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14662 Federal Register / Vol. 72, No.

60 / Thursday, March 29, 2007 / Rules and Regulations

extensively to the stabilization of all entities, both large and small, were Dated: March 23, 2007.
producer prices, which prior to 1980 able to express views on this issue. Lloyd C. Day,
experienced wide fluctuations from A proposed rule concerning this Administrator, Agricultural Marketing
year-to-year. National Agricultural action was published in the Federal Service.
Statistics Service records show that the Register on January 22, 2007 (71 FR [FR Doc. E7–5811 Filed 3–28–07; 8:45 am]
average price paid for both classes of 2639). Copies of the rule were provided BILLING CODE 3410–02–P
spearmint oil ranged from $4.00 per to Committee staff, which in turn made
pound to $11.10 per pound during the it available to spearmint oil producers,
period between 1968 and 1980. Prices handlers, and other interested person.
have been consistently more stable since Finally, the rule was made available FEDERAL ELECTION COMMISSION
the marketing order’s inception in 1980, through the Internet by the Office of the
with an average price for the period Federal Register and USDA. A 30-day 11 CFR Part 111
from 1980 to 2005 of $12.72 per pound comment period ending February 21,
for Scotch spearmint oil and $9.84 per 2007, was provided to allow interested [Notice 2007–7]
pound for Native spearmint oil. persons to respond to the proposal. No
During the period of 1998 through comments were received. Best Efforts in Administrative Fines
2005, however, large production and A small business guide on complying Challenges
carry-in inventories have contributed to with fruit, vegetable, and specialty crop
prices below the 26-year average, marketing agreements and orders may AGENCY: Federal Election Commission.
despite the Committee’s efforts to be viewed at: http://www.ams.usda.gov/ ACTION: Final Rules and Transmittal of
balance available supplies with fv/moab.html. Any questions about the Rules to Congress.
demand. Prices have ranged from $8.00 compliance guide should be sent to Jay
to $11.00 per pound for Scotch Guerber at the previously mentioned SUMMARY: The Federal Election
spearmint oil and between $9.10 and address in the FOR FURTHER INFORMATION Commission is revising its regulations to
$10.00 per pound for Native spearmint CONTACT section. amend four aspects of its Administrative
oil. The 2005 Native price exceeded the After consideration of all relevant Fines Program (‘‘AFP’’), a streamlined
26-year average by $0.16. Producers matter presented, including the process through which the Commission
stated, however, that fuel cost increases information and recommendation assesses civil money penalties for late
more than offset the price increase. submitted by the Committee and other filers and non-filers under the Federal
According to the Committee, the available information, it is hereby found Election Campaign Act of 1971, as
recommended salable quantities and that this rule, as hereinafter set forth, amended (‘‘FECA’’). First, the
allotment percentages are expected to will tend to effectuate the declared Commission is revising its rules
achieve the goals of market and price policy of the Act. regarding the permissible grounds for
stability. challenging a proposed civil money
As previously stated, annual salable List of Subjects in 7 CFR Part 985 penalty by clarifying the scope of the
quantities and allotment percentages Marketing agreements, Oils and fats, defense based on factual errors. Second,
have been issued for both classes of Reporting and recordkeeping the Commission is incorporating a
spearmint oil since the order’s requirements, Spearmint oil. defense for political committees that
inception. Accordingly, this action will demonstrate that they used their best
■ For the reasons set forth in the efforts to file reports timely. Third, the
not impose any additional reporting or
preamble, 7 CFR part 985 is amended as Commission is revising its rules
recordkeeping requirements on either
follows: regarding its final determinations to
small or large spearmint oil producers
or handlers. As with all Federal clarify when the Commission finds that
PART 985—MARKETING ORDER
marketing order programs, reports and no violation has occurred. Lastly, the
REGULATING THE HANDLING OF
forms are periodically reviewed to rules are being amended to explain that
SPEARMINT OIL PRODUCED IN THE
reduce information requirements and the Commission’s statement of reasons
FAR WEST
duplication by industry and public for its final decision in an AFP matter
sector agencies. ■ 1. The authority citation for 7 CFR usually consists of the reasons set forth
The AMS is committed to complying part 985 continues to read as follows: by the Commission’s reviewing officer
with the E-Government Act, to promote as adopted by the Commission. The
Authority: 7 U.S.C. 601–674.
the use of the Internet and other supplementary information that follows
information technologies to provide ■ 2. A new § 985.226 is added to read provides further information.
increased opportunities for citizen as follows:
EFFECTIVE DATE: April 30, 2007.
access to Government information and Note: This section will not appear in the
Code of Federal Regulations. FOR FURTHER INFORMATION CONTACT: Mr.
services, and for other purposes.
J. Duane Pugh Jr., Acting Assistant
As noted in the initial regulatory
§ 985.226 Salable quantities and allotment General Counsel, or Ms. Margaret G.
flexibility analysis, USDA has not
percentages—2007–2008 marketing year. Perl, Attorney, 999 E Street, NW.,
identified any relevant Federal rules
The salable quantity and allotment Washington, DC 20463, (202) 694–1650
that duplicate, overlap, or conflict with
percentage for each class of spearmint or (800) 424–9530.
this final rule.
In addition, the Committee’s meeting oil during the marketing year beginning SUPPLEMENTARY INFORMATION: Through
was widely publicized throughout the on June 1, 2007, shall be as follows: the AFP, the Commission may assess a
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spearmint oil industry and all interested (a) Class 1 (Scotch) oil—a salable civil money penalty for a violation of
persons were invited to attend the quantity of 886,667 pounds and an the reporting requirements of 2 U.S.C.
meeting and participate in Committee allotment percentage of 45 percent. 434(a) (such as not filing or filing late)
deliberations on all issues. Like all (b) Class 3 (Native) oil—a salable without using the traditional
Committee meetings, the October 4, quantity of 1,062,336 pounds and an enforcement procedures reserved for
2006, meeting was a public meeting and allotment percentage of 48 percent. more serious violations under 2 U.S.C.

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Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 14663

437g. See 2 U.S.C. 437g(a)(4)(C).1 committee, any report or any records of the other comment was not relevant to
Congress intended the Commission to such committee shall be considered in this rulemaking.
process these straightforward violations compliance with [FECA].’’ 2 U.S.C. After consideration of the relevant
through a ‘‘simplified procedure’’ that 432(i).3 The Lovely court concluded that comment, the Commission has decided
would ease the enforcement burden on the plain language of FECA requires the to revise its rules governing the AFP in
the Commission. See H.R. Rep. No. 106– Commission to consider the ‘‘best four ways, as described below: (1)
295, at 11–12 (1999). The rules efforts’’ defense in the AFP, and that the Clarifying the scope of the ‘‘factual
governing the AFP create a streamlined record in the Lovely case did not errors’’ defense; (2) incorporating a
procedure that balances the establish whether the Commission had ‘‘best efforts’’ defense for challenges to
respondent’s rights to notice and considered that defense. See Lovely, 307 RTB findings; (3) clarifying when the
opportunity to be heard with the need Commission may find that no violation
F. Supp. 2d at 300–01. The court
to operate the AFP in an expeditious has occurred in an AFP matter; and (4)
remanded the case to the Commission
manner without undue administrative explaining the procedure for issuing
for further proceedings. See id. at 301.
burden. See Explanation and Commission statements of reasons for
On remand, the Commission AFP final determinations. These
Justification for Final Rule on
determined that the political committee changes address the concerns raised by
Administrative Fines, 65 FR 31787,
had failed to show it used best efforts to the Lovely court and provide greater
31788 (May 19, 2000) (‘‘Admin Fines
file timely and confirmed the earlier clarity regarding permissible grounds
E&J’’).2
When the Commission finds reason to imposition of the civil money penalty. for challenging an RTB finding. The
believe (‘‘RTB’’) that a political See Statement of Reasons in revisions are substantially similar to
committee and its treasurer Administrative Fines Case 549 (Oct. 4, those proposed in the NPRM.
(‘‘respondents’’) violated the reporting 2005), available at http://www.fec.gov/ Under the Administrative Procedure
requirements, the respondents may law/law_rulemakings.shtml under the Act, 5 U.S.C. 553(d), and the
challenge the finding and the proposed heading ‘‘Best Efforts in Administrative Congressional Review of Agency
civil money penalty only for certain Fines Challenges.’’ Rulemaking Act, 5 U.S.C. 801(a)(1),
specified reasons. See revised 11 CFR Although the Lovely decision did not agencies must submit final rules to the
111.35. The Commission’s reviewing directly challenge the AFP rules, and Speaker of the House of Representatives
officer considers the challenge and did not affect the validity of 11 CFR and the President of the Senate and
forwards a recommendation to the 111.35 or the Commission’s publish them in the Federal Register at
Commission. See 11 CFR 111.36(e). consideration of any other AFP matters, least 30 calendar days before they take
After considering the challenge, the the Commission opted to open a effect. The final rules that follow were
reviewing officer’s recommendation, rulemaking by publishing a Notice of transmitted to Congress on March 23,
and any subsequent comments from the 2007.
Proposed Rulemaking on December 8,
respondent regarding the 2006, to seek public comment on Explanation And Justification
recommendation, the Commission proposed revisions to the AFP based on
makes a final determination. See revised I. Revised 11 CFR 111.35—Respondent
the court’s concerns. See Notice of Challenges to Reason To Believe
11 CFR 111.37. The Commission Proposed Rulemaking for Best Efforts in Finding or Proposed Civil Money
assesses civil money penalties based on Administrative Fines Challenges, 71 FR Penalty
published penalty schedules set forth in 71093 (Dec. 8, 2006) (‘‘NPRM’’). The
11 CFR 111.43. Respondents may Revised section 111.35 sets forth the
Commission received two comments,
challenge the Commission’s final requirements for AFP respondents’
which are available at http://
determination in U.S. District Court. See challenges to RTB findings and
www.fec.gov/law/
2 U.S.C. 437g(a)(4)(C)(iii); 11 CFR proposed civil money penalties. Revised
law_rulemakings.shtml under the section 111.35(a) is clarified so that it
111.38. heading ‘‘Best Efforts in Administrative
In Lovely v. FEC, 307 F. Supp. 2d 294 applies only to respondents that seek to
Fines Challenges.’’4 One comment made challenge an RTB finding or proposed
(D. Mass. 2004), a political committee
several recommendations as to how the civil money penalty.5 The Commission
challenged a civil money penalty
assessed by the Commission through the Commission could further clarify the is reorganizing and clarifying section
AFP. The political committee argued ‘‘best efforts’’ defense by incorporating 111.35 so that respondents may easily
that it had used its best efforts to file the the business management concept of identify the basis for challenges in the
report in question and that this ‘‘best practices’’ regarding corporate AFP. See revised 11 CFR 111.35(b).
constituted a valid and complete operation, financial controls, risk
prevention and risk assessment, while A. Revised 11 CFR 111.35(b)(1)—
defense under FECA’s ‘‘best efforts’’ Changes to the ‘‘Factual Errors’’ Defense
provision in 2 U.S.C. 432(i). See Lovely,
307 F. Supp. 2d at 299. Section 432(i) 3 The Commission had long interpreted the ‘‘best The NPRM sought comment on
provides that ‘‘[w]hen the treasurer of a
efforts’’ safe harbor to be limited to political proposed clarifications to the ‘‘factual
committees’ obligation to report certain substantive errors’’ defense and asked whether the
political committee shows that best information that may be beyond the control of the
efforts have been used to obtain, committees to obtain. See 11 CFR 104.7 (defining
regulation should include examples of
maintain, and submit the information ‘‘best efforts’’ for purposes of obtaining and the types of factual errors that would
required by this Act for the political
submitting contributor information). The suffice as grounds for challenging an
Commission is currently considering in a separate RTB finding. See NPRM, 71 FR at 71094.
proceeding whether to revise its application of this
1 The AFP applies to violations of the reporting provision in enforcement matters outside the scope
The comment did not address this issue.
requirements by political committees and their of the AFP. See Proposed Statement of Policy The Commission has decided to revise
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treasurers. See 11 CFR 111.30. Regarding Treasurer’s Best Efforts to Obtain,


2 The AFP is set to expire on December 31, 2008. Maintain, and Submit Information as Required by 5 The revisions to section 111.35(a) did not alter

See Pub. L. No. 109–115, sec. 721, 119 Stat. 2396, the Federal Election Campaign Act, 71 FR 71084 the basic timing requirement that a respondent
2493–94 (2005); Final Rule on Extension of (Dec. 8, 2006). The Commission anticipates issuing must file a challenge with the Commission within
Administrative Fines Program, 70 FR 75717 (Dec. a final policy statement this year. forty (40) days of when the Commission issues its
21, 2005) (extending the sunset date in 11 CFR 4 The Internal Revenue Service did not comment reason to believe finding. See revised 111.35(a);
111.30 to Dec. 31, 2008). on the NPRM. Admin Fines E&J, 65 FR at 31789.

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14664 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations

the rule regarding the ‘‘factual errors’’ defense. The Commission has decided respondents to understand and
defense as proposed in the NPRM, to adopt the Lovely court’s document in their written responses.
except for stylistic changes. The revised interpretation of 2 U.S.C. 432(i) and to The final rule differs slightly from the
rule states that the facts alleged to be in incorporate a ‘‘best efforts’’ defense into proposed rule, which would have stated
error must be facts upon which the the AFP. It appears in revised 11 CFR that the respondent must be prevented
Commission relied in its RTB finding. 111.35(b)(3) and is the same as the from filing in a timely manner by
See revised 11 CFR 111.35(b)(1). Thus, proposed rule, except for the changes ‘‘unforeseen’’ circumstances. The
a respondent may not challenge an RTB noted below. The ‘‘best efforts’’ defense Commission is making this change to
finding based on factual errors that are in the revised rule completely replaces emphasize that the ‘‘best efforts’’
irrelevant to the Commission’s actual the prior ‘‘extraordinary circumstances’’ defense is an objective test, which uses
RTB finding, such as errors in the RTB defense because the two defenses are a reasonable person standard and does
finding regarding individual names or largely coextensive. The Commission not depend upon the committee’s
titles of committee staff. reiterates its policy determination, as
The revised rule provides two treasurer or staff’s subjective ability to
stated in the initial rulemaking for the
examples of the type of factual errors foresee a particular circumstance. The
AFP, that respondents’ defenses in the
that would properly support a AFP should be limited because the examples included in the rule in 11 CFR
challenge: the respondent was not complete and timely disclosure of the 111.35(c) and (d), described below,
required to file the report in question, political committee’s financial activity illustrate how this defense operates as
and the respondent did in fact timely is a ‘‘cornerstone of campaign finance an objective test.
file as described in 11 CFR 100.19. See law.’’ See Admin Fines E&J, 65 FR at Under the first part of the defense, the
revised 11 CFR 111.35(b)(1). For 31789. respondent bears the burden of showing
example, a political committee that is The Lovely court recognized that the that the reasonably unforeseen
not subject to electronic filing Commission could ‘‘refine by regulation circumstances in fact prevented the
requirements could challenge an RTB what best efforts means in the context timely and proper filing of the required
finding and proposed civil money of submitting a report.’’ Lovely, 307 F. report. The NPRM requested public
penalty under section 111.35(b)(1) by Supp. 2d at 300. In exercising its comment regarding whether the
showing that the paper copy was filed authority to interpret how to incorporate Commission should apply a ‘‘but for’’ or
on time and the Commission relied on a ‘‘best efforts’’ defense into the AFP ‘‘contributing factor’’ test for
the factual error that the committee was rules, the Commission is mindful of the determining whether a respondent was
required instead to file electronically. statutory terms chosen by Congress. As
prevented from timely filing under the
See 11 CFR 104.18(a). As referenced in also explained by the Commission in its
rule. See NPRM, 71 FR at 71095. The
the rule’s second example, Commission statement of reasons in the Lovely case
rules currently state that certain reports after remand, section 432(i) creates a comment did not address this issue. The
are ‘‘timely filed’’ if they are deposited safe harbor for treasurers who Commission has decided that this rule
as registered or certified mail with the demonstrate that best efforts have been requires a strict causal relationship
U.S. Post Office, as Priority Mail or used to submit reports required by between the circumstances described in
Express Mail through the U.S. Post FECA. ‘‘Best’’ is an adjective of the the challenge (such as a natural disaster)
Office, or with an overnight delivery superlative degree. Therefore, best and the respondent’s inability to file the
service to be delivered the next business efforts requires more than ‘‘some’’ or report timely. It is not sufficient for
day with a postmark no later than 11:59 ‘‘good’’ efforts. Section 432(i)’s use of reasonably unforeseen circumstances to
p.m. EST on the filing date. See 11 CFR the phrase ‘‘best efforts,’’ instead of a make it merely more difficult than usual
100.19(b). Thus, a respondent who is ‘‘good faith’’ standard, means that an for the respondent to file on time. The
not required to file electronically could AFP respondent cannot rely upon the circumstance must cause the respondent
challenge an RTB finding based on state of mind of the committee’s to be unable to file in a timely and
evidence that it deposited the report in treasurer or staff to claim this defense.6 proper manner, despite the respondent
the proper manner pursuant to section Instead, the Commission’s revised rule attempting to use all available methods
100.19(b) on the filing date, even if the at 11 CFR 111.35(b)(3), which sets forth of filing. ‘‘Best efforts’’ is a high
Commission did not receive the report the ‘‘best efforts’’ defense, focuses on standard set by FECA, and the
because of a delivery failure by the U.S. actions taken by the respondent Commission reminds respondents that
Post Office or other delivery service. committee or treasurer to comply with there are multiple ways for a committee
The Commission emphasizes that the reporting deadlines. to file required reports properly and
revisions to section 111.35(b)(1) do not The ‘‘best efforts’’ defense is timely. See, e.g., 11 CFR 100.19(b)
create any new ‘‘factual errors’’ described in the revised rule as a two- (political committees not required to file
defenses, but simply recognize the types part test. The AFP respondent must electronically may file on paper by hand
of errors that the Commission has demonstrate that: (1) The respondent delivery, first class, registered, certified,
accepted previously as a defense in the was prevented from filing in a timely Priority or Express U.S. Mail, or
AFP. manner by ‘‘reasonably unforeseen overnight delivery service); 11 CFR
B. Revised 11 CFR 111.35(b)(3)—‘‘Best circumstances that were beyond the 104.18 (mandatory electronic filings
Efforts’’ Defense control’’ of the respondent; and (2) the accepted through the Commission’s
respondent filed the report in question filing system via internet, modem, or by
The NPRM also sought comment on no later than 24 hours after the end of
whether to replace the ‘‘extraordinary submission of diskette or CD). If the
the reasonably unforeseen respondent is prevented from using one
circumstances’’ defense in the prior rule circumstances preventing the timely
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with a ‘‘best efforts’’ defense for method of filing by a problem (such as


filing. See revised 11 CFR 111.35(b)(3).
challenging an RTB finding based upon a technical problem with the
The Commission believes this test is
2 U.S.C. 432(i). See NPRM, 71 FR at Commission’s modems), the respondent
straightforward and should be easy for
71094–95 and former 11 CFR cannot claim the ‘‘best efforts’’ defense
111.35(b)(1)(iii). The comment generally 6 See Statement of Reasons in Administrative
if it did not attempt to use other
supported the idea of a ‘‘best efforts’’ Fines Case 549 (Oct. 4, 2005). available methods to file timely (such as

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Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 14665

submission on a diskette or CD).7 committees and treasurers. The revised reasonably unforeseen circumstance
Therefore, to satisfy the ‘‘best efforts’’ rule provides such illustrations. The beyond the respondent’s control.
defense, a respondent must demonstrate examples of defenses in the revised rule The second example in revised
that it attempted to use all available are the same as proposed in the NPRM, section 111.35(c)(2) is a ‘‘widespread
methods to file, but that timely filing by except as noted otherwise below. Both disruption of information transmissions
each method was prevented by the sets of examples in revised section over the Internet not caused by any
reasonably unforeseen circumstances 111.35(c) and (d) are non-exhaustive failure of the Commission’s or
beyond the control of the respondent. lists and should not be read to override respondent’s computer systems or
The direct causal link between the the general requirements of the defense Internet service provider.’’ This example
reasonably unforeseen circumstances in revised section 111.35(b)(3) as covers circumstances in which
and the ability of the respondent to file discussed above. technological problems at a third-party
the report also underlies the second part hub or information transfer location,
of the test for the ‘‘best efforts’’ defense. 1. Revised 11 CFR 111.35(c)— rather than the Commission’s or
A respondent must show that the report Reasonably Unforeseen Circumstances respondent’s computer systems, caused
was properly filed no later than 24 Beyond Respondents’ Control widespread communication failures on
hours after the resolution of the the Internet that left the respondent
circumstances preventing the timely Revised section 111.35(c) provides unable to send, or the Commission
filing. When the situation (such as a three examples of circumstances that unable to receive, an electronically filed
problem with Commission computers) the Commission will consider report. This failure to transmit
is resolved, the Act’s high standard of ‘‘reasonably unforeseen and beyond the information must occur irrespective of
‘‘best efforts’’ requires that the control’’ of the respondent under a ‘‘best any failures of the Commission’s or
respondent file the report within a efforts’’ defense. The first example is respondent’s computer systems or
reasonably short period of time. The that a failure of Commission computers Internet service providers. If a
NPRM requested public comment or Commission-provided software, respondent demonstrates such a
regarding whether the 24-hour period in despite the respondent seeking widespread disruption of information
the proposed rule was appropriate for technical assistance, caused the transmissions occurred, the Commission
the ‘‘best efforts’’ defense. See NPRM, 71 respondent’s untimely electronic filing. will consider it ‘‘reasonably unforeseen
FR at 71095. The comment did not See revised 11 CFR 111.35(c)(1). This circumstances that were beyond the
address this issue. The Commission has example is similar to the example in the control’’ of the respondent. As with all
determined that a 24-hour period best prior rules, in which a failure of the examples in revised section
serves the interest in disclosure of the Commission computers satisfied the 111.35(c)(2), the respondent bears the
information as soon as practicable after ‘‘extraordinary circumstances’’ defense. burden of showing that these reasonably
the circumstances preventing the timely See former 11 CFR 111.35(b)(4)(iv); unforeseen circumstances in fact
disclosure are resolved. Admin Fines E&J, 65 FR at 31790 (‘‘Any prevented the respondent from filing
failure of the Commission’s system that timely, despite attempts to file by any
C. Examples of Circumstances Under prevents committees from filing their
the ‘‘Best Efforts’’ Defense available alternative methods permitted
reports when due would be recognized under Commission regulations.9 This
To provide further guidance to as an extraordinary circumstance example has been refined from the
respondents regarding the scope of the beyond the respondents’ control.’’).8 proposed rule to clarify the types of
‘‘best efforts’’ defense, the revised rule The revised rule differs from the transmission failures contemplated.
includes examples of circumstances that proposed rule by including the The final example in the rule states
will be considered ‘‘reasonably respondent’s seeking technical that a ‘‘[s]evere weather or other
unforeseen and beyond the control of assistance as part of the example. disaster-related incident’’ is a
the respondent,’’ and examples of Consistent with the prior defense based reasonably unforeseen circumstance
circumstances that will not be on Commission computer failures, the beyond the control of the respondent.
considered ‘‘reasonably unforeseen and revised example clarifies that political See revised 11 CFR 111.35(c)(3). Under
beyond the control of the respondent.’’ committees must use all Commission the prior rule, the Commission deemed
See revised 11 CFR 111.35(c) and (d). resources available to aid with certain weather conditions (lasting more
The comment argued that the rule electronic filing, such as technical than 48 hours) met the ‘‘extraordinary
should not be limited to examples of support manuals and personnel, before circumstances’’ test, explaining that
defenses that would be unacceptable a respondent will be considered ‘‘natural disasters where a committee’s
under the new ‘‘best efforts’’ defense, ‘‘prevented’’ from timely filing by office is located in the disaster area and
but should also include examples of Commission computer or software the committee cannot timely file a
defenses that would meet the new failures. Thus, any failure of report because of lack of electricity or
defense to provide guidance to Commission computers, servers, filing flooding or destruction of committee
system or Commission-provided records’’ would satisfy the defense. See
7 The Commission’s guidance and instructions to
software of sufficient severity that it previous 11 CFR 111.35(b)(1)(iii);
political committees required to file electronically
makes clear that if a report is successfully uploaded results in a respondent being unable to Admin Fines E&J, 65 FR at 31790. The
and accepted by the Commission, a confirmation file, despite the respondent seeking revised rule permits such severe
receipt (including a validation number) is assistance from the Commission’s weather-related events occurring at the
immediately sent to the committee via e-mail, fax technical support personnel, is a
or both. If a committee does not receive such a respondent’s or Commission’s location
receipt, the committee should not assume the filing
was received and should contact the Commission’s 8 In order to satisfy the prior ‘‘extraordinary 9 The Commission’s electronic filing manuals
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technical support personnel. See, e.g., ‘‘Frequently circumstances’’ defense, the failure of Commission detail step-by-step instructions for the various
Asked Questions About Electronic Filing,’’ computers had to last at least 48 hours. See former methods of acceptable electronic filing via the
available at http://www.fec.gov/support/ 11 CFR 111.35(b)(1)(iii). The new ‘‘best efforts’’ Internet, modem, or by saving the report to a
faq_filing.shtml (last visited Mar. 16, 2007); defense does not contain any minimum time period diskette or CD. See, e.g., ‘‘FECFile User Manual for
‘‘Common Electronic Filing Mistakes,’’ available at for the ‘‘reasonably unforeseen circumstances that Candidate Committees,’’ available at http://
http://www.fec.gov/elecfil/mistakes.shtml (last were beyond the control’’ of the respondent. See www.fec.gov/elecfil/authorized_manual/
visited Mar. 16, 2007). revised 11 CFR 111.35(b)(3). manual.shtml (last visited Mar. 16, 2007).

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to form the basis for a ‘‘best efforts’’ available so that their ability to file error, miscalculation of civil money
defense. The Commission is not reports on time will not be penalty, and best efforts) are the only
defining with specificity the level of compromised due to the unavailability permissible grounds for challenging the
severity for weather or other disaster- or inexperience of the treasurer or other Commission’s RTB finding or proposed
related incidents in revised section staff. See Final Rules on Administrative civil money penalty, and a respondent’s
111.35(c)(3) because a respondent’s Fines, 68 FR 12572, 12573 (Mar. 17, written response must be based on one
challenge must show that the weather or 2003) (adding staff ‘‘inexperience’’ and of these grounds to be considered by the
disaster-related incident in fact ‘‘unavailability’’ as examples of reviewing officer and the Commission.
prevented the respondent from filing circumstances that will not be Respondents bear the burden of
timely. Given that the effects upon the considered ‘‘extraordinary’’ under showing that a permissible defense is
respondent of each weather or disaster- former 11 CFR 111.35(b)(4)(iii)). satisfied.11
related incident will vary, the The Commission’s implementation of
Commission will evaluate the particular the ‘‘best efforts’’ defense set forth in II. Revised 11 CFR 111.37—
facts contained in individual challenges, this revised rule serves as a proxy for Commission Review of Respondent’s
instead of mandating such details in a the factual investigation of a Challenge and Reviewing Officer’s
rule of general application. respondent’s internal practices Recommendation
2. Revised 11 CFR 111.35(d)— regarding filing of reports that would A. Revised 11 CFR 111.37(b)—
Circumstances That Are Not Reasonably ordinarily be necessary to determine Commission Finding That No Violation
Unforeseen or Beyond Respondents’ whether such practices were sufficient Has Occurred
Control to constitute best efforts. The comment
Revised section 111.35(d) includes a argued that the Commission should Revised section 111.37 sets forth
non-exhaustive list of circumstances conduct a full examination of the procedures regarding the Commission’s
that are not considered ‘‘reasonably business models and management final determination for AFP matters
unforeseen and beyond the control’’ of procedures of each committee to upon receipt of the respondent’s
the respondent, and will not support a determine whether the committee challenge and the reviewing officer’s
‘‘best efforts’’ finding. See revised 11 implemented proper back-up systems recommendation. See revised 11 CFR
CFR 111.35(d)(1) through (6). All but and other measures reflecting 111.37(a) through (d). The NPRM sought
two of these examples are drawn from management ‘‘best practices’’ in the comment on proposed revisions to
the list of events that did not constitute relevant industry to reduce the risk of a section 111.37(b) regarding Commission
‘‘extraordinary circumstances’’ under late filing. However, such an determinations that no violation has
the Commission’s prior rule: investigation would be resource- occurred where the RTB finding is
Negligence; delays caused by committee intensive for the Commission, based on a factual error, and where the
vendors or contractors; illness, burdensome for the respondent, and respondent demonstrated it used best
inexperience or unavailability inappropriate in the AFP, which is a efforts to file timely. See NPRM, 71 FR
(including death) of the treasurer or streamlined procedure created by at 71095. The comment did not address
other staff; and committee computer, Congress to alleviate the Commission’s these rules. The Commission is revising
software or Internet service provider enforcement burden for routine and section 111.37(b) to clarify that the
failures. Compare revised 11 CFR minor filing violations. Absent existence of factual errors or a finding
111.35(d)(1) through (4) with former 11 reasonably unforeseen circumstances of best efforts are complete defenses.
CFR 111.35(b)(4). One example that were beyond the control of the Thus, if one of these defenses is
concerns Internet service provider respondent, the Commission sees no satisfied, the Commission will conclude
failures. See revised 11 CFR reason why political committees cannot that no violation of FECA has occurred.
111.35(d)(4). The proposed rule file reports on time.10 Thus, the Please note that the defense based on an
described this example as failures of Commission’s implementation of the incorrect basis for calculating the civil
committee computers or software. The ‘‘best efforts’’ defense appropriately money penalty (section 111.35(b)(2)) is
final rule also includes Internet service incorporates a statutory ‘‘best efforts’’ a defense only as to the amount of the
provider failures. Because many Internet standard, while taking into account the civil money penalty and does not serve
service providers are available, a failure unique streamlined nature of the AFP. as a basis for a finding of no violation
limited to one provider is not a defense under the AFP.
for late filing or not filing. The revised D. Revised 11 CFR 111.35(e)—Factual
Basis for Challenge B. Revised 11 CFR 111.37(d)—
rule adds two examples to this list based
Commission Statement of Reasons in
upon the Commission’s experience with The Commission is adding paragraph AFP Final Determinations
respondent challenges in the AFP: A (e) to 11 CFR 111.35 to require that the
failure to know filing dates and a failure respondent’s written response must The NPRM sought comment on
to use Commission software properly. detail the factual basis supporting its proposed revisions to section 111.37(d)
See revised 11 CFR 111.35(d)(5) and (6). challenge. Furthermore, respondents to make clear that the reasons for the
Under the revised rule, a respondent’s must provide supporting documentation reviewing officer’s recommendation
challenge will not succeed if its ‘‘best for their challenges. The comment did regarding the challenge, unless modified
efforts’’ defense is based on any of these not address this provision, which is or rejected by the Commission, will
circumstances as the cause of the failure identical to the proposed rule. serve as the Commission’s statement of
to file timely. The Commission notes The three defenses specified in reasons regarding the final
that the examples in revised section sections 111.35(b)(1) through (3) (factual determination in the AFP matter.12 See
111.35(d) are not exhaustive, but are NPRM, 71 FR at 71095. This proposed
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illustrative of the types of situations that 10 See Admin Fines E&J, 65 FR at 31790 (stating

are not reasonably unforeseen and that political committees should be aware of their 11 The Commission considers affidavits more

beyond the respondent’s control. The reporting duties and noting that the Commission persuasive evidence than unsworn statements
makes efforts to send reminders of deadlines and submitted in support of the respondent’s challenge.
Commission strongly encourages all political committees have ample time from the end 12 These revisions do not affect any statements of
political committees to name assistant of the reporting period to the filing deadline to reasons the Commissioners may issue in
treasurers and have additional staff prepare and file reports). enforcement matters under review.

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Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations 14667

revision addresses the Lovely court’s in its field. 5 U.S.C. 601(4). The rules List of Subjects in 11 CFR Part 111
concerns that it was unclear what apply to all types of political Administrative practice and
constituted the statement of reasons for committees and their treasurers. State procedures, Elections, Law enforcement.
the Commission’s final determination in political party committees are not
that matter. The comment did not independently owned and operated ■ For the reasons set out in the
address this issue. because they are not financed and preamble, the Federal Election
The Commission is revising section controlled by a small identifiable group Commission is amending subchapter A
111.37(d) to indicate that, unless of individuals, and they are affiliated of chapter I of Title 11 of the Code of
otherwise indicated by the Commission, with the larger national political party Federal Regulations as follows:
the statement of reasons for the organizations. In addition, the State
Commission’s final determination in an PART 111—COMPLIANCE
political party committees representing
AFP matter consists of the reasons PROCEDURE (2 U.S.C. 437g, 437d(a))
the Democratic and Republican parties
provided by the reviewing officer for the have a major controlling influence ■ 1. The authority citation for part 111
recommendation, if approved by the within the political arena of their State is revised to read as follows:
Commission. See Lovely, 307 F. Supp. and are thus dominant in their field.
2d at 301 (stating that the Commission’s Authority: 2 U.S.C. 432(i), 437g, 437d(a),
District and local party committees are 438(a)(8); 28 U.S.C. 2461 nt.
‘‘adoption of a reviewing officer’s generally considered affiliated with the
recommendation may suffice in some State committees and need not be ■ 2. Section 111.35 is revised to read as
circumstances’’). Statements setting considered separately. To the extent that follows:
forth additional or different reasons may any State party committees representing
also be issued. The revised rule also § 111.35 If the respondent decides to
minor political parties or any other challenge the alleged violation or proposed
recognizes that the Commission may political committees might be civil money penalty, what should the
modify or reject the reviewing officer’s considered ‘‘small organizations,’’ the respondent do?
recommendation in whole or in part. number that would be affected by this
See 11 CFR 111.37(d). In such cases, the (a) To challenge a reason to believe
rule is not substantial. finding or proposed civil money
Commission will indicate the grounds Furthermore, any separate segregated
for its action and it or individual penalty, the respondent must submit a
funds affected by these rules are not-for- written response to the Commission
Commissioners may issue one or more profit political committees that do not
statements of reasons. within forty (40) days of the
meet the definition of ‘‘small Commission’s reason to believe finding.
Former section 111.37(d) provided
organization’’ because they are financed (b) The respondent’s written response
that the Commission could determine
by a combination of individual must assert at least one of the following
that a violation of 2 U.S.C. 434(a) had
occurred, but waive the civil money contributions and financial support for grounds for challenging the reason to
penalty because the respondent certain expenses from corporations, believe finding or proposed civil money
demonstrated the existence of labor organizations, membership penalty:
‘‘extraordinary circumstances’’ under organizations, or trade associations, and (1) The Commission’s reason to
former section 111.35(b)(1)(iii). See therefore are not independently owned believe finding is based on a factual
former 11 CFR 111.37(d). As discussed and operated. Most of the other political error including, but not limited to, the
above, the Commission is removing the committees affected by these rules are committee was not required to file the
‘‘extraordinary circumstances’’ defense not-for-profit committees that do not report, or the committee timely filed the
and replacing it with a ‘‘best efforts’’ meet the definition of ‘‘small report in accordance with 11 CFR
defense in revised section 111.35(b)(3). organization.’’ Most political 100.19;
Under 2 U.S.C. 432(i), if the committees are not independently (2) The Commission improperly
Commission determines that the owned and operated because they are calculated the civil money penalty; or
treasurer used best efforts in compliance not financed by a small identifiable (3) The respondent used best efforts to
with this rule, there is no violation of group of individuals. Most political file in a timely manner in that:
FECA and the Commission will so committees rely on contributions from a (i) The respondent was prevented
notify the respondent pursuant to large number of individuals to fund the from filing in a timely manner by
revised section 111.37(b). See revised 11 committees’ operations and activities. reasonably unforeseen circumstances
CFR 111.37(b). Therefore, the The final rules also do not impose any that were beyond the control of the
Commission need not retain the former additional restrictions or increase the respondent; and
section 111.37(d). costs of compliance for respondents (ii) The respondent filed no later than
within the AFP. Instead, the final rules 24 hours after the end of these
Certification of No Effect Pursuant to 5 provide additional defenses available to circumstances.
U.S.C. 605(b) (Regulatory Flexibility political committees and their (c) Circumstances that will be
Act) treasurers, thereby potentially considered reasonably unforeseen and
The Commission certifies that the increasing the number of situations in beyond the control of respondent
attached final rules will not have a which the Commission assesses no civil include, but are not limited to:
significant economic impact on a money penalty. Moreover, these rules (1) A failure of Commission
substantial number of small entities. apply only in the AFP, where penalties computers or Commission-provided
The basis for this certification is that are proportionate to the amount of a software despite the respondent seeking
any individuals and not-for-profit political committee’s financial activity. technical assistance from Commission
entities affected by these rules are not Any political committee meeting the personnel and resources;
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‘‘small entities’’ under 5 U.S.C. 601(6). definition of ‘‘small entity’’ would be (2) A widespread disruption of
The definition of ‘‘small entity’’ does subject to lower fines than larger information transmissions over the
not include individuals, and classifies a committees with more financial activity. Internet not caused by any failure of the
not-for-profit enterprise as a ‘‘small Therefore, the final rules will not have Commission’s or respondent’s computer
organization’’ if it is independently a significant economic impact on a systems or Internet service provider;
owned and operated and not dominant substantial number of small entities. and

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14668 Federal Register / Vol. 72, No. 60 / Thursday, March 29, 2007 / Rules and Regulations

(3) Severe weather or other disaster- DEPARTMENT OF TRANSPORTATION Procedural Matters


related incident.
(d) Circumstances that will not be Federal Aviation Administration In general, under the Administrative
considered reasonably unforeseen and Procedure Act (APA), 5 U.S.C. 553,
beyond the control of respondent 14 CFR Part 13 agencies must publish regulations for
include, but are not limited to: public comment and give the public at
[Docket No. FAA–2006–26477]
(1) Negligence; least 30 days notice before adopting
(2) Delays caused by committee FAA Civil Penalty Adjudication Web regulations. There is an exception to
vendors or contractors; Site these requirements if the agency for
(3) Illness, inexperience, or good cause finds that notice and public
unavailability of the treasurer or other AGENCY: Federal Aviation comment are impracticable,
staff; Administration (FAA), DOT. unnecessary, or contrary to the public
(4) Committee computer, software or ACTION: Final rule; technical interest. In this case, the FAA finds that
Internet service provider failures; amendment. notice and comment requirements are
(5) A committee’s failure to know
SUMMARY: The FAA has a Web site that unnecessary due to the administrative
filing dates; and
(6) A committee’s failure to use filing provides access to many documents nature of the change. It is in the public
software properly. relating to the agency’s administrative interest for the Rules of Practice to
(e) Respondent’s written response adjudication of civil penalty cases. provide the correct address for the civil
must detail the factual basis supporting Currently, the address provided in the penalty adjudication Web site as soon as
its challenge and include supporting regulations for the civil penalty possible.
documentation. adjudication Web site is incorrect. In List of Subjects in 14 CFR Part 13
this rulemaking, we are amending the
■ 3. In section 111.37, paragraphs (b) regulations to substitute the correct Web Administrative practice and
and (d) are revised to read as follows: site address. procedure, Air transportation, Aviation
§ 111.37 What will the Commission do DATES: This rule is effective on March safety, Hazardous materials
once it receives the respondent’s written 29, 2007. transportation, Investigations, Law
response and the reviewing officer’s FOR FURTHER INFORMATION CONTACT: enforcement, Penalties.
recommendation? Sheila Skojec, Office of the Chief
* * * * * The Amendments
Counsel, Adjudication Branch, 800
(b) If the Commission, after reviewing Independence Avenue, SW.,
the reason to believe finding, the ■ Accordingly, the Federal Aviation
Washington, DC, 20591; telephone 202/ Administration amends part 13 of the
respondent’s written response, and the 385–8228.
reviewing officer’s written Federal Aviation Regulations as follows:
SUPPLEMENTARY INFORMATION:
recommendation, determines by an
affirmative vote of at least four (4) of its Background PART 13—INVESTIGATIVE AND
members, that no violation has occurred ENFORCEMENT PROCEDURES
The FAA assesses civil penalties for
(either because the Commission had violations of certain provisions of the ■ 1. The authority section for part 13
based its reason to believe finding on a Federal aviation statute and the Federal continues to read as follows:
factual error or because the respondent hazardous materials transportation
used best efforts to file in a timely statute. The rules of practice in 14 CFR Authority: 18 U.S.C. 6002; 28 U.S.C. 2461
manner) or otherwise terminates its 13.16 and 14 CFR part 13, subpart G (14 (note); 49 U.S.C. 106(g), 5121–5128, 40113–
proceedings, the Commission shall CFR 13.201–13.235) govern these 40114, 44103–44106, 44702–44703, 44709–
authorize the reviewing officer to notify proceedings involving the adjudication 44710, 44713, 46101–46111, 46301, 46302
the respondent by letter of its final of civil penalties. (for a violation of 49 U.S.C. 46504), 46304–
determination. The agency has a Web site containing 46316, 46318, 46501–46502, 46504–46507,
documents relating to the agency’s 47106, 47107, 47111, 47122, 47306, 47531–
* * * * *
(d) When the Commission makes a adjudication of civil penalties. These 47532; 49 CFR 1.47.
final determination under this section, documents include decisions and orders
issued by the Administrator, indexes of ■ 2. Amend § 13.210 by revising
the statement of reasons for the
Commission action will, unless decisions, contact information for the paragraphs (e)(2) to read as follows:
otherwise indicated by the Commission, Hearing Docket and the administrative § 13.210 Filing of documents.
consist of the reasons provided by the law judges, the rules of practice, and
other information. * * * * *
reviewing officer for the
recommendation, if approved by the We recently discovered that the (e) * * *
Commission, although statements address for the Web site set forth in 14 (1) * * *
setting forth additional or different CFR 13.210 is incorrect. As a result, we
are amending the rules to correct this (2) Decisions and orders issued by the
reasons may also be issued. If the
problem. Administrator in civil penalty cases,
reviewing officer’s recommendation is
indexes of decisions, contact
modified or not approved, the This Rulemaking information for the FAA Hearing Docket
Commission will indicate the grounds
for its action and one or more FAA Civil Penalty Adjudication Web and the administrative law judges, the
statements of reasons may be issued. Site. We are amending section 13.210 to rules of practice, and other information
cprice-sewell on PROD1PC61 with RULES

correct the Web site address for the FAA are available on the FAA civil penalty
Dated: March 22, 2007. civil penalty adjudication Web site. The adjudication Web site at: http://
Robert D. Lenhard, correct address is: http://www.faa.gov/ www.faa.gov/about/office_org/
Chairman, Federal Election Commission. about/office_org/headquarters_offices/ headquarters_offices/agc/
[FR Doc. E7–5730 Filed 3–28–07; 8:45 am] agc/pol_adjudication/AGC400/ pol_adjudication/AGC400/
BILLING CODE 6715–01–P Civil_Penalty. Civil_Penalty.

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