If a committee has net debts outstanding after an election is over, a campaign may accept contributions after the election to retire the debts provided that:
- The contribution is designated for that election (since an undesignated contribution made after an election counts toward the limit for the candidate’s upcoming election, unless the campaign requests
- The contribution does not exceed the contributor’s limit for the designated election; and
- The campaign has net debts outstanding for the designated election on the day it receives the contribution.
How to calculate net debts outstanding
A campaign’s net debts outstanding consist of unpaid debts incurred with respect to the particular election minus cash-on-hand plus the total amounts owed to the campaign in the form of credits, refunds of deposits, returns and receivables or a commercially reasonable estimate of the collectible amount, and loans exceeding $250,000 from the candidate’s personal funds.
Unpaid debts include the following:
- All outstanding debts and obligations,
- The estimated cost of raising funds to liquidate the debts, and
- If the campaign is terminating, estimated winding down costs (for example, office rental, staff salaries and office supplies).
Cash on hand consists of the resources available to pay the campaign’s total debts, including currency, deposited funds, traveler’s checks, certificates of deposit, treasury bills and any other investments valued at fair market value.
For the purpose of calculating net debts outstanding for the primary, cash-on-hand need not include contributions designated for the general.
Adjustment to net debts total
A campaign first calculates its net debts outstanding as of the day of the election. Thereafter, the campaign continually recalculates its total net debts outstanding as additional funds are received for, or spent on, the election for which the debt remains.
Contributions exceeding net debts
If, on the same day, a campaign receives several contributions that, together, exceed the amount needed to retire its debts, the campaign may:
- Accept a proportionate amount of each contribution and either refund the remaining amount or ask contributors to redesignate the excessive portions for another election; or
- Accept some contributions in full and either return or refund the others or seek redesignations or reattributions for them.