HOUSE BILL REPORT

HB 1679

BYRepresentatives Locke, Patrick, Belcher, Miller, Rust, Armstrong, Barnes, Brough, Zellinsky, Sanders, O'Brien, May, Valle, Betrozoff, Wineberry, Ferguson, Hankins, Ballard, Cantwell, Silver, D. Sommers, Taylor, Amondson, Padden, H. Sommers, Fuhrman, Lux, Pruitt, P. King, Walker, Fisher, Anderson, Todd, Crane, Unsoeld, Cooper, Rayburn and Brekke;by request of Secretary of State

Regulating political contributions by charities.

House Committe on Constitution, Elections & Ethics

Majority Report:  The substitute bill be substituted therefor and the substitute bill do pass.  (6)

      Signed by Representatives Fisher, Chair; Pruitt, Vice Chair; Barnes, R. King, Leonard and Sanders.

House Staff:Kenneth Hirst (786-7105)

AS REPORTED BY COMMITTEE ON CONSTITUTION, ELECTIONS & ETHICS

FEBRUARY 4, 1988

BACKGROUND:

State law requires charitable organizations and entities that solicit contributions for charitable organizations to register with the Secretary of State and to disclose certain information concerning their operations.

With certain exceptions, the public disclosure statutes require candidates and political committees to file reports with the Public Disclosure Commission.

SUMMARY:

SUBSTITUTE BILL:  Funds solicited by a charitable organization may not be used by a charitable organization as a contribution in support of, or opposition to, a candidate or ballot proposition unless the charitable organization using the funds in this manner:  discloses to each person or organization solicited (conspicuously, in writing, and prior to receiving the contribution) that part or all of the contribution may be used in this manner; files a statement with the Secretary of State indicating that the organization expects to receive or expend funds for this purpose and identifying the maximum percentage of funds raised from solicitations that may be dedicated for this purpose; and segregates, upon receipt, those funds to be used in this manner.  Once funds have been transferred out of the segregated account or deposited in any other account, they may not be redirected in any manner to political contributions.

Funds in the segregated account must be reported to the Public Disclosure Commission as required by the public disclosure laws for certain candidates and political committees.  The funds must be excluded from the report of solicitation activity filed with the Secretary of State unless, before the close of the accounting year, the funds are transferred into a nonpolitical account of the organization.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  The substitute bill states that it is the organization which uses the donations for political purposes that must file the disclosures and must notify persons solicited.

Fiscal Note:      Requested January 26, 1988

House Committee ‑ Testified For:    John Dziedzic, Secretary of State's Office.

House Committee - Testified Against:      None Presented.

House Committee - Testimony For:    Traditional, tax-exempt charitable organizations are prohibited from expending monies for political purposes but state law enacted in 1986 requires certain taxable organizations to file as charitable organizations as well.  Their political expenditures should be disclosed.

House Committee - Testimony Against:      None Presented.