3016 TERMINATION OF POLITICAL COMMITTEES, CONSTITUENT-SERVICE PROGRAMS, AND STATEHOOD FUNDS

3016.1 A final R&E Report and a verified statement of termination, on a form prescribed by the Director, shall be filed upon termination of any political committee (committee), constituent-service program (program), or Statehood Fund (fund).

3016.2 An elected official shall terminate a program or fund if the elected official:

1. (a) Fails to win re-election;
2. (b) Resigns; or
3. (c) Becomes ineligible to serve, by operation of law.

3016.3 An authorized committee shall terminate, upon satisfaction of all debts and obligations, when the purpose for which the committee was organized ceases.

3016.4 Any committee, program, or fund may terminate its reporting requirements by filing a final R&E Report; provided, that the committee, program, or fund:

1. (a) Has ceased to receive contributions or make expenditures;
2. (b) Has extinguished all debts and obligations;
3. (c) Is not involved in any enforcement, audit, or litigation action with the Office of Campaign Finance; and
4. (d) Has disbursed all surplus funds in accordance with § 3015.

3016.5 A committee, program, or fund that cannot extinguish its outstanding debts and obligations may qualify to terminate its reporting requirements by:

1. (a) Settling its debts for less than the full amount owed to its creditors; or
2. (b) Demonstrating that a debt is unpayable.

3016.6 The types of debts that are subject to debt settlement include:

1. (a) Amounts owed to commercial vendors;
2. (b) Debts arising from advances by individuals;
3. (c) Salary owed to committee or program employees; and
4. (d) Loans owed to political committees.

3016.7 The types of debts that are not subject to debt settlement include:

(a) Disputed debts; and

(b) Bank loans.

3016.8 A qualifying committee, program, or fund shall be settled if:

(a) Credit was initially extended in the ordinary course of business;

(b) Reasonable efforts, including, for example, fundraising, reducing overhead costs, and liquidating assets, were undertaken to satisfy the outstanding debt; and

(c) The creditor made the same efforts to collect the debt as those made to collect debts from a non-political debtor in similar circumstances.

3016.9 Once a committee, program, or fund has reached an agreement with a creditor, the treasurer shall file a debt settlement proposal with the Director on a form prescribed by the Director.

3016.10 Following receipt of the debt settlement proposal, the Director shall:

(a) Review each debt settlement proposal for substantial compliance with the Act; and

(b) Notify the committee or program within thirty (30) days of its approval or disapproval.

3016.11 A debt may be considered unpayable, under § 3016.5(b), if:

(a) The debt has been outstanding for at least twenty-four (24) months;

(b) The creditor is out of business, and no other entity has the right to collect the amount owed; and

(c) The creditor cannot be located after best efforts to do so.

3016.12 A committee, program, or fund may apply to the Director to determine whether a specific debt may be unpayable upon a showing that best efforts to locate the creditor have been made.

3016.13 For purposes of this section, the term "Best efforts" shall include the following:

(a) Ascertaining of the creditor's current address and telephone number; and

(b) Contacting the creditor by registered or certified mail, in person, or by telephone.

3016.14 The reporting obligation of a committee, program, or fund ends when the Director notifies the committee, program, or fund that the final Report has been

approved, and the official record closed.

SOURCE: Final Rulemaking published at 45 DCR 3161, 3180-82 (May 20, 1998); as amended by Final Rulemaking published at 57 DCR 2229, 2248 (March 19, 2010); as amended by Final Rulemaking published at 60 DCR 1402 (February 8, 2013); as amended by Final Rulemaking published at 60 DCR 11864 (August 16, 2013).