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1994-3: Guidelines for Submission of Disclosure Statements Prior to Joining Campaign Finance Program

Thursday, August 18, 1994

Re: Local Law No. 37 of 1994; Administrative Code §3-703(1)(c), (2), (12); Campaign Finance Board Rules 1-10; 1-11(b), (c); 3-02(a), (i(2), (3); 3-03(a)(1), (2); 5-01(d)(23), (24), (25); 9-04; Op. No. 1994-3

On May 12, 1994, the Campaign Finance Board adopted rules providing that committees authorized by prospective candidates to raise and spend funds for an election subject to the New York City Campaign Finance Act must file contemporaneous semi-annual disclosure statements during the first three years of the four-year election cycle in order to preserve claims for matching funds for contributions raised before January 12 in the election year, should the candidate join the Campaign Finance Program (the "Program") for that election. See Notice of Rules Providing for the Filing of Contemporaneous Semi-Annual Disclosure Statements, published in The City Record, May 19, 1994, at p. 1323 ("May 12 Rules") . These rules took effect on June 18, 1994 and were first applicable to disclosure statements filed on July 15, 1994.

On August 4, 1994, however, the City Council adopted Int. No. 408, which was signed into law by the Mayor on August 17, 1994 as Local Law No. 37 of 1994. This advisory opinion explains the new local law and how it has affected the May 12 rules. It is intended to give guidance in the interim period before amendments to the rules can be adopted and take effect.

1. Contemporaneous Disclosure Required for Public Matching Funds

New York City Administrative Code §3-703(12)(a) , which is added by the new law, requires that candidates for offices for which the threshold for public financing exceeds $5,0001 (mayor, public advocate, comptroller, and all five borough presidents) submit to the Board contemporaneous semi-annual disclosure statements before the applicable deadline for joining the Campaign Finance Program "in order for contributions received during the time periods covered by these statements... to qualify as matchable contributions." The deadline for joining the Program is April 30 in the election year. Administrative Code §3-703(1)(c). Thus, the authorized committees of prospective candidates for these offices must file contemporaneous semi-annual disclosure statements each July 15 and January 15 through January 15 in the election year in order to preserve their matching claims for contributions received during the reporting periods covered by those statements.

Contributions received during reporting periods for semi-annual disclosure statements before the applicable deadline for joining the Program, but not reported in a contemporaneous manner in a semi-annual disclosure statement, are not matchable contributions for any candidate ultimately on the ballot for mayor, public advocate, comptroller, or borough president in a primary, general, or special election, regardless whether the candidate once intended to run for a different office. In effect, the new law confirms the applicability of the May 12 Rules for prospective candidates for mayor, public advocate, comptroller, and borough president.

Section 3-703(12)(a) applies only to candidates for these four offices. Thus, following the direction of the new law and the principles of severability set forth in Campaign Finance Board Rule 1-10, the Board notes that the following rules have been overridden to the extent such rules would otherwise have been construed to invalidate matchable contribution claims made by candidates for City Council solely because the contributions were not reported to the Board in a contemporaneous semi-annual disclosure statement submitted prior to the deadline for joining the Program: Rules 1-11(b) (last sentence only); 3-02(i)(2) (last sentence only); and 5-01(d)(23), (24), and (25)2.

2. Optional Contemporaneous Disclosure

Administrative Code §3-703(12)(b), also added by the new law, authorizes the Board to adopt rules to establish an optional program permitting semi-annual disclosure statements to be submitted in a contemporaneous manner on behalf of candidates who are not subject to the contemporaneous disclosure requirement of §3-703(12)(a). Thus, the option of contemporaneous disclosure would be available for candidates for City Council. The failure of such candidates to file disclosure statements in a contemporaneous manner before joining the Campaign Finance Program would not adversely affect their eligibility for public funds pursuant to the Act, should such candidates ultimately join the Program. Apart from establishing their eligibility for public funds by demonstrating that they meet all the Act's requirements in order to receive public matching funds, participating candidates must demonstrate the validity of any matchable contribution claims they wish to make.

As enumerated above, certain rules have been overridden to the extent such rules would otherwise have been construed to invalidate matchable contribution claims made by candidates for City Council solely because the contributions were not reported to the Board in a contemporaneous semi-annual disclosure statement submitted prior to the deadline for joining the Program. The remaining May 12 Rules in effect create the optional program authorized by §3-703(12)(b) and, thus, their applicability as an optional program for candidates for City Council is confirmed by the new law.

If the candidate's authorized committee does not file one or more, or any, of the semi-annual disclosure statements in a contemporaneous manner pursuant to the optional program now in effect, and the candidate joins the Campaign Finance Program, the committee must file a single non-contemporaneous disclosure statement on June 1 of the election year, covering financial transactions for as many as three years preceding January 12 of the election year. See Campaign Finance Board Rules 3-02(a); 3-03(a)(2)3. Because filing in a contemporaneous manner provides a higher degree of assurance to the Board and the public that the contributions have actually been raised and spent in a manner that is consistent with the requirements of the Act, because contemporaneous disclosure substantially simplifies and reduces the disclosure and other compliance tasks of candidates who ultimately join the Program, and because contemporaneous disclosure gives the public more detailed information in a timely manner than is otherwise available, the Board strongly encourages all prospective participating candidates to submit semi-annual disclosure statements in a contemporaneous manner4.

* * *

The new law extends the deadline for the first semi-annual disclosure statement to January 15, 1995. See Local Law 37 of 1994 §2. If the committee previously submitted a disclosure statement to the Board on July 15, 1994, the contemporaneous statement due on January 15, 1995 will cover the period from July 12, 1994 through January 11, 1995; otherwise, the January 15, 1995 disclosure statement will cover the period from January 12, 1994 through January 11, 1995. The filer identification form is also due on January 15, 19955, unless it was previously submitted to the Board with the July 15, 1994 disclosure statement. See Rule 1-11(c).

All other Board rules are consistent with the new law and remain in full force and effect6. The new law does not affect the validity or require the resubmission of any disclosure statement submitted before its effective date. Local Law No. 37 of 1994 §3. Thus, contemporaneous disclosure statements for the 1997 elections that were submitted to the Board before August 17, 1994 will be treated in the manner provided by the new law and

Board rules, as modified thereby7.

 

NEW YORK CITY CAMPAIGN FINANCE BOARD

1 See Administrative Code §3-703(2) (applicable thresholds).

2 Section 3 of the new law nullifies the May 12 rules, from the time of their adoption, to the extent these rules are inconsistent with the provisions of the new law.

3 The June 1, 1997 disclosure statement encompasses the entire 1997 election cycle through January 11, 1997, except for the period covered by any contemporaneous disclosure statement the committee submitted to the Board for the 1997 elections before August 17, 1994, the day the new law took effect. Local Law No. 37 of 1994 §2; Rule 3-03(a) (2) (i), (ii). If a committee subsequently files one or more, but not all, the semi-annual disclosure statements in a contemporaneous manner under the optional program, the Board will advise whether it has been able to process the information filed so that the information need not be reported again in the June 1 statement, should the candidate join the Program.

4 The filing of contemporaneous disclosure statements before joining the Program "shall not be construed as a statement of intent to become a candidate, to run for a particular office, or to join the Program." Rule 3-02(i) (3); see also Rule 1-11(c).

5 Each subsequent semi-annual disclosure statement covers a separate six-month period. See Rule 3-03(a) (1) .

6 The Board intends to propose amendments to its rules to reflect the manner in which the rules have been overridden or modified pursuant to the new law.

7 In addition, the new law does not modify Rule 9-04 or software licensing agreements, pursuant to which the Board is providing Candidate Software for Managing and Reporting Transactions ("C-SMART©") to prospective candidates on the condition that their committees file contemporaneous disclosure statements for the 1997 elections. Local Law No. 37 of 1994 §3. Should these candidates discontinue filing contemporaneous disclosure statements, they must return C-SMART©. Candidates for whom contemporaneous statements are not submitted may obtain C-SMART© after they join the Campaign Finance Program.