Federal Election Commission Main Page
October 7, 1991
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1991-22
Douglas A. Kelley
Attorney at Law
Suite 500
701 Fourth Avenue South
Minneapolis, MN 55415
Dear Mr. Kelley:
This responds to your letter dated July 3, 1991,
requesting an advisory opinion concerning application of the
Federal Election Campaign Act of 1971, as amended ("the Act"
or "FECA"), to a recently enacted Minnesota statute that
provides State funding combined with voluntary expenditure
limits for Federal candidates who seek election in Minnesota.
You represent three elected Federal officeholders,
Senator David Durenberger and Representatives Jim Ramstad and
Vin Weber, whose filings with the Commission indicate that
they have already become candidates for re-election to the
United States Senate in 1994 (Durenberger) and to the United
States House of Representatives in 1992 (Ramstad and Weber).
You have also submitted the advisory opinion request on
behalf of the Chairman of the Minnesota Independent
Republican ("IR") Party, as well as on behalf of three
identified members of the Minnesota legislature who do not
appear to have become Federal candidates at this time.
The subject matter presented is the Minnesota
Congressional Campaign Reform Act, effective January 1, 1991.
Minn. Stat. ScSc 10A.40 through 10A.51 (hereinafter cited as
10A.xx). In brief, the statute authorizes the payment of
general revenue funds to Congressional candidates seeking
election in Minnesota provided those candidates agree to
voluntary limits on their campaign expenditures. You state
that the statute is in effect for the 1992 Federal elections
to the United States Congress in Minnesota and further
explain that it "will play a crucial role" in the "campaign
plans" of the above identified Federal candidates. The
Commission understands from your request that the Federal
candidates you represent will soon need to decide whether or
not they should participate in the new Minnesota campaign
finance system, and how they should conduct their campaigns
if candidates who will challenge them in the 1992 general
election make a different decision.
The candidates and the IR Party chairman request the
Commission's advice whether the FECA preempts the Minnesota
statute with respect to both its voluntary expenditure limits
specified for Federal candidates and to the financing of
those candidates' campaigns from the general revenues of the
State of Minnesota. You state that, if the Commission agrees
with your view that the statute is preempted by the FECA,
your clients request such a ruling "as soon as possible."
You further explain that early guidance from the Commission
will "save significant amounts of time and energy in
Minnesota that will be expended needlessly should the
Commission not act at this time."
The cited Minnesota statute has several significant
features. It is voluntary in the respect that no expenditure
limit applies to any Federal candidate who does not agree to
the limit.1/ MN 10A.43. It provides for the payment of a
financial "incentive" to those Federal candidates who sign
and file written agreements no later than September 1 of the
general election year and who qualify for the general
election ballot. MN 10A.43. The relevant expenditure limits
are $3,400,000 for United States Senate candidates and
$425,000 for candidates seeking election to the U.S. House of
Representatives. MN 10A.44. These limits apply to
expenditures made during the calendar year of the relevant
Federal election and are adjusted based on changes in the
consumer price index. MN 10A.44.2/
The amount necessary to pay the incentive is
appropriated from the general fund to the State treasurer and
is payable to major party candidates only after certification
of the results of the primary election. MN 10A.49. The
maximum amount payable to a Federal candidate who agrees to
the expenditure limit is 25% of the limit applicable to that
candidate. MN 10A.43.3/ In order to be entitled to receive
State funds, the Federal candidate must also match the amount
paid by the State with contributions received from other
sources. MN 10A.48.4/ In addition, a Federal candidate who
agrees to the expenditure limit becomes "subject to a civil
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1/ The statute uses the term "Congressional candidate" in
reference to those Federal candidates who are covered. It
defines such candidates to mean individuals who seek
nomination or election to the United States Senate or United
States House of Representatives from Minnesota and who are
candidates as defined under 2 U.S.C. Sc431(2). MN 10A.41.
2/ The expenditure limits are increased to 120% of the
specified limit in cases where a Federal candidate won a
contested primary election but received less than twice as
many votes as any one of the candidate's opponents in that
primary. A separate limit equal to 20% of the base limit
applies to "the aggregate amount of expenditures on behalf
of" a Federal candidate or elected Federal office holder in
any year "following an election year for the office held or
sought . . ." MN 10A.44
3/ A further incentive is available in that individuals
making contributions to a Federal candidate who has agreed to
the limits are entitled to have their contributions refunded
by the State in amounts up to $50 for individuals and $100
for married couples. MN 10A.43 and 290.06.
4/ A candidate who receives State funding is also required to
return up to the full amount of the State payments if the
candidate's actual expenditures are less than such payments.
The amount to be repaid or returned is the difference between
the State funding and the aggregate campaign expenditures of
the candidate. The FECA report that the candidate's
principal campaign committee must file by January 31 of the
year following the general election is used to determine the
amount of any required repayment. MN 10A.50 and 10A.51.
fine of up to four times" the amount of any expenditures
exceeding the limit, if that candidate "permits the
candidate's authorized committees to make aggregate
expenditures on the candidate's behalf in excess of" the
applicable limit. MN 10A.47.
In some circumstances the State will not make
payments to a Federal candidate who has agreed to the
expenditure limit and in other situations the expenditure
limit, even where agreed to, will not apply. Specifically,
if all major party Federal candidates for a given office
agree to the expenditure limit, no State funds will be paid
to any such candidate although the limits remain applicable
to them. MN 10A.44.5/ However, if a candidate agrees to the
limit, but has a major party candidate opponent who declines
to so agree, the limit will not apply to either. Moreover,
the candidate who agreed to the limit will receive the State
payments for which that candidate otherwise qualifies. MN
10A.44.
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5/ The same situation exists where all candidates, regardless
of political party affiliation, agree to the limits. MN
10A.44.
The statute also provides that contributions by or to
Federal candidates, as well as loans to them, are governed by
the FECA and subject to the penalties imposed therein. MN
10A.45 and 10A.47. Furthermore, the statute provides that
political party expenditures with respect to Federal
candidates are governed by the FECA, and that all reporting
and disclosure requirements for Federal candidates are
likewise governed by the FECA. MN 10A.46 and 10A.42; also,
see MN 10A.51.
As already indicated, you contend that the Minnesota
statutory scheme is preempted and superseded by the Act and
Commission regulations, and that your position is confirmed
in a series of past advisory opinions issued by the
Commission. The question presented to the Commission is:
Does the FECA preempt and supersede a statute that permits
payment of state funds to Federal candidates who enter
voluntary, binding agreements to limit their campaign
expenditures which are made enforceable via civil fines in
amounts up to 400% of excessive expenditures.
The Act states that its provisions and the rules
prescribed thereunder, "supersede and preempt any provision
of State law with respect to election to Federal office." 2
U.S.C. Sc453. The House committee that drafted this provisio
intended "to make certain that the Federal law is construed
to occupy the field with respect to elections to Federal
office and that Federal law will be the sole authority under
which such elections will be regulated." H.R. Rep. No.
93-1239, 93d Cong., 2d Sess. 10 (1974). According to the
Conference Committee report on the 1974 Amendments to the
Act, "Federal law occupies the field with respect to criminal
sanctions relating to limitations on campaign expenditures,
the sources of campaign funds used in Federal races, the
conduct of Federal campaigns, and similar offenses but does
not affect the States' rights" as to other areas such as
voter fraud and ballot theft. H.R. Rep. No. 93-1438, 93d
Cong., 2d Sess. 69 (1974). The Conference report also states
that Federal law occupies the field with respect to reporting
and disclosure of political contributions to and expenditures
by Federal candidates and political committees. Id. at
100-101.
When the Commission promulgated regulations at 11 CFR
108.7 regarding the effect of the Act on state law, it stated
that the regulations follow section 453 and that,
specifically, Federal law supersedes state law with respect
to the organization and registration of political committees
supporting Federal candidates, disclosure of receipts and
expenditures by Federal candidates and political committees,
and the limitations on contributions and expenditures
regarding Federal candidates and political committees.
Federal Election Commission Regulations, Explanation and
Justification, House Document No. 95-44, p. 51. 11 CFR
108.7(b). The regulations provide that the Act does not
supersede state laws concerning the manner of qualification
as a candidate or political party organization, dates and
places of elections, voter registration, voting fraud and
similar offenses, or candidates' personal financial
disclosure. 11 CFR 108.7(c). The Commission explained that
"[t]hese types of electoral matters are interests of the
states and are not covered in the act." House Document
95-44, p. 51.
The FECA in its 1974 amendments prescribed limits on
expenditures by all Federal candidates whether presidential
or congressional. See Public Law 93-443, Sc101(a), 88 Stat.
1264 (1974). As a direct result of the United States Supreme
Court decision in Buckley v. Valeo, 424 U.S. 1 (1976), the
Congress amended the FECA in 1976 to repeal the expenditure
limits for congressional candidates and to retain them only
for presidential candidates who qualified for campaign funds
paid from the United States Treasury pursuant to chapters 95
and 96 of Title 26, United States Code. See Public Law
94-283, Sc112, 90 Stat. 488 (1976).
In the context of this statutory background, the
Commission submitted its regulations on preemption (and other
topics) to Congress in early 1977 and then promulgated them
on April 13, 1977.6/ The pertinent regulations then provided,
as they do currently, that Federal law supersedes State law
concerning any limitation on expenditures regarding Federal
candidates and political committees. 11 CFR 108.7(b)(3); see
11 CFR 108.7 (1977)7/. Subsequent to both the enactment of
the 1974 FECA amendments and to the Buckley decision in 1976,
Congress has considered the issue of expenditure limits and
has, up to this point, chosen to enact such limits only for
Federally funded presidential candidates.8/ In making this
choice, Congress has also made another decision - to reject
the extension of Federal funding and the concomitant
expenditure limits to other Federal candidates.
This status of the Federal law does not suggest the
presence of a regulatory vacuum into which the states may
enter.9/ It is instead indicative that Federal law continues
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6/ The Commission had earlier submitted the same regulations
to Congress on August 3, 1976, but Congress adjourned on
October 1, 1976, two days before expiration of the 30 day
legislative review period as then mandated by the Act.
Accordingly, those regulations were never prescribed by the
Commission as final rules.
7/ The fact that this regulation is based upon 1974 FECA
legislative history, which pertains to criminal provisions of
Title 18 that were repealed in 1976, is of no consequence.
Violations of the expenditure limits that were retained in
the 1976 amendments are still subject to criminal penalties
in some circumstances, as are certain violations of the
contribution limits and prohibitions. 2 U.S.C. Sc437g(d); 26
U.S.C. ScSc9012, 9042. In addition, the deletion of the form
Title 18 provisions from the criminal code is of only limited
significance because, in virtually all respects, the
substantive provisions were renumbered and relocated in Title
2 of the Code. For example, the contribution limits formerly
in 18 U.S.C. Sc608 became 2 U.S.C. Sc441a(a), the corporate
prohibition in 18 U.S.C. Sc610 became 2 U.S.C. Sc441b, etc.
8/ Federal funding is also available to qualified national
committees of political party organizations to defray
expenses for their presidential nominating conventions. 26
U.S.C. Sc9008.
9/ The Commission notes that the preemption provision of the
original FECA in 1971 may have accorded considerably more
latitude for the application of state law to Federal
candidates. It provided, in part, that state law would not
be invalid or inapplicable unless complying with state law
would result in a violation of the FECA. It further
(Footnote continued)
to occupy the field with respect to enforcement of
expenditure limits and, further, that the will of Congress at
this time is that there be no expenditure limits for Federal
candidates, other than for presidential candidates who
qualify for U.S. Treasury funding.
The sweeping terms of the Act's preemption provision
and its legislative history, which is largely incorporated in
the Commission regulations, make clear that the FECA is to
occupy the field of campaign finance for Federal elections
and is to be the sole authority under which those elections
are regulated. 2 U.S.C. Sc453, 11 CFR 108.7. The Commission
has issued a number of advisory opinions that have concluded
or assumed, as a general rule, that funds from state
revenues, including tax check-offs or fees paid for state
services or filing fees, may be deposited in a state party's
Federal
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(Footnote 9 continued from previous page)
provided, however, that no state law shall be construed as
prohibiting any action or expenditure that could be lawfully
made under the FECA. Public Law 92-225, Sc403, 86 Stat. 20
(1972). The current Federal preemption provision of 2 U.S.C.
Sc453, along with implementing Commission regulations,
represent a striking contrast to the 1971 language and thus
further support the Commission's conclusion here.
account. 10/ The Commission's determination that a state may
deposit money in a party committee's Federal account is,
however, a separate question from whether a state may
regulate Federal campaign finance under the guise of a public
funding mechanism conditioned on abiding by spending limits.
The Minnesota statute not only purports to provide
funds directly to Federal candidates, but also purports to
enforce a limit on expenditures made by Federal candidates.
This statutory scheme to regulate Federal campaign finance
activity is clearly preempted by the Act's express preemption
provisions and the Commission's regulations at 108.7(b)(3)
which specifically state that "Federal law supersedes State
law concerning the ... limitation on contributions and
expenditures regarding Federal candidates...". As stated in
the Conference Report to the 1974 amendments:
The provisions of the conference
substitute make it clear that the Federal
law occupies the field with respect to
... the sources of campaign funds used in
Federal races, the conduct of Federal
campaigns, ... but does not affect the
States' rights to prohibit false
registration, voting fraud, theft of
ballots and similar offenses under State
law.
H.R. Conf. Rep. No. 1438, 93rd Cong., 2d Sess. 69 (1974)
(relating to contribution and expenditure limitations).
Minnesota's statute is not within the type of state laws
Congress stated were outside the realm of Federal preemption.
In fact, Minnesota's statutory scheme is more analogous to
the situation presented in Advisory Opinion 1989-25 in which
the Commission preempted a New Hampshire state statute to the
extent it restricted a political party's 2 U.S.C. Sc441a(d)
spending authority on behalf of Federal candidates who
receive ballot fee waivers.11/
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10/ See, e.g., Advisory Opinions 1991-14, 1988-33, 1983-15,
1982-17, 1980-103 and 1978-9.
11/ The Commission did not, however, issue an opinion on
whether Federal law preempts those portions of New Hampshire
law that directly regulate a candidate's expenditures or the
use of campaign funds. Advisory Opinion 1989-25.
This response constitutes an advisory opinion
concerning application of the Act and Commission regulations
to the specific transaction or activity set forth in your
request. See 2 U.S.C. Sc437f.
Sincerely,
(signed)
John Warren McGarry
Chairman for the
Federal Election Commission
Enclosures (AOs 1991-14, 1989-25, 1988-33, 1983-15, 1982-17)