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2009-8: Guidance Concerning Contributions Raised by "Other Candidates"

Thursday, October 29, 2009

Re:   New York City Administrative Code ("Admin. Code") §§ 3-702(2), (18), 3-703(1)(d), (e), (f), (g), (l) (1-a), (1-b), (14), 3-706, 3-708(11), 3-719; New York City Campaign Finance Board Rules ("Rules") 1-07, 1-08, 3-03(c)(2), 4-01; Advisory Opinion Nos. 2001-12 (September 20, 2001), 2008-7 (November 3, 2008), Op. No. 2009-8.    


On November 3, 2008, the New York City Campaign Finance Board (the "Board") issued an advisory opinion to provide guidance concerning the impact of legislation extending term limits1 on candidates subject to the New York City Campaign Finance Act (the "Act"). 2  Advisory Opinion 2008-7 (the "Term Limits AO") addressed two groups of candidates who changed their plans due to this extraordinary legislation: (1) Group 1, candidates with reported activity who sought re-election to their incumbent offices in 2009, instead of the higher offices they anticipated seeking in 2009; and (2) Group 2, candidates with reported activity prior to November 3, 2008, but who were no longer running in 2009, terminated prior to June 10, 2009, and will be seeking office in 2013.3  The Term Limits AO attempted to make it practical for Group 1 and Group 2 who wished or wish to join the Campaign Finance Program (the "Program") to do so, to treat both incumbents and potential challengers in 2009 and 2013 fairly, and to encourage competitive races for all covered offices. 

The Term Limits AO expressly restricted its application to candidates who met the definition of Group 1 and Group 2.  However, there are other candidates, in 2009 and future election cycles, who had or will have activity in that election cycle and then choose to terminate their candidacy.  In particular, in 2009 there are candidates who did not meet the criteria for Groups 1 and 2 in the Term Limits AO, such as:    

  • those who, after the passage of the term limits extension and the issuance of the Term Limits AO, filed a 2009 filer registration or certification form and later terminated their candidacy before June 10, 20094;
  • those who filed a 2009 filer registration but terminated their candidacy after June 10, 2009, including those who filed a certification by June 10, 2009;
  • those who filed a 2009 filer registration and terminated before the term limits extension; and
  • those who filed a 2009 filer registration form to run in 2009 against an incumbent who was not term-limited, but later terminated their candidacies.

The Board is issuing this advisory opinion (the "Opinion") to provide guidance concerning the contributions raised by these candidates (collectively, "Other Candidates") and to clarify that these candidates in the 2009 election cycle are not eligible to receive the benefits of the Term Limits AO.


To be eligible for public financing, the candidate's current committee must not have been authorized or "otherwise active for an election prior to the election(s) covered by the candidate's certification."  See Admin. Code § 3-703(1)(e).  The candidate will be deemed to have a committee that has been "active" for an election cycle5 if s/he filed a filer registration form for that election with the Board or received contributions or made expenditures.6  The 2009 election cycle covers the period from January 12, 2006 to January 11, 2010.  Thus, if the candidate filed a 2009 filer registration during this period or had any financial activity, the candidate's committee is deemed "active" during the 2009 election cycle.  Therefore, if the candidate chooses not to run in the 2009 election, and wishes to be eligible for public financing for a future covered election, the candidate must start a new committee for the future election cycle and transfer any funds from the old committee to the new committee.  See Admin. Code § 3-703(1)(e). 

Specifically, the Board interprets the Act and its Rules to provide that:

  • Other Candidates who wish to run for office in a future covered election and be participants in that election must create a new committee.  Funds raised by the 2009 committee may be transferred to the new committee for use in a future covered election (as described below).
  • Other Candidates who wish to run for office in a future covered election, but will be non-participants in that election, can retain their current committees and do not have to transfer their funds.

This approach prevents those who were not the intended beneficiaries of the Term Limits AO, or who did not abide by the terms of that AO, from taking advantage of the benefits of the Term Limits AO.7


  • The 2009 committee must continue to file with the New York State Board of Elections as required for any authorized committee, until it extinguishes its last liability.
  • If the candidate chooses to run for a future covered election and wishes to be eligible for public financing, s/he must open and register a new committee with the New York State and City Boards of Elections.8  See Admin. Code § 3-703(1)(e).9  After January 11, 2010, the candidate can submit a 2013 filer registration with the Board, and report all activity from the start of the new committee in the July 15, 2010 disclosure statement.       


  • Funds transferred from the 2009 committee to the new committee will not be eligible for matching.  See Admin. Code § 3-703(14); Rule 1-07.
  • Candidates must report contemporaneously the aggregate amount of each transfer and each contribution that is transferred.  See Admin. Code §§ 3-703(1)(d), (g); 3-703(14); Rule 3-03(c)(2).
  • Transferred contributions must not include over-the-limit or prohibited contributions.11  See Admin. Code §§ 3-702(18); 3-703(1)(f), (l); 3-703 (1-a), (1-b); Rules 1-07(c); 4-01(n).  Candidates have the burden of demonstrating that they did not transfer any over-the-limit or prohibited contributions.12  Id.


The Act imposes the following additional requirements on transfers from a non-principal committee to a principal committee:13

  • The campaign must obtain a transfer contribution card from each contributor – before the transfer – authorizing the candidate to use the contribution for the future election.  The campaign may not transfer any contribution for which such authorization has not been obtained.  See Admin. Code § 3-703(14).
  • The campaign must report certain expenditures made in connection with the transferred contributions.  See Admin. Code § 3-703(14)(b); Rule 1-08(o).  Most importantly, the campaign must report the cost of raising the transferred contributions.  Candidates can satisfy this reporting requirement by:14
    • Reporting the actual cost of raising the transferred contributions and submitting documentation to substantiate the expenditures made; OR
    • reporting the estimated cost of raising the transferred contributions.  This estimate is derived by dividing the transferor committee's total fundraising costs by the total amount of funds raised and multiplying this ratio by the total amount transferred; OR
    • applying a 15% "flat tax" to the total amount transferred (generally the simplest and recommended method).15
  • If the transfer is made after January 11, 2010, the committee will have the additional burden of reporting expenditures incurred by the transferor committee during the future election cycle.  See Admin. Code § 3-703(14)(b), Rules 1-08(o) and 3-03(c)(2).16


Given the unique and extraordinary circumstances presented by the legislation extending term limits, the Board must provide guidance to candidates not covered by the Term Limits AO. This guidance must ensure fairness for these candidates as well as their potential opponents.  The Board's guidance is grounded in its interpretation of the Campaign Finance Act and is supported by the Board's power to take actions "necessary and proper to carry out the purposes of the Act."  Admin. Code § 3-708(11); see Advisory Opinion No. 2001-12 (September 20, 2001); Advisory Opinion No. 2008-7 (November 3, 2008).17


1 Local Law No. 51 (2008). 

2 New York City Administrative Code ("Admin. Code") §§ 3-701, et seq.

3 The Term Limits AO allowed Group 1 candidates to either "restart" their 2009 elections by freezing their current committees until the 2013 election and opening a new committee for the 2009 election, or continue to use their existing 2009 committees.  Group 2 candidates were allowed to use their 2009 committees for the 2013 elections.

4 June 10, 2009 was both the deadline to file a 2009 certification form with the Board and the deadline for candidates who had reported activity prior to November 3, 2008, to file a termination form in order to take advantage of the benefits for Group 2 candidates, as outlined in the Term Limits AO.

5 The Board defines an "election cycle" as the period for which disclosure is required under the Act.

6 This applies to the 2009 election cycle and all future election cycles.

7 The AO 2008-7 was not meant to apply to any candidates other than those expressly classified as Group 1 or Group 2 who followed the requirements in that AO.  Therefore, the Term Limits AO left a gap in the interpretation of the law.  To the extent candidates believe they were given advice by Board staff in contravention of this Opinion, this Opinion supersedes any such advice.       

8 If a candidate is unsure as to whether s/he will seek public financing in a future covered election, the Board strongly advises such candidate to start a new committee as early as possible, as the money raised by the new committee may be eligible for public matching; money raised by the prior committee will not be matched. 

9 Other Candidates may open a new committee (if they have not already done so) at any point after the issuance of this Opinion.  Other Candidates may also use the 2009 committee to run for an office not covered by the Act.

10 These requirements apply to both transfers from a non-principal committee to a principal committee and from a principal committee to a principal committee.  A "principal committee" is a committee authorized for a covered election by a Program participant.  See Admin. Code §§ 3-702(2), 3-703(1)(e); Rule 3-03(c)(2). Committees used by non-participants in a covered election or by candidates in non-covered elections are non-principal committees.

11 The doing business contribution limits apply only to contributions from contributors who were doing business with New York City at the time the contribution was made.  Contributions received prior to February 2, 2008 are not subject to the doing business contribution limits.  However, contributions from corporations, partnerships, and LLCs cannot be transferred to any 2013 (or other future) committee, regardless when they were received.  See Admin. Code §§ 3-703(1)(l), (1-a), 3-719(2)(b); Rule 1-07(c)(2).

12 Most contribution limits and prohibitions apply to all candidates for a covered office even if they choose not to participate in the Program.  See Admin. Code §§ 3-703(1)(f), (l); 3-703(1-a) ; 3-719(2)(b).

13 These additional requirements apply only to Other Candidates who were not participants in the 2009 election, and will be participants in a future covered election.  See Admin. Code §§ 3-702(2), 3-703(1)(e); 3-703(14)(b); Rule 3-03(c)(2).  Only for the 2009 election cycle, the Board will not apply these additional requirements to candidates who terminated on or prior to June 10, 2009, and did not file a certification form to become a participant; such candidates will be presumed to be participants for the purposes of these additional transfer requirements.

14See 2009 Campaign Finance Handbook, p. 30-31. 

15 For the 2013 elections, there are three applicable spending limits—the limit for the three years prior to the year of the election (the "out-year limit"), the primary limit, and the general election limit.  See Admin. Code § 3-706(1), (2); Rule 1-08(b).  Expenditures made in connection with the transferred contributions will count towards the expenditure limit in effect at the time of the transfer, except that expenditures associated with transfers made on or before January 11, 2010, will be applied towards the out-year limit.  See Rule 1-08(o).   

16 Candidates subject to the expenditure reporting requirements for transfers are encouraged to transfer funds prior to the start of the 2013 election cycle—January 12, 2010—in order to avoid this additional burden. 

17 Candidates are strongly encouraged to contact the Board's Candidate Services Unit before they open a new committee and/or transfer any funds.