seec: Declaratory Ruling 2007-01

Declaratory Ruling 2007-01
   {Citizens} Citizens' Election Program: Loans and Candidate's Personal Funds                      
        
 
At its Regular Meeting on July 18, 2007, the Commission voted to initiate a declaratory ruling concerning the application of the loan and personal fund provisions of section
9-710 of Connecticut General Statutes.  
 
This declaratory ruling addresses the following issues:  (1) whether candidates intending to participate in the Citizens’ Election Program (the “Program”) may make or otherwise accept loans to their candidate committees; (2) whether candidates intending to participate in the Program may provide personal funds or make qualifying contributions to their candidate committees.
 
Re:   CONN. GEN. STAT. §§ 9-707; 9-710(a), (b), & (c).

Amount and Sources of Loans Provided to Candidates Intending to Participate in the Program
Chapter 157 expressly limits the aggregate amount and permissible sources of any loans provided to the candidate committees of candidates intending to participate in the Program to an aggregate of one thousand dollars from financial institutions:
 
The candidate committee for a candidate who intends to participate in the Citizens’ Election Program may borrow moneys on behalf of a campaign for a primary or a general election from one or more financial institutions, as defined in section 36a-41, in an aggregate amount not to exceed one thousand dollars. 
 
CONN. GEN. STAT. § 9-710(a) (emphasis added). 
 
Aggregate amount of loans: 
The statute provides that the aggregate amount of such loans to the candidate committee of a candidate who “intends to participate” in the Program may not exceed one thousand dollars.  CONN. GEN. STAT. § 9-710(a).  This one thousand dollar loan limit applies to candidate committees of candidates seeking any statewide or legislative office covered by the Program.  Therefore a candidate intending to participate in the Program whose candidate committee accepts a loan or loans exceeding one thousand dollars in the aggregate will not be in compliance with Program requirements, and consequently will not be eligible to receive public funds.
 
Permissible sources of loans:  
The statute provides only one source from which candidate committees of candidates intending to participate in the Program may receive loans:  financial institutions.  Section 36a-41 defines “financial institution” as meaning “a bank, Connecticut credit union, federal credit union, an out-of-state bank that maintains a branch in this state and an out-of-state credit union that maintains an office in this state.”  CONN. GEN. STAT. § 36a-41.  Consequently, if a candidate committee accepts a loan, in any amount, from an individual or individuals (including the candidate), a political committee, a corporation, a lobbyist, or any source other than a financial institution as defined by section 36a-41, the candidate will not be in compliance with Program requirements, and consequently will not be eligible to receive public funds.
 
Additionally, no person, PAC, or party committee can endorse or guarantee a loan or aggregate loans exceeding $500, except the candidate, or, in a general election, a state central committee.  CONN. GEN. STAT. § 9-710(a).
 
Repayment of Loans: 
Any permissible loans must be repaid before the candidate applies for a grant from the Citizens’ Election Fund.  Chapter 157 further provides:
 
All such loans shall be repaid in full prior to the date such candidate committee applies for a grant from the Citizens’ Election Fund pursuant to section 9-706. A candidate who fails to repay such loans or fails to certify such repayment to the State Elections Enforcement Commission shall not be eligible to receive and shall not receive grants from the fund.
 
CONN. GEN. STAT. § 9-710(b).
    
Use of Personal Funds
Chapter 157 permits candidates intending to participate in the Program to provide a limited amount of personal money to their candidate committees.  CONN. GEN. STAT.
§ 9-710(c).  The maximum amount of personal funds varies depending on the office being sought.  Candidates for Governor may provide up to $20,000.  Candidates for other statewide offices (Lieutenant Governor, Attorney General, State Comptroller, State Treasurer, Secretary of the State) may provide up to $10,000.  Candidates for state senator may provide up to $2,000, and candidates for state representative may provide up to $1,000.  CONN. GEN. STAT. § 9-710(c).  If candidates provide more than the maximum allowable amount of personal funds to their candidate committees, the candidates will not
be in compliance with Program requirements, and consequently will not be eligible to receive public funds.  
 
Deduction from Initial Grant:  
Candidates may only provide personal funds to their candidate committees before applying for initial grants.  CONN. GEN. STAT. § 9-707.  The initial grant that a candidate committee approved for a grant is eligible to receive is reduced by the amount of personal funds, if any, that the candidate provided to the candidate committee.  CONN. GEN. STAT. § 9-705(j)(1).  
 
Purpose of “Seed Money” Provisions
Section 9-710 allows for limited use of personal funds and loans as “seed money” for candidates intending to participate in the Program. See CONN. GEN. STAT. § 9-710.  Because of the strict limits on such “seed money” included in section 9-710, a candidate intending to participate in the Program should be aware of these limits at the inception of the candidate committee.  A candidate intending to participate in the Program who exceeds the limits on personal funds or loans would be unable to demonstrate compliance with Program requirements, and consequently would not be eligible to receive a grant.
 
Personal Funds Do Not Constitute Qualifying Contributions
Chapter 157 makes clear that personal funds provided by candidates do not constitute qualifying contributions.  CONN. GEN. STAT. § 9-710(c).  The only personal funds such candidates may provide are strictly limited to the amounts set forth in section 9-710(c).  Therefore, candidates intending to participate in the Program are not allowed to make a qualifying contribution to their own candidate committees.     
 
This constitutes a declaratory ruling pursuant to Conn. Gen. Stat. § 4-176, and provides guidance about the loan and personal fund provisions of Conn. Gen. Stat. § 9-710.
 
This declaratory ruling is limited to addressing the specific issues raised.   Any further questions regarding the issues discussed in this declaratory ruling may be raised to the staff of the State Elections Enforcement Commission. 
 
Adopted this 12th day of September, 2007, by Order of the Commission.

                                                                           




Content Last Modified on 1/23/2009 2:07:48 PM