Rule 5-01 Payment Procedure.

(a) (1) Board determines eligibility. No payments from the Fund shall be made to a participant unless the Board has determined that a candidate has met all eligibility requirements of the Act and these rules. The Board shall notify the participant of a determination of ineligibility.

(2) Public funds cap. (i) The Board shall determine, pursuant to §3-705(7)(a) of the Code, whether a participant is opposed by another candidate who has spent or contracted or obligated to spend, or received in loans or contributions, or both, an amount which in the aggregate exceeds one-fifth of the expenditure limit applicable to the participant. Such determination shall be made pursuant to Rule 7-03.

(ii) Participants seeking additional public funds pursuant to §3-705(7)(b) of the Code must file a signed statement with the Board pursuant to §3-705(7)(b) no later than the due date for the disclosure statement immediately preceding the public funds payment for which the participant is seeking to receive the additional public funds; provided, however, that participants seeking to receive the additional public funds on the first date payments are made by the Board for a primary election, must file the signed statement with the Board no later than the day before the first date the Board of Elections conducts hearings on any ballot petition filed by any candidate seeking nomination for election in any primary occurring in the same election cycle for which the candidate is seeking nomination for election, without regard to whether such hearings are related to a petition filed by an opponent of the participant.

(3) Small primaries. (i) A participant on the ballot in one or more primary election(s) in which the number of persons eligible to vote for party nominees in each such election totals fewer than one thousand shall not receive public funds in excess of five thousand dollars for qualified campaign expenditures in such election or elections; provided, however, that the foregoing limitation shall not apply to such participant if he or she is opposed in a primary election by (A) a participant who is not subject to such limitation or (B) a limited participant or non-participant who has spent or contracted or obligated to spend in excess of ten thousand dollars for such primary election. The Board shall determine whether a non-participant has exceeded such ten thousand dollar level pursuant to Rule 7-03.

(ii) For the purposes of subparagraph (i), the number of persons eligible to vote for party nominees in a primary election shall be as determined by the Board of Elections for the calendar year of the primary election pursuant to §5-604 of the New York Election Law. If such determination for any primary election is not available from the Board of Elections as of the day before the due date for filing a certification pursuant to §3-703(1)(c) of the Code, the most recent determination by the Board of Elections of the persons eligible to vote for party nominees for the office for which such primary election is held shall be relied upon.

(4) Non-competitive campaigns. (i) Pursuant to §3-705(9) of the Code, a participating candidate who endorses or otherwise publicly supports his or her opponent for election shall not be eligible for public funds.

(ii) Pursuant to §3-705(10) of the Code, a participating candidate who loses the primary election but remains on the ballot for the general election shall be ineligible to receive public funds unless the candidate certifies to the Board that he or she will actively campaign for office, by measures including but not limited to raising and spending funds, seeking endorsements, and broadly soliciting votes.

(b) Preliminary review of disclosure statements. (i) In order to make possible payment within four business days after receipt of disclosure statements, or as soon thereafter as is practicable, pursuant to §3-705(4) of the Code, the Board shall conduct a preliminary review of all disclosure statements filed and all receipts filed indicating proof of compliance with §12-110 of the Code. This preliminary review may be delayed if the participant fails to submit a disclosure statement, a receipt indicating compliance with §12-110 of the Code or information requested by the Board, or fails to submit a disclosure statement, a receipt indicating compliance with §12-110 of the Code or information requested by the Board by the date required by the Board, or submits a disclosure statement that fails to comply substantially with the requirements of the Act or these rules. A preliminary review may also be delayed for other reasons, including, but not limited to, consideration of whether a basis exists for an ineligibility determination, as described in subdivision (f). A delayed preliminary review may result in a delay in a payment determination, until such time as it is practicable and the Board is considering making payments based on matchable contributions claimed in disclosure statements actually received on or before a subsequent applicable due date.

(ii) After a participant has been informed that a matchable contribution claim has been deemed invalid or that the participant is ineligible for public funds, the participant shall not include in any petition or request to the Board any documentation or factual information not submitted to the Board prior to the determination under review unless the participating candidate can demonstrate good cause for the previous failure to submit such documentation or information and for any failures to communicate on a timely basis with the Board.

(c) Basis for payments. The amount paid to a participant shall be based upon the Board's review and audit of matchable contributions claimed and qualified campaign expenditures.

(d) Validity of matchable contribution claims and projected rate of invalid claims. The Board shall not make payment for any matchable contribution claim it determines or projects to be invalid. The Board shall consider the following factors in determining that matchable contribution claims are invalid and in projecting a rate of invalid matchable contribution claims:

(1) cash contributions from any one contributor that are greater than $100 in the aggregate, in violation of New York Election Law §14-118(2), or money order contributions from any one contributor that are greater than $100 in the aggregate;

(2) contributors who are individuals under the age of eighteen years or that are entities other than individuals;

(3) matchable contribution claims that would yield more than $1,050 in public funds per contributor (or $522 in the case of a special election);

(4) contributions that exceed the contribution limit applicable under the Act;

(5) contributor addresses that are not residential addresses within New York City;

(6) contributions for which information is omitted from or illegible in a disclosure statement;

(7) contributions made later than December 31 of the election year;

(8) contributions originally received for elections other than the election in which the candidate is currently a participant, as described in Rule 1-07;

(9) matchable contribution claims that exceed the gross amount of the contribution;

(10) contributions that were not received within the reporting period or that were made by post-dated check;

(11) (i) contributions totaling more than $99 for which a participant has not reported the contributor's occupation, employer, and business address; (ii) contributions totaling less than $99 for which a participant is required to report the contributor's occupation, employer, and business address, pursuant to Rule 3-03(c)(6)(ii), but has failed to do so;

(12) contributions that were returned to or not paid by the contributor;

(13) checks drawn by a person other than the contributor except checks signed by a contributor's authorized agent where the documentation required under Rule 4-01(b)(2) has been maintained and provided;

(14) contributions that are otherwise not matchable contributions within the meaning of the Act;

(15) any information that suggests that a contribution has not been processed or reported in accordance with Program requirements;

(16) any other information that suggests that matchable contribution claims may be invalid;

(17) contributions for which a record required under Chapter 4 was not kept or provided upon request;

(18) contributions for which complete supporting documentation required by Rule 3-04(a) has not been submitted;

(19) check or money order contributions made payable to entities other than the committee that has reported receiving the contribution;

(20) contributions that were made or accepted in violation of any federal, state, or local law;

(21) contributions that were not contemporaneously reported as matchable in disclosure statements or were reported in such statements that were not filed in a complete and timely manner;

(22) contribution checks drawn on business accounts, or accounts that bear indicia of being business accounts, such as the contributor's professional title;

(23) contributions purportedly from different contributors that were made by money orders bearing consecutive serial numbers or other markings indicating that they were purchased simultaneously;

(24) arithmetical errors in totals reported;

(25) contributions that were not itemized in a disclosure statement;

(26) contributions required to be deposited into an account established for a runoff election, as provided in Rule 2-06(c);

(27) contributions from individuals, other than employees of the candidate's principal committee, who are vendors to the participant or individuals who have an interest in a vendor to the participant, unless the expenditure to the vendor is reimbursement for an advance. For the purposes of this rule, “individuals who have an interest in a vendor" shall mean individuals having an ownership interest of ten percent or more in a vendor or control over the vendor. An individual shall be deemed to have control over the vendor firm if the individual holds a management position, such as the position of officer, director or trustee; and

(28) contributions from individuals having business dealings with the city, as defined in §3-702(18) of the Code, and contributions from lobbyists as defined in §3-211 of the Code.

(e) Withholding of public funds.

The Board shall withhold five percent of the amount of public funds payable to a participant until the final pre-election payment for any election in which the participant is eligible to receive public funds. In addition, the Board, in its discretion, may withhold a reasonable portion of the amount of public funds payable to a participant based upon:

(1) a projection of the rate(s) of invalid matchable contribution claims; and

(2) the participant's failure to provide to the Board, upon its request, documents or records required by Chapter 4 of these rules, or other information.

(f) Basis for ineligibility determination. The Board may determine that public funds shall not be paid to a participant if:

(1) the participant has failed to meet one of the eligibility criteria of the Act or these Rules;

(2) the participant is required to repay public funds previously received, as described in Rule 5-03, or the participant has failed to pay any outstanding claim of the Board for the payment of civil penalties or the repayment of public funds against such participant or his or her principal committee or a principal committee of such participant from a prior covered election, provided that the participant has received written notice of the potential payment obligation and potential ineligibility determination in advance of the certification deadline for the current covered election or an opportunity to present reasons for his or her eligibility for public funds to the Board;

(3) the participant fails to submit a disclosure statement required by these rules;

(4) the participant fails to provide to the Board, upon its request, documents or records required by Chapter 4 of these rules, or other information that verifies campaign activity;

(5) previous public fund payments to the participant for the election equal the maximum permitted by the Act;

(6) the participant fails to file the receipt indicating compliance with §12-110 of the Code, as required pursuant to §3-703(1)(m) of the Code and Rule 3-11;

(7) the participant endorses or publicly supports his or her opponent for election pursuant to §3-705(9) of the Code;

(8) the participant loses in the primary election but remains on the ballot for the general election and fails to certify to the Board, as required by §3-705(10) of the Code, that he or she will actively campaign for office in the general election, or the participant certifies to the Board that he or she will actively campaign for office in the general election but thereafter fails to engage in campaign activity that shall include but not be limited to, raising and spending funds, seeking endorsements, and broadly soliciting votes;

(9) there is reason to believe that the participant or an agent of the participant has committed a violation of the Act or these Rules;

(10) the participant or an agent of the participant has been found by the Board to have committed fraud in the course of Program participation or to be in breach of certification pursuant to Rule 2-02; or

(11) there is reason to believe that the participant or an agent of the participant has engaged in conduct detrimental to the Program that is in violation of any other applicable law.

(g) Payment is not final determination. Payments of public funds pursuant to this rule shall not constitute the Board's final determination of the amount, if any, for which the participant qualifies. The Board shall provide specific notice of any such final determination.

(h) Notice to participants. The Board shall notify participants of any difference between the amount claimed and amount paid. Subsequent payments may be adjusted upward or downward to reflect further review and auditing of previous matchable contribution claims.

(i) Pre-election payments.

(1) Pursuant to §§ 3-709(5) and (6) of the Code: (i) no public funds shall be paid to participants in a primary election any earlier than two weeks after the last day to file designating petitions for such primary election; (ii) no public funds shall be paid to participants in a runoff primary election or general election any earlier than the day after the day of the primary election held to nominate candidates for such election; and (iii) no public funds shall be paid to participants in a runoff special election held to fill a vacancy any earlier than the day after the day of the special election for which such runoff special election is held.

(2) Pursuant to §3-703(1)(a) and (5) of the Code, public funds are not payable to a participant who has not met the legal requirements to have his or her name on the ballot or who is unopposed. To enable the Board to ascertain whether a candidate has met the legal requirements to be on the ballot and is opposed, the Board shall first make payments in an election after the Board of Elections conducts hearings on the ballot petitions filed in that election except if the Board determines that delays in Board of Elections proceedings or determinations warrant first making payments earlier.

(3) The Board shall schedule at least three payment dates in the thirty days prior to a covered election, and the Board shall provide each participant a written determination specifying the basis for any payment or non-payment. As provided in Rule 5-02(a), the participant may petition the Board in writing for a reconsideration of any such payment or non-payment determination, prior to the election, and such reconsideration shall occur within five business days of the filing of such petition.

(j) Flat grants in special circumstances. Pursuant to §3-705(5)(a) of the Code, the Board shall pay to a participant in a runoff primary election or runoff special election an amount equal to twenty-five cents for each one dollar of public funds paid to the participant for the preceding election. The amount paid pursuant to this subdivision may be adjusted to reflect further review and auditing of matchable contribution claims for the preceding election. The Board shall make payments pursuant to this subdivision within four business days after the date of the preceding election or as soon thereafter as practicable.

(k) Post-payment audits. All determinations by the Board of eligibility and payment are subject to post-payment audit and final readjustment.

(l) Characterization of payments as for the primary or general election. (1) If a participant is on the ballot and has an opponent on the ballot in both a primary and the general elections, payments made after the primary election will be characterized initially as follows:

(i) As a primary election payment, if the payment is made on the basis of contribution and expenditure information reported in or before the disclosure statement due 10 days after the primary election, except as otherwise provided in subparagraph (ii).

(ii) As a general election payment, to the extent that any further primary election payments would exceed a maximum applicable in the primary election pursuant to the Act.

(iii) As a general election payment, if the payment is made on the basis of contribution and expenditure information reported in disclosure statements due later than 10 days after the primary election.

(2) If the Board determines that payments characterized initially as either primary or general election payments were, in fact, used for qualified campaign expenditures incurred in the other election, the payments will be recharacterized accordingly, and additional payments may be made or repayments required, if appropriate. The total public funds used for qualified campaign expenditures in a single election may not exceed the maximum applicable pursuant to §3-705(2) of the Code.

(m) Post-election payments. After an election the Board may defer payment determinations for a participant until the completion of its audit of the participant. The Board shall not make payments based upon disclosure statement amendments or resubmissions filed (i) after December 31 in an election year, including but not limited to amendments or resubmissions of the disclosure statement due the first January 15 after the election, or (ii) after the final disclosure statement in the case of a special election; provided however, that the Board may make payments based upon such amendments or resubmissions solely if they are made in response to invalid matching claims reports to which the Board has requested a response after December 31 in an election year or after the final special election disclosure statement, as the case may be.

(n) Deductions from payments. (1) The total amount of public funds payable to a participant for a covered primary, general, or special election shall be reduced by the sum of the following:

(i) the amount of outstanding civil penalties assessed by the Board as a result of the participant’s failure to comply with the Act and these Rules during the current covered election; and (ii) the amount of the participant’s:
(A) transfers and other disbursements from a political committee that is involved in an election in which the candidate is currently a participant, to a political committee that is not involved in that election;

(B) expenditures made to pay expenses for or debt from a previous election, including repayments of public funds and payment of penalties owed to the Board for a previous election;

(C) contributions to other political committees that do not meet the requirements provided in §3-705(8) of the Code for contributions that shall not be a basis for reducing public funds payments; and

(D) loans to other candidates that are not repaid within 30 days or by the date of the election, whichever is earlier, or spending for other candidates, including joint expenditures, to the extent such expenditures benefit another candidate, and independent expenditures; provided that independent expenditures made by the principal committee of a participant shall not be a basis for reducing public funds payments to that participant, where such expenditures do not, in the aggregate, exceed the amount provided in §§ 3-705(8)(i), (ii), or (iii) of the Code, as applicable, for contributions to political committees;

(E) loans to or spending for political party committees and political clubs that are not reimbursed within 30 days or by the date of the election, whichever is earlier, provided that if the participant demonstrates that the expenditure was for a tangible item that directly promotes the participant's election, such as an advertisement in a fundraising journal, this subdivision shall not apply to the fair market value of that item; and

(F) expenditures made for the purpose of furthering the participant's election to the position of Speaker of the City Council.

(2) Disbursements that would otherwise result in a deduction pursuant to subparagraph (ii) of paragraph (1) of this subdivision shall not result in any such deduction if:

(i) such disbursements are made out of a segregated bank account;

(ii) at no time does the segregated bank account contain any funds other than contributions received by the participant and deposited directly into the account pursuant to this Rule, and bank interest paid thereon;

(iii) funds deposited into the segregated bank account are not used for any purpose other than disbursements governed by subparagraph (ii) of paragraph (1) above or payment of bank fees associated with the segregated bank account;

(iv) contributors whose contributions are deposited into the segregated bank account have confirmed in writing, pursuant to Rule 4-01(b)(3)(ii)(C), that they understand that these contributions will only be used for such disbursements and will not be matched with public funds;

(v) copies of such written confirmations are submitted to the Board by the due date for the disclosure statement in which such contributions are required to be reported pursuant to these Rules;

(vi) copies of checks for each disbursement out of the segregated bank account are submitted to the Board by the due date for the disclosure statement in which such disbursements are required to be reported pursuant to these Rules;

(vii) a copy of each bank statement for the segregated bank account is submitted to the Board by the due date for the next disclosure statement; and

(viii) for each individual contribution deposited into the segregated bank account, and each disbursement out of the segregated bank account, the participant has complied with all other applicable provisions of the Act and these Rules, including but not limited to the record keeping and reporting provisions.

(3) Participants shall deposit the entire amount of a contribution into the segregated bank account provided for in paragraph (2), and may not divide the contribution between different accounts.

(4) Contributions deposited into a segregated bank account pursuant to this Rule will not be matched with public funds.

(5) Any funds remaining in a segregated bank account after the election must be returned to the contributors whose contributions were deposited into the account, or, if that is impracticable, to the Fund, on or before December 31 in the year following the year of the election.

(6) A participant who establishes a segregated bank account pursuant to this Rule, but fails to comply with any provision of paragraph (2), (3), (4), or (5) of this subdivision, shall no longer be entitled to the exception from paragraph (1) contained in paragraph (2) of this subdivision.

(7) Funds deposited into, and disbursements made from, a segregated bank account established and maintained in compliance with this Rule for the purpose of making expenditures to pay expenses for or debt from a previous election, including repayments of public funds owed to the Board, will not be considered to be raised or spent for the current covered election for purposes of the participant’s expenditure limit calculation.

(o) Use of final payment. Before the Board makes final payment, the participant shall submit to the Board bills or other documentation of outstanding debt for which the final public funds payment will be used. Within 60 days after the final public funds payment, the participant must demonstrate that the public funds were used to pay such outstanding debt or shall repay the public funds to the Board.

(p) Responding to invalid matching claims reports. In the event that the Board concludes that one or more of a participant's matchable contribution claims are invalid, a participant responding to the Board's report shall do so by the March 15 following the election or 60 days after receiving the report, whichever is later. In the case of a special election, a participant shall respond to an invalid matching claims report no later than 60 days after receiving the report.

(q) Ballot disqualification by Board of Elections; candidate not opposed on the ballot. The Board will not make payment to any participant disqualified from the ballot by the Board of Elections or by a court, or to any participant for an election in which all other candidates have been disqualified from the ballot by the Board of Elections or by a court, until after such participant or other candidate, as the case may be, is restored to the ballot by a subsequent determination by a court of competent jurisdiction. A participant who appears as the only candidate on the ballot in an election shall not be eligible to receive public funds, notwithstanding any write-in candidates in that election, except as otherwise provided in Rule 5-02(b).

(r) Reduction in maximum public funds payable. Pursuant to §3-705 of the Act, the maximum amount of public funds a participant may otherwise be eligible to receive will be reduced by the sum of the following: (1) any public funds retained by the Board in lieu of civil penalties; (2) any public funds retained by the Board in lieu of funds the participant is required to pay back to the Fund pursuant to the Act; (3) any public funds withheld pursuant to Rule 5-01(e)(2); and (4) pursuant to §3-703(1-b) of the Code, an amount equal to the total unreturned contributions in excess of the limitations applicable to persons having business dealings with the city.

(s) Approval by Board subject to correction of limited, isolated, and easily corrected compliance issues. The Board, in its discretion, may approve a public funds payment to a participant, notwithstanding that the participant has been determined by the Board to be ineligible to receive public funds because of limited, isolated, and easily corrected compliance issues. Such approval of public funds disbursement shall be conditioned upon a satisfactory demonstration by the participant that it has taken action, as specified by the Board and within a period of time specified by the Board, to comply with the Act and these rules. The participant shall have the burden of demonstrating to the Board that it has fully complied with the Board 's requirements.

(t) Payment of expenditures made in connection with litigation with public funds. A participating candidate and his or her principal committee may not use public funds to pay expenditures made in connection with any action, claim, or suit before any court or arbitrator.

(u) Payment by electronics funds transfer. All payments of public funds shall be by electronic funds transfer unless the Board determines, in its sole discretion, to use an alternative payment method. In order to receive prompt payment, the participating candidate shall provide the Board with a voided check and such additional information as shall be required by the Board.