Baldwin Haspel Burke & Mayer LLC

Campaign Contribution Rules for 2018 Federal and State Elections

Jack Casanova, Jr. - 

On November 6, 2018, elections will be held for numerous federal and state political positions. All 435 seats in the United States House of Representatives and 35 of the 100 seats in the United States Senate will be contested. In addition, 39 state and territorial governorships as well as various other state and local elections will all be contested.

The Federal Election Campaign Act (“the Act”) provides specific limitations with respect to political campaign contributions. The below table provides an overview of the contribution limits for the 2018 federal elections. These limits apply to all types of contributions (except contributions made from a candidate’s personal funds).

*Indexed for inflation in odd-numbered years.

**Additionally, a national party committee and its Senatorial campaign committee may contribute up to $47,400 combined per campaign to each Senate candidate.

1. PAC here refers to a committee that makes contributions to other federal political committees.

2. The limits in this column apply to a national party committee’s accounts for: (i) the presidential nominating convention; (ii) election recounts and contests and other legal proceedings; and (iii) national party headquarters buildings. A party’s national committee, Senate campaign committee and House campaign committee are each considered separate national party committees with separate limits. Only a national party committee, not the parties’ national congressional campaign committees, may have an account for the presidential nominating convention.

 3. For purposes of contribution limitations and prohibitions, a LLC is treated either as a corporation or a partnership. If an LLC is considered a corporation, it is generally prohibited from making contributions to political committees, although it is permitted to establish a PAC. Under C.F.R. 100.134(l), a corporation is defined as any separately incorporated entity. If an LLC is considered a partnership, it is permitted to make contributions to political committees, but it is subject to the rules for partnerships provided in more detail below). 

4. Corporations and Labor Unions are generally prohibited from making political contributions to individuals and PACs. However, Corporations and Labor Unions are permitted to establish PACs and make unlimited contributions to SUPER PACs.

5.  See attribution rules for Partnerships/LLCs below.

6. A Super PAC is a political committee that makes only independent expenditures and  may solicit and accept unlimited contributions from individuals, corporations, labor organizations and other political committees. It may not accept contributions from foreign nationals, federal contractors, national banks or federally chartered corporations.  

FEDERAL RULES FOR BUSINESS ENTITIES

The federal rules and procedures for campaign contributions differ when contributions originate from business entities. Specifically, the Federal Election Commission provides the following guidance:

Limited Liability Companies (LLC’s)

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

However, for purposes of contribution limitations and prohibitions, LLC’s may be treated as either a corporation or a partnership under the following circumstances:

(i) An LLC is treated as a corporation if:

(ii) An LLC is treated as a partnership if:

If an LLC is treated as a corporation, it is prohibited from making contributions to candidate committees, but it can establish a separate segregated fund (“SSF”). The LLC may also give money to independent expenditure-only political committees (“IEOPC”), more commonly known as Super PACs. An IEOPC may accept unlimited contributions, including from corporations and labor organizations.

If the LLC is taxable as a partnership, it is subject to the contribution limits for partnerships, provided below.

Alternatively, a single member LLC that has not chosen corporate tax treatment may make contributions; however, the contributions will be attributed to the single member, not the LLC.

Partnerships

Partnerships are permitted to make contributions according to special rules.

Contributions received by a candidate’s authorized committees from a partnership may not exceed the limitations. In addition, a contribution from a partnership also counts proportionately against each participating partner’s own limit with respect to the same candidate.

Because a contribution from a partnership is a joint contribution, the partnership must provide to the recipient committee, along with the contribution, a written notice listing the names of the contributing partners and the amount to be attributed to each. However, unlike other joint contributions, the signature of each contributing partner is not required.

Contributions Made by Individual Partners

Each individual partner may make contributions subject to limitations. For instance, although contributions made by the partnership as a whole count proportionately against each participating partner’s limit, contributions made by individual partners from their own funds do not count against the partnership’s limit.

A portion of the partnership contribution must be attributed to each contributing partner. If all partners within the organization are contributing, the partnership may attribute the contribution according to each partner’s share of the firm’s profits.

However, if the partnership attributes a contribution on another basis agreed to by the partners, all the following rules must be observed:

The portion attributed to each partner must not, when aggregated with other contributions from that person, exceed his or her individual contribution limit.

Prohibited Contributions

Campaigns are prohibited from accepting contributions from certain types of organizations and individuals. These prohibited sources are:

LOUISIANA ELECTIONS

The Louisiana contribution limits are detailed in the following chart:

1. The primary and general elections are considered as two separate elections. A candidate may accept contributions for the general election only if he is in the general election and only after the primary election.

2. A husband and wife may each make contributions to the same candidate up to the limit. However, separate checks should be used. If a single check is signed by one spouse, the other must provide an affidavit as to their intent to share in the contribution.

3. Legal entity means any partnership, association, labor union, political committee, corporation, LLC or other legal entity, including their subsidiaries Parent corporations and their subsidiaries are subject to a single limit. A corporation is a parent if it owns 50% of another.

4. In The Fund for Louisiana’s Future v. Louisiana Board of Ethics, et al., USDC, Eastern District of Louisiana No.14-0368 (May 2, 2014), the Court concluded that the limit did not apply to contributions received by Super PACs.

In Louisiana, the campaign contributions limits are determined by the type of political office being pursued. Under La. R.S. 18:1505.2, Louisiana political offices are divided into the following categories:

Major Office

Any office with an election district containing a population in excess of 250,000, including offices elected parishwide in Caddo, East Baton Rouge, Jefferson and Orleans.

District Office

Any Other Office

Contribution Rules and Limits

In Louisiana, “person” means any individual, partnership, association, labor union, political committee, corporation, LLC or other legal entity, including their subsidiaries. As a result, corporations and labor unions are permitted to make political donations for Louisiana elections.

Pursuant to La. R.S. 18:1505.2, contributions, in-kind contributions, loans, endorsements or guarantees on loans and transfers of funds are all counted towards the contribution limits. However, the below exceptions do not apply against contributions limits:


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