2001-04-18 - WRITTEN OPINIONS
2001-04-18. WRITTEN OPINIONS
GARY O. BARTLETT
PO Box 2169
Raleigh, NC 27602-2169
Fax (919) 715-0135
April 18, 2001
Mr. Duane Royal
Treasurer Sampson County Republican Party
PO Box 1325
Clinton, NC 28328
RE: Donation Use as to Party Headquarters
Dear Mr. Royal,
Your letter of March 29, 2001 requests guidance for political party building fund donation use and a ruling pursuant to GS 163-278.23. We welcome your request in order to have the opportunity to provide more detail to all parties as to this issue.
GS 163-278.19B controls the issue of donations to political party headquarters building funds. Please note (4) of that statute that specifically prohibits the use of building funds to pay utilities or to purchase equipment other than fixtures. Only expenditures authorized by GS 63-278.19B(4) may be made from the building fund. As such, the building fund can not be used to:
(1) Pay utilities
(2) Purchase furniture unless it becomes a fixture
(3) Purchase computers or related information technology items unless they become fixtures
A display case affixed to the building would be a fixture, which could be paid for out of the building fund. A fixture is an item attached to realty to which an expectation attaches that it will stay on or in the real estate. This would include light fixtures, sinks, bathtubs, commodes, heating and air conditioning systems, built-in kitchen appliances, wallpaper or paint, installed carpet or flooring, widow dressings, and other similar type items.
Since furniture and computers are not fixtures, they are not allowed to be paid under the provisions of GS 63-278.19(B). Thus the prohibition against contributions from corporations and business entities would come into play to make in-kind donations, of these types and from the list above, from businesses unlawful. In-kind donations by businesses of items and services allowed to be paid from a political party building fund would be lawful.
This office would interpret the "renovation" language found in the statute to allow repairs and maintenance to the building and fixtures (both as to the cost of materials and labor) to be paid for out of a political party building fund. Maintenance would also include pest control, lawn-care, and landscaping for the headquarters. Business entities would be able to provide funds or in-kind donations for these maintenance and repair needs as per the provisions of GS 163-278.19A.
This office would interpret that maintenance of the building would also include the costs of maintaining property insurance upon it and fixtures, but would exclude liability coverage and personal property coverage on non-fixture contents. Thus it may be necessary that the insurance premium on the party headquarters be unbundled so as to determine the actual cost of property coverage to the building and fixtures.
The payment of property tax upon the building and its fixtures from the building fund will be allowed by this office, based upon the fact that the payment of such taxes are necessary to maintain the building ownership in the political party, and that tax payments are often covered in escrow accounts paid into jointly with the allowable mortgage payment. Since items of personal property can not be bought with building fund monies, the tax on personal property can not be paid from the building fund.
Based upon a review of building fund reports filed with this office, it appears that disbursements from building funds for personal property have been made. Notice is hereby given that this office will not review building fund reports for enforcement purposes for a period until July 1, 2001 to allow political party organizations to amend their building fund reports to reflect corrected disbursements. The parties are allowed, as well, to amend their reports to reflect additional retroactive disbursements from building funds based upon any allowance of the same contained in this opinion. I would also ask the state parties headquarters staff to share this information with counties that have or plan to have county headquarters.
Gary O. Bartlett
Cc: North Carolina Democratic Party
Cc: North Carolina Republican Party
Cc: North Carolina Libertarian Party
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