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A Political Action Committee (PAC) is often the best way to make a difference in politics. In this post we will go over the key differences between the two most common PACs, and an overview of the steps you will need to take to start and terminate a Nonconnected PAC.

Separate Segregated Funds

Because Corporations and labor organizations can’t contribute to federal candidates. They can establish and administer a special kind of political committee: the separate segregated fund (SSF).

An SSF can raise funds to make contributions to candidates — including expenditures that are coordinated with candidates — within the applicable contribution limits.

Who can set up an SSF?

  • Corporations (including those without capital stock)

  • Labor organizations

  • Incorporated membership organizations (including trade associations)

  • National banks

  • Incorporated cooperatives

The sponsoring corporation or labor organization is called the SSF’s “connected organization.” The connected organization can use its own money to solicit contributions to the SSF and to pay the costs of establishing and operating the SSF, for example staff salaries and office space.

SSFs may solicit contributions only from a limited group of people, including the connected organization’s executive or administrative personnel, its stockholders (if the connected organization is a corporation), or its members (if the connected organization is a labor organization or a membership organization).

Nonconnected Committees

If you want to set up a Political Action Committee (PAC) — and your PAC is not a political party committee, a candidate’s authorized committee or a separate segregated fund (SSF) established by a corporation or labor organization — you can set up a “nonconnected” committee.

Members of congress and other political leaders often establish nonconnected committees, usually called Leadership PACs. Leadership PACs usually support candidates for various federal or nonfederal offices.

Super PACs and Hybrid PACs are another type of nonconnected committee. These committees must register and report all of their receipts and disbursements. If you are setting up a Super PAC or a Hybrid PAC, find more information on FEC.gov quick answers.

Essentials for nonconnected committees

Registration

Getting a tax ID and bank account
  • Political committees must establish a bank account. This is required for many reasons, including helping keep committee funds separate from personal funds. You’ll use this account to deposit receipts and make disbursements. The account must be at one of the following:

    • National bank

    • State bank

    • FDIC- or NCUA-insured institution

  • You’ll list the name and address of the bank on the authorized committee’s Statement of Organization (Form 1).

  • Banks require you to have a taxpayer identification number to open an account. Get your “Employer Identification Number” online or by completing IRS Form SS-4. If you have questions about obtaining a taxpayer identification number, call the Internal Revenue Service, 1-800-829-3676.

Getting a treasurer
  • Every political committee must designate a treasurer before it can accept contributions or make expenditures. Designate your treasurer on your Statement of Organization (Form 1).

  • Treasurers must ensure committee reports and statements are complete, accurate and timely. This is a significant responsibility— if there’s an enforcement action against a committee, the treasurer is usually named as a respondent. Treasurers can be found officially (or, in some circumstances, personally) liable for the actions they take.

  • Treasurer responsibilities:

    • Sign and file all committee reports and statements.

    • Deposit receipts in the committee’s designated bank within 10 days of receipt.

    • Authorize expenditures or appoint someone else (orally or in writing) to authorize expenditures.

    • Monitor contributions, ensuring they comply with legal limits and prohibitions.

    • Keep records of receipts and disbursements for three years from the filing date of the report to which they relate.

  • A candidate can choose to act as his or her own committee treasurer. Assistant treasurer

  • A committee can’t raise or spend money unless it has a treasurer. For that reason, the FEC urges every committee to designate an assistant treasurer on its Statement of Organization. If the treasurer resigns or is unavailable, the assistant treasurer can perform any of the duties listed above.

  • The assistant treasurer should be aware of all filing requirements and have access to the committee’s electronic filing password, if the committee files electronically. Changing treasurers

  • Committees must report a change in treasurer within 10 days of the change. Most do this by filing an amended Statement of Organization. This amended form designates (and is signed by) the new treasurer.

  • Treasurers can also resign by informing the FEC directly by letter or — in the case of electronic filers — by Form 99.

Registering a nonconnected committee
  • You must register your nonconnected committee within 10 days of raising or spending more than $1,000 in contributions or expenditures during a calendar year.

  • Register by filing a Statement of Organization (Form 1) with the FEC. The Statement of Organization collects some basic information, including the full name of your nonconnected committee, your address and your treasurer.

  • If the information you disclosed on your Statement of Organization ever changes, you must report that change within 10 days. Do this by filing an amended Statement of Organization. If your nonconnected committee isn’t an electronic filer, you may update your Statement of Organization by letter.

  • The Statement of Organization is available in the following options:

  • Read Form 1 instructions.

How to File

Some committees are required to file electronically. All other committees can choose whether to file electronically or by paper.

  • Electronic filing
  • Paper Filing
    • When filing by paper, your committee can use first-class mail, hand delivery or overnight mail options.

    • Always retain proof of mailing and delivery.

    • First-class mail or hand delivery

      • If you use first-class mail or hand delivery, your reports must be received by close of business on the filing deadline. If the filing deadline falls on a weekend or federal holiday, your report must be received by the close of business on the last business day before the filing deadline.
    • Overnight mail

      • “Overnight mail” means registered mail, certified mail, Priority or Priority Express mail (with delivery confirmation) or overnight delivery service (with online tracking)— if you use one of these methods, your reports must be postmarked by 11:59 p.m. Eastern Time on the filing deadline, unless the report is a pre-primary or a pre-general report.
    • Pre-primary and pre-general reports

      • Pre-primary and pre-general reports must be received by close of business on the filing deadline if sent by first-class mail or hand delivery. They must be postmarked by 11:59 p.m. Eastern Time three days before the filing deadline if sent by one of the “overnight mail” options.
    • Postal deliveries to the FEC:

      • Federal Election Commission
      • 999 E Street, NW
      • Washington, DC 20463

Regular Filing

Know your filing requirements
  • After registration, your nonconnected committee must file regular reports with the FEC until you request to terminate and that request is approved by the FEC.

  • Nonconnected committee filing requirements differ in election and non-election years. Election years are even-numbered years.

  • As you review required documents, you may notice that some forms are offered as both a web form and a PDF. With the exception of mandatory electronic filers, nonconnected committees can choose whether to file electronically or by paper. If a committee voluntarily files electronically, it must continue to do so for the remainder of the calendar year.

Election years
  • In election years, your nonconnected committee can choose to file either quarterly or monthly. If you want to switch your committee’s filing frequency, you can do this only once per calendar year, and your treasurer must notify the FEC. Send the notification along with a report filed under your current filing schedule, on paper or electronically, whichever is your regular method of filing.

  • Independent expenditures

    • In some circumstances, your nonconnected committee may need to file specific and separate reports of independent expenditures. These are called 24- and 48-Hour Reports.

For more information about Independent Expenditure reporting follow this link to the FEC.gov section on Coordinated Communications and Independent Expenditures

Non-election years
  • If your nonconnected committee files quarterly in election years, you’ll automatically switch to semi-annual reporting in non-election years.

  • If your committee files monthly in election years, you’ll keep filing monthly in non-election years.

  • If you want to switch filing frequency from monthly to quarterly or vice versa, you can do this only once per calendar year, and your treasurer must notify the FEC. Send the notification along with a report filed under your current filing schedule, on paper or electronically, whichever is your regular method of filing.

  • Other filing requirements may also apply if your committee is active in a special election.

Terminating a committee
  • If you decide to close down your committee operations, you must file a termination report.

  • You can file a termination report when your committee meets all of these criteria:

    • You no longer receive (or intend to receive) contributions.

    • You no longer make (or intend to make) expenditures.

  • Use your regular campaign finance disclosure form to file the termination report (Form 3, 3X or 3P). Check the “Termination Report” box on line 4 of that form’s cover page.

  • For example, you can combine your termination report with an already scheduled filing by checking the “Termination Report” box on your May monthly report. However, your termination report must include the following information:

    • All receipts and disbursements not previously reported. This includes your accounting of any debt retirement.

    • How you will use any remaining committee funds and assets.

  • If your committee is involved in an FEC enforcement action, audit or litigation, you cannot terminate your committee. You must file regularly until that matter is resolved.

  • Once the FEC notifies you that it has accepted your termination report, you can stop filing regular campaign finance disclosure reports with the FEC.

  • Don’t stop filing just because you checked the “Termination Report” box on your regular campaign finance disclosure form. You must file regularly scheduled reports until the Commission notifies you in writing that it has granted your request to terminate.

Troubleshooting

Missed deadline
  • The FEC doesn’t have the authority to give deadline extensions. If you miss a filing deadline, you may be referred to their Administrative Fine Program. File your report as soon as you realize you’ve missed a deadline. Contact the FEC with questions
Responding to a Request for Additional Information (RFAI)
Administrative Fine Program
Contact the FEC
First Posted 02-03-2017