H-3697

AN ACT Relating to public disclosure of election financing; amending RCW 42.17.090; adding new sections to chapter 42.17 RCW; and creating new sections.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. PURPOSE. The purpose of this act is to provide for a more informed electorate by requiring campaign financing disclosure by entities that are not political committees under this chapter and by requiring increased disclosure by political committees that are not domiciled within the state of Washington or that are created primarily for the election of persons to federal offices. For the following reasons, the legislature finds that disclosure of large contributions and large expenditures by such entities or committees is necessary:

(1) The term "political committee" is judicially interpreted to mean only entities that have a primary purpose of influencing the political process by supporting or opposing candidates or ballot propositions through the expenditure of funds. This interpretation, in practice, serves to exempt from disclosure requirements many entities that receive and spend substantial sums for campaigns within this state. It is significant that such organizations have played an increasingly important role in the financing of recent campaigns within this state.

(2) The manner and extent to which disclosure provisions apply to political committees not domiciled within this state or to political committees created primarily for the election of persons to federal offices is unclear. The administrative practice has been to require them to disclose only those contributions that are for state or local government campaigns and that are received from residents of this state or corporations having a place of business within this state. It is significant that these committees also have assumed an increasingly important role in the financing of campaigns for state and local government office, as well as the financing of state and local government ballot issue campaigns, and that many of their substantial contributions are from nonresident persons or businesses and therefore are exempt from disclosure requirements.

NEW SECTION. Sec. 2. DISCLOSURE BY ENTITIES THAT ARE NOT POLITICAL COMMITTEES. (1) For purposes of this section and section 3 of this act, "large contribution" means a contribution or aggregate of contributions made by one person to an entity during any calendar year that is in excess of, or has a value in excess of, one thousand dollars; "large expenditure" means an expenditure or aggregate of expenditures made by an entity to one person during any calendar year that is in excess of, or has a value in excess of, one thousand dollars. The term "large expenditure" does not include an "independent campaign expenditure" as defined under RCW 42.17.100.

(2) Each entity, whether domiciled or doing business within or without this state, that is not a political committee and that receives a large contribution or makes a large expenditure, shall, within ten days of receipt of the contribution or making of the expenditure, file with the commission a report containing the following information:

(a) The entity's name and address;

(b) The entity's purposes;

(c) The names, addresses, and titles of its officers or if it has no officers, the names, addresses, and titles of the entity's responsible leaders;

(d) The name, office sought, and party affiliation of each candidate for office within the state of Washington for whom it has accepted the contribution or made the expenditure, except that if it has accepted the contribution or made the expenditure on behalf of the entire Washington state ticket of any party, it need provide only the name of the party;

(e) The identity of the ballot proposition within the state of Washington for which proposition it has accepted the contribution or made the expenditure, and whether it is in favor of or opposed to such proposition;

(f) The name and address of the contributor of the large contribution, together with the amount of the contribution;

(g) The name and address of each person to whom a major expenditure was made, together with the amount of the expenditure; and

(h) Such other information as the commission may prescribe by rule, in keeping with the policies and purposes of this chapter.

(3) An entity incurring an obligation under this section to file more than one report in a calendar year may satisfy the obligation to file the additional reports by filing with the commission a letter providing updating or amending information.

NEW SECTION. Sec. 3. DISCLOSURE BY OUT-OF-STATE POLITICAL COMMITTEES AND POLITICAL COMMITTEES FOR FEDERAL OFFICE. (1) The commission may adopt rules applying the disclosure provisions of subsection (2) of this section to political committees that (a) either are not domiciled in this state or are involved primarily in federal election campaigns, and (b) in the commission's opinion, receive significant contributions, or make significant expenditures, to promote the election or defeat of any candidate for state or local office within this state or the passage or defeat of any ballot proposition within this state.

(2) A political committee to which this subsection applies shall file the report specified in this subsection only if the committee has received either a small contribution from a resident or a large contribution, or if the political committee has made a large expenditure. For purposes of this section, "small contribution" means any contribution or aggregate of contributions during the calendar year that is in excess of twenty-five dollars and that is made by any person residing in this state or by any corporation having a place of business in this state. "Large contribution" and "large expenditure" have the definitions in section 2 of this act. Within ten days after receiving a small contribution or a large contribution or of making a large expenditure, a committee to which this subsection applies shall file a report with the commission containing the following information:

(a) The committee's name and address;

(b) The committee's purposes;

(c) The names, addresses, and titles of its officers or if it has no officers, the names, addresses, and titles of the committee's responsible leaders;

(d) The name, office sought, and party affiliation of each candidate for office within the state of Washington for whom it has accepted a large contribution or made a large expenditure, except that if it has accepted the contribution or made the expenditure on behalf of the entire Washington state ticket of any party, it need provide only the name of the party;

(e) The identity of the ballot proposition within the state of Washington for which proposition it has accepted a small contribution, large contribution, or made a large expenditure, and whether it is in favor of or opposed to such proposition;

(f) The name and address of the contributor of each small and large contribution, together with the amount of each contribution;

(g) The name and address of each person to whom a major expenditure was made, together with the amount of the expenditure; and

(h) Such other information as the commission may prescribe by rule, in keeping with the policies and purposes of this chapter.

(4) A political committee that is not required to report under subsection (2) of this section but that receives a contribution from another committee that is required to report the contribution under the subsection may not use the contribution until the other committee reports it. If the other committee fails to report the contribution within thirty days after making it, the receiving committee shall immediately return it.

Sec. 4. RCW 42.17.090 and 1989 c 280 s 9 are each amended to read as follows:

(1) Each report required under RCW 42.17.080 (1) and (2) shall disclose the following:

(a) The funds on hand at the beginning of the period;

(b) The name and address of each person who has made one or more contributions during the period, together with the money value and date of such contributions and the aggregate value of all contributions received from each such person during the campaign or in the case of a continuing political committee, the current calendar year: PROVIDED, That pledges in the aggregate of less than one hundred dollars from any one person need not be reported: PROVIDED FURTHER, That the income which results from a fund-raising activity conducted in accordance with RCW 42.17.067 may be reported as one lump sum, with the exception of that portion of such income which was received from persons whose names and addresses are required to be included in the report required by RCW 42.17.067: PROVIDED FURTHER, That contributions of no more than twenty-five dollars in the aggregate from any one person during the election campaign may be reported as one lump sum so long as the campaign treasurer maintains a separate and private list of the name, address, and amount of each such contributor: PROVIDED FURTHER, That the money value of contributions of postage shall be the face value of such postage;

(c) Each loan, promissory note, or security instrument to be used by or for the benefit of the candidate or political committee made by any person, together with the names and addresses of the lender and each person liable directly, indirectly or contingently and the date and amount of each such loan, promissory note, or security instrument;

(d) All other contributions not otherwise listed or exempted;

(e) The name and address of each candidate or political committee to which any transfer of funds was made, together with the amounts and dates of such transfers;

(f) The name and address of each person to whom an expenditure was made in the aggregate amount of more than fifty dollars during the period covered by this report, and the amount, date, and purpose of each such expenditure. A candidate for state executive or state legislative office or the political committee of such a candidate shall report this information for an expenditure under one of the following categories, whichever is appropriate: (i) Expenditures for the election of the candidate; (ii) expenditures for nonreimbursed public office-related expenses; (iii) expenditures required to be reported under (e) of this subsection; or (iv) expenditures of surplus funds and other expenditures. The report of such a candidate or committee shall contain a separate total of expenditures for each category and a total sum of all expenditures. Other candidates and political committees need not report information regarding expenditures under the categories listed in (i) through (iv) of this subsection or under similar such categories unless required to do so by the commission by rule. The report of such an other candidate or committee shall also contain the total sum of all expenditures;

(g) The name and address of any person and the amount owed for any debt, obligation, note, unpaid loan, or other liability in the amount of more than two hundred fifty dollars or in the amount of more than fifty dollars that has been outstanding for over thirty days;

(h) The surplus or deficit of contributions over expenditures;

(i) The disposition made in accordance with RCW 42.17.095 of any surplus funds; and

(j) Such other information as shall be required by the commission by rule in conformance with the policies and purposes of this chapter((~~; and~~

(k) Funds received from a political committee not otherwise required to report under this chapter (a "nonreporting committee"). Such funds shall be forfeited to the state of Washington unless the nonreporting committee has filed or within ten days following such receipt files with the commission a statement disclosing: (i) its name and address; (ii) the purposes of the nonreporting committee; (iii) the names, addresses, and titles of its officers or if it has no officers, the names, addresses, and titles of its responsible leaders; (iv) the name, office sought, and party affiliation of each candidate in the state of Washington whom the nonreporting committee is supporting, and, if such committee is supporting the entire ticket of any party, the name of the party; (v) the ballot proposition supported or opposed in the state of Washington, if any, and whether such committee is in favor of or opposed to such proposition; (vi) the name and address of each person residing in the state of Washington or corporation which has a place of business in the state of Washington who has made one or more contributions in the aggregate of more than twenty-five dollars to the nonreporting committee during the current calendar year, together with the money value and date of such contributions; (vii) the name and address of each person in the state of Washington to whom an expenditure was made by the nonreporting committee on behalf of a candidate or political committee in the aggregate amount of more than fifty dollars, the amount, date, and purpose of such expenditure, and the total sum of such expenditures; (viii) such other information as the commission may prescribe by rule, in keeping with the policies and purposes of this chapter. A nonreporting committee incurring an obligation to file additional reports in a calendar year may satisfy the obligation by filing with the commission a letter providing updating or amending information)).

(2) The treasurer and the candidate shall certify the correctness of each report.

NEW SECTION. Sec. 5. Captions used in this act do not constitute part of the law.

NEW SECTION. Sec. 6. Sections 2 and 3 of this act are each added to chapter 42.17 RCW.