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Bill Summary · HB 111

Summary — HB 111: Election Law — Campaign Finance — Exploratory Committees (Maryland)

Status: Hearing scheduled 1/21 at 1:00 p.m. (Ways and Means)
Introduced: January 8, 2025 (first reader) — effective date in bill: June 1, 2025

Main purpose

The bill creates a statutory framework for “exploratory committees” in Maryland campaign finance law. It (1) defines exploratory committees, (2) makes most campaign‑finance rules that apply to political committees apply to exploratory committees, and (3) establishes a set of permissible activities, reporting and disposition rules, and limits (notably: donations to exploratory committees are not subject to contribution limits).

Key provisions and changes

  • Definition: An “exploratory committee” is an entity established by a potential candidate to determine that individual’s viability for a public office.
  • Applicability: Except for certain specified exceptions, provisions of Title 13 (Campaign Finance) that apply to political committees also apply to exploratory committees (e.g., organization and reporting requirements).
  • Contribution limits: A donation to an exploratory committee is expressly not subject to statutory contribution limits.
  • “Donation” defined, with exclusions (ordinary course of business receipts; funds expressly agreed not to be used for exploratory committee activity and kept in a segregated account).
  • Who may form one: A potential candidate may form an exploratory committee; an individual who is already a candidate may form an exploratory committee for a different public office.
  • Permitted disbursements (exploratory committee may spend funds only for):
    • Surveys/polls to assess viability
    • Direct mail/communications to potential voters
    • Staff salaries
    • Website creation
    • “Qualifying paid digital communications” (defined: campaign material placed/promoted for a fee to 500+ people)
    • Renting/leasing office space
    • Purchasing electronic equipment (computers, phones)
  • Prohibitions and restrictions:
    • May not prepay goods/services for use by the prospective candidate’s later authorized campaign committee.
    • If an authorized candidate committee results from the exploratory committee, any equipment purchases by the campaign committee from the exploratory committee must be at fair market value.
  • Disposition of remaining funds: Within 120 days after (a) the potential candidate files a certificate of candidacy or (b) publicly declines to run or the filing deadline passes, the exploratory committee must dispose of remaining funds either:
    • Pro rata refunds to contributors; or
    • Transfer the balance to one of: (i) the party state or local central committee (if the potential candidate is a party member), (ii) the authorized candidate committee (subject to the $6,000 contribution limit that applies to authorized candidate committees), (iii) a 501(c)(3) nonprofit, or (iv) the Fair Campaign Financing Fund (public financing fund for gubernatorial tickets).
  • Terminology change: Modifies the statutory definition of “campaign material” to reference “potential candidate” (clarifying scope of materials that require authority lines, etc.).

Who is affected

  • Potential candidates and their campaign finance entities (exploratory committees)
  • Donors to exploratory committees (no statutory contribution cap, but subject to reporting and other rules)
  • Authorized candidate campaign committees if they evolve from exploratory committees (purchase/equipment transfer rules; contribution limit applied on transfers)
  • State Board of Elections (SBE) — administrative oversight, filings, and enforcement
  • Political parties and the Fair Campaign Financing Fund (possible recipients of leftover funds)

Fiscal and administrative impact

  • The State Board of Elections can implement the bill using existing resources.
  • The Fair Campaign Financing Fund may see increased receipts when exploratory committees remit leftover funds (fiscal note anticipates possible annual revenue increases beginning FY2026).
  • No material impact on local governments; minimal small‑business effect.

Context/notes

  • Under current practice, Maryland’s Attorney General and SBE guidance have treated certain “testing the waters” activities as permissible without a formal statute; this bill codifies a structure and specific limits for exploratory committees.
  • Effective date in bill text: June 1, 2025.
  • The bill balances allowing potential candidates to test viability (and to accept unlimited donations for that purpose) with procedural controls (limited permitted uses, reporting, disposition rules, FMV rules on equipment transfers) intended to prevent circumvention of campaign finance limits.

Compiled from official sources — confirm details with the bill’s official record.

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