The Federal Election Commission (FEC) has published its first proposed rules implementing the new Bipartisan Campaign Finance Reform Act of 2002 (BCRA). They address soft money issues, which primarily impact political parties and campaign committees. However, nonprofits are impacted by new restrictions on some donations to 501(c) and 527 organizations involved in voter education and get-out-the-vote (GOTV) activities. The proposed regulations limit fundraising by political parties, federal candidates and officeholders or their agents for nonprofits that have PACs or whose purposes include influencing elections, or that carry out voter education and GOTV where federal candidates appear on the ballot. The purpose is to prevent these groups from becoming conduits for soft money. The fundraising restriction also applies to entities that have been established, financed or controlled by parties, candidates or officeholders. An exception allows federal candidates and officeholders or their agents (but not parties) to raise funds for 501(c) organizations if they do not specify how the money could be used, the organization’s principal purpose is not voter education and participation, and the funds are not used for public communications that support or oppose an identifiable federal candidate. A specific definition for "federal election activities" that trigger the fundraising restrictions includes voter registration within 120 days of a federal election, canvassing or other activities meant to identify voters' preference, get-out-the-vote drives, distribution of sample ballots and campaign messages that support a political party, but do not mention a candidate. It also includes "public communications" that refer to clearly identified federal candidates, such as mass mailings, telephone banks, broadcasts, newspapers, billboards and "any other form of general public political advertising" when a federal candidate appears on the ballot. Neither BCRA or the proposed regulations mention the Internet, and the FEC is asking for comments on whether or when Internet communications should be considered "public communications." In its announcement the FEC notes that some get-out-the-vote efforts are nonpartisan in nature, and seeks comments on whether or not it is "appropriate to treat certain party or candidate-initiated or 501(c) activities as nonpartisan voter drives," making it possible for them to benefit from donations and fundraising efforts by candidates. They also ask whether there should be a de minimus permissible level of these efforts before the restrictions of BCRA take effect. The FEC specifically asks for comments on how to determine when a nonprofit’s purposes include influencing elections, or how far back in time to reach in determining whether a group is involved with voter education or GOTV efforts. At its May 9 meeting the FEC debated the appropriate terminology for unregulated funds raised or spent in connection with federal elections. The draft regulations use the term "non-federal funds," and one Commissioner complained that this terminology is misleading, preferring the term "soft money." Since, in this context, "non-federal funds" do not refer to funds for state or local elections, but to unregulated federal campaign dollars, the public can be easily confused by the use of term. The Commission decided to seek public comment on that issue. Comments on the proposed rules are due by May 29, 2002. The FEC is encouraging electronic submission of comments to BCRAsoftmon@fec.gov. A public hearing will be held June 4-5, 2002. The proposed rules and related documents are available on the FEC website. Also, see a summary of future issues and the FEC’s rulemaking schedule. For a summary of the BCRA impacts on nonprofits see the Alliance for Justice website.