SB 54 Repeals Parts of IM22, Creates New Campaign Finance Rules

Governor Dennis Daugaard called on the Legislature yesterday to repeal and replace Initiated Measure 22, the Anti-Corruption Act that voters approved in November. They have their repeal-and-replace vehicle in Senate Bill 54, a proposal from Secretary of State Shantel Krebs to strike campaign finance limits imposed by IM 22 while creating some new limits and reporting requirements.

SB 54 runs 38 sections over 45 pages, so Greg Belfrage will likely decry it and Rep. Tim Goodwin will surely misread it. Here are the most important nuts and bolts:

First, SB 54 repeals most of IM 22’s first 27 sections. That means several things stay the way they were before IM 22:

1. Immediate family members can continue to give unlimited contributions to candidates (IM 22 capped family members the same as other donors).
2. Statewide candidates can continue to take up to $4,000 from individual donors (IM 22 kept Governor at $4K but dropped Lt. Gov. and A.G. to $2K and other statewide candidates to $1K).
3. Legislative candidates can continue to take up to $1,000 from individual donors (IM 22 dropped them to $750).
4. PACs can continue to take up to $10,000 from individual donors (IM 22 dropped that cap to $2K) and unlimited contributions from political committees (IM 22 banned those contributions).
5. Parties can continue to take up to $10,000 from individual donors (IM 22 dropped that cap to $5K) and unlimited contributions from political committees (IM 22 banned those contributions).
6. Recipients of campaign cash need not report the occupation and employer of donors giving more than $500.
7. Candidates continue to report names of all individuals giving more than $100 (IM 22 raised that threshold to $200).
8. Candidates will not file the extra pre-primary, post-primary, pre-general, and post-general campaign finance reports created by IM 22.
9. Candidates will not file IM 22’s “Timely Contribution Disclosure Statements” any time a donor’s total giving exceeds $500 for the year.
10. SB 54 restores language about independent communication expenditures, including the exemption of polls from independent communications reporting requirements as long as each poll question “does not expressly advocate for or against” the subject.

Senate Bill 54 strikes some references to IM 22’s Democracy Credits and ethics commission; however, SB 54 does not touch the sections authorizing those items (Sections 32–63, 68–69), nor the judicially contested limit on gifts from lobbyists (Section 31) or the thus far uncontested but by non-severability enjoined provisions on lobbying (Sections 64 through 67).

SB 54 then makes the following changes to current law:

1. The amount that candidates and ballot question committees can raise and/or spend before having to file statements of organization rises from $500 to $1,000.
2. Businesses, unions, and other groups previously barred from contributing to candidates may now participate in campaigns under the same limits as individuals (in other words, SB 54 treats corporations as persons).
3. Itemized expenses must now include the recipient of the amount spent. Right now, candidates just write, “Advertising: $5,000.” Under SB 54, candidates will have to write, “Advertising: $2,000 to Aberdeen American News, $1,500 to Hub City Radio, $1,500 to Lamar Billboards.”
4. Individuals and businesses can contribute no more than $10,000 to a ballot question committee. Right now, there are no limits on contributions to ballot question committees. If individuals and businesses funnel their money to ballot question committees through PACs or political parties, those contributions count toward the individual limits.
5. SB 54 increases several penalties for campaign finance violations from Class 2 misdemeanor to Class 1 misdemeanor.
6. SB 54 expands the definition of “independent communications” that must be reported from advocating for or against a candidate, office holder, ballot question, or political party to “disseminat[ing] information concerning” those entities. That change would make mailers like Represent.Us/SD’s postcard on Senator R. Blake Curd’s conflicts of interest clearly subject to reporting requirements.
7. SB 54 moves filing dates for pre-primary and pre-general reports ahead from the second Friday before each vote to fifteen days prior.
8. SB 54 moves due dates for year-end reports ahead from February 1 to the first Tuesday in December.

Senate Bill 54 is a lot to digest, but, along with Senate Bill 53, it signals the strategy I suggested yesterday Republicans would use to complicate any effort by Rick Weiland and other IM 22 supporters to refer the repeal of IM 22 to a public vote. SB 53 creates a campaign finance ethics commission; SB 54 repeals portions of IM 22 and adds some new requirements and restrictions. Legislators may submit more bills to repeal other portions of IM 22 and implement different regulations. No one referendum petition will be able to reinstate every provision of IM 22. Referring SB 54 would reinstate portions of IM 22 but also strike some arguably useful reforms.

Tracking the progress of SB 54 and its impact on IM 22 will also be challenging since SB 54, like IM 22, is written as a complicated mix of strikes and insertions. Reading SB 54 alongside IM 22 and prior statute will make your eyes go buggy. Pay close attention to SB 54 in committee and floor debate!