Federal Election Commission Main Page
October 25, 1993
CERTIFIED MAIL
RETURN RECEIPT REQUESTED
ADVISORY OPINION 1993-17
Maureen E. Garde, Executive Director
Massachusetts Democratic Party
45 Bromfield Street
Boston, MA 02108
Dear Ms. Garde:
This responds to your letter dated August 26, 1993, on
behalf of the Massachusetts Democratic Party ("the Party")
concerning application of the Federal Election Campaign Act
of 1971, as amended ("the Act"), and Commission regulations
to the allocation of the Party's expenditures for its Federal
and non-Federal activities when the State law mandates its
own payment procedures for the Party's administrative
expenses.
Your request indicates that there is a conflict between
the way the Party interprets Commission regulations on the
allocation of state party administrative expenses and the
interpretation by the Office of Campaign & Political Finance
of the Commonwealth of Massachusetts ("OCPF") as put forth in
an interpretive bulletin issued in April 1993. The
differences pertain to the percentage of state party
administrative expenses allocated for Federal activity and
for non-Federal activity, based upon "points" assigned to
each type of activity.
According to Commission regulations, state party
committees with separate Federal and non-Federal accounts
must allocate their administrative expenses and generic voter
drive costs between those accounts using the "ballot
composition method." This method is based on the ratio of
Federal offices to total Federal and non-Federal offices
expected on the ballot in the state's next general election.
11 CFR 106.5(d)(1)(i). The ballot composition ratio is
determined at the start of each two-year Federal election
cycle, in accordance with a point system set out in 11 CFR
106.5 (see below).
The Party has disclosed on its Schedule H1 (the
Commission disclosure page showing the point allocation and
percentage) for the 1993-94 election cycle an allocation of
two Federal points and four non-Federal points for a Federal
to non-Federal allocation of 33 percent to 67 percent. This
ratio is based on having one point each for the U.S. Senate
and the U.S. House, and one point each for the governor,
other statewide offices, state senate, and state
representative. No points were allocated for local
candidates.
The Party's allocation for Federal activity is higher
than the percentage set out by the OCPF's interpretive
bulletin, based on the assignment of fewer non-Federal points
than is required by the OCPF. You present a number of
reasons for the Party's allocation formula, including the
Party's belief that (a) the use of the word "may" in the
Commission's "Instructions for Preparing the Method of
Allocation Schedule H-1" indicates the discretionary nature
of counting non-Federal points, and (b) the "local
candidates" category should include no points because the
Party does not participate in any local elections and these
local elections "are almost exclusively non-partisan in
nature."
OCPF asserts, however, that the Party's non-Federal
account must pay the full amount of the state share permitted
by Federal regulation for any mixed activity. OCPF contends
that Federal law does not preempt State law where Federal law
permits payment of the state share of a mixed expense while
the State law mandates such payment. Specifically, OCPF has
required a 25/75 Federal/state allocation for state party
committees, unless the party committee adds to the ratio an
extra non-federal point permitted in the regulation (thus
resulting in a 22/78 allocation). The 25/75 ratio is derived
by assigning two Federal points, one each for the U.S. Senate
and the House, and six non-Federal points, one for governor,
two for other statewide offices, one for state senate, one
for state representative, and one for local candidates.
In a comment letter submitted to the Commission, OCPF
addressed the Party's assignment of zero points to the
category for local candidates. It points out that, although
the Party does not participate in local elections, other
state committees of other parties might, and the Party may do
so in the future. In addition, although most local elections
in Massachusetts are non-partisan, there are still 25
communities with "partisan preliminaries or caucuses."
You seek an advisory opinion as to whether the
non-Federal points are discretionary or mandatory, according
to Commission regulations. You also refer to the possible
preemption of Massachusetts regulations by Commission
regulations, and ask whether the Party may pay for all of its
administrative costs out of its Federal account.
Commission regulations describe the ballot composition
method as follows:
In calculating a ballot composition ratio, a
state or local party committee shall count the
federal offices of President, United States
Senator, and United States Representative, if
expected on the ballot in the next general
election, as one federal office each. The
committee shall count the non-federal offices of
Governor, State Senator, and State Representative,
if expected on the ballot in the next general
election, as one non-federal office each. The
committee shall count the total of all other
partisan statewide executive candidates, if
expected on the ballot in the next general
election, as a maximum of two non-federal offices.
State party committees shall also include in the
ratio one additional non-federal office if any
partisan local candidates are expected on the
ballot in any regularly scheduled election during
the two-year congressional election cycle. Local
party committees shall also include in the ratio a
maximum of two additional non-federal offices if
any partisan local candidates are expected on the
ballot in any regularly scheduled election during
the two-year congressional election cycle. State
and local party committees shall also include in
the ratio one additional non-federal office.
11 CFR 106.5(d)(1)(ii).
Discretionary Nature of the Non-Federal Points
The Commission notes language throughout 11 CFR
106.5(d)(1)(ii) using the word "shall." Although the word
"shall" carries a presumption that it is used in the
imperative, legislative history and purpose are relevant in
making such a determination. See Sutherland Statutory
Construction §§57.01-57.05 (5th Ed.). The Explanation and
Justification of the regulation as initially promulgated in
June 1990, and, as amended in March 1992, indicates the
non-imperative nature of the assignment of non-Federal
points. In March 1990, when the Commission promulgated
comprehensive regulations on allocation, the Commission
expressed its view that
allocating a portion of certain costs to a
committee's non-federal account is a permissive
rather than a mandated procedure. Thus, the
amounts that would be calculated under the rules
for a committee's federal share of allocable
expenses represent the minimum amounts to be paid
from the committee's federal account, without
precluding the committee from paying a higher
percentage with federal funds.
55 Fed. Reg. 26058, 26063 (June 26, 1990).
When discussing the points for "other partisan statewide
executive candidates," the Explanation and Justification
referred to independently elected lieutenant gubernatorial
candidates, and stated that that office "may be counted
separately from the governor." [emphasis added]. Id. at
26064. In addition, when the Commission amended the rules on
allocation of administrative costs by state and local party
committees, the Explanation and Justification stated that
party committees "may add an additional non-federal point"
and "may also include non-federal point(s) for local offices
if partisan local candidates are expected on the ballot in
any regularly scheduled election during the two-year
congressional election cycle." [emphasis added]. 57 Fed.
Reg. 8990 (March 13, 1992). In further discussing the
additional points for local office races, the Commission
referred to the Notice of Proposed Rulemaking, whose approach
was being affirmed, as proposing that "(d)(1)(ii) be amended
to allow" the inclusion of the points [emphasis added]. Id.
at 8991.
Based on the foregoing, the Commission concludes that
the non-Federal points are not mandatory under Federal law.
The allocation regulations impose a floor on Federal points
and a ceiling on non-Federal points. A state party committee
may take the highest number of non-Federal points allowable
and must take the minimum number of Federal points that are
required. A state party committee that proposes to apply a
ratio entailing a higher Federal percentage may do so.1/
Federal Preemption of State Law
Although the Commission has determined that the
non-Federal points in the allocation ratio are discretionary,
the practical effect of this determination with respect to
your request depends upon whether Federal law preempts the
application of State requirements.
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. §453. The House committee that drafted this provision
intended "to make certain that the Federal law is construed
to occupy the field with respect to elections to Federal
office and that the 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, but does not
affect state laws as to the manner of qualifying as a
candidate, or the dates and places of elections. Id. at
100-101.
These principles are codified in the Commission
regulations which provide for Federal preemption 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, at 51. 11 CFR
108.7(b).
Through its allocation regulations, the Commission has
asserted broad authority with regard to allocable expenses
that by their very nature are inextricably intertwined with
Federal election activity. For example, the full amount of
such expenses must be disclosed at the Federal level, along
with the allocation formulas used, and an explanation of the
transfers from the non-Federal account. 11 CFR 104.10.
The Commission's allocation regulations were clearly
designed to allow affected committees the flexibility to pay
for more than the minimum Federal share of allocable expenses
with funds raised under the Federal restrictions.
Recognizing that the allocation rules would be imposing more
Federal responsibilities on committees (e.g., the need to
disclose even the non-Federal share of disbursements), the
Commission intended to leave committees with the option of
paying for allocable expenses in a way that is less
burdensome if they so choose. This intent is reflected in
the language in the Explanation and Justification of the
regulations quoted above on pages 3 and 4.
The OCPF interpretive bulletin contradicts the
Commission's allocation regulations in that it would deny the
Party the flexibility to pay more than the Federal minimum
share with Federally restricted funds. Accordingly, the
Commission concludes that the applicable part of the
interpretive bulletin is preempted by Federal law.2/
This response constitutes an advisory opinion concerning
application of the Act, or regulations prescribed by the
Commission, to the specific transaction or activity set forth
in your request. See 2 U.S.C. §437f.
Sincerely,
(signed)
Scott E. Thomas
Chairman
P.S. Vice-Chairman Potter voted against approval of this
opinion and will submit a dissenting opinion at a later
date.
ENDNOTES
1/ If a state party committee chooses to pay a higher than
minimum Federal share for any particular administrative
expense, it may not make adjustments in other administrative
expenditures in order to "recapture" the difference between
that optional higher Federal share and the required Federal
minimum share.
2/ Since you have not raised it, the Commission does not
reach the issue of whether the portion of the interpretive
bulletin that would require the Party to disclose the
non-Federal share of allocable disbursements at the State
level also would be preempted.