Federal Election Commission Main Page
February 22, 1985
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1985-2
Mr. Tim Shaffer
Shaffer for State Senate Committee
P.O. Box 2121
Butler, PA 16003
Dear Mr. Shaffer:
This responds to your letter of January 10, 1985, requesting
an advisory opinion concerning application of the Federal
Election Campaign Act of 1971, as amended ("the Act"), and
Commission regulations to the transfer of funds from your state
campaign committee to your Federal campaign committee.
You state that during the 1978 election cycle you were a
candidate for Congress from the 25th District of Pennsylvania.
You authorized the "Send Shaffer to Congress Committee" as your
principal campaign committee. You state that you loaned this
committee a total of $26,950, which remains the only reported
outstanding debt owed by the committee. You have since been
elected to the Pennsylvania State Senate. For your state
campaign you authorized the formation of the "Shaffer for State
Senate Committee" under Pennsylvania law. Currently, your state
committee has a surplus in excess of $10,000. To retire part of
the debt that your Federal committee owes, you ask whether
contributions that were originally made to your state committee
may be transferred to your Federal committee.
The Commission considered a similar transfer of funds from a
person's state campaign committee to his Federal campaign
committee for debt repayment purposes in Advisory Opinion
1984-46. Because any person involved in any specific transaction
or activity may rely on an advisory opinion "which is
indistinguishable in all its material aspects from the
transaction or activity with respect to which such advisory
opinion is rendered," 11 CFR 112.5(a), the Commission reiterates
its discussion in Advisory Opinion 1984-46 (footnote omitted)
concerning your question:
Initially, the Commission notes that a transfer of
funds from your state campaign committee to your Federal
campaign committee would not be subject to the Act's
limitations on contributions as set forth at 2 U.S.C.
SS 441a(a). Commission regulations provide that transfers of
funds may be made without limit between "affiliated"
committees. 11 CFR 102.6(a). Included within the
definition of affiliated committees are all those political
committees that are established, financed, maintained, or
controlled by the same person or group of persons. See 2
U.S.C. SS 441a(a)(5); 11 CFR 100.5(g)(2), 110.3(a)(1)(i).
Moreover, Commission regulations recognize that two
committees may be deemed "affiliates" even though one of
them is not a political committee under the Act. 11 CFR
102.6(a). Thus, both your state committee and your Federal
committee are controlled by the same person for
campaign-related purposes so that the state committee would
be deemed affiliated with the Federal committee for the
purpose of making the proposed transfer.
While transfers of funds may be made between these
committees without limit, such transfers will nevertheless
apply toward the threshold for determining whether the state
committee is a "political committee" as defined at 11 CFR
100.5. See 11 CFR 102.6(a). Accordingly, if the state
committee transfers more than $1,000 to the Federal
committee in a given calendar year, the state committee
would become a political committee under the Act. See 2
U.S.C. SS 431(4)(A); 11 CFR 100.5(a), 102.6(a); Advisory
Opinion 1982-52. The state committee would then be required
to register and report as a political committee, disclosing
on its first report the sources of the funds then in its
accounts. See 11 CFR 104.12.
This cash on hand balance would be assumed to be
composed of those contributions most recently received by
the state committee. It would have to itemize such prior
contributions to the extent required by the Act and
Commission regulations. See 2 U.S.C. SS 434(b); 11 CFR
104.3(a). The state committee would also be required to
exclude any contributions not permissible under the Act from
those funds proposed to be transferred to the Federal
committee. See 2 U.S.C. SS 441a, 441b, 441c, and 441e; 11
CFR 104.12; Advisory Opinions 1984-3 and 1982-52. This
means that direct or indirect contributions from
corporations, labor organizations, and government
contractors, as well as national banks and foreign
nationals, must be excluded from the funds to be
transferred. 2 U.S.C. SS SS 441b, 441c, 441e.
Moreover, since the contribution limits apply to
the Federal committee and since the state committee
upon becoming a political committee under the Act also
becomes affiliated with the Federal committee, the
contribution limits of 2 U.S.C. SS 441a(a) apply to the
contributors of the funds held by the state committee.
Accordingly, the contributions of any person that are
included in the state committee's funds must be
aggregated with any contribution made by that person to
the Federal committee. For individual contributors,
the total may not exceed the $1,000 per election limit
of 2 U.S.C. SS 441(a)(1)(A). For multi-candidate
committees, the total may not exceed the $5,000 per
election limit of 2 U.S.C. SS 441a(2)(A). Any portion of
a contributor's contribution that exceeds the SS 441a(a)
limits may not be transferred. Instead the amount to
be transferred must be reduced to the extent of such
excessive amount. For instance, if the same person
contributed $200 to the state committee and $900 to the
Federal committee for the [1978] general election, the
amount of state committee funds transferred must be
reduced by $100, the amount by which that person's
aggregate contribution to both committees exceeds
$1,000.
When the state committee ascertains the proper
amount of funds that it may include in its cash on hand
as a political committee and files a report itemizing
such funds as required by the Act and regulations, it
may also report a transfer of that amount to its
affiliated Federal committee. This report may be both
the initial and the termination report of the state
committee as a Federal political committee. See 11 CFR
102.3. The Federal committee should report its receipt
of the transfer as a miscellaneous receipt from an
affiliated committee.
The Commission notes, however, that after notification
to your committee in December 1981 (and without receiving
any objection from your committee), the Commission
administratively terminated your committee's reporting
obligation pursuant to 11 CFR 102.4. This notice informed
your committee that: (1) administrative termination did not
relieve the committee of any legal responsibility for the
payment of any outstanding debt; (2) the committee must
continue to maintain records in accordance with the Act; (3)
any residual funds could be used only in accordance with
Commission regulations; and (4) raising funds to influence a
Federal election or supporting a Federal candidate would void the
administrative termination of your committee's reporting
obligation. The notice stated that if such occurred, your
committee would have to then report all financial activity since
the date of its last report filed.1/
Contributions made to a Federal committee to retire debts
incurred during a previous election cycle are treated as made for
the purpose of influencing a Federal election. See 11 CFR
110.1(g) and Advisory Opinion 1981-22. Accordingly, when you
make the transfer from your state committee to your Federal
committee, your Federal committee should report the transfer as
outlined in the portions of Advisory Opinion 1984-46 quoted in
this opinion. It should file such a report on the date that its
regularly scheduled report would otherwise have been due for the
reporting period(s) during which the proposed transfer(s) occurs,
i.e., on July 31, 1985, if the proposed transfer occurs between
January 1 and June 30, 1985. See 11 CFR 104.5(a)(2). Your
Federal committee should also include in such a report all
receipts and disbursements made since its last previous report
(which was filed on July 30, 1981, and covered the period from
January 1 through June 30, 1981).
Your request is not clear whether you contemplate a single
transfer or a series of transfers that may span more than one
reporting period. Therefore, your committee should also file a
report pursuant to 11 CFR 104.5(a)(2) for any subsequent
reporting period in which it receives funds or makes
disbursements or otherwise makes changes in the status of its
outstanding debt, such as forgiveness or repayment, in any
amount. Your committee should also review both its statement of
organization with amendments2/ and current FEC Form 1 to
determine if the committee needs to report any change or
correction in such information, pursuant to the current
requirements of 11 CFR 102.2(a).
1/ Thus, administrative termination is distinguishable from
committee-initiated termination pursuant to 11 CFR 102.3. See,
e.g., Advisory Opinions 1980-114 and 1977-43.
2/ Commission records show that your committee's last amendment
to its statement of organization was filed on September 29, 1978.
The Commission expresses no opinion concerning the
application of any state law which may govern the disposition of
the state campaign committee's funds in the manner described in
this request, since the Act does not supersede or preempt such a
question. See Advisory Opinions 1984-46 and 1978-37. Also, the
Commission expresses no opinion concerning any Federal or state
tax ramifications since such questions are outside the
Commission's jurisdiction.
This response constitutes an advisory opinion concerning
application of the Act, or regulations prescribed by the
Commission, to the specific transaction or activities set forth
in your request. See 2 U.S.C. SS 437f.