Senate Judiciary advances bill tightening campaign disclosure, loan reporting

Senator Peter Wirth, the bill’s prime sponsor, told the Senate Judiciary Committee that Senate Bill 85 would close several loopholes in state campaign finance law and update reporting deadlines.

Wirth said, "Senate bill 85 is very similar to a bill that this committee passed and that the senate passed 2 years ago. It does a number of different things ... this is a continuation of the work that I've done to close loopholes as a result of the changes that have occurred over the years with our election code." He described amendments that change the definition of "expenditure," create a required segregated bank account for donations the donor specifies not be used for independent expenditures, and add loan-term disclosure for candidate loans.

The committee heard from Common Cause New Mexico’s executive director, Molly Swank, who urged support. "Common Cause is supportive of SB 85 because it closes major loopholes in the campaign reporting act, including disclosures and the timing of those disclosures, expanding the definitions of expenditures and contributions, and abuse of the opt out provisions for contributors currently in the Campaign Reporting Act," Swank said.

Lindsey Bachman of the Secretary of State’s office explained changes to reporting time frames and modernizing filing requirements. Bachman summarized a number of timeline changes added by the bill, including moving non-election-year biannual filings to June and December, clarifying holiday deadlines and creating new pre-election supplemental reporting windows.

Major provisions described to the committee included: - A definitional change for "expenditure" intended to close a circular loophole that can exclude money used for political purposes from disclosure requirements during election windows. - A requirement that when a donor instructs that donated funds not be used for independent expenditures, those funds must be placed into a separate, segregated bank account; only funds meeting both conditions avoid being used for independent expenditures. - A prohibition on repaying loans made to a candidate that include a rate of interest when repayment would be made with campaign funds (the bill preserves loans from third-party lenders such as banks but bars candidates from profiting by lending to themselves with interest and then using contributions to pay that interest). - Expanded and clarified reporting timelines and thresholds for supplemental reports immediately before elections; equalizing the threshold for legislature and governor supplemental reporting to $1,000; and continuous reporting obligations for political action committees that retain open bank accounts.

Committee members pressed sponsors on enforcement, on whether the bill reaches certain entities that use LLCs to route expenditures, and on technical details such as whether loan evidence could create a tax issue. Wirth and Bachman said the measure aims to increase transparency while allowing the Secretary of State’s office and the Ethics Commission to pursue voluntary compliance and civil penalties where appropriate.

After questions and extended debate about enforcement, limits and the effect on recurring donations, Senator Stewart moved a due-pass recommendation. There was no objection; the chair announced the bill carried a due-pass recommendation out of committee.

Next steps: with the committee’s "do pass" recommendation, SB 85 advances to the next stage in the Senate process for consideration by the full chamber.