Bill Summary – FastDemocracy

HB 1351
                      Department of Legislative Services
                              Maryland General Assembly
                                    2021 Session
                           FISCAL AND POLICY NOTE
                              Third Reader - Revised
House Bill 1351                 (Delegate Wilkins)
Ways and Means                             Education, Health, and Environmental Affairs
  Campaign Finance - Contribution Through Third-Party Payment Processor and
                             Payment of Expenses
This bill requires a contribution to a campaign finance entity made through a third-party
payment processor to be transferred to the campaign account of the campaign finance entity
in a specified timely manner and authorizes the State Board of Elections (SBE) to impose
a civil penalty for a failure to do so. SBE must provide specified notice to campaign finance
entities regarding the beginning of the requirement for timely transfer of those
contributions. The bill also modifies a provision that allows for an expense of a campaign
finance entity to be paid from funds other than a campaign account under certain
circumstances. The bill takes effect July 1, 2021, with the exception of the provision
requiring SBE to provide notice to campaign finance entities, which takes effect
June 1, 2021.
                                    Fiscal Summary
State Effect: The bill is not expected to materially affect State finances.
Local Effect: None.
Small Business Effect: None.
                                         Analysis
Bill Summary: The bill requires a campaign finance entity – if a contribution to the
campaign finance entity is made through a third-party payment processor – to initiate the
transfer of the contribution from the account of the third-party payment processor to the
designated campaign account of the campaign finance entity within seven days after the
contribution is deposited in the account of the third-party payment processor. “Third-party
payment processor” means an online service in which payments to a person are made to
the processor’s merchant account rather than to the person’s own merchant account.
The bill authorizes SBE to impose a civil penalty, of up to $500 for each violation, for a
failure to transfer a contribution from the account of a third-party payment processor in
accordance with the bill.
By June 15, 2021, SBE must notify the responsible officers of each campaign finance entity
by email that, within seven days after July 1, 2021, the campaign finance entity must initiate
the transfer of any contributions to the entity that are held in the account of a third-party
payment processor on July 1, 2021, to the designated campaign account of the campaign
finance entity.
Under provisions that authorize an expense of a campaign finance entity to be paid from
funds other than a campaign account (provided the person who paid the expense is
reimbursed from the campaign account and the expense is reported as an expenditure of
the campaign finance entity), the bill repeals a reference to a campaign finance entity itself
paying an expense of the campaign finance entity from funds other than a campaign
account, leaving only the authority for a person authorized by a campaign finance entity to
pay an expense of the campaign finance entity from funds other than a campaign account.
Current Law: Unless otherwise expressly authorized by law, all campaign finance
activity for an election under the Election Law Article of the Annotated Code must be
conducted through a campaign finance entity (defined as a political committee established
under Title 13 of the Election Law Article). An individual may not file a certificate of
candidacy or a declaration of intent until the individual establishes, or causes to be
established, an authorized candidate campaign committee (a campaign finance entity
authorized by the candidate to promote the candidate’s candidacy).
Each campaign finance entity must designate one or more campaign accounts. Each
designated campaign account must (1) be in a financial institution and (2) be registered in
a manner that identifies it as the account of a campaign finance entity. A campaign finance
entity must deposit all funds received in a designated campaign account.
A campaign finance entity may not directly or indirectly make a disbursement except from
a designated campaign account. However, a campaign finance entity, or a person
authorized by the campaign finance entity, may pay an expense of the campaign finance
entity from funds other than a campaign account if (1) the expense is supported by a receipt
that is provided to the campaign finance entity and (2) the campaign finance entity
HB 1351/ Page 2
reimburses the person who paid the expense from the campaign account and reports the
expense as an expenditure of the campaign finance entity.
                               Additional Information
Prior Introductions: HB 1380 of 2020 passed the House and was referred to the Senate
Education, Health, and Environmental Affairs Committee, but no further action was taken.
Designated Cross File: None.
Information Source(s): State Board of Elections; Department of Legislative Services
Fiscal Note History:     First Reader - March 5, 2021
rh/hlb                   Third Reader - March 24, 2021
                                Revised - Amendment(s) - March 24, 2021
Analysis by: Scott D. Kennedy                        Direct Inquiries to:
                                                     (410) 946-5510
                                                     (301) 970-5510
HB 1351/ Page 3
Statutes affected: 
Text - First - Campaign Finance - Contribution Through Third-Party Payment Processor - Transfer to Campaign Account: 13-220 Election Law
Text - Third - Campaign Finance - Contribution Through Third-Party Payment Processor and Payment of Expenses: 13-220 Election Law, 13-604.1 Election Law, 13-401 Election Law