced by $30,000, meaning that the total compensation paid to
the candidate may not exceed $156/day (($87,000-$30,000)/365).
E. New 11 CFR 113.1(g)(6)(v)--Eligibility Period
The Commission's current regulation prohibits the use of campaign
funds to pay a candidate's salary before the filing deadline for access
to the primary election ballot for the federal office that the
candidate seeks, as determined by state law, or January 1 of each even-
numbered year in states that do not conduct primaries.\56\
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\56\ 11 CFR 113.1(g)(1)(i)(I).
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In the NPRM, the Commission proposed to allow candidates to begin
receiving compensation from campaign funds on the date the candidate's
principal campaign committee files a Statement of Organization with the
Commission, regardless of when the candidate is required to file for
ballot access under state law. This proposal was intended to reflect
more accurately when a candidate may start to forgo salary because of
the campaign, and to apply uniform criteria for when candidates'
principal campaign committees may start using campaign funds to
compensate the candidate.
The comments generally supported this proposal. Echoing the
Petition, several comments argued that ballot access deadlines are an
inaccurate means of determining when a candidate begins losing income
due to campaigning, and the lack of uniformity in state ballot access
deadlines militates against using those deadlines to trigger
candidates' eligibility to receive compensation from campaign funds.
The comments largely agreed with the Commission's proposal to allow
candidates to begin drawing compensation from campaign funds on the
date that their principal campaign committee files a Statement of
Organization with the Commission, but two comments suggested that the
eligibility period should begin when the candidate files the Statement
of Candidacy.
The Commission is adopting new 11 CFR 113.1(g)(6)(v) to allow
candidates to begin receiving compensation from campaign funds on the
date they file their Statement of Candidacy, rather than on the date of
the state's filing deadline for ballot access as under the current
regulation or when a principal campaign committee files a Statement of
Organization with the Commission as proposed. The comments indicate
that campaigns often start well before the state's filing deadline for
ballot access under state law. Moreover, under the Act and Commission
regulations, each candidate must file a new Statement of Candidacy with
the Commission for each election in which the candidate runs for
office, but a principal campaign committee is not required to file a
new Statement of Organization for each election. The Statement of
Candidacy is the first document that a campaign must file with the
Commission.\57\ Therefore, the Commission has determined that the
filing of a Statement of Candidacy will serve as a more accurate
standard than the state's deadline for filing for ballot access or a
Statement of Organization for determining when a campaign begins and
when a candidate becomes eligible to receive compensation from campaign
funds in each election. Moreover, the new regulation will help promote
uniformity in determining the start of the eligibility period.\58\
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\57\ A candidate must file a Statement of Candidacy within 15
days after becoming a candidate, 11 CFR 101(a), and a principal
campaign committee must file a Statement of Organization within 10
days after the candidate's Statement of Candidacy, 11 CFR 102.1(a).
\58\ The final rules differ from the proposed rules in one
additional respect. In the NPRM, the Commission proposed to provide
that, in the case of a special election, a candidate's principal
campaign committee could pay the candidate compensation starting on
the date the special election is set. The Commission received no
comments on this proposal and as noted above, received ample
comments supporting the notion that a candidate should be eligible
to receive compensation upon filing a Statement of Candidacy. The
Commission discerns no reason to differentiate special elections
from other types of elections in this respect. Therefore, under
these final rules, candidates, whether in special elections or
regularly scheduled elections, may begin receiving compensation from
campaign funds upon filing their Statement of Candidacy with the
Commission.
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The current regulation prohibits the use of campaign funds to pay a
candidate's salary after the date the candidate loses the primary
election, withdraws from the race, or otherwise ceases to be a
candidate or, if the candidate wins the primary, after the date of the
general election or general election runoff.\59\ For special elections
occurring in odd-numbered years, the eligibility period runs until the
date of the special election.
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\59\ 11 CFR 113.1(g)(1)(i)(I).
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In the NPRM, the Commission proposed to extend the eligibility
period for candidates who win the general election, general election
runoff, special election, or special election runoff by allowing them
to continue receiving compensation from campaign funds up to the date
they are sworn into office, rather than on the date of the election as
under the current regulation. For losing candidates and any other
individual who ceases to be a candidate, such as by withdrawing from
the race, the Commission proposed to continue the approach under the
current regulation and prohibit compensation from being paid beyond the
date of losing the election or otherwise ceasing to be a candidate.\60\
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\60\ Id.
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Many of the comments supported the Commission's proposal to permit
winning candidates to receive compensation from campaign funds up to
the date they are sworn into office, rather than the date of the
election, and two suggested lengthening the period for losing
candidates as well. One comment argued that losing candidates should be
permitted to receive compensation for a reasonable period, such as 60
days after the election, and another organization suggested 1 or 2
[[Page 13]]
months, so that the candidates may wind down their campaigns.
The Commission is adopting new 11 CFR 113.1(g)(6)(B) to enable all
candidates to accept compensation from campaign funds for 20 calendar
days after winning or losing the election or otherwise ceasing to
become a candidate. As the comments pointed out, all candidates must
spend time after a campaign winding down their campaigns, and a 20-day
period reflects the timelines of reportable activity for post-general
election reports.\61\ The Commission is extending the same rationale to
candidates who lose primary elections or otherwise drop out of the race
to maintain consistency between candidates who do and do not advance to
the general election.
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\61\ See id. 104.5(a)(2)(ii)(B).
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F. New 11 CFR 113.1(g)(6)(vi)--Debts and Debt Settlement
To prevent candidates from enriching themselves at the expense of
other campaign creditors, the Commission proposed in the NPRM to
prohibit any principal campaign committee seeking to settle debts for
less than full value from paying compensation to the candidate or
satisfying a debt to the candidate for compensation. In addition, under
the proposal, any debt settlement plan created under 11 CFR 116.7 would
be prohibited from providing for the payment of compensation to the
candidate before all other creditors are paid.
The Commission received two comments supporting this proposal, at
least in part. One comment said the proposed revision is necessary for
sufficient oversight of candidates receiving compensation from campaign
funds. The other agreed that a principal campaign committee's debt to a
candidate for compensation should be subordinated to debts owed to the
committee's other creditors in any debt settlement plan, but suggested
that committees seeking to settle debts for less than the full value
should also be permitted to settle a debt for compensation with the
candidate.
The Commission does not agree with the latter comment's suggestion.
New 11 CFR 113.1(g)(6)(vi) is intended to prevent a principal campaign
committee from paying compensation to a candidate at the expense of the
committee's other creditors. When a principal campaign committee seeks
to settle debts for less than the full amount owed, any campaign funds
that the committee pays to the candidate for compensation are funds
that could have been, but are not being, paid to help make other
creditors whole. Accordingly, new 11 CFR 113.1(g)(6)(vi) prohibits a
principal campaign committee from settling or satisfying a debt for
compensation to the candidate, or otherwise paying compensation to the
candidate, when seeking to settle debts to others for less than the
full amount owed.
G. New 11 CFR 113.1(g)(6)(vii)--Evidence of Earned Income
The Commission's current regulations require any candidate
receiving a salary from campaign funds to provide income tax records
and other evidence of earned income upon request of the Commission.\62\
In the NPRM, the Commission proposed in Proposed Compensation Cap
Alternatives D, E, and F to maintain this requirement at new 11 CFR
113.1(g)(6)(vii). The Commission received one comment supporting the
proposal as necessary for sufficient oversight of candidates receiving
compensation from campaign funds. The Commission agrees. Because income
earned by a candidate during certain time periods is a material
consideration in determining the maximum compensation that the
candidate may receive from campaign funds, new 11 CFR 113.1(g)(6)(vii)
maintains the current requirement that candidates who receive
compensation from campaign funds must provide income tax records or
other evidence of earned income upon request of the Commission.
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\62\ Id. 113.1(g)(1)(i)(I).
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The Commission is also adopting a proposal from the NPRM to require
candidates to maintain and preserve evidence of earned income for three
years after their principal campaign committees file reports disclosing
the payment of compensation to the candidates, pursuant to 11 CFR 102.9
and 104.14(b). The Commission received no comments on this proposal.
Sections 102.9 and 104.14(b) already require political committees and
their authorized agents to keep certain records of committee
disbursements \63\ and to maintain those records for three years after
filing a report to which such records relate.\64\ New 11 CFR
113.1(g)(6)(vii) clarifies that this record retention requirement
applies to evidence of a candidate's earned income, as well.
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\63\ Id. 102.9(b). Such records include bank records, vouchers,
worksheets, receipts, bills, and accounts. Id. 104.14(b)(1).
\64\ Id. 102.9(c).
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Certification of No Effect Pursuant to 5 U.S.C. 605(b) (Regulatory
Flexibility Act)
The Commission certifies that the final rules do not have a
significant economic impact on a substantial number of small entities.
The final rules provide flexibility to principal campaign committees
that choose to use campaign funds to pay their candidates compensation.
Any final rule that could be construed as placing an obligation on a
principal campaign committee would apply only to campaigns that choose
to pay their candidates compensation. The final rules would not impose
any new recordkeeping, reporting, or financial obligations on principal
campaign committees that do not choose to pay their candidates
compensation, and any such new obligations that are imposed on
principal campaign committees that do choose to pay compensation to
their candidates would be minimal. Thus, to the extent that any
entities affected by these final rules might fall within the definition
of ``small businesses'' or ``small organizations,'' the economic impact
of complying with these rules is not significant.
List of Subjects in 11 CFR Part 113
Campaign funds.
For the reasons set out in the preamble, the Federal Election
Commission amends 11 CFR chapter 1 as follows:
PART 113--PERMITTED AND PROHIBITED USES OF CAMPAIGN ACCOUNTS
0
1. The authority citation for part 113 continues to read as follows:
Authority: 52 U.S.C. 30102(h), 30111(a)(8), 30114, and 30116.
Sec. 113.1 [Amended]
0
2. In Sec. 113.1:
0
a. Remove and reserve paragraph (g)(1)(i)(I);
0
b. Redesignate paragraphs (g)(6) through (g)(8) as paragraphs (g)(7)
through (g)(9);
0
c. Add new paragraph (g)(6).
The addition reads as follows:
(6) Candidate compensation. (i) A Federal officeholder, as defined
in paragraph (c) of this section, must not receive compensation as a
candidate from campaign funds.
(ii) The use of campaign funds by a candidate's principal campaign
committee to pay compensation to the candidate is not personal use,
provided that the compensation does not exceed the lesser of: 50% of
the minimum annual salary paid to a Member of the
[[Page 14]]
United States House of Representatives under 2 U.S.C. 4501, and the
average annual income that the candidate earned during the most recent
five calendar years in which the candidate earned income prior to
becoming a candidate. The committee must calculate compensation,
minimum annual salary, and average annual income at the daily rate,
rounded to the nearest dollar.
(iii) For the purposes of this paragraph, compensation means direct
payments to the candidate unless the payments are otherwise permitted
by law, such as candidate expense reimbursements and candidate loan
repayments under 11 CFR part 116.
(iv) The candidate's principal campaign committee must reduce the
maximum amount of candidate compensation permissible under this
paragraph (g)(6) by the amount of any earned income the candidate
receives from any other source after filing a Statement of Candidacy
under 11 CFR 101.1(a).
(v)(A) Compensation shall not accrue or be paid to a candidate
before the date the candidate files a Statement of Candidacy with the
Commission. See 11 CFR 101.1(a).
(B) A candidate's principal campaign committee may pay the
candidate compensation from campaign funds up to 20 days after the
candidate wins the general election, general election runoff, special
election, or special election runoff, or otherwise ceases to be a
candidate, such as by losing an election or withdrawing from the race.
(vi) Any principal campaign committee seeking to settle debts for
less than the full value may not pay compensation to the candidate or
settle or satisfy a debt to a candidate for compensation.
(vii) The candidate must provide evidence of earned income from the
relevant years upon the request of the Commission. Any such evidence of
earned income must be maintained and preserved for three years after
the report disclosing the disbursement is filed, pursuant to 11 CFR
102.9 and 104.14(b).
Dated: December 14, 2023.
On behalf of the Commission,
Dara S. Lindenbaum,
Chair, Federal Election Commission.
[FR Doc. 2023-27906 Filed 12-29-23; 8:45 am]
BILLING CODE 6715-01-P
