Expenses for rent, personnel, overhead and other day-to-day costs of running the committee are not considered contributions or coordinated party expenditures as long as the expenses are not directly attributable to a clearly identified candidate. As explained, however, some of these expenses are allocable between federal and nonfederal accounts.
Rent, utilities and other administrative expenses
Administrative expenses may be allocated, including rent, utilities and office supplies, except when such expenses are directly attributable to a clearly identified candidate. If administrative expenses are not allocated, they must be paid for with all federal funds.
Note that salaries are only allocable as administrative expenses for employees who spend 25 percent or less of their compensated time on activities in connection with a federal election or Federal Election Activity (FEA).
Salaries of employees who spend more than 25% of compensated time on activities in connection with a federal election or FEA must be paid as Type 4 FEA.
Unreimbursed travel expenses
The rules described apply only to an individual’s payments for his or her own travel expenses; if an individual uses personal funds to pay the travel expenses of another, an in-kind contribution results.
$2,000 transportation exemption
An individual working for a party committee (including a paid staff member or a volunteer) may voluntarily spend up to $2,000 for unreimbursed transportation expenses on behalf of all political committees of the same party without making a contribution. Payments for transportation expenses that exceed $2,000 per year, however, are considered contributions—unless they are reimbursed by the party committee in a timely manner.
Reimbursed travel expenses
When an individual working on behalf of the party committee pays transportation and subsistence expenses while traveling, no contribution will result if the committee reimburses the individual within the following time limits:
- If the expense was paid with cash or a personal check, within 30 days from the date the expense was incurred.
- If the expense was paid with a credit card, within 60 days of the closing date on the credit card billing statement where the charge first appears.
Outside of these time limits, the payments are in-kind contributions.
Generic voter drive activity
Activities that urge the general public to register, to vote or to support candidates of a particular party or associated with a particular issue, without mentioning a specific candidate, are not considered contributions or coordinated party expenditures. However, costs for this type of activity are allocable.
Unless they otherwise qualify as Federal Election Activity, expenses for voter registration, voter identification, get-out-the-vote drives or any other activity that urges the general public to register or to vote or that promotes or opposes a political party without promoting or opposing any federal or nonfederal candidate may be allocated between federal and nonfederal accounts. Please note that salaries and wages do not qualify as voter drive activity.
Paying for allocable administrative and generic voter drive expenses
Fixed percentage ratio
Used For: Administrative expenses, voter drive activities, exempt party activities and certain staff salaries.
Under this allocation ratio, the minimum percentage of federal funds depends upon which federal offices appear on the ballot during the relevant even-numbered election year (and in the preceding year):
- If both a presidential candidate and a Senate candidate appear on the ballot, then at least 36 percent of the expenses must be allocated to the federal account;
- If a presidential candidate, but not a Senate candidate, appears on the ballot, then at least 28 percent of the expenses must be allocated to the federal account;
- If a Senate candidate, but not a presidential candidate, appears on the ballot, then at least 21 percent of the expenses must be allocated to the federal account; and
- If neither a presidential candidate nor a Senate candidate appears on the ballot, then at least 15 percent of the expenses must be allocated to the federal account.
If the activity refers to a federal candidate
If the activity refers to a clearly identified federal candidate, or if the funds used pay for any part of the costs of a broadcast, cable or satellite communication (and the communication does not refer solely to a clearly identified state or local candidate), only federal funds may be used to pay for the FEA.
Payment from federal or allocation account
- There are two ways to make payments for allocated expenses: A party committee may pay the entire amount of the expense from the federal account. It may then transfer funds from the nonfederal account to the federal account solely to cover the nonfederal share of each allocable expense; or
- A party committee may establish a separate federal account—called an allocation account—solely for the purpose of paying allocable expenses. The committee transfers funds from its federal and nonfederal accounts to the allocation account in amounts equal to the federal and nonfederal shares of each allocable expense.
Transfers from nonfederal account
Transfers from the nonfederal account to pay the nonfederal portion of an allocable expense must be made within a 70-day window: no more than 10 days before or 60 days after the day the federal account (or allocation account) makes the payment. Transfers of nonfederal funds to the federal account must be reported on Schedule H3 of Form 3X.
Note that transfers from a nonfederal account to pay its allocated share of expenses are an exception to the overall ban on nonfederal transfers to a federal or allocation account.
Reporting allocated administrative, generic voter drive and exempt activity expenses
- Schedule H1—Allocation Ratio for Administrative, Voter Drive Expenses, Exempt Activity Costs and Federal Election Activity
- Schedule H3—Transfers from Nonfederal Account
- Schedule H4—Payments for Allocable Expenses