Amendments to Campaign Finance Board Rules

Adopted Rules: Closed to Comments

Effective Date: 
Monday, June 22, 2020
Agency:
Download Copy of Adopted Rule (.pdf): 

I. Explanation, Basis, and Purpose

The Board rules are codified in Chapter 52 of the Rules of the City of New York.

The Campaign Finance Board (“CFB” or “the Board”) is a nonpartisan, independent City agency that empowers New Yorkers to make a greater impact in elections. The CFB administers the City’s campaign finance system, overseeing and enforcing the regulations related to campaign finance and holding candidates accountable for using public funds responsibly. The CFB publishes detailed public information about money raised and spent in City elections by candidates and independent spenders, and engages and educates voters through community outreach, the Voter Guide, and the Debate Program.

The CFB is amending its rules regarding public funds payments and repayments, registration and certification, proof of compliance with the Conflicts of Interest Board (“COIB”), deadlines for submitting certain documents and completing a compliance training, disclosure statements, contribution limits, transfers of funds, qualified expenditures, independent expenditures, special elections, runoff elections, and the Voter Guide.

The CFB is proposing these amendments to improve the administration of the Campaign Finance Program and to conform to, and facilitate implementation of and compliance with, amendments made to the City Charter by the 2018 and 2019 Charter Revision Commissions; Local Laws No. 1 and 128 for the year 2019, codified in sections 3-702, 3-703, 3-704, 3-705, 3-706, 3-708, 3-709, 3-709.5, 3-710, 3-713, 3-720, 3-801, and 12-110 of the Administrative Code of the City of NewYork (the “Code”) and sections 1052 and 1152 of the City Charter; section 14 of chapter 5 of the laws of 2019, codified in section 8-100(1) of the New York State Election Law; and section 8 of chapter 6 of the laws of 2019, codified in section 8-600 of the New York State Election Law.

The following is a summary of the changes.

Summary of Final Rules

Chapter 1

Section 1-02 is amended to update the definition of “optional early public funds repayment” to reflect the fact that there are now multiple public funds payments made before the ballot is set. Additionally, the definitions of “election” and “transfer” are amended to account for the removal of runoff elections (see also Chapter 16).

Section 1-04(a)(iii) is amended to clarify that if a scheduled payment date falls on a Saturday, Sunday, or legal holiday, the payment will be made on the next business day.

Chapter 2

Section 2-01 is amended to require that candidates declare an office sought when they submit a Filer Registration. Pursuant to section 2-02(e), a declaration of office sought must also be provided with a Certification. This information is crucial to effective and efficient administration of the Campaign Finance Program, as it is required in order to determine each candidate’s contribution limit, expenditure limit, threshold calculation, and total public funds payable.

Section 2-02 is amended to update the certification and rescission deadlines, in order to conform to §§ 3-703(1)(c) and 3-705(4) of the Code, as amended by Local Law No. 128 of 2019 (“Local Law 128”).

Section 2-03 is amended to provide that candidates may change their office sought until the certification deadline or until they receive public funds, whichever comes first. If the Board declares an extraordinary circumstance, thus creating a new certification deadline pursuant to section 3-703(1)(c)(iii) of the Code, then a candidate for any affected office (meaning that the declaration applies either to the original office sought or to the new office sought) may change their office sought, provided that they must refund any contributions that exceed the limits applicable to the new office sought, raise any additional funds required to meet the threshold applicable to the new office sought, and repay any public funds previously received that exceed the amount for which the candidate is now eligible. If an extraordinary circumstance is not declared, any candidate who changes their office sought after receiving public funds will be ineligible to receive additional public funds for the covered election and must repay all public funds previously received for that election. These requirements, which were not included in the Notice of Proposed Rules, are added to address the fairness and compliance considerations and the administrative burdens associated with a candidate receiving public funds based on the contribution limit, public funds maximum, matchable amount per contribution, and threshold applicable to one office and subsequently seeking election to a different office.

Section 2-06 is amended to clarify the deadlines by which candidates must complete the CFB’s pre-election compliance training. Candidates not seeking an early payment must complete the training by the final day of the disclosure period reported in the 32-day pre-primary disclosure statement, while candidates seeking an early payment must complete the training at least 15 business days before the payment is made.

Chapter 3

Section 3-01(b) is amended to reflect the fact that there are now multiple public funds payments made before the ballot is set.

Section 3-01(d) is amended to provide that a candidate may be ineligible to receive public funds during the pre-election period if the candidate maintains a significant reporting variance for either receipts or expenditures, fails to report employment information or provide complete and accurate backup documentation for a significant percentage of matching claims, or fails to attend a compliance training. Reporting variances, missing employment information, and documentation error rates above a certain percentage are common indicia of inadequate internal controls and thus provide a basis for the denial of public funds. The Board has previously denied public funds based on documentation error rates and missing employment information pursuant to its internal audit standards; this amendment represents a codification of that practice. The addition of reporting variance as a factor follows a 2015 rule change requiring that candidates submit all bank statements and deposit slips concurrently with each disclosure statement. Prior to this rule change, a significant reporting variance during the pre-election period could be a result of the campaign not yet having provided up-to-date bank records. Now, an underreporting variance likely indicates significant amounts of unreported activity, while an overreporting variance likely indicates a failure to comply with the requirement to provide bank records with each disclosure statement; either scenario represents a lack of adequate internal controls and a failure to disclose key information to the Board and/or the public. The threshold amounts for determining what constitutes a “significant” reporting variance, percentage of missing employment information, and documentation error rate will be calculated for each election cycle and will be publicized on or before July 11 in the year prior to the year of the election.

Section 3-02 is amended to remove the statement that a candidate who has been disqualified from the ballot, or who is no longer opposed by a candidate who appears on the ballot, is not eligible to receive public funds, as this statement appears in section 7-01(e) as amended herein.

Section 3-05 is amended to conform to §§ 3-703(1)(m) and 12-110(b)(2)(a) of the Code, as amended by Local Law 128, concerning filing with the Conflicts of Interest Board.

Chapter 4

Section 4-05(b) is amended to modify the disclosure schedule during the year of the election, in order to account for the rescheduling of the primary election from September to June per recent amendments to the State Election Law. The May 15 disclosure statement is removed, as the 32-day pre-primary disclosure statement will be due in mid-May, and a new disclosure statement is added in late August, due to the gap between the primary and general elections.

Section 4-05(b)(ii)(D) is amended to parallel the language used in section 1-04(a)(iii) regarding deadlines.

Section 4-05(c)(ii) is amended to accommodate the updates to contribution refund requirements in sections 5-07(b) and (c).

Section 4-05(c)(iv) is amended to change the threshold dollar amount above which contributions to political committees from a candidate’s personal funds are considered contributions to, and expenditures by, that candidate’s campaign.

Section 4-05(c)(vi) is amended to delete the requirement that transfers of funds consist entirely of contributions previously raised by the transferor committee.

Chapter 5

Section 5-01(b) is amended to update the year of the most recent contribution limit adjustment from 2018 to 2022.

A new section 5-01(c) is created to clarify that the new contribution limits, as created by the 2018 Charter revision and codified in § 3-703(1)(f) of the Code, apply to all contributions accepted by Option A candidates in the 2021 elections, regardless of when the contributions were received. Failure to refund the over-the-limit portion of contributions received at any time during the election cycle is a violation that may result in a penalty. See also CFB Advisory Opinion No. 2019-1.

Sections 5-07(b) and (c) are amended to provide that contribution refunds must be documented and are considered to be made on the date on which the funds cleared the committee account. The documentation provided must demonstrate that the refund cleared the committee account and was issued to the reported contributor (for example, for a refund made by check, the campaign must provide a copy of the front and back of the endorsed check as well as the corresponding committee bank statement). The sections are further amended to remove the requirement that contribution refunds be made by bank or certified check. Contribution refunds may be made electronically by ACH transfer, or using a committee check; however, the campaign assumes the risk that the contributor may not cash or deposit a committee check in a timely manner, which would delay the refund date and potentially affect the campaign’s public funds eligibility and result in violations and penalties.

Section 5-08(c) is amended to provide that transfers between CFB committees are not subject to the requirement to demonstrate that transferred funds are not derived from excess or prohibited contributions. This change is to conform to § 3-703(14) of the Code, as amended by Local Law 189 of 2016.

Chapter 6

Section 6-01(h)(i) is reworded to mirror the phrasing used in section 5-10(a), the corresponding provision regarding contributions.

Section 6-02(a) is amended to provide that expenditures to defend the validity of petitions may be qualified expenditures. This change is to conform to § 3-704(2)(h) of the Code, as amended by Local Law 128.

Section 6-02(a) is further amended to provide that, if a candidate or their sole opponent is removed from the ballot, the candidate may make qualified expenditures for a different election held later in the calendar year, unless the candidate is running as a write-in candidate for that later election. This amendment is added to address the fact that write-in candidates are not permitted to receive public funds, but because public funds payments will now be issued several months before ballot determinations are made, it is possible that a candidate could receive a public funds payment prior to the primary election, be disqualified from the primary ballot, and subsequently run a campaign solely as a write-in candidate for the general election. This amendment prohibits expenditures made for that election by that write-in candidate from being made with public funds.

Section 6-02(a) is further amended to provide that qualified expenditures for candidates in a small primary election, as defined by section 7-05(a), may not exceed $5,000 per candidate. This amendment is added to address the fact that, because public funds payments will now be issued several months before ballot determinations are made, it is possible that a candidate could receive a public funds payment exceeding $5,000 prior to the primary election, but only appear on the ballot in a small primary election, for which the candidate was eligible to receive no more than $5,000 in public funds pursuant to section 7-05(a). Pursuant to this amendment, candidates in a small primary are prohibited from making more than $5,000 in expenditures for that primary using public funds. Pursuant to § 3-710(2)(a) of the Code, candidates are also required to repay any amount of public funds received in excess of the amount they were eligible to receive; accordingly, a candidate in a small primary who receives more than $5,000 in public funds would be required to repay the excess amount to the Board. (See also section 7-05(c), added herein.) This amendment ensures that such candidates are not permitted to spend public funds they were not eligible to receive.

Chapter 7

Section 7-01(e) is amended to clarify that a candidate who does not appear on the ballot, or who is not opposed on the ballot, may be required to return any public funds received. This clarification is necessary because Local Law 128 provided for public funds payments beginning in December in the year prior to the election year, thus increasing the likelihood that a candidate who previously received public funds, or that candidate’s sole opponent, could subsequently be disqualified from the ballot. Candidates who are not opposed on the ballot are not eligible to receive public funds for that election. See Admin. Code § 3-703(5).

Section 7-01(e) is further amended to provide that a candidate who does not appear on the ballot, or is not opposed on the ballot, for an election is ineligible to receive additional public funds for a later election held in the same calendar year unless the candidate demonstrates that they will appear on the ballot in that later election. This amendment is added to address the fact that, because public funds payments will now be issued several months before ballot determinations are made, it is possible that a candidate could receive a public funds payment prior to the primary election, be disqualified or have their sole opponent disqualified from the primary ballot, and subsequently run a campaign solely as a write-in candidate for the general election. Pursuant to this amendment, that candidate could not receive additional public funds without demonstrating that they will be on the ballot for the general election.

Section 7-02(a)(iii) is relocated to new section 7-01(g) and is amended to reflect the fact that there are now multiple public funds payments made before the ballot is set. The section is also amended to remove the reference to unopposed candidates, who are covered in section 7-01(e).

Section 7-02(a) is amended to conform to the payment schedule established by § 3-705(4) of the Code, as amended by Local Law 128. Additionally, the section provides that a certified statement of need, which must be submitted in order to receive an early public funds payment, must be received at least 15 business days before the scheduled date of the payment. This is to allow CFB staff sufficient time to review statements of need and determine eligibility before issuing payments.

Section 7-02(c) is amended to clarify what may constitute “new information” for purposes of § 3-703(12) of the Code, which provides that the Board may not invalidate a matching claim that was submitted in a previously reviewed disclosure statement unless the Board learns of new information that is relevant to the eligibility for matching of the claim and that was not available to the Board at the time of the initial review. New information may include, but is not limited to, information relevant to the candidate’s eligibility to receive public funds generally, including the submission of a Certification not previously submitted, and information relevant to determining which contribution limit is applicable to the candidate, such as a declaration or change of the office sought.

Section 7-02(d) is amended to modify the characterization of public funds payments as being for the primary or general election. This change is to accommodate both the increased amount of time between the primary and general elections, due to the primary being rescheduled from September to June, and the additional early public funds payment dates created by § 3-705(4) of the Code, as amended by Local Law 128. Public funds payments will not be characterized as for the primary or general election, but no candidate may receive more than the maximum public funds payable amount for a single election prior to the day after the day of the primary election. For example, a City Council candidate who anticipates running in both the primary and general elections may submit sufficient valid matching claims to be eligible for public funds totaling $168,888 for the primary and $168,888 for the general, totaling $337,776. However, that candidate would only receive $168,888 prior to the primary election. On the first payment date after the primary election, the candidate could receive an additional $168,888 (less the 5% withholding assessed pursuant to Board Rule 7-06 and § 3-705(4) of the Code).

Section 7-04 is amended to conform to § 3-705(7) of the Code, as amended by Local Law 128, which requires that, in order for a candidate to receive either an early public funds payment or public funds payments totaling more than 25% of the maximum payable amount, either 1) the candidate must submit a certified statement of need attesting that one or more enumerated conditions applies, 2) the candidate must be opposed in an election for an office for which no incumbent is seeking re-election, or 3) the candidate must be opposed by a candidate who has received public funds for the election in question.

Section 7-05(c) is added to address the fact that, because public funds payments will now be issued several months before ballot determinations are made, it is possible that a candidate could receive a public funds payment exceeding $5,000 prior to the primary election, but only appear on the ballot in a small primary election, for which the candidate was eligible to receive no more than $5,000 in public funds pursuant to section 7-05(a). Pursuant to this amendment, candidates in a

small primary must return to the Board any public funds received in excess of $5,000, except that the funds may be used for a different election later in the calendar year for the same office, as long as the candidate is on the ballot in the later election. If the candidate uses the excess funds for a later election, the amount of the excess funds will be deducted from the total amount of public funds the candidate would otherwise be eligible to receive for that later election.

Section 7-06 is amended to provide that the Board may withhold an amount equal to the amount of any contributions made, solicited, or otherwise received in violation of the law, including contributions from a prohibited source and over-the-limit contributions (for which only the excess portion would be withheld), pending refund of the contribution (or excess portion, as applicable) to the contributor or disgorgement to the Public Fund. Previously, the Board’s policy was to deem a candidate ineligible to receive a pre-election public funds payment if the candidate had received and failed to refund any prohibited or over-the-limit contributions. By providing a less severe consequence for failing to refund such contributions in a timely manner, this change will reduce the burden on campaigns that do not have additional compliance issues.

Chapter 9

Section 9-02(f) is amended to clarify that a candidate who is no longer opposed by a candidate who appears on the ballot may not spend public funds for any purpose other than the payment of liabilities previously incurred for qualified expenditures. Candidates who are not opposed on the ballot are not eligible to receive public funds for that election. See Admin. Code § 3-703(5). Additionally, section 9-02(h) is amended and section 9-02(i) is added to clarify that a candidate may be required to repay public funds due to either failing to satisfy the requirements to actively campaign for office, or ceasing to actively campaign for office. Section 9-02(j) (previously section 9-02(h)) is added to clarify that a candidate may be required to repay public funds if the candidate fails to appear on the ballot or be opposed on the ballot. If a candidate who received public funds fails to actively campaign, that candidate may be required to repay all public funds received. If a candidate who received public funds ceases to actively campaign, that candidate may not incur additional expenditures and may be required to repay all public funds previously received, less the amount of any qualified expenditures made before the candidate ceased campaigning. See Admin. Code § 3-710(3). These amendments are necessary because Local Law 128 provided for public funds payments beginning in December in the year prior to the election year, thus increasing the likelihood that a candidate could receive public funds and subsequently drop out of the race or be disqualified from the ballot.

Chapter 13

Section 13-02(a)(viii) is amended to accommodate the updates to contribution refund requirements in sections 5-07(b) and (c).

Chapter 14

Section 14-01 is amended to expand the definition of “electioneering communication” to include communications disseminated within 60 (previously 30) days of a primary election. This change is to account for recent changes to the election calendar, in particular the establishment of early voting, codified in § 8-600 of the Election Law.

Section 14-03(a) is amended to align the independent expenditure disclosure schedule with the campaign disclosure schedule.

Chapter 15

Section 15-02(d)(viii) is amended to provide that special election candidates must demonstrate compliance with the COIB’s financial disclosure requirements by the due date of the first disclosure statement required to be filed with the CFB for the special election.

Section 15-03(e) is amended to provide that expenditures incurred outside of the calendar year in which a special election is held are presumed not to be qualified, unless the proclamation and the special election occur in different calendar years.

Section 15-04(e) is amended to reflect the threshold dollar amounts and payment dates for special elections stated in §§ 3-703(2), 3-705(4), and 3-709(5) of the Code, as amended by Local Law 128.

Chapter 16

Chapter 16 is repealed. New section 1057-g of the City Charter, implementing ranked choice voting in citywide elections beginning on January 1, 2021, renders runoff elections unnecessary. References to runoff elections are deleted throughout the rules.

Chapter 17

Sections 16-02(b)(i) and (iii) (previously sections 17-02(b)(i) and (iii)) are amended to allow for Voter Guide submissions between the primary and general elections. Previously, final general election Voter Guide statements were required to be submitted prior to the primary election, and no modifications could be made thereafter. As the primary election will now be held in June rather than September, the additional time between the primary and general elections allows for more flexibility in the submission schedule.

Additionally, the entirety of Chapter 17 is renumbered to become the new Chapter 16.

Chapter 18

The entirety of Chapter 18 is renumbered to become the new Chapter 17.

The following rules will take effect thirty days after final publication in The City Record.