This guide is written for party committees that have registered (or may need to register) as federal political committees.

This guide is not intended for local party groups that do not have to register as federal political committees. However, those groups remain subject to several FEC regulations.

In this guide, the term party committee refers to a party unit that has qualified as a political committee under federal law, with attendant registration and reporting requirements. 100.5. The term party organization refers to a party unit that has not triggered federal registration and reporting requirements.[1]

A party organization becomes a political committee under the Federal Election Campaign Act (the Act) when its activity in connection with a federal election exceeds one of the registration thresholds. The committee then has 10 days to file an FEC registration form (FEC Form 1). 100.5 (a) and (c); 102.1(d).

A newly registered political committee must begin disclosing its financial activity in FEC reports.

Registration Thresholds

State and National Organizations

A party organization at the state or national level [2] becomes a political committee when, during a calendar year, it:

• Spends more than $1,000 in contributions and other expenditures; or

• Raises more than $1,000 in contributions. 100.5(a).

Local Organizations

A local party organization becomes a political committee when, during a calendar year, it:

• Spends more than $1,000 in contributions and other expenditures;[3]  or

• Raises more than $5,000 in contributions; or

• Spends more than $5,000 on exempt party activities. 100.5(c).

Permissible Funds

Note that party organizations must finance their activity in connection with federal elections with funds that comply with the federal contribution limits and prohibitions. 102.5(b).

$1,000 Threshold for Contributions/Expenditures Made

Once a party organization spends more than $1,000 per calendar year on contributions and other expenditures, it becomes a political committee and must register. Note that the $1,000 threshold is an aggregate one—it applies to all contributions and expenditures made by the organization during the year, including transfers to a party committee (i.e., a federal account).

$1,000 and $5,000 Thresholds for Contributions Received

The “contributions received” threshold is $1,000 for state and national organizations and $5,000 for local party organizations. Funds specifically solicited or donated for the purpose of influencing federal elections count against this threshold (and are subject to the federal limits and prohibitions).

Funds (including loans) transferred in from a party committee (i.e., a federal account) also count against the threshold if they are used by the recipient party organization for federal activity.

$5,000 Threshold for Exempt Activities

This threshold applies only to local party organizations. Spending in excess of $5,000 per year on exempt party activities triggers political committee status. However, if the exempt activity supports both federal and nonfederal candidates, only the portion of the expense allocable to federal candidates counts against the $5,000 threshold. For more information on exempt party activities, see Chapter 7.

State, district and local party committees may raise and spend as many as three different types of funds:

·       Federal – These funds are subject to the limits, prohibitions and reporting requirements of the Act and are used to finance activities in connection with federal elections. Only federal funds count against the registration thresholds, described above;

·       Nonfederal – These funds are subject to state law, but may not be permissible under federal law. Nonfederal funds are generally used to finance state and local election activities; and

·      Levin – This is a new category of funds used for certain federal election activity. Levin funds may include donations from some sources ordinarily prohibited by federal law (e.g. corporations, unions and federal contractors) but permitted by state law. Levin donations are limited to $10,000 per calendar year from any source or to the limits set by state law – whichever limit is lower. For further information on Levin funds, see Chapter 8.

National parties may not solicit, raise, direct or spend funds or anything of value that are not subject to the prohibitions, limitations and reporting requirements of the Act. This prohibition of nonfederal and Levin funds also applies to any agent or officer acting on behalf of the national party committee or any entity that is directly or indirectly established, financed, maintained or controlled by a national party committee. 300.10(a)-(c). For information on agency and such entities, see below.

Any prohibitions that apply to political party committees also apply to any agent or officer acting on behalf of the party committee or any entity which is directly or indirectly established, financed, maintained or controlled by a party committee.

Agents of a Committee

An agent is any person who has actual authority, either expressed or implied, to engage in certain activities on behalf of the committee.[4]

State and Local Party Committees

In the case of state and local party committees, these activities are:

• Expending or disbursing any funds for federal election activity;

• Transferring or accepting transfers of funds for federal election activity;

• Engaging in joint fundraising activity if any part of the funds are to be used for federal election activity; or

• Soliciting any funds for, or making or directing any donations to, any tax-exempt 501(c) organization or 527 organization that is not also a political committee, a party committee or a campaign committee. 300.2(b)(2).

National Party Committees

In the case of the national party committees, these activities are:

• Soliciting, directing or receiving a contribution, donation or transfer of funds; or

• Soliciting any funds for, or making or directing contributions to, any tax-exempt 501(c) organization or 527 organization that is not also a political committee, a party committee or a campaign committee. 300.2(b)(1).

Definition of ‘Solicit’

To solicit means to ask that another person contribute, donate or transfer funds or otherwise provide anything of value, either directly or through an intermediary. Solicitation does not include providing information or guidance regarding the law. 300.2(m).

Definition of ‘Direct’

To direct means to ask a person who has expressed an intention to make a contribution, donation, transfer of funds, or to provide anything of value, to do so either directly or indirectly through an intermediary. Direction does not include merely providing information or guidance regarding the law. 300.2(n).

Entities of a Committee

To determine whether or not an organization is an entity of a party committee, a number of factors may be taken into account. Each is examined within the context of the overall relationship between the sponsor and the entity. These factors include whether the sponsor:

• Owns controlling interest in the voting stock or securities of the entity;

• Has the authority or ability to direct or participate in governing the entity. This authority may come from bylaws, constitutions, contracts or other rules, or through formal or informal practices;

• Has the authority or ability to hire, fire or otherwise control the decision-making members of the entity;

• Has overlapping membership with the entity which indicates a formal or ongoing relationship between them;

• Has overlapping officers or employees with the entity that indicates a formal or ongoing relationship between them;

• Has any members, officers or employees who were members, officers or employees of the entity that indicates a formal or ongoing relationship between them;

• Provides funds or goods in a significant amount or on an ongoing basis to the entity. This does not include transfers of an allocated share of joint fundraising activity;

• Causes or arranges for funds in a significant amount or on an ongoing basis to be provided for the entity. Again, this does not include transfers of an allocated share of joint fundraising activity;

• Had an active or significant role in the formation of the entity; and

• Has similar patterns of receipts or disbursements with the entity that indicate a formal or ongoing relationship between them.

300.2(c)

Safe Harbor Provision

Determination of whether an organization is an entity of a party committee is based on activity after November 6, 2002 only.

State, district and local party committees or organizations that engage in both federal and nonfederal activities must follow certain rules to ensure that federal activity is financed with funds that comply with the limitations and prohibitions of the Act. Federal activities include, for example:

• Contributions and other spending on behalf of specific federal candidates;

• The federal portion of allocable expenses, such as administrative expenses and generic voter drive costs;

• Certain transfers of funds to other party committees;

• Contributions to federally registered PACs: and

• Certain federal election activity (FEA), described in Chapter 8.

Each state, district or local party organization or committee that finances activity in connection with federal and nonfederal elections has three options:

• Set up three separate types of bank account: one or more federal accounts used for federal activity, one or more nonfederal accounts used exclusively for nonfederal activity, and one or more Levin accounts used for certain FEA. 300.30(c)(2); or

• Set up two separate types of account: one or more federal accounts and a nonfederal account. Committees that choose this option may deposit Levin funds into the nonfederal account, but must keep detailed records. 300.30(c)(3); or

• Set up one or more federal bank accounts for all of its activity, both federal and nonfederal. Such an account cannot accept Levin funds. 300.30(c)(1) and 102.5(a)(1)(ii). It must comply with all requirements of the Act.

For more information on the receipt of Levin funds, see Chapter 8.

Three Accounts: Federal, Nonfederal and Levin

Only contributions permissible under federal law may be deposited into the federal account. All federal activity must be transacted from that account. 102.5(a)(1) and (2); 300.30(b)(3)(i) and (ii)

By contrast, the nonfederal account may not finance any federal activity. The nonfederal account has no registration or reporting obligations under federal law but is subject to nonfederal laws, such as state registration and reporting requirements. See below.

Payments for administrative and other mixed federal/nonfederal expenses must be paid by the federal account or a special allocation account. Once a party committee establishes an allocation account, all allocable expenses must be paid for from that account as long as it exists. The nonfederal account may transfer its allocated portion of a mixed expense to the federal or allocation account, as explained in Chapter 13. 106.(7)(f). No funds from a combined allocation account may be transferred to any other account maintained by the committee or organization. 300.30(b)(4)(v). Funds may be transferred from the nonfederal account to pay the nonfederal share of allocable expenses, but no other nonfederal-to-federal transfers are permissible. 102.5(a)(1)(i) and 106.7.(f); 300.30(b)(3)(v)

Payments for FEA must be paid from the federal account or a special allocation account – separate from its federal/nonfederal allocation account. If the federal account pays the expenses, the committee may transfer funds from its Levin accounts to cover the allocable share. If an FEA allocation account is used, the committee must transfer funds from both its federal and Levin accounts to cover the allocable expenses. 300.34(c). No other transfers of Levin funds are permissible. 300.34(b).

Two Accounts: Federal and Nonfederal

Only funds permissible under federal law may be deposited into the federal account. All federal activity must be transacted from that account or from an allocation account. 102.5(a)(1)(i).

The nonfederal account may be used for nonfederal activity and, if the committee chooses to raise Levin funds, for allocable federal election activity. The committee must demonstrate through a reasonable accounting process that they have adequate Levin funds to cover any payments for the Levin component of allocable FEA that come from this combined account. 102.5(a)(3) and 300.30(c)(3).

The account’s Levin fund receipts and disbursements are subject to the disclosure provisions of the FEC regulations. See chapter 8 for discussion of FEA and Levin funds.

One Federal Account

When only one account—a federal account—is used for federal and nonfederal activity, that account is considered a political committee under federal law. All contributions received by the committee are subject to federal prohibitions, limitations and solicitation requirements (see below), regardless of whether the funds are used to pay for federal, nonfederal or FEA. Similarly, all receipts and disbursements must be reported, including those that pertain to nonfederal activity and federal election activity. 102.5(a)(1)(ii). The committee’s nonfederal activity is subject to nonfederal law (see below).

Receiving and Depositing Federal Contributions

Contributions deposited in either a federal account or an account used for both federal and nonfederal activity must meet certain conditions. Contributions must be:

·       Designated for the federal account;

·       The result of a solicitation which expressly states that the contribution may be used wholly or in part in connection with a federal election; or

·       From contributors who are informed that all contributions are subject to the prohibitions and limitations of the Act.

102.5(a)(2) and 300.30(a)(3)(ii).

See also “Solicitation Notices."

Soliciting Levin Funds

Levin funds must be raised under unique rules. For information of how to raise Levin funds, see Chapter 8.

Nonfederal Laws Apply

Disbursements made in connection with a nonfederal election are subject to relevant state or local law. Committees should therefore seek guidance from the appropriate election officials. See also Appendix E.

Importance of Office

A political committee must designate a treasurer on a Statement of Organization (FEC Form 1). 102.1, 102.2 and 102.7. The treasurer is responsible for seeing that the committee complies with the Act. Before agreeing to become treasurer, the individual should understand the duties and liabilities of the office.

Treasurer’s Duties

The treasurer is responsible for:

• Signing all reports and statements. 102.2(a), 104.1(a) and 104.14(a).

• Filing complete and accurate reports and statements on time. 104.1(a) and 104.14 (d).

• Monitoring contributions to ensure compliance with the Act’s limits and prohibitions. 103.3(b).

• Depositing receipts in the committee’s designated bank within 10 days. 103.3(a).

• Authorizing expenditures and appointing authorized agents (either orally or in writing) to receive contributions and make expenditures. 102.7(c) and 102.9.

• Keeping the required records of receipts and disbursements. 102.9 and 104.14(b).

Treasurer’s Liability

Treasurers are responsible for carrying out the duties listed above. For this reason, when the Commission brings an enforcement action against a political committee, the treasurer is named as a respondent along with the committee itself. Even when an enforcement action alleges violations that occurred during the term of a previous treasurer, the Commission usually names the current treasurer as a respondent. However, the Commission will indicate whether the treasurer is named in his or her official capacity, is alleged to have personally violated Commission law and regulation, or both.

Assistant Treasurer

The Commission urges every committee to designate an assistant treasurer on its Statement of Organization. An assistant treasurer may assume the treasurer’s duties when the treasurer is unavailable or has resigned. 102.7(a).

If the treasurer is unavailable to sign a report and there is no assistant treasurer, the committee may designate an assistant treasurer on an amended Statement of Organization. The assistant treasurer may sign both the amendment and the report. The amendment must be filed within 10 days of the change. 102.2(a)(2).

New Treasurer

A committee must report a change in treasurer within 10 days. 102.2(a)(2).

Within 10 days of exceeding a registration threshold and triggering political committee status, a party committee must file a Statement of Organization (FEC Form 1). 102.1(d). Line-by-line instructions are provided below, and with the form itself. For an example of the Statement of Organization, click here. [PDF]

Line-by-Line Instructions

Line 1. Name and Address of the Committee

Enter the full, official name of the committee and its mailing address. This address is considered the committee’s address of record. All Commission correspondence will be sent to this address. 102.2(a)(1)(i). In addition, a committee must include its internet web site, its fax number if available and, if required to file electronically, its e-mail address. 102.2(a)(i)(vii).

A party committee’s name cannot include the name of any candidate. Furthermore, a party committee cannot use the name of any candidate in the name of a special communication, such as a fundraising project, unless the project name shows unambiguous opposition to the candidate, as explained on page 19. 102.14(a) and (b)(3).

Line 2. Date

Enter the date when the committee officially became a political committee—that is, the date when the committee exceeded a registration threshold.

Line 3. FEC Identification Number

Leave this space blank. The committee will be notified of its FEC ID number by mail a few weeks after filing Form 1. From then on, the ID number should be included on reports, statements and other communications. 102.2(c).

If a committee must file a report before it has received an ID number, it should leave that space blank on the reporting form (FEC Form 3X, line 2).

Line 4. Is This Statement New or an Amendment?

Check “new.” (Amendments are discussed under “Updating Registration Information,” page 6.)

Line 5. Type of Committee

A party committee checks box (d) and identifies itself as either a national, state or subordinate (local) committee of a particular party. 102.2(a)(1)(i). National and state party committee status is determined by the Commission through the advisory opinion process. 100.13 and 100.14(a).

Line 6. Affiliated Committees

List the names and addresses of any affiliated committees. 102.2(a)(1)(ii). See 102.2(b)(1)(ii)(B). Affiliated committees share the same limits on contributions received and made; see "Affiliation and Contribution Limits."

• A local party committee lists the state party committee as an affiliate. Local committees are presumed to be under the direction and control of the state committee—and thus affiliated with the state committee—unless they can demonstrate otherwise. See 110.3(b)(3).

• A state party committee lists all affiliated local party committees. (It should not list local party organizations.) See 110.3(b)(3).

• A national party committee lists any committees it has established, financed, maintained or controlled. However, a national committee does not list state or local party committees, since they are not considered affiliated with the national committee for purposes of the contribution limits. A party’s Senate and House campaign committees are also not considered affiliated with the national committee for purposes of the contribution limits.[5] 110.3(b)(1) and (b)(2).

Line 7. Custodian of Records

Enter the name and address of the person who has actual possession of the committee’s financial records. The committee’s treasurer, assistant treasurer or another person (such as an accountant or bookkeeper) may serve as the custodian of records. 102.2(a)(1)(iii). (Recordkeeping rules are discussed in Chapter 10.)

Line 8. Treasurer and Assistant

List the name and mailing address of the treasurer. 102.2(a)(1)(iv). As previously discussed in Section 4, the Commission urges all political committees to list an assistant treasurer as well.

Line 9. Banks or Other Depositories

List the name and address of each bank where the committee deposits funds. The committee must have at least one checking account for the deposit of receipts. 102.2(a)(1)(vi) and 103.2.

Signing and Dating the Form

The treasurer or assistant treasurer must sign and date the form on the bottom line. 102.2(a)(1). The signer’s name must also be typed or printed where indicated.

Filing the Form

A party committee must file its Statement of Organization within 10 days of becoming a political committee. 102.1(d).

The Statement of Organization—and any amendments—are filed both with the FEC and the filing office of the state in which the committee has its headquarters, if that state has not received a waiver from the requirement to maintain copies of FEC statements and reports. See "State Filing" for details.

Updating Registration Information

Whenever any of the information on the Statement of Organization (Form 1) changes, the committee must report the change within 10 days by filing an amended Form 1 or a letter containing the same information (for paper filers only).

The amount of information required on an amended Statement of Organization depends on whether the committee files on paper or electronically. If the committee files electronically, it must submit a fully completed Form 1.

In the case of paper filers, the Form 1 or letter needs to include only:

• The name and address of the committee (Form 1, Line1);

• The date the change took effect (Line 2);

• The FEC ID number (Line 3);

• An indication that the statement is an amendment to the Statement of Organization (Line 4);

• The changed information (appropriate line number); and

• The name and signature of the treasurer (or assistant treasurer) and the date signed. 102.2(a)(2).

If a party committee incorporates for liability purposes only, its outgoing contributions and other expenditures are not subject to the prohibition on corporate contributions and expenditures. 114.12(a).

The treasurer, however, remains liable for the committee’s compliance with the federal campaign finance law. Liability for debts is generally governed by state law. See AO 1995-7 and opinions cited therein. See also Karl Rove and Company v. Thornburgh, 39 F.3d 1273 (5th Cir. 1994).