§ 163-278.320. Permitted uses of legal expense funds.
Overview of Statute
Legal expense funds can only be used for reasonable purposes and upon closing of a fund the money can be allocated to any of five defined funds or organizations.
Statute
(a) A legal expense fund may be used for reasonable expenses actually incurred by the elected officer in relation to a legal action or potential legal action brought by or against the elected officer in that elected officer’s official capacity. The elected officer’s campaign itself shall not be funded from a legal expense fund.
(b) Upon closing a legal expense account, the treasurer shall distribute the remaining monies in the legal expense fund to any of the following:
(1) The Indigent Persons’ Attorney Fee Fund under Article 36 of Chapter 7A of the General Statutes.
(2) The North Carolina State Bar for the provision of civil legal services for indigents.
(3) Payments to an organization described in section 170(c) of the Internal Revenue Code of 1986 (26 U.S.C. § 170(c)), provided that the candidate or the candidate’s spouse, children, parents, brothers, or sisters are not employed by the organization.
(4) To return all or a portion of a legal expense donation to the donor.
(5) Payment to the Escheat Fund established by Chapter 116B of the General Statutes.
(2007-349, s. 1; 2009-534, s. 2(g); 2017-6, s. 3; 2018-146, s. 3.1(a), (b).)
- Cross-References:
- Legal Expense Funds
1. Definition for Legal action.
Legal action. – A formal dispute in a judicial, legislative, or administrative forum, including but not limited to, a civil or criminal action filed in a court, a complaint or protest filed with a board of elections, an election contest filed under Article 3 of Chapter 120 of the General Statutes or G.S. 163A-1182, or a complaint filed with the State Board or Legislative Ethics Committee. The term “legal action” also includes investigations made or conducted before the commencement of any formal proceedings. The term “legal action” does not include the electionitself or the campaign for election.
2. Definition for Elected officer
Elected officer. – Any individual serving in or seeking a public office. An individual is seeking a public office when that individual has filed any notice, petition, or other document required by law or local act as a condition of election to public office. An individual continues to be an elected officer for purposes of this Article as long as a legal action commenced while the individual was an elected officer continues. If a legal action is commenced after an individual ceases to serve in or seek public office but the legal action concerns subject matter in the individual’s official capacity as an elected officer, for purposes of this Article, that individual is an elected officer as long as that legal action continues.
3. Definition for Official capacity
Official capacity. – Related to or resulting from the campaign for public office or related to or resulting from holding public office. “Official capacity” is not limited to “scope and course of employment” as used in G.S. 143-300.3.
4. Definition for Legal expense donation
Legal expense donation. – A legal expense donation means any advance, conveyance, deposit, distribution, transfer of funds, loan, payment, gift, subscription of money, or anything of value whatsoever, and any contract, agreement, or other obligation to make a contribution to a legal expense fund for a permitted use as provided in G.S. 163A-1570. The term “legal expense donation” does not include either of the following:
a. The provision of legal services to an elected officer by the State or any of its political subdivisions when those services are authorized or required by law, or
b. The provision of free or pro bono legal advice or legal services, provided that any costs incurred or expenses advanced for which clients are liable under other provisions of law shall be deemed legal expense donations.
5. Definition for State
“State” means 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.
6. Definition for person
The term “person” means any business entity, corporation, insurance company, labor union, or professional association.
7. Definition for Office
(4) Office. – The elected office for which the candidate has filed or petitioned.
(2006-155, s. 1; 2006-259, s. 48(a); 2017-6, s. 3.)
8. Definition for Payment
Payment. – Any money, thing of value, or economic benefit conveyed to the
lobbyist for lobbying, other than reimbursement of actual travel,
administrative expenses, or subsistence.
9. Definition for candidate
The term “candidate” means any individual who, with respect to a public office listed in G.S. 163A-1411(80), has taken positive action for the purpose of bringing about that individual’s nomination, retention, or election to public office. Examples of positive action include any of the following:
a. Filing a notice of candidacy, filing a notice to be retained, or a petition requesting to be a candidate.
b. Being certified as a nominee of a political party for a vacancy.
c. Otherwise qualifying as a candidate in a manner authorized by law.
d. Making a public announcement of a definite intent to run for public office in a particular election.
e. Receiving funds or making payments or giving the consent for anyone else to receive funds or transfer anything of value for the purpose of bringing about that individual’s nomination or election to office. Transferring anything of value includes incurring an obligation to transfer anything of value. Status as a candidate for the purpose of this Article continues if the individual is receiving contributions to repay loans or cover a deficit or is making expenditures to satisfy obligations from an election already held. Special definitions of “candidate” and “candidate campaign committee” that apply only in Part 2 of this Article are set forth in G.S. 163A-1475.
10. Definition for treasurer
The term “treasurer” means an individual appointed by a candidate, political committee, or referendum committee as provided in G.S. 163A-1412 or G.S. 163A-1496. (1973, c. 1272, s. 1; 1975, c. 798, ss. 5, 6; 1979, c. 500, s. 1; c. 1073, ss. 1-3, 19, 20; 1981, c. 837, s. 1; 1983, c. 331, s. 6; 1985, c. 352, ss. 1-3; 1997-515, ss. 4(a)-(c), 7(b)-(d); 1999-31, ss. 1(a), (b), 2(a)-(c), 3, 4(a); 1999-424, s. 6(a), (b); 2002-159, s. 55(n); 2003-278, s. 5; 2004-125, s. 3; 2004-127, s. 15; 2004-203, s. 12(b); 2005-430, s. 10; 2006-264, s. 23; 2007-391, s. 3; 2008-150, s. 6(a); 2008-187, s. 33(a); 2009-534, ss. 1, 3(a), (b); 2010-170, s. 1; 2011-31, s. 20; 2013-381, s. 50.1; 2015-66, s. 8(a); 2015-258, ss. 3(b), (b1); 2015-264, ss. 81(c), (d); 2017-6, s. 3.)
11. Definition for Candidate
“Candidate” means any individual who, with respect to a public office listed in G.S. 163A-1411(80), has filed a notice of candidacy, notice of retention, or a petition requesting to be a candidate, or has been certified as a nominee of a political party for a vacancy, or has otherwise qualified as a candidate in a manner authorized by law, or has filed a statement of organization under G.S. 163A-1412 and is required to file periodic financial disclosure statements under G.S. 163A-1418.