# TEE ATTORNEY GENERAL OF’ TEXAS AUHTIN. TXXAS 787lg

March 15, 1974
The Honorable Mark W. White, Jr. Secretary ofState State of Texas Austin, Texas 78711

Dear Mr. White: Opinion No. H- 259 Re: Responsibilities of candidates for federa 1office under the Campaign Reporting and Disclosure Act of 1973 The Campaign Reporting and Disclosure Act of 1973 (Acts 1973, ch. 423, p. 1101,generally found in Chapter 14, Texas Election Code), regulates campaign contributions and expenditures. Among the persons covered by theAct are candidates for certain federal offices. These candidates also must conform to the requirements ofthe Federal Election Campaign Act of 1971(P. L. 92-225, 86Stat. 3). See also 11C.F. R. 51.1et seq. A candidate’s concurrent responsibility under the state and federal laws is defined in $403 (2 U.S. C. $453) of the federal act. That section provides:

“Sec. 403. (a) Nothing in this Act shall be

deemed to invalidate or make inapplicable any provision ofany State law, except where compliance with such provision of law would result inaviolation ofa provision of this Act.

“(b) Notwithstanding subsection (a), noprovision ofState law shall be construed to prohibit any person from taking any action authorized by this Act or from makingany expenditure (as such term is defined in section’301(f) ofthis Act) which he could lawfully make under this Act. ”



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I p. 1210The Honorable Mark W. White, Jr., page 2 (H-259)

In addition, 5308(b)[2U. S.C. §438(b)] and §309 [2U. S.C. §4391ofthe federal act contemplate cooperation between state and federal officials in administering the system of reports on campaign contributions and expenditures. In light ofthese provisions ofthe federal act you ask our opinim as to

‘bhat portions of [the state act] are applicable tofederal candidates and what portions of [the state act] have been preempted by the Federal Election Campaigns Act. ” Section 403was offered as an amendment by Representative Udall during consideration ofthe bill by the House of Representatives acting as the committee of the whole. In explaining the amendment tothe House, he said:

“MR. UDALL, Mr. Chairman, Ihave offered

this amendment at the request of several of my colleagues. It deals with the conflict between the new Federal law we are going to have and the 50State laws. Some ofthe State laws are very ancient and have unrealistic and unworkable spending limitations and all the rest.

“This amendment comes in two parts.

“The first deals with the dilemma one might have, where, by complying with the reporting provision in the Federal law one would violate the State law, or, by complying with the State law, would violate the Federal law.

“[Paragraph (a)] simply says that one does not violate aState law when one complies with this Federal law.

p. 1211: The Honorable Mark W. White, Jr. page 3 (H-259)

“The second half of the amendment (Paragraph b) deals in amore affirmative fashion with this conflict of State and Federal law problem.

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“Let me give you an example. One member here tells me inhis State there is a very rigid provision which limits him to about $5,000. The new Act will have a $50, 000 limitation in it. All this amendment says is you can spend upto the amount authorized by the Federal Act without regard to alot ofold, obsolete State Acts. Ido not know ofany controversy. ” 117Gong. Rec. 4339b (1971). When the conference report was before the House, Representative Hays, the House sponsor ofthe legislation, was questioned on the effect of $403. The colloquy was:

“MR. BINGHAM.
. Iwould like to ask the chairman ofthe Committee on House Administration aquestion about the interpretation of section 403which deals with the effect ofthis legislation on State laws. As Iunderstand it, section 403 (b) would vitiate any State laws which impose either spending ceilings or lower ceilings on the amount that acandidate or his family might spend foi.a campaign. Is that correct?

“MR. HAYES. My opinion is that the gentleman is correct inhis interpretation. Subsection (b) of section 403 refers to awhole list ofpurposes in section 301(f) for which expenditures may be lawfully made. Obviously, contradictory State laws are superseded. Similarly limitations on contributions lower than those in this bill forcibly

p. 1212The Honorable Mark W. White, Jr. page 4 (H-259)

vitiate the intent ofthis bill and therefore, in my opinion, they are not valid. ” 118Cong. Rec. H85 (daily ed. Jan. 19, 1972). We believe that the two paragraphs of $403 must be construed together. Although paragraph (b) expressly controls over paragraph (a), we do not think paragraph (a) is rendered meaningless. Therefore, it is our opinion that the reference in paragraph (b) to “action authorized by this Act” refers to actions authorized expressly and affirmatively. The failure to prohibit anact is not an “authorization” of it. For example, even though the federal act does not require reports of contributions not exceeding one hundred dollars, we do not believe a candidate can successfully claim that the federal act expressly authorizes, under $403 (b) afailure to report contributions of one hundred dollars or less if a state law requires such a report. Thus, the more stringent reporting requirement of section 9 [Vernon’s Texas Election Code, Article 14.08(c)] ofthe state act would apply to federal candidates. On the other hand, as stated tothe House by the author of 5403 and by the sponsor ofthe bill, provisions of the federal act permitting expenditures of a certain kind or amount would supersede contrary state requirements. Section 403 is directed to actions authorized tobe taken by “any person”, and is not limited to candidates. The state law is generally applicable to those federal candidates, contributors and committees covered by it, except where there is a specific conflict with the federal law. The only potential conflict we have found is between $8[Vernon’s Texas Election Code, Article 14.071 of the state act and section 205 [18 U..S.C. $ 6101ofthe federal act. Section 8ofthe state act provides in part:

“(a) Except to the extent permitted in [Vernon’s Texas Election Code, Article 15.171 no corporation shall give, lend or pay any money or other thing of value, or promise to give, lend or pay any money

p. 1213,’ TIE Honorable Mark W. White, Jr. , page 5 (H-259)

or other thing of value, directly or indirectly, to any candidate, political committee, campaign manager, assistant campaign manager, or any other person, for the purpose of aiding or defeating the nomination or election of any candidate or of aiding or defeating the approval of any political measure submitted to avote of the people ofthis state or any subdivision thereof;
.” Section 205 of the federal act provides:

“Sec. 205. Section 610oftitle 18, United States Code, relating to contributions or expenditures by national banks, corporations, or labor organizations., is amended by adding at the end thereof the following paragraph:

“As used in this section, the phrase

‘contribution or expenditure’ ~shall include any direct or indirect payment, distribution, loan, advance, deposit, or gift ofmonqor any services, or anything ofvalue (except aloan of money by anational or State hank made in accordance with the applicable banking laws and regulations and in the ordinary course ofbusiness) to any candidate, campaign committee, or political party or organization, in connection with any election to any ofthe offices referred to in this section; but shall not include communications by acorporation to its stockholders and their families or by alabor organization to its members and their families on any subject; nonpartisan registration and get.- out-the-vote campaigns by a corporation aimed at its stockholders and their families, or by a labor organization aimed at its members and their families; the establishment, administration, and solicitation of contributions to a separate segregated

p, 1214The Honorable Mark W. White, Jr. page 6 (H-259)

fund to be utilized for political purposes by a corporation or labor organization: Provided, that it shall be unlawful for such afund to make acontribution or expenditure by utilizing money or anything ofvalue secured by physical force, job discrimination, financial reprisals, or the threat of force, job discrimination, or financial reprisal; or by dues, fees, or other monies required as a condition ofmembership in alabor organization or as a condition of employment, or by moneys obtained in any commercial transaction. ‘I We know of nojudicial construction ofthe state’s prohibition of direct or indirect contributions by a corporation. You have not asked us to construe this provision, and it is not necessary for us to do so. However, ifthe state act is interpreted toprohibit the types of activity permitted by section 205 ofthe federal act, the federal act would prevail in regard to candidates for federal office.

SUMMARY
Candidates for those federal offices included in the coverage ofthe Campaign Reporting and Disclosure Act of 1973.(Acts 1973 63Leg. ch. 423, p. llOl), committees working on behalf ofthose candidates and contributors to those candidates or committees must comply with the provisions of state election laws except where federal laws are in conflict as definedat:2U. S.C. $453.

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# . .I , The Honorable Mark W. White, Jr., page f 

# (H-259)

Ifthe state prohibition on direct or indirect corporate contributions is construed to prohibit contributions to federal candidates from the type of fund contemplated by 18U.S.C. $610, the federal law wilp prevail.Yours very truly, A

JOHN L. HILL Attorney General ofTexas

DAVID M. KENDALL, Chairman Opinion Committee

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