S-1671.1          _______________________________________________

                            SUBSTITUTE SENATE BILL 5149

                  _______________________________________________

State of Washington              52nd Legislature             1991 Regular Session

By Senate Committee on Law & Justice (originally sponsored by Senators Nelson and Rasmussen; by request of Public Disclosure Commission).

Read first time February 26, 1991.Regulating political gifts and public office funds.

     AN ACT Relating to gifts and public office funds; amending RCW 42.17.020, 42.17.090, 42.17.095, 42.17.170, 42.17.240, and 42.17.243; and providing an effective date.

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

     Sec. 1.  RCW 42.17.020 and 1990 c 139 s 2 are each amended to read as follows:

     (1) "Agency" includes all state agencies and all local agencies.  "State agency" includes every state office, department, division, bureau, board, commission, or other state agency.  "Local agency" includes every county, city, town, municipal corporation, quasi-municipal corporation, or special purpose district, or any office, department, division, bureau, board, commission, or agency thereof, or other local public agency.

     (2) "Ballot proposition" means any "measure" as defined by RCW 29.01.110, or any initiative, recall, or referendum proposition proposed to be submitted to the voters of the state or any municipal corporation, political subdivision, or other voting constituency from and after the time when the proposition has been initially filed with the appropriate election officer of that constituency prior to its circulation for signatures.

     (3) "Benefit" means any commercial, proprietary, financial, economic, or monetary advantage, or the avoidance of any commercial, proprietary, financial, economic, or monetary disadvantage.

(4) "Depository" means a bank designated by a candidate or political committee pursuant to RCW 42.17.050.

     (((4))) (5) "Treasurer" and "deputy treasurer" mean the individuals appointed by a candidate or political committee, pursuant to RCW 42.17.050, to perform the duties specified in that section.

     (((5))) (6) "Candidate" means any individual who seeks election to public office.  An individual shall be deemed to seek election when he first:

     (a) Receives contributions or makes expenditures or reserves space or facilities with intent to promote his candidacy for office; or

     (b) Announces publicly or files for office.

     (((6))) (7) "Commercial advertiser" means any person who sells the service of communicating messages or producing printed material for broadcast or distribution to the general public or segments of the general public whether through the use of newspapers, magazines, television and radio stations, billboard companies, direct mail advertising companies, printing companies, or otherwise.

     (((7))) (8) "Commission" means the agency established under RCW 42.17.350.

     (((8))) (9) "Compensation" unless the context requires a narrower meaning, includes payment in any form for real or personal property or services of any kind: PROVIDED, That for the purpose of compliance with RCW 42.17.241, the term "compensation" shall not include per diem allowances or other payments made by a governmental entity to reimburse a public official for expenses incurred while the official is engaged in the official business of the governmental entity.

     (((9))) (10) "Continuing political committee" means a political committee that is an organization of continuing existence not established in anticipation of any particular election campaign.

     (((10))) (11) "Contribution" includes a loan, gift, deposit, subscription, forgiveness of indebtedness, donation, advance, pledge, payment, transfer of funds between political committees, or transfer of anything of value, including personal and professional services for less than full consideration, but does not include interest on moneys deposited in a political committee's account, ordinary home hospitality and the rendering of personal services of the sort commonly performed by volunteer campaign workers, or incidental expenses personally incurred by volunteer campaign workers not in excess of fifty dollars personally paid for by the worker.  Volunteer services, for the purposes of this chapter, means services or labor for which the individual is not compensated by any person.  For the purposes of this chapter, contributions other than money or its equivalents shall be deemed to have a money value equivalent to the fair market value of the contribution. Sums paid for tickets to fund-raising events such as dinners and parties are contributions; however, the amount of any such contribution may be reduced for the purpose of complying with the reporting requirements of this chapter, by the actual cost of consumables furnished in connection with the purchase of the tickets, and only the excess over the actual cost of the consumables shall be deemed a contribution.

     (((11))) (12) "Elected official" means any person elected at a general or special election to any public office, and any person appointed to fill a vacancy in any such office.

     (((12))) (13) "Election" includes any primary, general, or special election for public office and any election in which a ballot proposition is submitted to the voters:  PROVIDED, That an election in which the qualifications for voting include other than those requirements set forth in Article VI, section 1 (Amendment 63) of the Constitution of the state of Washington shall not be considered an election for purposes of this chapter.

     (((13))) (14) "Election campaign" means any campaign in support of or in opposition to a candidate for election to public office and any campaign in support of, or in opposition to, a ballot proposition.

     (((14))) (15) "Expenditure" includes a payment, contribution, subscription, distribution, loan, advance, deposit, or gift of money or anything of value, and includes a contract, promise, or agreement, whether or not legally enforceable, to make an expenditure.  The term "expenditure" also includes a promise to pay, a payment, or a transfer of anything of value in exchange for goods, services, property, facilities, or anything of value for the purpose of assisting, benefiting, or honoring any public official or candidate, or assisting in furthering or opposing any election campaign.  For the purposes of this chapter, agreements to make expenditures, contracts, and promises to pay may be reported as estimated obligations until actual payment is made.  The term "expenditure" shall not include the partial or complete repayment by a candidate or political committee of the principal of a loan, the receipt of which loan has been properly reported.

     (((15))) (16) "Final report" means the report described as a final report in RCW 42.17.080(2).

     (((16))) (17) "Gift" means a rendering of money, property, services, discount, loan forgiveness, payment of indebtedness, reimbursements from or payments by persons, other than the state of Washington or any agency or political subdivision thereof, for travel or anything else of value in excess of fifty dollars in return for which legal consideration of equal or greater value is not given and received but does not include:

(a) Any contribution that is required to be reported under RCW 42.17.090 or 42.17.243;

(b) Any informational material that is transferred for the purpose of informing the recipient about matters pertaining to official agency business, and that is not intended to financially benefit that recipient;

(c) Any symbolic presentation that is not intended to financially benefit the recipient;

(d) Any honorarium that is required to be reported under this chapter;

(e) Any hosting in the form of entertainment, meals, or refreshments, the value of which does not exceed fifty dollars, furnished in connection with official appearances, official ceremonies, and occasions where official agency business is discussed;

(f) Gifts that are not used and that, within thirty days after receipt, are returned to the donor or delivered to a charitable organization without being claimed as a charitable contribution for tax purposes;

(g) Intrafamily gifts; or

(h) Gifts received in the normal course of private business or social interaction that are not related to public policy decisions or agency actions.

(18) "Immediate family" includes the spouse, dependent children, and other dependent relatives, if living in the household.

     (((17))) (19) "Legislation" means bills, resolutions, motions, amendments, nominations, and other matters pending or proposed in either house of the state legislature, and includes any other matter that may be the subject of action by either house or any committee of the legislature and all bills and resolutions that, having passed both houses, are pending approval by the governor.

     (((18))) (20) "Lobby" and "lobbying" each mean attempting to influence the passage or defeat of any legislation by the legislature of the state of Washington, or the adoption or rejection of any rule, standard, rate, or other legislative enactment of any state agency under the state Administrative Procedure Act, chapter 34.05 RCW.  Neither "lobby" nor "lobbying" includes an association's or other organization's act of communicating with the members of that association or organization.

     (((19))) (21) "Lobbyist" includes any person who lobbies either in his or her own or another's behalf.

     (((20))) (22) "Lobbyist's employer" means the person or persons by whom a lobbyist is employed and all persons by whom he is compensated for acting as a lobbyist.

     (((21))) (23) "Person" includes an individual, partnership, joint venture, public or private corporation, association, federal, state, or local governmental entity or agency however constituted, candidate, committee, political committee, political party, executive committee thereof, or any other organization or group of persons, however organized.

     (((22))) (24) "Person in interest" means the person who is the subject of a record or any representative designated by that person, except that if that person is under a legal disability, the term "person in interest" means and includes the parent or duly appointed legal representative.

     (((23))) (25) "Political advertising" includes any advertising displays, newspaper ads, billboards, signs, brochures, articles, tabloids, flyers, letters, radio or television presentations, or other means of mass communication, used for the purpose of appealing, directly or indirectly, for votes or for financial or other support in any election campaign.

     (((24))) (26) "Political committee" means any person (except a candidate or an individual dealing with his own funds or property) having the expectation of receiving contributions or making expenditures in support of, or opposition to, any candidate or any ballot proposition.

     (((25))) (27) "Public office" means any federal, state, county, city, town, school district, port district, special district, or other state political subdivision elective office.

     (((26))) (28) "Public record" includes any writing containing information relating to the conduct of government or the performance of any governmental or proprietary function prepared, owned, used, or retained by any state or local agency regardless of physical form or characteristics.

     (((27))) (29) "Surplus funds" mean, in the case of a political committee or candidate, the balance of contributions that remain in the possession or control of that committee or candidate subsequent to the election for which the contributions were received, and that are in excess of the amount necessary to pay remaining debts incurred by the committee or candidate prior to that election.  In the case of a continuing political committee, "surplus funds" mean those contributions remaining in the possession or control of the committee that are in excess of the amount necessary to pay all remaining debts when it makes its final report under RCW 42.17.065.

     (((28))) (30) "Writing" means handwriting, typewriting, printing, photostating, photographing, and every other means of recording any form of communication or representation, including letters, words, pictures, sounds, or symbols, or combination thereof, and all papers, maps, magnetic or paper tapes, photographic films and prints, magnetic or punched cards, discs, drums, and other documents.

     As used in this chapter, the singular shall take the plural and any gender, the other, as the context requires.

     Sec. 2.  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))) (iii) 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))) (iii) 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;

     (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.

     Sec. 3.  RCW 42.17.095 and 1982 c 147 s 8 are each amended to read as follows:

     The surplus funds of a candidate, or of a political committee supporting or opposing a candidate, may only be disposed of in any one or more of the following ways:

     (1) Return the surplus to a contributor in an amount not to exceed that contributor's original contribution;

     (2) Transfer the surplus to the candidate's personal account as reimbursement for lost earnings incurred as a result of that candidate's election campaign.  Such lost earnings shall be verifiable as unpaid salary or, when the candidate is not salaried, as an amount not to exceed income received by the candidate for services rendered during an appropriate, corresponding time period. All lost earnings incurred shall be documented and a record thereof shall be maintained by the candidate or the candidate's political committee.  The committee shall include a copy of such record when its expenditure for such reimbursement is reported pursuant to RCW 42.17.090;

     (3) Transfer all or part of the surplus to a public office fund established in accordance with RCW 42.17.243;

(4) Transfer the surplus to one or more candidates or to a political committee or party;

     (((4))) (5) Donate the surplus to a charitable organization registered in accordance with chapter 19.09 RCW;

     (((5))) (6) Transmit the surplus to the state treasurer for deposit in the general fund; or

     (((6))) (7) Hold the surplus in the ((campaign)) depository or depositories designated in accordance with RCW 42.17.050 for possible use in a future election campaign, for political activity, or for community activity, or for nonreimbursed public office related expenses incurred within sixty days of the election and report any such disposition in accordance with RCW 42.17.090((:  PROVIDED, That)).  However, if the candidate subsequently announces or publicly files for office, information as appropriate is reported to the commission in accordance with RCW 42.17.040 through 42.17.090.  If a subsequent office is not sought the surplus held shall be disposed of in accordance with the requirements of this section.

     Sec. 4.  RCW 42.17.170 and 1990 c 139 s 3 are each amended to read as follows:

     (1) Any lobbyist registered under RCW 42.17.150 and any person who lobbies shall file with the commission periodic reports of his activities signed by the lobbyist.  The reports shall be made in the form and manner prescribed by the commission.  They shall be due monthly and shall be filed within fifteen days after the last day of the calendar month covered by the report.

     (2) Each such monthly periodic report shall contain:

     (a) The totals of all expenditures for lobbying activities made or incurred by such lobbyist or on behalf of such lobbyist by the lobbyist's employer during the period covered by the report.  Such totals for lobbying activities shall be segregated according to financial category, including compensation; food and refreshments; living accommodations; advertising; travel; contributions; and other expenses or services.  Each individual expenditure of more than ((twenty-five)) fifty dollars for entertainment shall be identified by date, place, amount, and the names of all persons in the group partaking in or of such entertainment including any portion thereof attributable to the lobbyist's participation therein but without allocating any portion of such expenditure to individual participants.

     Notwithstanding the foregoing, lobbyists are not required to report the following:

     (i) Unreimbursed personal living and travel expenses not incurred directly for lobbying;

     (ii) Any expenses incurred for his or her own living accommodations;

     (iii) Any expenses incurred for his or her own travel to and from hearings of the legislature;

     (iv) Any expenses incurred for telephone, and any office expenses, including rent and salaries and wages paid for staff and secretarial assistance.

     (b) In the case of a lobbyist employed by more than one employer, the proportionate amount of such expenditures in each category incurred on behalf of each of his employers.

     (c) An itemized listing of each such expenditure in the nature of a contribution of money or of tangible or intangible personal property to any candidate, elected official, or officer or employee of any agency, or any political committee supporting or opposing any ballot proposition, or for or on behalf of any candidate, elected official, or officer or employee of any agency, or any political committee supporting or opposing any ballot proposition.  All contributions made to, or for the benefit of, any candidate, elected official, or officer or employee of any agency, or any political committee supporting or opposing any ballot proposition shall be identified by date, amount, and the name of the candidate, elected official, or officer or employee of any agency, or any political committee supporting or opposing any ballot proposition receiving, or to be benefited by each such contribution.  When a listing or a report of contributions is made to the commission under this subsection (2)(c), a copy of the listing or report must be given to the candidate, elected official, or officer or employee of any agency, or any political committee supporting or opposing any ballot proposition named in the listing or report.

     (d) The subject matter of proposed legislation or other legislative activity or rule-making under chapter 34.05 RCW, the state Administrative Procedure Act, and the state agency considering the same, which the lobbyist has been engaged in supporting or opposing during the reporting period.

     (e) Such other information relevant to lobbying activities as the commission shall by rule prescribe.  Information supporting such activities as are required to be reported is subject to audit by the commission.

     Sec. 5.  RCW 42.17.240 and 1989 c 158 s 1 are each amended to read as follows:

     (1) Every elected official and every executive state officer shall after January 1st and before April 15th of each year file with the commission a statement of financial affairs for the preceding calendar year.  However, any local elected official whose term of office expires immediately after December 31st shall file the statement required to be filed by this section for the year that ended on that December 31st.  In addition to and in conjunction with the statement of financial affairs, every official and officer shall file a statement describing any gifts received during the preceding calendar year.

     (2) Every candidate shall within two weeks of becoming a candidate file with the commission a statement of financial affairs for the preceding twelve months.

     (3) Every person appointed to a vacancy in an elective office or executive state officer position shall within two weeks of being so appointed file with the commission a statement of financial affairs for the preceding twelve months.

     (4) A statement of a candidate or appointee filed during the period from January 1st to April 15th shall cover the period from January 1st of the preceding calendar year to the time of candidacy or appointment if the filing of the statement would relieve the individual of a prior obligation to file a statement covering the entire preceding calendar year.

     (5) No individual may be required to file more than once in any calendar year.

     (6) Each statement of financial affairs filed under this section shall be sworn as to its truth and accuracy.

     (7) For the purposes of this section, the term "executive state officer" includes those listed in RCW 42.17.2401.

     (8) This section does not apply to incumbents or candidates for a federal office or the office of precinct committee officer.

     Sec. 6.  RCW 42.17.243 and 1977 ex.s. c 366 s 5 are each amended to read as follows:

     (1) Elected and appointed officials required to report under RCW 42.17.240((,)) shall report for themselves and for members of their immediate family to the commission any contributions received ((during the preceding calendar year)) for the officials' use in defraying nonreimbursed public office related expenses.  Contributions reported under this section shall be referred to as a "public office fund" and shall ((not be transferred to a political committee nor used to promote or oppose a candidate or ballot proposition, other than as provided by subsection (3) (a) of this section.  For the purposes of this section contributions shall include reimbursements from or payments by persons, other than the state of Washington or any agency, for travel expenses)) be held in a separate bank account established for that purpose.

(2) Within two weeks of the day the public office fund is established, the official for whom it is established shall file with the commission a registration statement to include:

(a) The name of the official;

(b) The name and business address of the person who will maintain all financial records of the fund;

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

Any official who has a public office fund in existence on the effective date of this act shall file a registration statement at the time the quarterly report required by subsection (3) of this section first comes due.

(3) A report shall be filed ((during the month of January of any year following a year)) within one month after the end of each calendar quarter in which ((such contributions were received for or expenditures made from)) a public office fund existed.  The report shall include:

     (a) The name and address of each contributor;

     (b) A description of each contribution, including the date on which it was received and its amount or, if its dollar value is unascertainable, an estimate of its fair market value; ((and))

     (c) A description of each expenditure made from a public office fund, including the name and address of the recipient, the amount, and the date of each ((such)) expenditure; and

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

The official for whom the office fund is established shall certify that the report is correct.

     (((2))) (4) No report under ((subsection (1))) subsections (2) and (3) of this section ((shall be)) is required if((:

     (a) The receipt of the contribution has been reported pursuant to RCW 42.17.065 (continuing political committee reports) or RCW 42.17.090 (political committee reports); or

     (b))) the contribution is in the form of meals, refreshments, or entertainment given in connection with official appearances or occasions where public business was discussed.

     (((3))) (5) Expenditures may be made from a public office fund only to pay expenses incurred by the official or members of the official's immediate family solely because of the person holding a public office.

(a) No funds or assets of a public office fund may be used to support or oppose a candidate or ballot proposition, political party, or political committee except as provided in subsection (6)(a) of this section.

(b) No payment may be made from a public office fund to an official to reimburse that official or a member of the official's family for lost earnings incurred as a result of that person being a public official.

(c) No funds or assets of a public office fund may be transferred to the public office fund of another person.

(d) All payments shall be substantiated by receipts or other appropriate documentation.

(6) Any funds ((which)) or other assets, whether tangible or intangible, that remain in a public office fund after all permissible public office related expenses have been paid may only be disposed of in one or more of the following ways:

     (a) Returned to a contributor in an amount not to exceed that contributor's original contribution; or

     (b) Donated to a charitable organization registered in accordance with chapter 19.09 RCW; or

     (c) Transferred to the state treasurer for deposit in the general fund; or

(d) In the case of tangible assets, transferred to the government agency in which the official holds office.

(7) The official or person named in the registration statement shall preserve books of account, bills, receipts, and all other financial records of the office fund for not less than five calendar years following the year in which the transaction occurred.

NEW SECTION. Sec. 7.      This act shall take effect January 1, 1992.