Changes to Kentucky's Campaign Contribution Laws

What you need to know about recent updates to campaign contribution limits in 2017. 

Senate Bill 75 passed the 2017 legislative session and will double many of Kentucky’s contribution limits this summer. Kentucky’s campaign finance laws and codes of ethics were relatively unchanged in the more than two decades following a legislative scandal in the early 1990s. However, statutory changes and legal opinions over the past few years have demonstrably altered the contributing limits and reporting transparency. This document intends to outline those changes for individuals, PACs, and corporations that may consider such political engagement in Kentucky.

Note that the Kentucky Registry of Election Finance (KREF) is currently updating their manuals and regulations to reflect the changes, and it intends to enforce the bill on July 1, 2017. KREF also issues advisory opinions to clarify interpretations of the law, and MML&K will update to this document if KREF offers future guidance. Take note that the increased limits only apply to future elections.  Some accounts from previous elections remain open, but any contributions into them max out at the pre- SB75 limits.

SB75 CONTRIBUTION LIMIT AND REPORTING CHANGES
*With the enactment of SB75 (2017), these amounts will be indexed to CPI and adjusted every odd-numbered year.

The following are the major changes in SB75:
  • Doubles the maximum contribution limits to $2,000 per election for individual candidates and the gubernatorial slate, and indexes the individual contribution limit of $2,000 to inflation. This new maximum applies separately to the primary election and the general election. (The limit previously was $1,000 per election.)
  • Eliminates the PAC-to-PAC and individual-to-PAC aggregate limit of $1,500, opting instead for an annual$2,000 cap that an individual can contribute per PAC. For example, previously an individual could only give a total of $1,500 annually to any and all PACs of their choice.  Under the new law, an individual can give $2,000 annually to as many PACs as they choose. 
  • Doubles the contribution an individual and a PAC can make to a political party’s state account (also known as an executive committee) to $5,000.  An individual contribution to a state political party’s federal account remains at $10,000. Thus, the new maximum individual contribution to a state political party is $15,000 per year ($5,000 to the party’s state account and $10,000 to the party’s federal account).  For reporting purposes, please note the designated account of the contribution in the memo line of checks as either “state account” or “federal account” when making contributions to a State Executive Committee.
  • Doubles the annual contributions an individual and PAC can make to the state legislative caucus campaign committees to $5,000. (e.g. the state Senate or House Republican Caucus Campaign Committee and the state Senate or House Democratic Caucus Campaign Committee). 
  • For married couples, they may now write a single check reflecting their combined contribution as long as: (1) both names are listed on the account in the upper left; (2) both signatures are on the check’s signature line; and (3) the memo line designates the individual amount and the election or elections to which the check is intended.  
REPORTING REQUIREMENT CHANGES IN SB75   
  • Requires state and local political parties, as well as caucus campaign committees, to report their contributions and expenditures semiannually on January 31 and July 31 each year, rather than the previous post-primary and post-general reporting. Building fund accounts must be reported quarterly.
  • Candidates now have an additional 60-day pre-general election reporting requirement and a slight change to an existing one.  Candidates now report their contributions and expenditures on the following timeline:        
  • 60-day pre-election report, 30-day pre-election report, 15-day pre-election report.

  • 30-day post-election report, 60-day pre-election report.  

CORPORATE CONTRIBUTIONS PROHIBITED WITH LIMITED EXCEPTIONS

Direct corporate contributions remain expressly prohibited to individual candidates, slates of candidates, PACs, political parties and caucus campaign committees in Kentucky.  However, there are two exceptions: corporations may contribute an  unlimited amount to political issues committees (which is fully reportable) and to the “building funds” of the state’s two political parties. 

CONTRIBUTIONS FROM LOBBYISTS

Lobbyists registered with the state Legislative Ethics Commission can neither make a contribution to an individual legislator, nor to caucus campaign committees.  They may, however, make a personal contribution of up to $15,000 to each state political party. A legislative agent may also contribute to other local, statewide, judicial, and federal campaigns within the contribution limits like any other citizen.  Contributions to a sitting state legislator running for another state or local office in Kentucky are prohibited, but contributions to a state legislator running for a federal office are acceptable.

A lobbyist may not organize or control PAC contributions, nor direct PACs to support one candidate over another.  Lobbyists may, however, provide information about which candidates support issues or industries, such as providing information on vote records.  Lobbyists also may provide general information about the political climate that may ultimately help the client determine when and where PAC contributions should be made.  The ultimate decision rests with the governing board of the PAC and should be made by a majority vote of that board.

DEFINITIONS

Kentucky’s campaign finance statutes include certain terms that are repeated throughout this document. The more commonly understood definitions and examples of each follow:
  • Slate of candidates – in Kentucky, candidates for Governor must announce their running mate in order to form their campaign organization. The Governor/Lt. Governor candidate pairing is referred to as a gubernatorial “slate” in Kentucky.

  • Permanent committee – Kentucky law does not use the term “political action committee,” opting for “permanent committee” instead. The terms are used interchangeably. 

  • Political issues committee - three or more persons (including corporations) joining together to advocate or oppose a constitutional amendment or public question which appears on the ballot if that committee receives or expends money in excess of $3,000.

  • Executive committee – referring to the state accounts of either of the two major state parties, the Republican Party of Kentucky (RPK) or the Kentucky Democratic Party (KDP). 

  • Caucus campaign committees – the majority and minority caucuses within each chamber of the legislature have a fundraising mechanism that receives contributions and make expenditures to support or oppose one or more specific candidates or slates of candidates for nomination or election, or a committee, specifically called:.
  • House Republican Caucus Campaign Committee;

  • Senate Republican Caucus Campaign Committee;

  • House Democratic Caucus Campaign Committee; and;

  • Senate Democratic Caucus Campaign Committee
  • Corporations – defined as all corporate types, including non-stock corporations, solely-owned corporations, not-for-profit corporations, S-corporations and professional service corporations (PSCs). Corporate contribution restrictions are not extended to business entities such as partnerships, including limited liability partnerships (LLPs), limited liability companies (LLCs), sole proprietorships or unincorporated associations.
The Republican Party of Kentucky frequently utilizes the term “Trust” when soliciting contributions. For instance, an RPK mailer may suggest checks be payable to some iteration of “The Republican Party of Kentucky Senate Trust” rather than the Senate Republican Caucus Campaign Committee. The term “Trust” in this instance is an accounting construct and not a legal definition. All such contributions are received by the state’s Republican executive committee, where they are redirected to the appropriate recipients. The benefit of such an arrangement is that a broader range of individuals may contribute to the state parties (e.g. registered lobbyists); the drawback is that “Trust” dollars count against the executive committee limit. The Kentucky Democratic Party does not utilize the same concept.