[Federal Register Volume 60, Number 240 (Thursday, December 14, 1995)]
[Rules and Regulations]
[Pages 64260-64279]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-30381]




[[Page 64259]]

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Part IV





Federal Election Commission





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11 CFR Part 100, et al.



Corporate and Labor Organization Activity; Express Advocacy and 
Coordination With Candidates; Final Rule

  Federal Register / Vol. 60, No. 240 / Thursday, December 14, 1995 / 
Rules and Regulations  

[[Page 64260]]


FEDERAL ELECTION COMMISSION

11 CFR Parts 100, 102, 109, 110, and 114

[Notice 1995-23]


Corporate and Labor Organization Activity; Express Advocacy and 
Coordination With Candidates

AGENCY: Federal Election Commission.

ACTION: Final rule and transmittal of regulations to Congress.

-----------------------------------------------------------------------

SUMMARY: The Commission is issuing revised regulations regarding 
expenditures by corporations and labor organizations. The new rules 
implement the Supreme Court's opinion in Federal Election Commission v. 
Massachusetts Citizens for Life, Inc., 479 U.S. 238 (1986) (MCFL), by 
substituting an express advocacy standard for the previous partisan/
nonpartisan standard with respect to corporate and labor organization 
expenditures. Consequently, in many respects, the revised rules permit 
corporations and labor organizations to engage in a broader range of 
activities than was permitted under the previous rules. New provisions 
are also being added to provide corporations and labor organizations 
with guidance regarding endorsements of candidates, activities which 
facilitate the making of contributions, and candidate appearances at 
colleges and universities.

DATES: Further action, including the publication of a document in the 
Federal Register announcing an effective date, will be taken after 
these regulations have been before Congress for 30 legislative days 
pursuant to 2 U.S.C. 438(d).

FOR FURTHER INFORMATION CONTACT:
Ms. Susan E. Propper, Assistant General Counsel, or Ms. Rosemary C. 
Smith, Senior Attorney, 999 E Street NW., Washington, D.C. 20463, (202) 
219-3690 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Commission is publishing today the final 
text of revisions to its regulations at 11 CFR 109.1(b)(4), 110.12, 
110.13, 114.1 (a) and (j), 114.2, 114.3, 114.4, 114.12(b) and 114.13. 
These provisions implement 2 U.S.C. 431(17) and 441b, provisions of the 
Federal Election Campaign Act of 1971, as amended (the Act or FECA), 2 
U.S.C. 431 et seq. Also included are conforming amendments to 11 CFR 
100.7(b)(21), 100.8 (b)(3) and (b)(23) and 102.4(c)(1). Section 438(d) 
of Title 2, United States Code, requires that any rule or regulations 
prescribed by the Commission to carry out the provisions of Title 2 of 
the United States Code be transmitted to the Speaker of the House of 
Representatives and the President of the Senate 30 legislative days 
before they are finally promulgated. These regulations were transmitted 
to Congress on December 8, 1995.

Explanation and Justification

    The new and revised rules reflect recent judicial and Commission 
interpretations of 2 U.S.C. 441b. This section of the FECA prohibits 
corporations and labor organizations from using general treasury monies 
to make contributions or expenditures in connection with federal 
elections. The new and amended rules contain the following changes:
    1. The partisan/nopartisan standards in previous 11 CFR part 114 
have been replaced by new language at section 114.2, 114.3, and 114.4, 
prohibiting corporations and labor organizations from making 
expenditures for communications to the general public expressly 
advocating the election or defeat of federal candidates. This new 
language applies only to expenditures.
    2. The provisions regarding candidate debates, candidate 
appearances, distributing registration and voting information, voter 
guides, voting records, and conducting voter registration and get-out-
vote drives in sections 110.13, 114.3, 114.4 and 114.13 have been 
revised and updated.
    3. New provisions have been added to sections 110.12, 114.1., 
114.2, and 114.4 to define ``restricted class,'' and to address 
candidate appearances at colleges and universities, endorsements of 
candidates, and activities which facilitate the making of 
contributions.
    4. New language has been added to 11 CFR 114.2, 114.3 and 114.4 to 
address the question of when coordination between a candidate and a 
corporation or labor organization will cause an activity to become a 
prohibited contribution.
    Please note that at an earlier stage of this rulemaking, the 
Commission revised the definition of express advocacy in accordance 
with the judicial interpretations found in Buckley v. Valeo, 424 U.S. 
1, 44 n. 52 (1976) (Buckley, MCFL and Federal Election Commission v. 
Furgatch, 807 F 2d 857 (9th Cir.), cert. denied, 484 U.S. 850 (1987) 
(Furgatch) and moved it to 11 CFR 100.22. See Explanation and 
Justification for 11 CFR 100.17, 100.22, 106.1, 109.1 and 114.10, 60 FR 
35292 (July 6, 1995). At that time, the definition of ``clearly 
identified,'' in 11 CFR 100.17, was also updated. In addition, new 
section 114.10 was added to allow qualified nonprofit corporations 
possessing certain essential features to use general treasury funds for 
independent expenditures, and to set out reporting obligations for 
qualified nonprofit corporations making independent expenditures. 
Section 114.10 implements the Supreme Court's decisions in MCFL and 
Austin v. Michigan Chamber of Commerce, 494 U.S.C. 652 (1990) (Austin).
    The history of this rulemaking, including the Petition for 
Rulemaking and the comments and public testimony, are discussed in more 
detail in the previously published Explanation and Justification at 60 
FR 35292 (July 6, 1995), and in the Notice of Proposed Rulemaking at 57 
FR 33548 (July 29, 1992) (Notice or NPRM). The promulgation of these 
regulations, after the close of the thirty legislative day period, will 
complete the Commission's consideration of the National Right to Work 
Committee's Petition for Rulemaking.

Section 100.7(b)(21)  Contribution

    Paragraph (b)(21) of this section is being amended by removing the 
term ``nonpartisan'' in describing candidate debates because that term 
is no longer used in the debate rules at 11 CFR 110.13. In addition, 
the cite to section 114.4(e) is being changed to 111.4(f) to correspond 
to the renumbering of that section.

Section 100.8 (b)(3) and (b)(23)  Expenditure

    Paragraph (b)(3) of section 100.8 is being amended to delete the 
term ``nonpartisan'' in describing the type of voter drive activity 
which fall outside the definition of ``expenditure.'' In order for this 
exception to apply, such activity must still be conducted without any 
effort to determine party or candidate preference. A reference to 
section 114.3(c)(4) has also been added for the convenience of readers 
concerned with corporate or labor organization voter drives aimed at 
the restricted class.
    Paragraph (b)(23) of this section is being amended by removing the 
term ``nonpartisan''in describing candidate debates because that term 
is no longer used in the debate rules at 11 CFR 110.13. In addition, 
the cite to section 114.4(e) is being changed to 114.4(f) to correspond 
to the renumbering of that section.

Section 102.4(c)(1)  Administrative Termination

    The citation to the rules governing debt settlement procedures is 
being changed from 11 CFR 114.10 to 11 CFR part 116. Section 114.10 now 
covers qualified nonprofit corporations, not debt settlement.

[[Page 64261]]


Section 109.1(b)(4)  Coordination with Candidates

    The Notice suggested revising 11 CFR 109.1(b)(4) to indicate that 
the limited types of communication with candidates and their campaign 
staff which are described in 11 CFR 114.2(c), 114.3 and 114.4 do not 
constitute coordination if they comply with the requirements of those 
sections. Upon further reflection, this proposal has been dropped 
because 11 CFR part 109 covers all persons, and the Commission's 
concerns regarding the coordination of corporate or labor organization 
activity is more appropriately addressed in 11 CFR 114.2 through 114.4, 
which are discussed below.

Section 110.12  Candidate Appearance on Public Educational Institution 
Premises

    New section 110.12 of the regulations addresses candidate 
appearances on the premises of public educational institutions. This 
section generally follows new paragraph (c)(7) of section 114.4, which 
is discussed more fully below. It has been included in the regulations 
so that public colleges and universities may continue to invite 
candidates to appear and address either the academic community or the 
general public in the same manner as incorporated private colleges and 
universities. A number of commenters pointed out that private schools 
should be treated the same as public educational institutions. Please 
note, however, that these institutions are also governed by state law 
which may impose additional requirements in this area.

Section 110.13  Candidate Debates

    The Commission has revised its regulations at 11 CFR 110.13 
governing the staging of candidate debates in several respects. First, 
the previous requirement that debates be ``nonpartisan'' has been 
removed. However, the rules continue to specify that candidate debates 
may not be structured to promote or advance a particular candidate. 
Also, debates may not be coordinated with a candidate in a manner that 
would result in the making of an in-kind contribution.
    In the NPRM, the Commission has proposed several additional 
requirements, such as a restriction on discussing campaign strategy and 
tactics with the candidate or agents of the candidate. The NPRM also 
included restrictions on giving one candidate more time during the 
debate or more advance information as to the questions to be asked. 
Several commenters were critical of these proposals. While this 
language has been deleted from the final rules, these restrictions are 
subsumed within the requirement that the debate not be structured to 
promote or advance a particular candidate over the others.
    The Commission also considered including language stating that 
staging organizations may not expressly advocate the election or defeat 
of any clearly identified candidate during the debates. That language 
does not need to be included in the final rule because the rules 
already state that the debates may not be structured to promote or 
advance one candidate over another. Please note that no portion of the 
entire event, including any pre-debate or post-debate commentary and 
analysis, may be structured to promote or advance a particular 
candidate. Nevertheless, a news organization that stages a candidate 
debate may produce a separate editorial containing express advocacy 
under the news story exception to the definitions of contribution and 
expenditure in 11 CFR 100.7(b)(2) and 100.8(b)(2).
1. Definition of Staging Organization
    Section 110.13(a) addresses several issues that have been raised 
regarding nonprofit groups and media organizations that wish to be 
staging organizations for candidate debates. First, this provision was 
rewritten to clarify that nonprofit organizations described in 26 
U.S.C. 501 (c)(3) and (c)(4) may stage debates even if they have not 
received official confirmation from the Internal Revenue Service of 
their status as nonprofit organizations. In addition, the previous 
language may have been confusing because it described these entities as 
``exempt from Federal taxation'', when they may be required to pay 
taxes on their nonexempt function income. Please note that under 
section 110.13, it is possible for a candidate debate to be sponsored 
by multiple staging organizations. The Internal Revenue Service 
commented that while the requirements in the FEC's rules are not 
identical to the factors the IRS considers, they do not conflict with 
the IRS's rules regarding political activity carried out by 501(c) 
organizations. Another commenter questioned the reason for 
disqualifying nonprofit organizations from staging debates if they 
endorsed candidates, as long as the debate is fair. The Commission is 
retaining this requirement because it is needed to ensure the integrity 
of candidate debates.
    Section 110.13(a)(2) follows the previous provision by indicating 
that broadcasters and the print media may stage candidate debates, but 
it does not indicate whether local cable stations or cable networks may 
stage debates. However, questions involving cable debates will be 
addressed in a separate NPRM. This area is currently subject to many 
changes, and the Commission intends to consult further with the Federal 
Communications Commission before addressing it.
    Two comments questioned the use of the term ``bona fide'' to 
describe newspapers who may qualify as debate staging organizations, 
and the Commission's authority to determine what is a bona fide 
newspaper or magazine under the First Amendment guarantee of freedom of 
the press. Bona fide newspapers and magazines include publications of 
general circulation containing news, information, opinion, and 
entertainment, which appear at regular intervals and derive their 
revenues from subscriptions and advertising. This term is explained in 
more detail in the Explanation and Justification for the 1979 rules on 
funding and sponsorship of federal candidate debates. See 44 FR 76734 
(December 27, 1979). These rules were transmitted to Congress on 
December 20, 1979, together with the Explanation and Justification. 
They became effective on April 1, 1980, after neither house of Congress 
disapproved them under 2 U.S.C. 438(d)(2). (An earlier version of the 
candidate debate rules was disapproved by Congress on September 18, 
1979. See 44 FR 39348 (July 5, 1979).) This is, as the Supreme Court 
has noted, an ``indication that Congress does not look favorably'' upon 
the Commission's construction of the Act. FEC v. Democratic Senatorial 
Campaign Committee, 454 U.S. 27, 34 (1981). See also, e.g., Sibbach v. 
Wilson, 312 U.S. 1, 16 (1941) (``That no adverse action was taken by 
Congress indicates, at least, that no transgression of legislative 
policy was found''). Accordingly, the revised rules follow the previous 
provisions by retaining the term ``bona fide'' to describe newspapers 
and magazines that may stage candidate debates.
    Finally, please note that the purpose of section 110.13 and 
114.4(f) is to provide a specific exception so that certain nonprofit 
organizations and the news media may stage debates, without being 
deemed to have made prohibited corporate contributions to the 
candidates taking part in debates. This exception is consistent with 
the traditional role these organizations have played in the political 
process. Individuals and unincorporated entities wishing to stage 
debates are not covered by the exception.

[[Page 64262]]

2. Debate Structure and Selection of Candidates
    The rules in section 110.13(b)(1) continue the previous policy of 
permitting staging organizations to decide which candidates to include 
in a debate, so long as the debate includes at least two candidates. 
Please note that a face-to-face appearance or confrontation by the 
candidates is an inherent element of a debate. Hence, a debate does not 
consist of a series of candidates appearances at separate times over 
the course of a longer event. See AO 1986-37. Nevertheless, the 
requirement of including two candidates would be satisfied, for 
example, if two candidates were invited and accepted, but one was 
unable to reach the debate site due to bad weather conditions, and the 
staging organization held the debate with only the other candidate 
present. Other situations will be addressed on a case-by-case basis. 
The Commission does not intend to penalize staging organizations for 
going forward with debates when circumstances beyond their control 
result in only one candidate being present and it is not feasible to 
reschedule. Please note that in some situations, the rules in 11 CFR 
114.4 regarding candidate appearance may also be applicable.
    Many comments, and much public testimony, was received on whether 
the Commission should establish reasonable, objective, 
nondiscriminatory criteria to be used by staging organizations in 
determining who must be invited to participate in candidate debates. In 
the alternative, it was suggested that the Commission could allow 
staging organizations to use their own pre-established sets of 
reasonable, objective, nondiscriminatory criteria, provided the 
criteria are subject to Commission review and are announced to the 
candidates in advance.
    In response to the comments and testimony, new paragraph (c) has 
been added to section 110.13 to require all staging organizations to 
use pre-established objective criteria to determine which candidates 
are allowed to participate in debates. Given that the rules permit 
corporate funding of candidate debates, it is appropriate that staging 
organizations use pre-established objective criteria to avoid the real 
or apparent potential for a quid pro quo, and to ensure the integrity 
and fairness of the process. The choice of which objective criteria to 
use is largely left to the discretion of the staging organization. The 
suggestion that the criteria be ``reasonable'' is not needed because 
reasonableness is implied. Similarly, the revised rules are not 
intended to permit the use of discriminatory criteria such as race, 
creed, color, religion, sex or national origin.
    Although the new rules do not require staging organizations to do 
so, those staging debates would be well advised to reduce their 
objective criteria to writing and to make the criteria available to all 
candidates before the debate. This will enable staging organizations to 
show how they decided which candidates to invite to the debate. Staging 
organizations must be able to show that their objective criteria were 
used to pick the participants, and that the criteria were not designed 
to result in the selection of certain pre-chosen participants. The 
objective criteria may be set to control the number of candidates 
participating in a debate if the staging organization believes there 
are too many candidates to conduct a meaningful debate.
    Under the new rules, nomination by a particular political party, 
such as a major party, may not be the sole criterion used to bar a 
candidate from participating in a general election debate. But, in 
situations where, for example, candidates must satisfy three of five 
objective criteria, nomination by a major party may be one of the 
criteria. This is a change from the Explanation and Justification for 
the previous rules, which had expressly allowed staging organizations 
to restrict general election debates to major party candidates. See 
Explanation and Justification, 44 FR 76735 (December 27, 1979). In 
contrast, the new rules do not allow a staging organization to bar 
minor party candidates or independent candidates from participating 
simply because they have not been nominated by a major party.
    The final rules which follow also continue the previous policy that 
sponsoring a primary debate for candidates of one political party does 
not require the staging organization to hold a debate for the 
candidates of any other party. See Explanation and Justification, 44 FR 
76735 (December 27, 1979).

Section 114.1  Definitions

1. Contribution and Expenditure
    The revised regulations in 11 CFR 114.1 (a)(1) and (a)(2) recognize 
that the MCFL decision necessitates certain distinctions between the 
terms ``contribution'' and ``expenditure.'' The previous rules had 
treated these terms as coextensive. The distinction arises because the 
Court read an express advocacy standard into the 2 U.S.C. 441b 
definition of expenditure. However, payments which are coordinated with 
candidates constitute expenditures and in-kind contributions to those 
candidates even if the communications do not contain express advocacy. 
See AO 1988-22.
    One commenter urged the Commission to continue to interpret the 
term ``contribution or expenditure'' to cover the same disbursements. 
The comment argued that the MCFL decision applies equally to 
contributions and expenditures. The Commission disagrees with this 
interpretation of MCFL, given that the case only involved the issue of 
whether corporate expenditures were made. In MCFL, the parties did not 
raise, and the Supreme Court did not resolve, the factual question of 
whether corporate contributions had been made by MCFL, Inc. However, 
the MCFL Court reaffirmed the First Amendment distinction between 
independent expenditures and contributions, which was recognized in the 
Buckley opinion. In Buckley, the Supreme Court generally struck down 
the Act's limitations on independent campaign expenditures by 
individuals and organizations (Buckley, 424 U.S. at 39-51), but upheld 
the constitutionality of the Act's restrictions on contributions to 
candidates. Id. at 23-38. Subsequently, the Court stated in NCPAC that 
``there was a fundamental constitutional difference between money spent 
to advertise one's views independently of the candidate's campaign and 
money contributed to the candidate to be spent on his campaign.'' 
Federal Election Comission v. National Conservation PAC, 470 U.S. 480, 
497 (1985). Similarly, the Court indicated that ``a corporation's 
expenditures to propagate its views on issues of general public 
interest are of a different constitutional stature than corporate 
contributions to candidates.'' Id., at 495-96. In light of this 
judicially-recognized distinction, the final version of section 
114.1(a)(1) and (a)(2) is being modified to recognize that the terms 
``contribution'' and ``expenditure'' are not coextensive.
    The attached rules also include two technical amendments to section 
114.1(a)(1). First, the reference to the National (sic) Savings and 
Loan Insurance Corporation has been deleted, because that entity no 
longer exists. Paragraph (a)(2)(ii) of section 114.1 is also being 
amended to remove the reference to ``nonpartisan'' voter drives.
2. Restricted Class
    New paragraph (j) of section 114.1 contains a definition of 
``restricted class'' for purposes of receiving 

[[Page 64263]]

corporate or labor organization communications containing express 
advocacy. It has been included to avoid describing everyone in the 
restricted class in numerous places throughout the regulations where it 
would be more convenient to simply use the term ``restricted class.'' 
The definition does not change who is considered to be within the 
restricted class. It also does not change who is an executive or 
administrative employee under section 114.1(c) or who is a member of a 
membership association under section 114.1(e).
    For most corporations and labor organizations, the restricted class 
is the same as the solicitable class. However, for incorporated trade 
associations and certain cooperatives, there are differences in who can 
receive solicitations and who can receive express advocacy 
communications. For example, a trade association's restricted class 
includes member corporations who are not in its solicitable class, 
since corporations may not make contributions under section 441b of the 
FECA. Conversely, however, a trade association may solicit its member 
corporations' stockholders and executive and administrative personnel, 
even though these individuals are not in its restricted class, if the 
member corporations have approved the solicitations. See, e.g., AO 
1991-24 and 11 CFR 114.8.

Section 114.2  Prohibitions on Contributions and Expenditures

1. Express Advocacy
    The final rules incorporate an express advocacy standard in several 
sections of 11 CFR part 114. First, new language in paragraphs (a) and 
(b) of section 114.2 prohibits corporations and labor organizations 
from making expenditures for communications to the general public that 
expressly advocate the election or defeat of one or more clearly 
identified candidates. Please note that some portions of the 
regulations refer to ``communications containing express advocacy.'' 
This term has the same meaning as the references elsewhere to 
``communications expressly advocating the election or defeat of one or 
more clearly identified candidates.''
    For the reasons explained above, the express advocacy standard in 
the revised rules applies to independent expenditures, but not 
contributions. The prohibition against contributions made by 
corporations and labor organizations in connection with federal 
elections remains unaffected by MCFL. Most, but not all, commenters 
supported the adoption of an express advocacy standard for evaluating 
independent expenditures under section 441b of the FECA.
    The provision prohibiting expenditures for communications 
containing express advocacy applies to all corporations and labor 
organizations except for qualified nonprofit corporations meeting the 
criteria set out in new section 114.10. Thus, these qualified nonprofit 
corporations may use general treasury funds to make independent 
expenditure communications to the general public which contain express 
advocacy. These could include registration and voting communications, 
official registration and voting information, voting records and voter 
guides. See also 11 CFR 114.4(c)(1)(i) and (ii).
2. Coordination With Candidates
    A new paragraph (c) has been added to 11 CFR 114.2 to address the 
topic of coordination of corporate or labor organization activity with 
candidates or their authorized committees or agents, which results in 
the making of an in-kind contribution. Previous paragraphs (c) and (d) 
have been redesignated as paragraphs (d) and (e), respectively.
    a. Initial Proposals. In Buckley v. Valeo, the Supreme Court made a 
distinction between independent expenditures and contributions. The 
Court observed, ``[u]nlike contributions, such independent expenditures 
may well provide little assistance to the candidate's campaign and 
indeed may prove counterproductive. The absence of prearrangement and 
coordination of an expenditure with the candidate or his agent not only 
undermines the value of the expenditure to the candidate, but also 
alleviates the danger that expenditures will be given as a quid pro quo 
for improper commitments from the candidate.'' Buckley, 424 U.S. at 47. 
Thus, Buckley could be interpreted to prohibit all contacts with 
candidates. However, the NPRM recognized that it is justifiable to 
allow some forms of contact to preserve the previous range of 
permissible activity, such as sponsoring candidate appearances. The 
prohibition against corporate contributions was expressly reaffirmed in 
MCFL. 479 U.S. at 260. Therefore, the NPRM sought to draw a distinction 
between permissible contacts with candidates which are necessary to 
conduct these activities, and more extensive coordination that will 
result in in-kind contributions in some circumstances. The proposals in 
the NPRM would have defined coordination to include discussions of 
specific campaign strategy or tactics.
    The proposed rules include new language in section 114.2(c) 
indicating when corporate and labor organization disbursements will be 
treated as impermissible in-kind contributions to particular 
candidates. Prior to the MCFL decision, the Commission had not needed 
to examine the extent to which such payments by corporations and labor 
organizations could be treated as in-kind contributions, because they 
were simply treated as prohibited corporate or labor organization 
expenditures in connection with federal elections, unless permitted by 
a specific exemption.
    b. Comments and Testimony. Numerous commenters expressed a wide 
variety of views on this topic. Many were confused as to how such a 
standard would work in practice. Some pointed out that this was an area 
not addressed by the MCFL decision, and that it appeared as though the 
Commission was trying to find a way to impose new requirements that 
would be at least as restrictive as the former partisan/nonpartisan 
standard. They argued that section 441b(b)(2)(A) of the FECA excludes 
communications with the restricted class on any subject from the 
definition of contribution or expenditures. Others favored a more 
restrictive rule allowing no contacts except for arranging the 
logistics of candidate debates and appearances, or obtaining responses 
for voter guides.
    c. Revised Rules. In response to these concerns, new section 
114.2(c) has been rewritten to clarify what types of contacts with 
candidates are considered impermissible coordination, and what types 
are permissible. The comments received in response to these proposals 
illustrated the need to clarify and simplify the operation of these 
provisions. Under revised section 114.2, a corporation or labor 
organization that only makes communications to its restricted class 
does not run the risk of having its expenditures treated as in-kind 
contributions. On the other hand, a corporation or labor organization 
that engages in election-related activities directed at the general 
public must avoid most forms of coordination with candidates, as this 
will generally result in prohibited in-kind contributions, and will 
compromise the independence of future communications to the general 
public. For example, a prohibited in-kind contribution would result if 
a voter guide is prepared and distributed after consulting with the 
candidate regarding his or her plans, projects or needs regarding the 
campaign. Please note that, in the case of a communication just to the 
restricted class, coordination will not cause that activity or future 
communications to the restricted class to be considered in-kind 
contributions. 

[[Page 64264]]
However, such coordination may compromise the ability of a 
corporation's or labor organization's separate segregated fund to make 
independent expenditures to those outside the restricted class in the 
future.
    Additional changes to the rules covering candidate debates, 
candidate appearances, colleges and universities, voting records, 
voting guides, voter registration and get-out-the-vote drives, 
endorsements, trademarks and letterhead, and facilitation are described 
below.
3. Facilitating the Making of Contributions
    As part of the revisions to 11 CFR Part 114, the Commission has 
reassessed the prohibition against corporations and labor organizations 
facilitating the making of contributions, and is adding a new provision 
which modifies its prior interpretation. Previously, in AOs 1987-29, 
1986-4 and 1982-2, MUR 3540 and in the 1989 and 1977 Explanation and 
Justifications of sections 110.6 and 114.3, the Commission has stated 
that corporations and labor organizations may not facilitate the making 
of contributions to particular candidates or political committees other 
than their own separate segregated funds. Explanation and Justification 
of Regulations, H. Doc. No. 95-44, 95th Cong., 1st Sess. at 104-105 
(1977); 54 F.R. 34106 (Aug. 17, 1989).
    The NPRM contemplated adding new language to 11 CFR 114.3(d) to set 
forth the current policies regarding facilitating the making of 
contributions. Please note that the new facilitation rules have been 
relocated to 11 CFR 114.2(f), since section 114.3 covers activities 
involving only the restricted class, and facilitation can involve 
activities that are directed to the restricted class or that go beyond 
the restricted class.
    The comments addressing this topic reflected a diversity of 
opinion. Some felt it was helpful to include the Commission's policies 
on facilitation in the regulations. Others felt the proposals would 
restrict the ability of corporations to engage in activities that were 
permissible, and would drive political fundraising underground, and 
thwart public disclosure. Another concern was that the rules would 
discourage corporations and labor organization from supporting the 
political activities of their employees in situations where the 
corporation or labor organizations does not take a position on the 
election. The Internal Revenue Service found no conflict with its 
requirements covering nonprofit corporations.
    The revised facilitation provisions attempt to address a variety of 
concerns. First, section 114.2(f)(1) sets out the general prohibition, 
and explains that facilitation means using corporate resources or 
facilities to engage in fundraising for candidates. However, this is 
not intended to negate the range of permissible activities found in 
other portions of the rules. For example, individual volunteer activity 
using corporate or labor organization facilities is still permissible 
under 11 CFR 100.7, 1008, and 114.9 (a), (b), and (c), provided it 
meets the conditions set forth in those rules. Similarly, there are no 
changes to the regulations governing the rental or use of corporate or 
labor organization facilities or aircraft by other persons. 11 CFR 
114.9 (d) and (e).
    The new rules at 11 CFR 114.2(f)(1) also explain that commercial 
vendors, such as hotels or caterers, would not facilitate the making of 
corporate contributions if in the ordinary course of their business 
they provide meeting rooms or food for a candidate's fundraiser and 
receive the usual and normal charge. The term ``commercial vendor'' is 
defined in 11 CFR 116.1(c).
    In the past, the Commission has also addressed situations where a 
candidate owns or operates a corporation. E.g. AOs 1995-8, 1994-8 and 
1992-24. Nothing in the new facilitation rules would modify the 
conclusions of these opinions that these corporations may serve as a 
commercial vendor or lessor to the candidate's committee as long as the 
transactions are consistent with the corporation's ordinary course of 
business.
    New paragraph (f)(2) of section 114.2 gives several examples of 
facilitation. Some of these include activities that do not fall within 
the ``safe harbors'' provided by other regulations. For example, 
facilitation would occur if a corporation or labor organization makes 
its meeting room available for a candidate's fundraiser, but has not 
made the room available for community or civic groups. Compare 11 CFR 
114.2(f)(2)(i)(D) with 11 CFR 114.13. The permissibility of using such 
room when the corporation or labor organization receives payment would 
be governed by 11 CFR 114.9(a), (b) or (d). Similarly, facilitation 
would result if other facilities, such as telephones and copiers, are 
used by campaign committee staff for a fundraiser, and the corporation 
is not reimbursed within a commercially reasonable time for the normal 
and usual rental charge. Compare 11 CFR 114.2(f)(2)(i)(B) with 11 CFR 
114.9(d).
    Other examples of facilitation include directing corporate or union 
employees to work on a fundraiser for a candidate; using a mailing, 
telephone or computer list of customers, vendors, or others outside the 
restricted class to distribute invitations and solicit contributions; 
and providing in-house or external catering and food services for the 
fundraiser. 11 CFR 114.2(f)(2)(i) (A), (C), and (E). However, in these 
three situations, the new rules allow either the candidate, or the 
organization's separate segregated fund, or the official directing the 
activity to pay the corporation or labor organization in advance for 
the fair market value of the services or the list. Such payment by a 
separate segregated fund or official would constitute an in-kind 
contribution subject to the individual's or the separate segregated 
fund's contribution limits, and is not treated as facilitation. The 
candidate's authorized committee must report receiving these in-kind 
contributions.
    A more limited advance payment method was approved by the 
Commission with regard to employee services in AO 1984-37. The new 
rules go beyond this advisory opinion with regard to the source of the 
advance payment and the types of services for which advance payment may 
be made. ``In advance'' means prior to when the list is provided, or 
the catering or food services are obtained, or the employees perform 
the work. Fair market value consists of the price that would normally 
be paid in the marketplace where the corporation or labor organization 
would normally obtain these goods or services, if reasonably 
ascertainable. However, in no case is the fair market value less than 
the corporation's or labor organization's actual cost, which includes 
total compensation earned by all employees directed or ordered to 
engage in fundraising, plus benefits and overhead.
    These new rules modify, to some extent, the interpretation applied 
in prior enforcement matters, including MUR 3540. The conciliation 
agreement for MUR 3540 stated that, ``[t]he `individual volunteer 
activity' exemption does not, however, extend to collective enterprises 
where the top executives of a corporation direct their subordinates in 
fundraising projects, use the resources of the corporation, such as 
lists of vendors and customers, or solicit whole classes of corporate 
executives and employees. See MURs 1690 and 2668. The individual 
volunteer activity exemption also does not apply when an employee uses 
the facilities of a corporation in connection with a Federal election 
and the corporation is reimbursed by a political committee or 

[[Page 64265]]
a candidate's committee [emphasis added]. See MUR 2185.''
    However, the new facilitation regulations now provide another 
exemption where an individual or a candidate's committee or other 
political committee pays in advance for the use of corporate personnel 
who are directed to organize or conduct a fundraiser for the candidate 
as part of their job, and hence are not volunteers. Although employees 
may be asked to undertake such activity, under new language in 
paragraph (f)(2)(iv) of this section, it is not permissible to use 
coercion, threats, force or reprisal to urge any individual to 
contribute to a candidate or engage in fundraising activities. Thus, 
employees who are unwilling to perform these services as part of their 
job have a right to refuse to do so.
    Under new paragraphs (f)(2)(iii) and (f)(4)(iii), facilitation 
includes corporate or labor organization solicitation of earmarked 
contributions that will be collected and forwarded by the 
organization's separate segregated fund (whether or not deposited in 
the separate segregated fund's account), unless the earmarked 
contributions are treated as contributions both by and to that separate 
segregated fund. The corporation or labor organization may name in the 
solicitation the candidate(s) for whom an earmarked contribution is 
sought. Space may be left on the contribution response card for 
contributors to designate candidates of their choice, but no candidates 
are suggested in the accompanying solicitation materials. The latter 
situation was presented in AO 1995-15. In both cases, under new 
paragraphs (f)(2)(iii) and (f)(4)(iii), the contributions must be 
counted against the separate segregated fund's limits to avoid 
facilitation, which is impermissible. Hence these new provisions 
supersede those portions of AOs 1991-29, 1981-57 and 1981-21 which 
indicate that a conduit separate segregated fund's contribution limits 
under 2 U.S.C. 441a are only affected if it exercises direction or 
control over the choice of the recipient candidate. Please note that 11 
CFR 110.6(b)(2)(ii) has not been changed, and therefore continues to 
prohibit corporations or labor organizations, themselves, from acting 
as conduits for contributions earmarked to candidates. See AO 1986-4. 
However, in AO 1983-18, the Commission recognized that a trade 
association political action committee may collect and forward 
contributions to other trade association political action committees 
where directed by member corporation executives. A corporation or union 
employee may still utilize the volunteer exemption found at 11 CFR 
100.7(b)(3) to collect earmarked contributions on their own time and 
forward such contributions to a specific candidate or committee. Such 
earmarked contributions would not be considered as contributions by the 
separate segregated fund.
    Paragraph (f)(3) lists two examples of separate segregated fund 
activity that do not constitute corporate or labor organization 
facilitation. First, separate segregated funds may continue to solicit 
or make contributions in accordance with the requirements of 11 CFR 
110.1, 110.2, and 114.5 through 114.8. Secondly, separate segregated 
funds may continue to solicit, collect and forward earmarked 
contributions to candidates under 11 CFR 110.6. The money expended by 
the separate segregated fund to solicit earmarked contributions must 
come from permissible funds received under the FECA, and will count 
against the separate segregated fund's contribution limit for the 
candidate(s) involved. These examples contrast with new paragraphs 
(f)(2)(iii) and (f)(4)(iii), under which a solicitation by the 
corporation or labor organization would either constitute facilitation 
or result in the contribution being counted against the separate 
segregated fund's contribution limits.
    In addition to the latter example discussed above, paragraph (f)(4) 
lists two other examples of corporate or labor organization activity 
which do not result in facilitation. The first preserves the practice 
of enrolling the restricted class in a payroll deduction plan or check-
off system, or an employee participation plan. No changes are being 
made in the operation of employee participation plans under 11 CFR 
114.11 or payroll deduction plans. The second example permits 
solicitations of the restricted class for contributions that 
contributors will send directly to candidates, without being bundled or 
forwarded through the separate segregated fund. This situation was 
presented in AO 1989-29, and falls within the corporation's or labor 
organization's right to communicate with its restricted class on any 
subject under 2 U.S.C. 441b(b)(2)(A).

Section 114.3  Disbursements for Communications to the Restricted Class 
in Connection With a Federal Election

1. Express Advocacy, Coordination, and Reporting Internal 
Communications
    The revised rules preserve several distinctions between 
communications and other activities directed solely to the restricted 
class (set forth at 11 CFR 114.3) and those directed to the general 
public or other individuals outside the restricted class (set forth at 
11 CFR 114.4). Section 114.3 continues to recognize that the FECA 
permits corporations and labor organizations to communicate with their 
restricted classes on any subject. 2 U.S.C. 441b(b)(2)(A). However, in 
light of the MCFL decision, the references to ``partisan'' activities 
have been replaced with narrower provisions that only apply to 
communications containing express advocacy. For example, in paragraph 
(c) of section 114.3, revised language makes clear that communications 
directed solely to the restricted class may contain express advocacy. 
In addition, amended section 114.3(b) now states more explicitly that 
only communications expressly advocating the election or defeat of a 
clearly identified candidate are subject to the reporting requirements 
of 11 CFR 100.8(b)(4) and 104.6. Similarly, the revisions delete the 
more restrictive language in previous section 114.3(a)(1) that had 
prohibited corporate and labor organization expenditures for 
``partisan'' communications to the general public because revised 
section 114.4 establishes that such communications are only prohibited 
if they contain express advocacy or are impermissibly coordinated with 
candidates or political committees.
    In contrast, under revised section 114.3(a)(1), communications 
directed solely to the restricted class may be coordinated with 
candidates and political committees. For example, they may involve 
discussions with campaign staff regarding a candidate's plans, 
projects, or needs. Such coordination will not transform that 
restricted class communication into an in-kind contribution. Nor will 
it affect subsequent activities directed only to the restricted class. 
However, communications to the restricted class that are based on a 
candidate's plans, projects and needs may jeopardize the independence 
of subsequent communications or activities, including those financed 
from the separate segregated fund, which extend to anyone outside the 
restricted class.
    One witness at the hearing objected to labor organizations' use of 
general treasury funds which could come from compulsory union dues to 
subsidize new forms of election-related activity, or even the 
activities set out in sections 114.3 and 114.4. This is an area over 
which the Department of Labor has jurisdiction, and recently it issued 
final rules removing 29 CFR part 470, in response to Executive Order 
12836 revoking Executive Order 12800. 58 FR 

[[Page 64266]]
15402 (March 22, 1993). The Commission does not have jurisdiction over 
whether dues and assessments are paid as a condition of employment or 
whether they are voluntary.
2. Candidate Appearances
    Paragraph (c)(2) of 11 CFR 114.3 governs corporate and labor 
organization funding of candidate appearances before the restricted 
class. The NPRM sought to resolve several issues not addressed in the 
previous rules and to clarify language on which the Commission has 
received a number of questions. For example, the Notice proposed that 
instead of allowing ``limited invited guests and observers'' to attend 
candidate appearances, the rule should refer to guests who are being 
honored or speaking or participating in the event. This is intended to 
cover individuals who are part of the program.
    One commenter was concerned that this language would interfere with 
its ability to allow its members to attend a candidate appearance. 
Under these provisions, which have been retained in the final rules, 
all those who qualify as members, and are therefore in an 
organization's restricted class, may attend. As noted above, nothing in 
the attached revisions to the rules affects the definition of who is a 
member.
    In addition, these amendments do not adversely affect the ability 
of corporations or labor organizations to invite their restricted 
class, other employees or the general public to attend a speech given 
by an officeholder or other prominent individual who is also a federal 
candidate, if the speech is not campaign-related and the individual is 
not appearing in his or her capacity as a candidate for Federal office. 
See, e.g., AOs 1980-22 and 1992-6.
    Two issues which generated considerable debate in this area were 
the solicitation and collection of contributions, and the presence of 
the news media, during restricted class candidate appearances.
a. Collection of Contributions by Candidates and Party Representatives 
During the Appearance
    The NPRM sought comment on whether candidates and party 
representatives should continue to be able to solicit contributions 
during an appearance before the restricted class. This had been 
specifically allowed under previous section 114.3(c)(2) for appearances 
before the restricted class. The NPRM sought comments on whether the 
candidate should be able to collect contributions at appearances, such 
as by ``passing the hat'' or placing donation boxes in the meeting 
room. Given that the proposed rules sought to incorporate the 
Commission's established policy that corporations and labor 
organizations are not permitted to facilitate the making of 
contributions to candidates or political committees other than their 
separate segregated funds, the NPRM questioned whether allowing 
candidates to accept contributions during their appearances should be 
viewed as impermissible facilitation.
    Some comments supported allowing candidates to request 
contributions. The Internal Revenue Service found no conflict between 
the provisions regarding candidate appearances and its rules.
    Section 114.3(c)(2) of the final rules provides that a candidate or 
party representative may ask for and collect contributions before, 
during or after the appearance while on corporate or union premises. 
Candidates and party representatives may also provide information on 
how to make contributions, such as by giving out a phone number or 
mailing address or by leaving envelopes or other campaign materials. 
However, this provision also specifies that corporate or labor 
organization officials may not collect contributions during the event. 
The collection of contributions by such officials would go beyond the 
right to communicate with the restricted class on any subject, and in 
essence, turn the candidate appearance into a fundraising event 
sponsored by the corporation or labor organization. As explained above, 
under new section 114.2(f), corporations and labor organizations may 
not facilitate the making of contributions to candidates.
b. Presence of the News Media
    Several issues have arisen regarding section 114.3(c)(2), which 
governs the presence of news media representatives at candidate 
appearances before only the restricted class. For example, a news 
organization may wish to reprint or broadcast the candidate's 
appearance in its entirety. Concerns have been raised that a candidate 
appearance before a corporation's or labor organization's restricted 
class would be transformed by this type of gavel-to-gavel coverage into 
a general public appearance. Accordingly, the Commission sought 
comments on two alternative proposals. Under Alternative C-1, such 
coverage was contemplated for appearances before the restricted class, 
provided that two conditions were met. First, if the corporation or 
labor organization permits one media representative to cover the 
appearance, all bona fide media organizations who request to cover the 
appearance must be given the opportunity to do so. This could be 
accomplished through pooling arrangements, if necessary. Secondly, if 
the corporation or labor organization permits the news media to cover 
an appearance by one candidate, the news media must be given the 
opportunity to cover all other candidates who appear on the same or 
different occasions. Alternative C-2 indicated that the corporation or 
labor organization may not permit the media to cover such candidate 
appearances before just the restricted class. Instead, under 
Alternative C-2, in addition to the two requirements on media access, 
media coverage of candidate appearances would be permissible only if 
all rank and file employees may also attend, all candidates for the 
same seat who request to appear are given a similar opportunity, and 
the corporation or labor organization does not expressly advocate, or 
encourage the audience to expressly advocate, the election or defeat of 
any candidate.
    One commenter felt that gavel-to-gavel coverage indicated that the 
candidate's speech is newsworthy, and that there is no evidence of a 
problem involving the exclusion of the news media. Others objected that 
the proposed rule would interfere with their ability to have 
officeholders address employees on topics of interest to the employees 
when the officeholders are candidates for office.
    The Commission has concluded that a modified version of Alternative 
C-1 is preferable and has been included in section 114.3(c)(2)(iv). The 
proposed language of Alternative C-2 which would have required the 
organization open the event to all rank and file employees, not just 
the restricted class, has been dropped because this would be 
administratively difficult to accomplish. However, the requirements in 
Alternative C-1 that candidates for the same office be treated 
similarly, and that different news organizations also be treated 
fairly, have been retained. These new provisions are intended to ensure 
that the corporation or labor organization does not manipulate the news 
media coverage of newsworthy events that are subsequently broadcast to 
the general public in a way that ensures favorable coverage for certain 
candidates, and no coverage or unfavorable coverage for others. Please 
note, however, that nothing in the amended rules will force 
corporations or labor organizations to invite the media to events that 
they would otherwise prefer to limit to the restricted class.

[[Page 64267]]

3. Registration and Get-Out-the-Vote Drives
    Section 114.3(c)(4) sets forth provisions governing voter 
registration and get-out-the-vote drives aimed at a corporation's or 
labor organization's restricted class. The NPRM included one revision 
to this provision. The proposed languaged stated explicitly that 
express advocacy is permissible in voter drive communications aimed 
solely at a corporation's or labor organization's restricted class. 
Consequently, the proposed revisions to section 114.3(c)(4) also 
retained the former language specifically permitting voter drive 
communications to urge the restricted class to vote for particular 
candidates and to register with a particular party. The proposed rules 
also contemplated continuing the long-standing policy that information 
and assistance in registering and voting shall not be withheld on the 
basis of support for or opposition to particular candidates or 
political parties.
    The Internal Revenue Service indicated that while the FEC's 
proposed rules regarding candidate appearances are more specific than 
theirs, they do not impinge upon the Internal Revenue Service's ``facts 
and circumstances'' test.
    Some commenters opposed removing the ``nonpartisan'' requirement 
from section 114.3(c)(4) because section 441b(b)(2)(B) of the Act 
requires that drives aimed at a corporation's or labor organization's 
restricted class be nonpartisan. The Commission believes the basic 
purpose of this statutory provision will be maintained by continuing to 
require corporations and labor organizations to make the same voter 
registration and voter drive services available to those who do not 
support the organization's preferred candidates or political party. 
Consequently, the final voter driver rules in this section follow the 
previous proposals, with one change. The revised rules specify that 
voter registration efforts may include transportation to the place of 
registration in addition to transportation to the polls.

Section 114.4  Disbursement for Communications Beyond the Restricted 
Class in Connection With a Federal Election

1. Express Advocacy and Coordination
    The provisions of section 114.4 regarding communications by 
corporations and labor organizations to persons outside the restricted 
class have also been substantially revised and reorganized. First, the 
nonpartisan standards found in the previous regulations have been 
replaced by language prohibiting corporations and labor organizations 
from including express advocacy in communications directed outside the 
restricted class when: (1) holding candidate appearances; (2) issuing 
registration and get-out-the-vote communications; (3) distributing 
registration and voting information, forms, or absentee ballots; (4) 
producing voter guides or voting records; or (5) conducting voter 
registration and get-out-the-vote drives.
    Second, in response to the concerns expressed by several commenters 
which are discussed above, the Commission has substantially revised the 
concept of coordination in section 114.4. The MCFL decision addressed 
the scope of the FECA's prohibition against corporate expenditures. 
However, the prohibition against corporate contributions was expressly 
reaffirmed in MCFL. 479 U.S. at 260. Accordingly, the final rules which 
follow preserve the statutory ban on contributions made by corporations 
and labor organizations in connection with federal elections. 
Prohibited contributions include in-kind contributions resulting from 
the coordination of election-related corporate or union communications 
with candidates, except for certain activities described in this 
section and 11 CFR 114.3, which may involve limited types of 
coordination with candidates.
    Under revised section 114.4(a), communications to the general 
public or to employees outside the restricted class that are based on 
information about a candidate's plans, projects and needs provided by 
the candidate or the candidate's agent are considered coordinated, and 
hence, in-kind contributions. Such coordination may also jeopardize the 
independence of subsequent communications to the general public, but 
will not affect future communications to the restricted class.
    Qualified nonprofit corporations under 11 CFR 114.10 are subject to 
the same restriction on coordinating their communications directed to 
the general public. Consequently, they may not include express advocacy 
in coordinated communications directed beyond the restricted class. 
Conversely, if they do include express advocacy in communications to 
the general public, these communications may not be coordinated with 
any candidate or political party. The purpose of the limited exception 
the Supreme Court recognized in MCFL was to avoid impermissibly 
infringing on these organizations' First Amendment rights when making 
independent expenditures.
2. Candidate and Party Appearances
    The NPRM sought comments on several questions and possible 
amendments regarding corporate and labor organization funding of 
candidate appearances before employees who are not in the restricted 
class. Section 114.4(b), as set out in the Notice, followed the 
previous rules at 11 CFR 114.4(a)(2) by allowing rank and file 
employees who are not in the restricted class to attend candidate 
appearances organized by corporations or labor organizations. Please 
note that corporate appearances are covered in paragraph (b)(1), and 
parallel provisions for labor organizations are found in paragraph 
(b)(2).
    As explained above, certain contacts with the candidate's campaign 
may be necessary to arrange the appearance. However, because these 
communications are being made beyond the restricted class, discussions 
of the candidate's plans, projects or needs relating to the campaign go 
beyond the permissible level of coordination, and hence would transform 
the appearance into an in-kind contribution. Likewise, corporations and 
labor organizations are also not permitted to expressly advocate the 
election or defeat of any clearly identified candidates in conjunction 
with the appearance. Nor should they promote or encourage express 
advocacy by the audience, thereby transforming the appearance into 
little more than a campaign rally.
a. Notifying and Inviting Other Candidates; Audience
    In situations where one candidate appears at a corporate or labor 
organization event, the proposed rules in section 114.4(b) would have 
followed the previous provisions by requiring corporations and labor 
organizations to let the other candidates for that office come and 
speak if they so request. However, comments were sought on possibly 
requiring a corporation to notify the other candidates in advance 
whenever they invite a candidate to appear. The commenters expressed 
concern that such a requirement would be unworkable. Accordingly, the 
final rules do not contain a prior notice provision.
    Instead, the final rules on candidate appearances generally follow 
the candidate debate rules in the case of Presidential candidates by 
requiring corporations and labor organizations to establish, in 
advance, objective criteria for deciding which Presidential and Vice 
Presidential candidates may appear, upon request. Under section 
114.4(b)(1)(i), appearances by House 

[[Page 64268]]
and Senate candidates remain subject to the requirement that all 
candidates for the seat must be given a similar opportunity to appear, 
upon request. Similarly, the provisions governing appearances by 
political party representatives in paragraph (b)(1)(iii) generally 
follow the previous regulations.
    Comments were also requested on new language in section 
114.4(b)(1)(vi) that would not allow the corporation or labor 
organization to favor one candidate through the structure or format of 
the candidate appearance. One example cited was giving rank and file 
employees time off to listen to one candidate but not to listen to 
others. Another example arises where candidates receive unequal time or 
facilities, unless it is clearly impractical to provide all candidates 
with similar opportunities, such as where a candidate requests to 
appear after a labor organization's convention is over. In response to 
another comment which objected to consideration of the format and 
timing of a candidate appearance, the Commission is revising the 
language in section 114.4(b)(1)(vi) to clarify that candidates cannot 
be given unequal amounts of time or substantially different locations 
for their appearances, unless the corporation can show it is 
impractical to give each candidate a similar time and location.
    In addition, paragraph (b)(1) of section 114.4 allows guests who 
are being honored or speaking or participating in the event (i.e. those 
who are part of the program), to be present during the candidate 
appearance. This provision follows similar language in 11 CFR 
114.3(c)(2)(i).
b. Collection of Contributions by Candidates and Party Representatives 
During the Appearance
    A question presented in the NPRM was whether the candidate or party 
representative may solicit and collect contributions during an 
appearance before employees who are not in the restricted class. 
Although this has been specifically allowed under section 114.3(c)(2) 
for appearances before the restricted class, there was no provision in 
former section 114.4 either allowing or disallowing this practice when 
the audience extends to all employees. The NPRM sought comments on 
whether the candidate should be able to pass the hat or place donation 
boxes in the room.
    Some comments supported allowing candidates to request 
contributions, but indicated that the rules needed to clarify that this 
would not constitute facilitation by the corporation or labor 
organization. The Internal Revenue Service found no conflict between 
the provisions regarding candidate appearances and its rules.
    Section 114.4(b)(1)(iv) of the final rules provides that a 
candidate or party representative may ask for contributions, may 
provide information on how to make contributions, and may leave 
campaign materials and envelopes for making contributions. See, e.g., 
AO 1987-29, n. 2. However, this provision also specifies that 
candidates and party representatives may not collect contributions 
during the event.
    Moreover, the corporation or labor organization, and its officers 
and employees, may not solicit or collect these contributions. This 
restriction includes corporate and union officials who may also serve 
on a fundraising committee for the candidate or otherwise be active in 
the campaign. The collection of contributions by corporate or union 
officials would, in essence, turn the candidate appearance into a 
general fundraising even sponsored by the corporation or labor 
organization, in violation of the new facilitation regulations of 
section 114.2(f).
c. Presence of the News Media
    The Notice presented several issues regarding the presence of news 
media at candidate appearances before employees outside the restricted 
class. For the reasons stated above, the final rules regarding these 
appearances follow the new regulations applicable to appearances before 
the restricted class. See discussion of 11 CFR 114.3(c)(2)(iv), 
including NPRM and comments, supra.
3. Use of Logos, Trademarks and Letterhead
    Another topic addressed in this rulemaking concerns the use of 
corporate or labor organization logos, trademarks and letterhead. The 
Commission has encountered situations in which executives of 
corporations or labor organizations use official corporate or labor 
organization stationery, whether or not reproduced at the executive's 
personal expense, to solicit funds or support for a candidate. E.g., 
MURs 3066, 1690 and 1261. The question presented in the NPRM was 
whether such a logo, trademark or letterhead may be used if the 
corporation or labor organization is reimbursed for the intangible 
value of the item(s), or whether their use (except through ordinary 
commercial transactions in the usual course of business) should be 
prohibited.
    Comments were sought on two alternative approaches. The first 
option, Alternative B-1, was to amend the definition in section 
114.1(a)(1) to treat logos, trademarks and letterhead as something of 
value and a contribution or expenditure if provided without charge or 
at less than the fair market value. That approach would have allowed 
individuals and candidates to reimburse corporations and labor 
organizations for the cost of the stationery plus the value of using 
the corporate or union symbol, name, etc. One difficulty, however, 
would have been ascertaining the fair market value, given subjective 
consideration such as goodwill. Thus, the second option, which was set 
forth as Alternative B-2 in section 114.4(c)(1), was to prohibit such 
uses, whether or not the corporation or labor organization is 
reimbursed, with four exceptions for: corporations qualifying for the 
MCFL exception; communications to the restricted class, as described 
under 11 CFR 114.3; communications beyond the restricted class, as 
permitted under 11 CFR 114.4; and solicitations made in accordance with 
11 CFR 114.5 through 114.8.
    The Commission received comments supporting and opposing both 
options. The Internal Revenue Service stated that alternative B-1 may 
conflict with the Internal Revenue Code requirements applicable to 
section 501(c)(3) corporations. Other commenters claimed that logos and 
letterhead were not corporate resources, or were of no value or of de 
minimis value, or that it is too difficult to assign a monetary value.
    The Commission considered the alternatives regarding the use of 
logos, letterhead and trademarks when it prepared the final rules, but 
could not reach a majority decision by the required four affirmative 
votes. See 2 U.S.C. 437c(c). Consequently, neither alternative has been 
included in the final rules.
    Both alternatives in the NPRM also indicated that when individuals 
make communications either by using personal stationery or by appearing 
in a campaign ad, the letter or advertisement cannot indicate that the 
individual is acting on behalf of the corporation or labor 
organization, and cannot include references to the individual's 
official title at that organization. Thus, these proposals were 
intended to preclude an individual from including an identification 
such as ``Vice President of XYZ Automobile Corporation.'' However, a 
general identification such as ``auto maker'' would be acceptable.
    Several commenters opposed this restriction on various grounds, 
including that the corporate title is part of the individual's 
identity, the use of 

[[Page 64269]]
the title enhances disclosure of those who are making the communication 
and it would encourage fraud if identifications were not allowed, and 
because the speech of people associated with nonprofit groups would be 
inhibited.
    The Commission considered the use of corporate or labor 
organization titles in individual communications and advertisements on 
behalf of a candidate when it prepared the final rules, but could not 
reach a majority decision by the required four affirmative votes. See 2 
U.S.C. 437c(c). Consequently, the proposed language has not been 
included in the final rules.
4. Registration and Voting Communications; Official Registration and 
Voting Information
    The provisions of previous paragraphs (b)(2) and (b)(3) of section 
114.4 regarding the distribution of registration and voting 
communications and information to the general public have been moved to 
new paragraphs (c)(2) and (c)(3), respectively. In addition to the 
changes regarding express advocacy and coordination with candidates, 
which are discussed above, revised paragraph (c)(3)(ii) no longer 
contains a reference to ``applicable state law'' permitting voter 
registration by mail. That language was made obsolete by the National 
Voter Registration Act of 1993, 42 U.S.C. 1973gg-1 et seq.
    Please also note that section 114.4(c)(2), regarding voting 
communications, does not change the Commission's decision in AO 1980-20 
that corporations may place newspaper or magazine advertisements simply 
urging the general public to register to vote.
5. Voting Records
    Provisions regarding the dissemination of voting records of Members 
of Congress are being moved from previous section 114.4(b)(4) to new 
section 114.4(c)(4). In response to the MCFL decision, the NPRM 
proposed modifying these rules in two respects. First, new language was 
put forth prohibiting voting records, and all accompanying 
communications to the general public, from expressly advocating the 
election or defeat of one or more clearly identified candidates or the 
candidates of a clearly identified political party. The proposed 
amendments also sought to disallow coordination with candidates in 
distributing voting records. The Internal Revenue Service commented 
that although their standards were different than the FEC's, the FEC's 
proposed rules do not impinge on the test used by the Internal Revenue 
Service to determine whether voting records or voter guides constitute 
political activity. Another commenter believed there was no need to 
discuss these matters with candidates.
    The revised version of section 114.4(c)(4) is substantially similar 
to the proposed rules. However, new language has been included to 
indicate that the decision as to the content of a voting record also 
may not be coordinated with a candidate or political party. The NPRM 
raised the question of whether to include language preventing 
corporations and labor organizations from obtaining voting record 
information directly from Members of Congress or political parties. The 
Commission has decided not to include such a restriction in the revised 
regulations.
6. Voter Guides
    In Faucher v. Federal Election Commission, 928 F.2d 468 (1st Cir. 
1991), cert. denied sub nom. Federal Election Commission v. Keefer et 
al., 502 U.S. 820 (1991), the Court of Appeals for the First Circuit 
invalidated the Commission's previous voter guide regulations at 11 CFR 
114.4(b)(5)(i). The Court concluded that the previous provisions of 
section 114.4(b)(5)(i) exceed the regulatory boundaries imposed by the 
FECA as interpreted by the Supreme Court. 928 F.2d at 472.
    Consequently, the NPRM proposed revisions, located in section 
114.4(c)(5), to allow corporations and labor organizations to prepare 
and distribute to the general public their own voter guides or to 
obtain voter guides prepared by nonprofit organizations that are tax-
exempt under 26 U.S.C. 501 (c)(3) or (c)(4). The proposed rules would 
have required that the same amount of space be provided for each 
candidate's response, that the voter guide not contain express 
advocacy, and that contact with candidates be limited to the 
preparations reasonably necessary to produce the guide, such as written 
communications regarding the candidate's positions on issues. The 
proposed revisions also sought to eliminate the previous restrictions 
on the geographic area in which voter guides could be distributed, and 
to prohibit coordination of the distribution of voter guides with 
candidates.
    Several commenters and witnesses challenged these proposals as 
contrary to the intent of the court in Faucher. In particular, they 
questioned the need to reprint the candidates' responses verbatim, the 
restriction that contacts with campaigns be in writing, the prohibition 
on coordinating the distribution of the guides, and the prohibition on 
distributing voter guides prepared by 501(c) organizations that endorse 
candidates, when the corporation or labor organization can make its own 
endorsements.
    In view of these comments, the Commission has substantially revised 
the final rules to provide a choice of two different ways of issuing 
and distributing voter guides, which are intended to comport with 
Faucher. Revised section 114.4(c)(5) begins by explaining that voter 
guides consist of candidates' positions on campaign issues, and may 
include biographical information on the candidates. Voter guides are 
similar to candidate debates in that they must include at least two 
candidates in the same election. However, no particular format is 
required for either type of voter guide.
    Under the new rules, both types of voter guides may be obtained 
from nonprofit organizations described in 26 U.S.C. 501 (c)(3) or 
(c)(4), regardless of whether the nonprofit group endorses candidates. 
Please note however, that a comment from the Internal Revenue Service 
indicates that nonprofit corporations organized under 26 U.S.C. 
501(c)(3) cannot endorse candidates. The previous rules referred to 
these groups as ``tax exempt,'' which may be confusing given that they 
may pay tax on certain categories of income.
    The first type of permissible voter guide, which is described in 
paragraph (c)(5)(i), is one that is prepared and distributed without 
any contact, cooperation, coordination or consultation with the 
candidate. the candidate's campaign or the candidate's agent. Hence, 
the information regarding the candidate's position on issues must be 
obtained from news articles, voting records, or other non-campaign 
sources. The voter guide also must not expressly advocate the election 
or defeat of any clearly identified candidate.
    The second type of permissible voter guide, which is described in 
paragraph (c)(5)(ii), is subject to further restrictions because it 
contemplates limited written contact with the candidate's campaign 
committee to obtain the candidate's responses to issues included in the 
voter guide. For example, further coordination with a candidate or his 
or her agents, such as a discussion of the candidate's plans, projects, 
or needs relating to the campaign, does not fall within this limited 
exception, and would thus result in an in-kind contribution. The 
Faucher decision does not mandate eliminating all restrictions on voter 
guides save for the prohibition on express advocacy. Accordingly, 
organizations preparing the second type 

[[Page 64270]]
of voter guide must give all candidates in the election (except for 
Presidential candidates) an equal opportunity to respond to the 
questions posed. Moreover, no candidate may receive greater prominence 
or substantially more space than other candidates participating in the 
voter guide. This requirement is similar to the candidate debate 
situation in which the forum may not be structured to promote one 
candidate over others.
    The second type of voter guide must not contain an electioneering 
message. See, Federal Election Commission v. Colorado Republican 
Federal Campaign Committee, 59 F. 3d 1015 (1th Cir. 1995), petition for 
cert. filed, No. 95-489 (Sept. 21, 1995) (statement that an office 
holder has a right to run for the Senate, but doesn't have the right to 
change the facts constituted an electioneering message); and AOs 1985-
14 and 1984-15. Similarly, the voter guide must not score or rate the 
candidates' responses in a way that conveys an electioneering message, 
such as by indicating that certain responses are ``right'' or ``wrong'' 
or receive a higher or lower grade than others.
7. Endorsements
    The NPRM proposed adding new paragraph (c)(6) to section 114.4 to 
reflect the Commission's policy regarding public endorsements of 
candidates by corporations and labor organizations. In AO 1984-23, the 
Commission permitted a corporation to include an endorsement in a 
publication directed to its restricted class. In addition, the NPRM 
indicated that the endorsement could be made during the candidate's 
appearance before the restricted class. One comment objected to 
enhancing the publicity corporate endorsements will receive. Another 
comment opposed these restrictions on corporate endorsements because 
labor organization endorsements receive wider media coverage. The 
Commission believes these concerns are misplaced. Media coverage of 
endorsements by corporations or labor organizations is similar to media 
coverage of candidate appearances in that both are governed by the news 
media's determination as to the newsworthiness of the event.
    The NPRM also sought comment on two alternative approaches 
regarding further corporate or labor efforts to publicize the 
endorsement through press releases and press conferences. Alternative 
D-1 sought to follow AO 1984-23 by allowing the corporation or labor 
organization to spend a de minimis amount to issue a press release 
regarding the endorsement to its usual media contacts. This language 
also explicitly recognized that the press release may be accompanied by 
a routine press conference. In contrast, Alternative D-2 would have 
permitted the corporation or labor organization to publicize the 
endorsement only by responding to quesitons posed during a routine 
press conference.
    Several comments preferred Alternative D-1, believing that 
Alternative D-2 could be easily manipulated, and is an artificial 
distinction. The Commission agrees, and has therefore decided to adopt 
Alternative D-1.
    The proposed rules would also have permitted corporations and labor 
organizations to have contact with candidates to the limited extent 
necessary to make the endorsement, without treating these 
communications as impermissible in-kind contributions. The Commission 
sought comment, however, on whether this limitation on candidate 
contact would inhibit the corporation's or labor organization's ability 
to obtain the information needed to make an endorsement decision. While 
one commenter expressed concern that these discussions with candidates 
and their campaign staff were unnecessary and provided an opportunity 
to coordinate endorsements with candidates, another commenter believed 
that organizations need to know the nature and viability and 
organization of the campaign, and thus the candidate's likelihood of 
success.
    The Commission agrees that organizations need to discuss various 
issues with candidates and their staff when deciding who to endorse. 
Hence, the language in section 114.4(c)(6)(ii) has been revised to 
allow a greater range of discussion with the candidate or campaign 
staff prior to the endorsement. However, the public announcement of the 
endorsement may not be coordinated with the candidate or the 
candidate's agents or authorized committee.
    Finally, the new rules advise consulting the Internal Revenue Code 
and IRS regulations regarding restrictions and prohibitions on 
endorsements by nonprofit corporations. The Internal Revenue Service 
indicated in its comment that nonprofit corporations organized under 26 
U.S.C. 501(c)(3) cannot endorse candidates.
8. Candidate Appearances on Educational Institution Premises
    The FECA prohibits corporations from making contributions to or 
giving anything of value to a federal candidate, including free use of 
facilities, such as halls and auditoriums. Since most private colleges 
and universities are incorporated, this prohibition applies to them. 
The NPRM included draft provisions to clarify the Commission's 
interpretation of this statutory prohibition as it applies to 
incorporated educational institutions. In the proposed rules, section 
114.4(c)(7) included an exception to permit colleges, universities, and 
other incorporated nonprofit educational institutions which are exempt 
from federal taxation under 26 U.S.C. 501(c)(3) to make their premises 
available to groups that are associated with the school and wish to 
invite candidates to address students, faculty and the general public, 
under certain conditions.
    Several comments and witnesses expressed an overall concern that 
the Commission was attempting to over-regulate political speech on 
campuses. They pointed out that historically, universities have sought 
to promote the free exchange and debate of ideas in an intellectual 
environment, and have tried to stimulate student interest in democratic 
processes and institutions. They were also concerned that the new rules 
could affect classroom discussions. The Internal Revenue Service 
indicated that the proposed FEC rules were more specific than the 
``facts and circumstances'' test used by the IRS, but did not conflict 
with that test.
    The Commission has now revised new paragraph (c)(7) of section 
114.4 in a number of respects to clarify the intent of the new rules. 
First, language has been added at paragraph (c)(7)(i) to clarify that 
educational institutions may continue to charge candidates the usual 
and normal charge for the use of their facilities. Secondly, private 
colleges, universities, and other incorporated nonprofit educational 
institutions may make their premises available to candidates who wish 
to address students, faculty, the academic community, or the general 
public (whomever is invited) at no cost or for less than the usual and 
normal charge. See 11 CFR 114.4(c)(7)(ii). However, the school must 
make reasonable efforts to ensure that the appearances are conducted as 
speeches, question and answer sessions, or other academic events, and 
do not constitute campaign rallies. Incorporated educational 
institutions may also continue to allow individuals who are candidates 
to appear in another capacity, such as officeholders or prominent 
speakers on particular issues, if they do not refer to the campaign or 
their status as candidates. See, e.g., AO 1992-6. The new rules also do 
not prevent candidates from participating in campus 

[[Page 64271]]
events in other capacities, such as when the candidate is also a 
faculty member.
    Although the proposed rules in the Notice covered candidate 
appearances on college campuses, they did not specifically address 
candidate debates. As noted by the commenters, there is a long 
tradition of holding candidate debates in college auditoriums. The 
Commission did not intend to curtail this practice, and the final rules 
do not prevent such debates from being held. Colleges and universities 
that qualify for tax-exempt status under 26 U.S.C. 501(c)(3) may stage 
candidate debates in accordance with the requirements set out in 11 CFR 
110.13 and 114.4(f).
    The proposed rules in section 114.4(c)(7)(i) would have required 
educational institutions to have an established policy allowing 
associated organizations, such as student groups, to sponsor candidate 
appearances so long as the policy does not favor one candidate or party 
over any other. Several commenters questioned the need for such a 
policy, and expressed concern that colleges and universities would be 
forced to grant access to their facilities to groups not connected with 
the educational institution. Consequently, the language in new section 
114.4(c)(7) is being amended to include a more general requirement that 
the educational institution does not favor any one candidate or 
political party in allowing the appearances.
    The proposed rules also sought to ensure that admission to a 
candidate's appearance would not be based on party affiliation, or any 
other indications of support for or opposition to the candidate by 
requiring either the educational institution or the sponsoring group to 
control access to the facility, rather than the candidate's campaign 
committee. This proposal has been dropped as impracticable.
    The NPRM indicated that one objective was to ensure that these 
candidate appearances will not become campaign rallies, fundraising 
events, or opportunities for the school or group issuing the invitation 
to expressly advocate, or encourage the audience to expressly advocate, 
the election or defeat of the candidate who is appearing. Accordingly, 
the proposals sought to restrict the presence of campaign banners, 
posters, balloons and other similar items which would be viewed as 
indicative of a campaign rally. Several commenters and witnesses 
recognized the necessity for educational institutions to refrain from 
express advocacy, so as to avoid jeopardizing their nonprofit status. 
However, the comments also emphasized the practical difficulties in 
trying to control expressions of support or opposition by the audience, 
and trying to ensure that a campaign rally atmosphere does not ensue. 
They also questioned distinctions between posters and hats or buttons. 
Finally, they argued that colleges are public fora, and the 
government's ability to restrict speech in public fora is limited.
    The revised rules in paragraph (c)(7)(ii)(B) retain the prohibition 
against the educational institution engaging in express advocacy. 
However, the language regarding a campaign rally atmosphere has been 
modified to require the educational institution to make reasonable 
efforts to ensure that the appearance does not turn into a campaign 
rally. This does not require the college or university to monitor 
buttons or campaign materials brought in or worn by members of the 
audience. These provisions are consistent with the requirement that 
exempt organizations under 26 U.S.C. 501(c)(3) refrain from 
participating in or intervening in political campaigns.
    The NPRM also proposed a prohibition against candidates collecting 
contributions during the appearance, coupled with language allowing 
candidates to ask for contributions to be sent to their campaign 
committees. The Notice also suggested a provision barring educational 
institutions from soliciting contributions. The comments generally 
supported these proposals as consistent with the nonprofit status of 
these educational institutions under the Internal Revenue Code. They 
also suggested that candidates be informed in advance that they may not 
collect contributions.
    It is not necessary to include in the final rules these 
restrictions on soliciting and collecting contributions. They are 
already subsumed within the requirement that the educational 
institution make a reasonable effort to ensure the candidate appearance 
does not become a campaign rally. In addition, candidate appearances at 
incorporated private colleges and universities are already subject to 
additional requirements under the Internal Revenue Code and regulations 
issued thereunder.
    The NPRM also included provisions allowing educational institutions 
to invite the media to cover these candidate appearances and to 
broadcast them to the general public, provided the schools follow the 
same guidelines that would apply to other corporations, as set forth in 
section 114.3(c)(2)(iii) and section 114.4(b)(1)(viii). The Commission 
has decided not to include this provision in the final rules and to 
allow educational institutions and the news media to work out their own 
arrangements.
9. Candidate Appearances in Churches
    The NPRM presented the possibility of issuing rules regarding 
candidate appearances in churches and religious facilities. However, 
this topic received little attention from the commenters. The large 
number of other more immediate issues in this rulemaking may have 
overshadowed considerations of candidate appearances in religious 
settings. At this point, the Commission has decided to defer this 
matter for further consideration.
10. Registration and Get-Out-The-Vote Drives
    Voter registration and get-out-the-vote drives aimed at the general 
public or at employees outside the restricted class have been moved 
from previous paragraph (c) to renumbered paragraph (d) of section 
114.4. The NPRM included several revisions to this provision, most of 
which are included in the attached final rules. First, the regulations 
distinguish between the speech and nonspeech components of voter 
drives. Thus, the rules conform to the MCFL decision by applying an 
express advocacy standard to the speech components of voter drives. 
Hence, new language in paragraph (d)(1) indicates that communications 
containing express advocacy may not be made during voter drives aimed 
at employees outside the restricted class, or during voter drives aimed 
more broadly at the general public.
    The revised voter drive rules also include changes regarding the 
nonspeech components of voter drives. Under section 114.4(d), 
corporations and labor organizations may conduct voter registration and 
get-out-the-vote drives without the involvement of a nonprofit 
organization which is described in 26 U.S.C. 501 (c)(3) or (c)(4). To 
the extent that AO 1978-102 indicates that such drives must be jointly 
sponsored with a civic or nonprofit organization, that opinion is 
superseded by the regulatory changes to this section. However, the 
validity of AO 1980-45, which affirmed the ability of a 501(c)(3) 
nonprofit corporation to conduct a voter registration drive, is not 
affected by the revised rules. Paragraph (d)(2) specifies that these 
drives cannot be coordinated with any candidate or political party. 
Moreover, under paragraph (d)(5), workers cannot be paid only to 
register voters supporting a particular candidate or political party.
    Both the proposed and the final rules in section 114.4(d)(4) 
contemplate 

[[Page 64272]]
continuing the long-standing policy that information and assistance in 
registering and voting shall not be withheld on the basis of support 
for or opposition to particular candidates or political parties. New 
language in paragraph (d)(6) indicates that those receiving information 
or assistance must be notified in writing that their party or candidate 
preferences may not be a basis for refusing them assistance. This 
requirement can be easily satisfied simply by posting a sign at a voter 
registration table or in a vehicle used to take voters to the polls.
    The comments and testimony revealed little, if any, consensus 
regarding these proposals. There was opposition to section 114.4(d) on 
the grounds that voter drives are something of value to candidates, and 
are therefore contributions or expenditures. There was also concern 
that the proposals did not contain sufficient safeguards against 
electioneering and coordination with candidates. On the other hand, 
others believed that the Commission has no authority to prohibit 
coordinating voter registration and get-out-the-vote drive 
communications with candidates, and that the only restriction on this 
activity should be that the organization must refrain from express 
advocacy. The provisions requiring certain notifications to the targets 
of the drive were thought to be unnecessary and expensive. The Internal 
Revenue Service indicated that while the FEC's rules are more specific 
than theirs, they do not impinge upon the Internal Revenue Service's 
``facts and circumstances'' test.
    After carefully considering the comments, the Commission has 
decided that the proposals in the NPRM are in keeping with the FECA and 
the MCFL decision. Thus, the final rules follow the proposed rules, 
with two minor changes. First, paragraph (d)(3) has been modified to 
clarify that voter registration and get-out-the-vote drives cannot be 
targeted primarily at individuals who will register with, or vote for, 
the party preferred by the drive sponsor. Second, the rules specify 
that voter registration efforts may include transportation to the place 
of registration in addition to transportation to the polls.
11. Membership Organizations, Trade Associations, Cooperatives and 
Corporations Without Capital Stock
    Paragraph (e) of section 114.4 generally follows previous paragraph 
(d) by specifying that these organizations may hold candidate 
appearances under the same conditions as other corporations.
12. Candidate Debates
    Provisions governing the funding of candidate debates, which were 
previously located in section 114.4(e), are now located in section 
114.4(f). These rules have been revised in two respects. First, these 
debates are no longer referred to as ``nonpartisan.'' Second, the term 
``bona fide'' has been moved so that it modifies ``newspaper, magazine 
and other periodical publication,'' instead of modifying 
``broadcaster.'' This change conforms to the wording of the candidate 
debate rules in 11 CFR 110.13.

Section 114.12  Incorporation of Political Committees; Payment of 
Fringe Benefits

    This section has been renamed to make it easier for the reader to 
locate the topics covered. In addition, paragraph (b) of section 
114.12, which pertains to candidates using corporate and labor 
organization meeting rooms, has been moved to new section 114.13.

Section 114.13  Use of Meeting Rooms

    This new section replaces previous 11 CFR 114.12(b). It permits 
corporations and labor organizations to make meeting rooms available to 
a candidate or political committee if the room is customarily made 
available to clubs, civic or community groups, and if the rooms are 
made available to any other candidate or committee upon request. It 
differs from the previous rule, however, in that it does not not refer 
to making rooms available on a ``nonpartisan basis.'' One commenter 
objected to this provision arguing that it sanctions the political use 
of labor organization facilities paid for, in part, with the forced 
dues of employees. Issues involving compulsory union dues are more 
properly within the jurisdiction of the Department of Labor.

Certification of no Effect Pursuant to 5 U.S.C. 605(b) [Regulatory 
Flexibility Act]

    The attached final rules will not, if promulgated, have a 
significant economic impact on a substantial number of small entities. 
The basis for this certification is that, few, if any, small entities 
will be affected by these final rules. In addition, any small entities 
affected are already required to comply with the requirements of the 
Federal Election Campaign Act.

List of Subjects

11 CFR Part 100

    Elections.

11 CFR Part 102

    Political committees and parties, Reporting and recordkeeping 
requirements.

11 CFR Part 109

    Elections, Reporting and recordkeeping requirements.

11 CFR Part 110

    Campaign funds, Political committees and parties.

11 CFR Part 114

    Business and industry, Elections, Labor.

    For the reasons set out in the preamble, Subchapter A, Chapter I of 
Title 11 of the Code of Federal Regulations is amended as follows:

PART 100--SCOPE AND DEFINITIONS (2 U.S.C. 431)

    1. The authority citation for Part 100 continues to read as 
follows:

    Authority: 2 U.S.C. 431, 438(a)(8).

    2. 11 CFR part 100 is amended by revising paragraph (b)(21) of 
section 100.7 to read as follows:


Sec. 100.7  Contribution (2 U.S.C. 431(8)).

* * * * *
    (b) * * *
    (21) Funds provided to defray costs incurred in staging candidate 
debates in accordance with the provisions of 11 CFR 110.13 and 
114.4(f).
* * * * *
    3. 11 CFR Part 100 is amended by revising paragraphs (b)(3) and 
(b)(23) of section 100.8 to read as follows:


Sec. 100.8  Expenditure (2 U.S.C. 431(9)).

* * * * *
    (b) * * *
    (3) Any cost incurred for activity designed to encourage 
individuals to register to vote or to vote is not an expenditure if no 
effort is or has been made to determine the party or candidate 
preference of individuals before encouraging them to register to vote 
or to vote, except that corporations and labor organizations shall 
engage in such activity in accordance with 11 CFR 114.4 (c) and (d). 
See also 11 CFR 114.3(c)(4).
* * * * *
    (23) Funds used to defray costs incurred in staging candidate 
debates in accordance with the provisions of 11 CFR 110.13 and 
114.4(f).
* * * * *

[[Page 64273]]


PART 102--REGISTRATION, ORGANIZATION, AND RECORDKEEPING BY 
POLITICAL COMMITTEES (2 U.S.C. 433)

    4. The authority citation for Part 102 continues to read as 
follows:

    Authority: 2 U.S.C. 432, 433, 438(a)(8), 441d.

    5. 11 CFR part 102 is amended by revising paragraph (c)(1) of 
section 102.4 to read as follows:


Sec. 102.4  Administrative termination (2 U.S.C. 433(d)(2)).

* * * * *
    (c) * * *
    (1) The committee has complied with the debt settlement procedures 
set forth at 11 CFR part 116.
* * * * *

PART 109--INDEPENDENT EXPENDITURES (2 U.S.C. 431(17), 434(c))

    6. The authority citation for part 109 continues to read as 
follows:

    Authority: 2 U.S.C. 431(17), 434(c), 438(a)(8), 441d.

    7. 11 CFR part 109 is amended by revising paragraph (b)(4) of 
section 109.1 to read as follows:


Sec. 109.1  Definitions (2 U.S.C. 431(17)).

* * * * *
    (b) * * *
    (4) Made with the cooperation or with the prior consent of, or in 
consultation with, or at the request or suggestion of, a candidate or 
any agent or authorized committee of the candidate--
    (i) Means any arrangement, coordination, or direction by the 
candidate or his or her agent prior to the publication, distribution, 
display, or broadcast of the communication. An expenditure will be 
presumed to be so made when it is--
    (A) Based on information about the candidate's plans, projects, or 
needs provided to the expending person by the candidate, or by the 
candidate's agents, with a view toward having an expenditure made; or
    (B) Made by or through any person who is, or has been, authorized 
to raise or expend funds, who is, or has been, an officer of an 
authorized committee, or who is, or has been, receiving any form of 
compensation or reimbursement from the candidate, the candidate's 
committee or agent;
    (ii) But does not include providing to the expending person upon 
request Commission guidelines on independent expenditures.
* * * * *

PART 110--CONTRIBUTION AND EXPENDITURE LIMITATIONS AND PROHIBITIONS

    8. The authority citation for part 110 continues to read as 
follows:

    Authority: 2 U.S.C. 431(8), 431(9), 432(c)(2), 437d(a)(8), 
438(a)(98), 441a, 441b, 441d, 441e, 441f, 441g and 441h.

    9. 11 CFR part 110 is amended by adding new section 110.12 to read 
as follows:


Sec. 110.12  Candidate appearances on public educational institution 
premises.

    (a) Rental of facilities at usual and normal charge. Any 
unincorporated public educational institution exempt from federal 
taxation under 26 U.S.C. 115, such as a school, college or university, 
may make its facilities available to any candidate or political 
committee in the ordinary course of business and at the usual and 
normal charge. In this event, the requirements of paragraph (b) of this 
section are not applicable.
    (b) Use of facilities at no charge or at less than the usual and 
normal charge. An unincorporated public educational institution exempt 
from federal taxation under 26 U.S.C. 115, such as a school, college or 
university, may sponsor appearances by candidates, candidates' 
representatives or representatives of political parties at which such 
individuals address or meet the institution's academic community or the 
general public (whichever is invited) on the educational institution's 
premises at no charge or at less than the usual and normal charge, if:
    (1) The educational institution makes reasonable efforts to ensure 
that the appearances constitute speeches, question and answer sessions, 
or similar communications in an academic setting, and makes reasonable 
efforts to ensure that the appearances are not conducted as campaign 
rallies or events; and
    (2) The educational institution does not, in conjunction with the 
appearance, expressly advocate the election or defeat of any clearly 
identified candidate(s) or candidates of a clearly identified political 
party, and does not favor any one candidate or political party over any 
other in allowing such appearances.
    10. 11 CFR part 110 is amended by revising section 110.13 to read 
as follows:


Sec. 110.13  Candidate debates.

    (a) Staging organizations. (1) Nonprofit organizations described in 
26 U.S.C. 501 (c)(3) or (c)(4) and which do not endorse, support, or 
oppose political candidates or political parties may stage candidate 
debates in accordance with this section and 11 CFR 114.4(f).
    (2) Broadcasters, bona fide newspapers, magazines and other 
periodical publications may stage candidate debates in accordance with 
this section and 11 CFR 114.4(f).
    (b) Debate structure. The structure of debates staged in accordance 
with this section and 11 CFR 114.4(f) is left to the discretion of the 
staging organization(s), provided that:
    (1) Such debates include at least two candidates; and
    (2) The staging organization(s) does not structure the debates to 
promote or advance one candidate over another.
    (c) Criteria for candidate selection. For all debates, staging 
organization(s) must use pre-established objective criteria to 
determine which candidates may participate in a debate. For general 
election debates, staging organization(s) shall not use nomination by a 
particular political party as the sole objective criterion to determine 
whether to include a candidate in a debate. For debates held prior to a 
primary election, caucus or convention, staging organizations may 
restrict candidate participation to candidates seeking the nomination 
of one party, and need not stage a debate for candidates seeking the 
nomination of any other political party or independent candidates.

PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY

    11. The authority citation for part 114 continues to read as 
follows:

    Authority: 2 U.S.C. 431(8)(B), 431(9)(B), 432, 437d(a)(8), 
438(a)(8), and 441b.

    12. 11 CFR part 114 is amended by revising paragraphs (a)(1), 
(a)(2) introductory text and (a)(2)(ii), and by adding paragraph (j) to 
section 114.1 as follows.


Sec. 114.1  Definitions.

    (a) For purposes of part 114 and section 12(h) of the Public 
Utility Holding Company Act (15 U.S.C. 791(h))--
    (1) The terms contribution and expenditure shall include any direct 
or indirect payment, distribution, loan, advance, deposit, or gift of 
money, or any services, or anything of value (except a loan of money by 
a State bank, a federally chartered depository institution (including a 
national bank) or a depository institution whose deposits and accounts 
are insured by the Federal Deposit Insurance Corporation or the 
National Credit Union Administration, if such loan is made in 
accordance with 11 CFR 100.7(b)(11)) to any candidate, political 

[[Page 64274]]
party or committee, organization, or any other person in connection 
with any election to any of the offices referred to in 11 CFR 114.2 (a) 
or (b) as applicable.
    (2) The terms contribution and expenditure shall not include--
    (i) * * *
    (ii) Registration and get-out-the-vote campaigns by a corporation 
aimed at its stockholders and executive or administrative personnel, 
and their families, or by a labor organization aimed at its members and 
executive or administrative personnel, and their families, as described 
in 11 CFR 114.3;
* * * * *
    (j) Restricted class. A corporation's restricted class is its 
stockholders and executive or administrative personnel, and their 
families, and the executive and administrative personnel of its 
subsidiaries, branches, divisions, and departments and their families. 
A labor organization's restricted class is its members and executive or 
administrative personnel, and their families. For communications under 
11 CFR 114.3, the restricted class of an incorporated membership 
organization, incorporated trade association, incorporated cooperative 
or corporation without capital stock is its members and executive or 
administrative personnel, and their families. (The solicitable class of 
a membership organization, cooperative, corporation without capital 
stock or trade association, as described in 11 CFR 114.7 and 114.8, may 
include some persons who are not considered part of the organization's 
restricted class, and may exclude some persons who are in the 
restricted class.)
    13. 11 CFR part 114 is amended by revising section 114.2 to read as 
follows:


Sec. 114.2  Prohibitions on contributions and expenditures.

    (a) National banks and corporations organized by authority of any 
law of Congress are prohibited from making a contribution, as defined 
in 11 CFR 114.1(a), in connection with any election to any political 
office, including local, State and Federal offices, or in connection 
with any primary election or political convention or caucus held to 
select candidates for any political office, including any local, State 
or Federal office. National banks and corporations organized by 
authority of any law of Congress are prohibited form making 
expenditures as defined in 11 FR 114.1(a) for communications to those 
outside the restricted class expressly advocating the election or 
defeat of one or more clearly identified candidate(s) or the candidates 
of a clearly identified political party, with respect to an election to 
any political office, including any local, State or Federal office.
    (1) Such national banks and corporations may engage in the 
activities permitted by 11 CFR part 114, except to the extent that such 
activity is foreclosed by provisions of law other than the Act.
    (2) The provisions of 11 CFR part 114 apply to the activities of a 
national bank, or a corporation organized by any law of Congress, in 
connection with local, State and Federal elections.
    (b) Any corporation whatever or any labor organization is 
prohibited from making a contribution as defined in 11 CFR 114.1(a) in 
connection with any Federal election. Except as provided at 11 CFR 
114.10, corporations and labor organizations are prohibited from making 
expenditures with respect to a Federal election (as defined in 11 CFR 
114.1(a)) for communications to those outside the restricted class 
expressly advocating the election or defeat of one or more clearly 
identified candidate(s) or the candidates of a clearly identified 
political party.
    (c) Disbursements by corporations and labor organizations for the 
election-related activities described in 11 CFR 114.3 and 114.4 will 
not cause those activities to be contributions or expenditures, even 
when coordinated with any candidate, candidate's agent, candidate's 
authorized committee(s) or any party committee to the extent permitted 
in those sections. Coordination beyond that described in 11 CFR 114.3 
and 114.4 shall not cause subsequent activities directed at the 
restricted class to be considered contributions or expenditures. 
However, such coordination may be considered evidence that could negate 
the independence of subsequent communications to those outside the 
restricted class by the corporation, labor organization or its separate 
segregated fund, and could result in an in-kind contribution. See 11 
CFR 109.1 regarding independent expenditures and coordination with 
candidates.
    (d) A candidate, political committee, or other person is prohibited 
from knowingly accepting or receiving any contribution prohibited by 
this section.
    (e) No officer or director of any corporation or any national bank, 
and no officer of any labor organization shall consent to any 
contribution or expenditure by the corporation, national bank, or labor 
organization prohibited by this section.
    (f) Facilitating the making of contributions. (1) Corporations and 
labor organizations (including officers, directors or other 
representatives acting as agents of corporations and labor 
organizations) are prohibited from facilitating the making of 
contributions to candidates or political committees, other than to the 
separate segregated funds of the corporations and labor organizations. 
Facilitation means using corporate or labor organization resources or 
facilities to engage in fundraising activities in connection with any 
federal election, such as activities which go beyond the limited 
exemptions set forth in 11 CFR 100.7, 100.8, 114.9(a) through (c) and 
114.13. A corporation does not facilitate the making of a contribution 
to a candidate or political committee if it provides goods or services 
in the ordinary course of its business as a commercial vendor in 
accordance with 11 CFR part 116 at the usual and normal charge.
    (2) Examples of facilitating the making of contributions include 
but are not limited to--
    (i) Fundraising activities by corporations (except commercial 
vendors) or labor organizations that involve--
    (A) Officials or employees of the corporation or labor organization 
ordering or directing subordinates or support staff (who therefore are 
not acting as volunteers) to plan, organize or carry out the 
fundraising project as a part of their work responsibilities using 
corporate or labor organization resources, unless the corporation or 
labor organization receives advance payment for the fair market value 
of such services;
    (B) Failure to reimburse a corporation or labor organization within 
a commercially reasonable time for the use of corporate facilities 
described in 11 CFR 114.9(d) in connection with such fundraising 
activities;
    (C) Using a corporate or labor organization list of customers, 
clients, vendors or others who are not in the restricted class to 
solicit contributions or distribute invitations to the fundraiser, 
unless the corporation or labor organization receives advance payment 
for the fair market value of the list;
    (D) Using meeting rooms that are not customarily made available to 
clubs, civic or community organizations or other groups; or
    (E) Providing catering or other food services operated or obtained 
by the corporation or labor organization, unless the corporation or 
labor organization receives advance payment for the fair market value 
of the services;
    (ii) Providing materials for the purpose of transmitting or 
delivering contributions, such as stamps, envelopes addressed to a 
candidate or political committee other than the 

[[Page 64275]]
corporation's or labor organization's separate segregated fund, or 
other similar items which would assist in transmitting or delivering 
contributions, but not including providing the address of the candidate 
or political committee;
    (iii) Soliciting contributions earmarked for a candidate that are 
to be collected and forwarded by the corporation's or labor 
organizations's separate segregated fund, except to the extent such 
contributions also are treated as contributions to and by the separate 
segregated fund; or
    (iv) Using coercion, such as the threat of a detrimental job 
action, the threat of any other financial reprisal, or the threat of 
force, to urge any individual to make a contribution or engage in 
fundraising activities on behalf of a candidate or political committee.
    (3) Facilitating the making of contributions does not include the 
following activities if conducted by a separate segregated fund--
    (i) Any activity specifically permitted under 11 CFR 110.1, 110.2, 
or 114.5 through 114.8, including soliciting contributions to a 
candidate or political committee, and making in kind contributions to a 
candidate or political committee; and
    (ii) Collecting and forwarding contributions earmarked to a 
candidate in accordance with 11 CFR 110.6.
    (4) Facilitating the making of contributions also does not include 
the following activities if conducted by a corporation or labor 
organization--
    (i) Enrolling members of a corporation's or labor organization's 
restricted class in a payroll deduction plan or check-off system which 
deducts contributions from dividend or payroll checks to make 
contributions to the corporation's or labor organization's separate 
segregated fund or an employee participation plan pursuant to 11 CFR 
114.11;
    (ii) Soliciting contributions to be sent directly to candidates if 
the solicitation is directed to the restricted class, see 11 CFR 
114.1(a)(2)(i); and
    (iii) Soliciting contributions earmarked for a candidate that are 
to be collected and forwarded by the corporation's or labor 
organization's separate segregated fund, to the extent such 
contributions also are treated as contributions to and by the separate 
segregated fund.
    14. 11 CFR part 114 is amended by revising section 114.3 to read as 
follows:


Sec. 114.3  Disbursements for communications to the restricted class in 
connection with a Federal election.

    (a) General. (1) Corporations and labor organizations may make 
communications on any subject, including communications containing 
express advocacy, to their restricted class or any part of that class. 
Corporations and labor organizations may also make the communications 
permitted under 11 CFR 114.4 to their restricted class or any part of 
that class. The activities permitted under this section may involve 
election-related coordination with candidates and political committees. 
See 11 CFR 109.1 and 114.2(c) regarding independent expenditures and 
coordination with candidates.
    (2) Incorporated membership organizations, incorporated trade 
associations, incorporated cooperatives and corporations without 
capital stock may make communications to their restricted class, or any 
part of that class as permitted in paragraphs (a)(1) and (c) of this 
section.
    (b) Reporting communications containing express advocacy. 
Disbursements for communications expressly advocating the election or 
defeat of one or more clearly identified candidate(s) made by a 
corporation, including a corporation described in paragraph (a)(2) of 
this section, or labor organization to its restricted class shall be 
reported in accordance with 11 CFR 100.8(b)(4) and 104.6.
    (c) Communications containing express advocacy. Communications 
containing express advocacy which may be made to the restricted class 
include, but are not limited to, the examples set forth in paragraphs 
(c)(1) through (c)(4) of this section.
    (1) Publications. Printed material expressly advocating the 
election or defeat of one or more clearly identified candidate(s) or 
candidates of a clearly identified political party may be distributed 
by a corporation or by a labor organization to its restricted class, 
provided that:
    (i) The material is produced at the expense of the corporation or 
labor organization; and
    (ii) The material constitutes a communications of the views of the 
corporation or the labor organization, and is not the republication or 
reproduction, in whole or in part, of any broadcast, transcript or tape 
or any written, graphic, or other form of campaign materials prepared 
by the candidate, his or her campaign committees, or their authorized 
agents. A corporation or labor organization may, under this section, 
use brief quotations from speeches or other materials of a candidate 
that demonstrate the candidate's position as part of the corporation's 
or labor organization's expression of its own views.
    (2) Candidate and party appearances. (i) A corporation may allow a 
candidate, candidate's representative or party representative to 
address its restricted class at a meeting, convention or other function 
of the corporation, but is not required to do so. A labor organization 
may allow a candidate or party representative to address its restricted 
class at a meeting, convention, or other function of the labor 
organization, but is not required to do so. A corporation or labor 
organization may bar other candidates for the same office or a 
different office and their representatives, and representatives of 
other parties addressing the restricted class. A corporation or labor 
organization may allow the presence of employees outside the restricted 
class of the corporation or labor organization who are necessary to 
administer the meeting, other guests of the corporation or labor 
organization who are being honored or speaking or participating in the 
event, and representatives of the news media.
    (ii) The candidate, candidate's representative or party 
representative may ask for contributions to his or her campaign or 
party, or ask that contributions to the separate segregated fund of the 
corporation or labor organization be designated for his or her campaign 
or party. The incidental solicitation of persons outside the 
corporation's or labor organization's restricted class who may be 
present at the meeting as permitted by this section will not be a 
violation of 11 CFR part 114. The candidate's representative or party 
representative (other than an officer, director or other representative 
of a corporation or official, member or employee of a labor 
organization) or the candidate, may accept contributions before, during 
or after the appearance at the meeting, convention or other function of 
the corporation or labor organization.
    (iii) The corporation or labor organization may suggest that 
members of its restricted class contribute to the candidate or party 
committee, but the collection of contributions by any officer, director 
or other representative of the corporation or labor organization 
before, during, or after the appearance while at the meeting, is an 
example of a prohibited facilitation of contributions under 11 CFR 
114.2(f).
    (iv) If the corporation or labor organization permits more than one 
candidate for the same office, or more than one candidate's 
representative or party representative, to address its restricted 
class, and permits the news 

[[Page 64276]]
media to cover or carry an appearance by one candidate or candidate's 
representative or party representative, the corporation or labor 
organization shall also permit the news media to cover or carry the 
appearances by the other candidate(s) for that office, or the other 
candidates' representatives or party representatives. If the 
corporation or labor organization permits a representative of the news 
media to cover or carry a candidate or candidate's representative or 
party representative appearance, the corporation or labor organization 
shall provide all other representatives of the news media with equal 
access for covering or carrying that appearance. Equal access is 
provided by--
    (A) Providing advance information regarding the appearance to the 
representatives of the news media whom the corporation or labor 
organization customarily contacts and other representatives of the news 
media upon request; and
    (B) Allowing all representatives of the news media to cover or 
carry the appearance, through the use of pooling arrangements if 
necessary.
    (3) Phone banks. A corporation or a labor organization may 
establish and operate phone banks to communicate with its restricted 
class, urging them to register and/or vote for a particular candidate 
or candidates, or to register with a particular political party.
    (4) Registration and get-out-the-vote drives. A corporation or a 
labor organization may conduct registration and get-out-the-vote drives 
aimed at its restricted class. Registration and get-out-the-vote drives 
include providing transportation to the place of registration and to 
the polls. Such drives may include communications containing express 
advocacy, such as urging individuals to register with a particular 
party or to vote for a particular candidate or candidates. Information 
and other assistance regarding registering or voting, including 
transportation and other services offered, shall not be withheld or 
refused on the basis of support for or opposition to particular 
candidates, or a particular political party.
    15. 11 CFR part 114 is amended by revising section 114.4 to read as 
follows:


Sec. 114.4  Disbursements for communications beyond the restricted 
class in connection with a Federal election.

    (a) General. A corporation or labor organization may communicate 
beyond the restricted class in accordance with this section. Any 
communications which a corporation or labor organization may make to 
the general public under paragraph (c) of this section may also be made 
to the corporation's or labor organization's restricted class and to 
other employees and their families. Communications which a corporation 
or labor organization may make only to its employees (including its 
restricted class) and their families, but not to the general public, 
are found in paragraph (b) of this section. Communications which a 
corporation or labor organization may make only to its restricted class 
are found at 11 CFR 114.3. The activities permitted under paragraphs 
(b) and (c) of this section may involve election-related coordination 
with candidates and political committees only to the extent permitted 
by this section. See 11 CFR 109.1 and 114.2(c) regarding independent 
expenditures and coordination with candidates. Incorporated membership 
organizations, incorporated trade associations, incorporated 
cooperatives and corporations without capital stock will be treated as 
corporations for the purpose of making communications beyond the 
restricted class under this section.
    (b) Communications by a corporation or labor organization to 
employees beyond its restricted class-- (1) Candidate and party 
appearances on corporate premises or at a meeting, convention or other 
function. Corporations may permit candidates, candidates' 
representatives or representatives of political parties on corporate 
premises or at a meeting, convention, or other function of the 
corporation to address or meet its restricted class and other employees 
of the corporation and their families, in accordance with the 
conditions set forth in paragraphs (b)(1)(i) through (b)(1)(viii) of 
this section. Other guests of the corporation who are being honored or 
speaking or participating in the event and representatives of the news 
media may be present. A corporation may bar all candidates, candidates' 
representatives and representatives of political parties from 
addressing or meeting its restricted class and other employees of the 
corporation and their families on corporate premises or at any meeting, 
convention or other function of the corporation.
    (i) If a candidate for the House or Senate or a candidate's 
representative is permitted to address or meet employees, all 
candidates for that seat who request to appear must be given a similar 
opportunity to appear;
    (ii) If a Presidential or Vice Presidential candidate or 
candidate's representative is permitted to address or meet employees, 
all candidates for that office who are seeking the nomination or 
election, and who meet pre-established objective criteria under 11 CFR 
110.13(c), and who request to appear must be given a similar 
opportunity to appear;
    (iii) If representatives of a political party are permitted to 
address or meet employees, representatives of all political parties 
which had a candidate or candidates on the ballot in the last general 
election or which are actively engaged in placing or will have a 
candidate or candidates on the ballot in the next general election and 
who request to appear must be given a similar opportunity to appear;
    (iv) The candidate's representative or party representative (other 
than an officer, director or other representative of a corporation) or 
the candidate, may ask for contributions to his or her campaign or 
party, or ask that contributions to the separate segregated fund of the 
corporation be designated for his or her campaign or party. The 
candidate, candidate's representative or party representative shall not 
accept contributions before, during or after the appearance while at 
the meeting, convention or other function of the corporation, but may 
leave campaign materials or envelopes for members of the audience. A 
corporation, its restricted class, or other employees of the 
corporation or its separate segregated fund shall not, either orally or 
in writing, solicit or direct or control contributions by members of 
the audience to any candidate or party in conjunction with any 
appearance by any candidate or party representative under this section, 
and shall not facilitate the making of contributions to any such 
candidate or party (see 11 CFR 114.2(f));
    (v) A corporation or its separate segregated fund shall not, in 
conjunction with any candidate, candidate representative or party 
representative appearance under this section, expressly advocate the 
election or defeat of any clearly identified candidate(s) or candidates 
of a clearly identified political party and shall not promote or 
encourage express advocacy by employees;
    (vi) No candidate, candidate's representative or party 
representative shall be provided with more time or a substantially 
better location than other candidates, candidates' representatives or 
party representatives who appear, unless the corporation is able to 
demonstrate that it is clearly impractical to provide all candidates, 
candidates' representatives and party representatives with similar 
times or locations;

[[Page 64277]]

    (vii) Coordination with each candidate, candidate's agent, and 
candidate's authorized committee(s) may include discussions of the 
structure, format and timing of the candidate appearance and the 
candidate's positions on issues, but shall not include discussions of 
the candidate's plans, projects, or needs relating to the campaign; and
    (viii) Representatives of the news media may be allowed to be 
present during a candidate, candidate representative or party 
representative appearance under this section, in accordance with the 
procedures set forth at 11 CFR 114.3(c)(2)(iv).
    (2) Candidate and party appearances on labor organization premises 
or at a meeting, convention or other function. A labor organization may 
permit candidates, candidates' representatives or representatives of 
political parties on the labor organization's premises or at a meeting, 
convention, or other function of the labor organization to address or 
meet its restricted class and other employees of the labor 
organization, and their families, in accordance with the conditions set 
forth in paragraphs (b)(1) (i) through (iii), (vi) through (viii), and 
paragraphs (b)(2) (i) and (ii) of this section. Other guests of the 
labor organization who are being honored or speaking or participating 
in the event and representatives of the news media may be present. A 
labor organization may bar all candidates, candidates' representatives 
and representatives of political parties from addressing or meeting its 
restricted class and other employees of the labor organization and 
their families on the labor organization's premises or at any meeting, 
convention or other function of the labor organization.
    (i) The candidate's representative or party representative (other 
than an official, member or employee of a labor organization) or the 
candidate, may ask for contributions to his or her campaign or party, 
or ask that contributions to the separate segregated fund of the labor 
organization be designated for his or her campaign or party. The 
candidate, candidate's representative or party representative shall not 
accept contributions before, during or after the appearance while at 
the meeting, convention or other function of the labor organization, 
but may leave campaign materials or envelopes for members of the 
audience. No official, member, or employee of a labor organization or 
its separate segregated fund shall, either orally or in writing, 
solicit or direct or control contributions by members of the audience 
to any candidate or party representative under this section, and shall 
not facilitate the making of contributions to any such candidate or 
party. See 11 CFR 114.2(f).
    (ii) A labor organization or its separate segregated fund shall 
not, in conjunction with any candidate or party representative 
appearance under this section, expressly advocate the election or 
defeat of any clearly identified candidate(s), and shall not promote or 
encourage express advocacy by its members or employees.
    (c) Communications by a corporation or labor organization to the 
general public.
    (1) General. A corporation or labor organization may make the 
communications described in paragraphs (c)(2) through (c)(5) of this 
section to the general public. The general public includes anyone who 
is not in the corporation's or labor organization's restricted class. 
The provisions of paragraph (c) of this section shall not prevent a 
qualified nonprofit corporation under 11 CFR 114.10(c) from including 
express advocacy in any communication made to the general public under 
paragraphs (c)(2) through (c)(5)(i) of this section.
    (2) Registration and voting communications. A corporation or labor 
organization may make registration and get-out-the vote communications 
to the general public, provided that the communications do not 
expressly advocate the election or defeat of any clearly identified 
candidate(s) or candidates of a clearly identified political party. The 
preparation and distribution or registration and get-out-the-vote 
communications shall not be coordinated with any candidate(s) or 
political party. A corporation or labor organization may make 
communications permitted under this section through posters, 
billboards, broadcasting media, newspapers, newsletter, brochures, or 
similar means of communication with the general public.
    (3) Official registration and voting information.
    (i) A corporation or labor organization may distribute to the 
general public, or reprint in whole and distribute to the general 
public, any registration or voting information, such as instructional 
materials, which has been produced by the official election 
administrators.
    (ii) A corporation or labor organization may distribute official 
registration-by-mail forms to the general public. A corporation or 
labor organization may distribute absentee ballots to the general 
public if permitted by the applicable State law.
    (iii) A corporation or labor organization may donate funds to State 
or local government agencies responsible for the administration of 
elections to help defray the costs of printing or distributing 
registration or voting information and forms.
    (iv) The corporation or labor organization shall not, in connection 
with any such distribution, expressly advocate the election or defeat 
of any clearly identified candidate(s) or candidates of a clearly 
identified political party and shall not encourage registration with 
any particular political party.
    (v) The reproduction and distribution of registration or voting 
information and forms shall not be coordinated with any candidate(s) or 
political party.
    (4) Voting records. A corporation or labor organization may prepare 
and distribute to the general public the voting records of Members of 
Congress, provided that the voting record and all communications 
distributed with it do not expressly advocate the election or defeat of 
any clearly identified candidate, clearly identified group of 
candidates or candidates of a clearly identified political party. The 
decision on content and the distribution of voting records shall not be 
coordinated with any candidate, group of candidates or political party.
    (5) Voter guides. A corporation or labor organization may prepare 
and distribute to the general public voter guides consisting of two or 
more candidates' positions on campaign issues, including voter guides 
obtained from a nonprofit organization which is described in 26 U.S.C. 
501 (c)(3) or (c)(4), provided that the voter guides comply with either 
paragraph (c)(5)(i) or (c)(5)(ii) (A) through (E) of this section. The 
sponsor may include in the voter guide biographical information on each 
candidate, such as education, employment positions, offices held, and 
community involvement.
    (i) The corporation or labor organization shall not contact or in 
any other way act in cooperation, coordination, or consultation with or 
at the request or suggestion of the candidates, the candidates' 
committees or agents regarding the preparation, contents and 
distribution of the voter guide, and no portion of the voter guide may 
expressly advocate the election or defeat of one or more clearly 
identified candidate(s) or candidates of any clearly identified 
political party.
    (ii) (A) The corporation or labor organization shall not contact or 
in any other way act in cooperation, coordination, or consultation with 
or at the request or suggestion of the candidates, the candidates' 
committees or agents regarding the preparation, contents and 
distribution of the voter 

[[Page 64278]]
guide, except that questions may be directed in writing to the 
candidates included in the voter guide and the candidates may respond 
in writing;
    (B) All of the candidates for a particular seat or office shall be 
provided an equal opportunity to respond, except that in the case of 
Presidential and Vice Presidential candidates the corporation or labor 
organization may choose to direct the questions only to those 
candidates who--
    (1) Are seeking the nomination of a particular political party in a 
contested primary election; or
    (2) Appear on the general election ballot in the state(s) where the 
voter guide is distributed or appear on the general election ballot in 
enough states to win a majority of the electoral votes;
    (C) No candidate may receive greater prominence in the voter guide 
than other participating candidates, or substantially more space for 
responses;
    (D) The voter guide and its accompanying materials shall not 
contain an electioneering message; and
    (E) The voter guide and its accompanying materials shall not score 
or rate the candidates' responses in such a way as to convey an 
electioneering message.
    (6) Endorsements. A corporation or labor organization may endorse a 
candidate and may communicate the endorsement to its restricted class 
through the publications described in 11 CFR 114.3(c)(1) or during a 
candidate appearance under 11 CFR 114.3(c)(2), provided that no more 
than a de minimis number of copies of the publication which includes 
the endorsement are circulated beyond the restricted class. The 
corporation or labor organization may publicly announce the endorsement 
and state the reasons therefor, in accordance with the conditions set 
forth in paragraphs (c)(6) (i) and (ii) of this section. The Internal 
Revenue Code and regulations promulgated thereunder should be consulted 
regarding restrictions or prohibitions on endorsements by nonprofit 
corporations described in 26 U.S.C. 501(c)(3).
    (i) The public announcement of the endorsement may be made through 
a press release and press conference. Disbursements for the press 
release and press conference shall be de minimis. The disbursements 
shall be considered de minimis if the press release and notice of the 
press conference is distributed only to the representatives of the news 
media that the corporation or labor organization customarily contacts 
when issuing non-political press releases or holding press conferences 
for other purposes.
    (ii) The public announcement of the endorsement may not be 
coordinated with the candidate, the candidate's agents or the 
candidate's authorized committee(s).
    (7) Candidate appearances on educational institution premises--(i) 
Rental of facilities at usual and normal charge. Any incorporated 
nonprofit educational institution exempt from federal taxation under 26 
U.S.C. 501(c)(3), such as a school, college or university, may make its 
facilities available to any candidate or political committee in the 
ordinary course of business and at the usual and normal charge. In this 
event, the requirements of paragraph (c)(7)(ii) of this section are not 
applicable.
    (ii) Use of facilities at no charge or at less than the usual and 
normal charge. An incorporated nonprofit educational institution exempt 
from federal taxation under 26 U.S.C. 501(c)(3), such as a school, 
college or university, may sponsor appearances by candidates, 
candidates' representatives or representatives of political parties at 
which such individuals address or meet the institution's academic 
community or the general public (whichever is invited) on the 
educational institution's premises at no charge or at less than the 
usual and normal charge, if:
    (A) The educational institution makes reasonable efforts to ensure 
that the appearances constitute speeches, question and answer sessions, 
or similar communications in an academic setting, and makes reasonable 
efforts to ensure that the appearances are not conducted as campaign 
rallies or events; and
    (B) The educational institution does not, in conjunction with the 
appearance, expressly advocate the election or defeat of any clearly 
identified candidate(s) or candidates of a clearly identified political 
party, and does not favor any one candidate or political party over any 
other in allowing such appearances.
    (d) Registration and get-out-the-vote drives. A corporation or 
labor organization may support or conduct voter registration and get-
out-the-vote drives which are aimed at employees outside its restricted 
class and the general public in accordance with the conditions set 
forth in paragraphs (d)(1) through (d)(6) of this section. Registration 
and get-out-the-vote drives include providing transportation to the 
polls or to the place of registration.
    (1) The corporation or labor organization shall not make any 
communication expressly advocating the election or defeat of any 
clearly identified candidate(s) or candidates of a clearly identified 
political party as part of the voter registration or get-out-the-vote 
drive.
    (2) The registration or get-out-the-vote drive shall not be 
coordinated with any candidate(s) or political party.
    (3) The registration drive shall not be directed primarily to 
individuals previously registered with, or intending to register with, 
the political party favored by the corporation or labor organization. 
The get-out-the-vote drive shall not be directed primarily to 
individuals currently registered with the political party favored by 
the corporation or labor organization.
    (4) These services shall be made available without regard to the 
voter's political preference. Information and other assistance 
regarding registering or voting, including transportation and other 
services offered, shall not be withheld or refused on the basis of 
support for or opposition to particular candidates or a particular 
political party.
    (5) Individuals conducting the registration or get-out-the-vote 
drive shall not be paid on the basis of the number of individuals 
registered or transported who support one or more particular candidates 
or political party.
    (6) The corporation or labor organization shall notify those 
receiving information or assistance of the requirements of paragraph 
(d)(4) of this section. The notification shall be made in writing at 
the time of the registration or get-out-the-vote drive.
    (e) Incorporated membership organizations, incorporated trade 
associations, incorporated cooperatives and corporations without 
capital stock. An incorporated membership organization, incorporated 
trade association, incorporated cooperative or corporation without 
capital stock may permit candidates, candidates' representatives or 
representatives of political parties to address or meet members and 
employees of the organization, and their families, on the 
organization's premises or at a meeting, convention or other function 
of the organization, in accordance with the conditions set forth in 
paragraphs (b)(1) (i) through (viii) of this section.
    (f) Candidate debates. (1) A nonprofit organization described in 11 
CFR 110.13(a)(1) may use its own funds and may accept funds donated by 
corporations or labor organizations under paragraph (f)(3) of this 
section to defray costs incurred in staging candidate debates held in 
accordance with 11 CFR 110.13.
    (2) A broadcaster, bona fide newspaper, magazine or other 
periodical publication may use its own 

[[Page 64279]]
funds to defray costs incurred in staging public candidate debates held 
in accordance with 11 CFR 110.13.
    (3) A corporation or labor organization may donate funds to 
nonprofit organizations qualified under 11 CFR 110.13(a)(1) to stage 
candidate debates held in accordance with 11 CFR 110.13 and 114.4(f).
    16. 11 CFR part 114 is amended by revising the title of section 
114.12, and by removing and reserving paragraph (b) of section 114.12 
to read as follows:


Sec. 114.12  Incorporation of political committees; Payment of fringe 
benefits.

* * * * *
    (b) [Reserved]
* * * * *
    17. 11 CFR part 114 is amended by adding section 114.13 to read as 
follows:


Sec. 114.13  Use of meeting rooms.

    Notwithstanding any other provisions of part 114, a corporation or 
labor organization which customarily makes its meeting rooms available 
to clubs, civic or community organizations, or other groups may make 
such facilities available to a political committee or candidate if the 
meeting rooms are made available to any candidate or political 
committee upon request and on the same terms given to other groups 
using the meeting rooms.

    Dated: December 8, 1995.
Danny L. McDonald,
Chairman, Federal Election Commission.
[FR Doc. 95-30381 Filed 12-13-95; 8:45 am]
BILLING CODE 6715-01-M