Support from corporation or labor organization
A corporation or labor organization may make donations from its treasury funds to nonfederal candidates and to organizations not involved in federal elections, if permitted by state law. However, foreign nationals are prohibited from making contributions or expenditures in connection with state and local elections.
SSF involvement in nonfederal elections
An SSF may expend its funds for nonfederal elections, as permitted by state law. A committee engaging in activities to influence both federal and nonfederal elections has two options under FEC regulations:
- Set up one federal account (an SSF) that supports both federal and nonfederal candidates while reporting all activity to the FEC; or
- Set up two accounts—an SSF for federal elections and a nonfederal account for state and local elections.
Using one SSF account
A committee may support both federal and nonfederal candidates and committees with one SSF account, but all funds received by the SSF are subject to the prohibitions, contribution limits and solicitation restrictions of the Federal Election Campaign Act (the Act).
Reportable nonfederal activity
A registered SSF must file FEC reports on all its financial activity of its federal account, including activity that supports nonfederal candidates. SSF disbursements for nonfederal elections must be reported as “Other Disbursements” on Line 29 of Form 3X and itemized on Schedule B once they aggregate over $200 to the same candidate, committee or other person in a calendar year.
State law applies
Any SSF contribution or expenditure made in connection with a nonfederal election is subject to applicable state law. An SSF should seek guidance from state election officials before engaging in nonfederal campaign activity.
Using two accounts
Alternatively, a committee or connected organization may set up two accounts—an SSF for activity in connection with federal elections and a second account (sometimes referred to as a "state PAC") for activity in connection with nonfederal elections. This option permits the committee to maintain a nonfederal account that has no federal registration or reporting obligations. When conducting an activity that benefits both federal and nonfederal candidates and committees, however, the committee may have to allocate the costs between the two accounts. This means that the committee may pay for at least some of the costs from its federal account, and follow specific rules for payment.
If two accounts are used, only the federal account (the SSF) has registration and reporting obligations under the Act.
An account used only for state and local elections is generally not subject to the Act’s registration and reporting requirements, nor is it subject to the Act’s contribution limits or solicitation rules. (Nevertheless, federal law prohibits nonfederal committees from accepting contributions from foreign nationals, national banks and federally chartered corporations. Note, however, that when the SSF and the nonfederal account engage in activities for which payment may be allocated between the accounts, transfers to/from the nonfederal account are reportable.
Transfers from the nonfederal account
The committee may not transfer funds from the nonfederal account to the federal account except under these two circumstances:
- The nonfederal account acting in its capacity as a collecting agent.
- The nonfederal account transferring the nonfederal share of an allocated expense attributed to both federal and nonfederal elections.
Collecting agent activity
A nonfederal account may act as a collecting agent for contributions to the federal account and transfer funds raised for the federal SSF without triggering registration requirements.
Allocated expense payments
A nonfederal account may transfer funds to the federal account to cover the nonfederal portion of expenses benefiting both federal and nonfederal candidates and committees. For example, the nonfederal account may transfer its allocable share of the expenses for a public communication that supports both a federal and a nonfederal candidate. The transfer must be made according to the rules described in Supporting multiple candidates.