1-45-106. Unexpended campaign contributions
Overview of Statute
In accordance with the state constitution, candidate committees may contribute unexpended campaign contributions to a political party, a candidate committee by the same candidate for another office, a charitable organization, or for expenditures related to voter outreach and postsecondary education scholarships. A candidate committee may also return contributions to contributors, use the funds for official office expenses, or retain the contributions for a future election pursuant to certain disclosure requirements. These contributions, however, can never be used for personal purposes not related to supporting the candidate’s election. A candidate committee must spend these unexpended campaign contributions within nine years of the date that the officer holder’s term expires or the election day, whichever is later.
Issue committees may donate unexpended contributions to a charitable organization or return the funds to contributors.
<See 2020 Colorado Executive Orders D08-20 (2020 CO EO D08-20), D36-20 (2020 CO EO D36-20), and D61-20 (2020 CO EO D61-20) related to COVID-19 directing that the Secretary of State may suspend any requirement for in-person filings of forms, statements, applications or any other documents with the Secretary of State’s office.>
(1)(a)(I) Subject to the requirements of section 3(3)(e) of article XXVIII of the state constitution, unexpended campaign contributions to a candidate committee may be:
(A) Contributed to a political party;
(B) Contributed to a candidate committee established by the same candidate for a different public office, subject to the limitations set forth in section 3 of article XXVIII of the state constitution, if the candidate committee making such a contribution is affirmatively closed by the candidate no later than ten days after the date such a contribution is made;
(C) Donated to a charitable organization recognized by the internal revenue service;
(D) Returned to the contributors, or retained by the committee for use by the candidate in a subsequent campaign.
(II) Except as authorized by section 1-45-103.7(6.5), in no event shall contributions to a candidate committee be used for personal purposes not reasonably related to supporting the election of the candidate.
(III) A candidate committee for a former officeholder or a person not elected to office shall expend all of the unexpended campaign contributions retained by such candidate committee, for the purposes specified in this subsection (1), no later than nine years from the date such officeholder’s term expired or from the date of the election at which such person was a candidate for office, whichever is later.
(b) In addition to any use described in paragraph (a) of this subsection (1), a person elected to a public office may use unexpended campaign contributions held by the person’s candidate committee for any of the following purposes:
(I) Voter registration;
(II) Political issue education, which includes obtaining information from or providing information to the electorate;
(III) Postsecondary educational scholarships;
(IV) To defray reasonable and necessary expenses related to mailings and similar communications to constituents;
(V) Any expenses that are directly related to such person’s official duties as an elected official, including, but not limited to, expenses for the purchase or lease of office equipment and supplies, room rental for public meetings, necessary travel and lodging expenses for legislative education such as seminars, conferences, and meetings on legislative issues, and telephone and pager expenses.
(2) Deleted by Laws 2000, Ch. 36, § 4, eff. March 15, 2000.
(3) Unexpended contributions to an issue committee may be donated to any charitable organization recognized by the Internal Revenue Service or returned to the contributor.
(4) This section shall apply to unexpended campaign contributions transferred from a political committee formed prior to January 15, 1997, to a candidate committee registering after January 15, 1997, pursuant to section 1-45-108.
(5) Notwithstanding any other provision of law, any unexpended campaign contributions retained by a candidate committee for use in a subsequent election cycle shall be counted and reported as contributions from a political party in any subsequent election in accordance with the requirements of section 3(3)(e) of article XXVIII of the state constitution.
Source: Initiated 96: Entire article R&RE, effective upon proclamation of the Governor, January 15, 1997.L. 98: (1) amended, p. 955, § 3, effective May 27.L. 2000: (1)(a) and (2) amended, p. 123, § 4, effective March 15. L. 2003: IP(1)(a)(I) amended and (5) added, p. 2157, § 2, effective June 3. L. 2010: (1)(a)(I)(B) amended, (SB 10-041), ch. 151, p. 522, § 1, effective July 1. L. 2019: (1)(a)(I)(D)(II) amended and prelude added, (SB 19-229), ch. 354, § 2, effective Sept. 1.
Holding that subsection (2) is constitutional. The state’s interest in preventing avoidance of valid contribution limits by use of funds carried over from prior campaigns is both compelling and served by the restriction set forth in subsection (2). This provision is narrowly tailored to accomplish the state’s legitimate interest. Citizens for Responsible Gov’t State Political Action Comm. v. Buckley, 60 F. Supp. 2d 1066 (D. Colo. 1999).
Holding that a candidate’s disclosure report is not required to report unexpended campaign funds at the end of an election cycle as contributions from a political party. To accomplish the purpose of subsection (5), it is necessary only that a candidate committee report the amount of unexpended campaign funds on hand at the end of an election cycle. To report money already on hand as a fictional, new contribution from an unidentified political party would artificially inflate the amount of funds reportedly available to a candidate committee and would be confusing to those who read the report. Williams v. Teck, 113 P.3d 1255 (Colo. App. 2005).
Holding that the candidate committee was permitted to use unexpended contributions to pay elected state senator’s legal fees. Although legal fees are not specifically mentioned as permissible expenses under subsection (1)(b)(V), the words “including, but not limited to,” indicate that the statute merely illustrates the kinds of expenses that may be regarded as directly related to an elected official’s duties. Here, the legal fees may properly be characterized as directly related to official duties of elected state senator. The senator’s duties include filing periodic reports with the secretary of state, and the fees were reasonably necessary to demonstrate that senator and his or her committee had properly performed this duty. Williams v. Teck, 113 P.3d 1255 (Colo. App. 2005).
- Campaign Finance
1. Definition for Contribution
(a) (I) The payment, loan, pledge, gift, or advance of money, or guarantee of a loan, made to any candidate committee, issue committee, political committee, small donor committee, or political party;
(II) Any payment made to a third party for the benefit of any candidate committee, issue committee, political committee, small donor committee, or political party;
(III) The fair market value of any gift or loan of property made to any candidate committee, issue committee, political committee, small donor committee or political party;
(IV) Anything of value given, directly or indirectly, to a candidate for the purpose of promoting the candidate’s nomination, retention, recall, or election.
(b) “Contribution” does not include services provided without compensation by individuals volunteering their time on behalf of a candidate, candidate committee, political committee, small donor committee, issue committee, or political party; a transfer by a membership organization of a portion of a member’s dues to a small donor committee or political committee sponsored by such membership organization; or payments by a corporation or labor organization for the costs of establishing, administering, and soliciting funds from its own employees or members for a political committee or small donor committee.
Section 2(5) of article XXVIII of the state constitution.
C.R.S. § 1-45-103 further adds:
(b) “Contribution” includes, with regard to a contribution for which the contributor receives compensation or consideration of less than equivalent value to such contribution, including, but not limited to, items of perishable or nonpermanent value, goods, supplies, services, or participation in a campaign-related event, an amount equal to the value in excess of such compensation or consideration as determined by the candidate committee.
(c) “Contribution” also includes:
(I) Any payment, loan, pledge, gift, advance of money, or guarantee of a loan made to any political organization;
(II) Any payment made to a third party on behalf of and with the knowledge of the political organization; or
(III) The fair market value of any gift or loan of property made to any political organization.
C.R.S. § 1-45-103.
2. Definition for Election Cycle
(a) The period of time beginning thirty-one days following a general election for the particular office and ending thirty days following the next general election for that office;
(b) The period of time beginning thirty-one days following a general election for the particular office and ending thirty days following the special legislative election for that office; or
(c) The period of time beginning thirty-one days following the special legislative election for the particular office and ending thirty days following the next general election for that office.
Section 2(6) of article XXVIII of the state constitution.
3. Definition for Issue committee
Any person, other than a natural person, or any group of two or more persons, including natural persons:
(I) That has a major purpose of supporting or opposing any ballot issue or ballot question; or
(II) That has accepted or made contributions or expenditures in excess of two hundred dollars to support or oppose any ballot issue or ballot question.
(b) “Issue committee” does not include political parties, political committees, small donor committees, or candidate committees as otherwise defined in this section.
(c) An issue committee shall be considered open and active until affirmatively closed by such committee or by action of the appropriate authority.
Section 2(10) of article XXVIII of the state constitution.
(b) For purposes of section 2 (10) (a) (I) of article XXVIII of the state constitution, “major purpose” means support of or opposition to a ballot issue or ballot question that is reflected by:
(I) An organization’s specifically identified objectives in its organizational documents at the time it is established or as such documents are later amended; or
(II) An organization’s demonstrated pattern of conduct based upon its:
(A) Annual expenditures in support of or opposition to a ballot issue or ballot question; or
(B) Production or funding, or both, of written or broadcast communications, or both, in support of or opposition to a ballot issue or ballot question.
(c) The provisions of paragraph (b) of this subsection (12) are intended to clarify, based on the decision of the Colorado court of appeals in Independence Institute v. Coffman, 209 P.3d 1130 (Colo. App. 2008), cert. denied, — U.S. —, 130 S. Ct. 165, 175 L. Ed. 479 (2009), section 2 (10) (a) (I) of article XXVIII of the state constitution and not to make a substantive change to said section 2 (10) (a) (I).
C.R.S. § 1-45-103.
4. Definition for Political party
Any group of registered electors who, by petition or assembly, nominate candidates for the official general election ballot. “Political party” includes affiliated party organizations at the state, county, and election district levels, and all such affiliates are considered to be a single entity for the purposes of this article, except as otherwise provided in section 7. Section 2(13) of article XXVIII of the state constitution.
5. Definition for Candidate committee
A person, including the candidate, or persons with the common purpose of receiving contributions or making expenditures under the authority of a candidate. A contribution to a candidate shall be deemed a contribution to the candidate’s candidate committee. A candidate shall have only one candidate committee. A candidate committee shall be considered open and active until affirmatively closed by the candidate or by action of the secretary of state. Section 2(3) of article XXVIII of the state constitution.
6. Definition for Political committee
Any person, other than a natural person, or any group of two or more persons, including natural persons that have accepted or made contributions or expenditures in excess of $200 to support or oppose the nomination or election of one or more candidates.
(b) “Political committee” does not include political parties, issue committees, or candidate committees as otherwise defined in this section.
(c) For the purposes of this article, the following are treated as a single political committee:
(I) All political committees established, financed, maintained, or controlled by a single corporation or its subsidiaries;
(II) All political committees established, financed, maintained, or controlled by a single labor organization; except that, any political committee established, financed, maintained, or controlled by a local unit of the labor organization which has the authority to make a decision independently of the state and national units as to which candidates to support or oppose shall be deemed separate from the political committee of the state and national unit;
(III) All political committees established, financed, maintained, or controlled by the same political party;
(IV) All political committees established, financed, maintained, or controlled by substantially the same group of persons.
Section 2(12) of article XXVIII of the state constitution.
7. Definition for Unexpended campaign contributions
The balance of funds on hand in any candidate committee at the end of an election cycle, less the amount of all unpaid monetary obligations incurred prior to the election in furtherance of such candidacy. Section 2(15) of article XXVIII of the state constitution.
8. Definition for State
A state of the United States, the District of Columbia, Puerto Rico, the United States Virgin Islands, or any territory or insular possession subject to the jurisdiction of the United States. C.R.S. § 1-8.3-102.
9. Definition for Title
A brief statement that fairly and accurately represents the true intent and meaning of the proposed text of the initiative.
10. Definition for Person
Any natural person, partnership, committee, association, corporation, labor organization, political party, or other organization or group of persons. Section 2(11) of article XXVIII of the state constitution.
11. Definition for Section
A bound compilation of initiative forms approved by the secretary of state, which shall include pages that contain the warning required by section 1-40-110 (1), the ballot title, the abstract required by section 1-40-110 (3), and a copy of the proposed measure; succeeding pages that contain the warning, the ballot title, and ruled lines numbered consecutively for registered electors’ signatures; and a final page that contains the affidavit required by section 1-40-111 (2). Each section shall be consecutively prenumbered by the petitioner prior to circulation.
12. Definition for Election
Any election under the “Uniform Election Code of 1992” or the “Colorado Municipal Election Code of 1965”, article 10 of title 31, C.R.S. C.R.S. § 1-7.5-103.
13. Definition for Secretary
The Colorado secretary of state. C.R.S. § 1-1.5-102.
14. Definition for Committee
The committee of signers described in section 1-12-108(2). C.R.S. § 1-12-100.5.
15. Definition for Candidate
Any person who seeks nomination or election to any state or local public office that is to be voted on in this state at any primary election, general election, school district election, special district election, or municipal election. “Candidate” also includes a judge or justice of any court of record who seeks to be retained in office pursuant to the provisions of section 25 of article VI. A person is a candidate for election if the person has publicly announced an intention to seek election to public office or retention of a judicial office and thereafter has received a contribution or made an expenditure in support of the candidacy. A person remains a candidate for purposes of this article so long as the candidate maintains a registered candidate committee. A person who maintains a candidate committee after an election cycle, but who has not publicly announced an intention to seek election to public office in the next or any subsequent election cycle, is a candidate for purposes of this article. Section 2(2) of article XXVIII of the state constitution.
Case Name: Williams v. Teck
Citation: 113 P.3d 1255 (Colo. App. 2005)
Case URL: https://www.ravellaw.com/opinions/b837539b988847244293e956229bee83
Case Summary: Holding that candidate committee satisfied reporting requirements with regard to unexpended contributions; candidate committee could properly use unexpended contributions to pay senator's legal fees; and candidate committee was not required to terminate after senator was elected to his final term.
Case Name: Citizens for Responsible Gov’t State Political Action Comm. v. Buckley
Citation: 60 F. Supp. 2d 1066 (D. Colo. 1999)
Federal District Court: District of Colorado
Case URL: https://www.ravellaw.com/opinions/44ef1e036180bb3bb8719139e6b06d08
Case Summary: Holding that the following subsection of the Fair Campaign Practices Act was constitutional: "Any unexpended campaign contributions retained by a candidate committee for use in a subsequent election cycle shall be counted and reported as contributions from political committees in any subsequent election for purposes of section 1–45–104(1) no matter how those contributions were originally classified," because (1) "the State's interest in preventing avoidance of valid contribution limits by use of carryovers is both compelling and served by this restriction" and (2) "[t]his provision is narrowly tailored to accomplish the State's legitimate interest."