Bank accounts of nonconnected PACs

Establishing federal and nonfederal bank accounts

All political committees must register an official committee depository. A committee engaging in both federal and nonfederal election activity has two options:

• Set up one federal account (accepting only contributions subject to the limits and prohibitions of the Federal Election Campaign Act (the Act)) to support both federal and nonfederal candidates and report all activity to the FEC; or
• Set up two accounts—one for federal elections and another for state and local elections.

The second option permits the committee to maintain a separate nonfederal account that has no federal registration or reporting obligations. When conducting an activity that relates to both federal and nonfederal elections however, the committee must allocate the costs between the two accounts. Also, please note that any activity (including reporting requirements) by nonfederal accounts is governed by relevant state law. A nonfederal account generally has no reporting obligations with the FEC.

Note: Because PACs established, financed, maintained or controlled by a federal candidate may not accept federally impermissible funds, even those funds in the nonfederal account of a leadership PAC must comply with federal limits and prohibitions. In fact, the total contributions from individuals to the PAC’s federal and nonfederal accounts may not exceed $5,000 per calendar year.

Non-contribution account

Consistent with the Emily's List v. FEC and Carey v. FEC decisions, the Commission no longer enforces the statutory contribution limits, as well as any implementing regulations, against any nonconnected political committee with regard to contributions from individuals, political committees, corporations, and labor organizations, as long as:

• The committee deposits the contributions into a separate bank account for the purpose of financing independent expenditures, other advertisements that refer to a federal candidate, and generic voter drives (i.e., a non-contribution account);
• The non-contribution account remains segregated from any accounts that receive source-restricted and amount-limited contributions for the purpose of making contributions to candidates; and
• Each account pays a percentage of administrative expenses that closely corresponds to the percentage of activity for that account.

Until such time as the Commission adopts a new regulation, nonconnected political committees that wish to establish a separate non-contribution account consistent with the stipulated judgment in Carey should:

• Register as a Hybrid PAC using Form 1; and
• Report all receipts and disbursements for both accounts pursuant to the Act and Commission regulations, following the specific reporting guidance put out by the Commission on October 5, 2011.