Executive Director

Mailing Address:

P.O. BOX 27255

RALEIGH, NC 27611-7255

December 11, 2006

The Honorable Charles W. Albertson

525 Legislative Office Building

Raleigh, N.C. 27603-5925

Dear Senator Albertson:

This is to formalize our conversation on December 4, 2006, in which you have requested an advisory opinion pursuant to G.S. § 163-278.23regarding permissible uses of campaign funds from a candidate's campaign committee. Specifically, you want to ensure that you comply with changes in S.L. 2006-161 that became effective on October 1, 2006.

It is my understanding that your committee would like to make expenditures to reward campaign contributors, volunteers, office staff members or persons with whom you interact as part of running for and holding public office. These expenditures may be tickets purchased from a University or a museum, a thank you dinner, a gift or a charitable contribution made in the honor of such persons. These are legitimate uses of campaign funds under our current Campaign Finance laws and Session Law 2006-161. Below is the statute that governs these expenditures.

" § 163-278.16B. Use of contributions for certain purposes.

(a) A candidate or candidate campaign committee may use contributions only for the following purposes:

(1) Expenditures resulting from the campaign for public office by the candidate or candidate's campaign committee.

(2) Expenditures resulting from holding public office.

(3) Contributions to an organization described in section 170(c) of the Internal Revenue Code of 1986 (26 U.S.C. § 170(c)), provided that the candidate or the candidate's spouse, children, parents, brothers, or sisters are not employed by the organization.

(4) Contributions to a national, State, or district or county committee of a political party or a caucus of the political party.

(5) Contributions to another candidate or candidate's campaign committee.

(6) To return all or a portion of a contribution to the contributor.

(7) Payment of any penalties against the candidate or candidate's campaign committee for violation of this Article imposed by a board of elections or a court of competent jurisdiction.

(8) Payment to the Escheat Fund established by Chapter 116B of the General Statutes.

To ensure full compliance with Campaign Finance disclosure laws, the committee must document for its records the relationship of those who benefit from any expenditure and their ties to the committee's campaign or the elected official's public office. Then any expenditure must be accurately stated on Campaign Finance reports.

Please be aware that Session Law 2006-161 prohibits a contribution to a charitable organization if the candidate's spouse, children, parents, brothers or sisters are employed by the organization or on any board governing the organization.

Another option available to you is the use of a booster fund. In short, this fund is governed by all contribution and expenditure laws, is used for support of an elected official's duties and activities while in elective office, and requiring that the elected official must make semi-annual reports in January or July. Below is the language contained in G.S. § 163-278.36:

§ 163-278.36. Elected officials to report funds.

All donations to, and all payments from any "booster fund," "support fund," "unofficial office account" or any other similar source made or used in support of an individual's candidacy for elective office, or in support of an individual's duties and activities while in an elective office shall be deemed contributions and expenditures as defined in this Article and shall be reported as contributions and expenditures as required by this Article. The reports due in January and July of each year shall show the balance of each separate fund or account maintained on behalf of the elected office holder. (1977, c. 615; 1999-31, s. 4(c).)

The purpose of S.L 2006-161 is to limit the wide discretion candidates and political committees previously were allowed in how campaign funds were spent. That purpose should be kept in mind by all committees. Whenever a committee is in doubt about whether an expenditure is proper, it should, as has been done here, request an opinion pursuant to G.S. § 163-278.23.

This opinion is based upon the facts as stated in our conversation December 4, 2006. If those facts should change, you should evaluate whether this opinion is still applicable and binding. Finally, this opinion will be filed with the Codifier of Rules to be published unedited in the North Carolina Register and the North Carolina Administrative Code.


North Carolina Register Volume 29, Issue 09, November 3, 2014

Gary O. Bartlett

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