                      TEE       ATTORNEY                       GENERAL
                                       OF’ TEXAS

                                 AUHTIN.       TXXAS           787lg




                                          March        15, 1974


        The Honorable     Mark W.     White,   Jr.                     Opinion   No.   H-   259
        Secretary   of State
        State of Texas                                                 Re:   Responsibilities   of
        Austin,   Texas 78711                                                candidates     for
                                                                             federa 1 office under
                                                                             the Campaign Report-
                                                                             ing and Disclosure
        Dear   Mr.   White:                                                  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 the Act are candidates       for certain   federal   offices.   These
        candidates      also must conform       to the requirements      of the Federal    Elec-
        tion Campaign Act of 1971 (P. L. 92-225,             86 Stat. 3). See also 11 C. F. R.
         5 1. 1 et 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 pro-
                      vision of any State law, except where compliance
                      with such provision    of law would result in a violation
                      of a provision  of this Act.

                              “(b) Notwithstanding    subsection   (a), no provision
                      of State 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)   of this Act) which he could lawfully     make
                      under this Act. ”




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




In addition,   5 308(b)[2U. S. C. § 438(b)] and § 309 [2U. S. C. § 4391 of the
federal   act contemplate    cooperation   between   state and federal    officials
in administering     the system of reports     on campaign   contributions      and
expenditures.

 In light of these provisions    of the federal  act you ask our opinim as to
‘bhat portions    of [the state act] are applicable   to federal  candidates and
 what portions   of [the state act] have been preempted       by the Federal
 Election   Campaigns    Act. ”

Section 403 was offered      as an amendment      by Representative  Udall
during consideration     of the bill by the House of Representatives      acting
as the committee     of the whole.    In explaining   the amendment   to the House,
he said:

                        “MR.    UDALL,    Mr.      Chairman,      I have   offered
              this amendment     at the request  of several  of my col-
              leagues.   It deals with the conflict   between the new
              Federal  law we are going to have and the 50 State laws.
              Some of the State laws are very ancient and have un-
              realistic 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   pro-
              vision 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     a State law when one complies   with this Federal
              law.




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




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

                       11




                       “Let me give you an example.           One member
                  here tells me in his 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 up to the
                  amount authorized       by the Federal    Act without
                  regard    to a lot of old, obsolete    State Acts.    I do
                  not know of any controversy.        ” 117 Gong. Rec. 4339b
                  (1971).

          When the conference     report was before            the House,  Representative
    Hays,    the House sponsor of the legislation,            was questioned   on the effect
    of $403.    The colloquy was:

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

                       “MR.    HAYES.       My opinion is that the gen-
                  tleman is correct       in his interpretation.      Subsection
                  (b) of section 403 refers        to a whole list of purposes
                  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




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




                 vitiate the intent of this bill and therefore, in my
                 opinion,  they are not valid. ” 118 Cong. 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   an act 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) a failure      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)] of the state act would apply to federal            candidates.
On the other hand, as stated to the House by the author of 5 403 and by
the sponsor     of the 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          to be 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. $ 6101 of the federal              act.

       Section     8 of the 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




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




                       or other thing of value,       directly  or indirectly,    to
                       any candidate,     political   committee,    campaign   mana-
                       ger, 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 a vote of the people of this state or
                       any subdivision     thereof;            .”

             Section     205 of the federal       act provides:

                            “Sec. 205. Section   610 of title 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 of monqor        any services,
                       or anything of value (except           a loan of money by
                       a national or State hank made in accordance                    with
                       the applicable        banking laws and regulations            and
                       in the ordinary         course of business)       to any candidate,
                       campaign        committee,      or political    party or organiza-
                       tion, in connection         with any election       to any of the
                       offices     referred     to in this section; but shall not
                       include communications             by a corporation       to its
                       stockholders         and their families      or by a labor
                       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




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




              fund to be utilized     for political   purposes    by a corp-
              oration    or labor organization:      Provided,     that it
              shall be unlawful for such a fund to make a contribution
              or expenditure      by utilizing    money or anything of value
              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     of membership     in a labor
              organization     or as a condition     of employment,        or
              by moneys      obtained in any commercial         transaction.     ‘I

        We know of no judicial        construction    of the 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,     if the state act is interpreted        to prohibit  the types of activity
permitted    by section     205 of the federal     act, the federal    act would
prevail   in regard    to candidates     for federal    office.



                                     SUMMARY



                   Candidates    for those federal    offices  included in the
              coverage    of the Campaign     Reporting     and Disclosure
              Act of 1973.(Acts      1973 63 Leg. ch. 423, p. llOl),
              committees     working    on behalf of those 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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        The   Honorable   Mark    W.    White,    Jr.,   page   f    (H-259)


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

                                                    Yours   very    truly,
                                                    A




                                                     JOHN L.    HILL
                                                     Attorney   General      of Texas




        DAVID     M.   KENDALL,        Chairman
        Opinion   Committee




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