Firm Articles

State and Local Political Contributions and Major Donors

by Arthur J. McDaniel

The law regarding state and local political contributions is the Political Reform Act of 1974. The statutory provisions are in California Government Code, Title 9, sections 81000 through 91014. The Act imposes filing requirements on not only candidates and their committees, but also on certain donors. The Act also established the California Fair Political Practices Commission to interpret and enforce the rules. In addition, the California Secretary of State established the Political Reform Division to administer the rules concerning financial disclosure.

Major Donor

Specifically, a donor (a term that includes both individuals and entities) that makes political contributions of $10,000 or more in a calendar year is a “Major Donor.” The contributions counted are those to candidates for state and local public office, and those to support or oppose state or local measures.

Major Donor Report – Form 461

A Major Donor must file FPPC Form 461, semi-annually, by January 31 and July 31, to report those contributions. Moreover, during the odd years, a Major Donor, may have to file quarterly reports, if the contributions during a quarter to a state officeholders, state candidates, or committees formed primarily to support or oppose any elected state officer or candidate are $10,000 or more. Those quarterly reports are due on October 10, and April 10.

Late Contribution Report – Form 497

Once a donor has become a Major Donor, there is an additional filing requirement for certain contributions made within 16 days of an election. The contributions to which these rules apply are those of $1,000 or more to a single candidate, controlled committee, or a committee primarily formed to support or oppose a candidate or ballot measure. These contributions must be reported within 24 hours on FPPC Form 497.   

Where Filed

Major Donors file the following reports: original and one copy with the Secretary of State Political Reform Division, two copies with the Registrar of Voters for Los Angeles County, 2 copies with the Registrar of Voters for San Francisco County, and two copies with the Registrar of Voters for their county of Domicile.

State Contribution Limits

The Act imposes limits on candidates for specific state offices. The limits apply to each election. For elections occurring in 2005 and 2006, a donor is limited to $3,300 per election per candidate for the legislature; $5,600 per election per candidate for statewide office; and $22,300 per election per candidate for Governor. There is no overall limit placed on donors, who may contribute as much as they want, governed only by the per-election per-candidate limit.

Local Contribution Limits

The State Contribution limits do not affect local jurisdictions, such as counties and cities. For local candidates and measures, donors are bound only by rules the local jurisdiction has adopted. However, these local contributions do count toward the Major Donor filing requirements.    

DISCLAIMER

As provided in Treasury Department Circular 230, this article is not intended or written by Lobb Cliff & Lester, LLP to be used, and cannot be used, by a client or any other person or entity for the purpose of avoiding tax penalties that may be imposed on any taxpayer.