11 CFR 114.10 - Nonprofit corporations exempt from the prohibitions on making independent expenditures and electioneering communications.

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There is 1 rule appearing in the Federal Register for 11 CFR Part 114. View below or at eCFR (GPOAccess)
§ 114.10 Nonprofit corporations exempt from the prohibitions on making independent expenditures and electioneering communications.
(a) Scope. This section describes those nonprofit corporations that qualify for an exemption in 11 CFR 114.2. It sets out the procedures for demonstrating qualified nonprofit corporation status, for reporting independent expenditures and electioneering communications, and for disclosing the potential use of donations for political purposes.
(b) Definitions. For the purposes of this section—
(1) The promotion of political ideas includes issue advocacy, election influencing activity, and research, training or educational activity that is expressly tied to the organization's political goals.
(2) A corporation'sexpress purpose includes:
(i) The corporation's purpose as stated in its charter, articles of incorporation, or bylaws, except that a statement such as “any lawful purpose,” “any lawful activity,” or other comparable statement will not preclude a finding under paragraph (c) of this section that the corporation's only express purpose is the promotion of political ideas;
(ii) The corporation's purpose as publicly stated by the corporation or its agents; and
(iii) Purposes evidenced by activities in which the corporation actually engages.
(3)
(i) The termbusiness activities includes but is not limited to:
(A) Any provision of goods or services that results in income to the corporation; and
(B) Advertising or promotional activity which results in income to the corporation, other than in the form of membership dues or donations.
(ii) The termbusiness activities does not include fundraising activities that are expressly described as requests for donations that may be used for political purposes, such as supporting or opposing candidates.
(4) The termshareholder has the same meaning as the term stockholder, as defined in 11 CFR 114.1(h).
(c) Qualified nonprofit corporations. For the purposes of this section, a qualified nonprofit corporation is a corporation that has all the characteristics set forth in paragraphs (c)(1) through (c)(5) of this section:
(1) Its only express purpose is the promotion of political ideas, as defined in paragraph (b)(1) of this section;
(2) It cannot engage in business activities;
(3) It has:
(i) No shareholders or other persons, other than employees and creditors with no ownership interest, affiliated in any way that could allow them to make a claim on the organization's assets or earnings; and
(ii) No persons who are offered or who receive any benefit that is a disincentive for them to disassociate themselves with the corporation on the basis of the corporation's position on a political issue. Such benefits include but are not limited to:
(A) Credit cards, insurance policies or savings plans; and
(B) Training, education, or business information, other than that which is necessary to enable recipients to engage in the promotion of the group's political ideas.
(4) It:
(i) Was not established by a business corporation or labor organization;
(ii) Does not directly or indirectly accept donations of anything of value from business corporations, or labor organizations; and
(iii) If unable, for good cause, to demonstrate through accounting records that paragraph (c)(4)(ii) of this section is satisfied, has a written policy against accepting donations from business corporations or labor organizations; and
(5) It is described in26 U.S.C. 501(c)(4).
(d) Permitted corporate independent expenditures and electioneering communications.
(1) A qualified nonprofit corporation may make independent expenditures, as defined in11 CFR 100.16, without violating the prohibitions against corporate expenditures contained in 11 CFR part 114.
(2) A qualified nonprofit corporation may make electioneering communications, as defined in11 CFR 100.29, without violating the prohibitions against corporate expenditures contained in 11 CFR part 114.
(3) Except as provided in paragraphs (d)(1) and (d)(2) of this section, qualified nonprofit corporations remain subject to the requirements and limitations of11 CFR part 114, including those provisions prohibiting corporate contributions, whether monetary or in-kind.
(e) Qualified nonprofit corporations; reporting requirements
(1) Procedures for demonstrating qualified nonprofit corporation status.
(i) If a corporation makes independent expenditures under paragraph (d)(1) of this section that aggregate in excess of $250 in a calendar year, the corporation shall certify, in accordance with paragraph (e)(1)(i)(B) of this section, that it is eligible for an exemption from the prohibitions against corporate expenditures contained in11 CFR part 114.
(A) This certification is due no later than the due date of the first independent expenditure report required under paragraph (e)(2)(i) of this section.
(B) This certification may be made either as part of filing FEC Form 5 (independent expenditure form) or, if the corporation is not required to file electronically under11 CFR 104.18, by submitting a letter in lieu of the form. The letter shall contain the name and address of the corporation and the signature and printed name of the individual filing the qualifying statement. The letter shall also certify that the corporation has the characteristics set forth in paragraphs (c)(1) through (c)(5) of this section. A corporation that does not have all of the characteristics set forth in paragraphs (c)(1) through (c)(5) of this section, but has been deemed entitled to qualified nonprofit corporation status by a court of competent jurisdiction in a case in which the same corporation was a party, may certify that application of the court's ruling to the corporation's activities in a subsequent year entitles the corporation to qualified nonprofit corporation status. Such certification shall be included in the letter submitted in lieu of the FEC form.
(ii) If a corporation makes electioneering communications under paragraph (d)(2) of this section that aggregate in excess of $10,000 in a calendar year, the corporation shall certify, in accordance with paragraph (e)(1)(ii)(B) of this section, that it is eligible for an exemption from the prohibitions against corporate expenditures contained in11 CFR part 114.
(A) This certification is due no later than the due date of the first electioneering communication statement required under paragraph (e)(2)(ii) of this section.
(B) This certification must be made as part of filing FEC Form 9 (electioneering communication form).
(2) Reporting independent expenditures and electioneering communications.
(i) Qualified nonprofit corporations that make independent expenditures aggregating in excess of $250 in a calendar year shall file reports as required by11 CFR part 104.
(ii) Qualified nonprofit corporations that make electioneering communications aggregating in excess of $10,000 in a calendar year shall file statements as required by11 CFR 104.20(b).
(f) Solicitation; disclosure of use of contributions for political purposes. Whenever a qualified nonprofit corporation solicits donations, the solicitation shall inform potential donors that their donations may be used for political purposes, such as supporting or opposing candidates.
(g) Non-authorization notice. Qualified nonprofit corporations making independent expenditures or electioneering communications under this section shall comply with the requirements of 11 CFR 110.11.
(h) Segregated bank account. A qualified nonprofit corporation 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.
(i) 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), including any qualified nonprofit corporation, to carry out any activity that it is prohibited from undertaking by the Internal Revenue Code, 26 U.S.C. 501, et seq.
[60 FR 35305, July 6, 1995, as amended at 65 FR 38424, June 21, 2000; 67 FR 65211, Oct. 23, 2002; 75 FR 32, Jan. 4, 2010]
Editorial Note:
At 67 FR 78682, Dec. 26, 2002, § 114.10(e)(2) was amended by removing “109.2” and adding “109.10”. However, this reference does not exist.
§ 114.10, Nt.
Effective Date Note:
At 79 FR 62819, Oct. 21, 2014, § 114.10 was revised. This rule will be effective once it has been before Congress for 30 legislative days. For the convenience of the user, the revised text is set forth as follows:
§ 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. Corporations and labor organizations are prohibited from making coordinated expenditures as defined in 11 CFR 109.20, coordinated communications as defined in 11 CFR 109.21, or contributions as defined in 11 CFR part 100, subpart B.
Note to paragraph (a):
Pursuant to SpeechNow.org v. FEC,599 F.3d 686 (D.C. Cir. 2010) (en banc), and Carey v. FEC, 791 F. Supp. 2d 121 (D.D.C. 2011), corporations and labor organizations may make contributions to non-connected political committees that make only independent expenditures, or to separate accounts maintained by non-connected political committees for making only independent expenditures, notwithstanding 11 CFR 114.2(b) and 11 CFR 114.10(a). The Commission has not conducted a rulemaking in response to these cases.
(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 by11 CFR part 114, 104.4(a), and 109.10(b)-(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 by11 CFR 104.20(b).
(c) Non-authorization notice. Corporations or labor organizations making independent expenditures or electioneering communications shall comply with the requirements of 11 CFR 110.11.
(d) 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 persons other than national banks, corporations organized by authority of any law of Congress, or foreign nationals (as defined in 11 CFR 110.20(a)(3)), as described in 11 CFR 104.20(c)(7), from which it makes disbursements for electioneering communications.
(e) 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.

Title 11 published on 2015-01-01.

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For a complete list of all Rules, Proposed Rules, and Notices view the Rulemaking tab.

  • 2015-03-06; vol. 80 # 44 - Friday, March 6, 2015
    1. 80 FR 12079 - Independent Expenditures and Electioneering Communications by Corporations and Labor Organizations
      GPO FDSys XML | Text
      FEDERAL ELECTION COMMISSION
      Announcement of Effective Date.
      The effective date for the final rule published October 21, 2014, at 79 FR 62797, is January 27, 2015.
      11 CFR Parts 104 and 114

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United States Code

Title 11 published on 2015-01-01

The following are ALL rules, proposed rules, and notices (chronologically) published in the Federal Register relating to 11 CFR Part 114 after this date.

  • 2015-03-06; vol. 80 # 44 - Friday, March 6, 2015
    1. 80 FR 12079 - Independent Expenditures and Electioneering Communications by Corporations and Labor Organizations
      GPO FDSys XML | Text
      FEDERAL ELECTION COMMISSION
      Announcement of Effective Date.
      The effective date for the final rule published October 21, 2014, at 79 FR 62797, is January 27, 2015.
      11 CFR Parts 104 and 114