by Bob Lackner

Congratulations! The election is over and you’re now a member of the General Assembly! You know the official salary for the job will hardly compensate you in full for the many official duties you’ll be undertaking, and you also know the state won’t pay for a lot in terms of funding your office or hiring staff. You likely have campaign funds remaining after the election and know there are probably some rules addressing the use of such money (after all, as you know from your campaign, there is never any shortage of rules governing the use of campaign money), but you don’t know what they are.

For starters, this is a nice problem to have. As we will see, the law allows elected officials to use leftover campaign funds for a number of specified and beneficial purposes—and having leftover campaign money certainly gives an advantage over elected candidates who finish the election without these additional resources. In addition, the rules in this area are mostly clear and concise.

The legal term for leftover campaign money is “unexpended campaign contributions.” [1] This year, the 2020 election cycle ends on December 3, 2020. A candidate committee’s unexpended campaign contributions will be the amount of money the committee has on hand as of the first day of the new election cycle, or December 4, 2020, less any unpaid obligations the candidate committee has incurred as of that date.

Rules governing the use of campaign contributions are specified in the Fair Campaign Practices Act (FCPA).[2] As a threshold matter, the amount of money a candidate committee may retain after the end of the election is subject to an important restriction found in the campaign finance requirements of article XXVIII of the Colorado Constitution (Article XXVIII). Under Article XXVIII, the amount of any unexpended campaign contributions retained by a candidate committee on the first day of the new election cycle is treated as a contribution by a political party, regardless of the original source of the contributions, for purposes of the limit on political party contributions in that election cycle. This means that all unexpended campaign contributions that a candidate retains at the beginning of the new election cycle convert, or are “morphed,” into political party contributions.

To make things more complicated and challenging, under current campaign contribution limits, for the election cycle that begins on December 4, 2020, a political party cannot contribute more than $24,425 to Senate candidates and $17,625 to House candidates.[3] On December 4, 2020, if a candidate committee retains unexpended campaign contributions in an amount that exceeds the limits for Senate and House candidates, respectively, the candidate committee will be in violation of the law because it will have, on that date, accepted more in contributions from a political party than is permissible. A candidate committee in that position must spend down enough of the unexpended campaign contributions so that the amount retained on December 4, 2020, is below the applicable limit.

The statute classifies permitted uses of unexpended campaign contributions in two groups. Under the first group,[4] unexpended campaign contributions may be:

• Contributed to a political party;
• Contributed to a candidate committee established by the same candidate for a different public office in accordance with the applicable campaign contribution limits as long as the candidate committee making the contribution is terminated no later than 10 days after the contribution is made;
• Donated to a charitable organization recognized by the Internal Revenue Service; or
• Returned to the contributors or retained by the committee for use by the candidate in a subsequent campaign.

In addition to the uses described above, a person elected to office may also use unexpended campaign contributions for any of the following additional purposes:[5]

• Voter registration;
• Political issue education, which includes obtaining information from or providing information to the electorate;
• Postsecondary educational scholarships;
• To defray reasonable and necessary expenses related to mailings and similar communication to constituents; or
• To pay expenses that are directly related to the candidate’s official duties as an elected official, including, without limitation, expenses for purchasing or leasing office equipment and supplies; room rental for public meetings; necessary travel and lodging expenses for legislative education expenses such as seminars, conferences, and meetings on legislative issues; and telephone and pager expenses.

The Office of Legislative Legal Services (OLLS) refers to the last provision as the “catch-all” provision because, by its very terms, it permits the use of unexpended campaign contributions for “any expenses that are directly related to such person’s official duties as an elected official….” This is the provision we consult to research a contemplated use of unexpended campaign contributions that is not explicitly addressed in the statute. Questions involving use of the “catch-all” provision typically hinge on how direct the connection is between the contemplated use of the money and the member’s official duties as a legislator.

If the use of the money is directly connected to a task enabling the member to perform his or her duties as a legislator, the OLLS is likely to recommend that the use conforms to the statutory requirements. For example, the OLLS has regularly advised members that they may use unexpended campaign contributions to retain one or more legislative aides.

A candidate committee for an officeholder who does not run for reelection or is not reelected or for a person who is not initially elected to office must use all unexpended campaign contributions retained by the committee no later than nine years after the date the officeholder’s term ends or after the date of the election at which the unelected person was on the ballot, whichever is later.[6] As with any other form of campaign expenditure, a candidate committee must disclose the use of unexpended campaign contributions in its regular campaign finance disclosure reports required to be filed by law.[7]

If you are a member of the Colorado General Assembly, we encourage you to contact the OLLS if you have any questions about the propriety of using unexpended campaign contributions for a particular purpose. Additional information on this topic is provided in a document on the Colorado General Assembly’s website entitled “Frequently asked questions and answers involving the conversion or use of unexpended campaign funds.” In accordance with our customary recommendations on these matters, we also encourage legislators with questions to seek the advice and counsel of the Colorado Secretary of State’s Office as the body charged by law with the administration and enforcement of the state’s campaign finance laws.

 

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[1] The campaign and political finance provisions of the state constitution define “unexpended campaign contributions” to mean “the balance of funds on hand in any candidate committee at the end of an election cycle, less the amount of all unpaid monetary obligations incurred prior to the election in furtherance of such candidacy.” See article XXVIII, section 2(15) of the Colorado Constitution.

[2] The FCPA is codified in article 45 of title 1, C.R.S. The section of the FCPA that addresses unexpended campaign contributions is § 1-45-106, C.R.S.

[3] See Rule 10.17(h) of the Secretary of State’s Rules Concerning Campaign and Political Finance.

[4] § 1-45-106 (1)(a)(I)(A)–(D), C.R.S.

[5] § 1-45-106 (1)(b)(I)–(V), C.R.S.

[6] § 1-45-106 (1)(a)(III), C.R.S.

[7] In general, these disclosure requirements are specified in § 1-45-108, C.R.S.