Under the Federal Election Campaign Act (the Act) contributions are subject to limits.The chart on the next page summarizes the Act’s contribution limits. This chapter examines the rules concerning the limits placed on contributions to a candidate’s campaign.The limits apply to all types of contribu- tions (except contributions made from a candidate’s personal funds, as explained in Chapter 3).

It is important to note that a campaign is prohibited from retaining contributions that exceed the limits. 110.9. In the event that a campaign receives exces- sive contributions, it must follow special procedures for handling such funds (within 60 days); see “Rem- edying an Excessive Contribution” in Section 7 of this chapter.

1. OVERVIEW OF LIMITS

This section outlines the limits the Act places on contributions to a candidate’s campaign.The term campaign is used in this Guide to mean a candidate for a speci ed federal of ce, his or her authorized agents, the principal campaign committee and any other authorized committees.

$2,700 per Election

Under the Act, individuals and groups (that are
not prohibited from making contributions, such as partnerships, sole proprietorships, certain LLCs
and Indian tribes) may contribute a maximum of $2,700 per election to a candidate’s campaign. (This limit is indexed for in ation in odd-numbered years, beginning in 2005.) Note that this limit applies to contributions from the members of a candidate’s family (e.g., spouse, parent).The limit also applies
to contributions from political committees other than multicandidate committees (see “Contribu- tions from Other Candidates” below; authorized committees of federal candidates have a $2,000 per election limit). 110.1(a) and (b)(1).

$5,000 per Election—Multicandidate Committees

Political committees that have quali ed as multican- didate committees have a higher contribution limit: $5,000 per election. 110.2(a) and (b)(1).To qualify as a multicandidate committee, a political commit- tee must have:

• Been registered for at least six months;

• Received contributions from more than 50

  contributors; and

• Made contributions to at least ve candidates

  for federal of ce. Note, however, that state party organizations are not required to meet this third requirement. 100.5(e)(3).

  When making a contribution to a candidate’s campaign, a multicandidate PAC or party com- mittee must notify the campaign in writing that it has quali ed for multicandidate committee status. 110.2(a)(2). (The notice may be pre-printed on the committee’s checks, letterhead or other appropri- ate materials.)1 When the contributing committee fails to provide such a noti cation, the candidate committee’s treasurer should verify whether that committee has quali ed in order to avoid accepting an excessive contribution. 103.3(b). Multicandidate status can be veri ed by consulting the FEC’s Public Records Of ce of the FEC website (www.fec.gov/ disclosure.shtml). Committees that have satis ed the criteria for multicandidate status and have led FEC Form 1M (Noti cation of Multicandidate Sta- tus) will be identi ed as “quali ed.”

  1 As explained in the Explanation and Justi cation to rules on contributions by multicandidate political committees, prescribed January 1, 1994, 58 Fed. Reg. 42173( August 6, 1993), available online at http://go.usa.gov/8hRj.

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CONTRIBUTION LIMITS

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18 Chapter 4

$46,800 National Party Committee Limit for Senate Candidates

With respect to their contributions to Senate can- didates, the national committees of the Republican and Democratic parties each share a $46,800 limit with their party’s national senatorial campaign com- mittee. Unlike other candidate contribution limits, this one applies to the total contributions made

to a Senate candidate by those party committees for the entire campaign period (the primary and general elections). 110.2(e).This limit is indexed for in ation in odd-numbered years.

$100 Limit on Cash Contributions

A campaign may not accept more than $100 in
cash from a particular source with respect to any campaign for nomination for election, or election to federal of ce. 110.4(c).

$50 Limit on Anonymous Contributions

An anonymous contribution of cash is limited to $50.Any amount in excess of $50 must be promptly disposed of and may be used for any lawful purpose unrelated to any federal election, campaign or can- didate. 110.4(c)(3).

Contributions from Other Candidates

A candidate’s authorized committees may accept a contribution of up to $2,000 per election from the authorized committee of another federal candidate. 102.12(c)(2) and 102.13(c)(2).

In addition, principal campaign committees of ac- tive candidates cannot qualify as multicandidate committees. 102.12(c) and 102.13(c).The principal campaign committee of a former candidate may, however, become a multicandidate committee.AOs 1993-22, 1988-41 and 1985-30.

The applicable contribution limit for contributions from a nonfederal campaign is $2,700 per election. 110.1. However, a contribution of more than $1,000 may trigger registration by the nonfederal campaign as a federal political committee. 100.5(a). For more information and other applicable restrictions (such as the requirement that the funds given be federally permissible), see “Contributions from Unregistered Organizations” in Chapter 10, Section 1.

A liated Committees—Shared Limit

Political committees established, nanced, main- tained or controlled by the same person, organiza- tion or group are af liated. 110.3(a) and (b).This de nition applies to all types of political commit- tees, including nonconnected committees, party committees, corporate/labor PACs and

authorized committees.This is important because af liated committees that make contributions to candidate committees share one overall contribu- tion limit, per candidate, per election. See 110.3(a).

Party Committees

Although a state party committee operates under its own contribution limit, local party committees within a state are presumed to be af liated with the state party committee.2 This means that contribu- tions from those local party committees that are required to register as federal political committees count against the state committee’s limit. 110.3(b) (1)(ii) and (3). See AOs 2005-02 and 1999-04.

Note, however, that the national party committee, the House campaign committee and the Senate campaign committee are each considered a sepa- rate committee, with separate contribution limits (except for the special national party committee limit of $46,800 for Senate candidates, as explained above). 110.2(e) and 110.3(b)(2).

Unregistered Local Party Organizations

Local party organizations that do not have to register with the FEC may contribute an aggregate of $1,000 to federal candidates (assuming no other federal expenditures are made) without triggering a reporting requirement with the FEC. 100.5(a).The organization must be able to show that the contri- bution was made with funds permissible under the Federal Election Campaign Act. 102.5. Prior to cross- ing the registration threshold, the local organization does not share a contribution limit with the state party committee.AOs 2005-02 and 1999-04.

2 A local party committee may be considered independent of the state party committee if it can meet certain standards
as determined by the FEC through its Advisory Opinion process. See 110.3(b)(3)(i) and (ii). See also AOs 1999-04 and 1978-09.

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Corporate/Labor/Membership Organization PACs

All separate segregated funds (also called political action committees or PACs) established, nanced, maintained or controlled by the same corporation or labor organization are af liated. For example:

• PACs established by a parent corporation and its subsidiaries are af liated.

• PACs established by a national or internation- al union and its local unions are af liated.

• PACs established by a federation of national or international unions and the federation’s state and local central bodies are af liated.

• PACs established by an incorporated mem- bership organization and its related state and local entities are af liated.

  100.5(g)(2) and (3); 110.3(a)(1)(ii) and (2).

  When committees are not automatically af liated under the conditions described above, the Commis- sion may nevertheless conclude that two or more committees are af liated based on factors listed in the regulations. 100.5(g)(4)(ii)(A)-(J) and 110.3(a)(3) (ii)(A)-(J).The Commission makes these decisions, through advisory opinions, on a case-by-case basis. For examples, see AOs 2009-18, 2006-12, 2005-03, 2004-32, 2002-11 and 2001-07 (plus opinions cited within those AOs).

  Authorized Committees

  An authorized committee, however, can be af li- ated only with another authorized committee of the same candidate. 100.5(g)(5) and 110.3(a)(1)(i). Note that, by de nition, an unauthorized commit- tee sponsored by an of ceholder (i.e., a “leadership PAC”) is not considered to be af liated with any authorized committees sponsored by the same indi- vidual. 100.5(e)(6) and (g)(5).

2. HOW LIMITS WORK

The limits on contributions to candidates apply separately to each federal election in which the candidate participates.A primary election, general election, runoff election and special election are each considered a separate election with a separate

limit.3 100.2. (A special election may itself involve separate primary, general and/or runoff elections, each with a separate contribution limit.)4 In some cases, a party caucus or convention is considered a primary election, as explained below.

Party Caucus or Convention

A party caucus or convention constitutes an elec- tion only if it has the authority under relevant state law to select a nominee for federal of ce. (Notable examples of these types of conventions are those held in Connecticut, Utah and Virginia.) Otherwise, there is no separate limit for a caucus or conven- tion; it is considered part of the primary process. When the caucus or convention does constitute a primary election, reports must be led for the con- vention as they would for the primary. 100.2(c)(1) and (e). See also, for example,AOs 1992-25, 1986- 21 and 1986-17. See Chapter 12 for information on ling reports.

Candidates Who Lose in the Primary

A candidate is entitled to an election limit only if he or she seeks of ce in that election.Thus, a candi- date who loses the primary (or otherwise does not participate in the general election) does not have a separate limit for the general. If a candidate accepts contributions for the general election before the primary is held and loses the primary (or does not otherwise participate in the general election), the candidate’s principal campaign committee must re- fund, redesignate or reattribute the general election contributions within 60 days of the primary or the date that the candidate publicly withdraws from the primary race.5 110.1(b)(3) and 110.2(b)(5). See also in this chapter, Section 4, “Designated and Undesig- nated Contributions” and Section 8,“Contributions to Retire Debts.”

3. 3  Presidential campaigns should note that all Presidential primary elections held during a calendar year are considered one election for the purposes of the contribution limits. 110.1(j)(1).

4. 4  In AO 2009-15, the Commission ruled that an authorized committee may accept contributions that may be used in a special or emergency election or runoff, even though an election has not been scheduled and may not occur.

5. 5  In AO 2008-04, the Commission ruled that the authorized committee of a Presidential candidate receiving primary matching funds may issue refunds or obtain redesignations to his or her Senate campaign for contributions made in con- nection with the general election.

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Campaigns must adopt an accounting system to distinguish between contributions made for the primary election and those made for the general election, as discussed in Chapter 10, Section 1, “Fun- draising.” 102.9(e). 6 Nevertheless, the campaign of a candidate running in the general election may spend unused primary contributions for general elec-

tion expenses.The contributions would continue
to apply toward the contributors’ limits for the primary. 110.3(c)(3).The campaign of a candidate running in the general election may use general election contributions for primary election debts; the contributions would still count against the con- tributor’s general election limits. 110.1(b)(3)(iv).As noted above, should the candidate lose the primary, contributions accepted for the general must be refunded, redesignated or reattributed within 60 days and may not be used to repay primary election debt.AO 1986-17.Therefore, candidates should en- sure they have enough cash on hand to make those refunds if needed.

6 In AO 2007-03, the Commission ruled that a Presidential candidate could solicit and receive private contributions for the 2008 Presidential general election without losing eligibil- ity to receive public funding if the candidate received his party’s nomination for President, provided that the campaign (1) deposited and maintained all private contributions desig- nated for the general election in a separate account; (2) re- frained from using these contributions for any purpose; and (3) refunded the private contributions in full if the candidate ultimately decided to receive public funds.

Contribution Limits

Independent and Non-Major Party Candidates

Even when independent and non-major party candi- dates are not involved in an actual primary, they are entitled to a primary limit.They may choose one of the following dates to be their “primary” date, and, until that date, they may collect contributions that count towards the contributor’s primary limits.

• The last day on which, under state law, a candidate may qualify for a position on the general election ballot; or

• The date of the last major primary election, caucus or convention in that state.

  Non-major party candidates may also choose the date of the nomination by their party as their pri- mary date. 100.2(c)(4).

  Primary vs. General Election

Unopposed Candidates; Elections Not Held

A candidate is entitled to a separate contribution limit even if:

• The candidate is unopposed in an election; • A primary or general election is not held

because the candidate is unopposed;7 or
• The general election is not held because the candidate received a majority of votes in the

previous election.

The date on which the election would have been held is considered the date of the election. 110.1(j) (2) and (3).The campaign must le pre-election reports and, in the case of a general election, a post-election report.AO 1986-21. See also Chapter 12, Section 3,“When to Report.”

Recounts

A federal campaign may establish a recount fund either as a separate bank account of the candi- date’s authorized committee or as a separate entity. Although they are not considered contributions under the Act, any funds solicited, received, directed, transferred or spent in connection with a recount are subject to the amount limitations, source prohibitions and reporting requirements of the

Act. See 52 U.S.C. §30125(e).This means that the normal contribution limits, reporting requirements and source restrictions apply.The Commission has addressed the use of funds raised for recount pur- poses in AO 2010-14 (permitting the use of such funds before an election for certain recount-related purposes) and AO 2010-18 (permitting the redes- ignation of excess recount funds to a state party committee’s federal account). Committees must disclose funds received for a recount as “Other Re- ceipts” and funds spent as “Other Disbursements.” For more information and reporting instructions, see AO 2006-24 and Chapter 13, “Completing FEC Reports.”

7 A primary election that is not held because the candidate was nominated by a caucus or convention with authority to nominate is not a separate election with a separate contribu- tion limit. 110.1(j)(4).

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3. CONTRIBUTIONS TO UNAUTHORIZED COMMITTEES

If a contributor makes a contribution to a com- mittee not authorized by any candidate and knows that a substantial portion of the contribution will be contributed to or spent on behalf of a particu- lar candidate, the contribution counts against the contributor’s per-election limit with respect to that candidate. 110.1(h).

4. DESIGNATED AND UNDESIGNATED

CONTRIBUTIONS

The Commission strongly recommends that cam- paigns encourage contributors to designate their contributions for speci c elections. Designated contributions ensure that the contributor’s intent is conveyed to the candidate’s campaign. In the case of contributions from political committees, written designations also promote consistency in report- ing and thereby avoid the possible appearance of excessive contributions on reports.

E ect of Designating vs. Not Designating

Designated contributions count against the donor’s contribution limits for the election that is named. Undesignated contributions count against the donor’s contribution limits for the candidate’s next election. 110.1(b)(2).

For example:

• An undesignated contribution made8 after the

  candidate has won the primary, but before the general election, applies toward the con- tribution limit for the general election.

• In the case of the candidate who has lost the primary, an undesignated contribution made after the primary automatically applies to- ward the limit for the next election in which the candidate runs for federal of ce.

  8 See Section 5 for an explanation of when a contribution is “made.”

• If the candidate does not plan to run for fed- eral of ce in the future, the committee may:

• −  Presumptively redesignate the contribu-

  tion to retire any primary debts they may have. 110.1(b)(5)(ii)(C); see “Remedy-
  ing Excessive Contributions” below for proper procedure; or

• −  Request written redesignation from the contributor to retire debts from a previ- ous election cycle.9

  Otherwise, the committee must return or refund the contribution.

  For additional information on presumptive redesig- nation, see Section 7 of this chapter, “Remedying an Excessive Contribution.”

  How Contributions are Designated

  Contributors designate contributions by indicating in writing the speci c election to which they intend a contribution to apply. 110.1(b)(2)(i). Contributors may make this written designation on the check (or other signed written instrument) or in a signed statement accompanying the contribution. 110.1(b) (4).A designation also occurs when the contributor signs a form supplied by the candidate. 110.1(b)(4); see also AO 1990-30.

  Campaign Must Retain Designations

  The campaign must retain copies of contribution designations for three years. If the designation ap- pears on the check (or other written instrument), the campaign must retain a full-size photocopy. 102.9(c) and (f); 110.1(l)(1).

5. DATE CONTRIBUTION IS MADE vs. DATE OF RECEIPT

The date a contribution is made by the contribu- tor and the date the contribution is received by the campaign are signi cant for purposes of the con- tribution limits. It is important to understand the distinction.

9

Note that if a contribution designated to retire the debt
of a previous campaign exceeds the amount of the debt, the contribution must be returned, refunded, redesignated or reattributed. Contributions can be designated for debt retirement only if debt exists and if the contributor has not already met the contribution limit for that election. 110.1(b) (3)(i).

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Date Contribution is Made

The date a contribution is made is the date the contributor relinquishes control over it. 110.1(b)(6). For example:

• A hand-delivered contribution is considered made on the date it is delivered by the con- tributor to the campaign. 110.1(b)(6).

• A mailed contribution is made on the date
  of the postmark. 110.1(b)(6). Note that if a campaign wishes to rely on a postmark as evi- dence of the date a contribution was made,

  it must retain the envelope or a copy of it.

  110.1(l)(4).

• An in-kind contribution is made on the date

  that the goods or services are provided by the contributor. See AOs 2004-36 and 1996- 29.

• A contribution made via the Internet is considered made on the date the contributor electronically con rms making the transac- tion.AO 1995-09.

• An earmarked contribution is considered made during the election cycle in which the contribution is actually made, regardless of the year in which the election is held. See AOs 2008-08 and 2006-30 (footnote 5). (Note that the conduit must forward this information to the campaign.) See Appendix A for more information.

  Date Contribution is Received

  The date of receipt is the date the campaign (or
  a person acting on the campaign’s behalf) actually receives the contribution. 102.8(a).This is the date used by the campaign for reporting purposes, but it also affects the application of the net debts out- standing rule (discussed in Section 8 of this chap- ter).

  Contributions Charged on Credit Cards

  When the committee receives contributions through credit card charges, the date of receipt
  is the date on which the committee receives the contributor’s signed authorization to charge the contribution.The treasurer should retain a copy of the authorization form in the committee’s records. See AOs 1995-09 and 1990-04.

In-Kind Contributions

The date of receipt for an in-kind contribution is the date the goods or services are provided to the committee, even if the contributor pays the bill for the goods or services after they are provided. See 110.1(b)(6).

E ect of Dates on Undesignated Contributions

The date an undesignated contribution is made determines which election limit it counts against. The date of receipt, however, does not affect the application of the contribution limits.An undesig- nated contribution made on or before Election Day counts against the donor’s limit for that election, even if the date of receipt is after Election Day and even if the campaign has no net debts outstanding. On the other hand, an undesignated contribution made after an election counts against the donor’s limit for the candidate’s next election. 110.1(b)(2) (ii).

E ect of Dates on Designated Contributions

Both the date a contribution is made and the date of receipt affect the application of the net debts outstanding rule to a designated contribution.The date the contribution is made determines whether the rule will apply, while the date of receipt governs whether the contribution is acceptable under the rule. For example, a contribution designated for

the primary and made before that election will not be subject to the net debts outstanding rule, even if the campaign receives the contribution after the primary. By contrast, a contribution designated for—but made after—the primary is acceptable only to the extent the campaign has net debts outstanding for the primary on the date of receipt. 110.1(b)(3)(i) and (iii). See Section 8 of this chapter.

Date of Deposit

While all contributions must be deposited within 10 days, the date of deposit is not used for report- ing or contribution limit purposes.

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6. JOINT CONTRIBUTIONS

A joint contribution is a contribution that is made by more than one person using a single check or other written instrument.Although each individual has a separate contribution limit, joint contributors may combine their contribution limits by contribut- ing a joint contribution (for example, a check for $5,400 for a candidate’s primary election) as long as both sign the check (or an attached statement), as explained below. 110.1(k).

Each Contributor Must Sign the Check

When making a joint contribution, each contributor must sign the check (or other written instrument) or a statement that accompanies the contribution. 110.1(k)(1). Note that if the check or an accom- panying statement of attribution is not signed by each contributor, the entire contribution will be attributed only to the party who signed the check. 104.8(c). However, under certain circumstances

the committee may presumptively reattribute the excessive portion of a contribution. See “Reattribu- tion” below.

Exception: Partnerships and LLCs

Contributions from partnerships and certain LLCs are not considered joint contributions, but do trig- ger special attribution requirements; see Appendix B.

Attribution

If the check or statement does not indicate how much should be attributed to each donor, the re- cipient committee must attribute the contribution in equal portions. 110.1(k)(1) and (2). For example, if a committee receives a $1,000 joint contribu- tion signed by two individuals but with no written attribution, the committee must attribute a $500 contribution to each donor.

A campaign may request that a contribution be reattributed, as explained below.

7. REMEDYING AN EXCESSIVE CONTRIBUTION

When a committee receives an excessive contribu- tion—one which exceeds the contributor’s limit or

the campaign’s net debts outstanding for an elec- tion—the committee may remedy the violation by refunding the excessive amount or by seeking a redesignation or reattribution of it within 60 days. Step-by-step procedures for obtaining a reattribu- tion or redesignation are explained below.

Redesignation

By Contributor

With a redesignation, the contributor instructs the committee to use the excessive portion of a contri- bution for an election other than the one for which the funds were originally given. For example, the contributor may redesignate the excessive portion of a contribution made for the primary election so that it counts against his or her limit with respect to the general election (provided the contributor has not already contributed the maximum for the general election).

When requesting a redesignation, the committee must inform the contributor that he or she may, alternatively, request a refund of the excessive amount. 110.1(b)(5).

Presumptive Redesignation by Committee

Under certain circumstances, the committee may make a presumptive redesignation of an excessive contribution.When an individual or a non-multican- didate committee makes an excessive contribution to a candidate’s authorized committee, the cam- paign may presumptively redesignate the excessive portion to the general election if the contribution:

• Is made before that candidate’s primary elec- tion;

• Is not designated in writing for a particular election;

• Would be excessive if treated as a primary election contribution; and

• As redesignated, does not cause the contribu- tor to exceed any other contribution limit. 110.1(b)(5)(ii)(B)(1)-(4).

  Also, the excessive portion of an undesignated contribution made after the primary, but before the general election, may be automatically applied to the primary if the campaign’s net debts outstand- ing from the primary equal or exceed the amount redesignated. 110.1(b)(5)(ii)(C). See Section 8 in this chapter.

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The committee is required to notify the contribu- tor in writing of the presumptive redesignation within 60 days of the treasurer’s receipt of the con- tribution, and must offer the contributor the option to receive a refund instead. 110.1(b)(5)(ii)(C).

It is important to note that presumptive redesigna- tions may be made only within the same election cycle.Also, presumptive redesignation is not an option when the contributor is a multicandidate committee.

Reattribution

By Contributor

With a reattribution, the contributor instructs the committee in writing to attribute the excessive portion of a joint contribution to another individual. For example, if the committee receives an excessive contribution drawn on a joint checking account, but signed by only one account holder, the committee may seek a reattribution signed by each contribu- tor of the excessive amount to the other account holder. 110.1(k)(3). (A joint contribution may also be reattributed so that a different amount is at- tributed to each contributor.10) Note that a joint contribution must represent the personal funds of each contributor because contributions made in the name of another are prohibited. See 110.4(b).

When requesting reattributions, the committee must also inform contributors that they may, alter- natively, ask for a refund of the excessive portions of their contributions. 110.1(k)(3).

Presumptive Reattribution by Committee

When a committee receives an excessive contribu- tion made via a written instrument with more than one individual’s name imprinted on it, but only one signature, the committee may attribute the permis- sible portion to the signer.The committee may make a presumptive reattribution of the excessive portion to the other individual whose name is im- printed on the written instrument, without obtain- ing a second signature, so long as the reattribution does not cause the contributor to exceed any other contribution limit. 110.1(k)(3)(ii)(B)(1).

10 See the Explanation and Justi cation published with the nal rule, 52 Fed. Reg. 760, 765-766 (January 9, 1987), available online at http://go.usa.gov/8hR5.

The committee is required to notify the contribu- tors in writing of the presumptive reattribution within 60 days of the treasurer’s receipt of the contribution, and must offer the contributors the option to receive a refund if it was not intended to be a joint contribution. 110.1(k)(3)(ii)(B)(2)-(3).

When to Request Redesignations and Reattributions

In many circumstances, the committee will be able to presumptively redesignate or reattribute contri- butions. For all other circumstances, contributions can be redesignated or reattributed only by the individual contributor.

A committee may ask a contributor to redesignate and/or reattribute a contribution (within 60 days of the treasurer’s receipt), for example, when the committee receives:

• A designated or undesignated contribution that exceeds the donor’s limit. 110.1(b)(5)(i) (A) and (C).

• A designated or undesignated contribution for an election in which the candidate is not running. For example, a contribution that was designated for the general but was received before the primary may be redesignated for a future primary if the candidate loses the primary or otherwise does not run in the general election. See 102.9(e); see also AOs 1996-29, 1992-15 and 1986-17.

• A contribution that is designated for, but made after, an election and that exceeds the campaign’s net debts outstanding for that election. 110.1(b)(3)(i) and (5)(i)(B).

• An undesignated contribution (which nor- mally applies to the candidate’s upcoming election) that the committee wants to use to retire debts of a previous election. Note that, if it is redesignated, the contribution then counts against the donor’s contribution limits for that previous election. 110.1(b)(5)(i)(D).

Contribution Limits

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Campaign Guide for Congressional Candidates

Procedures for Obtaining Redesignations and Reattributions from Contributors

The committee treasurer is the person ultimately responsible for complying with the procedures outlined below. 103.3(a) and (b).

Step 1: Deposit Contribution

A committee must deposit contributions within 10 days of the treasurer’s receipt. (If a contribution is not deposited, it must be returned to the contribu- tor within 10 days of receipt.) 103.3(a).

Step 2: Determine Whether Excessive

The committee must determine whether a contri- bution exceeds the donor’s limit or the campaign’s net debts outstanding.The Commission encourages committees to make this determination within 30 days of receiving the contribution.This allows a committee suf cient time to request and receive a redesignation and/or reattribution within the 60- day limit, as explained below.

Step 3: Be Prepared to Make Refund

When a committee deposits contributions that may exceed the limits or net debts outstanding for an election, the committee must not spend the funds because they may have to be refunded.To ensure that the committee will be able to refund the con- tribution in full, the committee may either maintain suf cient funds in its regular campaign depository or establish a separate account used solely for the deposit of possibly illegal contributions. 103.3(b)(4). Furthermore, the committee must keep a written record noting the reason a contribution may be excessive and must include this information when reporting the receipt of the contribution. 103.3(b) (5).

Step 4: Request Redesignation and/or Reattribution
When requesting a redesignation, the committee asks the contributor to provide a written, signed redesignation of the contribution for another elec- tion.The request must also state that the donor may receive a refund of the excessive portion of the contribution if he or she does not wish to redesignate it. 110.1(b)(5)(ii)(A).11

11 Redesignations may be made electronically provided that the method offers a suf cient degree of assurance of

When requesting a reattribution, the committee asks the contributor whether the contribution was intended to be a joint contribution from more than one person.Alternatively, if the original contribution was a joint contribution, the committee requests that contributors adjust the amount attributable to each.12 In either case, the committee should inform contributors that they must each sign the reattribu- tion.The request must notify each contributor that, instead of reattributing the contribution, he or she may seek a refund of the portion of the contribu- tion that exceeds the limits or the campaign’s net debts outstanding. 110.1(k)(3)(ii)(A).

Step 5: Redesignation/Reattribution Made or Make Refund within 60 Days
Within 60 days after the date of the committee’s receipt of the contribution either:

• The contributor must provide the committee with a redesignation or reattribution; or

• The committee must refund the excessive portion of the contribution.

103.3(b)(3).

A contribution is properly redesignated if, within the 60-day period, the contributor provides the committee with a written, signed statement redes- ignating the contribution for a different election. 110.1(b)(5)(ii)(B).

A contribution is properly reattributed if, within the 60-day period, the contributors provide the com- mittee with a written statement reattributing the contribution.The statement must be signed by all contributors and must indicate the amount attrib- utable to each donor. (If the contributors do not specify how to divide the contribution, the commit- tee must attribute the contribution equally among the contributors.) 110.1(k)(2) and (3)(ii)(B).

the contributor’s identity and intent to redesignate, and
the committee retains a record of the redesignation in a manner consistent with the recordkeeping requirements in 110.1(1). For more information, see the FEC’s Interpretive Rule on Electronic Redesignations (76 FR 16233 (March 23, 2011)) at http://go.usa.gov/8hRH.

12 See the Explanation and Justi cation published with the nal rule, 52 Fed. Reg. 760, 766 (January 9, 1987), available online at http://go.usa.gov/8hn4.

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Contribution Limits

Step 6: Keep Records and Report

The committee must keep documentation for each reattribution and redesignation to verify that it was received within the 60-day time limit. Documenta- tion for a reattribution or a redesignation must include one of the following:

• A copy of the postmarked envelope bearing the contributor’s name, return address or other identifying code;

• A copy of the signed statement reattributing or redesignating the contribution with a date stamp showing the date of the committee’s receipt; or

• A copy of the written redesignation or reat- tribution dated by the contributor.

  110.1(l)(6).

  The documentation relating to a reattribution or redesignation must be retained for three years. 102.9(c).

8. CONTRIBUTIONS TO RETIRE DEBTS

If a committee has net debts outstanding after an election is over, a campaign may accept contribu- tions after the election to retire the debts provided that:

• The contribution is designated for that elec- tion (since an undesignated contribution made after an election counts toward the limit for the candidate’s upcoming election, unless the campaign requests its redesigna- tion);

• The contribution does not exceed the con- tributor’s limit for the designated election; and

• The campaign has net debts outstanding for the designated election on the day it receives the contribution.

  110.1(b)(3)(i) and (iii).

  How to Calculate Net Debts Outstanding

  A campaign’s net debts outstanding consist of unpaid debts incurred with respect to the particular election minus cash on hand plus the total amounts owed to the campaign in the form of credits,

refunds of deposits, returns and receivables or a commercially reasonable estimate of the collectible amount, and loans exceeding $250,000 from the candidate’s personal funds.13 110.1(b)(3)(ii).

Unpaid Debts

Unpaid debts include the following:

• All outstanding debts and obligations;

• The estimated cost of raising funds to liqui-

  date the debts; and

• If the campaign is terminating, estimated

  winding down costs (for example, of ce

  rental, staff salaries and of ce supplies). 110.1(b)(3)(ii).

  Cash on Hand

  Cash on hand consists of the resources available to pay the campaign’s total debts, including currency, deposited funds, traveler’s checks, certi cates of deposit, treasury bills and any other investments valued at fair market value. 110.1(b)(3)(ii)(A).

  For the purpose of calculating net debts outstand- ing for the primary, cash on hand need not include contributions designated for the general. 110.1(b) (3)(iv).

  Adjustment to Net Debts Total

  A campaign rst calculates its net debts outstand- ing as of the day of the election.Thereafter, the campaign continually recalculates its total net debts outstanding as additional funds are received for, or spent on, the election for which the debt remains. 110.1(b)(3)(ii) and (iii).

  Contributions Exceeding Net Debts

  If, on the same day, a campaign receives several con- tributions that, together, exceed the amount needed to retire its debts, the campaign may:

• Accept a proportionate amount of each contribution and either refund the remaining amount or ask contributors to redesignate the excessive portions for another election; or

13 For an illustration of how the net debts outstanding calculation is performed, see the Explanation and Justi cation published with the nal rule, 52 Fed. Reg. 762 (January 9, 1987), available online at http://go.usa.gov/8hnk.

Chapter 4 27

• Accept some contributions in full and either return or refund the others or seek redesig- nations or reattributions for them. (See “Re- designations” and “Reattributions” in Section 7 above.)

110.1(b)(3).

9. CONTRIBUTIONS FROM PARTNERSHIPS

Partnerships are permitted to make contributions according to special rules. 110.1(e) and (k)(1). For further details, see Appendix B.

10. CONTRIBUTIONS FROM LIMITED LIABILITY COMPANIES

Corporation v. Partnership

For purposes of contribution limitations and prohi- bitions, a limited liability company (LLC) is treated as either a corporation or a partnership.
An LLC is treated as a corporation if:

• It has chosen to le, under Internal Revenue Service (IRS) rules, as a corporation; or

• It has publicly traded shares. 110.1(g)(3). An LLC is treated as a partnership if:

• It has chosen to le, under IRS rules, as a partnership; or

• It has made no choice, under IRS rules, as to whether it is a corporation or a partnership. 110.1(g)(2).

  If an LLC is treated as a corporation, it is prohibited from making contributions to candidate commit- tees, but it can establish an SSF (see Chapter 5 for general information on the corporate prohibition). It may also give money to IEOPCs. If it is considered a partnership, it is subject to the contribution limits for partnerships outlined in Appendix B. 110.1(g).

  Single Member LLC

  If a single member LLC has not chosen corporate tax treatment, it may make contributions; the con- tributions will be attributed to the single member, not the LLC. 110.1(g)(4).

Notifying Recipient Committee

An LLC must, at the time it makes a contribution, notify the recipient committee:

• That it is eligible to make the contribution; and

• How the contribution is to be attributed among members.

  This requirement will prevent the recipient com- mittee from inadvertently accepting an illegal con- tribution. 110.1(g)(5).

  11. CONTRIBUTIONS FROM MINORS

  An individual who is under 18 years old may make contributions to candidates and political commit- tees, subject to the limit of $2,700 per election, if:

  • The decision to contribute is made knowingly and voluntarily by the minor;

  • The funds, goods or services contributed are owned or controlled by the minor, proceeds from a trust for which he or she is a bene - ciary or funds withdrawn by the minor from a nancial account opened and maintained in his or her name; and

  • The contribution is not made using funds given to the minor as a gift for the purpose of making the contribution, and is not in any way controlled by another individual. 110.19.

  12. CANDIDATE’S PERSONAL FUNDS

  When candidates use their personal funds for campaign purposes, they are making contributions to their campaigns. Unlike other contributions, these candidate contributions are not subject to any limits. 110.10;AOs 1991-09, 1990-09, 1985-33 and 1984-60.They must, however, be reported (as discussed below).

  Contributions from members of the candidate’s family are subject to the same limits that apply to any other individual. For example, a candidate’s parent or spouse may not contribute more than $2,700, per election, to the candidate.

Campaign Guide for Congressional Candidates

28 Chapter 4

Contribution Limits

De nition of a Candidate’s “Personal Funds”

The personal funds of a candidate include:

• Assets which the candidate has a legal right

  of access to or control over, and which he or she has legal title to or an equitable interest in, at the time of candidacy;

• Income from employment;

• Dividends and interest from, and proceeds

  from sale or liquidation of, stocks and other

  investments;

• Income from trusts, if established before the

  election cycle;

• Income from trusts established by bequests

  (even after candidacy);

• Bequests to the candidate;

• Personal gifts that had been customarily re-

  ceived by the candidate prior to the beginning

  of the election cycle; and

• Proceeds from lotteries and similar games of

  chance. 100.33(a) and (b).

  Assets Jointly Held with Spouse

  A candidate may also use, as personal funds, his or her portion of assets owned jointly with a spouse (for example, a checking account or jointly owned stock). If the candidate’s nancial interest in an asset is not speci ed, then the candidate’s share is deemed to be half the value. 100.33(c).

  Some banks may require a spouse to cosign a loan obtained by the candidate using jointly held assets as collateral.While an endorsement or guarantee of a loan normally constitutes a contribution, in this instance the spouse is not considered a contribu- tor as long as the candidate’s share in the col- lateral equals or exceeds the amount of the loan. 100.52(b)(4);AO 1991-10.

What Are Not Considered Personal Funds

Personal Gifts and Loans

If any person, including a relative or friend of the candidate, gives or loans the candidate money “for the purpose of in uencing any election for Federal of ce,” the funds are not considered personal funds of the candidate even if they are given to
the candidate directly. Instead, the gift or loan is considered a contribution from the donor to the campaign, subject to the per-election limit and reportable by the campaign. 100.52.This is true even if the candidate uses the funds for personal living expenses while campaigning. 100.52; See AOs 1985-33 and 1982-64; see also AO 1987-01.

Bank Loans Used in Connection with Campaign
Bank loans are not considered contributions from the bank if they comply with FEC regulations on bank loans. (See “Bank Loans” in Chapter 6.)

When a candidate obtains a bank loan for use in connection with his or her campaign, the loan is considered to be from the bank and not from the candidate’s personal funds.The candidate is act- ing as the agent of the campaign. 102.7(d) and AO 1985-33.

13. REPAYMENT OF PERSONAL LOANS FROM CANDIDATE

For personal loans (including advances of personal funds or endorsements of bank loans to the com- mittee) from the candidate to his or her authorized committee made on or after November 6, 2002, that aggregate more than $250,000, the following rules apply separately to the primary and general elections:

• The committee may use contributions to repay the candidate for the entire amount of the loan or loans only if those contributions were made on or before the day of the elec- tion; and

• The committee may use contributions to re- pay the candidate only up to $250,000 of the personal loans from contributions made after the date of the election. 116.11(b).

Chapter 4 29

30 Chapter 4

Furthermore, if the committee uses the amount of cash-on-hand as of the date of the election to repay the candidate for loans in excess of $250,000, it must do so within 20 days of the election. 116.11(c). During that time, the committee must treat the portion of candidate loans that exceed $250,000, minus the amount of cash-on-hand as of the day after the election, as a contribution by the candi- date. 116.11(c).AO 2003-30. See also AOs 2008-22 and 2008-09.

Note that a runoff election has a separate limit for purposes of FEC regulations at 116.11. For example, if a candidate loaned the committee $345,000 for the primary election, the committee could repay the candidate up to $250,000 from contributions made after the date of the primary election. Simi- larly, if the candidate loaned $300,000 for a primary runoff election, the committee could repay the candidate up to $250,000 from contributions made after the date of the runoff election.

Campaign Guide for Congressional Candidates

Prohibited Contributions

CHAPTER 5

PROHIBITED CONTRIBUTIONS

Campaigns are prohibited from accepting contribu- tions from certain types of organizations and indi- viduals. See 110.9, 110.20, 114.2(c) and 115.2.These prohibited sources are listed below.

If a committee is uncertain whether a contribution comes from a prohibited source, it must follow the procedures described under “Questionable Contri- butions,” below.

1. PROHIBITED SOURCES

Corporations, Labor Organizations, National Banks

Campaigns may not accept contributions made from the general treasury funds of corporations, labor organizations or national banks.1 114.2(a), (b) and (d).This prohibition applies to any incorporated organization, including a nonstock corporation, a trade association, an incorporated membership organization and an incorporated cooperative.2

A campaign may, however, accept contributions from separate segregated funds (PACs) established by corporations, labor organizations, incorporated membership organizations, trade associations and national banks. 114.2 and 114.5. Moreover, the

1. 1  National banks and federally chartered corporations may not make contributions in connection with any election— federal, state or local. 114.2(a).

2. 2  However, a political committee that has incorporated for liability purposes only is not considered a prohibited source. 114.12(a).

Federal Election Campaign Act permits corporations, labor organizations, incorporated membership or- ganizations, trade associations and national banks to use their treasury funds for certain election-related activities that bene t candidates. See Chapter 7, Sections 8 and 9 for more information.

Federal Government Contractors

Campaigns may not accept or solicit contributions from federal government contractors. 115.2. Since corporate contributions are already prohibited,
the government contractor ban applies primarily
to contributions from a partnership (or a limited liability company) with a government contract. It also applies to the personal and business funds of (1) individuals under contract to the federal govern- ment and (2) sole proprietors of businesses with federal contracts. 115.4 and 115.5.

The spouses of individuals and sole proprietors who are federal government contractors and em- ployees of federal government contractors, how- ever, may make contributions from personal funds. 115.5 and 115.6.

Foreign Nationals

Campaigns may not solicit or accept contribu- tions from foreign nationals.3 Federal law prohibits contributions, donations, expenditures and dis- bursements solicited, directed, received or made directly or indirectly by or from foreign nationals in connection with any election — federal, state
or local.This prohibition includes contributions or donations made to political committees and build- ing funds and to make electioneering communica- tions. 110.20(b)-(g). Furthermore, it is a violation of federal law to knowingly provide substantial assistance in the making, acceptance or receipt of contributions or donations in connection with fed-

3 Foreign nationals may not make contributions or dona- tions in connection with any election—federal, state or lo- cal—either directly or through any other person. 110.20(b).

Chapter 5 31

eral and nonfederal elections to a political commit- tee, or for the purchase or construction of an of ce building. 110.20(h).This prohibition includes, but is not limited to, acting as a conduit or intermediary for foreign national contributions and donations. 110.20(g) and (h).

A person acts knowingly for the purposes of this section when he or she has:

• Actual knowledge that the funds have come from a foreign national;

• Awareness of certain facts that would lead a reasonable person to believe that there is a substantial probability that the money is from a foreign national; or

• Awareness of facts that should have prompt- ed a reasonable inquiry into whether the source of funds is a foreign national.

  110.20(a)(4).

  Pertinent facts that satisfy the “knowing” require- ment include knowledge of:

• Use of a foreign passport or passport num- ber;

• Use of a foreign address;

• A check or other written instrument drawn

  on an account or wire transfer from a foreign

  bank; or

• Contributor or donor living abroad.

  110.20(a)(5)(i)-(v).

  De nition of Foreign National

  A foreign national is:

• An individual who is: (1) not a citizen of the

  United States and (2) not lawfully admitted for permanent residence (as de ned in 8 U.S.C. §1101(a)(20)); or

• A foreign principal, as de ned in 22 U.S.C. §611(b). Section 611 de nes a foreign princi- pal as a group organized under the laws of a foreign country or having its principal place of business in a foreign country.The statute speci cally mentions foreign governments, political parties, partnerships, associations and corporations. 110.20(a)(3).

  “Green Card” Exception

  An individual who is not a citizen of the United States is eligible to make a contribution if he or she has a “green card” indicating that he or she is lawfully admitted for permanent residence in the United States. 110.20(a)(3)(ii).

Domestic Subsidiaries of Foreign Corporations
In advisory opinions, the Commission has said that a United States corporation that is a subsidiary of a foreign corporation may sponsor a separate segre- gated fund which can in turn make contributions to federal candidates as long as:

• The foreign parent does not nance election- related contributions or expenditures either directly or through the subsidiary.4

• No foreign national (including the foreign parent) participates in the operations of the separate segregated fund or in its administra- tion (such as by appointing of cers) or in any decision to make donations, contributions, disbursements or expenditures in connection with any federal or nonfederal election. See 110.20(i).

  See also AOs 2009-14, 2006-15, 2000-17, 1995-15, 1992-16, 1990-08 and 1985-03.

  Determining Nationality of Contributor

  The Commission stated, in AO 1998-14, that the use of any surname on a contribution check (or similar instrument) would not, by itself, give any reason to inquire as to the person’s nationality. Nonetheless, the Commission advised the commit- tee to take the following minimally intrusive steps to ensure that the contributions it received did not come from foreign nationals:

• Ensure that public political ads and solicita- tions directed to audiences outside the U.S. contain a summary of the foreign national prohibition of 52 U.S.C. §30121.

• Make further inquiry into the nationality of the contributor if the committee receives a contribution postmarked from any non U.S. territory.

• Make further inquiry into the nationality of the contributor if the committee receives a contribution indicating that either the bank or the account owner has a foreign address.

  In all of the above instances, if the contribution is submitted along with credible evidence (e.g., a copy of a valid U.S. passport) that the contributor is a U.S. citizen, a U.S. national or a permanent resident alien, no further inquiry need be made. However, if

  4 Refer to AO 1982-34 for a discussion of nancing the admin- istrative costs of an SSF.

Campaign Guide for Congressional Candidates

32 Chapter 5

the committee has actual knowledge that the con- tributor is in fact a foreign national, it may not rely on these documents as a defense. 110.20(a)(7).

Contributions in the Name of Another

A contribution made by one person in the name of another is prohibited. 52 U.S.C. §30122; 110.4(b). For example, an individual who has already contrib- uted up to the limit to the campaign may not give money to another person to make a contribution to the same candidate. Similarly, a corporation is prohibited from using bonuses or other methods of reimbursing employees for their contributions. 114.5(b)(1).

Candidate Employed by Prohibited Source

As noted in Chapter 4, Section 12, a candidate’s salary or wages earned from bona de employment are considered his or her personal funds. 100.33(b). However, compensation paid to a candidate in excess of actual hours worked, or in consideration of work not performed, is generally considered a contribution from the employer. 113.1(g)(6)(iii).
If the employer is a corporation, federal govern- ment contractor, or another prohibited source, the excess payment would result in a prohibited con- tribution under the regulations applicable to that employer. See 110.20 (foreign nationals), 114.2(c) (corporations and labor organizations) and 115.2 (federal contractors).

2. QUESTIONABLE CONTRIBUTIONS

If a committee receives a contribution of question- able legality, it must follow the ve procedures described below. 103.3(a) and (b). (Procedures for handling contributions that exceed the contribution limits or the campaign’s net debts outstanding are described in Chapter 4, Sections 7 and 8.)

Return or Deposit Contribution

When receiving a contribution of questionable legality, a committee must, within 10 days of the treasurer’s receipt, take one of two steps:

• Return the contribution to the donor with- out depositing it; or

• Deposit the contribution. 103.3(b)(1).

Be Prepared to Make Refund

If it decides to deposit the questionable contri- bution, the committee must make sure that the funds are not spent because they may have to be refunded.To ensure this, the committee may either maintain suf cient funds in its regular campaign depository or establish a separate account used solely for the deposit of possibly illegal contribu- tions. 103.3(b)(4).

Document the Possibility of Illegal Contribution

The committee must keep a written record noting the reason why a contribution may be prohibited and must include this information when reporting the receipt of the contribution. 103.3(b)(5). See also Chapter 11, Section 2,“Recording Receipts,” under the subheading “Possibly Illegal Contributions.”

Seek Evidence of Legality

Within 30 days of the treasurer’s receipt of a possibly prohibited contribution, the committee must make at least one written or oral request for evidence that the contribution is legal. Evidence of legality includes, for example, a written statement from the contributor explaining why the contribu- tion is legal, or an oral explanation that is recorded by the committee in a memorandum. 103.3(b)(1) and AO 1995-19.

Con rm Legality or Refund Contribution

Within these 30 days, the committee must either:

• Con rm the legality of the contribution; or

• Refund the contribution. 103.3(b)(1).

  Disgorge Prohibited Contribution Discovered Late

  If a committee deposits a contribution that appears to be legal and later discovers that it is prohibited (based on new information not available when the contribution was deposited), the committee must disgorge the contribution within 30 days of mak- ing the discovery. 103.3(b)(2).This situation might arise, for example, if the committee learned that

  a past contributor was a foreign national or had a contract with the federal government.As another 

Prohibited Contributions

Chapter 5 33

example, the committee might nd out that a cor- poration reimbursed employees for their contribu- tions to the committee (and had thus made corpo- rate contributions and contributions in the name of another).

Contributor Known

If the identity of the original contributor is known, the committee must refund the funds to the source of the original contribution. 103.3(b)(2).Alterna- tively, the committee may pay the funds to the U.S. Treasury.AO 1996-05; but see Fireman v. United States, 44 Fed. Cl. 528 (1999).5 To do so, send the funds to:

U.S. Department of the Treasury Financial Management Services Credit Accounting Branch
3700 East-West Highway Hyattsville, MD 20782

The committee should include a cover letter that explains that the funds being sent represent poten- tial violations of the Federal Election Campaign Act and requests that the funds be placed in the “gen- eral fund account.”

Contributor Unknown

If, however, the identity of the original contributor cannot be determined or is in question, the com- mittee may disburse the funds to a governmental entity (federal, state or local), or to a quali ed char- itable organization described in 2 U.S.C. §170(c). AOs 1995-19 and 1991-39.

Prohibited In-kind Contribution

If the prohibited contribution was an in-kind contri- bution, the committee should disgorge an amount equal to the value of the contribution to the appro- priate party as determined above.

Insu cient Funds

If the committee does not have suf cient funds
to disgorge the contribution when the illegality is discovered, the committee must use the next funds it receives. 103.3(b)(2).

5 In Fireman, the Court of Federal Claims ruled that a contributor of illegal contributions has a right to have the contributions refunded to him rather than disgorged to the U.S.Treasury.

Reporting

For instructions on reporting disgorged contribu- tions, see Chapter 13, Section 22.

Campaign Guide for Congressional Candidates

34 Chapter 5