Effective July 1, 2007, the Virginia General Assembly closed a loophole in state law that allowed non-Virginia politicians to create a Virginia in-state PAC for the purpose of avoiding the contribution limits of their home state. For example, according to published reports, former New York Governor George Pataki established a Virginia in-state PAC that received in excess of $500,000 from nine contributors during a two-month span earlier this year. If Pataki had established his PAC in New York, then his committee would not have been allowed to accept such large contributions from so few donors. Moreover, sponsors of the legislation, former H.B. 2852, also noted that contributions from these PACs overwhelmingly were given to candidates in other states rather than Virginia candidate or committees.
Under the new law, in order to register as a Virginia in-state PAC, a newly-formed committee must—at the time of registration—state that it will make 50% or more of its overall contributions to Virginia registered campaigns and committees. If a committee cannot make such a statement, then it will not be allowed to register with the Virginia State Board of Elections as an in-state PAC. Importantly, this change does not affect Federal PACs (i.e., the new law does not require a Federal PAC to make 50% or more of its contributions to Virginia candidates prior to being able to register with the State Board of Elections).