Sweeping Reforms Regarding Ohio
Political Contributions

Maria Armstrong
Bricker & Eckler LLP
December 2006

Full Text of H.B. 694

Update. H.B. 694 was signed by Governor Taft on January 2, 2007 and becomes effective 90 days after the Governor's signature, although H.B. 694 applies to any contributions made on or after January 1, 2007. For more detailed information on this new law and later amendments see Ohio Pay-to-Play Laws.

On December 20, 2006, the Ohio General Assembly finalized some very significant changes to Ohio's political contribution laws that could profoundly affect most government contractors as well as most state agencies, boards and commissions and virtually all local political subdivisions. In sum, Amended House Bill 694, awaiting the Governor's signature, provides that no state office or political subdivision may award any bid or unbid contract over $500 to political contributors who have contributed over $2,000 to the officeholder ultimately responsible for awarding the contract. The $2,000 threshold is met when any owner, partner, member, certain shareholders, their spouses, children, or affiliated political action committee of the company makes, individually or in combination with each other, $2,000 in contributions over a two-year period.

Any company that does (or ever wants to do) business with the state, city, county, townships, school districts, or other political subdivisions, must be very careful with political contributions of all partners, co-owners, members, their spouses and minor children, and any affiliated corporate political action committee. In addition, partners, members, certain shareholders, their spouses or children, or affiliated corporate PACs are prohibited, jointly or individually, from making contributions to the officeholder responsible for their company's contracts from the date of contract award until one year after contract completion. Violations can result in fines, criminal penalties and forfeiture of the contract. Every LLC, partnership, sole proprietor, and most corporations should be aware of these new changes, which go into effect on January 1, 2007.

For state and local governments, the new law requires certain affirmations in contracts and now includes collective bargaining agreements in the contract ban, thus limiting contributions by labor organizations who contract with the state and their affiliated PACs. In addition to expanding the provisions related to unbid contracts issued by the state, the newly enacted revisions to Ohio laws include competitively bid contracts and sweep a number of new state and local governmental entities into the new restrictions.

Any contractor who does, or hopes to do, business at any level of state or local government should carefully review and understand Amended House Bill 694 before making any political contributions to a candidate or officeholder. And all state and local elected officials and candidates at all levels should also take care before awarding any contract, bid or unbid.