[Federal Register Volume 76, Number 248 (Tuesday, December 27, 2011)]
[Proposed Rules]
[Pages 80803-80817]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2011-32632]


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 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 76, No. 248 / Tuesday, December 27, 2011 / 
Proposed Rules  

[[Page 80803]]



FEDERAL ELECTION COMMISSION

11 CFR Part 114

[Notice 2011-18]


Independent Expenditures and Electioneering Communications by 
Corporations and Labor Organizations

AGENCY: Federal Election Commission.

ACTION: Notice of proposed rulemaking.

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SUMMARY: The Federal Election Commission seeks comments on proposed 
changes to its rules regarding corporate and labor organization funding 
of expenditures, independent expenditures and electioneering 
communications. These and other proposed changes are in response to a 
Petition for Rulemaking filed by the James Madison Center for Free 
Speech urging the Commission to amend its regulations in response to 
the decision of the Supreme Court in Citizens United v. FEC. The 
Commission has made no final decision on the issues presented in this 
rulemaking.

DATES: Comments must be received on or before February 3, 2012. Reply 
comments must be limited to the issues raised in the initial comments 
and must be received on or before February 17, 2012. The Commission 
will hold a hearing on these proposed rules and any modifications or 
amendments thereto that may be proposed on March 7, 2012. Anyone 
wishing to testify at the hearing must file written comments by the due 
date and must include a request to testify in the written comments.

ADDRESSES: All comments must be in writing. Comments may be submitted 
electronically via the Commission's Web site at http://www.fec.gov/fosers/. Commenters are encouraged to submit comments electronically to 
ensure timely receipt and consideration. Alternatively, comments may be 
submitted in paper form. Paper comments must be sent to the Federal 
Election Commission, Attn.: Robert M. Knop, Assistant General Counsel, 
999 E Street NW., Washington, DC 20463. All comments must include the 
full name and postal service address of the commenter, and of each 
commenter if filed jointly, or they will not be considered. The 
Commission will post comments on its Web site at the conclusion of the 
comment period.

FOR FURTHER INFORMATION CONTACT:  Mr. Robert M. Knop, Assistant General 
Counsel, or Attorneys Ms. Esther D. Heiden, Mr. Theodore M. Lutz, or 
Ms. Joanna S. Waldstreicher, 999 E Street NW., Washington, DC 20463, 
(202) 694-1650 or (800) 424-9530.

SUPPLEMENTARY INFORMATION: The Federal Election Campaign Act of 
1971,\1\ as amended, (``the Act'') prohibits corporations and labor 
organizations from using general treasury funds to make contributions 
or expenditures in connection with Federal elections. 2 U.S.C. 441b. 
The term ``contribution or expenditure'' includes any ``direct or 
indirect payment, distribution, loan, advance, deposit, or gift of 
money, or any services, or anything of value * * * to any candidate, 
campaign committee, or political party or organization,'' in connection 
with any Federal election. 2 U.S.C. 441b(b)(2); 11 CFR 114.1(a)(1); see 
also 2 U.S.C. 431(8)(A) and (9)(A); 11 CFR 100.52 and 100.111. The 
Act's prohibition on expenditures by corporations and labor 
organizations includes ``independent expenditures,'' which are 
expenditures expressly advocating the election or defeat of a clearly 
identified candidate that are not made in concert or cooperation with, 
or at the request or suggestion of, a clearly identified candidate, the 
candidate's authorized political committee, or their agents, or a 
political party committee and its agents. 2 U.S.C. 431(17); 11 CFR 
100.16(a).
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    \1\ Public Law 92-225, 86 Stat. 3 (1971); 2 U.S.C. 431 et seq.
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    The Bipartisan Campaign Reform Act of 2002 \2\ (``BCRA'') amended 
the Act to also prohibit corporations and labor organizations from 
using general treasury funds to make electioneering communications. 2 
U.S.C. 441b(b)(2). Electioneering communications are broadcast, cable, 
or satellite communications that refer to a clearly identified 
candidate for Federal office, are publicly distributed within sixty 
days before a general election or thirty days before a primary 
election, and are targeted to the relevant electorate. 2 U.S.C. 
434(f)(3)(A)(i) and (f)(3)(C); 11 CFR 100.29(a)(1)-(3). The 
Commission's regulations prohibiting independent expenditures and 
electioneering communication made by corporations and labor 
organizations are found at 11 CFR part 114. The Act and Commission 
regulations also require entities that make independent expenditures 
and electioneering communications to report certain information to the 
Commission, which the Commission then places on the public record. 2 
U.S.C. 434(c) and 434(f); 11 CFR 104.20 and 109.10. In addition, the 
Act and Commission regulations require communications expressly 
advocating the election or defeat of a clearly identified candidate, as 
well as electioneering communications, to include disclaimers stating 
who paid for the communication and whether the communication was 
authorized by a Federal candidate or a Federal candidate's authorized 
political committee or its agents. 2 U.S.C. 441d(a); 11 CFR 110.11.
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    \2\ Public Law 107-155, 116 Stat. 81 (2002).
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    In Citizens United v. FEC, the Supreme Court held that the two 
statutory provisions prohibiting corporations from making independent 
expenditures and electioneering communications violate the First 
Amendment. 558 U.S. ----, 130 S. Ct. 876 (2010). At the same time, the 
Supreme Court reaffirmed the validity of the Act's reporting, 
disclosure, and disclaimer requirements for independent expenditures 
and electioneering communications at 2 U.S.C. 434(f) and 441d(a)(3) and 
(d)(2). Id. at 913-16.\3\
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    \3\ Although Citizens United did not directly address whether 
labor organizations also have a First Amendment right to use their 
general treasury funds for independent expenditures and 
electioneering communications, the Act and Commission regulations 
treat labor organizations in a similar manner to corporations. See 2 
U.S.C. 441b; see generally CFR part 114; see also Advisory Opinion 
2010-11 (Commonsense Ten) at n.3. When addressing corporations, the 
Court in Citizens United often referred to labor organizations, and 
provided no basis for treating labor organization communications 
differently than corporate communications under the First Amendment. 
Therefore, the Commission proposes to make the same regulatory 
changes discussed in this Notice of Proposed Rulemaking for both 
corporations and labor organizations.
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    The James Madison Center for Free Speech filed a Petition for 
Rulemaking urging the Commission to amend its regulations to conform to 
the decision in Citizens United. Specifically, the Petition for 
Rulemaking asked the

[[Page 80804]]

Commission to remove 11 CFR 114.2, 114.4, 114.9, and 114.14 to the 
extent that these regulations implement the Act's ban on the use of 
general treasury funds by corporations and labor organizations to make 
independent expenditures and electioneering communications. The 
Petition for Rulemaking also asked the Commission to remove 11 CFR 
114.10, because that regulation implements an exception to the 
prohibition on independent expenditures and electioneering 
communications by corporations that is no longer necessary after 
Citizens United. Finally, the petitioners requested that the Commission 
remove 11 CFR 114.15, because that regulation relating to certain 
permissible communications by corporations and labor organizations is 
also no longer necessary after Citizens United.
    On June 21, 2011, the Commission published a Notice of Availability 
seeking public comment on the Petition for Rulemaking. Notice of 
Availability on Independent Expenditures and Electioneering 
Communications by Corporations and Labor Organizations, 76 FR 36001 
(June 21, 2011). The Commission received three comments in response to 
the Notice of Availability.
    Two commenters urged the Commission to adopt the changes 
recommended in the Petition for Rulemaking. One of these two comments 
urged the Commission to repeal portions of 11 CFR 114.2, 114.3, 114.4, 
114.9 and 114.14, insofar as these regulations implement the 2 U.S.C. 
441b bans on independent expenditures and electioneering 
communications. The comment went on to request that the Commission 
either clarify or repeal sections 114.10 and 114.15. The other comment 
supporting the petition asked the Commission to remove portions of 
sections 114.2, 114.3, 114.4, 114.9 and 114.14 to the extent that they 
are invalid after the Court's decision in Citizens United. Both of 
these commenters further stated that any NPRM issued in response to the 
Citizens United decision and the Petition for Rulemaking should address 
only those regulations clearly invalidated by the Court decision, and 
should address no other issues.
    One of the two commenters supporting the petition stated that 
further rulemaking is not appropriate at this time because the 
Commission has had only brief experience with the post-Citizens United 
legal landscape. That commenter suggested that the Commission should 
wait until ``expert research'' is conducted on a number of issues 
before engaging in broader rulemaking. Both commenters also suggested 
that the Commission should limit its rulemaking to those regulations 
directly affected by Citizens United so that the Commission can reach 
consensus.
    A third commenter urged the Commission not to amend or remove its 
regulations in response to the Petition for Rulemaking or Citizens 
United. That commenter noted that the Citizens United decision was not 
unanimous and suggested that the Court's rationale was incorrect. The 
commenter expressed concern that the Court's decision and any 
subsequent rulemaking implementing the decision would reduce 
transparency of corporate spending on Federal elections.
    The Commission is issuing this Notice of Proposed Rulemaking to 
address certain regulations implicated by the Citizens United decision 
and raised by the Petition for Rulemaking, and the comments received in 
response to its Notice of Availability. The Commission seeks comment 
on: (1) Eliminating the prohibitions in 11 CFR 114.2 and 114.14 on the 
use of corporate and labor organization general treasury funds to 
finance independent expenditures and electioneering communications; (2) 
eliminating 11 CFR 114.15, which permits corporations and labor 
organizations to make electioneering communications that are not the 
functional equivalent of express advocacy; (3) eliminating the 
prohibitions in 11 CFR 114.3 and 114.4 regarding express advocacy in 
communications to the general public and revising the standards for 
voter registration and get-out-the-vote (``GOTV'') drives; (4) revising 
11 CFR 114.9, which governs the use of corporate and labor organization 
facilities for political activity; and (5) eliminating or amending the 
regulation at 11 CFR 114.10, which governs the making of independent 
expenditures and electioneering communications by qualified nonprofit 
corporations.

I. Background

    The Act and Commission regulations prohibit corporations and labor 
organizations from using general treasury funds to make expenditures, 
including independent expenditures. 2 U.S.C. 441b(a) and (b)(2); 11 CFR 
114.2(b)(2).
    In enacting section 203 of BCRA, Congress extended the Act's 
prohibitions on the use of general treasury funds for corporate and 
labor organization expenditures under 2 U.S.C. 441b to include 
electioneering communications. 2 U.S.C. 441b(b)(2); see also 2 U.S.C. 
434(f)(3); 11 CFR 100.29, 104.3, 114.2, 114.10, and 114.14.
    In Citizens United, the Supreme Court held that the Act's 
prohibitions on financing independent expenditures and electioneering 
communications with corporate general treasury funds were 
unconstitutional. Citizens United, a non-profit corporation, in January 
2008 released a film in theaters and on DVD about then-Senator Hillary 
Clinton, who was a candidate in the Democratic Party's 2008 
Presidential primary elections. Citizens United wanted to pay cable 
companies to make the film available to digital cable subscribers for 
free through video-on-demand, which allows subscribers to view 
programming, including movies. Citizens United planned to make the film 
available within thirty days of the 2008 primary elections.
    Citizens United filed suit seeking a preliminary injunction, 
arguing that the ban on corporate electioneering communications at 2 
U.S.C. 441b(b)(2) was unconstitutional as applied to payments to make 
the film available through video-on-demand and that the disclosure and 
disclaimer requirements at 2 U.S.C. 434(f) and 441d were 
unconstitutional as applied to payments for the film and for three 
planned advertisements for the movie. The district court denied the 
request for a preliminary injunction and granted the Commission's 
motion for summary judgment. 530 F. Supp. 2d 274 (D.D.C. 2008).
    The Supreme Court invalidated section 441b's restrictions on 
corporate independent expenditures and electioneering communications. 
130 S.Ct. at 913. The Supreme Court held that the prohibition on 
corporate independent expenditures and electioneering communications is 
a ban on speech and concluded that section 441b was therefore ``subject 
to strict scrutiny.'' Id. at 898.
    The Court noted that ``[p]olitical speech is `indispensable to 
decisionmaking in a democracy, and this is no less true because the 
speech comes from a corporation rather than an individual.''' Id. at 
904 (quoting First Nat'l Bank of Boston v. Bellotti, 435 U.S. 765, 777 
(1978)). The Court stated that the anti-distortion rationale previously 
used to justify restrictions on corporate speech ``interferes with the 
`open marketplace of ideas' protected by the First Amendment.'' Id. at 
906.\4\ The Supreme Court also disagreed that corporate independent 
expenditures can be limited because of an interest in

[[Page 80805]]

protecting dissenting shareholders from being compelled to fund 
corporate political speech and held that such disagreements may be 
corrected by shareholders through the procedures of corporate 
democracy. Id. at 911. ``All speakers, including individuals and the 
media, use money amassed from the economic marketplace to fund their 
speech, and the First Amendment protects the resulting speech.'' Id. at 
905. Accordingly, the Supreme Court held that ``the rule that political 
speech cannot be limited based on a speaker's wealth is a necessary 
consequence of the premise that the First Amendment generally prohibits 
the suppression of political speech based on the speaker's identity.'' 
Id.
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    \4\ The Court therefore overruled its previous decisions in 
Austin v. Michigan Chamber of Commerce, 494 U.S. 652 (1990), and, in 
part, McConnell.
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    The Supreme Court further held that, while the government has a 
compelling interest in preventing corruption or the appearance of 
corruption, ``independent expenditures, including those made by 
corporations, do not give rise to corruption or the appearance of 
corruption.'' Id. at 909. Thus, the Court invalidated section 441b's 
restrictions on corporate independent expenditures and electioneering 
communications. Id. at 913.
    Citizens United also challenged the Act's disclaimer and disclosure 
provisions at sections 434(f) and 441d as applied to the film and three 
advertisements for the film. Under the Act, electioneering 
communications must include a statement identifying the person 
responsible for payment for the advertisement. 2 U.S.C. 441d(a). Also, 
any person who spends more than $10,000 on electioneering 
communications within a calendar year must file a disclosure statement 
with the Commission identifying the person making the electioneering 
communication, the election to which the communication pertains, and 
providing information about certain contributors who gave $1000 or more 
within a specified time period. 2 U.S.C. 434(f)(2). The Court rejected 
the challenge to the statutory requirement and upheld the reporting 
provisions because ``transparency enables the electorate to make 
informed decisions and give proper weight to different speakers and 
messages.'' Citizens United, 130 S. Ct. at 913-16. The Court recognized 
that disclaimer and disclosure requirements impose no ceiling on 
campaign activities, do not prevent anyone from speaking, and advance 
the public's ``interest in knowing who is speaking about a candidate 
shortly before an election.'' Id. at 914-15. ``Prompt disclosure of 
expenditures can provide shareholders and citizens with the information 
needed to hold corporations and elected officials accountable for their 
positions and supporters.'' Id. at 916.

II. Overview of Changes to 11 CFR Part 114: Corporate and Labor 
Organization Activity

    Commission regulations implementing the statutory provisions struck 
down by Citizens United are no longer valid. The Commission previously 
released a statement saying that it would no longer enforce statutory 
provisions or regulations prohibiting corporations and labor 
organizations from making independent expenditures and electioneering 
communications. FEC Statement on the Supreme Court's Decision in 
Citizens United v. FEC (Feb. 5, 2010) (available at http://www.fec.gov/press/press2010/20100205CitizensUnited.shtml). These regulations 
include portions of current 11 CFR part 114, which concern corporate 
and labor organization activity. In this rulemaking, the Commission 
proposes to amend 11 CFR 114.2, 114.3, 114.4, and 114.10, and to remove 
11 CFR 114.14, and 114.15. The Commission has not made any 
determination as to which, if any, of the proposed alternatives it 
should adopt in its final rules.
    The Commission proposes to change 11 CFR part 114 by: (1) Modifying 
specific language within sections of part 114 that prohibit 
corporations and labor organizations from using general treasury funds 
to finance independent expenditures and electioneering communications, 
and (2) removing language that may be superfluous, given the 
permissible uses of general treasury funds under Citizens United.
    Among the Commission's proposals are alternatives for modifying 
current 11 CFR 114.2(b)(2)(i), which prohibits corporations and labor 
organizations from making expenditures, including independent 
expenditures. The Commission proposes to modify 11 CFR 114.2(b)(2)(i) 
in one of two ways: (1) Narrow the prohibition to allow all 
expenditures except those that are coordinated with a candidate or a 
political party committee, including coordinated communications, or (2) 
narrow the prohibition to allow only communications that are not 
coordinated with a candidate or a political party committee, while 
continuing to prohibit expenditures that are not made for 
communications. These alternative approaches would also apply to the 
expenditure prohibition for voter registration and GOTV drives, 
discussed below in the proposed changes to section 114.3 (with respect 
to the restricted class) and section 114.4 (with respect to the general 
public).
    With respect to 11 CFR 114.4, the Commission proposes to remove the 
prohibition on making express advocacy communications to those outside 
the restricted class, but would maintain the restrictions on 
coordinating with candidates and political parties when making 
communications to those outside the restricted class. Regarding 11 CFR 
114.9, the Commission seeks comment on whether 11 CFR 114.9 should be 
revised and, if so, how.\5\ Additionally, the Commission seeks comment 
on whether to repeal or revise certain provisions of 11 CFR 114.10. 
These provisions currently exempt qualified nonprofit corporations 
(``QNC'') from the pre-Citizens United ban on corporate independent 
expenditures and electioneering communications. The proposed revisions 
would apply to all corporations and labor organizations, not limited to 
QNCs, making independent expenditures and electioneering 
communications.\6\ The existing provisions currently reference other 
Commission regulations that apply to QNCs making independent 
expenditures or electioneering communications, including references to 
the reporting requirements for independent expenditures and 
electioneering communications under 11 CFR 104.4(a), 109.10(b), and 
104.20(b), and the disclaimer provisions of 11 CFR 110.11. The 
Commission seeks comment on whether to remove section 114.10 or to 
revise section 114.10 to expand these rules to apply to all 
corporations and labor organizations that make such independent 
expenditures or electioneering communications. Finally, the Commission 
proposes to remove 11 CFR 114.14, and 114.15, which implement 
exceptions to the general prohibition against corporate and labor 
organization funding of independent expenditures and electioneering 
communications.
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    \5\ While the Commission proposes to retain the reporting 
requirements currently at 11 CFR 114.3(b), which require 
corporations and labor organizations to report disbursements for 
communications containing express advocacy made to the restricted 
class, it recognizes that a communication containing express 
advocacy may now be made both to the general public and the 
restricted class, thereby triggering different thresholds for 
reporting obligations.
    \6\ Corporations that are foreign nationals, government 
contractors, or national banks, and corporations that are organized 
by authority of any law of Congress continue to be prohibited from 
making independent expenditures or electioneering communications. 2 
U.S.C. 441b, 441c and 441e.

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[[Page 80806]]

III. Proposed 11 CFR 114.2(b)--Prohibitions on Certain Expenditures

    The Commission regulation at 11 CFR 114.2(b) implements 2 U.S.C. 
441b(a) by prohibiting corporations and labor organizations from making 
expenditures, including independent expenditures.\7\ This rule also 
prohibits corporations and labor organizations from making payments for 
electioneering communications unless certain criteria are met. The 
Supreme Court's decision in Citizens United invalidated the 
prohibitions on corporate independent expenditures and electioneering 
communications in 2 U.S.C. 441b(a).\8\ Accordingly, certain portions of 
11 CFR 114.2(b) are no longer valid. The Commission therefore proposes 
to revise this regulation to remove the prohibitions on independent 
expenditures and electioneering communications.
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    \7\ An ``independent expenditure'' is defined by the Act as ``an 
expenditure by a person-- (A) expressly advocating the election or 
defeat of a clearly identified candidate; and (B) that is not made 
in concert or cooperation with or at the request or suggestion of 
such candidate, the candidate's authorized political committee, or 
their agents, or a political party committee or its agents.'' 2 
U.S.C. 431(17); see also 11 CFR 100.16(a). Express advocacy is 
defined in 11 CFR 100.22 as ``any communication that--(a) Uses 
phrases such as ``vote for the President,'' ``re-elect your 
Congressman,'' ``support the Democratic nominee,'' ``cast your 
ballot for the Republican challenger for U.S. Senate in Georgia,'' 
``Smith for Congress,'' ``Bill McKay in '94,'' ``vote Pro-Life'' or 
``vote Pro-Choice'' accompanied by a listing of clearly identified 
candidates described as Pro-Life or Pro-Choice, vote against Old 
Hickory,'' ``defeat'' accompanied by a picture of one or more 
candidate(s), ``reject the incumbent,'' or communications of 
campaign slogan(s) or individual word(s), which in context can have 
no other reasonable meaning than to urge the election or defeat of 
one or more clearly identified candidate(s), such as posters, bumper 
stickers, advertisements, etc. which say ``Nixon's the One,'' 
``Carter '76,'' ``Reagan/Bush'' or ``Mondale!''; or (b) When taken 
as a whole and with limited reference to external events, such as 
the proximity to the election, could only be interpreted by a 
reasonable person as containing advocacy of the election or defeat 
of one or more clearly identified candidate(s) because--(1) The 
electoral portion of the communication is unmistakable, unambiguous, 
and suggestive of only one meaning; and (2) Reasonable minds could 
not differ as to whether it encourages actions to elect or defeat 
one or more clearly identified candidate(s) or encourages some other 
kind of action.''
    \8\ See discussion above regarding the applicability of the 
Citizens United holding to labor organizations.
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A. 11 CFR 114.2(b)(2)(i)--Prohibition on Corporate and Labor 
Organization Expenditures

    Current 11 CFR 114.2(b)(2)(i) prohibits corporations and labor 
organizations from making ``expenditures,'' as defined in 11 CFR part 
100, subpart D. With certain exceptions, this prohibition applies to 
all expenditures, whether they are independent, coordinated, or any 
other form of expenditure, including in-kind contributions.\9\
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    \9\ An in-kind contribution is an expenditure. 11 CFR 
100.111(e)(1). All corporate and labor organization contributions, 
including in-kind contributions, continue to be prohibited after 
Citizens United. Coordinated communications and coordinated 
expenditures continue to be prohibited because they are a form of 
in-kind contribution. 11 CFR 109.20(b) and 109.21(b).
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    The Commission is considering two alternatives for revising 11 CFR 
114.2(b)(2)(i). Both alternatives would permit corporations and labor 
organizations to make expenditures from their general treasury funds 
for communications that are not coordinated with a candidate or 
political party, and both alternatives would maintain the prohibition 
on corporate and labor organization expenditures for all activities 
that are coordinated with a candidate or political party as defined in 
11 CFR 109.20 or 109.21. The alternatives differ in that Alternative A 
would permit corporations and labor organizations to make all types of 
expenditures from their general treasuries for any non-coordinated 
activities, whether or not they are communications, while Alternative B 
would maintain the prohibition on non-expressive expenditures by 
corporations and labor organizations regardless of whether they are 
coordinated with a candidate or political party.
    Alternative A proposes treating all expenditures the same on the 
ground that Citizens United did not distinguish among different types 
of expenditures so long as they are made independently of any campaign 
or political party. By contrast, Alternative B suggests distinguishing 
between expenditures for communications and other types of 
expenditures, on the ground that the Court's holding in Citizens United 
struck down prohibitions on political speech as inconsistent with the 
First Amendment, but did not address non-communicative conduct because 
``independent expenditures'' are defined as communications. The 
Commission invites comment on which of the two approaches reflects the 
more appropriate response to Citizens United and why. In considering 
both alternatives, the Commission seeks comment on whether it should 
distinguish between communicative and non-communicative expenditures 
and how. For example, how should the Commission treat corporate or 
labor organization expenditures for transporting voters to polling 
places as part of a non-coordinated get-out-the-vote (``GOTV'') 
campaign supporting or opposing a specific candidate which includes 
both communicative and non-communicative elements? Such expenses might 
include the driver's salary, vehicle rental, and fuel, and, if workers 
were brought in from another geographical area to assist in the 
efforts, the payment for their travel, lodging, and food costs.
Alternative A--Permit Corporations and Labor Organizations To Make 
Expenditures Except for Coordinated Expenditures and Coordinated 
Communications
    Alternative A would remove the existing broad prohibition on 
corporate and labor organization expenditures from general treasury 
funds and replace it with a regulation specifically prohibiting only 
(a) expenditures that are coordinated with a candidate or a political 
party committee and (b) coordinated communications. Alternative A would 
permit independent corporate and labor organization communications that 
contain express advocacy, which is one component of the statutory and 
regulatory definition of an ``independent expenditure'' (e.g., a 
television advertisement that urges its audience to vote for a clearly 
identified Senate candidate), and those that do not contain express 
advocacy (e.g., a mass mailing that exhorts readers to vote for 
unspecified candidates who support a particular cause). Expenditures 
that are not for communications would also be permitted under 
Alternative A as long as these expenditures are not in-kind 
contributions, such as expenditures that are coordinated with 
candidates or political party committees. Permissible expenditures 
would include: (a) Payment for transportation of volunteers to campaign 
events, (b) payment for expenses of voter registration drives, (c) the 
provision of food to campaign volunteers, or (d) the provision of 
babysitting services to enable voters supporting a particular candidate 
or political party to vote.
    The Commission seeks comment on Alternative A. Does Alternative A 
eliminate too much or too little of the prohibition on corporate and 
labor organization expenditures? Does Alternative A provide clear 
guidance on the types of expenditures corporations and labor 
organizations may make in accordance with Citizens United?
    The Commission also seeks comment on whether Alternative A should 
distinguish between expenditures for communications and other types of 
non-coordinated expenditures. If spending by corporations or labor 
organizations--

[[Page 80807]]

whether for communicative or non-communicative expenditures--is neither 
coordinated with a federal candidate or political party nor is an in-
kind contribution, can it be banned post-Citizens United? Does 
Alternative A's removal of the ban on non-coordinated corporate and 
labor organization expenditures accurately reflect the Court's holding 
and rationale?
Alternative B--Permit Corporations and Labor Organizations To Make 
Independent Expenditures But Not Coordinated Communications or Non-
Communicative Expenditures
    Alternative B would amend the prohibition on corporate and labor 
organization expenditures to permit independent expenditures from 
general treasury funds for non-coordinated communications, but would 
continue to prohibit non-communicative expenditures (including in-kind 
contributions) and coordinated communications. Alternative B would 
distinguish expenditures for communications from other types of 
expenditures. Under Alternative B, corporations and labor organizations 
would be permitted to make expenditures from general treasury funds 
solely for ``political speech presented to the electorate that is not 
coordinated with a candidate.'' Citizens United, 130 S. Ct. at 910. 
Coordinated communications as well as all non-communicative 
expenditures would continue to be prohibited.
    The Commission seeks comment on whether the decision in Citizens 
United should be read to apply to non-communicative activities, and 
whether Alternative B is consistent with Citizens United. Is 
Alternative B specific enough as to the types of expenditures 
corporations and labor organizations may make? To what extent does the 
Act contemplate the distinction between speech and non-speech 
expenditures? Would maintaining the ban on non-speech expenditures 
further the government's interest in preventing corruption or the 
appearance of corruption?

B. 11 CFR 114.2(b)(2)(ii) and (b)(3)--Prohibition on Corporate and 
Labor Organization Express Advocacy Communications and Electioneering 
Communications to Those Outside the Restricted Class

    Currently, 11 CFR 114.2(b)(2)(ii) prohibits corporations and labor 
organizations from ``making expenditures with respect to a Federal 
election * * * for communications to those outside the restricted class 
that expressly advocate the election or defeat of one or more clearly 
identified candidate(s) or the candidates of a clearly identified 
political party.'' Because the Supreme Court held in Citizens United 
that corporations and labor organizations have a constitutional right 
to make expenditures for communications containing express advocacy to 
those not in their restricted classes, the Commission proposes to 
remove paragraph (b)(2)(ii).
    Similarly, 11 CFR 114.2(b)(3) prohibits corporations and labor 
organizations from making payments for electioneering communications to 
those outside their restricted classes unless permissible under 11 CFR 
114.10 or 114.15.\10\ Because Citizens United held that corporations 
may make electioneering communications, including to audiences outside 
their restricted classes, the Commission proposes to remove paragraph 
(b)(3) of section 114.2. The Commission seeks comment on this proposal.
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    \10\ This provision does not apply to State party committees and 
State candidate committees that incorporate under 26 U.S.C. 
527(e)(1), provided that: (1) The committee is not a political 
committee as defined in 11 CFR 100.5; (2) the committee incorporated 
for liability purposes only; (3) the committee does not use any 
funds donated by corporations or labor organizations to make 
electioneering communications; and (4) the committee complies with 
the reporting requirements for electioneering communications at 11 
CFR part 104.
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IV. Proposed 11 CFR 114.3--Disbursements for Communications to the 
Restricted Class by Corporations and Labor Organizations in Connection 
With a Federal Election

    Current 11 CFR 114.3 implements certain statutory exceptions to the 
general ban on contributions and expenditures by corporations and labor 
organizations. Before Citizens United was decided, corporations and 
labor organizations could make communications containing express 
advocacy only to their restricted classes. 2 U.S.C. 441b(a) and 
(b)(2)(A). Section 114.3 implements these provisions of the Act, and 
sets out the requirements and restrictions on those communications to 
the restricted class, including publications; candidate and party 
appearances; phone banks; and voter registration and GOTV drives.
    The Commission's current regulations at 11 CFR 114.4 set out the 
restrictions and prohibitions for communications by corporations and 
labor organizations beyond the restricted class. The Act establishes 
specific reporting requirements for communications made by corporations 
and labor organizations to their restricted class and exempts 
disbursements for such communications from the definition of 
expenditure, whether or not the communications contain express 
advocacy. 2 U.S.C. 431(9)(B)(iii). The Commission proposes to maintain 
the current structure in which 11 CFR 114.3 addresses disbursements for 
communications made to the restricted class and 11 CFR 114.4 addresses 
disbursements for communications made to those outside the restricted 
class, with certain proposed changes discussed below. The Commission 
requests comment on this approach. Should the Commission maintain the 
separate regulations as they are now, or divide them in a different 
way? Would combining 11 CFR 114.3 and 114.4 be more readily 
understandable to the public now that corporations and labor 
organizations can make express advocacy communications beyond the 
restricted class?

A. 11 CFR 114.3(b)--Reporting of Disbursements for Express Advocacy 
Communications

1. Reporting of Disbursements for Express Advocacy Communications 
Solely to the Restricted Class Under Current 11 CFR 114.3(b)
    The proposed rules would not change the requirement, currently at 
11 CFR 114.3(b), that corporations and labor organizations report 
disbursements for communications containing express advocacy made to 
the restricted class in accordance with 11 CFR 100.134 and 104.6. The 
Act exempts express advocacy communications made by corporations and 
labor organizations to their restricted class from the definition of 
``expenditure.'' 2 U.S.C. 431(9)(B)(iii). However, the Act requires 
that corporations and labor organizations that make disbursements for 
express advocacy communications to the restricted class in excess of 
$2,000 for any election file quarterly reports in an election year and 
pre-election reports for any general election. 2 U.S.C. 431(9)(B)(iii), 
434(a)(4)(A)(i) and (ii). This statutory requirement is implemented in 
the Commission regulations at current 11 CFR 100.134(a), 104.6(a), and 
114.3(b).
2. Reporting of Disbursements for Express Advocacy Communications 
Beyond the Restricted Class
    As discussed in Section VII.B below, proposed 11 CFR 114.10(b) 
would require corporations and labor organizations that make 
independent expenditures for communications to persons outside the 
restricted class to report these independent expenditures

[[Page 80808]]

under 2 U.S.C. 434(c). This provision requires that ``every person 
(other than a political committee) who makes independent expenditures 
in an aggregate amount or value in excess of $250 during a calendar 
year'' report such expenditures to the Commission.
    The Commission does not propose to change the language of current 
11 CFR 114.3(b) because Citizens United upheld disclosure requirements, 
and did not affect the provision of the Act at 2 U.S.C. 431(9)(B)(iii) 
that exempts disbursements for express advocacy communications to the 
restricted class from the definition of ``expenditure'' and establishes 
the reporting requirement for such communications. The Commission 
requests comment on this approach.
3. Reporting of Express Advocacy Communications Both to the Restricted 
Class and Outside the Restricted Class
    Prior to Citizens United, corporations and labor organizations were 
prohibited from making payments for independent expenditures directed 
to individuals outside of the restricted class. Now that the Court has 
struck down the prohibition on independent expenditures, the Commission 
seeks comment on how a corporation or labor organization should report 
spending for communications containing express advocacy directed both 
to the restricted class and outside the restricted class. If a 
corporation or labor organization makes a single disbursement for a 
communication containing express advocacy that is made both to the 
general public, which is an independent expenditure, and the restricted 
class, which is exempt from the definition of expenditure, should the 
fact that the communication went outside the restricted class result in 
the entire disbursement being treated as an independent expenditure, 
subject to the relevant reporting requirements? Alternatively, should 
the corporation or labor organization allocate the expense between the 
cost of the communication made to the restricted class and the cost of 
the communication made outside the restricted class and report the 
allocated expenses separately under the two reporting regimes?

B. Proposed 11 CFR 114.3(c)(4)--Voter Registration and Get-Out-the-Vote 
Drives

    Current 11 CFR 114.3(c)(4) provides that a corporation or a labor 
organization may conduct voter registration and GOTV drives ``aimed at 
its restricted class.'' Section 114.3(c)(4) states that voter 
registration and GOTV drives include providing transportation to the 
place of registration and to the polls. The current provision further 
permits such drives to include communications containing express 
advocacy, ``such as urging individuals to register with a particular 
political party or to vote for a particular candidate.'' 11 CFR 
114.3(c)(4). However, the current provision prohibits corporations and 
labor organizations from withholding or refusing to give information 
and other assistance regarding registering or voting ``on the basis of 
support for or opposition to particular candidates, or a particular 
political party.'' Id.
    The Commission is proposing two alternatives to revise paragraph 
(c)(4). Alternative A would also remove the existing requirement that 
corporations or labor organizations may not withhold or refuse to give 
information or other assistance on the basis of support for, or 
opposition to, particular candidates or a particular political party, 
but maintain the exemption from the definition of ``contribution or 
expenditure'' under 2 U.S.C. 441b(b)(2)(B) for voter registration and 
GOTV drives that meet that requirement. Alternative B would not make 
any changes to current 11 CFR 114.3(c)(4) except the technical change, 
and therefore retain the current prohibition on withholding or refusing 
to give information and other assistance regarding registering or 
voting ``on the basis of support for or opposition to particular 
candidates, or a particular political party.'' The Commission invites 
comment on which, if either, of the two proposals better comports with 
Citizens United and the Act.
Alternative A--Remove Requirement That Corporations and Labor 
Organizations Not Withhold or Refuse To Provide Assistance on the Basis 
of Support for, or Opposition to, Particular Candidates or a Particular 
Party
    This alternative would remove the prohibition on withholding or 
refusing to provide information or other assistance regarding 
registering or voting based on support for or opposition to particular 
candidates, or a particular party. Instead, Alternative A would 
prohibit corporations and labor organizations from conducting voter 
registration or GOTV drives only if the activity is coordinated with a 
candidate or political party. As discussed in Section III.A above, one 
approach to revising the Commission's regulations would be to eliminate 
the existing broad prohibition on corporate and labor organization 
expenditures, and instead prohibit only those expenditures that are 
coordinated with a candidate or a political party committee. Similarly, 
Alternative A would permit corporations and labor organizations to 
conduct voter registration and GOTV drives without restriction, so long 
as they were not coordinated with a candidate or political party.
    Alternative A, however, would adhere to the statutory exception to 
the definition of ``contribution or expenditure'' for nonpartisan voter 
registration and GOTV drives. See 2 U.S.C. 441b(b)(2)(B). Under 
existing regulations, corporations and labor organizations do not have 
to report to the Commission disbursements for voter registration and 
GOTV drives that meet the conditions of the statutory exception, since 
such disbursements are neither contributions nor expenditures. While 
voter registration and GOTV drives are permissible under Alternative A, 
regardless of whether the drives meet the conditions of the statutory 
exception, corporations or labor organizations conducting drives that 
meet those conditions are not required to report disbursements for 
those drives. Thus, Alternative A would specify that disbursements for 
voter registration and GOTV drives are not contributions or 
expenditures if the drives are conducted in such a manner that the 
corporation or labor organization does not withhold or refuse to 
provide information or other assistance regarding registering or voting 
on the basis of support for or opposition to particular candidates or a 
particular political party, consistent with the statutory exception in 
2 U.S.C. 441b(b)(2)(B).
    The Commission requests comment on this proposal. Is Alternative A 
consistent with Citizens United? Does the proposal eliminate too much 
or too little in implementing the remaining prohibitions on corporate 
and labor organization expenditures? Is this consistent with the 
uniform treatment of all expenditures under Alternative A? Should this 
reporting regime inform the Commission's choice of alternatives for 
amending section 114.4?
    In Citizens United, the Court rejected an ``intricate case-by-case 
determination'' to determine whether political speech is banned, given 
that a corporation has a constitutional right to speak. 130 S. Ct. at 
892. By not weighing the expressive elements of expenditures, does 
Alternative A avoid the need for such ``intricate case-by-case 
determinations''?
Alternative B--Retain Existing Regulation at 11 CFR 114.3(c)(4)
    Alternative B would make no changes to the existing regulation at 
11 CFR 114.3(c)(4) other than the technical change discussed above. As 
discussed

[[Page 80809]]

in Section III.A above, one alternative for revising the Commission's 
regulations to comply with the decision in Citizens United would be to 
specifically exclude expenditures for communications (i.e., 
``independent expenditures'') from the broader prohibition on 
expenditures, while still prohibiting corporate and labor organization 
expenditures such as in-kind contributions, coordinated expenditures, 
or expenditures that do not involve communications. Like proposed 
Alternative B for 11 CFR 114.2(b)(2)(i) discussed above, Alternative B 
for 11 CFR 114.3(c)(4) would also distinguish between speech and non-
speech activity.
    In promulgating the current regulation at 11 CFR 114.3(c)(4), the 
Commission distinguished between the ```pure speech' aspects of the 
drives [that] may be partisan,'' and the non-speech activity aspects of 
the drives that ``must be conducted in a nonpartisan manner.'' 1977 E&J 
at 105 (1977). The Commission's implementation of the nonpartisan 
requirement of 2 U.S.C. 441b(b)(2)(B) reflects this distinction between 
``pure speech'' and non-speech elements of voter registration and GOTV 
drives. Because Alternative B takes the approach that Citizens United 
did not overturn the prohibition on corporate and labor organization 
disbursements that do not involve political speech in the form of 
independent expenditures and electioneering communications, under 
Alternative B the Commission would continue to regulate the non-speech 
aspects of voter registration and GOTV drives in order to implement 2 
U.S.C. 441b. These expenses might include, for example, the driver's 
salary, vehicle rental and fuel, and travel, lodging, and food costs in 
instances where volunteers or workers were brought in from other 
locations to participate in a voter registration or GOTV drive. These 
expenses might also include office leasing and other general office 
costs, as well as child care costs for voter registration and GOTV 
workers and for voters.
    In Alternative B, as in Alternative A, a corporation or labor 
organization would continue to be able to make voter registration or 
GOTV communications, including express advocacy, to its restricted 
class under 11 CFR 114.3(c)(4). Furthermore, in Alternative B, as in 
Alternative A, voter registration and GOTV drives conducted in 
accordance with proposed 11 CFR 114.3(c)(4) would remain exempt from 
the definition of ``expenditure'' under 2 U.S.C. 441b(b)(2)(B). 
However, Alternative B would maintain the prohibition on withholding or 
refusing to provide information or other assistance regarding 
registering or voting based on support for or opposition to particular 
candidates, or a particular party. Additionally, under Alternative B, 
corporations and labor organizations would remain prohibited from 
engaging in non-communicative activities related to voter registration 
and GOTV drives other than those conducted in accordance with proposed 
11 CFR 114.3(c)(4).
    The Commission also notes the significance of this reporting regime 
for the Commission's choice of alternatives for amending section 114.4, 
discussed below. Corporations and labor organizations are not required 
to report disbursements associated with qualifying voter registration 
or GOTV drives, such as driver salaries and the cost of fuel, while 
persons who file reports with the Commission must report all 
expenditures for communications (both independent expenditures and 
electioneering communications). Does the statute implicitly distinguish 
between communications and voter registration and GOTV drives?
    The Commission requests comments on this approach. Is Alternative B 
consistent with the holding in Citizens United? Is it appropriate to 
interpret Citizens United's holding as related only to pure speech and 
therefore not to extend these holdings to these types of non-
communicative conduct? Alternatively, do all aspects of voter 
registration and GOTV drives possess inherently communicative qualities 
that would prohibit such regulation? The Commission seeks comment on 
where voter registration and GOTV drives fall on the spectrum ranging 
from speech to conduct.

V. Proposed 11 CFR 114.4--Disbursements for Communications by 
Corporations and Labor Organizations Beyond the Restricted Class in 
Connection With a Federal Election

    Current 11 CFR 114.4 sets out a number of exceptions to the 
prohibitions on corporations and labor organizations making 
expenditures. The regulation permits certain communications and 
activities directed outside the restricted class, both to employees 
outside the restricted class and the general public. This section also 
permits certain communications made to those outside the restricted 
class to be coordinated, to a limited extent, with candidates. 
Specifically, section 114.4(b) covers candidate and party appearances 
on corporate or labor organization premises or at a meeting, 
convention, or other function that is attended by employees outside the 
restricted class.
    Current section 114.4(c) identifies the types of communications 
that corporations and labor organizations can make to the general 
public, namely: (1) Voter registration and voting communications; (2) 
official registration and voting information; (3) voting records; (4) 
voter guides; (5) endorsements; (6) candidate appearances on 
educational institution premises; and (7) electioneering 
communications, and the relevant requirements and restrictions that 
apply to each. The proposed changes to 11 CFR 114.4 would eliminate the 
prohibition on express advocacy communications made outside the 
restricted class, but would maintain the restrictions on coordination 
with candidates and political parties in communications outside the 
restricted class.

A. Proposed 11 CFR 114.4(a)--General

    Current 11 CFR 114.4(a) provides that any communications that a 
corporation or labor organization makes to the general public may also 
be made to the restricted class and to its employees outside the 
restricted class. Paragraph (a) also provides that communications 
described in section 114.4 may be coordinated with candidates and 
political committees only to the extent permitted in section 114.4. The 
Commission is proposing minor changes to the language of paragraph (a) 
to clarify the meaning of the provisions.

B. Proposed 11 CFR 114.4(c)--Communications by a Corporation or Labor 
Organization to the General Public

    Current 11 CFR 114.4(c) addresses communications by corporations 
and labor organizations to the general public, and currently includes 
specific provisions on seven types of communications, listed above, 
that corporations and labor organizations may make to the general 
public. Each of the provisions within paragraph (c) prohibits 
coordinating the communication with a candidate or a candidate's 
committee or agent, with the exception of paragraph (c)(7) addressing 
candidate appearances on incorporated non-profit educational 
institution premises and paragraph (c)(8) regarding electioneering 
communications. The Commission proposes to restructure paragraph (c) by 
adding to paragraph (c)(1) a general prohibition on a corporation or 
labor organization acting in cooperation, consultation, or concert with 
or at the request or suggestion of a candidate, a candidate's committee 
or

[[Page 80810]]

agent, or a political party committee or its agent regarding the 
preparation, contents, and distribution of any of the specific types of 
communications described at proposed 11 CFR 114.4(c)(2) through (c)(6). 
This language would replace the separate prohibitions on coordination 
contained in each of the specific paragraphs at current 11 CFR 
114.4(c)(2) through (c)(6). The Commission seeks comment on this 
approach.
1. Removal of Express Advocacy Prohibition
    Proposed 11 CFR 114.4(c)(1) would remove the current language 
specifically permitting qualified nonprofit corporations (``QNCs'') 
under 11 CFR 114.10(c) to include express advocacy in any communication 
made to the general public. See Section VII, below. After Citizens 
United, all corporations and labor organizations may include express 
advocacy in any communication made to the general public so long as the 
communication is not coordinated with candidates or political parties. 
Hence, this language is now superfluous.
    Current 11 CFR 114.4(c)(2) through (c)(6) govern several types of 
communications that corporations and labor organizations may make to 
the general public and set out the conditions under which corporations 
and labor organizations may make them. These communications are: voter 
registration and GOTV communications; official voter registration and 
voting information; voting records; voter guides; and endorsements. 
Proposed 11 CFR 114.4(c)(1) would include a reference to proposed 11 
CFR 114.10 to make clear that corporations and labor organizations are 
no longer limited to the specific types of communications listed in 
these paragraphs. Nonetheless, the Commission proposes to retain these 
paragraphs to provide specific information about some of the types of 
election-related communications that corporations and labor 
organizations may make. All five of these paragraphs currently prohibit 
corporations or labor organizations from expressly advocating the 
election or defeat of clearly identified candidates in these 
communications. Proposed 11 CFR 114.4(c)(2) through (6) would eliminate 
the prohibition on express advocacy contained in each of the current 
paragraphs when these communications are not coordinated with any 
candidate or political party. The Commission requests comment on these 
proposed deletions.
2. Proposed 11 CFR 114.4(c)(2)--Voter Registration and GOTV 
Communications
    Current 11 CFR 114.4(c)(2) contains a list of media through which 
corporations and labor organizations may make voter registration and 
voting communications to the general public. The list currently 
includes: posters, billboards, broadcasting media, newspapers, 
newsletters, brochures, and ``similar means of communication with the 
general public.'' 11 CFR 114.4(c)(2). The Commission proposes to add 
mail, Internet communications, emails, text messages, and telephone 
calls to the list. These changes are intended to reflect additional 
common means of political communication. The Commission requests 
comment on these proposed additions. Are there any other methods of 
communications that should specifically be included in the list? 
Alternatively, is a list of media through which corporations and labor 
organizations may make registration and voting communications to the 
general public necessary at all or, should the Commission modify the 
regulation simply to state generically that such communications to the 
general public are permissible?
3. Proposed 11 CFR 114.4(c)(5)--Voter Guides
    Current 11 CFR 114.4(c)(5) sets forth certain requirements for and 
restrictions on the preparation and distribution of voter guides by 
corporations and labor organizations to the general public. This 
provision currently requires that voter guides present the positions of 
two or more candidates on campaign issues. It further requires that all 
candidates for a particular seat or office be given an equal 
opportunity to respond, and prohibits the corporation or labor 
organization from giving greater prominence to any one candidate or 
substantially more space for a candidate's responses, and from 
including an electioneering message in the voter guide or accompanying 
materials. Paragraph (c)(5) would be revised by eliminating the 
requirement that the voter guide contain the positions of two or more 
candidates, or that all candidates for a particular office or seat be 
permitted to respond. The prohibitions on giving one candidate more 
prominence or space on electioneering communications would also be 
removed. The Commission proposes these deletions to conform its voter 
guide rules to the holding in Citizens United that corporations and 
labor organizations may expressly advocate the election or defeat of 
candidates in communications to the general public and may make 
electioneering communications so long as such communications are not 
coordinated with candidates. The Commission requests comments on these 
proposed changes.
4. Proposed 11 CFR 114.4(c)(6)--Endorsements
    Current 11 CFR 114.4(c)(6) permits corporations and labor 
organization to endorse candidates, and sets out certain requirements 
and restrictions on such endorsements. Current 11 CFR 114.4(c)(6) 
permits a corporation or labor organization to communicate the 
endorsement only to its restricted class through specific types of 
publications, and prohibits these publications from being distributed 
to the general public other than at a de minimis level. Current 11 CFR 
114.4(c)(6) then sets out the circumstances under which a corporation 
and labor organization may announce an endorsement to the general 
public. The Commission proposes to remove these restrictions on the 
manner of announcing a corporation or labor organization's endorsement 
of a candidate in proposed 11 CFR 114.4(c)(6) consistent with Citizens 
United. The Commission requests comments on these proposed deletions.
5. Proposed 11 CFR 114.4(c)(8)--Electioneering Communications
    Current 11 CFR 114.4(c)(8) permits corporations and labor 
organizations to make electioneering communications to the general 
public only to the extent permitted under current 11 CFR 114.15. 
Section 114.15 permits corporations and labor organizations to make 
electioneering communications, unless the communication is susceptible 
of no reasonable interpretation other than as an appeal to vote for or 
against a clearly identified Federal candidate. As noted below, the 
Commission proposes to remove Section 114.15.
    Current 11 CFR 114.4(c)(8) further permits QNCs to make 
electioneering communications to the general public in accordance with 
current 11 CFR 114.10. Section 114.10(d)(2), in turn, permits QNCs to 
make any electioneering communication. Because Citizens United struck 
down the prohibition on corporations and labor organizations making 
electioneering communications, the exception to the prohibition on 
electioneering communications at 11 CFR 114.4(c)(8) is superfluous. 
Therefore, the Commission proposes to eliminate current 11 CFR 
114.4(c)(8) in its entirety. The Commission seeks comment on this 
approach.

[[Page 80811]]

C. Proposed 11 CFR 114.4(d)--Voter Registration and GOTV Drives

    Current 11 CFR 114.4(d) permits corporations and labor 
organizations to conduct voter registration and GOTV drives aimed at 
the general public. It states that registration and GOTV drives include 
providing transportation to the place of registration and to the polls. 
The current provision prohibits such drives from including 
communications containing express advocacy and states that the drives 
may not be coordinated with any candidate or political party. The 
current provision also prohibits corporations or labor organizations 
(1) from withholding or refusing to give information and other 
assistance regarding registering or voting on the basis of support for, 
or opposition to, particular candidates or a particular political 
party; (2) from directing the drives primarily at individuals based on 
registration with a particular party; and (3) from paying individuals 
conducting such drives on the basis of number of individuals registered 
or transported to the polls who support a particular candidate or 
candidates or political party.
    In light of Citizens United, the Commission is proposing two 
alternatives to revise 11 CFR 114.4(d). Both Alternatives A and B would 
remove the prohibition on communications expressly advocating the 
election or defeat of candidates or political parties made in 
connection with a voter registration or GOTV drive. Alternative A, 
however, as discussed in more detail below, would also remove all of 
the existing requirements and prohibitions regarding voter registration 
and GOTV drives, with the exception of the prohibition on coordination 
with candidates or political parties. Alternative A would maintain the 
exemption from the definition of ``expenditure'' under 2 U.S.C. 
431(9)(B)(ii) and 11 CFR 100.133 for voter registration and GOTV drives 
that meet the existing requirements and prohibitions. In contrast, as 
discussed in more detail below, Alternative B would retain current 11 
CFR 114.4(d), except that it would remove the prohibition on express 
advocacy currently at 11 CFR 114.4(d)(1). The Commission invites 
comment on which, if either, of the two proposals better comports with 
Citizens United and why.
Alternative A--Remove All Restrictions on Voter Registration and GOTV 
Drives Except for the Prohibition on Coordinating With Candidates and 
Political Parties
    This alternative would remove all the requirements for and 
restrictions on voter registration and GOTV drives at current 11 CFR 
114.4(d)(3) through (6), while retaining the prohibition on 
coordinating drives with candidates or political parties, currently at 
11 CFR 114.4(d)(2). As discussed in Sections III.A and IV.E above, one 
approach to revising the Commission's regulations to make them 
consistent with Citizens United would be to eliminate the existing 
broad prohibition on corporate and labor organization expenditures, and 
instead prohibit only those expenditures that are coordinated with a 
candidate or a political party committee, including coordinated 
communications, or in-kind contributions. Similarly, Alternative A 
would permit corporations and labor organizations to conduct voter 
registration and GOTV drives without restriction, as long as they were 
not coordinated with a candidate or political party.
    Alternative A, however, would maintain the statutory exemption from 
the definition of ``expenditure'' at 2 U.S.C. 431(9)(B)(ii) for voter 
registration and GOTV drives. Under the Commission's existing rules, 
corporations and labor organizations do not have to report to the 
Commission disbursements for voter registration and GOTV drives that 
meet the conditions of the statutory exception because such 
disbursements are neither contributions nor expenditures. While voter 
registration and GOTV drives are permissible under Alternative A 
regardless of whether the drives meet the conditions of the statutory 
exception, corporations or labor organizations conducting drives that 
meet those conditions are not required to report disbursements for 
those drives. Proposed Alternative A would state that disbursements for 
voter registration and GOTV drives are not expenditures if the drive 
meets the requirements for, and restrictions on, voter registration and 
GOTV drives that are currently located at 11 CFR 114.4(d)(1) and (3)-
(6). These requirements would include the prohibition on express 
advocacy, as well as the prohibition on withholding or refusing to 
provide information or other assistance regarding registration or 
voting on the basis of support for, or opposition to, particular 
candidates or a particular political party.
    The Commission requests comment on this proposal. Is this 
alternative appropriately consistent with Citizens United? Does the 
proposal eliminate too much or too little in implementing the remaining 
prohibitions on corporate and labor organization expenditures?
Alternative B--Retain Existing Regulation at 11 CFR 114.4(d) Except for 
the Prohibition on Express Advocacy
    Alternative B would make no changes to the existing regulation at 
11 CFR 114.4(d), except to remove the prohibition on corporations and 
labor organizations making communications expressly advocating the 
election or defeat of clearly identified candidates currently at 11 CFR 
114.4(d)(1). As discussed in Sections III.A and IV.E above, Alternative 
B would exclude expenditures for communications from the prohibition on 
expenditures, while still prohibiting other corporate and labor 
organization expenditures, such as in-kind contributions, coordinated 
expenditures, and expenditures that are not for communications.
    After Citizens United, corporations and labor organizations are no 
longer prohibited from making independent expenditures for 
communications. Because Alternative B is based on the interpretation 
that Citizens United did not disturb the prohibition on corporate and 
labor organization expenditures that do not involve communications, 
Alternative B would continue to implement the Act's restrictions on the 
non-speech aspects of voter registration and GOTV drives, such as the 
costs associated with driving voters to registration sites or the polls 
or ``providing babysitting services to enable voters to go to the 
polls.'' 1977 E&J at 106. Therefore, under Alternative B, three current 
prohibitions would remain in effect: (1) Directing voter drives at 
individuals based on party affiliation; (2) withholding or refusing to 
provide information or other assistance regarding registration or 
voting on the basis of support for, or opposition to, particular 
candidates or a particular political party; and (3) paying individuals 
conducting voter drives based on the number of individuals registered 
or transported who support a particular candidate or political party. 
Voter registration and GOTV drives conducted in accordance with 
proposed Alternative B would remain exempt from the definition of 
``expenditure'' under 2 U.S.C. 431(9)(B)(ii).
    The current rule at 11 CFR 114.4, like the rule at 114.3, 
recognizes the distinction between expenditures for communications and 
for non-communicative activities. Current

[[Page 80812]]

114.4(c)(2) specifically allows for voter registration or GOTV 
communications to the general public, provided that the communications 
do not contain express advocacy, while current 114.4(d), following 2 
U.S.C. 441b(b)(2)(B), exempts voter registration and GOTV drives 
conducted in a nonpartisan manner from the definition of 
``expenditure.'' In Alternative B, as in Alternative A, a corporation 
or labor organization would be able to make voter registration or GOTV 
communications, including express advocacy, to the general public under 
proposed 11 CFR 114.4(c)(2). Furthermore, under both Alternative A and 
Alternative B, voter registration and GOTV drives conducted in 
accordance with proposed 11 CFR 114.4(d) would remain exempt from the 
definition of ``expenditure'' in 2 U.S.C. 441b(b)(2)(B). However, under 
Alternative B, corporations and labor organizations would continue to 
be prohibited from engaging in non-communicative activities related to 
voter registration and GOTV drives other than those conducted in 
accordance with proposed 11 CFR 114.4(d).
    The Commission requests comments on this proposal. Is this 
alternative consistent with Citizens United? Does the proposal 
eliminate too much or too little in implementing the remaining 
prohibitions on corporate and labor organization expenditures?

VI. Proposed 11 CFR 114.9--Use of Corporate and Labor Organization 
Facilities

    The use of corporate or labor organization facilities in connection 
with Federal elections is generally treated as both a contribution and 
an expenditure under the Act. Section 114.9 establishes certain limited 
exceptions to this requirement for minimal usage of these facilities by 
certain individuals, and also requires corporations and labor 
organization to obtain reimbursement from individuals who use their 
facilities in connection with Federal elections for more than minimal 
usage. 1977 E&J at 115; see also Explanation and Justification for 
Final Rules for Internet Communications, 71 FR 18589, 18611 (Apr. 12, 
2006); Advisory Opinion 1985-26 (General Mills) (concluding that, under 
114.9(c), an employee's failure to reimburse a corporation for the 
corporation's distribution of campaign materials could result in 
prohibited corporate expenditure). Citizens United invalidated the 
prohibition on corporate and labor organization independent 
expenditures at 2 U.S.C. 441b(a). The Citizens United decision did not 
address the prohibition on contributions by corporations and labor 
organizations at 2 U.S.C. 441b.
    The Commission seeks comment on whether 11 CFR 114.9 should be 
revised in light of the Citizens United decision. If so, how should the 
Commission revise the regulation? To what extent should 11 CFR 114.9 be 
revised, if at all, to account for the continued validity of the 
contribution ban at 2 U.S.C. 441b?

VII. Proposed Revision of 11 CFR 114.10--Corporations and Labor 
Organizations Making Independent Expenditures and Electioneering 
Communications

    The Commission promulgated 11 CFR 114.10 primarily in response to 
the Supreme Court's decision in MCFL v. FEC, 479 U.S. 238 (1986). In 
MCFL, the Court considered the application of the independent 
expenditure prohibition in 2 U.S.C. 441b to MCFL, a nonprofit 
corporation organized to promote certain ideological views. The Court 
concluded that, because MCFL did not have the potential to corrupt the 
electoral process, it did not implicate the concerns that prompted 
regulation of corporations by Congress. See MCFL, 479 U.S. at 259. In 
response to MCFL, the Commission adopted 11 CFR 114.10, creating a 
regulatory exception to the independent expenditure ban in section 441b 
for organizations with the same characteristics as MCFL, referred to as 
``qualified nonprofit corporations'' or ``QNCs.'' After Congress 
enacted BCRA's electioneering communications provisions in 2002, the 
Commission added an exception in 11 CFR 114.10 for QNCs making 
electioneering communications. Because Citizens United struck down the 
statutory bans on independent expenditures and electioneering 
communications for all corporations and labor organizations, the 
regulatory exceptions for QNCs are now superfluous.
    To determine if the Commission should revise 11 CFR 114.10, or 
remove the provision in its entirety, the Commission seeks comments on 
a proposal to remove current paragraphs (a) through (c) and (e)(1), as 
these regulations specifically apply only to QNCs. The Commission 
proposes to redesignate the provision currently at 11 CFR 114.10(d) and 
revise it to recognize explicitly the right of all corporations and 
labor organizations to make independent expenditures and electioneering 
communications. The Commission further proposes to retain and 
redesignate the regulations at 11 CFR 114.10(e)(2) through (i), and 
would expand them to apply to all corporations and labor organizations 
that make independent expenditures and electioneering communications. 
These provisions include: (1) The reporting requirements for QNCs 
making independent expenditures or electioneering communications at 11 
CFR 114.10(e); (2) the solicitation disclaimer requirement at 11 CFR 
114.10(f); (3) the non-authorization disclaimer requirement at 11 CFR 
114.10(g); (4) the provision in 11 CFR 114.10(h) permitting QNCs to 
establish segregated bank accounts for disbursements for electioneering 
communications; and (5) 11 CFR 114.10(i), which states that nothing in 
section 114.10 authorizes any organization exempt from taxation under 
26 U.S.C. 501(a) to carry out any activity that it is prohibited from 
undertaking by the Internal Revenue Code. The Commission seeks comment 
as to whether maintaining any or all of these regulations is necessary 
or appropriate.

A. Proposed 11 CFR 114.10(a)--Independent Expenditures and 
Electioneering Communications by Corporations and Labor Organizations

    Current 11 CFR 114.10(d) specifically permits QNCs to make 
independent expenditures and electioneering communications. Because 
Citizens United made independent expenditures and electioneering 
communications permissible for all corporations and labor 
organizations, proposed 11 CFR 114.10(a) would expand certain 
provisions of current 11 CFR 114.10(d) to cover all corporations and 
labor organizations. As discussed above, the Commission seeks comments 
on whether it would be helpful for corporations and labor organizations 
to have a regulation explicitly permitting them to make independent 
expenditures and electioneering communications. Should the regulation 
instead more broadly state that corporations and labor organizations 
may make any communication in connection with an election so long as it 
is not a coordinated communication under 11 CFR 109.21? Alternatively, 
would it be sufficient to remove the current prohibitions in 11 CFR 
114.2(b)(2) and (b)(3) on corporations and labor organizations making 
disbursements for independent expenditures and electioneering 
communications from general treasury funds?

B. Proposed 11 CFR 114.10(b)--Reporting Independent Expenditures and 
Electioneering Communications

    Current 11 CFR 114.10(e)(2) sets forth the reporting requirements 
for QNCs making independent expenditures and

[[Page 80813]]

electioneering communications. Proposed 11 CFR 114.10(b) would expand 
this language to include independent expenditures and electioneering 
communications made by all corporations and labor organizations. 
Proposed 11 CFR 114.10(b)(1) would state that corporations and labor 
organizations that make independent expenditures aggregating in excess 
of $250 with respect to a given election in a calendar year must file 
reports according to 11 CFR 104.4(a) and 109.10(b) through (e). Section 
104.4(a) requires that ``every person that is not a political committee 
must report independent expenditures in accordance with paragraphs (e) 
and (f) of this section and 11 CFR 109.10'' (emphasis added).
    Proposed 11 CFR 114.10(b)(2) would state that corporations or labor 
organizations that make electioneering communications aggregating in 
excess of $10,000 in a calendar year must file statements as required 
by 11 CFR 104.20(b). Section 104.20(b), in turn, requires that ``every 
person who has made an electioneering communication * * * aggregating 
in excess of $10,000 during any calendar year'' file a statement on FEC 
Form 9, disclosing information set out in paragraph (c) of that section 
(emphasis added). Given that the definition of ``person'' already 
covers corporations and labor organizations, is it necessary or helpful 
to have an additional regulation that specifically states that 
corporations and labor organizations are subject to these requirements? 
See 2 U.S.C. 431(11); 11 CFR 100.10.

C. Proposed 11 CFR 114.10(c)--Solicitation; Disclosure of Use of 
Contributions for Political Purposes

    Current 11 CFR 114.10(f) requires that solicitations for donations 
by QNCs disclose to potential donors that their donations may be used 
for political purposes, such as supporting or opposing candidates.
    Proposed 11 CFR 114.10(c) would maintain this requirement, and 
would expand it to cover solicitations for donations that may be used 
for political purposes where the solicitations are made by any 
corporation or labor organization.
    The requirement at current section 114.10(f) derives from the 
Supreme Court's decision in MCFL. Explanation and Justification for 
Final Rules on Express Advocacy; Independent Expenditures; Corporate 
and Labor Organization Expenditures, 60 FR 35292, 35303 (July 6, 1995). 
In holding the prohibition on independent expenditures unconstitutional 
as applied to QNCs, the Supreme Court reasoned that ``[t]he rationale 
for regulation is not compelling with respect to independent 
expenditures by [MCFL]'' because ``[i]ndividuals who contribute to 
appellee are fully aware of its political purposes, and in fact 
contribute precisely because they support those purposes.'' MCFL, 479 
U.S. at 260-61. ``Given a contributor's awareness of the political 
activity of [MCFL], as well as the readily available remedy of refusing 
further donations, the interest [of] protecting contributors is simply 
insufficient to support Sec.  441b's restriction on the independent 
spending of MCFL.'' Id. at 262 (emphasis added).
    In Citizens United, the Court upheld the disclaimer requirements of 
2 U.S.C. 441d(d)(2) and the disclosure requirements of 2 U.S.C. 434(f). 
In analyzing the disclaimer requirements, the Court recognized that 
``[t]he disclaimers required by [BCRA] Sec.  311 `provide the 
electorate with information,' McConnell, 540 U.S. at 196, and thereby 
`insure that the voters are fully informed' about the person or group 
who is speaking, Buckley, 424 U.S. at 76.'' Citizens United, 130 S. Ct. 
at 915 (additional citation omitted). Regarding disclosure 
requirements, the Court cited its previous explanation that 
``disclosure is a less restrictive alternative to more comprehensive 
regulations of speech.'' Id. The Court further recognized that 
``disclosure permits citizens and shareholders to react to the 
[political] speech of corporate entities in a proper way. This 
transparency enables the electorate to make informed decisions and give 
proper weight to different speakers and messages.'' Id. at 916.
    Although the Supreme Court's decision in Citizens United to strike 
down the independent expenditure and electioneering communications ban 
in section 441b appears to have rendered the QNC exception unnecessary, 
is the solicitation disclosure requirement in MCFL still important in 
ensuring that those solicited have the information necessary to make 
informed decisions about how their donations may be used? The 
Commission seeks comment as to whether any or all of these proposed 
regulations are necessary. If the statutory basis for such a 
requirement remains sound, does language in the Court's opinion in 
Citizens United regarding disclosure and disclaimers mean that the 
Commission may and should continue to have a specific requirement that 
QNCs provide disclosure to potential donors and contributors? If so, 
should the rules at current 11 CFR 114.10(c) defining ``QNC'' be 
retained so that these entities will be apprised of this requirement? 
Should the Commission establish a broader disclosure requirement so 
that all corporations and labor organizations must disclose to those 
they solicit that any money given to the corporation or labor 
organization may be used for political purposes, such as making 
communications supporting or opposing candidates? Should the Commission 
require corporations and labor organizations to state in such 
disclosures that the funds received may be used specifically for 
independent expenditures or electioneering communications, as opposed 
to for ``political purposes'' generally?
    Because Citizens United struck down the statutory bans on 
independent expenditures and electioneering communications for all 
corporations and labor organizations, is the regulatory requirement 
that QNC include a solicitation disclaimer now superfluous? Should the 
Commission remove 11 CFR 114.10(f) in its entirety instead of revising 
it?

D. Proposed 11 CFR 114.10(d)--Non-Authorization Notice

    Current 11 CFR 114.10(g) requires that QNCs comply with the 
disclaimer requirements of 11 CFR 110.11. The Court in Citizens United 
upheld the disclaimer provisions of 2 U.S.C. 441d. 130 S. Ct. at 914-
16. Section 441d(a) requires that certain communications include 
statements identifying the person who paid for the communication and 
whether the communication is authorized by any candidate or candidate's 
committee, and sets out the requirements for such statements. These 
communications include all public communications by any person that 
expressly advocate the election or defeat of a clearly identified 
candidate, and all electioneering communications by any person. 2 
U.S.C. 441d(a). The Act defines ``person'' to include corporations and 
labor organizations. 2 U.S.C. 431(11).
    Section 110.11 implements the requirements of 2 U.S.C. 441d. 
Because the requirements of 2 U.S.C. 441d and 11 CFR 110.11 apply to 
public communications containing express advocacy and electioneering 
communications made by any person, the provision applies equally to 
corporations and labor organizations. Therefore, if a corporation or 
labor organization makes an independent expenditure or electioneering 
communication as permitted after Citizens United, the communication 
must include a statement identifying, among other things, the name and

[[Page 80814]]

address of the corporation or labor organization that paid for the 
communication. Proposed 11 CFR 114.10(d) would follow current 11 CFR 
114.10(g), but would expand it to require that all corporations and 
labor organizations comply with 11 CFR 110.11. Although the 
requirements at 2 U.S.C. 441d and 11 CFR 110.11 already apply to 
corporations and labor organizations because they are considered 
``persons'' under the Act, should proposed section 114.10(d) explicitly 
state that all corporations and labor organizations must comply with 
the requirements of 11 CFR 110.11?

E. Proposed 11 CFR 114.10(e)--Segregated Bank Account

    The Commission proposes a regulation to state affirmatively that a 
corporation or labor organization may establish a segregated bank 
account for funds to be used for the making of electioneering 
communications. This regulation would not affect other restrictions and 
limitations applicable to those that make electioneering 
communications. Current 11 CFR 114.10(h) states that a QNC may, but is 
not required to, establish a segregated bank account into which it 
deposits only funds donated or otherwise provided by individuals, as 
described in 11 CFR part 104, and from which it makes disbursements for 
electioneering communications. Proposed 11 CFR 114.10(e) would adopt 
this language and expand it to state that all corporations or labor 
organizations may establish such accounts.\11\ The current regulation 
at 11 CFR 114.10(h) implements 2 U.S.C. 434(f)(2)(E) and (F), which 
sets out the reporting requirements for every person making 
disbursements for electioneering communications paid out of segregated 
bank accounts. Aside from this reporting requirement, however, the Act 
does not otherwise affirmatively state that a person may establish such 
a segregated account. Furthermore, 11 CFR 114.10(h) is the only place 
in the current regulations that affirmatively states that a person may, 
but is not required to, set up such a segregated bank account, and this 
regulation is limited to QNCs.
---------------------------------------------------------------------------

    \11\ This provision applies to corporation and labor 
organizations but not to political committees, because, by 
definition, political committees do not make electioneering 
communications. 2 U.S.C. 434(f)(3); see also 11 CFR 104.20(b).
---------------------------------------------------------------------------

    The Commission requests comment on the proposed regulation that 
would affirmatively state that any corporation or labor organization 
may, but is not required to, set up a segregated bank account for the 
purpose of making electioneering communications, as described in 2 
U.S.C. 434(f)(2)(E). Is such a regulation necessary, given that the 
reporting requirements in the Act already contemplate the existence of 
such a segregated bank account? Should the Commission adopt a broader 
regulation that would permit, but not require, any person (other than a 
political committee) to set up such an account? Alternatively, should 
the Commission require corporations and labor organizations that make 
independent expenditures and electioneering communications to use a 
segregated bank account?

F. Proposed 11 CFR 114.10(f)--Activities Prohibited by the Internal 
Revenue Code

    Current 11 CFR 114.10(i) states that nothing in section 114.10 
shall be construed to authorize any organization exempt from taxation 
under 26 U.S.C. 501(a) to carry out any activity that it is prohibited 
from undertaking by the Internal Revenue Code. The Commission proposes 
to move this provision to new section 114.10(f). The language referring 
specifically to QNCs would be removed, for the reasons discussed above. 
The Commission requests comments on this proposed change.

VIII. Proposed Removal of 11 CFR 114.14 and 114.15

    The Commission proposes to remove existing 11 CFR 114.14 and 114.15 
in their entirety. Together, these sections prohibit corporations and 
labor organizations from providing general treasury funds to other 
persons to make electioneering communications that are the functional 
equivalent of express advocacy.
    The Court held in Citizens United that corporations may make 
electioneering communications. Because 11 CFR 114.14 is a prophylactic 
regulation designed to prohibit corporations and labor organizations 
from doing through other persons what the corporation or labor 
organization could not do directly, the decision in Citizens United 
could be interpreted to have rendered unnecessary the prohibition in 11 
CFR 114.14. The Commission therefore seeks comment on whether it should 
remove the prohibition in this section.
    In considering this issue, the Commission notes that section 434(f) 
of the Act requires that entities making electioneering communications 
report certain information to the Commission, including the 
identification of persons who have provided funds to segregated bank 
accounts for the purpose of making such communications. 2 U.S.C. 
434(f). The Commission promulgated 11 CFR 104.20(c)(7) to implement 
this statutory requirement. Explanation and Justification for Final 
Rules on Bipartisan Campaign Reform Act of 2002 Reporting, 68 FR 404, 
413 (Jan. 3, 2003). In doing so, the Commission interpreted the statute 
to treat funds provided for the purpose of making electioneering 
communications as ``donations,'' rather than as ``contributions'' under 
the Act. Id. Should this same interpretation of section 434(f) apply to 
corporate and labor organization funds provided to other persons for 
the purpose of making electioneering communications? If such funds are 
donations, they would not violate the prohibition on corporate and 
labor organization contributions in section 441b(a) of the Act. The 
Commission seeks comment on whether there should be a distinction drawn 
between the treatment of funds provided by individuals to other persons 
for electioneering communications as donations in 11 CFR 104.20(c)(7) 
and the treatment of funds provided by corporations and labor 
organizations to other persons for electioneering communications as 
contributions in 2 U.S.C. 441b(b)(2). If so, why, and if not, why not?
    In addition to current section 114.14, the Commission seeks comment 
on the proposed removal of section 114.15, which provides a safe harbor 
for certain electioneering communications made by corporations and 
labor organizations. If the prohibition in section 114.14 is removed as 
proposed, should any portion of section 114.15 be retained? Is section 
114.15 relevant to any remaining valid Commission regulations, such 
that they should not be removed? The Commission notes that, if the 
Commission decides to remove section 114.15, references to this section 
in other rules will need to be deleted. If the Commission decides to 
remove section 114.15, should the Commission consider revising other 
relevant cross-references?

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

    The Commission certifies that the attached proposed rules, if 
adopted, would not have a significant economic impact on a substantial 
number of small entities. There are two bases for this certification. 
First, there are few small entities that would be affected by these 
proposed rules. The Commission's proposed revisions may affect some 
for-profit corporations, labor organizations, individuals, and some 
non-profit organizations. Individuals and labor organizations are not 
``small entities'' under 5 U.S.C. 601(6). Many non-profit

[[Page 80815]]

organizations that might use general treasury funds to make independent 
expenditures or electioneering communications are not ``small 
organizations'' under 5 U.S.C. 601(4) because they are not financed by 
a small identifiable group of individuals, but rather rely on 
contributions from a large number of individuals to fund operations and 
activities.
    Second, the proposed rules would not have a significant economic 
impact on the small entities affected by this rulemaking. Overall, the 
proposed rules would relieve a funding restriction that the current 
rules place on some corporations and labor organizations. The proposed 
rules would allow small entities to engage in activity they were 
previously prohibited from funding with corporation or labor 
organization funds. Thus, while one effect of the proposed rule would 
be to increase substantially the number of corporations and labor 
organizations that use general treasury funds to make independent 
expenditures or electioneering communications, these entities will do 
so voluntarily and not because of any new Federal requirement to do so. 
Although they would incur some costs in complying with the obligation 
to report independent expenditures and electioneering communications, 
these costs would not be very great and thus would not have a 
significant economic impact on the small entities affected by this 
rulemaking. In fact, the obligation for corporations and labor 
organizations to report electioneering communications should not be 
burdensome because the trigger to report electioneering communications 
remains high. Further, because qualified non-profit corporations would 
continue to be able to make independent expenditures and electioneering 
communications just as they have done before, their reporting 
obligations will not change or become more burdensome because of this 
rulemaking. Therefore, the attached rule would not have a significant 
economic impact on a substantial number of small entities.

List of Subjects in 11 CFR Part 114

    Business and industry, elections, Labor.

    For the reasons set out in the preamble, the Federal Election 
Commission proposes to amend Subchapter A of Chapter I of Title 11 of 
the Code of Federal Regulations as follows:

PART 114--CORPORATE AND LABOR ORGANIZATION ACTIVITY

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

    Authority:  2 U.S.C. 431(8), 431(9), 432, 434, 437d(a)(8), 
438(a)(8), 441b.

    2. Section 114.2 is amended by revising the section heading and 
paragraph (b)(2), and removing paragraph (b)(3), to read as follows:


Sec.  114.2  Prohibitions on contributions and expenditures.

* * * * *
    (b) * * *
    Alternative A for paragraph (b)(2).
    (2) Corporations and labor organizations are prohibited from making 
coordinated expenditures as defined in 11 CFR 109.20 and coordinated 
communications as defined in 11 CFR 109.21.
    Alternative B for paragraph (b)(2).
    (2) Corporations and labor organizations are prohibited from making 
expenditures as defined in 11 CFR part 100, subpart D, except for 
payments for communications that are not coordinated communications as 
defined in 11 CFR 109.21.
* * * * *
    3. In Sec.  114.3, paragraph (c)(4) is revised to read as follows:


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

* * * * *
    (c) * * *
    Alternative A for paragraph (c)(4).
    (4) Registration and get-out-the-vote drives.
    (i) Voter registration and get-out-the-vote drives permitted. A 
corporation or 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. The corporation or labor organization 
must not act in cooperation, consultation, or concert with or at the 
request or suggestion of any candidates, candidates' committees or 
agents, or political party regarding the planning, organization, 
timing, or administration of a voter registration or get-out-the-vote 
drive.
    (ii) Disbursements for certain voter registration and get-out-the-
vote drives not expenditures or contributions. Disbursements for voter 
registration and get-out-the-vote drives are not contributions or 
expenditures, provided that the drive is conducted so that information 
and other assistance regarding registering or voting, including 
transportation and other services offered, is not withheld or refused 
on the basis of support for or opposition to particular candidates, or 
a particular political party. See 2 U.S.C. 441b(b)(2)(B). 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.
    Alternative B for paragraph (c)(4).
    (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.
    4. Section 114.4 is amended by revising the section heading, 
paragraphs (a), (c)(1), (c)(2), (c)(3)(i), (c)(4), (c)(5), (c)(6) and 
(d), and by removing paragraphs (c)(3)(iv), (c)(3)(v), and (c)(8) to 
read as follows:


Sec.  114.4  Disbursements for communications by corporations and labor 
organizations 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. 
Communications that 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 set forth in paragraph (b) of this 
section. Any communications that a corporation or labor organization 
may make to the general public are set forth in paragraph (c) of this 
section, and may also be made to the corporation's or labor 
organization's restricted class and to other employees and their 
families. Communications that a corporation or labor organization may 
make only to its restricted class are set forth at 11 CFR 114.3. The 
activities described in paragraphs (b) and (c) of this section may be 
coordinated with candidates and political committees only to the extent 
permitted by this section. See 11 CFR 100.16, 109.21, and 114.2(c) 
regarding independent expenditures and coordination with candidates.

[[Page 80816]]

Incorporated membership organizations, incorporated trade associations, 
incorporated cooperatives, and corporations without capital stock will 
be treated as corporations for the purpose of this section.
* * * * *
    (c) Communications by a corporation or labor organization to the 
general public.
    (1) General. A corporation or labor organization may make 
independent expenditures or electioneering communications pursuant to 
11 CFR 114.10. This section addresses specific communications, 
described in paragraphs (c)(2) through (c)(7) of this section, a 
corporation or labor organization may make to the general public. The 
general public includes anyone who is not in the corporation's or labor 
organization's restricted class. The corporation or labor organization 
must not act in cooperation, consultation, or concert with or at the 
request or suggestion of any candidates, candidates' committees or 
agents, or political party committee or party committee's agent 
regarding the preparation, contents and distribution of any of the 
communications described in paragraphs (c)(2) through (7) of this 
section.
    (2) Voter registration and get-out-the-vote communications. A 
corporation or labor organization may make voter registration and get-
out-the-vote communications to the general public. A corporation or 
labor organization may make communications permitted under this 
paragraph (c)(2) through posters, billboards, broadcasting media, 
newspapers, newsletters, brochures, mail, Internet communications, 
emails, text messages, telephone calls, 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, that has been produced by the official election 
administrators.
* * * * *
    (4) Voting records. A corporation or labor organization may prepare 
and distribute to the general public the voting records of Members of 
Congress.
    (5) Voter guides. A corporation or labor organization may prepare 
and distribute to the general public voter guides, including voter 
guides obtained from a nonprofit organization that is described in 26 
U.S.C. 501(c)(3) or (c)(4).
    (6) Endorsements. A corporation or labor organization may endorse a 
candidate, and may communicate the endorsement to its restricted class 
or to the general public. 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).
* * * * *
    Alternative A for paragraph (d).
    (d) Voter registration and get-out-the-vote drives.
    (1) Voter registration and get-out-the-vote drives permitted. A 
corporation or labor organization may support or conduct voter 
registration and get-out-the-vote drives that are aimed at employees 
outside its restricted class and the general public. The corporation or 
labor organization must not act in cooperation, consultation, or 
concert with or at the request or suggestion of any candidates, 
candidates' committees or agents, or political party regarding the 
planning, organization, timing, or administration of a voter 
registration or get-out-the-vote drive. Voter registration and get-out-
the-vote drives include providing transportation to the polls or to the 
place of registration.
    (2) Disbursements for certain voter registration and get-out-the-
vote drives not expenditures. Voter registration or get-out-the-vote 
drives that are conducted in accordance with paragraphs (d)(2)(i) 
through (d)(2)(v) of this section are not expenditures.
    (i) 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.
    (ii) The voter 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.
    (iii) 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.
    (iv) Individuals conducting the voter 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.
    (v) 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.
    Alternative B for paragraph (d).
    (d) Voter registration and get-out-the-vote drives. A corporation 
or labor organization may support or conduct voter registration and 
get-out-the-vote drives that 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)(5) of this 
section. Voter 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 must not act in 
cooperation, consultation, or concert with or at the request or 
suggestion of any candidates, candidates' committees or agents, or 
political party regarding the planning, organization, timing, or 
administration of a voter registration or get-out-the-vote drive.
    (2) The voter 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.
    (3) 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.
    (4) Individuals conducting the voter 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.
    (5) The corporation or labor organization shall notify those 
receiving information or assistance of the requirements of paragraph 
(d)(3) of this section. The notification shall be made in writing at 
the time of the registration or get-out-the-vote drive.

[[Page 80817]]

    5. Section 114.10 is revised to read as follows:


Sec.  114.10  Corporations and labor organizations making independent 
expenditures and electioneering communications.

    (a) General. Corporations and labor organizations may make 
independent expenditures, as defined in 11 CFR 100.16, and 
electioneering communications, as defined in 11 CFR 100.29.
    (b) Reporting independent expenditures and electioneering 
communications. (1) Corporations and labor organizations that make 
independent expenditures aggregating in excess of $250 with respect to 
a given election in a calendar year shall file reports as required by 
11 CFR 104.4(a) and 11 CFR 109.10(b) through (e).
    (2) Corporations and labor organizations that make electioneering 
communications aggregating in excess of $10,000 in a calendar year 
shall file the statements required by 11 CFR 104.20(b).
    (c) Solicitation; disclosure of use of contributions for political 
purposes. Whenever a corporation or labor organization solicits 
donations that may be used for political purposes, the solicitation 
shall inform potential donors that their donations may be used for 
political purposes, such as supporting or opposing candidates.
    (d) Non-authorization notice. Corporations or labor organizations 
making independent expenditures or electioneering communications shall 
comply with the requirements of 11 CFR 110.11.
    (e) Segregated bank account. A corporation or labor organization 
may, but is not required to, establish a segregated bank account into 
which it deposits only funds donated or otherwise provided by 
individuals, as described in 11 CFR part 104, from which it makes 
disbursements for electioneering communications.
    (f) Activities prohibited by the Internal Revenue Code. Nothing in 
this section shall be construed to authorize any organization exempt 
from taxation under 26 U.S.C. 501(a) to carry out any activity that it 
is prohibited from undertaking by the Internal Revenue Code, 26 U.S.C. 
501 et seq.


Sec. Sec.  114.14 and 114.15  [Removed].

    6. Sections 114.14 and 114.15 are removed.

    Dated: December 15, 2011.

    On behalf of the Commission.
Cynthia L. Bauerly,
Chair, Federal Election Commission.
[FR Doc. 2011-32632 Filed 12-23-11; 8:45 am]
BILLING CODE 6715-01-P