This month, many companies that had not previously been required to file Maryland pay-to-play reports will be required to file with the Maryland State Board of Elections for the first time. Maryland’s pay-to-play reporting law, which was amended earlier this year as described in our mailing of April 21, 2015, now requires companies that have one or more Maryland state or local government contracts worth at least $200,000 to register and file a semiannual report by the end of this month, even if they have not received new contracts this year and even if they have no reportable contributions.
These semiannual reports are due if the entity, or its subsidiary (i.e., 30 percent or more of the equity of the subsidiary is owned or controlled by the business entity) has a single contract with the state, county, municipal corporation or other political subdivision of the state that equals or exceeds $200,000.1 The disclosure also must include the name of each candidate, if any, to whom one or more applicable contributions in a cumulative amount of $500 or more were made during the reporting period by covered donors. For this $500 contribution reporting threshold, covered donors include not only the entity and its subsidiary but also company PACs, officers, directors and partners of the business entity and its subsidiary. Furthermore, political contributions made by employees, agents or other persons at the suggestion or direction of a business entity or subsidiary also must be reported.
If a company has contributions to report, it also will need to disclose specific details regarding covered government contracts, including the amount and nature of the business done with the state and its political subdivisions, the agency that awarded each contract, the company awarded the contract (including a contracting company in which the filer owns a 30 percent interest) and the award, start and end dates of the contract.
If a company does not have any contributions to report, it need only list the name of the agency that has awarded the covered contract.
The next periodic reports will be due November 30, 2015, and May 31, 2016. In addition, to the extent a company is awarded a new contract with a value of $200,000 or more, it is required to file a report disclosing applicable contributions and reportable contracts for the last 24 months within one business day.
Please contact us with any questions, for assistance filing the report or to discuss the possibility of seeking a waiver from the Board of Elections from the contract disclosure requirement.
1 Lobbyist employers have a filing obligation as well.
This memorandum is provided by Skadden, Arps, Slate, Meagher & Flom LLP and its affiliates for educational and informational purposes only and is not intended and should not be construed as legal advice. This memorandum is considered advertising under applicable state laws.