Below is a summary of new developments concerning campaign finance issues. BCRA Rulemaking The Federal Election Commission’s (FEC) final rule and explanation on “electioneering communications” under the Bipartisan Campaign Reform Act of 2002 (BCRA) was approved at its September 10 meeting. The final rule exempts broadcasts that are unpaid or that are funded by organizations exempt under 501(c)(3) of the tax code. See our website for more details. The FEC is currently considering a rule defining prohibited coordinated communications between corporations, including nonprofits and labor unions, and federal candidates or their committees and parties. OMB Watch filed comments seeking exemptions for nonpartisan grassroots lobbying and voter education activities. A public hearing is scheduled for October 23-24. BCRA sponsors Reps. Chris Shays (R-CT) and Martin Meehan (D-MA) filed a lawsuit against the FEC on October 8 challenging the soft money regulations adopted in July. Shays and Meehan are being represented by Democracy 21, which has the full text of the complaint on its website. The suit asks the federal district court in Washington, D.C., to issue an injunction against enforcement of the rules until Congress has time to correct them. BCRA sponsors are invoking the Congressional Review Act in an attempt to overturn the rules. However, Senate Majority Leader Tom Daschle (D-SD) has said he will not support this effort, which would result in re-consideration of the entire bill passed by Congress earlier this year. See our summary of the soft money rules. PAC Legislation Advocates for state and local Political Action Committees (PACs) seeking an exemption from the “Stealth PAC” law of 2000 have teamed up with campaign finance reformers pushing for improvements in disclosure under the law to back a new House bill, H.R. 5596. The Stealth PAC law requires all PACs exempt under Section 527 of the federal tax code to register with the IRS and report their contributions and expenditures. State and local PACs have lobbied Congress for an exemption for PACs with no federal election activity that file reports at the state or local level. Previous attempts to change the law have failed, most recently in April when the House voted down a larger taxpayer rights bill. The law, aimed at providing the public with information about the role of soft money in federal elections, requires the IRS to post reports on its website. However, the information has not been posted in a searchable form, limiting its usefulness. The Campaign Finance Institute released a report Website Woes, The Federal Non-System for Campaign Finance Disclosure last week detailing problems with this system and noting improvements needed on the FEC and Federal Communications Commission sites. H.R. 5596 would exempt state and local candidates and PACs with no involvement in federal elections from the filing and disclosure requirements if they file reports at the state level. It would also require the IRS to provide information disclosed in a searchable, downloadable format, and require PACs to disclose the dates of contributions and expenditures, the purpose of expenditures and notification of any change in address or officers. The bill’s sponsors, which include Reps. Kevin Brady (R-TX), Meehan and Shays, expect it to pass before the end of the Congressional session. A similar bill is expected to be introduced in the Senate, or pass as part of the CARE Act. (see related story) Electioneering by Religious Organizations On October 1 the House defeated a bill that would have allowed religious organizations to endorse candidates and spend tax-deductible funds on partisan election activities, by a wide margin on October 2. The final vote -- 178 YEA - 239 NAY - 15 Not Voting -- reflected concerns about the separation of church and state and campaign finance reform. See related article for more details.