Appendices

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Appendices

Appendices:
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Appendix W
DISSOLUTION OF A COMMITTEE

The Michigan Campaign Finance Act (MCFA) specifies when and under what conditions a committee may be dissolved. A dissolved committee has no further filing obligations under the MCFA. All committees are encouraged to request dissolution when activity in the committee ends. A committee that has not been dissolved and does not have a Reporting Waiver must continue to file campaign statements as required by the MCFA.

A Committee is Eligible for Dissolution When:

  • The incumbent officeholder vacates office or is constitutionally or legally barred from seeking reelection,*
  • The committee has disclosed the disbursement of all unexpended funds and assets,
  • The committee has disclosed the payment or forgiveness of all debts,
  • The committee has paid all late filing fees in full,
  • The committee has filed all outstanding campaign statements, and
  • The committee has answered all outstanding Notice(s) of Error or Omission.

(*)An officeholder cannot dissolve his or her Candidate Committee until his or her term of office expires. An exception to this provision exists for officeholders who are not qualified to seek reelection.

Requesting Dissolution: Committees that have maintained a Reporting Waiver may request dissolution with their filing official by filing a Single-Page Dissolution Statement. On the Statement, the signers verify that the committee: 1.) Obtained and maintained the Reporting Waiver; 2.) Has no outstanding late filing fees or other debts; and 3.) Has no remaining assets.

Committees that have not maintained a Reporting Waiver may request dissolution with their filing official by filing either a 1.) Dissolution Campaign Statement or 2.) another required campaign statement that includes a dissolution date of the committee on the cover page. Committees that are required to file campaign statements electronically must file their dissolution request campaign statement electronically. The committee must dissolve on or before the closing date of the campaign statement. A Dissolution Campaign Statement must open on the day after the closing date of the last campaign statement filed by the committee and close on the date of the committee’s dissolution.

Granting or Denying the Dissolution Request: The filing official will review each dissolution request and determine if the committee is eligible to dissolve based on the criteria listed above. The committee will be notified whether their dissolution request was granted or if it was denied. If a dissolution request is denied and the committee qualifies for a Reporting Waiver, the filing official will automatically update the committee records to avoid the accrual of any additional fees or filing requirements while the committee works on completing the dissolution process.

Automatic Dissolution of Candidate Committees: The filing official may automatically dissolve a Candidate Committee with a Reporting Waiver when an officeholder vacates office or an individual is defeated in the election, providing the committee meets all of the requirements to dissolve. A committee that qualifies for automatic dissolution will not be dissolved if the candidate expresses a desire, in writing, to keep the committee active.

Disposition of Unexpended Funds: Unexpended funds of a Candidate Committee that are not eligible for transfer to another Candidate Committee of the same candidate must be disbursed in the following ways in accordance with Section 45 of the MCFA.

  1. Given to a Political Party Committee (state central, congressional district or county).
  2. Given to a tax-exempt charitable organization as long as the candidate does not become an officer or director of or receive compensation, either directly or indirectly, from that organization. *
  3. Returned to contributors of the funds; including the candidate as a contributor. The returned amount cannot exceed the amount originally contributed by the person.
  4. Given to a House Political Party Caucus Committee if the person was a candidate for the office of State Representative. (Maximum contribution of $40,000.00 per year allowed).
  5. Given to a Senate Political Party Caucus Committee if the person was a candidate for the office of State Senator. (Maximum contribution of $40,000.00 per year allowed).
  6. Given to an Independent Committee.
  7. Given to a Ballot Question Committee.

(*) A Candidate Committee that chooses to donate any of its remaining assets to a tax-exempt charity must provide verification of the disposition of the funds to their filing official. This verification can be in the form of a receipt or letter of acknowledgement on the charity’s letterhead.

Independent, Political, IEC/Super PAC, Ballot Question and Political Party Committees may dispose of unexpended, or leftover, funds in any legal manner.

FAQs

  1. When can I dissolve my committee?

A committee can request dissolution when activity in the committee ends. An officeholder cannot dissolve his or her Candidate Committee until his or her term of office expires. An exception to this provision exists for officeholders who are not qualified to seek reelection.

  1. How do I dissolve my committee?

Committees that have maintained a Reporting Waiver may request dissolution with their filing official by filing a Single-Page Dissolution Statement.

Committees that have not maintained a Reporting Waiver may request dissolution with their filing official by filing either a 1.) Dissolution Campaign Statement or 2.) another required campaign statement that includes a dissolution date of the committee on the cover page. Committees that are required to file campaign statements electronically must file their dissolution request campaign statement electronically.

  1. Why was my dissolution request denied?

Your dissolution request was denied for one of the following reasons:

  • The candidate is an incumbent officeholder and has not vacated office or is not constitutionally or legally barred from seeking reelection,
  • The committee has not disclosed the disbursement of all unexpended funds and assets,
  • The committee has not disclosed the payment or forgiveness of all debts,
  • The committee has not paid all late filing fees in full,
  • The committee has not filed all outstanding campaign statements, or
  • The committee has not answered all outstanding Notice(s) of Error or Omission.
  1. My dissolution request has been denied, do I still have filing obligations?

Yes. A committee that has not been dissolved and does not qualify for a Reporting Waiver must continue to file campaign statements as required by the MCFA. Contact your filing official if you have questions as to why your dissolution request was denied and how to complete the dissolution process.

  1. My committee was automatically dissolved, can I reactivate it?

Maybe. Contact your filing official in writing to request that the committee be reinstated.

  1. How can I spend the remainder of my committee funds to qualify for dissolution?

Unexpended funds of a Candidate Committee that are not eligible for transfer to another Candidate Committee of the same candidate must be disbursed in the following ways in accordance with Section 45.

  1. Given to a Political Party Committee (state central, congressional district or county).
  2. Given to a tax-exempt charitable organization as long as the candidate does not become an officer or director of or receive compensation, either directly or indirectly, from that organization.*
  3. Returned to contributors of the funds; including the candidate as a contributor. The returned amount cannot exceed the amount originally contributed by the person.
  4. Given to a House Political Party Caucus Committee if the person was a candidate for the office of State Representative. (Maximum contribution of $40,000.00 per year allowed).
  5. Given to a Senate Political Party Caucus Committee if the person was a candidate for the office of State Senator. (Maximum contribution of $40,000.00 per year allowed).
  6. Given to an Independent Committee.
  7. Given to a Ballot Question Committee.

(*) A Candidate Committee that chooses to donate any of its remaining assets to a tax-exempt charity must provide verification of the disposition of the funds to their filing official. This verification can be in the form of a receipt or letter of acknowledgement on the charity’s letterhead.

Independent, Political, Ballot Question and Political Party Committees may dispose of unexpended, or leftover, funds in any legal manner.

ADDITIONAL RESOURCES

RULINGS AND INTERPRETIVE STATEMENTS

03/14/2017McRaeIS3,6,9(1),21a,45MSU is a tax exempt charitable organization under 26 USC 501( c )(3). Accordingly, the University qualifies as a tax exempt charitable organization for purposes of MCL 169.209(1)(g) and as an incumbent Member of the Board of Trustees, your client is authorized by the Act to make a donation to MSU. It is understood that because the Act requires a candidate to maintain a candidate committee until he or she “is constitutionally or legally barred from seeking reelection or fails to file for reelection to that office by the applicable filing deadline,” your client is not currently in the process of dissolving her candidate committee. MCL 169.203(1)(e),221. This is significant because a different law governs the disposition of any remaining candidate committee funds at termination. Under section 45(2)(b), MCL 169.245(2)(b), residual candidate committee funds may be transferred at dissolution to “a tax exempt charitable organization, as long as the candidate does not become an office or director of or receive compensation, either directly or indirectly, from the organization.” MCL 169.245(2)(b). Once the process of winding down commences, disbursements from your client’s candidate committee will be subject to this restriction…… Complete text of 03/14/2017
01/13/2010RichnerIS45It is reasonable to presume that compensation paid by the recipient charitable organization to a candidate’s spouse or dependent child will always benefit the candidate, whether the benefit derived by the candidate is direct or indirect. In these circumstances, the candidate may not transfer unexpended funds to that charitable organization. On the other hand, it is possible that a candidate would not benefit from compensation paid to a non-dependent child or to a child who does not reside in the same household as the candidate. The transfer of unexpended funds could be allowed depending upon the specific fact of each case…. Complete text of 01/13/2010
12/17/2007MurleyIS6A donation from a Candidate Committee to the Michigan Political History Society MPHS may be expenditure if the committee can demonstrate an identifiable, tangible benefit that advances the candidate’s nomination or election. The committee can donate the funds under the incidental expense provision of the MCFA and the dissolution process to the MPHS. A PAC may donate to the MPHS in any lawful manner…. Complete text of 12/17/2007
8/21/2006CampbellDR45A Ballot Question Committee may expend any portion of its remaining account balance for the payment of legal fees incurred in defense of the committee. Since the MCFA restricts the use of unexpended funds of a candidate committee and does not impose any such restrictions on other committees, then it can be concluded that a committee other than a candidate committee can disperse its remaining funds in any legal manner. Legal fees that are incurred “in assistance of, or in opposition to the qualification, passage or defeat of a ballot question” must be treated as expenditures and reported in accordance with the MCFA. (YES Saginaw Committee)…. Complete text of 08/21/2006
9/13/1993PridniaIS49(1), R65, 45Donation to charity, State Senate [OEFs abolished, PA 411, 1994]….. Complete text of 09/03/1993
10/22/1992WolpeDR12(1), 45(1), 66(1)The contribution limits for a gubernatorial committee are greater than the contribution limits prescribed in the Federal Election Campaign Act for federal committees. Therefore, the Act does not preclude transferring funds raised by a congressional committee to a gubernatorial candidate committee. Contributions made to a congressional committee are transferred to a gubernatorial candidate committee are not considered qualifying contributions and cannot be matched with public funds the from the state campaign account. If a candidate chooses to accept public funds, the candidate’s expenditures for each election are limited to those stated in section 67 of the Act. The definition of “expenditure” in section 6 is broad enough to include testing the water expenditures. Therefore, if public funds are accepted, money spent before formally declaring candidacy that assists the nomination or election to the office of governor will be included when calculating the expenditure limitation…. Complete text of 10/22/1992
4/9/1991PetersDR5(2)A review of the Act and rules suggests that funds that are returned to a committee after the committee has dissolved must be reported and disposed of in the same manner as if the committee remained in existence…. Complete text of 04/09/1991
9/8/1987ShortIS24, 36, 45, 49Farewell Party [OEFs abolished, PA 411, 1994]…. Complete text of 09/08/1987
4/8/1983PlaweckiIS44(2)A loan is a “contribution” and, therefore, may not be made between two Candidate Committees, even when both committees are Candidate Committees held by the same individual. Any left over funds or funds, which are not consumed or used up by the candidate’s first committee, may be transferred to his or her second committee when the second committee has a higher contribution limit. These transfers are not contributions. In addition, since a loan is a contribution, candidate committee to candidate committee loans are prohibited. If a candidate has transferred left over funds or funds which were not consumed or used up by the candidate’s first committee to his or her second committee, it would be inconsistent to allow any funds to be returned to the dissolving committee…. Complete text of 04/08/1983
3/31/1982WelbornIS3(1), 3(4), 45(1)A person may be a “candidate” for one seat while still an incumbent, and therefore, also a “candidate” for another seat. The Candidate Committee for the office for which the person is an incumbent must be maintained until the deadline for filing for reelection to the incumbent seat has passed. An officeholder may not dissolve his or her Candidate Committee for that office until becoming “constitutionally or legally barred from seeking reelection or fails to file for reelection to that office by the applicable filing deadline”, even though the officeholder has announced his or her candidacy for another office. If a candidate simultaneously holds two Candidate Committees, and if one of the committees has a higher contribution limit than the other, and if funds are transferred from the committee having the lower limits to the committee having the higher limits, then the funds so transferred may not be transferred back…. Complete text of 03/31/1982
10/28/1981PitschIS3(1), 45(2)A Candidate Committee’s unexpended funds may only be disposed of when the committee dissolves…. Complete text of 10/28/1981 - Pitsch
10/23/1981JenkinsIS3(1), 3(4), 8(2), 11(2), 45(2)A person becomes a “candidate” for purposes of the Act by raising money, even though the individual has not announced as a candidate, filed for office, campaigned, or otherwise become a candidate in the ordinary sense of the word. A committee that is not required to organize and file under the Act (i.e., does not spend or receive $200.00 or more in a calendar year) is not prohibited from receiving funds. If a group of persons raises money to support the potential candidacy of a particular individual, and if the money is raised without that individual’s consent, and if the money so raised is $200.00 or more, then the group must register as a Political Committee. Committees other than Candidate Committees are not subject to Section 45(2), and may dispose of unexpended funds in any lawful manner. [Amount changed to $500.00, P.A. 95, effective June 21, 1989.]…. Complete text of 10/23/1981 Jenkins
8/6/1980DeeringIS3(2), 5(2), 6(1), 44(2), 45(1)A “candidate committee” does not include a Federal Candidate Committee. A disbursement from a state Candidate Committee to a Federal Candidate Committee is not an “expenditure” and, therefore, may not be made by the State Candidate Committee. Joint fund raiser rules apply. However, the Federal Candidate Committee may contribute to the State Candidate Committee and may, therefore, pay more than its fair share of the joint expenses, or receive less than its fair share of the joint benefits, subject to the provisions of federal law. A Federal Candidate Committee that contributes to a State Candidate Committee is a “person” which is subject to contribution limitations…. Complete text of 08/06/1980 - Deering
2/6/1980AltmanIS45(1)An individual may transfer funds from the state elective committee to the local committee, but may not transfer funds from the local committee to the state elective committee. [Amended PA 590, 1996 to add contribution limits for all committees]…. Complete text of 02/06/1980 - Altman
12/14/1979ParishIS22A committee treasurer has the responsibility for maintaining the committee’s records, and the committee is responsible for ascertaining that the treasurer is meeting this requirement. If the committee’s treasurer changes, then the new treasurer, the former treasurer, and the committee principals are collectively responsible for the transferal of the records. If the committee dissolves, then the last treasurer of the committee is responsible for the maintenance of the records. If that person is not available, then the responsibility revolves upon the committee’s principals. [Provision for designation of individual other than treasurer to be responsible for record keeping, report preparation and report filing, P.A. 95, effective June 21, 1989.]…. Complete text of 12/14/1979 - Parish
8/11/1978GoemaereDR45A Candidate Committee’s unexpended funds may not be treated as personal income of the candidate upon dissolution of the committee…. Complete text of 08/11/1978 - Goemaere
8/11/1978CartwrightDR45Disposal of unexpended funds of candidate committee…Complete text…. Complete text of 08/11/1978 - Cartwright
11/2/1978RoseIS45(2)A candidate may not retain a committee’s assets for personal use after the election…. Complete text of 11/02/1978 - Rose
10/10/1978AllenIS6(1), 7(4), 45(1)A debt incurred in one year may be paid in subsequent years. Interest incurred on a campaign debt is a legitimate campaign expenditure. The Department strongly encourages a statement of the purpose of a fund raising effort. Excess funds raised at a fund raiser may be used for another legitimate campaign purpose of the committee. A candidate may use funds from one committee to repay the debts of another committee if the requirements of section 45 are met…. Complete text of 10/10/1978 - Allen

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