Expenditures

Table of Contents

PAC Manual:
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Appendices:
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“Expenditure” means a payment, donation, loan, or promise of payment of money or anything of ascertainable monetary value for goods, materials, services, or facilities in assistance of, or in opposition to, the nomination or election of a candidate, the qualification, passage or defeat of a ballot question or the qualification of a new political party. Expenditure includes, but is not limited to, any of the following:

  • A contribution or a transfer of anything of ascertainable monetary value for purposes of influencing the nomination or election of a candidate, the qualification, passage, or defeat of a ballot question or the qualification of a new political party.
  • An expenditure for voter registration or get-out-the-vote activities made by a person who sponsors or finances the activity or who is identified by name with the activity.
  • An expenditure made for poll watchers, challengers, distribution of election day literature, canvassing of voters to get out the vote, or transporting voters to the polls.

Expenditure does not include any of the following:

  • An expenditure for communication by a person with the person’s paid members or shareholders and those individuals who can be solicited for contributions to a separate segregated fund under Section 55.
  • An expenditure for communication on a subject or issue if the communication does not support or oppose a ballot question or candidate by name or clear inference.
  • An expenditure for the establishment, administration, or solicitation of contributions to a separate segregated fund in compliance with Section 55.
  • An expenditure by a broadcasting station, newspaper, magazine, or other periodical or publication for a news story, commentary or editorial in support of or opposition to a candidate for elective office or a ballot question in the regular course of publication or broadcasting.
  • An offer or tender of an expenditure if expressly and unconditionally rejected or returned.
  • An expenditure for nonpartisan voter registration or nonpartisan get-out-the-vote activities made by an organization that is exempt from federal income tax pursuant to section 501(c )(3) of the internal revenue code.
  • An expenditure for nonpartisan voter registration or nonpartisan get-out-the-vote activities performed pursuant to Michigan Election Law by the Secretary of State and other registration officials who are identified by name with the activity.

RECORDING AND REPORTING EXPENDITURES

The committee’s treasurer or designated record keeper must: See Appendix A

  • Record all expenditures by the amount, date made, and the recipient’s name and address.
  • Record all expenditures made to or on behalf of Candidate Committees by the amount, date made, and the committee’s name and address. Record the candidate’s name and county of residence, the office he or she seeks, and the district or community served by the office.
  • Record all expenditures made to support or oppose a ballot question by the amount, date made and a description of the question. Also record whether the question is a statewide, multi-county or single-county issue. For multi-county issues, indicate the name of the county with the greatest number of voters eligible to vote on the issue. If the expenditure is made to or on behalf of a specific Ballot Question Committee, record the name and address of the Ballot Question Committee.
  • Record funds spent from the committee’s account that are not “expenditures” as defined by the Act. These are funds that are not spent to influence voters on a candidate or an issue. A record of these types of expenditures is needed to balance the committee’s funds on campaign statements.

Refer to the Campaign Statement instructions booklet for specific information on how to report expenditures.

When a Written Instrument is Required: A written instrument such as a check or money order must be used to make an expenditure of $50.01 or more. The written instrument must show the committee’s name and the name of the recipient. A committee may not make expenditures of $50.01 or more in cash.

ACCEPTABLE EXPENDITURES AND EXEMPTIONS

Petty Cash Fund: The committee treasurer may establish a petty cash fund with funds withdrawn from the committee’s official depository.

  • The committee must record the name, date, and amount of each expenditure made from the petty cash fund.
  • Single cash expenditures of $50.00 or less may be made from the petty cash fund.

In-Kind Expenditures: In-kind expenditures are goods, services and facilities provided to another committee at no cost or at a discount.

The value of an in-kind expenditure is the fair market value or usual rental charge of the good, service or facility. If the committee provides goods, services or facilities to another committee at a discount, the value of the in-kind expenditure is the amount discounted.

Independent Expenditures: Independent expenditures are expenditures made on behalf of a candidate or a ballot question without the direction or control of the candidate’s committee or a committee supporting or opposing the ballot question and are not contributions to the committee. Independent expenditures are never made under the control of or at the direction of another person or committee. Independent expenditures can be made in any amount and do not count toward the total contribution amount given to a candidate. Independent expenditures may also be made in opposition to a candidate or ballot issue.

Limitations On Expenditures To Candidates: The Act limits the amount Independent and Political Committees can contribute to, or expend on behalf of, candidates. The following types of expenditures count toward the expenditure limit: expenditures in cash, expenditures by written instrument such as a check or money order, in-kind expenditures, and loans. Independent expenditures do not count toward the limit.

Normally referred to as “contribution limits”, the limitations are set on an “election cycle” basis and apply to the amount a committee can expend as a direct contribution of money to a Candidate Committee or as an in-kind contribution of goods or services to, or on behalf of a Candidate Committee. An election cycle begins on the day following a general election in which the office involved appears on the ballot and ends on the day of the next general election in which the office appears on the ballot. For a special election the election cycle begins on the day the special election is scheduled or the date the office involved becomes vacant (whichever is earlier) and ends on the day of the special election.

The following charts list the maximum amount a Political Committee or an Independent Committee may give to a candidate during the candidate’s election cycle.

Expenditure Limits for Political Committees and Individuals
(Also Referred to as “Contribution Limits”)

Governor$7,150
Lt. Governor$7,150
Local candidate or judicial candidate in district with population over 250,000$7,150
State Senator$2,100
Local candidate or judicial candidate in district with population 85,001 to 250,000$2,100
State Representative$1,050
Local candidate or judicial candidate in district with population up to 85,000$1,050
Any Other State Elective Office$7,150
Bundled Contributions$7,150

Expenditure Limits for Independent Committees
Carefully review the criteria before giving at the amounts listed.
(Also Referred to as “Contribution Limits”)

Governor$71,500
Lt. Governor$71,500
Local candidate or judicial candidate in district with population over 250,000$71,500
State Senator$21,000
Local candidate or judicial candidate in district with population 85,001 to 250,000$21,000
State Representative$10,500
Local candidate or judicial candidate in district with population up to 85,000$10,500
Any Other State Elective Office$71,500
Bundled Contributions$71,500

Expenditure Limits for Caucus Committees
(Also Referred to as “Contribution Limits”)

A house political party caucus committee or senate political party caucus committee is not limited in the amount of contributions made to the candidate for the office of state legislator except as follows:

  • Shall not pay a debt incurred by a candidate if that debt was incurred while the candidate was seeking nomination at a primary election and the candidate was opposed at that primary.
  • Shall not make a contribution to or make an expenditure on behalf of a candidate if that candidate is seeking nomination at a primary election and the candidate is opposed at that primary.

A house political party caucus committee or a senate political party caucus committee shall follow the contribution limits for Independent Committees when making a contribution to a candidate for any Michigan office other than State legislator.

  • State Elective Offices: State elective offices not listed above are secretary of state, attorney general, supreme court justice, state board of education, University of Michigan regent, Michigan State University trustee, Wayne State University governor.

Loans by Independent and Political Committees: A loan accepted by a candidate from an Independent or Political Committee counts toward the contribution limit applicable to the committee. A loan received by a candidate which is endorsed or guaranteed by a third party counts toward the contribution limit applicable to the third party to the extent the third party is liable for the amount loaned. Amounts repaid on a loan by the committee no longer count toward the contribution limit applicable to the lender or any person endorsing or guaranteeing the loan.

An amount contributed to a candidate by an Independent or Political Committee does not count toward the contribution limit applicable to any person who may have given the funds involved to the Independent or Political Committee, unless the person directs or controls the ultimate use of those funds. A person cannot make a contribution to a Political or Independent Committee with the understanding or agreement that the contribution will be passed on to a particular Candidate Committee.

Designation of Contributions for Previous Election Cycles: A contribution received by a Candidate Committee is considered to be for the current election cycle unless specifically designated for a previous election cycle. An Independent or Political Committee can designate a contribution for a previous election cycle if the designation is made in writing; the committee did not reach the applicable contribution limit set for the candidate in the election cycle identified in the designation; and the designated contribution does not exceed the Candidate Committee’s outstanding debts from the election cycle identified in the designation.

Delivery of a Contribution to Another Committee by a Third Party: An individual who obtains possession of a contribution that a committee registered under the Act wishes to give to another committee registered under the Act has ten (10) business days to take one of the following actions:

  1. Deliver the contribution to the appropriate committee treasurer;
  2. Deliver the contribution to any agent of the appropriate committee; or
  3. Return the contribution to the payer.

The 10-day time limit for these actions does not apply if the individual in possession of the contribution is the treasurer or designated record keeper of the contributing committee.

Use of Independent Contractors See Appendix L

Endorsements: An endorsement is not (in and of itself) an expenditure under the MCFA. An organization such as a corporation, labor organization, domestic dependent sovereign or a committee can endorse a candidate. However, the expense to communicate the endorsement may be considered an expenditure made on behalf of a candidate committee. Therefore, committees and organizations must be in compliance with the MCFA when making expenditures to communicate an endorsement. If the candidate committee alone makes expenditures to communicate the endorsement, no violation of the MCFA can occur.

Expenditure Exemptions

The Act exempts the following activities from the expenditure definition:

  • A group or committee may communicate with its paid members or shareholders without having to report the expenses involved as expenditures. The communication can support or oppose ballot questions.
  • A group or committee may communicate with anyone or a subject or an issue without having to report the expenses involved as expenditures if the communication does not support or oppose a ballot question by name or clear influence.

Prohibited Expenditures

  • A committee may not make a single expenditure from petty cash that exceeds $50.00.
  • A committee may not make an expenditure in cash that exceeds $50.00.

Transfers Between PACs

Transferring funds from one committee to another is often simply a “contribution” from one committee to another committee. If the transfer is really a contribution, then the transaction must be recorded and reported as such and any limitations or prohibitions provided in the Michigan Campaign Finance Act (MCFA) apply. However, there are certain circumstances provided for in the MCFA where a “transfer” is not considered a contribution. Transfers must be recorded and reported as required by the MCFA. The transfers below are:

  • Federal Parent PAC to State/Local Affiliated PAC
  • State/Local Affiliated PAC to State/Local Affiliated PAC
  • State/Local Affiliated PAC to Federal Parent PAC

If you encounter a transfer scenario that is not covered in this publication, please contact our office for further direction. You can email us at Disclosure@Michigan.gov or call us at 517–335–3234.

  • Federal Parent PAC to State/Local Affiliated PAC

A federal parent PAC can transfer funds to the Michigan state/local affiliate PAC. See Appendix K: Itemization of Contributions and Expenditures for more information.

  • State/Local Affiliated PAC to State/Local Affiliated PAC

A state/local affiliated PAC may transfer funds to another state/local PAC. Since both committees are registered under the MCFA, no additional itemization of the contributions is required.

  • State/Local Affiliated PAC to Federal Parent PAC

A state/local affiliated PAC may transfer funds to their federal parent PAC under the provisions of the MCFA. However, since the receiving committee is not covered under the MCFA, but rather the Federal Elections Commission, there may be other regulations outside of the MCFA that would prohibit the transfer.

DISSOLUTION OF COMMITTEE: See Appendix W




Page last modified on December 26, 2018, at 03:05 PM