Federal PACs may participate in both federal and non-federal elections. For example, a PAC may work to support candidates for Congress and candidates for a state legislature.
To the extent that they participate in state and local elections, however, PACs will have to ensure compliance with both federal and state election laws. This is true with respect to raising money and spending money.
For example, federal PACs are prohibited from receiving contributions from corporations, but many states allow such contributions to state PACs. To resolve this tension, PACs may wish to establish separate bank accounts — one for federally permissible funds and another for funds that are federally impermissible.
On the expenditure side, PACs engaging in both federal and state election activity — and maintaining separate federal and state bank accounts — will have to allocate the their expenditures between the two pools of funds. The allocation calculations vary depending on the nature of a particular expenditure. For example, administrative cost allocations are calculated differently from public communication expenditures. And fundraising costs have a separate allocation method.
Finally, PACs engaging in both federal and state election activity will need to be mindful of both federal and state public financial disclosure requirements.