20336 Federal Register / Vol. 44, No. 66 / Wednesday, April 4,1979 / Rules and Regulations

FEDERAL ELECTION COMMISSION

11 CFR Chapter IX

Presidential Election Campaign Fund

and Presidential Primary Matching

Fund

AGENCY: Federal Election Commission. 

ACTION: Transmittal of Regulations to 

Congress and Establishment of Chapter.

s u m m a r y : FEC Regulations relating to 

Administration of the Presidential 

Primary Matching Payment Account 

have been revised and transmitted to 

Congress pursuant to 26 U.S.C. 9039(c). 

The revisions have been renumbered 

according to the section of the U.S. Code 

upon which each regulation is based. 

This renumbering has necessitated their 

transfer from Chapter I to Chapter IX of 

Title 11 of the Code of Federal 

Regulations. The Commission’s 

experiences in administering the 

Primary Matching Account provisions of 

Chapter 96 of Title 26, United States 

Code, as well as comments solicited 

from the public at hearings held on June 

20,1978, (43 FR 23587, May 31,1978) 

indicated the need for greater clarity in 

the regulations, especially as regards the 

reporting of particulars of expenditures, 

documentation requirements for 

submissions for matching payments, and 

procedures for suspension of payments 

for knowing and willful breaches of 

candidate agreements. Further 

information on the intended effect of the 

revised regulations is contained in the 

supplemental information below.

26 U.S.C. 9039(c) requires that any rule 

or regulation prescribed by the 

Commission to implement Chapter 96 of 

Title 26, United States Code, be 

transmitted to the Speaker of the House 

of Representatives and the President of 

the Senate prior to final promulgation. If 

neither House of Congress disapproves 

of the regulations within 30 legislative 

days of their transmittal, the 

Commission may finally prescribe the 

regulations in question. The following 

requlations were transmitted to 

Congress on February 16,1979. 

e f f e c t iv e DATE: Further action, 

including the announcement of an 

effective date and deletion of existing 

regulations in Subchapter C of 11 CFR 

Chapter I, will be taken by the 

Commission after these regulations have 

been before the Congress 30 legislative 

days in accordance with 26 U.S.C. 

9039(c).

FOR FURTHER INFORMATION CONTACT:

Ms. Patricia Ann Fiori, Assistant 

General Counsel, Regulations and

Législation, 1325 K Street, Northwest, 

Washington, D.C. 20510, (202) 523-4143. 

SUPPLEMENTARY INFORMATION:

Explanation and Justification of the 

Presidential Primary Matching Fund 

Regulations, Parts 9031 Through 9038

§ 9032.1 Authorized Committee.

Except for the language concerning 

independent expenditures, this 

definition generally follows 26 U.S.C. 

9032(1). The language regarding 

independent expenditures provides that 

an expenditure by an authorized 

committee on behalf of the candidate 

who authorized that committee cannot 

qualify as an independent expenditure. 

With the addition of this language, the 

definition of authorized committee for 

Title 26 purposes is the same as the 

definition of that term for Title 2 

purposes (11 CFR 109.1(e)).

§ 9032.2 Candidate.

This definition generally follows 26 

U.S.C. 9032(2), except that the language 

concerning an individual who is not 

actively conducting campaigns in more 

than one State has been transferred to 

the sections dealing with termination of 

payments to inactive candidates. 

(Sections 9033.4(a), 9033.5). In addition, 

this definition also adds the disavowal 

language appearing at 11 CFR 100.2(c).

§ 9032.3 Commission.

This definition follows 26 U.S.C. 

9032(3).

§ 9032.4 Contribution.

The statute contains a definition of 

the term contribution two provisions— 

26 U,S.C. 9032(4) and 9034(a). However, 

these statutory definitions only set forth 

the criteria for matchable and 

nonmatchable contributions. The 

criteria for matchable and 

nonmatchable contributions will appear 

at Part 9034 of these regulations.

Because the definition of contribution 

in Title 2 is applicable to Title 26, this 

section incorporates the definition of the 

term “contribution” as it now appears in 

Title 2 provisions and regulations 

thereunder.

§ 9032.5 Matching Payment Account.

This definition follows 26 U.S.C. 

9032(5).

§ 9032.6. Matching Payment Period.

This definition follows 26 U.S.C. 

9032(6).

% 9032.7 Primary Election.

This definition generally follows 26 

U.S.C. 9032(7).

§ 9032.8 Political Committee.

This definition generally follows 26 

U.S.C. 9032(8), except that the word 

individual is eliminated. With this

deletion, the definition of the term 

"political committee” is the same for 

Title 26 purposes as it is for Title 2 

purposes. (See 2 U.S.C. 431(d).)

§ 9032.9 Qualified Campaign Expense.

This section adds to the statutory 

definition of the terpa qualified campaign 

expense (26 U.S.C. 9032(9)) by 

establishing a time frame for making 

qualified campaign expenses. This time 

frame begins on the date an individual 

becomes a candidate. Thus, this section 

in conjunction with § 9034.4, requires the 

candidate from the date he or she 

becomes a candidate to make 

expenditures only for the purpose of 

defraying qualified campaign expenses. 

This requirement in effect prohibits a 

candidate who accepts public funding 

from using private contributions 

received after becoming a candidate, 

including those received prior to 

establishing eligibility, for expenses 

which are not qualified campaign 

expenses. Where a candidate uses such 

contributions for nonqualified campaign 

expenses, repayment is required under 

§ 9038.

If a candidate spends private 

campaign contributions received prior to 

establishing eligibility for public funding 

on nonqualified campaign expenses, 

those private funds would obviously not 

be available to defray the candidate’s 

qualified campaign expenses. The net 

result would be that the candidate 

would Subsequently require more public 

funding to meet his or her qualified 

campaign expenses. In essence, this 

additional public funding would restore 

private campaign funds diverted by the 

candidate to nonqualified campaign 

purposes. Such an outcome would be 

equivalent to permitting a candidate to 

use matching funds to defray 

nonqualified campaign expenses.

In this regard, statutory provisions 

require candidates to repay matching 

funds used to restore amounts spent on 

nonqualified campaign expenses. 26 

U.S.C. 9038(b)(2)(B) states in part as 

follows:

If the Commission determines that any 

amount of any payment made to a candidate 

from the matching payment account was used 

for any purpose other than * * * (B) * * * to 

restore funds * * * which were used to 

defray qualified campaign expenses * * * the 

candidate shall pay to the Treasury an 

amount equal to such amount.

This section also establishes the close 

of the time frame for making qualified 

campaign expenses as the last day of 

the candidate’s eligibility. Since an 

individual’s candidacy for presidential 

nomination in essence ends on the date 

of ineligibility, any expenditures made
Federal R egister / Vol. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations 20337

after that date, except for winding down 

costs under § 9034.4(c), cannot be 

considered to be incurred by the 

candidate “in connection with” his or 

her campaign for nomination.

Subsection (b) incorporates language 

from 2 U.S.C. 441a(b){2) and 11 CFR

110.8(g).

§ 9032,10 State.

This definition adds Puerto Rico, 

Guam, the Virgin Islands, and the Canal 

Zone to the language of 26 U.S.C. 

9032(10). Because primary elections are 

held in these aTeas, they should be 

included in the definition of State.

PART 9033 Eligibility for Payments

The statute delineates three 

provisions which must be included in 

the agreement between the Commission 

and an eligible candidate. The candidate 

must agree: To furnish any evidence the 

Commission requests concerning 

qualified campaign expenses; to furnish 

any records, books or other infomration 

the Commission requests; and to submit 

to a Commission audit under 26 U.S.C. 

9038, as well as pay any amounts 

required to be paid under that provision.

With regard to the candidate 

agreement concerning evidence of 

qualified campaign expenses, subsection 

(a)(1) provides that the candidate has 

the burden of proving that his or her 

expenditures are qualified campaign 

expenses. While the statute does not 

explicitly state that this burden of proof 

rests with the candidate, the statutory 

requirement that the candidate “agree to 

obtain and furnish to the Commission 

any evidence it may request of qualified 

campaign expenses” clearly indicates 

that the candidate who accepts public 

funding has the burden of proving that 

his or her expenditures were made to 

defray qualified campaign expenses.

The candidate’s burden of proof with 

regard to qualified campaign expenses 

consists of two elements—the candidate 

must show (1) that the expenditure was 

made, and (2) that the goods or services 

purchased were in connection with the 

campaign. These two elements are 

derived from the statutory definition of 

the term qualified campaign expense. 

Section 9032(9)(A) of Title 26 states in 

part that a qualified campaign expense 

is one which is

incurredby a candidate, or his authorized 

committee, in connection with his campaign 

for nomination for election * * * (Emphasis 

added).

Thus, the first element of the 

candidate’s burden of proof—showing 

that the expenditure was made—is 

directed at providing that the 

expenditure was actually incurred;

while file second element—that the 

goods or services purchased were in 

connection with the campaign—is 

directed at showing that the expenditure 

was in connection with the candidate’s 

campaign.

Subsections (a) (1) and (2) set forth 

the minimum documentation necessary 

for a candidate to discharge his or her 

burden of proof concerning qualified 

campaign expenses. With regard to 

showing that the expenditure was 

incurred, all expenditures, except for 

petty cash fund expenditures, must be 

documented by a cancelled check to the 

payee who provides the goods or 

services to the campaign. Except in the 

case of certain travel advances, an 

expenditure may not be documented by 

a cancelled check to a campaign staffer 

who in turn pays for goods or services 

used by the campaign. A cancelled 

check to a campaign staffer would not 

suffice to meet the candidate’s burden of 

proof because at the time an advance is 

made to a staffer« the expenditure is not 

yet incurred for a campaign purpose.

With regard to showing that an 

expenditure was made in connection 

with the candidate’s campaign, the 

purpose of the expenditure must be 

documented. For expenditures 

exceeding $100, or to a payee who 

receives more than $100 per year, the 

candidate must present written 

documentation disclosing a description 

of the goods or services purchased if this 

written documentation is not available, 

certain collateral evidence may be used 

to show the purpose of the expenditure. 

Finally, if a description of the goods or 

services does not suffice to show that 

the expenditure is campaign related, the 

Commission may request the candidate 

to state the connection between the 

expenditure and the campaign.

Subsections (a) (3) and (4) deal with 

the statutorily prescribed area of the 

candidate agreement concerning books 

and records. The candidate is required 

to furnish to the Commission bank 

records for all accounts as well as 

supporting documentation for 

contributions submitted for matching. 

These records relate to die basic issues 

of whether candidate expenditures are 

qualified and of die matchability of 

contributions.

Subsection (a)(5) deals with the 

candidate agreement concerning audit 

and examination. This subsection is 

intended to enable the Commission to 

conduct its audit and examination 

expeditiously.

In addition to the specific areas of 

candidate agreement mentioned in the 

statute, this section sets forth additional 

requirements.

Subsections (a) (6) and (7) relate to 

matching fund submissions and 

payments. These requirements will 

insure a standard format for making 

payments and determining matchability 

of contributions. This standard format 

will enable the Commission to provide 

funds to candidates on a prompt basis.

Under subsection (a)(8), candidates 

must agree to comply with the Title 2 

Recordkeeping and Disclosure 

Requirements. Such a condition is 

desirable in order to encourage prompt 

disclosure as well as adequate 

recordkeeping.

Finally, subsection (a)(9) requires the 

candidate and principal campaign 

committee to agree to pay any civil 

penalties included in a conciliation 

agreement with or imposed by a court 

against the candidate, the principal 

campaign committee or any authorized 

committee. This agreement is designed 

to deal with a situation in which such a 

penalty is imposed against an 

authorized committee after it has 

transferred all of its campaign funds to 

the principal campaign committee. Thus, 

the principal campaign committee would 

be liable for those penalties.

Subsection (c) provides that the 

Commission may suspend payments to a 

candidate if he or she knowingly, 

willfully, and substantially fails to 

comply with Title 2 disclosure 

requirements. While the statute does not 

specifically authorize such a suspension, 

the Commission’s power to suspend is 

implied from its express authority to 

initially determine candidate eligibility. 

It is clear that the statute empowers the 

Commission to determine whether a 

candidate has established eligibility by 

meeting the conditions set forth at 26 

U.S.C. Section 9033 and regulations 

prescribed thereunder. Since eligibility 

is a continuing requirement, the power 

to initially determine whether eligibility 

has been established necessarily implies 

the authority to monitor and, where the 

candidate is no longer fulfilling the 

conditions of eligibility, revoke 

eligibility.

§ 9033.2 Candidate certifications;

threshold amount

Subsection (a) concerns the statutory 

provision at 26 U.S.C. 9033(b)(2), which 

requires the candidate to certify that he 

is seeking nomination by a political 

party for election to the office of 

President. Subsection (a) provides that 

in order to meet this certification 

requirement, the party whose 

nomination the candidate seeks must 

have a procedure for holding a primary 

election for nomination to the office of 

President. Because Chapter 96 of Title 26
20338 Federal Register / Vol. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations

provides public funding for presidential 

primary candidates, it is obvious that 

the party whose nomination the 

candidate seeks must hold a primary 

election as defined at section 9032.7.

Subsection (a) also defines the term 

political party to mean an association, 

committee or organization which 

nominates an individual for election to 

the office of President. This definition is 

derived from 2 U.S.C. Section 431 (m).

Subsections (b) and (c) basically 

follow 26 U.S.C. 9033(b)(1), (2), and (3). 

Subsection (c) establishes an orderly 

procedure for submitting information 

and documentation concerning 

threshold contributions. This 

information and documentation is 

necessary for the Commission to 

determine whether the candidate has in 

fact established eligibility. The 

verification process under this section 

may consist of such activity as 

contacting contributors to verify 

residential addresses stated by the 

candidate under § 9033.2(c)(2)(A) or 

contacting contributors to determine if a 

contribution was in fact made, etc. Such 

verifications and audits are directed at 

determining whether the conditions of 

eligibility have in fact been met by a 

candidate.

Subsection (f) provides that the 

Commission may suspend payments to a 

candidate who knowingly and willfully 

exceeds the expenditure limitations set 

forth at 2 U.S.C. 441a(b). As with 

suspension for failure to comply with 

reporting requirements, suspension for 

expenditures is within the implied 

authority of the Commission to 

determine, monitor and revoke 

eligibility.

§ 9033.3 Matching Payment Threshold

Requirèmen ts.

This section deals with a Commission 

determination that a candidate has 

failed to meet the minimum contribution 

requirement. Where the Commission 

makes such a determination, the 

candidate is afforded an opportunity to 

either satisfy the threshold requirement 

or to demonstrate that he has satisfied 

that requirement. This opportunity to 

demonstrate that the Commission’s 

determination is in error takes the form 

of submitting written materials to the 

Commission. (See Explanation and 

Justification of § 9033.8.)

§ 9033.4 Ineligibility dates defined.

This section sets forth the several 

possible d ates on w hich a candidate 

m ay becom e ineligible for m atching 

funds.

Subsection (a) basically follows the 

language of 26 U.S.C. 9032(2), which 

states that the term candidate shall not

include an individual w ho is not actively 

conducting cam paigns in more than one 

State.

Subsection (b) follows the language of 

26 U.S.C. 9033(c)(1)(B), which provides 

for the termination of payments to a 

candidate who fails to receive a 

requisite percentage of votes in two 

consecutive primaries.

Subsection (c) establishes the last day 

of the matching payment period as one 

of the possible dates of ineligibility for 

candidates. Since the last day of the 

.matching payment period will be the 

ineligibility date for candidates who 

remain active until their party choses a 

nominee, the date of ineligibility for all 

candidates is covered under this section. 

§ 9033.5 Determination o f Inactive

Candidacy.

This section sets forth a procedure for 

terminating payments to a candidate 

who is no longer actively seeking 

nomination for election in more than one 

State. Prior to termination, the candidate 

is given an opportunity to present 

written material to demonstrate that he 

or she is an active candidate in more 

than one State. (See Explanation and 

Justification of § 9033.8.)

This section also provides that the 

Commission will not make a 

determination of inactive candidacy at 

any time before March 1 or after July 1 

of the presidential election year.

Because most States hold their 

presidential preference primaries or 

caucuses during the period from March 1 

through July 1, it would be unreasonable 

to require the candidate to remain active 

in more than one State either before or 

after that period.

Subsection (e) sets forth the factors 

which the Commission will consider in 

determining whether a candidate is 

inactive. These factors are designed to 

indicate minimal campaign activity in at 

least two States.

§ 9033.6 Determination o f Active

Candidacy.

Statutory provisions require that 

payments terminate to a candidate who 

fails to receive at least 10% of the votes 

cast for all candidates of his or her party 

in two consecutive primaries unless the 

candidate certifies to the Commission 

that he or she will not be an active 

candidate in the primary involved (26 

U.S.C. 9033(c)(1)(B)). This section sets 

forth a procedure through which the 

Commission may refuse to accept the 

candidate’s certification by determining 

that he or she is an active candidate in 

the primary involved. This procedure is 

intended to deal with a situation where 

a candidate who is active in a particular 

State primary nevertheless certifies to

the Commission that he or she is not 

active in that primary in order to escape 

the operation of 26 U.S.C. 9033(c)(1)(B).

§ 9033.7 Reestablishment o f Eligibility.

This section establish es a procedure 

for a candidate w hose eligibility h as 

term inated through inactivity to 

reestab lish eligibility for m atching 

paym ents upon becom ing an active 

candidate again.

§ 9033.8 Suspension o f Payments.

This section sets forth the procedure 

for suspending payments under 

§ 9033.1(c) and § 9033.2(f). The Federal 

Election Campaign Act does not provide 

that Administrative Procedure Act 

(APA) requirements for adjudicative 

hearings (5 U.S.C. 554-557) apply to 

determinations by the Commission. 

While APA requirements for a full trial 

type hearing may not be applicable, 

procedural due process requirements 

mandate that prior to suspension the 

candidate be afforded some type of 

opportunity to demonstrate to the 

Commission that suspension is not 

warranted, (see K. Davis,

A dm inistrative Law o f the Seventies,

§ 7.00-1-3 (Supp. 1977); Mathews v. 

Eldridge, 424 U.S. 319 (1976).)

The procedure set forth in this section 

fulfills due process requirements. It 

includes the following elements: Notice 

of the legal and factual matters upon 

which the Commission is relying; and 

opportunity to present in writing 

evidence and reasons why suspension 

should not occur; a final determination 

by the Commission on the basis of all 

evidence presented; and a statement of 

reasons underlying the Commission’s 

determination. (It should be noted that 

even if the APA requirements were 

applicable to determinations by the 

Commission, the APA itself contains a 

significant exception to the requirement 

for a full trial type hearing by providing 

for the submission of evidence in 

written form under-5 U.S.C. 556(d).)

PART 9034 Entitlements.

§ 9034.1 Candidate Entitlements.

Subsection (a) deals with entitlement 

to matching fund payments prior to the 

date of ineligibility. It provides that a 

candidate is entitled to receive 

payments in an amount equal to each 

matchable campaign contribution 

received by the candidate. However, 

once a candidate reaches the date of 

ineligibility under § 9033.4, that 

candidate receives no further matching 

payments unless he or she has met 

outstanding Campaign obligations.
Federal Register / Vol. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations 20339

For example, assume that candidate X 

is in the following Financial status on the 

date of ineligibility:

Obligations for qualified campaign expenses____ $120,000

Cash on hand...TM,..............— ...................... 20,000

Candidate’s X net outstanding campaign obligation ___ _______ ...____ __________________ L ___ 100,000

Matchable contributions not submitted for

matching-----------------------’.._______ _________ 15,000

Since candidate X has net outstanding 

campaign obligations of $100,000, he is 

entitled to $15,000 in matching funds on 

the basis of matchable contributions 

that had not been submitted for 

matching prior to thé date of 

ineligibility. On the other hand, assume 

candidate Y in the following financial 

status on the date of ineligibility.

Obligations for qualified campaign

expenses.-.................... $10,000

Cash on hand............... $20,000

Net outstanding campaign

obligations..... ................. 0

Matchable contributions not submitted

for matching............................ $15,000

Because candidate Y has no net 

outstanding campaign obligations on the 

date of ineligibility, he is entitled to no 

matching funds.

Subsection (a) thus bases entitlement 

to matching fund payments on or after 

the date of ineligibility on the existence 

of net outstanding campaign obligations 

on that date. In essence this approach 

requires the candidate to apply private 

funds whenever possible to discharge 

obligations for qualified campaign 

expenses.

Subsection (a) follows the legislative 

intent of 26 U.S.C. 9033(c)(1) which 

provides that payments are cut off to a 

candidate who become inactive, except 

where those payments are used to 

defray expenses incurred before the 

date of ineligibility. Therefore, if a 

campaign has no debts for qualified 

campaign expenses on the date of 

ineligibility, no further matching funds 

are forthcoming. While 26 U.S.C. 

9033(c)(1) specifically applies only to an 

individual whose candidacy terminates 

through inactivity, the same legislative 

intent would be appropriate for 

application to a candidate whose date of 

ineligibility occurs at the end of the 

matching payment period. Finally, 

inasmuch as thS statutory language of 26 

U.S.C. 9034 entitles a candidate to 

matching funds for contributions 

received after a certain date without 

any specific mention of a final date for 

matching contributions, subsection (a) 

accords with statutory requirements.

Subsection (b) sets forth the 

entitlement formula for candidates who^ 

have net outstanding campaign 

obligations on the date of ineligibility. 

Basically, these candidates are entitled 

to payments only if the private

contributions received between the date 

of ineligibility and the date of 

submission are not sufficient to 

discharge the net debt.

For example, assume that candiate A 

is in the following financial status on the 

date of ineligibility.

Net debt at date of ineligibility............$100,000

Matchable contributions received

after the date of ineligibility but

before the date of submission..... .....$30,000*

Because on the date of submission, 

the difference between: (1) The amount 

of private contributions received by 

candidate A after the date of 

ineligibility; and (2) candidate A’s 

remaining net debt is $70,000, he is 

entitled to receive $30,000—an amount 

equal to the amount of matchable 

contributions received after the date of 

ineligibility.

As with subsection (a), subsection (b) 

accords with statutory requirements. In 

addition, subsection (b) also furthers the 

policy that the candidate should use 

private contributions to discharge 

campaign obligations wherever possible.

Subsection (c) deals with candidates 

whose eligibility has been reestablished 

after having fallen into inactive status.

Subsection (d) follows the language of 

26 U.S.C. 9034(b).

§ 9034.2 Matchable Campaign

Contributions.

This section sets forth the rules for 

determining which contributions are 

matchable. The language of 26 U.S.C. 

9034 makes it clear that not all 

contributions are matchable. The major 

statutory restrictions reflected in this 

section are that contributions must be a 

gift of money made by written 

instrument and that only $250 from each 

individual contributor is considered 

matchable.

Statutory restrictions also require that 

the contribution be “received” by the 

candidate on or after January 1 of the 

calendar year immediately preceding 

the presidential election year (26 U.S.C. 

9034). This section specifies that the 

candidate must physically receive the 

contribution after the January 1 date. 

This requirement specifically precludes 

a candidate from collecting post-dated 

checks before January 1 of the year 

preceeding the presidential general 

election year and then submitting those 

checks for matching on the basis that 

they weren’t received until the date 

written on the check. The legislative 

history of the public financing 

provisions clearly indicates 

congressional intent to bar candidates 

from receiving matching funds for

* ‘ Example assumes all contributions are 100% 

matchable.

contributions solicited and received 

prior to the year preceeding the 

presidental general election year. (See 

120 Cong. Rec. 54438, daily ed., March 

26,1974).

This section defines a w ritten 

instrum ent to m ean a check, m oney 

order, or any other negotiable 

instrum ent p ayable on dem and to the 

candidate, or his or her com m ittee. The 

contributor’s full nam e,"signature, and 

m ailing address, as w ell as the'am ount 

and date o f the gift, must appear on the 

instrum ent or in an accom panying 

w ritten document.

§ 9034.3 Nonmatchable contributions.

This section reflects statutory 

restrictions found in 26 U.S.C. § 9034(a), 

which excludes certain categories of 

contributions from being matched,

Subsections (g) through (i) reflect the 

Commission’s view that amounts paid in 

the form of a purchase price for certain 

items or tickets are not matchable since 

the intent necessary to make a gift is 

lacking on the part of the purchaser. 

Particularly, subsections (h) through (i) 

follow Internal Revenue Service rulings 

72-411 and 72-412 which exclude certain 

contributions from the category of 

political contributions that are 

deductible for income tax purposes.

§ 9034.4 Use o f Contributions and

Matching Payments.

Subsection (a) specifies that the 

candidate must spend both private 

contributions and matching fund 

payments only on expenditures which 

are qualified campaign expenses. As 

was stated earlier, if a candidate were 

permitted to spend private campaign 

funds on campaign expenses which 

were not qualified, those private funds 

would not be available to defray the 

candidates qualified campaign 

expenses. The candidate would then 

require more public funding to defray 

qualified campaign expenses. This 

additional public funding would in 

essence restore private campaign funds 

spent on nonqualified campaign 

expenses. Such a restoration of funds 

would violate 26 U.S.C. 9038 (b)(2)(B). 

(See Explanation and Justification of 

§ 9032.9.)

Subsection (b) establish es the 

can d id ate’s date o f ineligibility as the 

cut off date for making qualified 

cam paign exp enses. Sin ce a cand id ate’s 

cam paign for nom ination essen tially 

term inates on the date o f ineligibility, 

any expenditures m ade after that date, 

excep t for winding down costs, can not 

possibly b e m ade in conn ection w ith the 

can d id ate’s cam paign for nomination^ 

T he statutory definition o f the term
20340 Federal Register / Vol. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations

qualified campaign expense provides 

that such an expense is one which is “in 

connection with” a candidate’s 

campaign For nomination. Expenditures 

made after the termination of that 

campaign can not meet such a 

requirement.

Subsection (c) deals with winding 

down costs. Such costs, although 

perhaps incurred after a candidate’s 

date of ineligibility may nevertheless be 

considered qualified campaign expenses 

if they are associated with the 

termination of the candidate’s campaign 

(Re: A.O.R 1976-54). Examples of such 

costs include expenses incurred for 

transportation by campaign staff to 

return from National nominating 

convention, for employment of 

personnel necessary for Commission 

audit pursuant to PART 9038, etc.

Under subsection (d), an expenditure 

which is in excess of expenditure 

limitations is not considered a qualified 

campaign expense. The statutory 

definition of the term qualified campaign 

expense specifically excludes any 

expenditure which consititutes a 

violation of any Federal law. Since both 

2 U.S.C. 441(a)(b) and 26 U.S.C. 9035(a) 

prohibit an eligibile candidate from 

making expenditures in excess of 

certain limitations, any expenditure 

which exceeds those limitations is by 

definition not a qualified campaign 

expense.

Subsection (e) provides that civil or 

criminal penalties which must be paid 

pursuant to the Act are not considered 

qualified campaign expenses. If such 

amounts were considered qualified 

campaign expenses, a portion of the 

.money used to pay those penalties 

would consist of Federal funds. In order 

to permit candidates to pay such 

penalties, subsection (e) provides that 

amounts received or expended to defray 

those penalties will not be considered 

contributions or expenditures. Such 

amounts will thus not be subject to 

contribution and expenditure 

limitations, but such amounts are 

subject to disclosure requirements.

Subsection (f) relates to payments for 

the purpose of determining whether an 

individual should become a candidate. 

These expenditures for "testing the 

waters” will be considered qualified 

campaign expenses despite the fact that 

they are usally made prior to the date an 

individual becomes a candidate. (See 

also 11 CRF 100.4(b)(1), 100.7(b)(1).)

Subsection (g) deals with statutory 

provisions at 2 U.S.C. 441a(a)(5)(c)(iii).

Subsection (h) deals with a candidate 

who has reestablished eligibility after 

falling into inactive status. Expenditures 

made by such candidates while in

inactive status are considered qualified 

campaign expenses as are those made 

after eligibility is reestablished. *

§ 9034.5 Net Outstanding Campaign

Obligations.

This section sets forth a formula for 

computing a candidate’s financial status 

at the date of ineligibility. Under this 

formula, the campaign’s obligations for 

qualified campaign expenses including 

winding down costs are balanced 

against total of the campaign’s cash on 

hand, the value of capital assets, and 

amounts owed to the campaign.

PART 9035

This part follows the statutory 

language at 26 U.S.C. 9035.

PART 9036—Certification by the Commission 

§ 9036.1 Initial Certification.

This section sets out a procedure for 

the first certification of contributions to 

a candidate who has satisfied eligibility 

requirements. As is required by 26 

U.S.C. § 9036(a), the Commission shall 

certify for payment amounts to which 

the candidate is entitled within ten days 

after the Commission notification to the 

candidate that he or she has established 

eligibility.

§ 9036.2 Additional certifications.

This section sets forth the format in 

which contributions submitted for 

matching must be presented to the. 

Commission after the initial 

certification. These contributions must 

be presented in the same way except 

that contributions need not be 

segregated by State and the occupation 

and principal place of business of 

contributors whose aggregate 

contributions exceed $100 during a 

calendar year need not be included. 

Since this information is important only 

for determining eligibility, it need not be 

included in subsequent certifications.

§ t9036.3 Insufficient Documentation.

This section sets forth the rules under 

which a contribution will be rejected for 

matching purposes because sufficient 

documentation is lacking to insure that 

it meets the criteria for a matchable 

contribution.

§ 9036.4 Certification Review and

Notice.

This section establishes a procedure 

for determining whether a candidate’s 

submission meets acceptable standards 

of good order as prescribed at § § 9036.2 

and 9036.3.

§ 9036.5 Resubmissions and hearing

opportunity.

T h is sectio n sets forth a m echanism 

for the settlem ent o f disagreem ents over

which contributions are matchable and 

which are not matchable. The candidate 

who disputes a Commission conclusion 

that a contribution is not matchable will 

be given an opportunity to present 

written materials to demonstrate that 

the contribution is matchable. After 

consideration of materials submitted by 

the candidate, the Commission will 

render a final determination on the 

issue. This procedure meets due process 

requirements. (See Explanation and 

Justification of § 9033.8.)

§ 9036.6 Continuation o f certification.

This section permits a candidate to 

submit contributions for matching until 

January 21 of the year following the 

presidential election year. In essence, 

this means that the candidate will have 

21 days after the December 21 deposit 

date to submit those contributions to the 

Commission for matching. Thus, January 

21 is the last day on which contributions 

may be submitted to the Commission for 

matching. This deadline allows the 

candidate sufficient time to submit 

contributions for matching, while 

avoiding unnecessarily delayed 

submissions which would burden the 

Commission in the efficient performance 

of its certification duties.

PART 9037 Payments

This part follows the statutory 

language of 26 U.S.C. 9037.

PART 9038 Examination and Audits.

% 9038.1 Audit.

This section b a sica lly follow s the 

statutory language at 26 U.S.C. 9038(a), 

the Com m ission is authorized to conduct 

its audit before the close o f the matching 

paym ent period for candidates who 

becom e inactive prior to that date. Since 

these candidates have term inated 

cam paign activity, no purpose is served 

by w aiting until the end o f the matching 

paym ent period to conduct an audit.

§ 9038.2 Repayments.

This section is based on statutory 

provisions at 26 U.S.C. 9038(b). It 

requires a candidate to repay any 

amounts spent,from private 

contributions or matching funds if the 

expenditures were not documented in 

accordance with § 9033.1(a)(1). The 

candidate has the burden of proving that 

expenditures are qualified campaign 

expenses. Where required 

documentation is lacking, the candidate 

hés not met that burden of proof. 

Therefore, the Commission has the 

authority to require repayment.
Federal Register / Vol. 44, No. 66 / W ednesday, April 4, 1979 / Rules and Regulations 20341

This section also requires repayment 

where the candidate spends private 

contributions as well as public funds on 

expenditures on which are not qualified 

campaign expenses. For an explanation 

of this approach, see the Explanation 

and Justification of § 9032(9).

This section also sets fôrth a 

procedure for determining disputes 

concerning the amount of a repayment. 

This procedure meets due process 

requirements. (See Explanation and 

Justification of § 9033.8.)

§ 9038.3 Liquidation of Obligations;

Repayment.

This section generally follows the 

statutory provisions at 26 U.S.C. 9038. It 

sets forth a formula for recapturing from 

the candidate’s accounts that portion of 

the account which represents Federal 

funds.

Chapter IX is added to 11 CFR to read 

as follows:

CHAPTER IX— FEDERAL ELECTION

COMMISSION -

SUBCHAPTER C— PRESIDENTIAL

ELECTION CAMPAIGN FUND,

PRESIDENTIAL PRIMARY MATCHING

FUND

PART 9031— SCOPE

§ 9031.1 Scope.

The restrictions, liabilities and 

obligations imposed by this subchapter 

are in addition to those imposed by 

sections 431-455 of Title 2 and 

regulations prescribed thereunder.

Unless expressly statéd to the contrary, 

this subchapter does not affect the 

restrictions, obligations and liabilities 

imposed by sections 431-455 of Title 2 ’ 

and regulations prescribed thereunder.

(Sec. 310(8), Pub. L. 92-225, added by sec. 208, 

Pub. L. 93-443, 88 Stat. 1297, and amended by 

secs. 105 and 107(a)(1), Pub. L. 94-283, 90 Stat. 

481 (2 U.S.C. 437d(a)(8), and sec. 408(c), Pub.

L. 93-443, 88 Stat. 1297 (26 U.S.C. 9039(b))).

PART 9032— DEFINITIONS

Sec.

9032.1 Authorized Committee.

9032.2 Candidate.

9032.3 Commission.

9032.4 Contribution.

9032.5 Matching Payment Account.

9032.6 Matching Payment Period.

9032.7 Primary Election.

9032.8 Political Committee.

9032.9 Qualified Campaign Expense.

9032.10 State.

Authority: Sec. 408(c), Pub. L. 93-443, 88 Stat. 

1297, as amended by sec. 115(c)(2), Pub. L. 94- 

283, 90 Stat. 495, 500 (26 U.S.C. 9032).

§ 9032.1 Authorized Committee.

(a) ‘‘Authorized committee” means 

any political committep which is 

authorized by a candidate to solicit or 

receive contributions or to make 

expenditures on behalf of the candidate. 

This authorization shall be in writing 

and addressed to the unauthorized 

political committee. A copy of the 

authorization shall be filed by the ' 

candidate with the Commission. A 

withdrawal of authorization shall also 

be in writing and shall be addressed and 

filed in the same manner as the 

authorization.

(b) An expenditure by an authorized 

committee on behalf of the candidate 

who authorized the committee cannot 

qualify as an independent expenditure.

§ 9032.2 Candidate.

“Candidate” means an individual who 

seeks nomination for election to the 

office of President of the United States. 

An individual is considered to seek 

nomination for election if he or she—

(a) Takes the action necessary under 

the law of a State to qualify for a 

caucus, convention, primary election or 

run off election;

(b) R eceives contributions or incurs 

qualified cam paign expenses;

(c) G ives consent to any other person 

to receive contributions or to incur 

qualified cam paign exp en ses on his or 

her behalf; or

(d) Receives written notification from 

the Commission that any other person is 

receiving contributions or making 

expenditures on the individual’s behalf 

and fails to disavow that activity by 

letter to the Commission within 30 days 

of notification.

§ 9032.3 Commission.

“Cominission” means the Federal 

Election Commission, 1325 “K” Street, 

Northwest, Washington, D.C. 20463.

§ 9032.4 Contribution.

For purposes of Subchapter C, 

“contribution"’ has the same meaning 

giveft the term under 2 U.S.C. 431(e) and 

11 CFR 100.4, except as provided at 11 

CFR 9034.4(e).

§ 9032.5 Matching payment account

“Matching payment account” means 

the Presidential Primary Matching 

Payment Account established by the 

Secretary of the Treasury under 26 

U.S.C. 9037(a).

§ 9032.6 Matching payment period.

“Matching payment period” means 

the period beginning January 1 of the 

year in which a Presidential general 

election is held and ending on one of the 

following dates:

(a) For a candidate seeking the 

nomination of a party which nominates 

its Presidential candidate at a national 

convention, the date on which the party 

nominates its candidate.

(b) For a candidate seeking the 

nomination of a party which does not 

make its nomination at a national 

convention, the earlier of—

(1) The date the party nominates its 

Presidential candidate, or

(2) The last day of the last national 

convention held by a major party in the 

calendar year.

§ 9032.7 Primary election.

“Primary election” means an election, 

including a runoff election, or a 

nominating convention or a caucus held 

by a political party—

(a) For the selection of delegates to a 

national nominating convention of a 

political party;

(bJFor the expression of a preference 

for the nomination of Presidential 

candidates;

(c) For the purposes stated in both 

paragraphs (a) and (b) of this section; or

(d) To nominate a Presidential 

candidate.

§ 9032.8 Political committee.

“Political committee” means any 

committee, club, association, 

organization or other grbup of persons 

(whether or not incorporated) which 

accepts contributions or incurs qualified 

campaign expenses for the purposes of 

influencing, or attempting to influence, 

the nomination of any individual for 

election to the office of President of the 

United States.

§ 9032.9 Qualified campaign expense.

(a) “Qualified campaign expense” 

means a purchase, payment, 

distribution, loan, advance, deposit, or 

gift of money or anything of value—

(1) Incurred by a candidate or his or 

her authorized committees from the date 

the individual becomes a candidate 

through the last day of the candidate’s 

eligibility as determined under § 9033.4.

(2) Made in connection with his or her 

campaign for nomination; and

(3) Neither the incurrence nor 

payment of which constitutes a violation 

of any law of the United States or of any 

State in which the expense is incurred 

or paid, except that any State law which 

has been preempted by the Federal 

Election Campaign Act of 1971, as 

amended shall not be considered a State 

law for purposes of this Subchapter.

(b) An expenditure is made on behalf 

of a candidate, including a Vice 

Presidential candidate, if it is made by—
20342 Federal Register / Vol. 44, No. .66 / Wednesday, April 4, 1979 / Rules and Regulations

(1) An authorized committee or any 

other agent of the candidate for 

purposes of making an expenditure

(2) Any person authorized or 

requested by the candidate, an 

authorized committee of the candidate, 

or an agent of the candidate to make the 

expenditure; or

(3) A committee which has been 

requested by the candidate, by an 

authorized committee of the candidate, 

or by an agent of the candidate to make 

the expenditure, even though such 

committee is not authorized in writing.

§ 9032.10 State.

“State” means each State of the 

United States, Puerto Rico, the Canal 

Zone, the Virgin Islands, the District of 

Columbia, and Guam.

PART 9033— ELIGIBILITY

S e c . -

9033.1 Candidate agreements.

9033.2 Candidate certifications; threshold 

amounts.

9033.3 Matching payment threshold 

requirements.

9033.4 Ineligibility dates defined.

9033.5 Determination of Inactive Candidacy.

9033.6 Determination of Active Candidacy.

9033.7 Reestablishment of Eligibility.

9033.8 Suspension of Payments.

Authority: Sec. 408(c), Pub. L. 93-443, 88 Stat. 

1297, as amended by sec. 305(c) and 306(b)(2), 

Pub. L. 94-283, 90 Sfat. 499-500 (26 U.S.C. 

9033).

§ 9033.1 Candidate agreements.

(a) A candidate seeking to become 

eligible to receive Presidential primary 

matching fund payments shall agree in a 

letter signed by the candidate to the 

Commission that the candidate and his 

or her principal campaign committee 

will comply with the conditions set forth 

below.

(1) The candidate has the burden of 

proving that expenditures by the 

candidate, the principal campaign 

committee or any authorized committee 

are qualified campaign expenses. The 

candidate shall agree to obtain and 

furnish to the Commission at its request 

any evidence regarding qualified 

campaign expenses by the candidate, 

the principal campaign committee and 

all authorized committees. The 

candidate must include as part of this 

evidence the following documentation:

(i) For expenditures exceeding $100 or 

for expenditures of less than $100 to a 

payee who receives expenditures 

aggregating more than $100 per year, 

either:

(A) A receipted bill which is from the 

payee and states the particulars of the 

expenditure; or

(B) If such a receipted bill is not 

available, the follow ing docum ents, 

w hich must state the particulars o f the 

expenditure:

(1) A cancelled check negotiated by 

the payee; plus

(2) O ne o f the follow ing docum ents 

generated by the payee— a bill, invoice, 

voucher or contem poraneous 

memorandum;

(3) Where the documents specified in 

Subsection (2) (11 CFR 

9033.1(a)(l)(i)(B)(2)} are not available, a 

voucher or contemporaneous 

memorandum from the candidate or the 

committee; or

(C) If neither a receipted bill nor the 

docum entation specified in subsection

(ii) is available, a can celled check 

stating the particulars o f the 

expenditure.

(D) Where the supporting 

documentation required above (11 CFR

9033.1(a)(l)(i) (A), (B), (C)) is not 

available, the candidate or committee 

may present a cancelled check and 

collateral evidence to document the 

qualified campaign expense. Such 

collateral evidence may include but is 

not limited to:

(1) Evidence demonstrating that the 

expenditure is part of an identifiable 

program or project which is otherwise 

.sufficiently documented, such as where 

the expenditure is one of a number of 

documented expenditures relating to a 

campaign mailing or to the operation of 

a campaign office;

(2) Evidence that the expenditure is 

covered by a p reestablished w ritten 

cam paign com m ittee policy, such as a 

per diem policy; etc.

(ii) For all other expenditures:

(A) If from the petty cash fund, a 

record disclosing the identification o f 

the payee, the am ount and the date of 

the expenditure; or

(B) A can celled ch eck w hich h as been 

negotiated by the payee and states the 

identification o f the payee, and the 

am ount and date o f the expenditure.

(C) For purposes of subparagraph (1), 

(11 CFR 9033.1(a)(1)) “payee” means the 

person who provides the goods or 

services to the candidate or committee 

in return for the expenditure except for 

an advance of $500 or less for travel 

and/or subsistence to an individual who 

will be the recipient of the goods or 

services purchased.

(D) For purposes of subparagraph (1) 

(11 CFR 9033.1(a)(1)), the term 

“particulars" means the identification o f 

the payee, the date and amount of the 

expenditure, and a description of the 

goods or services purchased.

(2) Upon the request of the 

Commission the candidate shall supply

an explanation of the connection 

between the expenditure and the 

campaign;

(3) The candidate shall keep and 

furnish to the Commission any books, 

records, including bank records for all 

accounts and supporting documentation 

for matching fund submissions, or other 

information that the Commission may 

request, as well as copies of books and 

records maintained by all authorized 

committees of the candidate.

(4) For purposes of audit and 

examination pursuant taPart 9038, of 

this chapter, and at the Commission’s 

request, the candidate shall gather the 

books and records specified in 

subsection 3 in one centralized location.

(5) The candidate shall permit an 

audit and examination pursuant to Part i 

9038 of this chapter of all campaign 

expenditures, including those made by 

all authorized committees; facilitate 

such audit by making available office 

space, records, and such personnel as is 

necessary to the conduct of the audit 

and examination; and pay any amounts 

required to be paid under Part 9038 of 

this chapter.

(6) The candidate shall submit the 

name and mailing address of the person 

who is entitled to receive matching fund 

payments on behalf of the candidate 

and the name and address of the 

national or State bank designated by the 

candidate as a campaign depository as 

required at 11 CFR Part 103 of this 

chapter and § 9037.3.

(7) The candidate shall prepare 

matching fund submissions in 

accordance with Federal Election 

Commission Guideline for Presentation 

in Good Order.

(8) The candidate shall comply with 

applicable requirements of Sections 431- 

434; 437b Title 2, U.S. Code and Parts 

100-108 of these Regulations.

(9) The candidate shall pay any civil 

penalties included in a conciliation 

agreement with or imposed under 2 

U.S.C. 437g against the candidate, the 

principal campaign committee or any 

authorized committee of the candidate.

(b) The candidate may submit the 

letter containing the agreements 

required under § 9033.1 at any time after 

January 1 of the year immediately 

preceding the Presidential election year.

(c) Payments may be suspended to a 

candidate if he or she knowingly, 

willfully and substantially fails to 

comply with this disclosure 

requirements of 2 U.S.C. 434 and 11 CFR 

Part 104 as specified in the candidate 

agreement. Any determination to 

suspend payments shall be made in 

accordance with the procedure set forth 

at § 9033.8.
Federal "Register / Vol. 44, No. 66 / Wednesday, April 4, 1979,/ Rules and Regulations 20343

§ 9033.2 Candidate certifications; 

threshold amount.

A candidate seeking to become 

eligible to recei ve Presidential primary 

matching fund payments shall make the 

following certifications to the 

Commission in a written statement 

signed by the candidate:

(a) The candidate shall certify that he 

or she is seeking nomination by a 

political party to the office of President 

in more than one State. For purposes of 

this section in order for a candidate to 

be deemed to be seeking nomination by 

a political party to the office of 

President, the party whose nomination 

the candidate seeks must have a 

procedure for holding a primary 

election, as defined in 11 CFR 9032.7, for 

nomination to that office.

- (1) For purposes of this section (11 

CFR 9033.2) the term political party 

means an association, committee or 

organization which nominates an 

individual for electron to the office of 

President. The fact that an association, 

committee or organization qualifies as a 

political party under this section does 

not affect the party’s status as a 

national political party for purposes of 2 

U.S.C. 441a(a)(l)(B) and 441a(a)(2)(B).

(b) The candidate and his or her 

authorized committee(s) shall certify 

that they will not incur qualified 

campaign expenses in excess of the 

limitations under 11 CFR Part 9035.

(c) (l)(i) The candidate and his or her 

authorized committees shall certify that 

they have received matchable 

contributions which, in the aggregate, 

exceed $5,000 in contributions from 

individuals who are residents of each of 

at least 20 States, and which with 

respect to any individual do not exceed 

$250.

(ii) In order to be considered a 

resident for threshold purposes, the 

individual need not meet the 

qualifications of voting residence, but a 

candidate may not submit contributions 

from one individual as a resident of 

more than one State.

(2) For each State in which the 

candidate certifies he or she has met 

this requirement, the candidate shall—

(i) Submit an alphabetical list of 

contributors showing: each contributor’s 

full name and residential address; the 

date of the deposit into the designated 

campaign depository; the dollar amount 

of each-contribution submitted for 

matching purposes; the matchable 

portion thereof; the total amount of all 

m’atchable contributions submitted; an 

indication of which contributions were 

received as a result of entertainment 

activity; and for individuals whose 

aggregate contributions exceed $100 per

calendar year, the occupation and 

principal place of business;

(ii) Submit a photocopy of each check 

or other written instrument for each 

contribution which the candidate 

submits to establish eligibility for 

matching funds. The photocopies shall 

be segregated alphabetically by State, 

and shall be accompanied by and 

referenced to copies of the relevant 

deposit slip.

(3) Contributions which are not 

submitted in compliance with this 

subsection shall not count toward the 

threshold amount.

(d) The Commission may conduct 

audits of candidate records and make 

verifications of contributions submitted 

under this section to determine 

eligibility and shall notify candidates if 

it chooses to conduct such audits or 

verifications. In that case, the 

Commission may, at its own discretion 

waive the submission requirement under 

subsection (c)(2)(ll CFR 9033.2(c}(2}).

(e) The candidate may submit the 

certifications required under 11 CFR 

9033.2 at any time after January 1 of the 

year immediately preceding the 

Presidential election year.

(f) Payments may be suspended to a 

candidate if he or she knowingly and 

willfully exceeds the expenditure 

limitations at 2 U.S.C. 441a(b). Any 

determination to suspend payments 

shall be made in accordance with the 

procedure set forth at 11 CFR 9033.8.

§ 9033.3 Matching payment threshold 

requirements.

The Commission shall, as soon as 

practicable and, during the Presidential 

election year, generally within 5 working 

days, examine the submission under 11 

CFR 9033.1 and 9033.2 and shall either—

(a) Make a determination that the 

candidate has satisfied the minimum 

contribution threshold requirement 

under 11 CFR 9033.2(c); or

(b) Make an initial determination that 

the candidate has failed to satisfy the 

matching payment threshold 

requirements. The Commission shall 

notify the candidate of its initial 

determination, giving the legal and 

factual reasons for the determination 

and advising the candidate of the 

evidence upon which its initial 

determination is based. The candidate 

will be given an opportunity to satisfy # 

the threshold requirements or to submit 

within 30 days of the receipt of the 

Commission’s notice written legal or 

factual materials to demonstrate that he 

or she has satisfied those requirements. 

The Commission will consider any 

written legal or factual materials 

submitted by the candidate before

making its final determination. Such 

materials may be submitted by counsel 

if the candidate so desires. A final 

determination that the candidate has 

failed to satisfy threshold requirements 

shall be accompanied by a written 

statement of reasons for the 

Commission’s action. This statement 

shall explain the legal and factual 

reasons underlying the Commission’s 

determination and shall summarize the 

results of any investigation upon which 

the determination is based.

§ 9033.4 Ineligibility dates defined.

The ineligibility date of a candidate is 

determined by paragraph (a), (b), or (c) 

(11 CFR 9033.4 (a), '(b), (c)) whichever 

occurs first.

(a) The ineligibility date shall be the 

day on which an individual ceases to be 

a candidate because he or she is not 

actively conducting campaigns in more 

than one State in connection with 

seeking the Presidental nomination. This 

date shall be the eariier of—

(1) The date the candidate publicly 

announces that he or she will not be 

actively conducting campaigns in more 

than one State; or

(2) The date the candidate notifies the 

Commission by letter that he or she is 

not actively conducting campaigns in 

more than one state; or

(3) The date which the Commission 

determines under § 9033.5 to be the date 

that the candidate is not actively 

seeking election m more than one State.

(b) The ineligibility date shall be the 

30th day following the date of the 

second consecutive primary election in 

which such individual receives less than 

10 percent of the number of popular 

votes cast for all candidates of the same 

party for the same office in that primary 

election, if the candidate permitted or 

authorized his or her name to appear on 

the ballot unless the candidate certifies 

to the Commission at least 25 business 

days prior to the primary that he or she 

will not be an active candidate in the 

primary involved.

(1) liie Commission may refuse to 

accept the candidate’s certification if it 

determines under 11 CFR 9033.6 that the 

candidate is an active candidate in the 

primary involved.

(2) For purposes of this paragraph, if 

the candidate is running in two primary 

elections in different States on the same 

date, the highest percentage of votes a 

candidate receives in any one State will 

govern. Separate .primary elections held 

in more than one State on the same date 

are not deemed to be consecutive 

primaries. If two primary elections are 

held on the same date in the same State 

(e.g., a primary to select delegates to a
20344 Federal Register / Voi. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations

national nom inating convention and a 

prim ary fo r the exp ression o f p reference 

for the nom ination o f cand id ates for 

election to the office o f President), the 

highest percentage o f votes a candidate 

receiv es in either election will govern.

(c) The ineligibility date shall be the 

last day of the matching payment period 

for the candidate as specified in 11 CFR 

9032.6.

§ 9033.5 Determination of Inactive 

Candidacy.

(a) The Commission may on the basis 

of the factors listed in subsection (e) (11 

CFR 9033.5(e)) make an initial 

determination that a candidate is no 

longer actively seeking nomination for 

election in more than one State at any 

time after March 1 but before July 1 of 

the Presidential election year.

(b) The Commission shall notify the 

candidate in writing of its initial 

determination, giving the legal and 

factual reasons for the determination 

and advising the candidate of the 

evidence upon which its initial 

determination is based and of the date 

on which active campaigning in more 

than one State ceased. TTie candidate 

will be given an opportunity to submit 

within 15 business days of receipt of the 

Commission’s notice, written legal or 

factual materials to demonstrate that he 

or she is actively campaigning in more 

than one State.

(c) T h e Com m ission w ill consid er any 

w ritten legal or factu al m aterials 

subm itted by the candidate in m aking its 

final determ ination. Such m aterials m ay 

b e subm itted by counsel if the candidate 

so desires. In addition prior to m aking a 

final determ ination, the Com m ission w ill 

consid er the facto rs listed in p aragraph

(e) o f this section.

(d) A final determ ination o f inactive 

cand id acy shall be accom panied by a 

w ritten statem ent o f reason s for the 

Com m ission’s action. T his statem ent 

shall exp lain the reason s underlying the 

Com m ission’s determ ination and shall 

sum m arize the results o f any 

investigation upon w hich the 

determ ination is based.

(e) In making its final determ ination, 

the Com m ission shall consider, but is 

not lim ited to considering, the follow ing 

factors:

(1) The frequency and type of public 

appearances, speeches, and 

advertisements;

(2) Cam paign activity w ith resp ect to 

soliciting contributions or making 

expenditures for cam paign purposes;

(3) Continued em ploym ent o f 

cam paign personnel or the use o f 

volunteers; and

(4) The release of committed 

delegates.

(f) Upon a final determ ination by the 

Com m ission that the candidate is 

inactive, that cand id ate’s eligibility for 

m atching paym ents w ill term inate.-

§ 9033.6 Determination of active 

candidacy.

(a) Where a candidate certifies to the 

Commission under § 9033.4(b) that he 

will not be an active candidate in an 

upcoming primary, the Commission may 

within 10 business days of receiving 

such certification notify the candidate in 

writing that it has made an initial 

determination that the candidate is an 

active candidate in the primary 

involved. This initial determination shall 

be based on the factors listed in 11 CFR 

9033.5(e).

(b) The Com m ission’s notice shall set 

forth the legal and factu al reason s for 

the initial determ ination and advise the 

candidate o f the evidence upon w hich 

its initial determ ination is based . The 

cand id ate w ill be given an opportunity 

to subm it w ithin 10 busin ess days o f 

receip t o f the Com m ission’s n otice 

w ritten legal or factu al m aterials to 

dem onstrate that he or she is not an 

active cand id ate in the prim ary 

involved.

(c) Thè Commission will consider any 

written legal or factual materials 

submitted by the candidate in making its 

final determination. Such materials may 

be submitted by counsel if the candidate 

so desires. In addition, prior to making a 

final determination, the Commisssion 

will consider the factors listed in 11 CFR 

9033.5(e).

(d) A final determination by the 

Commission under this section (11 CFR 

9033.6) shall be accompanied by a 

written statement of reasons for the 

Commission’s action. This statement 

shall explain the reasons underlying the 

Commission’s determination and shall 

summarize the results of any 

investigation upon which the 

determination is based.

§ 9033.7 Reestablishment of Eligibility.

(a) A candidate who has become 

ineligible under § 9033.4(a) on the basis 

that he or she is not actively 

campaigning in more than one state may 

reestablish eligibility for matching 

payments by submitting to the 

Commission evidence of active 

campaigning in more than one State. In 

determining whether the candidate has 

reestablished eligibility, the Commission 

will consider, but is not limited to 

considering, the factors listed in 11 CFR 

9033.5(e). The Commission shall make 

its determination without requiring the

individual to reestablish eligibility under 

11 CFR 9033.1 and 2. The day the 

Commission determines to be the day 

the candidate become active again will 

be the reestablishment of eligibility 

date.

(b) A candidate determined to be 

ineligible under 11 CFR 9033.4(b) by 

failing to obtain the required percentage 

of votes in two consecutive primaries 

may have his or her eligibility 

reestablished if the candidate receives 

at least 20 percent of the total number of 

votes cast for candidates of the same 

party for the same office in a primary 

election held subsequent to the date of 

the election which rendered the 

candidate ineligible.

§ 9033.8 Suspension of Payments.

(a) If the Commission has reason to 

believe that a candidate has knowingly, 

willfully and substantially failed to 

comply with th§ disclosure requirements 

of 2 U.S.C. 434 and 11 CFR Part 104, or 

that a candidate has knowingly and 

willfully exceeded the expenditure 

limitations at 2 U.S.C. 441a(b), the 

Commission may make an initial 

determination to suspend payments to 

that candidate.

(b) The Com m ission shall notify the 

candidate o f its initial determ ination, 

giving the legal and factu al reasons for 

the detem ination and advising the 

candidate o f the evidence upon which 

its initial determ ination is based. The 

candidate w ill b e given an opportunity 

w ithin 20 days o f the Com m ission’s 

n otice to com ply w ith the above cited 

provisions or to subm it w ritten legal or 

factu al m aterials to dem onstrate that he 

or she is not in violation o f those 

provisions.

(c) The Com m ission w ill consider any 

w ritten legal or factu al m aterials 

subm itted by the candidate in making its 

final determination.. Such m aterials may 

b e subm itted by counsel if the candidate 

so desires.

(d) A final determ ination to suspend 

paym ents by the Com m ission shall be 

accom panied by a w ritten statem ent of 

reason s for the Com m ission’s action.

T his statem ent shall explain the reasons 

underlying the Com m ission’s 

determ ination and shall sum marize the 

results o f any investigation upon which 

the determ ination is based.

(e) A cand id ate w hose paym ents have 

been suspended under this section may 

becom e entitled to receive paym ents if 

he or she fulfulls the follow ing 

conditions:

(1) For candidates whose suspension 

was based on failure to comply, with 

reporting requirements, compliance with 

reporting requirements and payments or
Federal Register / Vol. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations 20345

agreement to pay any civil or criminal 

penalties resulting from failure to 

comply; or

(2) For candidates whose payments 

were suspended for exceeding 

expenditure limitations, repayment of an 

amount equal to the amount by which 

the candidate exceeded the expenditure 

limitation end payment of or agreement 

to pay any civil or criminal penalties 

resulting from violation of limitation.

PART 9034— ENTITLEMENTS

S ec.

9034.1 Candidate entitlements.

9034.2 Matchable Campaign Contributions.

9034.3 Nonmatchable Campaign 

Contributions.

9034.4 Use of Contributions and matching 

payments.

9034.5 Net outstanding campaign 

obligations.

Authority: Sec. 408(C), Pub. L. 93-443, 88 

Stat. 1299, as amended'by sec. 307(b),Püb. L. 

94-283, 90 Stat. 501 (26U.S.C. 9034).

§ 9034.1 Candidate entitlements.

(a) A candidate who has been notified 

by the Commission under 11 CFR 9036.1 

that he or She has successfully satisfied 

eligibility and certification requirements 

is entitled to receive payments in an 

amount equal to the amount of each 

matchable campaign contribution 

received by the candidate, except that a 

candidate who has become ineligible 

under 11 CFR 9033.4 may not receive 

further matching payments regardless of 

the date of deposit of the underlying 

contributions if he or she has no met 

outstanding campaign obligations as 

defined in 11 CFR 9034.5.

(b) If on the date of ineligibility a 

candidate has net outstanding campaign 

obligations as defined under 11 CFR

9034.5, that candidate may continue to 

receive matching payments for 

matchable contributions received and 

deposited before December 31 of the 

Presidential election year only if on the 

date of submission there are remaining 

net outstanding campaign obligations. 

The candidate shall be entitled to 

payment only if at the time of 

submission the sum of the contributions 

received on or after the date of 

ineligibility plus matching funds 

received on or after the date of 

ineligibility fon the basis of post 

ineligibility contributions) is less than 

the candidate’s net outstanding 

campaign obligations. This entitlement 

will be equal to the lesser of:

(1) The amount of contributions 

submitted for matching; or

(2) The remaining net outstanding 

campaign obligations.

■(c) A candidate whose eligibility has 

been reestablished under § 9033.7 or 

who after suspension of payments has 

met the conditions set forth at 11 CFR 

9033.8(e) is entitled to receive payments 

for matchable contributions for Which 

payments were not received during the 

ineligibility or suspension period.

(d) The total amount of payments to a 

candidate under this section shall not 

exceed 50% of the total expenditure 

limitation applicable under 2 U.S.C. 

441a(b)(l)( A) as adjusted by 2 U.S.C. 

441a(c).

§ 9034.2 Matchable campaign 

contributions.

(a) Contributions meeting the 

following requirements will be 

considered matchable campaign 

contributions.

(1) The contribution must be a gift of 

money made: by an individual; 'by a 

written instrument identifying the 

contributor by full name and mailing 

address; and for the purpose of 

influencing the result of a primary 

election.

(2) The contribution shall be 

matchable only to the extent of the first 

$250 contributed by an individual 

account the contributor is considered to 

be the owner whose signature appears 

on the check. To be attributed equally to 

other joint tenants of the account, the 

check or other accompanying written 

document shall contain the signature(s) 

of the joint tenant(s).

(3) In cases of money orders which do 

not contain the signature c f the 

contributor, an accompanying written 

document shall contain the signature of 

the contributor.

(4) Checks drawn on escrow or trust 

accounts can only be a contribution 

from the person who has bénéficiai 

ownership of the account and therefore 

must be signed by that person with the 

statement that the giving of the 

contribution does not violate the 

conditions of the trust or escrow 

agreement.

;{5) Contributions in the form of checks 

written on partnership accounts or 

accounts of unincorporated associations 

or businesses are matchable 

contributions, so long as—

(i) The checks are accompanied by 

documentation whidh specifies that the 

contribution is made by a specific 

individual or individuals;

(ii) Such documentation is signed by 

the individual or individuals; and

fiii) The aggregate amount of the 

contributions drawn on a partnership or 

unincorporated association or business 

account does not exceed $1,000 to any

one Presidential candidate seeking 

nomination.

§ 9034.3 Nonmatchable campaign 

contributions.

A contribution to a candidate other 

than one which meets the requirements 

of 11 CFR 9034.2 is not matchable. 

Contributions which are not matchable 

include:

(a) In-kind contributions of real or 

personal property;

(b) A subscription, loan, advance, or 

deposit of money, or anything of value;

(C) A contract, promise, or agreement, 

whether or not legally enforceable, such 

as a pledge card or credit card 

transaction, to make a contribution for 

any such purposes (but a gift of money 

by written instrument is not rendered 

unmatchable solely because the 

contribution was preceded by a promise 

orpledge);

(d) Funds from a corporation, labor 

organization, government contractor, 

political committee as defined in 11 CFR 

100.14 or any group of persons other 

than those under 11 CFR 9034.2(c)(4);

(e) Contributions which are illegally 

made or accepted, such as contributions 

in the name of another;

(f) Contributions in the form of a 

check drawn upon the account of a 

committee, corporation,-union, or 

government contractor even though the 

funds represented personal funds 

earmarked by a contributing individual 

to a Presidential candidate;

(g) Contributions in the form of the 

purchase price paid for an item with 

significant intrinsic and enduring value, 

such ns a watch;

(h) Contributions in the form of the 

purchase price .paid for a chance to 

participate in a raffle, lottery, or a 

similar drawing for valuable prizes;

(i) Contributions in the form of the 

purchase price paid for the admission to 

any activity that primarily confers 

private benefits in the form of 

entertainment to the contributor, such as 

a concert, motion picture, or theatrical 

performance, in which case the amount 

of the matchable contribution shall 

include only the excess of the amount 

paid for admission over the fair market 

value of all the benefits available to the 

purdhaser of the ticket, using a good 

faith reasonable estimate.

(1) The fair market value and any 

amount in excess of the fair market 

value of the benefits conferred shall be 

clearly and separately indicated on the 

promotional material and the tickets for 

the event, and a copy of such material 

and of a ticket shall accompany the 

submission of documentation under 11 

CFR 9033.2 and 9036.2.
20346 Federal Register / Vol. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations

(2) A contribution in the form of the 

purchase price paid for admission to an 

activity that is essentially political is 

fully matchable. An “essentially 

political” program is one the principal 

purpose of which is political speech or 

discussion, such as the traditional 

political dinner or reception.

(j) Contributions which are made by 

persons without the necessary donative 

intent to make a gift or made for any 

purpose other than to influence the 

result of a primary election; and

(k) Contributions of currency of the 

United States or currency of any foreign 

country.

t

§ 9034.4 Use of contributions and 

matching payments.

(a) Except as provided in paragraph

(e) of this section, all contributions 

received by an individual from the date 

he or she becomes a candidate and all 

matching payments received by the 

candidate shall be used only to defray 

qualified campaign expenses or to repay 

loans or otherwise restore funds (other 

than contributions which were received 

and expended to defray qualified 

campaign expenses), which were used 

to defray qualified campaign expenses.

(b) Any expenses incurred after a 

candidate reaches the date of 

ineligibility under 11 CFR 9033.4 are not

qualified campaign expenses, except as 

provided in paragraph (c) of this section.

(c) Winding down costs shall be 

considered a qualified campaign 

expense if such costs are:

(l) Incurred before the date of 

ineligibility; or

(2) Associated with the termination of 

political activity, such as the cost of 

complying with post election 

requirements of the Act and other 

necessary administrative costs, 

including office space rental, staff 

salaries, etc.

(3) For purposes of this subsection, 

winding down costs shall be deemed to 

have been incurred before the 

candidate’s date of ineligibility if an oral 

or written arrangement or commitment 

for the activity was made on or before 

candidate’s date of ineligibility

(d) An expenditure which is in excess 

of any of the limitations under 2 U.S.C. 

441a(b)(l)(A) shall not be considered a 

qualified campaign expense.

(e) Civil or criminal penalties paid 

pursuant to the Federal Election 

Campaign Act are not qualified 

campaign expenses and can not be 

defrayed from contributions or matching 

payments. Any amounts received or 

expended to pay such penalties shall not 

be considered contributions or 

expenditures, but such amounts shall be

reported in accord an ce w ith 11 CFR Part 

104.

(f) Even though incurred prior to the 

date an individual becomes a candidate, 

payments made for the purpose of 

determining whether an individual 

should become a candidate, such as 

those incurred in conducting a poll, shall 

be considered qualified campaign 

expenses if the individual subsequently 

becomes a candidate.

(g) Where a candidate has received < 

matching funds and is simultaneously 

seeking nomination or election to 

another Federal office, any transfer of 

funds between his or her principal 

campaign committees or authorized 

committees must be in accordance with 

2 U.S.C. 441a(a)(5)(C) and 11 CFR 

110.3(a)(l)(v).

(h) A candidate whose eligibility has 

been reestablished under 11 CFR 9033.7 

or who after suspension of payments 

has met the conditions set forth at 11 

CFR 9033.8(e) is entitled to receive 

payments for matchable contributions 

for which payments were not received 

during the ineligibility or suspension 

period.

§ 9034.5 Net outstanding campaign 

obligations.

(a) A candidate’s net outstanding 

campaign obligations equal the 

difference between paragraph (a) (1) 

and (2) of this section:

(1) The total of all outstanding 

obligations for qualified campaign 

expenses as of the candidate’s date of 

ineligibility under 11 CFR 9033.4, plus 

estimated necessary winding down 

costs as defined under 11 CFR 9034.4(c) 

less

(2) The total of:

(i) C ash on hand as o f the close o f 

busin ess on the la st day o f eligibility 

(including all contributions received as 

o f that date w hether or n o t subm itted for 

m atching);

(ii) The fair market value of capital 

assets on hand; and

(iii) Am ounts ow ed to the cam paign in 

the form o f credits, returns, receivab les, 

or reb ates o f qualified cam paign 

exp enses; or a com m ercially reason ab le 

am ount b ased on the collectibility o f 

those credits, returns, receiv ab les or 

rebates.

(b) The candidate shall submit a 

statement of net outstanding campaign, 

obligations within 15 days of the 

candidate’s date of ineligibility.

(c) For purposes o f this section, a 

cap ital a sset m eans any property w hich 

has rem aining useful life exceeding 1 

year from the date o f the cand id ate’s 

ineligibility: Provided, T h at the fair

market value at the-date of ineligibility 

exceeds $500.

PART 9035— EXPENDITURE

LIMITATION

Sea

9035.1 Qualified Campaign Expense 

Limitation.

9035.2 Limitation on Expenditures From 

Personal or Family Funds.

Authority: Sec. 408(c), Pub. L. 93-443, 88 

Stat. 1300, as amended by sec. 305(a), 307(c). 

Pub. L. 94-283, 90 Stat. 494, 501 (26 U.S.C. 

9035.)

§ 9035.1 Qualified Campaign Expense 

Limitation.

No candidate who has accepted 

matching funds shall knowingly incur 

qualified campaign expenses in excess 

of the expenditure limitation applicable 

under 2 U.S.C. 441a(b)(l)(A);

§ 9035.2 Limitation on Expenditures from 

Personal or Family Funds.

(à) No candidate who has accepted 

matching funds shall knowingly make 

expenditures from his or her personal 

funds, or funds of his or her immediate 

family, in connection with his or her 

campaign for nominatioh for election to 

the office of President in excess of, in 

the aggregàte $50,000.

(b) For purposes of this section, the 

term “immediate family” means a 

candidate, spouse, and any child, 

parent, grandparent, brother, halfbrother, sister, or half-sister of the 

candidate, and the spouses of such 

persons.

(c) For purposes of this section, 

“personal funds” has the same meaning 

as specified in 11 CFR 110.10.

PART 9036— CERTIFICATION BY THE

COMMISSION

Sec.

9036.1 Initial certification.

9036.2 Additional certification.

9036.3 Insufficient documentation.

9036.4 Certification review and notice.

9036.5 Resubmission and hearing 

opportunity.

9036.6 Continuation of certification. 

Authority: Sec. 408(c), Pub. L. 93-443, 88

Stat. 1300 (26 U.S.C. 9036).

§9036.1 Initial certification.

(a) After a determination has been 

made that the candidate has 

successfully satisfied the eligibility and 

certification requirements under 11 CFR

9033.1 and 9033.2 including the threshold 

requirement, the Commission shall so 

notify the candidate in writing and shall 

request the submission in accordance 

with paragraph (b) of this section of all 

contributions received and deposited by 

a date specified by the Commission.
Federal Register / Vol. 44, No. 66 / Wednesday, April 4, 1979 / Rules and Regulations 20347

(b) Contributions w hich are subm itted 

for purposes o f m eeting the threshold 

requirem ents must be subm itted in 

accordance w ith the Federal Election 

Com m ission Guideline for P resentation 

in Good Order.

(c) Within 10 calendar days after the 

Commission has sent notification to the 

candidate under subsection (a) (11 CFR 

9036.1(a)), but not before the beginning 

of the matching payment period, the 

Commission shall certify to the 

Secretary of the Treasury for payment of 

the amount to which such candidate is 

entitled.

§ 903.2 Additional certifications.

(a) To obtain subsequent certifications 

following the initial certification and 

payment, a candidate shall file all 

information required for the initial 

eligibility under Part 9033, except that:

(1) The alphabetical listing of 

contributors need not be segregated by 

State;

(2) The candidate need not resubmit 

the agreement under 11 CFR 9033.1 and 

the the certifications under § 9033.2; and

(3) The occupation and principal place 

of business need not be disclosed for 

individuals whose aggregate 

contributions exceed $100 per calendar 

year, except that such information is 

subject to recordkeeping and reporting 

requirements under 2 U.S.C. 432(c)(2), 

434(b)(2) and 11 CFR 102.9(a)(2), 

104.2(b)(2).

(b) R equests for additional 

certifications m ay b e subm itted on d ates 

to be determ ined and published by the 

Commission from tim e to time.

(c) Except as provided by 11 CFR 

9036.4, requests for additional 

certification shall cover a period 

beginning the day following the close of 

the period for the previous submission.

(d) A ll subm issions for m atching 

payments must b e in accord an ce w ith 

the Federal E lection Com m ission 

Guideline for P resentation in Good 

Order.

(e) The Commission shall certify to 

the Secretary of the Treasury any 

additional amount to which a candidate 

is entitled within 15 calendar days of 

receipt of information submitted under 

paragraph (a) (11 CFR 9036.2(a)), but not 

before the beginning of the matching 

payment period.

§ 9036.3 Insufficient documentation.

Contributions which are otherwise 

matchable may be rejected for matching 

purposes because of insufficient 

supporting documentation. These 

contributions may become matchable if 

there is a proper resubmission in 

accordance with 11 CFR 9036.5 and

9036.6. Insufficient documentation 

includes:

(a) Discrepancies in the written 

instrument, such as:

(1) Instruments drawn on other than 

personal accounts of contributors and 

not signed by the contributing 

individual;

(2) Signature discrepancies; and

(3) Lack of the contributor’s signature, 

the amount of the contribution, or the 

listing of the committee or candidate as 

payee;

(b) Discrepancies between listed 

contributions and supporting 

documentation, such as:

(1) The contributor’s name is 

misspelled;

(2) The listed amount requested for 

matching exceeds the amount contained 

on the written instrument; and

(3) A written instrument has not been 

submitted to support a listed 

contribution;

(c) Discrepancies within or between 

contribution lists submitted, such as:

(1) The address o f the contributor is 

m issing or incom plete or the 

contributor’s nam e is alphabetized 

incorrectly, or more than one contributor 

is listed per item ; and

(2) A discrepancy in aggregation 

w ithin or betw een subm issions, or a 

listing o f a contributor more than once 

w ithin the sam e subm ission.

§ 9036.4 Certification review and notice.

(a) The Commission will review the 

submission to determine if the 

submission meets acceptable standards 

of good order under 11 CFR 9036.2 and 

9036.3. Those submissions not meeting 

the standards will not be certified, and 

the candidate will be requested to 

resubmit the documentation. 

Submissions of a sufficient size will be 

reviewed using statistical sampling, and 

the candidate will be given a reduced 

amount based on the results of the 

sample. (Note that under 11 CFR 9036.5 

contributions which are sumbitted and 

rejected may be resubmitted for 

matching.) If the Commission certifies to 

the Treasury for payment an amount 

which is less than the amount requested 

by the candidate, the Commission shall 

notify the candidate in writing which 

notice or notices shall include:

(1) The amount less than the full 

amount requested for certification;

(2) The am ount o f the contribution 

and the nam e o f the contributor w hich 

the Com m ission consid ers not 

m atch able and the reason s therefor, or, 

if statistical sampling is used, the 

estim ated am ount o f contributions by 

type aind the reason for rejection;

(3) The amount of contributions which 

are not in dispute and which the 

Commission will certify to the Treasury 

for payment; and

(4) A statement that the candidate has 

the opportunity to supply the 

Commission with additional 

documentation or other explanation in 

the form of a resubmission under 11 CFR

9036.5 in order as to make the disputed 

contributions matchable.

(b) In any ca se w here the candidate or 

his or her com m ittee h as know ledge that 

a contribution w hich has been subm itted 

for m atching purposes does not so 

qualify, such a s a ch eck returned to the 

com m ittee for insufficient funds, the 

Com m ission shall b e notified as soon as 

p ossible so that a proper adjustm ent 

m ay b e made, in the am ount to be 

certified.

§ 9036.5 Resubmissions and hearing 

opportunity.

(a) Contributions which were 

submitted and rejected under 11 CFR

9036.4 may be resubmitted with the 

necessary information.

(b) In order to be reviewed, the 

resubmission of disputed contributions 

shall be made on a separate list 

identifying the submission in which the 

contributions were originally submitted.

(c) Resubmissions must be presented 

to the Commission at a time specified 

and, to the extent approved, will be 

certificed to the Secretary of the 

Treasury within 15 calendar days.

(d) If the candidate chooses to make a 

resubmission and the Commission 

determines that the disputed 

contribution is still unmatchable, the 

Commission will notify the candidate in 

writing of its determination. The 

Commission will advise the candidate of 

the legal and factual reasons for its 

determination and of the evidence on 

which that determinatioA is based. The 

candidate will be given an opportunity 

to submit within 30 days of the 

Commission’s notice written legal or 

factual materials to demonstrate that the 

contribution is matchable.

(e) The Commission will consider any 

written legal or factual materials 

submitted by the candidate in making its 

final determination. Such materials may 

be submitted by counsel if the candidate 

so desires.

(f) A final determ ination by the 

Com m ission that a contribution is not 

m atch able shall b e accom panied by a 

w ritten statem ent o f reason s for the 

Com m ission’s action. T his statem ent 

shall explain the reason s underlying the 

Com m ission’s determ ination and shall 

sum m arize the results o f any
20348 Federal Register / VdL 44, No. 66 / Wednesday, April 4, 1973 / Roles and Regulations

investigation upon which the 

determination is based.

§ 9036.6 Continuation of certification.

(a) Candidates who have received 

"matching funds and who are eligible to 

continue to receive such funds may 

continue to submit contributions to the 

commission to be certified for matching 

through January 21 of the year following 

the election.

(b) No contribution will be matched rf 

it is submitted after this period, 

regardless of the date the contributions 

were deposited.

PART 9037— PAYMENTS

Sec.

9037.1 Payments of Presidential Primary 

Matching Funds.

9037.2 Equitable Distribution of Funds. 

9037.3. Deposits of Presidential Primary

Matching Funds.

Authority? Sec. 408(a), Pub. L. 93-443, 88 

Stat. 1300 (26 U.S.C. 9037).

§ 9037.1 Payments of Presidential Primary 

Matching Funds.

Upon receipt of a written certification 

from the Commission, but not before the 

beginning of the matching payment 

period, the Secretary of the Treasury or 

his or her delegate will promptly 

transfer the amount certified from the 

matching payment account to the 

candidate.

§ 9037.2 Equitable Distribution o f Funds.

In making such transfers to 

candidates of the same political party, 

the Secretary or his or her delegate will 

seek to achieve an equitable distribution 

of funds available in the matching 

payment account and the Secretary or 

his or her delegate will take into 

account, in seeking to achieve an 

equitable distribution of funds available 

in the matching payment account, the 

sequence in which such certifications 

are received.

§ 9037.3 Deposits of Presidential Primary 

Matching Funds.

Upon receipt of any matching funds, 

the candidate shall deposit the full 

amount received into a checking 

account maintained by the candidate's 

principal campaign committee in the 

depository designated by the candidate.

PART 9038— EXAMINATIONS AND

AUDITS

Sec.

903&1 Audit

9038.2 Repayments.

9038.3 Liquidation, of Obligations; 

Repayment

Authority: Section 408(c), Pub. L. 93-443,88 

S ta t 1300 (26 U.S.C. 9038).

§ 9038.1 A u d it

(a) After the close of a matching 

payment period, the Commission shall

conduct an audit of the qualified 

campaign expenses of every candidate 

and his or her authorized committees 

who received Presidential primary 

matching funds. For candidates whose 

date of ineligibility occurs before the 

end of the matching payment period, the 

audit may be conducted at any time 

after the date of ineligibility.

(b) In addition, the Commission may 

conduct other examinations and audits 

from time to time as it deems necessary 

to carry out the provisions of this 

subchapter,

§ 9038.2 Repayments.

(a) If the Commission determines that?

(1) Any portion of the payments made 

to a candidate from the matching 

payment account was in excess of the 

aggregate amount to which such 

candidate was entitled; or

(2) Any amount of any payment made 

to a candidate from the matching 

payment account or any contributions 

received by the candidate were used for 

any purposes other than—

(i) To defray qualified campaign 

expenses; or

(ii) To repay loans which were used to 

defray qualified campaign expenses; or

(iii) To restore funds (other than 

contributions which were received and 

expended to defray qualified campaign 

expenses) which were used to defray 

qualified campaign expenses; or

(3) Any amounts spent by the 

candidate from matching funds or from 

private contributions were not 

documented in. accordance with 11 CFR 

9033.1(a)(1); the Commission shall notify 

the candidate as soon as possible, but 

no later than 3 years after the end of 

such matching payment period. The 

candidate shall repay to the Secretary of 

the Treasury, within 90 days of the 

notice, an amount equal to the amount 

improperly paid under § 9038.2(a)(1), an 

amount equal to the amount improperly 

expended under 11 CFR 903&2(a)(2), or 

an amount equal to the: amount of any 

expenditure which is improperly 

documented under 11 CFR 903&2(a)(3). 

The Commission’s notice shall set forth 

the legal and factual reasons for the 

determination that a repayment is 

required and shall also advise the 

candidate of the evidence upon which 

that determination is based. Upon 

application by the candidate, the 

Commission may grant a 90 day 

extension of the repayment period.

(b) If the candidate disputes the 

Commission’s determination that a 

repayment is required, he or she shall be 

given an opportunity to submit in 

writing, within 30 days of receipt of the 

Commission’s notice, legal or factual 

materials to demonstrate that a 

repayment is not required.

(c) The Commission will consider any 

written legal or factual materials 

submitted by the candidate in making its 

final determination. Such materials may 

be submitted by counsel if the candidate 

so desires.

fdj A final determination by the 

Commission that a candidate must 

repay a certain amount shall be 

accompanied by a written statement of 

reasons for the Commfssicm’s action. 

This statement shall explain the reasons 

underlying the Commission’s 

determination and shall summarize the 

results of any investigation upon which 

the determination is based.

(e) The Candidate shall repay to the 

Secretary of the Treasury the amount 

specified by the Commission: in its 

notice of final determination within 20 

days from the date the notice its received 

by the candidate. Upon application by 

the candidate, the Commission may 

grant a 90 day extension of this period.

§ 9036.3 Liquidation of obligations; 

repaym ent

(a) Amounts received by the 

candidate from the matching payment 

account may be retained for 6 months 

after the end of the matching payment 

period and may be used to pay qualified 

campaign expenses incurred by the 

candidate.

(b) After all obligations have been 

liquidated, the candidate shall so inform 

the Commission in writing..

(c) (1) If on the last day of candidate 

eligibility the candidate’s net 

outstanding campaign obligations, as 

defined in 11 CFR 9034.5, reflect a 

surplus, the candidate shall within 30 

days of the ineligibility date repay to the 

Secretary of the Treasury an amount 

which represents the amount of 

matching funds contained in the 

candidate’s surplus. The amount shall 

be an amount equal to that portion of 

the surplus which bears the same ratio 

to the total surplus that the total amount 

received by the candidate from the 

matching payment account bears to the 

total1 deposits made to the candidate’s 

accounts.

[2] For purposes of this subsection, 

total deposits shall be considered all 

deposits to all candidate accounts minus 

transfers between accounts, refunds, 

rebates, reimbursements, checks 

returned for insufficient funds, proceeds 

of loans and other similar amounts.

Dated; March 28,1979.

Joan D. Aikens,

Chairman, federal Election Commission

[FR Doc. 79-10101 Filed 4-3-79; 8:45 am]

BILLING CODE 6715-01-M