18519.4. Surplus Funds from Elections Prior to 1/1/97.

(a) Campaign Funds That Become Surplus on or After January 1, 1997. Campaign funds that become surplus on or after January 1, 1997, including surplus funds from the November 5, 1996, general election, are subject to the surplus rules of Government Code section 89519.

(b) Campaign Funds Held by Officeholders that Have Not Yet Become Surplus.

(1) Campaign funds received prior to January 1, 1997, that are held by an elected officer and have not yet become surplus because the elected officer has not been defeated or left office, may be used for any lawful purpose under Government Code sections 89510-89518 or transferred to a committee for a future election of the elected officer pursuant to 2 Cal. Code of Regs. section 18530.1 regarding carryover of funds. Unless spent or transferred to a committee for a future election, these funds will become surplus on the date the elected officer leaves office and will be subject to the surplus rules of Government Code section 89519 at that time.

(2) On or after January 1, 1997, a candidate or a candidate's controlled committee(s) may declare any funds or assets which were held by the committee as of December 31, 1996, to be surplus within the meaning of Government Code section 89519.

(c) Campaign Funds That Were Received After January 1, 1989, but Before January 1, 1997, and Became Surplus Before January 1, 1997. Campaign funds that were received after January 1, 1989, but before January 1, 1997, and became surplus before January 1, 1997, shall be used for the following purposes, as set forth in Government Code section 89519 in effect as of December 31, 1996 (repealed 1997):

(1) (A) The payment of outstanding campaign debts or elected officer's expenses.

(B) For purposes of this subdivision, the payment for, or the reimbursement to the state of, the costs of installing and monitoring an electronic security system in the home or office, or both, of a candidate or elected officer who has received threats to his or her physical safety shall be deemed an outstanding campaign debt or elected officer's expense, provided that the threats arise from his or her activities, duties, or status as a candidate or elected officer and that the threats have been reported to and verified by an appropriate law enforcement agency. Verification shall be determined solely by the law enforcement agency to which the threat was reported. The candidate or elected officer shall report any expenditure of campaign funds made pursuant to this section to the commission. The report to the commission shall include the date that the candidate or elected officer informed the law enforcement agency of the threat, the name and phone number of the law enforcement agency, and a brief description of the threat. No more than five thousand dollars ($5,000) in surplus campaign funds may be used, cumulatively, by a candidate or elected officer pursuant to this subdivision. Payments made pursuant to this subdivision shall be made during the two years immediately following the date upon which the campaign funds became surplus campaign funds. The candidate or elected officer shall reimburse the surplus campaign fund account for the fair market value of the security system no later than two years immediately following the date upon which the campaign funds become surplus campaign funds, upon sale of the property on which the system is installed, or prior to the closing of the surplus campaign fund account, whichever comes first. The electronic security system shall be the property of the campaign committee of the candidate or elected officer.

(2) The pro rata repayment of contributions.

(3) Donations to any bona fide charitable, educational, civic, religious, or similar tax-exempt, nonprofit organization, where no substantial part of the proceeds will have a material financial effect on the former candidate or elected officer, any member of his or her immediate family, or his or her campaign treasurer.

(4) Contributions to a political party or committee so long as the funds are not used to make contributions in support of or opposition to a candidate for elective office.

(5) Contributions to support or oppose any candidate for federal office, any candidate for elective office in a state other than California, or any ballot measure.

(6) The payment for professional services reasonably required by the committee to assist in the performance of its administrative functions, including payment for attorney's fees for litigation which arises directly out of a candidate's or elected officer's activities, duties, or status as a candidate or elected officer, including, but not limited to, an action to enjoin defamation, defense of an action brought of a violation of state or local campaign, disclosure, or election laws, and an action arising from an election contest or recount.

(d) Surplus Campaign Funds That Were Received Before January 1, 1989. Surplus campaign funds that were received prior to January 1, 1989, may be used for the following purposes as set forth in Elections Code section 20300 in effect as of December 31, 1996 (repealed 1997):

(1)(A) The repayment of personal or committee loans or other obligations if there is a reasonable relationship to a political, legislative, or governmental activity.

(B) For purposes of this subdivision, the payment for, or the reimbursement to the state of, the costs of installing and monitoring an electronic security system in the home or office, or both, of a candidate or elected officer who has received threats to his or her physical safety shall be deemed to have a reasonable relation-ship to a political, legislative, or governmental activity, provided that the threats arise from his or her activities, duties, or status as a candidate or elected officer and that the threats have been reported to and verified by an appropriate law enforce-ment agency. Verification shall be determined solely by the law enforcement agency to which the threat was reported. The candidate or elected officer shall report any expenditure of campaign funds made pursuant to this section to the commission. The report to the commission shall include the date that the candidate or elected officer informed the law enforcement agency of the threat, the name and phone number of the law enforcement agency, and a brief description of the threat. No more than five thousand dollars ($5,000) in surplus campaign funds may be used, cumulatively, by a candidate or elected officer pursuant to this subdivision. Payments- made pursuant to this subdivision shall be made during the two years immediately following the date upon which the campaign funds became surplus campaign funds. The candidate or elected officer shall reimburse the surplus campaign fund account for the fair market value of the security system no later than two years immediately following the date upon which the campaign funds become surplus campaign funds, upon sale of the property on which the system is installed, or prior to the closing of the surplus campaign fund account, whichever comes first. The electronic security system shall be the property of the campaign committee of the candidate or elected officer.

(2) The payment of the outstanding campaign expenses.

(3) Contributions to any candidate, committee, or political party, except where otherwise prohibited by law.

(4) The pro rata repayment of contributors.

(5) Donations to any religious, scientific, educational, social welfare, civic, or fraternal organization no part of the net earnings of which inures to the benefit of any private shareholder or individual or to any charitable or nonprofit organization which is exempt from taxation under subsection (c) of Section 501 of the Internal Revenue Code or Section 17214 or Sections 23701a to 23701j, inclusive, or Section 23701l, 23701n, 23701p, or 23701s of the Revenue and Taxation Code.

(6) Except where otherwise prohibited by law, held in a segregated fund for future political campaigns, not to be expended except for political activity reason-ably related to preparing for future candidacy for elective office.

NOTE: On January 6, 1998, the federal court in Sacramento enjoined enforcement of Proposition 208. Until further notice, this regulation should not be used since it implements provisions of Proposition 208.

NOTE: Authority cited: Section 83112, Government Code. Reference: Section 89519, Government Code.

History

1. New section filed 1-7-97; operative 1-7-97.
2. Amendment filed 5-13-97; operative 5-13-97.
3. Change without regulatory effect adding explanatory note filed 7-18-2000.
4. Repeal filed 5-4-2001; operative 6-3-2001.