The study again found that a number of states have made progress in the area of electronic filing of campaign finance reports, and electronic filing is now mandatory for statewide and/or legislative candidates in 24 states.  Seventy-five percent of the states have an electronic filing program in place.  Seventeen states received grades in the A range for their electronic filing programs—more than in any other category in the study, and four more than last year.  One state received a B in this category, four states received Cs, and two received Ds. Twenty-six states received F grades, indicating there is still significant progress to be made in this area.  The failing states include those with completely voluntary electronic filing programs, because of the value placed on mandatory electronic filing in the Grading State Disclosure criteria.

• 37 states have an electronic filing program for candidate campaign finance reports.
• 24 states have some type of mandatory requirement for electronic filing of campaign finance reports.
• 18 of these states require electronic filing by candidates for both statewide and legislative office.
• 6 states require electronic filing for statewide candidates only.
• 13 states have voluntary electronic filing for candidates for statewide and legislative office.
• Of the 37 states with an electronic filing program, 34 reported having adequate funds to administer the program and 3 reported insufficient funds.
• 13 states have no electronic filing program.

Significant Changes Since 2004:

• 2 states that previously had voluntary electronic filing programs converted to mandatory electronic filing for both statewide and legislative candidates (Maine and New Mexico).
• 1 state that previously only required electronic filing of statewide candidates added mandatory electronic filing for legislative candidates (Hawaii).
• 1 state that previously had a voluntary electronic filing program added mandatory electronic filing for statewide candidates (Indiana).
• 7 states reported increased funding for electronic filing; three states noted a decrease in funding.

States with the strongest electronic filing programs, all receiving an A+ and tied for first place in this category, are:  Arizona; Florida; Hawaii; Illinois; Maryland; Massachusetts; Michigan; New York; Ohio; Texas; and Washington.

States with no electronic filing (all tied for the last place rank) are:  Alabama; Arkansas; Idaho; Kansas; Mississippi; Montana; Nebraska; New Hampshire; North Dakota; South Carolina; South Dakota; Vermont; and Wyoming.

The most encouraging trend identified in states’ electronic filing programs is an increase in the number of states that mandate electronic filing for statewide and/or legislative candidates.  In 2004, 21 states had mandatory requirements for electronic filing of campaign finance reports, and 15 of these required electronic filing by candidates for both statewide and legislative office.  This year, 24 states have mandatory requirements for electronic filing of campaign finance reports, and of these, 18 require electronic filing for candidates for both statewide and legislative office.  Six states require electronic filing for statewide office candidates, but offer voluntary programs for legislative candidates. The thresholds that trigger mandatory electronic filing vary by state and type of candidate, and range in amount from zero (Arizona) to $250,000 (Connecticut).

In addition to the 24 states that require electronic filing of at least some candidates, 13 states offer completely voluntary electronic filing programs. While these states still received failing grades in this category, their ranks indicate that they are performing substantially better than those states with no electronic filing program.  Candidate participation in voluntary electronic filing programs varies widely throughout the states, from less than one percent (Delaware) to over 50 percent (Kentucky and New Jersey for statewide candidates, and Tennessee for legislative candidates). The average rate of electronic filing in states with completely voluntary programs is 27% for statewide candidates and 25% for legislative candidates.

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Nineteen states offer a free, web-based filing system for candidates while twenty states provide free filing software, and in six of these states (Delaware, Indiana, Massachusetts, New Jersey, New Mexico and Texas) candidates can take advantage of either option.  In addition, most states provide candidates with a standard filing format (technical specifications) that can be used to ensure reports are filed in a manner compatible with the filing agency’s computer system.  In their responses to the Grading State Disclosure 2005 survey, many states indicated they have improved outreach, training and technical assistance offered to candidates, either in response to increased demand or in expectation of an increased number of e-filers due to new electronic filing requirements.

Adequate funding is a critical component of electronic filing programs; in addition to the resources necessary to develop such a program, disclosure agencies also require funding to maintain and upgrade them, and to provide support and training to candidates.  Fortunately, most states recognize the need to continue to provide a stable funding stream that anticipates both program growth and the need to adapt to new technology.  This year, nearly all states reported having adequate funding for their electronic filing programs, and only three states reported decreased funding.

Thirteen states (Alabama, Arkansas, Idaho, Kansas, Mississippi, Montana, North Dakota, Nebraska, New Hampshire, South Carolina, South Dakota, Vermont and Wyoming) still have no electronic filing program in place, though South Carolina and Montana are in the process of developing one.  New Hampshire, which previously reported that it offered candidates the option of filing electronically, clarified in its Grading State Disclosure 2005 survey answers that what it actually offers are downloadable forms that candidates may print and complete, but then must return via traditional filing methods such as mail or in-person delivery.