[Code of Federal Regulations]
[Title 11, Volume 1]
[Revised as of January 1, 2003]
From the U.S. Government Printing Office via GPO Access
[CITE: 11CFR116.8]

[Page 232-233]
 
                       TITLE 11--FEDERAL ELECTIONS
 
                 CHAPTER I--FEDERAL ELECTION COMMISSION
 
PART 116--DEBTS OWED BY CANDIDATES AND POLITICAL COMMITTEES--Table of Contents
 
Sec. 116.8  Creditor forgiveness of debts owed by ongoing committees; Commission review.

    (a) General requirements. A creditor may forgive the outstanding 
balance of a debt owed by an ongoing committee if the creditor and the 
ongoing committee have satisfied the requirements of 11 CFR 116.3 or 
116.5, as appropriate, regarding extensions of credit by commercial 
vendors and advances by committee staff and other individuals, and the 
debt has been outstanding for at least twenty-four months, and--
    (1) The creditor has exercised reasonable diligence in attempting to 
locate the ongoing committee and has been unable to do so; or
    (2) The ongoing committee--
    (i) Does not have sufficient cash on hand to pay the creditor;
    (ii) Has receipts of less than $1000 during the previous twenty-four 
months;
    (iii) Has disbursements of less than $1000 during the previous 
twenty-four months; and
    (iv) Owes debts to other creditors of such magnitude that the 
creditor could reasonably conclude that the ongoing committee will not 
pay this particular debt.
    (b) Procedures for forgiving debts. A creditor that intends to 
forgive a debt owed by an ongoing committee shall notify the Commission 
by letter of its intent. The letter shall demonstrate that the 
requirements set forth in paragraph (a) of this section are satisfied. 
The letter shall provide the following information--
    (1) The terms of the initial extension of credit and a description 
of the terms under which the creditor has extended credit to 
nonpolitical debtors of similar risk and size of obligation;
    (2) A description of the efforts made by the candidate or the 
ongoing committee to satisfy the debt;
    (3) A description of the remedies pursued by the creditor to obtain 
payment of the debt and a comparison to the remedies customarily pursued 
by the creditor in similar circumstances involving nonpolitical debtors; 
and
    (4) An indication that the creditor has forgiven other debts 
involving nonpolitical debtors in similar circumstances, if any.
    (c) Commission review. Upon the Commission's request, the ongoing 
committee or the creditor shall provide such additional information as 
the Commission may require to review the creditor's request. The 
Commission will review each request to forgive a debt to determine 
whether the candidate, the ongoing committee, and the creditor have 
complied with the requirements of 11 CFR part 116, and

[[Page 233]]

whether or not the forgiveness of the debt would result in an apparent 
violation of the Act or the Commission's regulations.