No Good Gift Goes Unreported: 130 New Campaign Finance Laws Since 2012

By Sarah E. Hunt, Esq., Manager, State Issues and Ethics Officer

Thirty-nine (39) states have enacted 130 new campaign finance laws since the completion of the 2012 election cycle. If you have not yet done so for the current cycle, please review your political giving program with your legal counsel to ensure it remains compliant.

The campaign finance law changes of most import to political donors are modifications to contribution limits. Nine (9) states, Alabama, Arizona, Connecticut, Illinois, Maryland, Minnesota, Montana, North Carolina and Wyoming, adjusted contribution limits in 2013. These cap increases are all substantial, often more than double the previous limits. In some cases, the legislature removed the caps altogether.

Note that a contribution cap increase does not imply that a state is now taking a more relaxed approach to campaign finance regulation. Oftentimes these increases came hand-in-hand with expanded disclosure requirements or new limitations on corporate donations. States more frequently increased contribution caps for donations to political and party committees than for individual candidate committees. When planning your giving in states that have just increased their contribution cap limits, carefully consider whether or not you are better served donating to leadership committees versus individual candidates.

Arizona’s legislature passed the most controversial contribution limit increase when it raised its limit to $2500. The previous limit was set by the people at the ballot box. Campaign finance reform advocates challenged the legal authority of the legislature to change the cap. The Arizona Supreme Court ultimately upheld the contribution cap increase, opening the door for more legislative changes to Arizona’s campaign finance law.

The judiciary was involved in Nebraska’s campaign finance law changes as well. The Nebraska Supreme Court declared unconstitutional the state’s Campaign Finance Limitation Act. The unicameral legislature responded by lowering from $250 to $100 the threshold for the required reporting of corporate campaign contributions. This change applies even to corporate contributors who make small in-kind donations of goods or services. If, for example, a local coffee house provides coffee and pastries for a candidate meet-and-greet in Nebraska, the value of the donated refreshments is now much more likely to exceed the reporting threshold.

Corporate contributions also continue to be a popular state legislative topic. Arkansas enacted H.J.R. 1009 (2013), which will ban corporate contributions to candidates if it is passed by the people at the ballot box in November 2014. Alabama went the opposite direction, and repealed its $500 limit on corporate contributions to candidates. Maryland and Maine redefined “business entity” for contribution limit purposes, and will now count as one entity multiple business entities that are controlled or owned by the same member or members.

The landmark United States Supreme Court case Citizens United continues to spark state level campaign finance legislation. Connecticut, North Dakota and South Dakota, citing Citizens United as a motivator, all enacted significant changes requiring more disclosures by political action committees or corporate donors. Illinois, New Jersey, Oregon, Utah and West Virginia passed resolutions expressing their philosophical opposition to the Citizens United ruling.

Almost all of the 39 states that recently amended their campaign finance laws made updates to disclosure requirements and penalty policies. Washington and Connecticut have engaged in rulemakings or passed legislation that explicitly regulate internet advocacy and on-line electioneering. States are also commissioning campaign finance working groups, so more legislative proposals are likely.

Active donors who play in multiple states must be vigilant in the oft-changing world of state campaign finance law. If you have questions or thoughts about creating an effective, compliant, multiple-state giving program, I would be happy to hear from you at seh@stateside.com.

***

Sarah E. Hunt, Esq. is Manager, State Issues and Ethics Officer at Stateside Associates. She works with clients on a wide range of state and local government affairs issues. Sarah also helps Stateside and its clients navigate lobbying ethics, comply with campaign finance laws, and develop political giving strategies. She practiced campaign finance, election law, and non-profit management with a boutique political law firm for several years before her work at Stateside Associates.

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