South Dakota Repeals and Replaces Voter Approved Ethics Measure

Renae Bpmba, Esq.
Research Associate

South Dakota Gov. Dennis Daugaard signed a raft of campaign finance and lobbying laws to preserve the spirit of Initiated Measure 22 (IM 22) after lawmakers repealed the voter approved measure earlier this session.

IM 22 was a ballot measure approved by voters in the November 2016 election to enact an ethics and campaign finance overhaul. The measure created a publicly funded campaign finance system and lowered contribution limits. The measure also provided new gift limits and revolving door restrictions for former state officials. Lawmakers challenged the constitutionality of IM 22 and won a temporary injunction blocking the law from taking effect. After the 2017 regular legislative session commenced, the Legislature quickly passed House Bill 1069 to repeal IM 22.

After the repeal of the voter approved measure, many pieces of legislation were introduced by lawmakers to calm citizen criticisms and replace provisions of the now repealed IM 22. Senate Bill 54, Senate Bill 131, and House Bill 1073 were among the introduced IM 22 replacement bills making significant changes to campaign finance and lobbying laws signed into law by Daugaard this session.

Senate Bill 54 allows organizations, such as corporations and labor unions, to contribute directly to candidates and restricts candidates from using campaign funds for personal expenses. Senate Bill 131 prohibits elected officers and officials from lobbying in the two-year period after termination of service in the state government, and House Bill 1073 was approved to set a $100 annual cap on gifts from lobbyists to elected officials. The new laws become effective July 1, 2017.

[The details for this article have been updated on our website in the Contribution section of the Political Contributions Compliance Laws and the Gift and Important Features sections of the Lobbying Compliance Laws for South Dakota.]

Summary of Changes UPDATE
Note Recent Changes to Compliance Regulations 

Michael Beckett, Esq., Research Manager

FEDERAL: Commissioner Ann M. Ravel has resigned from the Federal Election Commission (FEC). In her February 19 resignation letter to the president, Ravel urged the prioritizing of campaign finance reform, additional disclosure requirements, and a reduction of reliance on the wealthy. Without Ravel, the FEC will have three registered members of the Republican Party and two registered members of the Democratic Party. The FEC requires at least four commissioners to agree for any official action. Ravel’s replacement will be selected by President Trump and will need confirmation by the U.S. Senate. While not more than three members of the commission may be registered with the same political party, the president is not obligated to nominate a registered member of the Democratic Party.

MISSOURI: The Ethics Commission recently released a series of advisory opinions related to Constitutional Amendment 2. The amendment, passed by the voters in the November election, amended state campaign finance laws. The new advisory opinions address issues not fully articulated in the constitutional amendment. Opinions confirm: contribution limits do not apply to local candidates; the definitions of continuing and political action committees are substantially the same and are interpreted to be the same; and contribution limits only apply to continuing or political action committees if a contribution to the committee is designated for a specific candidate. Another opinion finds a limited liability company (LLC) to be a corporation for the purpose of the corporate contribution ban if the LLC is an eligible entity electing to be classified as a corporation under the federal tax code. Other opinions relate to the eligibility of foreign corporations contributing to Missouri PACs, the application of the $25,000 per election aggregate limit to be received by a political party, and the applicability of contribution limits to state legislative campaign committees.

NEW JERSEY: The state Appellate Division recently upheld two state agency decisions related to contractor pay-to-play violations. Della Pello Paving, Inc. lost two contracts totaling roughly $7 million and was barred from contracting with the state for the remainder of Gov. Chris Christie’s second term because it made a $500 contribution to the Somerset County Republican Organization. State pay-to-play laws prohibit a contractor from receiving a contract exceeding $17,500 if it contributed more than $300 during the previous 18 months to a county political party committee. Della Pello challenged the state agency decisions claiming the contribution was intended for Sheriff Frank Provenzano’s campaign and not for the county political committee. The inadvertent contribution needed to be returned within 30 days to avoid a pay-to-play violation. Della Pello did not request and receive reimbursement until more than a year after making the donation; moreover, Provenzano was not running for re-election the year the contribution was made. Following the decision of the appellate court, Della Pello’s attorney sought emergency review by the state Supreme Court, but the court refused to hear the case.

NORTH CAROLINA: The North Carolina Supreme Court issued an order blocking Senate Bill 4 from taking effect while the legal challenge to the law is pending. This order halts the merger of the State Board of Elections with the State Ethics Commission. Gov. Roy Cooper is currently challenging Senate Bill 4 on the basis the General Assembly overstepped its state constitutional authority when it adopted the law establishing an eight-member board to oversee elections and consider ethics complaints and issues.

VERMONT: Gov. Phil Scott issued an informal directive to staff and administrative personnel to stay clear of legislators and lobbyists in social situations. The governor is taking aim at the after-hours restaurant and bar scene in Montpelier, where staff, lawmakers, and lobbyists are typically seen commingling. Those in favor of the governor's directive welcome the crackdown, while others believe forbidden fraternization is impossible to avoid given the small-town nature of the state capital. Others are concerned the rule will hurt business owners who rely on these social outings for revenue.

Legislation We Are Tracking

At any given time, more than 1,000 legislative bills, which can affect how you do business as a government affairs professional, are being discussed in federal, state, and local jurisdictions. These bills are summarized in State and Federal Communications' digital encyclopedias for lobbying laws, political contributions, and procurement lobbying and can be found in the client portion of our website.

Summaries of major bills are also included in monthly email updates sent to all clients. The chart below shows the number of bills we are tracking in regard to lobbying laws, political contributions, and procurement lobbying.

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