Chapter 16. Contributions by Business Entities
Regulation .01 Scope.LinkCopy Citation
A.
Applicability. This chapter applies to contributions made by business entities in accordance with Election Law Article, §13-226, Annotated Code of Maryland.
B.
Effective Date. This chapter is effective as of January 1, 2015.
Regulation .02 Attribution.LinkCopy Citation
A.
In General. For purposes of applying the contribution limits provided in Election Law Article, §13-226(b), Annotated Code of Maryland, contributions by two or more business entities are considered to be made by one contributor and affiliated if:
(1)
One business entity is a wholly owned subsidiary of another; or
(2)
The business entities are owned or controlled by at least 80 percent of the same individuals or business entities.
B.
Standard. For purposes of Election Law Article, §13-226(e), Annotated Code of Maryland, two or more business entities shall be considered to be owned or controlled by at least 80 percent of the same individuals or business entities if:
(1)
80 percent or more of the beneficial ownership or equity of each entity is held by the same person or group of persons; or
(2)
80 percent or more of the voting shares or rights, membership or partnership interests with voting or governing authority, control rights, trust control, or other form of governance or rights authority in each entity is directly or indirectly held or controlled by the same person or group of persons.
C.
Control. A person or group of persons is deemed to have direct or indirect control of one or more business entities if the person or group of persons is authorized to make decisions regarding:
(1)
Direction and amount of contributions, political spending, or any other political activity on behalf of the business entities; or
(2)
Responsibility for day-to-day operation of the business entities.
D.
Notice Requirement. At the time a contribution is made, the contributing business entity shall determine whether an affiliated business entity has made a prior contribution to the political committee during the current election cycle and, if so, provide prompt written notice to the political committee of the prior contribution, including the name and address of the affiliated business entity.
E.
Affiliation.
(1)
After a determination of affiliation is made for contribution purposes, the business entities will be considered as one contributor for the remainder of the election cycle.
(2)
If the business entity acquires, merges with, or changes ownership or control over another business entity and would be determined to be affiliated for contribution purposes:
(a)
The prior contributions made by the acquired, merged, or newly owned or controlled business entity will not be retroactively attributed to the original business entity; and
(b)
The future contributions made by the acquired, merged, or newly owned or controlled business entity will be attributed to the original business entity, along with the current aggregate contributions made by the original business entity.
F.
Prohibition.
(1)
If a business entity is prohibited from making contributions, then all business entities affiliated with it are also prohibited from making contributions during the election cycle.
(2)
Ownership or control of a business entity may not be changed or altered for the purpose of circumventing the contribution limits provided in Election Law Article, §13-226, Annotated Code of Maryland.
Regulation .03 Non-Contribution Disbursements.LinkCopy Citation
A.
Requirements. The costs in §B of this regulation will not be considered a contribution by a business entity to a political action committee that it has established and:
(1)
Only solicits contributions from the employees of the business entity; or
(2)
Participates in a payroll deduction program established by the business entity.
B.
Disbursements. The following costs by a business entity not considered a contribution to a political action committee it has established:
(1)
The cost of establishing or modifying the payroll program to permit the business entity to offer its employees the option of making contributions by payroll deduction;
(2)
Providing information or written materials regarding how to participate in the payroll deduction program to the employees of the business entity;
(3)
The cost of compliance training for employees who volunteer to contact other employees to explain the political purpose and operation of the political committee established by the business entity and the employee’s right to refuse to participate without reprisal;
(4)
The costs associated with soliciting employees to participate in the payroll deduction program including:
(a)
The use of office space in the business entity; or
(b)
Personnel of the business entity; or
(5)
The cost of legal services concerning the requirements of Election Law Article, Title 13, Annotated Code of Maryland.
C.
Restrictions. A solicitation permitted under §B of this regulation by a business entity shall be limited to:
(1)
Current or active employees, not spouses of the employees or retirees;
(2)
Appeals for voluntary contributions without promise of reimbursement, reward, or other inducement from the business entity or labor organization in exchange for the employee’s participation; and
(3)
Without actual or threatened penalty, coercion, discrimination, or other reprisal for the employee’s non-participation.
Chapter annotations
Authority: Election Law Article, §§1-101 and 2-102(b)(4), Annotated Code of Maryland
History: Effective date: November 24, 2014 (41:23 Md. R. 1377)
History: Regulation .03 adopted effective February 12, 2018 (45:3 Md. R. 159)