SB 415
Department of Legislative Services
Maryland General Assembly
2021 Session
FISCAL AND POLICY NOTE
Enrolled - Revised
Senate Bill 415 (Senator Pinsky)
Education, Health, and Environmental Affairs Ways and Means
and Budget and Taxation
Public Financing Act - Matching Fund Revisions (Maryland Fair Elections Act)
This bill modifies the Public Financing Act (PFA), primarily by (1) modifying the
qualifying requirements and matching contributions and (2) mandating appropriations to
the Fair Campaign Financing Fund (FCFF) of $4 million in fiscal 2023 and an amount
sufficient to fully fund specified numbers of gubernatorial tickets under PFA in future
elections. The bill takes effect June 1, 2021.
Fiscal Summary
State Effect: General fund expenditures increase by $2.2 million in FY 2022, $4.0 million
in FY 2023, and an indeterminate amount in FY 2026, to appropriate money to FCFF.
Special fund revenues for FCFF increase by $2.2 million in FY 2022, $4.0 million in
FY 2023, and an indeterminate amount in FY 2026; and special fund expenditures for
public campaign matching funds increase by up to $10.0 million across FY 2022 and 2023,
and by an indeterminate amount in FY 2026. The bill establishes a mandated
appropriation for FY 2023, FY 2026, and each subsequent fiscal year that includes a
gubernatorial primary election.
Local Effect: The bill does not materially affect local government finances.
Small Business Effect: Potential meaningful.
 Analysis
Bill Summary:
Notice of Intent to Participate
Before receiving a “private contribution” under PFA, a gubernatorial ticket must (1) by the
deadline to file a certificate of candidacy, file with the State Board of Elections (SBE) a
notice of intent to participate as a publicly financed candidate for both the primary and
general elections and (2) establish a campaign finance entity for complying with the
requirements of PFA.
The campaign finance entity may accept only:
 a “private contribution” (a contribution or series of contributions from an individual
that does not exceed $250 in the aggregate in an election cycle);
 an “eligible private contribution” (a monetary private contribution from an
individual who is a resident of the State that does not exceed $250 in the aggregate
in an election cycle that is accompanied by specified documentation of the donor
attesting that the contribution is made with the personal funds of the donor);
 a public contribution; and
 contributions or loans from a member of a gubernatorial ticket or the spouse of a
member of a gubernatorial ticket of not more than a combined total of $50,000.
Qualifying for Public Financing
To qualify as an eligible gubernatorial ticket (eligible to receive a public contribution), a
gubernatorial ticket must collect, within the qualifying period, at least (1) 1,500 eligible
private contributions and (2) an aggregate total of $120,000.
The qualifying period is from the first day of the election cycle for a gubernatorial election
until (1) the first Monday in May of the election year, for principal political party
candidates and (2) the first Monday in August of the election year, for all other participating
candidates.
Public Contribution Matching Amounts
The public contribution matching amounts available to each gubernatorial ticket are shown
in Exhibit 1. The total public contribution payable to a gubernatorial ticket for either a
primary or general election may not exceed $3.0 million. A gubernatorial ticket that is
unopposed in a primary election receives one-third of the public contribution amount the
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gubernatorial ticket would otherwise be entitled to receive. If a gubernatorial ticket
withdraws from participation in the program after receiving a public contribution, the full
amount of any public contribution received, with specified interest, must be repaid.
SBE must authorize distribution of money to gubernatorial tickets in accordance with the
matching amounts, and regulations adopted by SBE, on a continuing basis, upon
certification that a gubernatorial ticket has met the qualifying requirements. Distributions
may not begin earlier than January 1 of the year of the election.
Exhibit 1
Public Contribution Matching Amounts
Portion of Eligible Public Contribution Matching
Private Contribution Amount (Per Each Dollar of an
(Maximum of $250) Eligible Private Contribution)
First $50 $8
Second $50 6
Third $50 2
Remaining $100 0
Funding of the Public Financing Act
Under existing law and under the bill, PFA is supported by FCFF. The bill requires SBE,
by June 30 of the third year immediately preceding a year of a gubernatorial election, to
determine whether the balance of the fund is sufficient to provide for a full contribution
for:
 in a primary election, two gubernatorial tickets; and
 in a general election, one gubernatorial ticket.
If the balance of the fund is determined to be insufficient to provide those public
contributions:
 by August 1 of the third year immediately preceding a year of a gubernatorial
election, SBE must send a notice to the Governor of the amount of money needed
to provide the above-described public contributions; and
 the Governor must include in the annual budget bill for the appropriate fiscal year
an appropriation in an amount equal to the amount submitted to the Governor by
SBE.
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Independent of those requirements, for fiscal 2023 only, the Governor must include in the
annual budget bill an appropriation of at least $4.0 million to the fund.
Except with respect to the $4.0 million appropriated in fiscal 2023, if general funds are
appropriated to the fund under the provisions above, after the gubernatorial election SBE
must authorize repayment to the general fund of the amount that exceeds the amount
necessary to provide for a full contribution for eligible candidates described above.
Civil Penalty Authority
Existing criminal penalties apply to violations of PFA, but the bill also authorizes SBE to
impose civil penalties of up to $1,000 per violation, for certain violations. The bill specifies
various procedures applicable to imposing a civil penalty, including a right to a trial in the
District Court, that are similar to those under SBE’s existing civil penalty authority for
certain violations under State campaign finance law. The civil penalties are distributed to
FCFF.
Current Law: PFA provides for a system of public financing of elections for candidates
for Governor and Lieutenant Governor. The Act established FCFF, and the fund is
administered by the Comptroller. An income tax checkoff on the individual income tax
return form that allowed an individual to contribute up to $500 to the fund on the
individual’s tax return was repealed under the Budget Reconciliation and Financing Act
of 2010 (Chapter 484). Chapter 312 of 2015, however, reinstituted a tax checkoff on the
individual income tax return form without a limit on the amount of contributions that may
be made and it also established certain other sources of revenue for the fund, including
various penalties, fines, and fees imposed under State election law.
To qualify for public funding under PFA, a gubernatorial ticket must raise “seed money”
equal to 10% of the expenditure limit for eligible tickets in the election. The expenditure
limit is calculated for each election using a formula based on the population of the State
and inflation. The limit applies separately to each primary and general election. For 2018,
the expenditure limit was $2,798,370. Accordingly, the amount of seed money a qualifying
ticket was required to raise in 2018 was $279,837.
Seed money must be raised in the form of “eligible private contributions,” which are
contributions of $250 or less from individuals. Contributions from business entities or
political committees do not qualify as eligible private contributions. Once a ticket has
qualified by raising seed money, public funds are disbursed for the primary election on a
matching basis. For a ticket with opposition, the ticket receives $1 in public funds for each
$1 in eligible private contributions it raises. For a ticket without opposition, the ticket
receives $1 in public funds for each $3 in eligible private contributions it raises.
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A participating ticket may accept contributions of more than $250 or contributions from
business entities or political committees, but these funds are not seed money, may not be
matched with public funds, and count toward the ticket’s expenditure limit for the election.
If a participating ticket wins the primary election, it is entitled to receive public funds for
the general election equal to the expenditure limit for the election. There is no requirement
to raise eligible private contributions to receive public funds for the general election.
Any private contributions a participating ticket raises in the general election will count
toward its expenditure limit for the election and correspondingly reduce the amount of
public funds the ticket may spend. Expenditures by the State or local central committee of
a political party that are coordinated with a participating ticket do not count toward the
expenditure limit.
State Fiscal Effect:
Appropriations to the Fair Campaign Financing Fund
The current balance in FCFF is $3.8 million. General fund expenditures increase by
$2.2 million in fiscal 2022 (supplementing the existing $3.8 million in FCFF) and by
$4.0 million in fiscal 2023, in order to provide a sufficient amount in FCFF to provide a
full contribution to two gubernatorial tickets in the 2022 primary election and to comply
with the bill’s mandated appropriation in fiscal 2023 (which is enough to provide a full
contribution to one gubernatorial ticket for the general election). While appropriation of
the funding in fiscal 2022 is not mandated, full funding for two gubernatorial tickets for
the primary election is assumed, for the purposes of this fiscal and policy note, due to the
bill’s effective date.
General fund expenditures increase in fiscal 2026 by an indeterminate amount, pursuant to
the bill’s mandated appropriation, to supplement funding in FCFF that is unused after the
2022 elections (and funding generated from FCFF’s other revenue sources between the
2022 and 2026 elections) to fully fund the program for the 2026 elections.
It is assumed, for the purposes of this fiscal and policy note, that enough money is disbursed
to candidates during the 2022 elections so that, following the elections, there is not any
amount in excess of the amount needed for full contributions (for the 2026 elections) that
would need to be repaid to the general fund under the bill’s general fund repayment
provision.
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Fair Campaign Financing Fund Revenues and Expenditures
FCFF revenues increase by $2.2 million in fiscal 2022, $4.0 million in fiscal 2023, and an
indeterminate amount in fiscal 2026, reflecting the receipt of the general fund
appropriations. FCFF expenditures increase over the course of fiscal 2022 and 2023, and
in fiscal 2026, by an indeterminate amount, to make disbursements of public contributions
to participating candidates for the 2022 primary and general elections and the 2026 primary
election. FCFF revenues may also increase due to the collection of civil or criminal
penalties.
Small Business Effect: To the extent the bill results in additional campaign spending that
otherwise would not occur, small businesses providing campaign consulting services and
materials may meaningfully benefit.
Additional Information
Prior Introductions: None.
Designated Cross File: HB 424 (Delegate Feldmark) - Ways and Means.
Information Source(s): State Board of Elections; Comptroller’s Office; Judiciary
(Administrative Office of the Courts); Office of the State Prosecutor; Department of
Budget and Management; Department of Legislative Services
Fiscal Note History: First Reader - February 1, 2021
rh/hlb Third Reader - March 29, 2021
Revised - Amendment(s) - March 29, 2021
Enrolled - May 7, 2021
Revised - Amendment(s) - May 7, 2021
Analysis by: Scott D. Kennedy Direct Inquiries to:
(410) 946-5510
(301) 970-5510
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Statutes affected:
Text - First - Public Financing Act - Matching Fund Revisions (Maryland Fair Elections Act): 13-235 Election Law, 15-102 Election Law, 15-103 Election Law, 15-104 Election Law, 15-105 Election Law, 15-108 Election Law, 15-103 Election Law, 15-113 Election Law
Text - Third - Public Financing Act - Matching Fund Revisions (Maryland Fair Elections Act): 13-235 Election Law, 15-102 Election Law, 15-103 Election Law, 15-104 Election Law, 15-105 Election Law, 15-108 Election Law, 15-103 Election Law, 15-113 Election Law
Text - Enrolled - Public Financing Act - Matching Fund Revisions (Maryland Fair Elections Act): 13-235 Election Law, 15-102 Election Law, 15-103 Election Law, 15-104 Election Law, 15-105 Election Law, 15-108 Election Law, 15-103 Election Law, 15-113 Election Law