Significant campaign finance reform legislation cleared the Maryland House of Delegates Thursday, and is now under consideration by a committee of the Maryland Senate. The Campaign Finance Reform Act of 2013 (HB 1499 and SB 1039) responds to recommendations of the recently convened Maryland Commission to Study Campaign Finance Law. The bill addresses many of the recommendations set forth in the Commission’s final report, issued in December 2012. If enacted, the changes will become effective January 1, 2015.  Highlights of the bill include:

  • Contribution and Transfer Limits. Per recipient, per election cycle contribution limits will increase from $4,000 to $6,000 per recipient, and the limit on per cycle aggregate contributions will increase from $10,000 to $24,000. Contribution and “transfer” limits will be indexed for inflation, with adjustments made at the start of every election cycle.
  • Business Entity Contributions. Two or more business entities (i.e., corporations, sole proprietorships, partnerships, LLCs, etc.) that are under common ownership or control will be treated as a single contributor for purposes of the contribution limits, closing a loophole in the current attribution rule, which applies only to corporate entities.
  • Out-of-state PACs.  Nonfederal out-of-state PACs will be subject to Maryland registration and reporting requirements.
  • Independent Expenditures and Electioneering Communications. New 48-hour registration and reporting requirements will be triggered when individuals or groups make independent expenditures (i.e., communications expressly advocating election or defeat of a candidate or ballot measure) or disbursements for electioneering communications. Donor disclosure will be expanded to require identification of any person making cumulative donations to the filer of $10,000 or more during the reporting period, regardless of whether the donations were made for the purpose of furthering independent expenditures or electioneering communications. The types of communications subject to independent expenditure and electioneering communication reporting are also broadened to include, for example, certain mass email and text blasts.
  • Pay-to-play.  The law governing disclosure of political contributions by government contractors will be refined to narrow the scope of reportable contributions and the “doing public business” threshold. Reporting will be done electronically, and reports will be made available to the public online. Contractors will be required to certify their compliance with the reporting requirements to the agencies with which they do business, and will be subject to new detailed record-keeping requirements.
  • Enforcement. The bill gives the State Board of Elections additional tools to enforce the campaign finance laws, including expanded audit authority and the authority to issue civil penalties for certain violations. The statute of limitations for prosecuting criminal violations is also extended from 2 to 3 years.

We will be tracking the bill and will supplement this post as the bill makes its way through the legislative process.