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Secretary of State says House Bill 4024 will need major tech fixes and funding; $25M placeholder cited
Summary
Secretary Tobias Reed and deputy Ricardo Lujan Valerio told the committee that implementing HB 4024 (2024 campaign finance reform) will require legislative clarifications, a new secure reporting system to replace ORESTAR, expanded staff and an early $25 million placeholder budget request to meet an accelerated timeline.
Secretary of State Tobias Reed and deputy chief Ricardo Lujan Valerio gave a detailed update on implementing House Bill 4024, the 2024 campaign finance law that creates contribution limits, new committee types and original-source-of-funds disclosure requirements.
Ricardo Lujan Valerio said the office had exhausted all actions within its authority but that several open issues require legislative clarification: how to define "established finance, maintain, or control" (EFMC) networks that tie contribution limits across connected entities; whether enforcement should be complaint-based or proactive; how to balance transparency with contributors’ privacy; and how to operationalize original-source-of-funds reporting. "This is a massive amount of change that no other state that we know of has attempted all at once," he said.
The Secretary’s office said many core changes take effect Jan. 1, 2027 (contribution limits and committee reorganizations) and additional transparency provisions on Jan. 1, 2028, which creates a compressed timetable to design, procure and deploy a secure reporting and dashboard system. Reed warned that ORESTAR, the state's current filing engine, is nearly 20 years old and "was not built for this new era." The office described primary cost drivers as a new vendor-built IT platform, data-security work, and expanded elections-division staffing for compliance and investigations.
On budget, Reed said predecessors initially requested about $5.4 million but that a $25,000,000 placeholder is being used to reflect the scale of work that could be needed depending on statutory choices and project timelines. Committee members asked whether delaying implementation would reduce costs; Reed said delaying would likely reduce pressure and cost but that legislative guidance will be needed to determine specifics.
The Secretary’s office closed by asking for close legislative partnership, additional resources and targeted statutory clarifications to make HB 4024 workable and avoid undermining public trust in the campaign finance system. The committee recorded the update; no immediate statutory changes were enacted during the hearing.
