Rule 5-03 Repaying Public Funds.

(a) Participants returning public funds. Participants returning public funds shall make a check payable or endorse the public fund check to the "New York City Election Campaign Finance Fund." Participants may not reclaim public funds they have returned.

(b) Participant is disqualified from the ballot. (1) Pursuant to §3-709(7) of the Code, a participant who has been finally disqualified or whose designating or nominating petitions have been finally declared invalid by the New York City Board of Elections or a court of competent jurisdiction, may not thereafter spend public funds for any purpose other than the payment of previous liabilities incurred in qualified campaign expenditures. All public funds in excess of such liabilities previously incurred shall be promptly repaid to the Board; the amount to be repaid shall be determined in accordance with §3-710(2)(b) of the Code and subdivision (d). A repayment made pursuant to §3-709(7) shall not preclude a determination that an additional repayment is required pursuant to that or any other provision of the Act.

(2) Pursuant to §3-710(3) of the Code, a participant who has been disqualified by a court of competent jurisdiction on the grounds that he or she committed fraudulent acts in order to obtain a place on the ballot, and such decision is not reversed, shall pay to the Board an amount equal to the total public funds paid to the participant. Payments required pursuant to this paragraph shall be made promptly upon such final determination.

(c) Excess public fund payments. Pursuant to §3-710(2)(a) of the Code, the Board shall notify a participant in writing if public funds paid to the participant were in excess of the aggregate amount for which the participant qualified, and such participant shall pay to the Board an amount equal to the amount of the excess payments.

(d) Improper use of public funds. Pursuant to §3-710(2)(b) of the Code, the Board shall notify a participant in writing if it finds that public funds paid to the participant were used for purposes other than qualified campaign expenditures and the participant shall repay to the Board any improperly used public funds; provided, however, that in considering whether or not a participating candidate shall be required to pay to the Board such amount or an amount less than the entire amount to be repaid, the Board shall act in accordance with the following: (i) where credible documentation supporting each qualified campaign expenditure exists but is incomplete, the Board shall not impose such liability for such expenditure; (ii) where there is an absence of credible documentation for each qualified campaign expenditure, the Board may impose liability upon a showing that such absence of credible documentation for such expenditure arose from a lack of adequate controls including, but not limited to trained staff, internal procedures to follow published Board guidelines and procedures to follow standard financial controls.

(e) Unspent campaign funds. (1) Pursuant to §3-710(2)(c) of the Code, the Board shall notify a participant in writing if it finds that the participant owes unspent campaign funds to the Board. The participant shall promptly pay to the Board unspent campaign funds from an election; provided, however, that all unspent campaign funds for a participant shall be immediately due and payable to the Board upon a determination by the Board that the participant has delayed the post-election audit process. The participant shall promptly pay to the Board any additional unspent campaign funds based upon a determination made by the Board at a subsequent date. The amount of unspent campaign funds shall be presumed to be equal to the participant’s authorized committee bank account balance on January 11 in the year following the election, or for special elections, on the last day of the reporting period for the final disclosure statement the candidate is required to file with the Board for such election, less any permissible documented post-election expenditures pursuant to subparagraph (ii) of paragraph (2) of this subdivision. The Board may also consider information revealed in the course of an audit or investigation in making an unspent campaign funds determination, including, but not limited to, the fact that campaign expenditures were made in violation of law, that expenditures were made for any purpose other than the furtherance of the participant’s nomination or election, or that the participant has not maintained or provided requested documentation. If a participant repays to the Fund all funds remaining in his or her authorized committee bank account on or before December 31 in the year of the election, or, for special elections, on or before the last day of the month following the month in which the election took place, such participant shall be presumed not to owe additional unspent funds, provided that any contributions received and expenditures made after such funds are repaid must be raised and spent in compliance with the Act and these Rules.

(2) (i) A participant may not use receipts for any purpose other than disbursements in the preceding election until all unspent campaign funds have been repaid, except as otherwise provided in Rule 1-03(b). Notwithstanding the presumption of Rule 1-08(c)(1), a participant has the burden of demonstrating that a post-election expenditure is for the preceding election.

(ii) Before repaying unspent campaign funds, a participant may make post-election expenditures only for routine activities involving nominal cost associated with winding up a campaign and responding to the post-election audit. Such expenditures may include: payment of utility bills and rent; reasonable staff salaries and consultancy fees for responding to a post-election audit; reasonable staff salaries and legal fees incurred prior to the date of the issuance of the participant's final audit report and associated with defending against a claim that public funds must be repaid; a post-election event for staff, volunteers, and/or supporters held within thirty days of the election; reasonable moving expenses related to closing the campaign office; a holiday card mailing to contributors, campaign volunteers, and staff; thank you notes for contributors, campaign volunteers, and staff; payment of taxes and other reasonable expenses for compliance with applicable tax laws; and interest expense. Routine post-election expenditures that may be paid for with unspent campaign funds do not include such items as post-election mailings other than as specifically provided for in this subparagraph; making contributions; or making bonus payments or gifts to staff or volunteers. Unspent campaign funds may not be used for transition and inauguration activities.

(iii) Notwithstanding the restriction on the use of receipts provided in subdivision (2)(i), a participant who has outstanding liabilities from the election, including a participant who owes public funds or penalties to the Board, may make post-election expenditures for the purpose of raising funds to repay such debt, provided, however, that such expenditures and any contributions received shall be included in the participant's unspent funds calculation unless such expenditures and contributions are incurred or received after the date of the issuance of the participant's final audit report.

(f) Other reasons for repayment. The Board shall notify a participant of any amount of public funds to be repaid because: (i) the participant has not maintained copies of checks or contribution cards that document matchable contributions; or (ii) the public funds paid were based on contributions that have been returned or contribution checks that have not been paid; or (iii) the participant has failed to demonstrate eligibility for the public funds paid or compliance with Program requirements, or both; or (iv) a determination pursuant to §§ 3-705(6), (7), or 3-706(3) of the Code is reversed following reconsideration pursuant to Rule 7-03(k).

(g) Repayment determinations. The participant shall promptly repay public funds upon any determination made by the Board that a repayment is required pursuant to the Act and this rule. Any claim for the repayment of public funds shall be based on a final determination issued by the Board following an adjudication pursuant to Rule 7-02(f), unless such adjudication is waived by the candidate or principal committee.