Repeal 2 Cal. Code Regs. Section 18531.1:

18531.1. Affiliated Entities Sharing One Contribution Limit

(a) Any person (except an individual) established, financed, maintained, or controlled by another person, such as a business, labor organization, association, or individual, is "affiliated" with the person that established, finances, maintains, or controls it. Such persons shall be known as "affiliated entities."

(b) For purposes of the limitations on contributions in Government Code sections 85301 through 85313, all contributions made by affiliated entities shall be considered to be made by a single person. The non-individual limit of section 85309 shall apply to any contribution from affiliated entities drawn on the bank account of a non-individual.

(c) Affiliated entities may together contribute up to the applicable contribution limit of any one of the affiliates, except that no single affiliate may contribute more than its own contribution limit.

(d) If one or more of the following indicia of establishing, financing, maintaining or controlling exists, the persons involved will be presumed for purposes of this title to be affiliated. (1) If during the twelve-month period prior to making a campaign contribution to a candidate, a person possesses either of the following with respect to an entity:

(A) Ownership of an interest of more than 50 percent in voting rights, shares or securities of the entity or of a person having control over such entity; or

(B) The authority, power, or ability to direct or control the activities of the entity or a person having control over such entity.

(2) Each of the entities has the same, or a majority of the same, persons as board members or principal officers and this indicates a formal relationship.

(3) The entities in question are political committees that have received contributions and receive contributions from the same person or persons, which contributions represent a majority of the contributions received by each of the political committees in a calendar year.

(4) A person directly or indirectly provides a majority of an entity's funds, services, or goods on a regular or ongoing basis, for less than full consideration.

(5) One of the entities is a sponsored committee of the other entity (see Government Code section 82048.7).

(6) A person has, after December 31, 1996, formed an entity for the purpose of making contributions to California state or local candidates.

(e) The contributions of any entity, such as a partnership, whose contribution decisions are controlled by one individual, shall be aggregated with contributions made by that individual. [NOTE: If two or more individuals control these decisions, no aggregation with any one individual's contributions will occur.]

(f) The state central committee of a party is affiliated with its county central committees (see Government Code section 85205) and any California account of its national party committee that has filed a statement of organization under Government Code section 82013(a). These committees have a combined limit on contributions made to them, as well as from them. (See Government Code section 85303.) This subdivision does not apply to any other state or local subordinate, arm, association, committee, club, person, or group of persons associated with, or chartered or authorized by, the same political party, which are subject, instead, to the normal affiliation rules of this section.

(g) Affiliated entities that are "committees" as defined in Government Code section 82013(a) may transfer funds to each other without limit, but such transfers shall be reported as miscellaneous increases to cash by the transferee and expenditures by the transferor committee. Nothing in this section shall limit transfers between political committees of funds raised through joint fundraising efforts, if the committees reasonably allocate such funds on the basis of funds raised or costs incurred to raise such funds. Nothing in this section shall limit transfers of funds from one committee acting as an "intermediary" for other persons who are the true source of such contributions to any affiliated entity.

(h) Neither Government Code section 85311 nor this regulation shall result in the affiliation of any ballot measure committee or "issues PAC" that:

(1) Is a recipient committee as defined in Government Code section 82013(a);

(2) Does not make contributions to, or independent expenditures in support of or opposition to, candidates; and

(3) Qualifies for tax-exempt status under section 501(c) of the Internal Revenue Code.

COMMENT: For reporting by affiliated entities, see Regulation 18428.

NOTE: On January 6, 1998, the federal court in Sacramento enjoined enforcement of Proposition 208. Until further notice, this regulation should not be used since it implements enjoined provisions of Proposition 208.

Note: Authority: Section 83112, Gov. Code

Reference: Section 85311, Gov. Code