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8.1 The Difference Between Contributions and Transfers

Maryland law makes a distinction between contributions and transfers. It is important to understand the difference, since there are separate contribution and transfer limits and contributions and transfers are reported differently on your campaign finance report.

A contribution is money or anything of value given to a political committee to promote or assist in promoting the success or defeat of a candidate, political party, or question. A contribution can be made by any individual or by an entity, including a corporation or other business entity, a political club, a federal committee, or a labor union.

-§ 1- 101 (o) and § 13-226 of the Election Law Article

A transfer is a monetary contribution made by one political committee  to another. For example: a PAC may transfer money to a candidate committee. In addition, the law allows an out-of-state political committee to transfer money to a Maryland political committee if the out-of-state committee is properly registered with its own state’s election authority. Federal committees are not considered out-of-state political committees and therefore cannot make transfers but can make contributions.

-§ 1-101(ss) and § 13-227 of the Election Law Article

8.2 Contribution Limits

1. Generally

A person may contribute directly or indirectly no more than $4,000 to one political committee, and a total of $10,000 to all political committees, during the four-year cycle.

-§ 13-226 of the Election Law Article

2. Contributions to a Candidate

The $4,000 limit on contributions to the political committee of a candidate applies regardless of the number of offices sought by the candidate in separate elections during the 4 year election cycle or the number of authorized candidate committees formed to support the candidate, including slates.

-§ 13-226(d) of the Election Law Article

3. Exceptions

• Cash – A person may make cash contributions in the aggregate up to $100 in an election cycle to a political committee.

-§ 13 – 226(a)(1) of the Election Law Article

• Ballot Issue Committee - There is no limit on how much an individual may contribute to a ballot issue committee. Contributions to a ballot issue committee do not count toward the contributor’s aggregate contribution limit.
• Administrative Contribution -  An administrative contribution earmarked as such, is not subject to the $4,000 limit and does not count toward the contributor’s aggregate contribution limit. See Section 8.17 of the Summary Guide for more information on Administrative Contributions.

4. Duty of the Committee

Every political committee has a duty to assist contributors to ensure compliance with Maryland law. The political committee must issue a receipt upon receiving one or a series of contributions of $51.00 or more from a contributor; or upon request by the contributor regardless of the amount given. It is unlawful for a committee to knowingly accept a contribution over the legal contribution limits. Additionally, the contributor has a duty to inquire about contribution limits. See 70 Opinions of the Attorney General 96 (1985)

8.3 Transfer Limits

1. Generally

A  political committee may transfer no more than $6,000 to another political committee during the four (4) year cycle. There is no aggregate limit.

– §13-227 of the Election Law Article

2. Exceptions

The transfer limit of $6,000 does not apply to transfers between the following committees:

• State and local party central committees of the same political party;
• A slate and its candidate members (provided the slate member first files a slate designation with the election office); and
• A candidate's authorized campaign committees

3. Transfers to and from Ballot Issue Committees

• Transfers between ballot issue committees are unlimited.
• Transfers from ballot issue committees to non-ballot issue committees are permissible, but cannot be made regularly and cannot account for a significant amount of the transferor’s funds. The maximum transfer can be no more than $6,000.
• Transfers from other political committees to a ballot issue committee is are not subject to transfer limits. §13-227(a) of the Election Law Article.

8.4 In-Kind Contributions and Independent Expenditures

1. In-Kind Contributions

An in-kind contribution is a contribution given to a political committee in a form other than money. Normally, there are two types of transaction that may be considered an in-kind contribution: (1)  a contribution given to a political committee in non-monetary form (e.g. services or property); or (2) a coordinated expenditure made on behalf of the candidate where the candidate knows of and consents to the expenditures. In-kind contributions include items, services, goods  and anything of value provided to the political committee. The amount of an in-kind contribution is the fair market value of the item or items (at the time of the contribution).

Example: a person may contribute bumper stickers to a candidate’s committee. The amount of the contribution equals the fair market value of the bumper stickers or in this case, what the individual paid for the bumper stickers. It is important to remember that an in-kind contribution counts toward the donor’s contribution limits.

Services provided to a campaign for free or at a reduced cost will also be considered an in-kind contribution unless permitted as an individual’s volunteer activity for a campaign. The contribution limits do not apply when an individual volunteers his or her own time to a campaign, or uses the individual’s personal vehicle to provide transportation incident to an election. §13-233(1) of the Election Law Article.

An individual is not considered a volunteer when a business or other person compensates the individual, directly or indirectly, for working on behalf of the campaign.

Example: Sheets of Color, a commercial business, designs a logo for John D. Candidate, free of charge. Since Sheets of Color would normally charge $1,000 for designing logos, the business has made an in-kind contribution of $1,000 to John D. Candidate's committee. This $1,000 counts toward Sheets of Color contribution limits discussed in Section 7.2 of this Summary Guide.

2. Independent Expenditures

Independent expenditures occur when a person or organization makes an expenditure to promote the success or defeat of a candidate without coordinating with, or acting at the request or suggestion of the candidate, a political committee of the candidate, or an agent of the candidate. If cooperation or coordination exists between the person and the candidate, then the expenditure would be an in-kind contribution subject to the contribution limits.

3. Personal Expenditures

Personal expenditures by an individual incurred to express purely personal political views are not subject to the contribution limits. The individual must act independently and the expenditure may not be made in coordination with or at the request or suggestion of the candidate, a political committee of the candidate or an agent of the candidate.

- § 13-102 and 1-101(z) of the Election Law Article

8.5 Ticket Purchases

Purchasing a ticket to attend a campaign fundraiser is considered a contribution or a transfer to the political committee selling the tickets. It is a transfer if the ticket is purchased by another political committee or by an out-of-state political committee. It is a contribution if it is purchased by a person.

8.6 Contributions by Business Entities

Contributions made by business entities are subject to the $4,000/$10,000 contribution limit.
Contributions by different corporations** are considered made by one contributor if:

• The corporations that made the contributions were owned by the same stockholders; or
• One of the corporations wholly owns the other.

13-226(e) of the Election Law Article

If a contribution is from a business entity, the name and address of the entity (not the name of the person who signed the check on behalf of the business) should be entered in the treasurer's records, as well as in the campaign finance reports.

8.7 Transfers by Affiliated Political Committees

Transfers by committees that are affiliated with one another are treated as if they were made by one contributor. Committees are “affiliated” if they are organized and operated in coordination
and cooperation with each other or otherwise conduct their operations and make their transfer or disbursement decisions under the control of the same individual or entity.

- § 13-227(d) of the Election Law Article

8.8 Form of Payment (cash, check, or charge)

1. Contributions

A person may not make a contribution of money in excess of $100 except by check or credit card.

-§ 13-226 of the Election Law Article

A person can make cash contributions up to $100 for an election cycle. Once the threshold is reached, the person is prohibited from making further cash contributions for the remainder of the election cycle to any political committee.

2. Transfers – Check Only

A transfer must be in monetary form and must be made by check. However, there are instances when a political committee may want to give something of value (other than money) to another political committee. This is permissible, but it is not a transfer. A non-monetary donation in non-monetary form would be, an in-kind contribution, and subject to the contribution limits, not the transfer limits.

8.9 Determining When a Contribution is Received

Generally, a contribution or transfer should be considered received as of the date the political committee takes possession of it. However, if the date that a contribution or transfer by check is received is in a different election cycle than the date the check was issued, the date the check was issued is considered the received date. For example: Mr. X issues a check on December 30, 2006. Committee Y does not receive it until January 3, 2007. Since the check was issued in a different election cycle, Committee Y should treat the contribution as if it had been received on December 30th.

-§ 13-232 of the Election Law Article

8.10 Prohibited Contributions and Transfers

1. No Joint Contributions

Maryland law does not recognize joint contributions. A contribution made to a political committee must be attributed to a single person. If a political party receives a contribution with two names on the check, the contribution should be reported as a contribution by the signer of the check.

If the campaign has knowledge that the check is meant to be from both named individuals on the check, then the contribution should be split equally between the contributors and reported as separate contributions. For example: if you receive a $100 check  from George and Martha Washington, and the political committee has knowledge that both George and Martha Washington intended to make a contribution to the political committee, the $100 check may be evenly split between both of them and reported on the committee’s campaign finance report as (1)  A contribution of $50 from George Washington; and (2) a contribution of $50 from Martha Washington.

If it is unclear whether or not a contribution is from both individuals, it is the duty of the campaign to contact the contributors to confirm their intention.

2. Anonymous Contributions

Anonymous contributions are strictly prohibited. Accordingly, the campaign treasurer may not accept money or things of value unless the identity of the contributor is known. If an anonymous contribution is received, it must be paid over to the Treasurer of the State of Maryland. When reporting the expenditure on the campaign finance report, please include a remark that states, “This money is from an anonymous source and is being turned over to the State Treasurer in accordance with §13-239 of the Election Law Article, Annotated Code of Maryland.”

-§ 13-239 of the Election Law Article

Maryland State Treasurer
80 Calvert Street, Rm 109
Annapolis, MD 21401

3. Pass-Through Contributions

A contribution may not be accepted in the name of any other person or entity but the name of the person making the contribution. A person may not use another person as a conduit to conceal the source of the contribution. For example, Johnny Fatcat gives $4,000 to Sally, a family member, so she can make a contribution to the Committee to Elect Rebecca Goodie. Because the actual source of the contribution is Johnny Fatcat and not Sally, this would be considered a pass-through contribution. Johnny Fatcat is using Sally as a conduit for the contribution to conceal the fact he is actual source of the funds.

- § 13-602(a)(5) of the Election Law Article

4. Contributions During the Legislative Session

Generally

Contributions may not be solicited, accepted, or deposited by the Governor, Lieutenant Governor, Attorney General, Comptroller, a member of the General Assembly, or a person acting on behalf of any of these individuals, during the Legislative Session, which begins on the second Wednesday in January of each year and continues for 90 days.

- §13-235 of the Election Law Article

The prohibition applies to any political committee attached to the Governor Lieutenant, Governor, Attorney General, Comptroller, and members of the General Assembly. For example, a slate with a member of General Assembly on it is prohibited from receiving a contribution even if all other members of slates are not in the General Assembly.

Fundraising for other political committees

The use of a restricted official’s name on a fundraising invitation gives the impression that the official is actively engaging in the solicitation for the fundraising event. In addition, others soliciting and selling tickets to the event may even use the name of the official as an incentive for attending. Therefore, the name of the official may not be placed on fundraising invitations during legislative session.

Extended or Special Legislative Session

The restriction only applies to the regular 90 day legislative session and not to an extended or special session.

Exceptions

A restricted official may fundraise during legislative session if the restricted official is a filed candidate for a federal or local office. In order to be considered a filed candidate for federal office, the restricted official must have on record with the Federal Election Commission a Statement of Candidacy prior to the commencement of fundraising activities. A courtesy copy of the Statement of Candidacy should be provided to the State Board.

In order to be considered a filed candidate for local office, the restricted official must file a Certificate of Candidacy with the appropriate local board of elections. Again, the restricted official may not engage in fundraising activities until the Certificate of Candidacy is on record.

Finally, a restricted official running for Governor who participates in public financing program may accept eligible private contributions during session only if the member has filed a Certificate of Candidacy and a Notice of Intent to Qualify for Public Contribution with the State Board.

5. State Funded Entities

An entity that at any time during the election cycle derives the majority of its operating funds from the State may not make a contribution to a political committee during the election cycle.

- §13-236 of the Election Law Article

6. Concealment of Source

Regardless of a political committee’s compliance with applicable transfer limits, a political committee or contributor may be in violation of the campaign finance laws if a transfer is made for the purpose of concealing the source of the funds or the intended recipient.

- §13-229 of the Election Law Article

A contributor may not make contributions a political committee in excess of the limits by using another political committee as a conduit for the contribution.

8.11 Receipts

Campaign contribution receipts must be issued for:

• Contributions other than the purchase of tickets to an event made in the individual or cumulative amount of $51or more;
• The purchase of a ticket that costs $51 or more;
• The purchase of several tickets (each costing less than $51) totaling $251 or more; and
• Contributions, including ticket sales, of any amount, upon request of the contributor.

- § 13-222 of the Election Law Article

Reminder: 

All information recorded on a receipt must be included on the campaign finance report. While receipts are not always required (see above), the name, address, and amount of every contributor, including those persons purchasing tickets and small items, regardless of the purchase amount, must be recorded in the treasurer's account books. (See Wheels of Fortune exception for certain counties, Section 8.14 of the Summary Guide.)

8.12 Contributions by the Candidate

The candidate or the candidate’s spouse may make unlimited contributions to the candidate’s campaign committee. The money contributed must be given directly to the campaign treasurer to be deposited in the campaign bank account. Money contributed by the candidate cannot be repaid to the candidate. If the candidate gives money to the campaign with the expectation of possibly being repaid, the money must be  reported as a loan to the campaign. Money loaned can be repaid, or if funds do not become available, converted into a contribution.

- §13-231 of the Election Law Article

8.13 Raffles and Wheels

1. Raffles

A political committee, or a candidate for public office, may conduct a raffle in which prizes in the form of cash or merchandise are awarded. The cost of a raffle ticket may not exceed $5 and an individual may not purchase more than $50 worth of tickets.

– § 12-106 (b) of the Criminal Law Article

This section does not relieve the candidate or political committee from the reporting and record keeping requirements of the Election Law Article. Accordingly, the name and address of the purchaser and the amount of each purchase of raffle tickets (regardless of the number of tickets purchased) must be kept as part of the treasurer's books and records.

The raffle tickets must bear an authority line. (See Section 12 of the Summary Guide.)

2. Paddle Wheels and Wheels of Fortune

A paddle wheel or wheel of fortune may be used by a political committee at a political fundraiser only in:

• Anne Arundel County;
• Baltimore City; or
• Baltimore County.

A treasurer is not required to identify in the account book of the committee each contribution given by each individual who purchases a spin on the wheel, provided:

• The cost to purchase each spin or chance on the wheel does not exceed $2;
• Total receipts from wheels do not exceed $2,500 per election;
• The net income from a wheel does not exceed $1,500 in a 24-hour period at a single fundraising event; and
• The account book includes the total net amount received at the fundraising event at which the wheel is used and a listing of the names and addresses of the individuals who attended.

If a political committee raises or receives funds from a wheel in excess of any of the limitations, the political committee must either:

• Donate the excess funds to the charity of its choice; or
• Identify in the account book the amount received from each individual who purchased a spin or chance on the wheel.

- §13-240 of the Election Law Article and §§ 13-406,
13-506, and 13-605 of the Criminal Law Article

8.14 Payroll Deductions

1. Employer

An employer may accumulate in a separate, segregated escrow account the combined, voluntary, and periodic campaign contributions of employees made by payroll deduction.

The employer is required to keep detailed and accurate records of all payroll deductions, including:

• The names of the individual contributors;
• The date on which each contribution is withheld;
• The amount of each contribution withheld from an employee’s paycheck; and
• The disposition of the amounts withheld.

Within 3 months after withholding a contribution, the employer must transfer the contribution (along with the information listed above) to a treasurer of the appropriate political committee, which may be a political action committee (PAC) affiliated with the employer. The political committee is required to treat and report the contributions as if they came directly from the employees. 

–§ 13-241 of the Election Law Article

An employer who solicits its employees to make political contributions by payroll deduction must inform each employee of the political purposes of the political committee to which the money will be transferred. The employee must also be informed of his or her right to refuse to contribute without reprisal. Finally, the employer may not receive or use money or anything of value if it is obtained:

• By physical force,
• By job discrimination;
• By financial reprisals;
• By threat of force, job discrimination, or financial reprisals;
• As a result of a commercial transaction; or
• As dues, fees, or other assessment required as a condition of membership in a labor organization or employment.

-§ 13-241(e) and (f) of the Election Law Article

2. Employee Membership Entities

If an employer withholds by payroll deduction an employee’s dues to an employee membership entity, for example, a union, the employee may also contribute by payroll deduction to one or more PACs affiliated with the membership entity. The employer is required to collect the contributions and transmit them to the employee membership entity designated by the employee.

The money accumulated by an employer under such a program must be deposited in a segregated escrow account maintained solely for that purpose. The funds in the account must be transferred along with the information specified below, to the employee membership entity within 30 days after being withheld.

Within 30 days after receiving the money, the employee membership entity must transmit the employee contributions:

• To its affiliated PAC; or
• To a State or local chapter of the membership entity, if the contribution was designated for a PAC affiliated with the State or local chapter. The State or local chapter must transmit the funds to its affiliated PAC within 5 days after receipt.

The affiliated PAC, in conjunction with its employee membership entity and the employer, must keep detailed and accurate records of each contribution, including:

• The names of the individual contributors;
• The date on which the payroll deduction was made;
• The amount of the contribution to the PAC;
• The name of the affiliated PAC designated by the employee to receive the contribution; and
• The date on which the contribution was received by the employee membership entity and the affiliated PAC.

The PAC is required to treat and report the contributions as if they came directly from the employees.   

–§ 13-242 of the Election Law Article

The rules for soliciting, receiving, and using contributions by an employer payroll deduction to a political committee apply to an employee membership entity and the affiliated PAC.

–§ 13-242(f) of the Election Law Article

3. Reporting Payroll Deductions

Payroll deductions may be reported on campaign finance reports as a lump sum. However, once an individual has contributed $51 or more in the election cycle, that individual is required to be reported separately on the campaign finance report and receive a receipt.

8.15 Collection by Membership Entities

1. Generally

A membership entity (an organization that collects dues from its members) may establish a program for periodically collecting voluntary contributions from its members for the membership entity’s affiliated PAC. The contributions must be collected along with:

• Membership dues invoiced and collected by the affiliated entity on a periodic basis; or
• Voluntary contributions made to a federal PAC, if the federal PAC is also affiliated with the membership entity.

The membership entity is required to transfer the contributions to the affiliated PAC within 30 days of receiving the contributions.

The membership entity is required to maintain a detailed and accurate record of all contributions collected. The records must include:

• The names of the individual contributors;
• The date on which each contribution was received;
• The amount of each contribution; and
• The disposition of the contributions.

The PAC is required to treat and report the contributions as if they came directly from the individual members of the membership entity.

2. Rules Regarding Solicitation of Members

In soliciting a member to contribute to its affiliated PAC, a membership entity must inform the member of the political purposes of the PAC and that the member has the right to refuse to contribute to the PAC without reprisal. A contribution may not be secured, received, or used by the membership entity or its affiliated PAC if it is obtained as dues, fees or other assessment required as a condition of membership or by actual or threatened:

• Physical force;
• Membership discrimination; or
• Financial or professional reprisals.

- § 13-243 of the Election Law Article

8.16 Administrative Contributions (Party Central Committees and PACs only)

Administrative contributions are earmarked contributions by the donor for non-campaign or non-electoral expenditures.

1. Who can receive Administrative Contributions?

Only a political party central committee and a political action committee of a corporation may receive administrative contributions.

2. Who can make Administrative Contributions and what are the limits?

A person may make unlimited administrative contributions to a party central committee. For a corporate PAC, only the corporate sponsor may make an administrative contribution. The contribution will not count against the person’s $4,000/$10,000 contribution limit. The contribution must be expressly earmarked as an administrative contribution; otherwise it will be considered a normal campaign contribution subject to the limits.

Political committees are prohibited from making transfers for an administrative purpose.

3. Receipt and Use of an Administrative Contribution by a Central Committee

A central committee may not commingle administrative contributions with campaign funds. Administrative contributions must be maintained in a separate account and may not be directed for any other use.

Administrative funds can only be used for non-campaign related expenses such as:

• Salary for central committee employees, including part-time employees;
• Office equipment and supplies;
• Cell phones, pagers and blackberries for staff, including part-time staff and volunteers;
• Maintenance of a voter file;
• Voter registration activity;
• Generic issue polling;
• Rent, utilities and building maintenance for the central committee headquarters and offices;
• Bank charges and accounting fees for preparing taxes, or filing campaign finance report, a similar routine accounting tasks ;
• Legal fees for litigation arising from campaign activities by the central committee.

Prohibited uses of administrative funds include paying for:

• Walk around services
• Get out the vote activities
• Maryland State or local candidate specific polling
• Producing flyers, brochures, signs and other forms of public communications referencing a State or local candidate, a slate of State and/or local candidates or a political party.
• Late fees for the central committee

This is not an exhaustive list. Please contact the State Board for further information.

• Receipt and Use of an Administrative Contribution by a Corporate PAC

A corporation may make an unlimited administrative contribution to its affiliated political action committee. Administrative expenditures may be used for the initial startup, such as modifying the payroll computers and obtaining legal advice for establishment of the PAC. The funds may also be used for yearly costs of maintaining records, filing reports and salaries.

5. Reporting Requirements

Administrative contributions and expenditures are reported separately from campaign related contributions and expenditures.

8.17 Contributions by Minors

Contributions by minors are permissible. However, the financial independence of the minor should be established. For example, a parent cannot contribute $4,000 to a political committee  and then give $4,000 to his 2-year-old child so the child may also make a contribution. This scenario would be considered a pass through contribution and an attempt to circumvent the contribution limitations.

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