Executive Director


P.O. BOX 27255

RALEIGH, NC 27611-7255

January 5, 2009

Mr. Edward Hay

Post Office Box 1544

Asheville, NC 28802

Re: June 5, 2008 Advisory Opinion to Jerry Meek, Chairman NC Democratic Party

Mr. Hay:

As you are likely aware, on June 5, 2008,1 issued an advisory opinion at the request of Jerry Meek. In his request, he asked two questions concerning political party building funds. These questions were based on a "Factual Overview" that provided information that an unnamed county Democratic Party had purchased a headquarters building and established a building fund pursuant to N.C. Gen. Stat. 163-278.19B. The facts provided that this county Democratic Party then "gratuitously conveyed" the building to a non-profit corporation, which has allowed the county Democratic Party to use the property for purposes of a headquarters. No other information was provided as to the identity or purpose of the non-profit corporation. Mr. Meek asked if the established building fund could make payments to the non-profit corporation for the use of the headquarters and also pay property taxes for the building.

Based on these facts and N.C. Gen. Stat. § 163-278.19B, Mr. Meek was advised that the county Democratic Party could not use the building funds to make payments to the non-profit corporation or pay property taxes for the building. N.C. Gen. Stat. § 163-278.19B(4) provides that donations deposited into a building funds account cannot be used for headquarters rent, utilities, or equipment other than fixtures. The fact that the building funds would be used to make payments to the non-profit corporation that owns the building for use of the building would constitute rental payments and would therefore be prohibited by statute.

After this opinion was rendered, additional information was provided to our office about the specific county Democratic Party and the non-profit corporation. These additional facts provided that at some point after the Buncombe County Democratic Party purchased a building to be used as a headquarters, the bank required individuals to extend the note that was due to be paid. The bank did not want to extend the note without individual guarantors. Therefore, several individuals formed a corporation in order to extend the note so that the building could be maintained for the Buncombe County Democratic Party. The name of the corporation is Buncombe County Democratic Headquarters, Inc. The corporation has nine named Trustees that have taken on the responsibility to solicit donations for the building fund in order to make the mortgage payments. The building fund account to which these donations are directly deposited is the same building fund account that was originally established by the Buncombe County Democratic Party. The Trustees of the Corporation do not deposit any funds into any bank account. They collect contributions and provide those contributions to you, as Treasurer for the Buncombe County Democratic Party. From this account, all mortgage payments are made, just in the same way they were made prior to the extension of the note.

This new information provides that the building fund is not making payments to the non-profit corporation. In fact, the payments are being made to the Bank of Asheville just in the same way they were made previous to the note extension. Therefore, the payments are not rental payments but in fact mortgage payments.

As long as the Trustees continue to provide the contributions directly to you for deposit into the building fund account and all activities of this account are continued to be reported in accordance with N.C. Gen. Stat. 163-278.9, then the building fund can make mortgage payments to the Bank of Asheville and property tax payments for the building.

This opinion is based upon the information in this letter. If the information is incorrect or 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.



Gary O. Bartlett

Executive Director

cc: Julian Mann III, Codifier of Rules

Jerry Meek, Chairman, North Carolina Democratic Party

Robert Christy, Trustee, Buncombe County Democratic Headquarters, Inc.

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