Federal Election Commission Main Page
FEDERAL ELECTION COMMISSION
Washington, DC 20463
March 10, 2006
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 2006-06
Mr. Brandon Hall
Campaign Manager
Busby for Congress
P.O. Box 712
Cardiff by the Sea, CA 92007
Dear Mr. Hall:
We are responding to your advisory opinion request on
behalf of Francine Busby for Congress ("the Committee")
concerning the application of the Federal Election Campaign
Act of 1971, as amended ("the Act"), and Commission
regulations to the upcoming special general election in
California's 50th Congressional District. Because Ms. Busby
is participating in the special general election, all
expenditures from personal funds that she or her opponent(s)
in the special general election made or make between
November 3, 2004 and April 11, 2006, must be aggregated as
expenditures for the special general election, for
Millionaires' Amendment purposes. The application of the
Millionaires' Amendment provisions between April 12, 2006
and June 6, 2006 vary depending on whether there are two
elections on June 6, 2006 or just one, as discussed in
greater detail below.
Background
The facts presented in this advisory opinion are based
on your letter received on February 14, 2006.
The Committee is the principal campaign committee of
Francine Busby, a candidate for Congress in California's
50th Congressional District. She is a candidate both in the
special general election to replace former Congressman Randy
"Duke" Cunningham for the remainder of the 109th Congress
("Special General Election"), and in the regular primary
election to nominate a Democratic Party candidate for the
same seat in the 110th Congress ("Primary Election").
Under California law, the Special General Election will
be held on April 11, 2006. That election is open to all
qualified candidates, regardless of party affiliation. If a
candidate receives a majority of the votes cast, he or she
will be declared the winner. If no candidate receives a
majority of the votes cast, then a runoff election will be
held among the top vote-getters of each qualified political
party. At present, two Democratic candidates, several
Republican candidates, and one Libertarian candidate are on
the ballot in the Special General Election.
Should a runoff election ("Special General Runoff") be
required, it will be held on June 6, 2006 - the same day as
the Primary Election. Unlike the Special General Election,
in the Primary Election the candidates of each political
party are only running against each other for their party's
nomination. Most, if not all, of the candidates currently
running in the Special General Election are also running in
the Primary Election for their respective political party's
nomination.
Question Presented
How do the provisions of the Millionaires' Amendment apply
to the April 11, 2006, Special General Election and the June
6, 2006, Primary Election in California's 50th Congressional
District?
Legal Analysis and Conclusions
On November 6, 2002, the Bipartisan Campaign Reform Act
of 2002, Pub. L. No. 107-155, 116 Stat. 81 (2002) ("BCRA")
took effect. As amended by BCRA, the Act contains a set of
provisions collectively referred to as the "Millionaires'
Amendment." See 2 U.S.C. 441a(i) and 441a-1 . The
Millionaires' Amendment provisions applicable to elections
for the United States House of Representatives are set forth
in 2 U.S.C. 441a-1.1 See also 11 CFR 400.21(b), 400.31(e),
and 400.41.
Under the Millionaires' Amendment, candidates may
solicit, receive, and spend contributions from individuals
exceeding the contribution limit in 2 U.S.C. 441a(a)(1)(A)
if they are running against self-financed candidates who
make expenditures from their personal funds that exceed
certain amounts. See 2 U.S.C. 441a-1(a)(1)(A) and 11 CFR
400.41(b)(1). Additionally, national and State party
committees may make coordinated party expenditures in excess
of the normally applicable coordinated party expenditure
limit, in 2 U.S.C. 441a(d), on behalf of candidates opposing
self-financed candidates. See 2 U.S.C. 441a-1(a)(1)(C) and
11 CFR 400.41(b)(2). The Millionaires' Amendment also
requires that candidates and/or their principal campaign
committees comply with a number of new reporting and
notification requirements. See, e.g., 2 U.S.C. 441a-1(b)
and 11 CFR 400.20, 400.21, 400.22, and 400.30(b)(2).
The provisions of the Millionaires' Amendment apply
separately to each election cycle. See 2 U.S.C. 431(25) and
11 CFR 400.2(a). For Millionaires' Amendment purposes, an
"election cycle" is defined as the period beginning on the
day after the date of the most recent election for the
specific office or seat that a candidate is seeking and
ending on the date of the next election for that office or
seat. Id. Primary elections and general elections are
considered to be separate election cycles and a runoff
election is considered to be part of the election cycle of
the election that necessitated the runoff. Id.
Accordingly, for candidates in the Special General
Election, the election cycle began on November 3, 2004, the
day after the last general election, and ends on April 11,
2006, the day of the Special General Election. See 2 U.S.C.
431(25) and 11 CFR 400.2(a). If no winner is declared on
April 11th, the Special General election cycle still began
on November 3, 2004, but ends on June 6, 2006, the date of
the Special General Runoff. Id. For candidates in the
Special General Election who are also in the Primary
Election, the election cycle for the Primary Election
commences on April 12, 2006, the day after the Special
General Election, and ends on June 6, 2006, the date of the
Primary Election.2 Id.
An expenditure from personal funds3 made during a
particular election cycle is made for the purpose of
influencing that election, unless designated for a different
election campaign on FEC Form 3Z-1. See 11 CFR 104.19. An
expenditure from personal funds is considered made on the
date the funds are deposited into the account designated by
the candidate's authorized committee as the campaign
depository, under 11 CFR 103.1 and 103.2, on the date the
instrument transferring the funds is signed, or on the date
the contract obligating the personal funds is executed,
whichever is earlier. 11 CFR 400.4(b).
The discussion below describes how the Millionaires'
Amendment regulations apply during the Special General and
Primary election cycles.
Special General Election Cycle: November 3, 2004 -
April 11, 2006
Candidates participating in the Special General
Election must aggregate all expenditures from personal funds
made during the Special General Election Cycle (November 3,
2004 through April 11, 2006). For purposes of the
Millionaires' Amendment those expenditures are considered
expenditures for the Special General Election. See
discussion supra; 2 U.S.C. 431(25) and 11 CFR 400.2(a).
Thus, if Ms. Busby's total expenditures from personal funds
exceed $350,000 at any time during the Special General
Election Cycle, the Committee must, within 24 hours, file
with the Commission an Initial Notification of Expenditures
from Personal Funds ("Initial Notification") on FEC Form 10.
See 11 CFR 400.21(b) and 400.24(b). The Committee must also
send a copy of this form to all candidates running in the
Special General Election and to the national party
committees of those candidates. See id. After filing an
Initial Notification, every time Ms. Busby's expenditures
from personal funds aggregate in excess of $10,000, the
Committee must, within 24 hours, file with the Commission an
Additional Notification of Expenditures from Personal Funds
("Additional Notification") on FEC Form 10 and send a copy
of that form to those who received copies of the Initial
Notification. See 11 CFR 400.22(b) and 400.24(b). During
the Special General Election Cycle, Ms. Busby and the
Committee are not required to send a copy of FEC Form 10 to
any opposing candidates in the Primary Election or to their
national party committees, unless those opposing candidates
are also participating in the Special General Election.4
If the Committee receives a copy of FEC Form 10 filed
by one of Ms. Busby's opponents in the Special General
Election before April 11, 2006, the Committee must calculate
the "opposition personal funds amount" to determine whether
it qualifies for increased individual contributions and
increased coordinated party expenditures. See 11 CFR
400.30(b)(1) and 400.10 (defining "opposition personal funds
amount"). The Committee may also obtain constructive
notification of the FEC Form 10 by downloading the form from
the FEC's website. See 11 CFR 400.30(b)(1), (d).
Likewise, for Millionaires' Amendment purposes, any
expenditures from personal funds made by Ms. Busby's
opponents during the Special General Election Cycle are also
considered expenditures for the Special General Election.
See discussion supra; 2 U.S.C. 431(25) and 11 CFR 400.2(a).
Therefore, for Millionaires' Amendment purposes, if any of
Ms. Busby's opponents in the Special General Election files
a FEC Form 10 with the Commission - even if the opposing
candidate designates the expenditure as in connection with
the Primary Election - the expenditure is considered an
expenditure for the Special General Election. Id. Thus,
Ms. Busby or the Committee may download that FEC Form 10 (if
they have not received it) and treat it as filed for the
Special General Election.
In calculating the opposition personal funds amount,
the Committee would normally take into account the gross
receipts advantage as determined using the FEC Form 3Z-1
filed by each candidate in his or her 2005 Year End Report.
See 11 CFR 400.10(a)(3). However, FEC Form 3Z-1 does not
provide information regarding gross receipts with respect to
special elections. Thus, the Committee should not include
the gross receipts amounts in calculating the opposition
personal funds amount for the Special General Election
Cycle. Consequently, the Committee will calculate the
opposition personal funds amount as follows: the opposing
candidate's aggregate expenditures from personal funds as of
the date of calculation minus Ms. Busby's aggregate
expenditures from personal funds as of the date of
calculation. If the opposition personal funds amount makes
the Committee eligible for increased coordinated party
expenditures (i.e., if it exceeds $350,000), the Committee
must file FEC Form 11 with the Commission and with Ms.
Busby's national and State party committees within 24 hours
of receiving the FEC Form 10. See 11 CFR 400.30(b)(2).
If the Committee determines that it is eligible to
receive increased individual contributions, it may begin
soliciting contributions up to $6,300 per individual
contributor (three times the current individual contribution
limit of $2,100) for use only during the Special General
Election Cycle. See 2 U.S.C. 441a-1(a)(1)(A) and 11 CFR
400.41. The Committee must stop accepting such increased
contributions during the Special General Election Cycle,
however, if: (1) it reaches the proportionality provision
limit; (2) Ms. Busby's own expenditures from personal funds
make her ineligible for increased limits; or (3) the
opposing candidate whose expenditures from personal funds
entitled the Committee to receive increased contributions
ceases to be a candidate.5 See 2 U.S.C. 441a-1(a)(1) and
(a)(3); 11 CFR 400.31 and 400.32.
The manner in which the provisions of the Millionaires'
Amendment will apply between April 12, 2006, and June 6,
2006, depends on the outcome of the Special General
Election. If one candidate receives a majority of the votes
on April 11, 2006, then no Special General Runoff will
occur. If no candidate receives a majority of the votes,
however, the Special General Runoff will take place on the
same date as the Primary Election. The application of the
Millionaires' Amendment's provisions to each of these two
scenarios is discussed below.
Scenario 1 - No Special General Runoff: April 12 -
June 6, 2006
If one candidate wins the Special General Election and
no Special General Runoff takes place, then the Special
General Election Cycle will end on April 11, 2006. For
those candidates that participated in the Special General
Election, the Primary Election Cycle will begin on April 12,
2006. Accordingly, the Committee must dispose of all
"excess contributions"6 it received during the Special
General Election Cycle within 50 days after April 11, 2006.
See 2 U.S.C. 441a-1(a)(4) and 11 CFR 400.51. It may not
spend any of these excess contributions on the Primary
Election, or any other election, and it may not seek to have
any such excess contributions redesignated by the
contributors for the Primary Election or for any other
election. See 2 U.S.C. 441a-1(a)(4); 11 CFR 400.50, 400.51,
400.52, 400.53, and 400.54.
Under 11 CFR 110.3(c)(3), any carryover of unused funds
from one election cycle to another (or from a previous
Federal campaign committee to a current Federal campaign
committee) is a transfer, regardless of whether the
candidate maintains different committees or different
campaign accounts for different elections. Any portion of
Ms. Busby's expenditures from personal funds that was not
used for expenses in the Special General Election Cycle that
is transferred to the Primary Election Cycle under 11 CFR
110.3(c)(3) will be considered an expenditure from personal
funds for the Primary Election. Ms. Busby and/or the
Committee must use a reasonable accounting method such as
the one described in 11 CFR 110.3(c)(4) to determine the
portion of the amount transferred that constitutes the
candidate's personal funds.
In the case of such a transfer, the date the
expenditure from personal funds is made is the date the
funds are transferred to the Primary Election Cycle, i.e.,
April 12, 2006. If the aggregate of the transferred funds
and other expenditures from personal funds for the Primary
Election Cycle exceeds $350,000, Ms. Busby will trigger the
Millionaires' Amendment for the Primary Election and must
file an Initial Notification on FEC Form 10 with the
Commission and with all opposing candidates in the
Democratic Primary Election. This Initial Notification must
be filed by April 13, 2006. See 11 CFR 400.21(b) and
400.24(b).
On April 12, 2006, the Committee should check the
Commission's website to see if any of Ms. Busby's Democratic
opponents in the Primary Election who did not also
participate in the Special General Election filed any FEC
Form 10s with the Commission between November 3, 2004 and
April 11, 2006. If any such opposing candidates did file
one or more FEC Form 10s, the Committee will obtain
constructive notification of such filings as of the date on
or after April 12, 2006 that it downloads the opposing
candidate's FEC Form 10s. Once it downloads the form(s),
the Committee should determine whether it is eligible for
increased contributions from individuals for the Primary
Election Cycle.7
The Primary Election Cycle is a separate and distinct
election cycle from the Special General Election Cycle.
Thus, in calculating the opposition personal funds amount,
expenditures from personal funds made during the Special
General Election Cycle by any candidate running in the
Special General Election must not be aggregated with
expenditures from personal funds made during the Primary
Election Cycle. Additionally, in calculating the opposition
personal funds amount for the Primary Election Cycle, the
Committee must include the gross receipts as reported in FEC
Form 3Z-1 in the 2005 Year End reports. See 11 CFR
400.10(a)(3). Ms. Busby and the Committee must comply with
the Millionaires' Amendment regulations set forth in
11 CFR part 400 as they normally would in any primary
election.
Scenario 2 - Special General Runoff & Primary: April
12 - June 6, 2006
If no candidate receives a majority of votes in the
Special General Election on April 11, 2006, California will
hold a Special General Runoff on June 6, 2006, the same date
as the Primary Election. Under this scenario, between April
12, 2006 and June 6, 2006, candidates participating in both
the Special General Runoff and the Primary Election will
technically be in simultaneous election cycles: the
continuation of the Special General Election Cycle that
began on November 3, 2004 and the Primary Election Cycle.
As stated by Senator DeWine during consideration of the
Millionaire's Amendment, "This amendment attempts to bring
about equity and fairness and also, quite candidly, to
increase the opportunity for all candidates to get their
ideas to the public." See 147 CR S2537 (daily ed. March 20,
2001) (Sen. DeWine). Under the novel facts presented here,
including the treatment of special elections under
California law, while those candidates are technically
running in two simultaneous election cycles, because the
Special General Runoff and Primary Election date and office
sought are precisely the same, the purposes of the
Millionaires' Amendment are best effectuated by designating
all personal expenditures by a candidate to both elections
in which the candidate is participating.8 Otherwise, for
purposes of the Millionaires' Amendment, a candidate in both
elections could split his or her expenditures between the
elections, and effectively double the personal funds
threshold for filing the Initial Notification from $350,000
to $700,000.
Consequently, if Ms. Busby participates in both the
Special General Runoff and the Primary Election, her
expenditures from personal funds between April 12, 2006, and
June 6, 2006, will count toward both elections. For
example, if she makes a $400,000 expenditure from personal
funds during this time frame, that expenditure will be
considered a $400,000 expenditure from personal funds in
connection with the Special General Runoff, as well as a
$400,000 expenditure from personal funds in connection with
the Primary Election.9
The Committee must file the appropriate notification
that may result from the aggregation (e.g. Initial
Notification or Additional Notification). Expenditures from
personal funds must also be used to calculate the opposition
personal funds amount with regard to the Primary Election.
This calculation must also take into account the gross
receipts amounts on FEC Form 3Z-1 filed with the 2005 Year
End reports.
Likewise, if any of Ms. Busby's opponents in the
Special General Runoff makes expenditures from personal
funds between April 12th and June 6th, the Committee should
count those expenditures against the opponent's threshold
for the Special General Runoff, regardless of whether the
opponent designates the personal expenditures to his or her
Special General Runoff or Primary Election accounts. In
calculating the opposition personal funds amount, the
Committee must aggregate all expenditures from personal
funds made during the Special General Election Cycle
(November 3, 2003 to June 6, 2006), including expenditures
designated to the Committee's Primary election account.
However, the Committee should not include gross receipts
amounts in this calculation because these amounts are
attributed entirely to the Primary Election and not to the
Special General Runoff.
In addition to the requirements discussed above, Ms.
Busby and the Committee must comply with all other
applicable requirements of the Millionaires Amendment
regulations. These requirements include disposal of excess
contributions after the Primary Election and repayment of
personal loans. See e.g., 2 U.S.C. 441a-1(a)(4) and
441(a)(j); see also 11 CFR part 400, subpart E and 11 CFR
116.11 and 116.12.
This response constitutes an advisory opinion
concerning the application of the Act and Commission
regulations to the specific transaction or activity set
forth in your request. See 2 U.S.C. 437f. The Commission
emphasizes that if there is a change in any of the facts or
assumptions presented, and such facts or assumptions are
material to a conclusion presented in this advisory opinion,
then the requestor may not rely on that conclusion as
support for its proposed activity.
Sincerely,
(signed)
Michael E. Toner
Chairman
_______________________________
1 The Millionaires' Amendment contains separate provisions
for candidates for the U.S. House of Representatives and
candidates for the U.S. Senate. Because you are a candidate
for the U.S. House of Representatives, this advisory opinion
refers only to the provisions that address candidates for
the U.S. House of Representatives.
2 The relevant election cycle for candidates participating
only in the Primary Election (i.e., who are not running in
the Special General Election) began on November 3, 2004 and
ends on June 6, 2006.
3 See 11 CFR 400.4 for definition of "expenditure from
personal funds." See also 2 U.S.C. 441a-1(b)(1)(A).
4 The relevant election cycle for candidates participating
only in the Primary Election (i.e., who are not running in
the Special General Election) began on November 3, 2004 and
ends on June 6, 2006. During the Special General Election
Cycle, candidates participating only in the Primary Election
should aggregate all expenditures from personal funds and,
if those expenditures aggregate in excess of $350,000 prior
to April 11, 2006, they should file FEC Form 10 with the
Commission and send copies of that form to all opposing
candidates who are also only participating in the Primary
Election as well as to the national party committees of
those candidates.
5 The Committee could also continue to accept increased
contributions if another opposing candidate remaining in the
Special General Election made sufficient expenditures from
personal funds to entitle the Committee to do so.
6 "Excess contributions" are contributions made at the
increased limit but not spent in connection with the
election to which they relate. See 2 U.S.C. 441a-1(a)(4)
and 11 CFR 400.50.
7 The spending of Ms. Busby's opponents in the Primary
Election Cycle will not trigger an increased party
coordinated expenditure limit, because party committees
cannot make coordinated party expenditures in connection
with a primary election campaign, only in connection with a
general election campaign. See
2 U.S.C. 441a(d) and 11 CFR 400.30(c)(1).
8 This conclusion is limited to the specific circumstances
seen here, where no candidate running in the Special General
Runoff will be running against the same opposing candidate
in both the Special General Runoff and the Primary Election.
9 In this example, with respect to Ms. Busby's Special
General Runoff opponents, the Committee must aggregate all
of her expenditures from personal funds made prior to April
12 with those made on or after April 12. With respect to
Ms. Busby's Primary Election opponents, however, the
Committee must aggregate only those expenditures from
personal funds made between April 12 and June 6, 2006.