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Advance Notice of Proposed Rulemaking on Technological Modernization

On April 25, 2013, the Commission approved an Advance Notice of Proposed Rulemaking (ANPRM) seeking comment on possible updates to its regulations to address electronic transactions and other technological advances.

Among other things, the Commission is considering whether to revise its regulations to reflect electronic transactions made by debit cards, credit cards, gift cards, Internet-based payment processing and online banking. A rulemaking could also address the receipt, deposit, accounting, recordkeeping, reporting, redesignation and reattribution of electronic transactions, as well as matching funds, conduit activity and contributions made via text message. The Commission is also considering whether to eliminate references to outmoded technologies such as telegrams and fax machines. Comments on whether and how the Commission should make these potential changes, as well as comments addressing general industry practices for electronic transactions, must be received by June 3, 2013. 

ANPRM
The Commission seeks to ensure that the regulated community is able to utilize evolving technological innovations while, at the same time, ensuring that the use of such technology is consistent with the Federal Election Campaign Act (the Act), the Presidential Election

Campaign Fund Act and the Presidential Primary Matching Payment Account Act. The Commission seeks comments on revising its regulations to take into account electronic transactions in a way that provides sufficient guidance to the regulated community while reducing the need for serial revisions to reflect new and emerging technologies. The ANPRM asks whether revisions should identify specific, approved means of electronic transactions or whether regulations should provide more general standards.

The ANPRM asks commenters for information on general industry practices regarding commercial and consumer electronic transactions, how political committees receive electronic contributions, and what role, if any, commercial industry standards should play in the Commission’s consideration of electronic contribution regulations.  The ANPRM also seeks data and comments concerning a wide range of electronic modernization issues, including those highlighted below.

Several Commission regulations have “writing,” “signature,” and “printing” requirements. For example, Commission regulations require documents to be “signed” before being filed with the Commission without explicitly providing for the possibility of electronic signatures, e.g., 11 CFR 111.4 (submission of complaints), 111.23 (designation of counsel), and 300.37(d) (certifications by certain tax-exempt organizations). And some regulations mention “printed” documents and communications without expressly addressing whether an electronic communication or an attachment to an electronic message, such as a PDF, is considered “printed.” The Commission is considering whether it should revise these requirements to address electronic documents and records.

The Commission will also consider comments on the recordkeeping practices for electronic transactions. Commission regulations that require political committees to maintain records of contributions and disbursements do not explicitly account for electronic transactions. Although the Commission has interpreted its recordkeeping regulations in the context of electronic transactions (e.g., Advisory Opinions 1995-09 (NewtWatch), 1994-40 (Alliance for American Leadership) and 1993-04 (Cox)), the ANPRM asks whether the Commission should revise these regulations to address expressly recordkeeping requirements for electronic transactions, for example, by requiring political committees that receive credit card contributions to maintain records with cardholders’ names and credit card numbers.

The ANPRM also asks how the Commission should address references in its regulations to technologies that are obsolete or rarely used today, such as telegrams (11 CFR 104.6(c)(1)); typewriters (11 CFR 114.9(d)); and carbon copies of checks (11 CFR 102.9(b)(2)(iii)).

FEC regulations prohibit cash contributions in excess of $100 (11 CFR 110.4). The Commission seeks comments on whether prepaid debit, credit, banking and gift cards should be considered the functional equivalent of cash, and, if so, whether the regulation should be revised to prohibit contributions in excess of $100 made by such prepaid cards.

In several recent advisory opinions, the Commission approved the use of text messaging to process political contributions (AOs 2012-30 (Revolution Messaging LLC), 2012-28 (CTIA – The Wireless Association), 2012-26 (Cooper for Congress, ArmourMedia, Inc., & mQube, Inc.), and 2012-17 (Red Blue T LLC, ArmourMedia, Inc., & mQube, Inc.)). The Commission asks for public input on whether it should amend its regulations to address contributions made by text message, and, if so, whether it should take the approach of these advisory opinions.

Public Comments
The complete text of the ANPRM is available at http://sers.fec.gov/fosers/showpdf.htm?docid=296410. Written comments must be submitted on or before June 3, 2013. Comments may be submitted on paper, but the Commission highly encourages submitting comments electronically to ensure timely receipt and consideration. Electronic comments may be submitted via the Commission’s website at http://www.fec.gov/foser.

Paper comments should be sent to the Federal Election Commission, Attn: Amy L. Rothstein, Assistant General Counsel, 999 E Street, N.W., Washington, DC 20463. All comments must include the full name and postal service address of the commenter, and of each commenter if filed jointly, or they will not be considered. The Commission will post all comments to its website at the conclusion of the comment period.

(Posted 5/3/2013; By: Isaac Baker)

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