Definition
The balance of contributions given to a candidate for a specific election that remain after the election and are not needed to pay off that election's campaign debts. They can be used in limited ways:
- Returned to contributors, so long as the amount returned to a donor does not exceed the aggregate amount contributed. Refunds of contributions made by the candidate to his or her own campaign are subject to restriction.
- Transferred without limit to a political party or legislative caucus committee;
- Held for use in a future campaign for election 1) to the same office last sought, or 2) to a different office, if the campaign obtains written permission from the contributors of the surplus to use their contributions to seek this different office.
- Transferred to the candidate's personal account as payment for earnings lost as a result of campaigning, so long as the lost earnings can be documented, the payment does not exceed what the candidate would have otherwise earned, and all payments are properly recorded and reported.
- Donated to a charitable organization registered as required by law with the Secretary of State's Office.
- Transmitted to the state treasurer for deposit in the general fund, the oral history, state library, and archives account under RCW 43.07.380, or the legislative international trade account under RCW 43.15.050, as specified by the candidate or political committee.
- Deposited into a separate Surplus Funds Account and then used to pay non-reimbursed public office related expenses* or for any of the six purposes outlined above.
Funds remaining after an election are no longer surplus once they are mingled with new contributions for a future election or used to make expenditures for a future election campaign.
Disbursement of surplus funds is reported as an expenditure on Schedule A to the C-4 report. These disposal options also apply to the disposal of items purchased by the campaign. When campaign assets are disposed of, attach an explanation to the C-4 report. (For example, if a left-over computer was donated to the county party central committee, the explanation would include the date, the name of the recipient, the item's description and its fair market value.) WAC 390-16-221.
Who Needs to Set Up a Surplus Funds Account?
Any elected official who wants to spend surplus campaign funds for non-reimbursed public office related expenses must set up a Surplus Funds Account in order to make these types of expenditures. The account also may be used for the other six legally permissible options for disposing of surplus campaign funds found in RCW 42.17A.430 and listed above. However, the dangers of not setting up a separate Surplus Funds Account and simply disposing of surplus funds out of the now inactive campaign account are:
- the funds can't be used for non-reimbursed public office related expenses*; and
- once new campaign monies are co-mingled with any existing surplus balance, or the surplus is carried forward to a new campaign, or expenditures triggering candidacy for a new campaign are made out of the account, none of the funds in the account is considered surplus funds and the money may only be used for expenditures that are directly related to the new campaign.
*A "non-reimbursed public office-related expense" is an expenditure incurred by an elected or appointed official, or a member of his or her immediate family, solely because of being an official. WAC 390-05-518 If the official incurs a non-reimbursed public office-related expense that also, in any manner, could be considered personal in nature, PDC staff recommends paying the expenditure with personal funds, and then seeking reimbursement from a surplus funds account only for that specific portion that is directly related to his or her elected office.
Opening the Account
Take all or a portion of truly surplus funds and open a separate Surplus Funds Account (or transfer latest surplus into an already existing Surplus Funds Account). The campaign reports an expenditure to show that a transfer has occurred.
Disclosure
When the account is established by opening a separate bank account:
- file a C-1 giving the Candidate's Name plus the words "Surplus Funds Account;"
- transfer all or a portion of the eligible surplus funds into the new or existing Surplus Funds Account (which should be a checking account -- rather than a savings account -- if there will be more than infrequent expenditures out of it); and
- file C-4 reports along with Schedule A's showing any transfers into the account at the top of the Schedule A and also itemizing all expenditures out of the account on the form. File a C-4 for the Surplus Funds Account monthly by the 10th of the month, covering the preceding calendar month, for any month in which you transferred in or spent over $200. If over $200 in activity does not occur in a month, the next report is triggered when over $200 has been transferred into the account or spent out of it since the last report was filed. Then, file the C-4 by the 10th of the following month.